Exhibit 10.2
(EPIX LOGO) [b71427epb7142701.gif]
July 25, 2008
Elkan Gamzu, Ph.D.
33 Nobscot Road
Newton, MA 02459
Dear Elkan:
I am pleased to offer you, subject to the terms of this letter agreement (this
“Letter Agreement”), the position of interim Chief Executive Officer of EPIX
Pharmaceuticals, Inc. (the “Company”) for a start date of July 28, 2008. Except
as expressly provided herein, this Letter Agreement shall fully supersede all
previous agreements, arrangements or understandings between you and the Company,
including, but not limited to, the Service Agreement between the Company and
enERGetics, LLC (the “Service Agreement”; provided that Section 5 of the Service
Agreement shall remain in full force and effect.
1. Position
You will serve as interim Chief Executive Officer of the Company and will report
directly to the Company’s Board of Directors.
2. Extent of Service
During your employment, you shall devote substantially your full working time
and best efforts to the business and affairs of the Company, provided that
nothing contained in this Section 2 will be deemed to prevent or limit your
right to manage your personal investments on your own personal time provided
such activities do not create a conflict of interest with your employment at the
Company. You shall not engage in other activities that interfere with your
duties to the Company or knowingly take any action contrary to the best
interests of the Company. Notwithstanding the foregoing, the Company
acknowledges that you serve on the Board of Directors of three corporations:
Pharmos Corp, NeuroHealing Pharmaceuticals, Inc., and AviTx, Inc. and the
Company further acknowledges and agrees that you will be permitted hereunder to
devote reasonable amounts of your working time to serving as a Director of such
entities and to providing consultative services to NeuroHealing Pharmaceuticals,
Inc., and AviTx, Inc. You agree to notify the Board of Directors of the Company
in the event that you are unable, or that you anticipate that you will become
unable, to perform your obligations hereunder because of your commitments to
Pharmos Corp, NeuroHealing Pharmaceuticals, Inc., and AviTx, Inc.
3. Work Location

 

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Elkan Gamzu, Ph.D.
July 25, 2008
Page 2
You will work out of the Company’s office in Lexington, Massachusetts. You agree
to travel as reasonably required.
4. Base Salary.
You will receive an initial base salary of $11,538.46 bi-weekly, which is
equivalent to an annual salary of $300,000, less applicable deductions and
withholdings. Your salary will be paid in accordance with the Company’s normal
payroll practices, as may be amended from time to time.
5. Benefits
You will be eligible to participate in the employee benefits and insurance
programs generally made available to the Company’s full-time employees, subject
to your meeting the eligibility requirements of the plans and programs. Nothing
in this Letter Agreement shall be construed to require the Company to adopt or
retain such plans or programs.
6. Equity
Subject to approval by the Board of Directors, you will be granted an Incentive
Stock Option to purchase three hundred thousand (300,000) shares of the
Company’s common stock (the “Option”), pursuant to the terms of the Company’s
2008 Stock Option and Incentive Plan (the “Plan”). The Option will vest based on
your continued employment with the Company as follows. The shares subject to the
Option shall vest in nine (9) tranches. The first such tranche, which shall be
in the amount of thirty three thousand three hundred and thirty-six (33,336)
shares, shall vest on the last day of July 2008. The remaining eight
(8) tranches, each of which shall be in the amount of thirty three thousand
three hundred and thirty-three (33,333) shares, shall vest at the rate of one
tranche per month on the last day of each of the next eight (8) consecutive
months commencing with August 2008. The exercise price of the Option will be
equal to the closing price of the Company’s common stock on the last trading day
of the month in which the Option is granted (the “Grant Date”), pursuant to the
Company’s Equity Award Grant Policy. The Option shall, in all events, be subject
to the terms of the Plan and the approved form of Incentive Stock Option
Agreement thereunder1, including that the Option shall vest in full if there is
a change of control and, within eighteen (18) months following such change of
control, the Company terminates your employment without cause or you terminate
your employment with good cause (for example, because you are demoted), all as
more fully set forth in the Plan and your Incentive Stock Option Agreement.
7. Representations
This offer is conditioned on your representation that you are not subject to any
confidentiality, non-competition agreement or any other similar type of
restriction that may affect your ability to
 

1   Please note that there is a $100K limitation on ISO grants.

 

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Elkan Gamzu, Ph.D.
July 25, 2008
Page 3
devote full time and attention to your work at the Company. You further
represent that you have not used and you will not use or disclose any trade
secret or other proprietary right of any previous employer or any other party.
9. Conditions to Employment.
You agree that the following items are conditions to your employment with the
Company:
          (a) You must execute and deliver and abide by the terms of the
enclosed Employee Non-Competition, Non-Solicitation, Confidentiality and
Assignment Agreement;
          (b) Your employment with the Company shall be on an at-will basis. In
other words, you or the Company may terminate employment for any reason and at
any time, with or without notice. You and the Company acknowledge and agree that
your position is on an interim basis and that the Company expects to appoint a
permanent Chief Executive Officer on a future date.
          (c) The Company will deduct from any payments it otherwise is to make
to you pursuant to the terms of this Letter Agreement or otherwise any
withholding taxes and other deductions required by law. Nothing in this Letter
Agreement shall be construed to obligate the Company to compensate you for
adverse tax consequences associated with the terms of this Letter Agreement.
          (d) This offer of employment is contingent upon compliance with the
Immigration Act of 1986.
We look forward to you joining the EPIX team. Please confirm your acceptance of
this offer of
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Elkan Gamzu, Ph.D.
July 25, 2008
Page 4
employment by signing below and returning a copy to me no later than July 25,
2008.

            Very truly yours,
      /s/ Robert Perez       Robert Perez      Chairman of the Compensation
Committee
EPIX Board of Directors     

Enclosures
I acknowledge and accept the terms and conditions of this Letter Agreement:

     
/s/ Elkan Gamzu, Ph.D.
 
   
Elkan Gamzu, Ph.D.
  Date: July 25, 2008