EXHIBIT 10.1

Offer Letter

 

LOGO [g49253img001.jpg]      

115 Sansome Street, Suite #310

San Francisco, California 94104

  

(415) 415-7880 Tel.

(415) 875-7075 Fax

25 April 2008

Jane Moffitt

460 Nimitz Avenue

Redwood City, CA 94061

 

Re: Offer of Employment

Dear Jane:

On behalf of Nile Therapeutics, Inc. (the “Company”), I am pleased to confirm
our verbal offer of employment to you for the position of Vice President,
Regulatory Affairs starting on May 19, 2008, on an at-will basis. You shall have
such powers and perform such duties as are customarily performed by a Vice
President, Regulatory Affairs, and you shall report directly to Peter Strumph,
Chief Executive Officer.

You will be paid an annual base salary of $250,000, which will be paid in
accordance with the Company’s normal payroll procedures. In addition, you will
be eligible to participate in various Company fringe benefit plans made
available to the Company’s employees, including the Company’s medical and
dental, disability insurance and vacation programs. You will be entitled to 15
business days of vacation per year. The Company will reimburse you for all
normal, usual and necessary expenses incurred in furtherance of the business and
affairs of the Company, including reasonable travel and entertainment, upon
timely receipt by the Company of appropriate vouchers or other proof of your
expenditures and otherwise in accordance with any expense reimbursement policy
as may from time to time be adopted by the Company.

Subject to the approval of the Company’s Board of Directors (the “Board”), you
will be granted an option to purchase 200,000 shares of the Company’s common
stock under the Company’s 2005 Stock Option Plan, as amended to date (the
“Plan”), at an exercise price per share equal to the fair market value of a
share of our common stock on the grant date as determined by the Board. Shares
subject to this option will vest over a period of four years, subject to your
continued service to the Company, with one-fourth (1/4th) of the shares vesting
after one year and the remaining shares vesting in thirty six (36) equal monthly
installments thereafter (the “Employment Options”).

Subject to the approval of the Board, you will also be granted a
performance-based stock option (the “Performance Options”) to purchase up to
100,000 shares of the Company’s common stock under the Plan at an exercise price
per share equal to the fair market value of a share of our common stock on the
grant date as determined by the Board. Subject to your continued service to the
Company, shares subject to this option will vest in an amount equal to up to
25,000 shares per year, or a prorated portion thereof for periods wherein you
are employed for less than one year, upon the certification by the Board or
Compensation Committee thereof of the achievement of certain annual corporate
and individual milestones for a specified year (the “Performance Milestones”),
which are determined and may be modified by the Board or Compensation Committee;
provided, that, the option on any of such 25,000 shares that could have vested
in a year, or a prorated portion thereof for periods wherein you are employed
for less than one year, which remain unvested following such a Board or
Compensation Committee determination, shall immediately terminate with respect
to any then unvested shares.

 

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All options referred to in this letter will be subject to the terms and
conditions of the Plan and our standard form of stock option agreement, which
you will be required to sign as a condition of receiving the option.

You will also be entitled to receive an annual bonus of up to 30% of your annual
base salary, based upon the successful accomplishment of individual and
corporate performance goals to be set annually by the Company’s Compensation
Committee, less applicable withholdings, payable in accordance with the
Company’s normal and customary payroll procedures. Any performance bonus shall
be payable on the date determined by the Compensation Committee.

Immediately following a Change in Control (as defined below), all Employment
Options and any subsequently granted options that vest over a period of time,
and not based on performance, shall immediately vest and shall become
exercisable immediately and shall remain exercisable for a period equal to the
lesser of five (5) years from the date of the Change of Control event or ten
(10) years from the date of grant of such options; provided, that, for the
avoidance of doubt, the Performance Options and any subsequently granted options
that vest based on certain corporate and individual milestones shall not
immediately vest based upon the Change of Control.

If within the twelve (12) month period following a Change in Control (as defined
below), you experience a Covered Termination or a Constructive Termination, and
if, within sixty (60) days of such Covered Termination or Constructive
Termination, you execute and do not revoke during any applicable revocation
period a general release of all claims against the Company and its affiliates in
a form acceptable to the Company, then, as a severance benefit, you shall be
entitled to (i) six (6) months of your base salary then in effect, less
applicable withholdings, payable in full within thirty (30) days of your last
day of employment (such six (6) months of your base salary to be paid in
connection with a Change in Control even if the Change in Control constitutes a
Low Valuation Transaction (as defined below)), and (ii) a prorated portion of
your maximum annual bonus determined by calculating the number of days that have
elapsed from the beginning of the year of your Covered Termination or
Constructive Termination to the date of your Covered Termination or Constructive
Termination, less applicable withholdings, payable in full within thirty
(30) days of your last day of employment. You understand and agree that, other
than as required under applicable law, you shall not be entitled to any other
severance pay, severance benefits, or any other compensation or benefits other
than as set forth in this letter in the event of such a termination. In the
event that you have a legal right to pay in lieu of termination notice, or to
severance pay, the severance pay set forth herein shall be reduced by the amount
of such legally required payments.

For purposes of clarity, if following a Change of Control your employment is
terminated by the Company for Cause, or if you voluntarily terminate your
employment with the Company, you shall not be entitled to any severance pay,
severance benefits, or any compensation or benefits from the Company whatsoever,
other than as required under applicable law.

For purposes of this letter, the term “Cause” means the occurrence by you of any
one or more of the following events: (i) gross negligence or willful misconduct
in the performance of your duties to the Company; (ii) repeated unexplained or
unjustified absence from the Company; (iii) a material and willful violation of
any federal or state law; (iv) commission of any act of fraud with respect to
the Company; (v) conviction of a felony or a crime involving moral turpitude
causing material harm to the standing and reputation of the Company; or (vi) a
material failure to perform your duties or to follow the instructions of the
Chief Executive Officer, in each case as determined in good faith by the Chief
Executive Officer.

For purposes of this letter, a “Change in Control” shall mean a transaction or
series of transactions (other than an offering of the Company’s stock to the
general public through a registration statement filed with the Securities and
Exchange Commission) whereby any “person” or related “group” of “persons” (as
such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) (other than the Company, any of its
subsidiaries, an employee benefit plan maintained by the Company or any of its
subsidiaries

 

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or a “person” that, prior to such transaction, directly or indirectly controls,
is controlled by, or is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of securities of the Company possessing more than 50% of the
total combined voting power of the Company’s securities outstanding immediately
after such acquisition. Notwithstanding the foregoing, no transaction shall be
considered a Change of Control for the purposes of this letter: (A) if the
stockholders existing prior to such transaction(s) hold in the aggregate more
than fifty percent (50%) of the securities or assets of the surviving or
resulting company; (B) in connection with a private placement of equity
securities of the Company in connection with a financing of the Company’s
on-going operations; or (C) for any transaction ascribing a valuation to the
Company of less than One Hundred Twenty Five Million Dollars ($125,000,000) (a
“Low Valuation Transaction”); provided, however, that such a transaction may be
considered as part of a series of transactions that gives rise to a Change of
Control pursuant to the terms of this letter.

For purposes of this letter, the term “Constructive Termination” means your
resignation which constitutes a “separation from service” within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and
the Department of Treasury regulations and other guidance promulgated thereunder
within ninety (90) days of the first to occur of one or more of the following
events which remains uncured thirty (30) days after your delivery of written
notice thereof: (A) any change in your position with the Company that diminishes
in any material respect the duties and responsibilities of your position as in
effect immediately preceding such action; provided, however, that a reduction in
duties, level of responsibilities or the requirements of your position solely by
virtue of the Company being acquired and made part of a larger entity shall not
by itself constitute grounds for a Constructive Termination; (B) any material
reduction by the Company in your base salary or in the percentage of your annual
bonus opportunity as a percentage of your base salary; or (C) the Company’s
relocation of your principal office to a place more than a material distance
from the Company’s present headquarters (except that required travel on the
Company’s business to an extent substantially consistent with your present
business travel obligations shall not be considered a relocation).

For the purposes of this letter, the term “Covered Termination” means the
termination of your employment with the Company effected by the Company other
than for Cause, which constitutes a “separation from service” within the meaning
of Section 409A of the Code and the Department of Treasury regulations and other
guidance promulgated thereunder.

While we look forward to an extended and mutually rewarding association, and
notwithstanding any of the above, your employment with the Company is “at will.”
This means that you are free to terminate your employment at any time and for
any reason and that the Company can terminate your employment at any time and
for any reason that is not illegal under state or federal law, without any
continued obligations to you other than to pay you all accrued but unpaid base
salary, performance bonus and expense reimbursement through the date of
termination. This policy can be changed only by a written contract signed by the
President or Chief Executive Officer of the Company. No oral commitments to you
regarding your employment are valid, whether made now or in the future.

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. That documentation must be provided to the
Company within three business days of your date of hire, or our employment
relationship with you may be terminated. You will also be required to sign our
standard confidential information and invention assignment agreement
(“Inventions Agreement”) upon the start of your employment.

In the event of any dispute or claim relating to or arising out of our
employment relationship or this letter agreement (including, but limited to, any
claims of breach of contract, wrongful termination or age, sex, race or other
discrimination or harassment under any state or federal statute or common law),
you and the Company agree that all such disputes shall be fully and finally
resolved by binding

 

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arbitration conducted by the American Arbitration Association (“AAA”) in San
Francisco County, California in accordance with the then existing AAA
arbitration rules. Either of us, however, may obtain injunctive relief in court
to prevent irreparable harm pending the conclusion of any such arbitration. The
Company will pay any fees charged by an arbitrator to hear this matter.

Please sign and date this letter on the spaces provided below to acknowledge
your acceptance of the terms of this agreement and return the original to Peter
Strumph by April 28, 2008, after which time this offer will expire. This letter
agreement, and the Inventions Agreement referred to above, constitute the entire
agreement between you and the Company regarding the terms and conditions of your
employment, and they supersede all prior negotiations, representations or
agreements between you and the Company. The provisions of this agreement may
only be modified by a document signed by you and an authorized officer of the
Company.

We look forward to working with you at the Company. Please feel free to call me
at (415) 875-7881 if you have any questions. If you find the foregoing
arrangement acceptable, kindly sign below and return to me a copy of this
letter.

 

Sincerely, Nile Therapeutics, Inc. By:   /s/ Peter Strumph   Peter Strumph  
Chief Executive Officer

I agree to and accept employment with Nile Therapeutics, Inc. on the terms and
conditions set forth in this agreement.

 

Date: April 25, 2008     /s/ Jane Moffitt

 

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