Exhibit 10.1

 

NITROMED, INC.
125 Spring Street
Lexington, MA 02421

 

March 20, 2006

 

Jerry Karabelas

C/o Care Capital LLC

47 Hulfish Street, Suite 310

Princeton, NJ 08542

 

Dear Jerry:

 

On behalf of NitroMed, Inc. (the “Company”), I am very pleased to offer you
employment with the Company. The purpose of this letter is to summarize the
terms of your employment with the Company, should you accept our offer.

 

Employment. You will be employed to serve, effective March 20, 2006, in the
position of Acting Chief Executive Officer and President, reporting to the Board
of Directors. You agree to devote such time as is reasonably necessary to the
advancement of the Company’s business and interests and to the performance of
your duties and responsibilities.

 

Compensation. Your base annualized rate of compensation will be $361,000, less
all applicable federal, state and local taxes and withholdings, to be paid in
installments in accordance with the Company’s standard payroll practices. Such
base salary may be adjusted from time to time in accordance with normal business
practices and in the sole discretion of the Board of Directors. During such time
as you are serving as the Acting Chief Executive Officer and President pursuant
to the terms of this Letter, you agree that you will receive no compensation as
an outside director, including without limitation, fees for your service as
Chairman of the Board of Directors.

 

Annual Bonus. If the Compensation Committee of the Board of Directors approves
an annual bonus for fiscal year 2006, you may be eligible for a discretionary
award of up to 50% of your annualized base salary. The bonus award, if any, will
be based on both individual and corporate performance and will be determined by
the Compensation Committee in its sole discretion. In any event, you must be an
active employee of the Company on the date the fiscal year 2006 bonus is
distributed in order to be eligible for a bonus award.

 

Benefits. You shall be eligible to participate in any and all bonus and benefit
programs that the Company establishes and makes available to its employees from
time to time, provided that you are eligible under (and subject to all
provisions of) the plan documents governing those programs. Such benefits may
include: participation in group medical and dental insurance programs, term life
insurance, long-term disability insurance and participation in the Company’s
401(k) plan. The benefits made available by the Company, and the rules, terms,
and conditions for participation in such benefit plans may be changed by the
Company at any time and from time to time without advance notice.

 

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Vacation. You shall be eligible for a maximum of twenty (20) days of vacation
per calendar year, subject to proration to your date of hire and to be taken at
such times as may be approved in the sole discretion of the Company.

 

Stock Option Program. You will be eligible to participate in the Company’s stock
option program. Subject to approval by the Compensation Committee of the Board
of Directors, the Company will grant to you an option to purchase 225,000 shares
of the Company’s Common Stock (subject to adjustment for stock splits,
combinations, or other recapitalizations) which will vest (i.e., become
exercisable) as follows:  the shares will vest in twelve (12) equal monthly
installments beginning on the first month anniversary of the grant date, subject
to your continued employment by the Company. Notwithstanding the foregoing, all
then-unvested shares shall immediately accelerate and become fully exercisable
in the event of a change of control. The option exercise price will be equal to
the fair market value of a share of Common Stock on the date of grant of the
option as determined by the Compensation Committee of the Board of Directors.
The option will be issued pursuant to the Restated 2003 Stock Incentive Plan and
will be subject to all of the terms and conditions set forth in the Restated
2003 Stock Incentive Plan and the stock option agreement covering the option.

 

At-Will Employment. If you accept the Company’s offer of employment, your
employment with the Company will be on an “at-will” basis, meaning that either
you or the Company may terminate the employment relationship at any time, for
any reason, with or without cause and with or without notice. Although your job
duties, title, compensation and benefits, as well as the Company’s personnel
policies and procedures, may change from time to time, the “at-will” nature of
your employment may only be changed by a written agreement signed by you and the
Chairman of the Compensation Committee of the Board of Directors of the Company,
which expressly states the intention to modify the at-will nature of your
employment.

 

Invention, Non-Disclosure and Non-Compete Agreement. As a condition of your
employment, you will be required to execute the Company’s Invention,
Non-Disclosure and Non-Compete Agreement, a copy of which is enclosed with this
letter.

 

Proof of Legal Right to Work. For purposes of federal immigration law, you will
be required to provide the Company with documentary evidence of your identity
and eligibility for employment in the United States. Such documentation must be
provided to the Company within three (3) business days of your date of hire, or
our employment relationship with you may be terminated. You may need to obtain a
work visa in order to be eligible to work in the United States. If that is the
case, your employment with the Company will be conditioned upon your obtaining a
work visa in a timely manner as determined by the Company.

 

Company Policies and Procedures. As an employee of the Company, you will be
required to comply with all Company policies and procedures. Violations of the
Company’s policies may lead to immediate termination of your employment.
Further, the Company’s premises, including all workspaces, furniture, documents,
and other tangible materials, and all information technology resources of the
Company (including computers, data and other electronic files, and all internet
and email) are subject to oversight and inspection by the

 

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Company at any time. Company employees should have no expectation of privacy
with regard to any Company premises, materials, resources, or information.

 

Other Agreements and Governing Law. You represent that you are not bound by any
employment contract, restrictive covenant or other restriction preventing you
from entering into employment with or carrying out your responsibilities for the
Company, or which is in any way inconsistent with the terms of this letter.
Please note that this offer letter is your formal offer of employment and
supersedes any and all prior or contemporaneous agreements, discussions and
understandings, whether written or oral, relating to the subject matter of this
letter or your employment with the Company. The resolution of any disputes under
this letter will be governed by Massachusetts law.

 

If this letter correctly sets forth the initial terms under which you will be
employed by the Company, please sign the enclosed duplicate of this letter in
the space provided below, along with the attached form, and return them to me in
the attached envelope. If you do not accept this offer by March 21, 2006 at 5:00
p.m., this offer will be revoked.

 

 

On behalf of NitroMed, Inc.,

 

 

 

 

 

/s/ Mark Leschly

 

 

Mark Leschly

 

Chairman

 

Compensation Committee, Board of Directors

 

The foregoing correctly sets forth the terms of my at-will employment by
NitroMed, Inc.

 

/s/ Jerry Karabelas

 

Date: Effective as of March 20, 2006

Jerry Karabelas

 

 

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