EXHIBIT 10.1
 

 
March 7, 2012
Jennifer Simpson, PhD
765 Warren Street
Westfield, New Jersey 07090

Re:           Employment Offer

 
Dear Jennifer:
 
Delcath Systems, Inc. (“Delcath” or “Company”) is pleased to offer you the
position of Executive Vice President, Global Marketing at the New York, NY
location of Delcath.  This position reports directly to the President and Chief
Executive Officer.  Your start date is no later than March 26, 2012.  This
letter is written to confirm the details of our offer to you.   The terms of
your employment offer include the following:
 
 
1.
Your initial rate of base salary will be paid at an annualized rate of $285,000
per year.  Your base salary will be reviewed periodically and may be increased
or decreased.  In the event you are awarded a merit increase in 2013, any such
increase will be pro-rated to reflect your start date of employment.  The base
salary is intended to compensate you for all hours worked.  Compensation and
benefits are subject to applicable taxes, deductions, and withholdings

 
 
2.
You will also be eligible to earn an annual performance bonus based upon the
achievement of annual performance goals according to the terms of the Company’s
annual incentive plan (“AIP”).   Your annual incentive target bonus will be up
to 40% of your gross annual base salary.  You will be eligible to participate in
the Company’s AIP for 2012 and your bonus award, if any is earned, will be
pro-rated for 2012 from your start date of employment.

 
 
3.
On your first day of employment with the Company, you will be granted a stock
option to purchase 60,000 shares of the Company’s common stock at a price per
share equal to the closing price on the date of grant (“Option”).  The Option
will be granted under the 2009 Stock Incentive Plan (“2009 Plan”) and shall be
subject to the terms of the 2009 Plan and such further terms and conditions as
set forth in a written stock option grant letter to be provided by the Company
to you to evidence the Option.  The Option will vest in three (3) equal
installments (1/3 each) over a three (3) year period on the first, second and
third anniversary of your employment start date with Delcath.  The Option shall
vest in full and become immediately exercisable in the event of a Change of
Control (“COC”) as defined in the 2009 Plan if the Option has not otherwise
already expired or been terminated.  The Option will be a non-qualified option
and is not intended to qualify as an incentive stock option within the meaning
of Section 422 of the Internal Revenue Code.

 

 
 

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4.
On your first day of employment with the Company you will also be granted 7,500
shares of restricted stock (the “Restricted Stock Award”).  The Restricted Stock
Award will vest in three (3) equal installments (1/3 each) over a three (3) year
period on the first, second and third anniversary of your employment start date
with Delcath. The Restricted Stock Award shall be granted under the Company’s
2009 Plan and shall be subject to the terms of the 2009 Plan and such further
terms and conditions as set forth in a written restricted stock agreement to be
provided by the Company to you to evidence the Restricted Stock Award under the
2009 Plan. The Restricted Stock Award shall vest in full in the event of a COC
as defined in the 2009 Plan if the Restricted Stock Award has not otherwise
already expired or terminated.

 
 
5.
You will receive a Special One-Time Bonus of $50,000 (“Special Bonus”) payable
within your first payroll cycle.  If you are terminated for cause or resign
prior to the first anniversary of your date of employment, you shall be
obligated to return a pro rata portion of the Special Bonus to the Company based
upon the number of days remaining until your first anniversary with the Company,
divided by 365.  (For example, if you resigned or were terminated for cause on
your 300th day of employment, you would owe the Company 65/365ths x $50,000, or
$8,904.11.)

 
 
6.
As of your first day of employment with Delcath, you will be eligible to earn
four  (4) weeks of paid vacation annually (which will accrue on a monthly
basis), according to the terms of Delcath’s vacation policy, provided that your
vacation days will be pro-rated for the 2012 calendar year based upon your start
date of employment with Delcath.

 
 
7.
You will be entitled to participate in various Company benefit
programs.  Company benefits may be modified or terminated from time to time in
the Company’s sole discretion.  At present, you will be eligible for the
following Company benefits, subject to the terms and conditions of the
applicable plans or policies:

 
 
i.
Health and Dental insurance;

 
 
ii.
Life, Accidental Death and Dismemberment, Short and Long Term Disability
insurance;

 
 
iii.
Participation in the Company’s 401K retirement savings plan;

 
 
iv.
Participation in the pre-tax transit program, if available;

 
 
v.
Participation in a Flexible Spending Account.

 
In case of a conflict between any benefit described anywhere in this agreement
and the applicable plan or policy, the terms of the applicable plan or policy
will control.
 
 
8.
Your employment will at all times be subject to Delcath’s policies and
procedures as in effect from time to time.

 

 
 

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9.
The Company may terminate your employment at any time and for any or no reason,
with or without cause or advance notice, by giving you written notice of such
termination. Similarly, you may terminate your employment with the Company at
any time, for any or no reason, upon fourteen (14) days written notice to the
Company, during which time you shall provide reasonable transition assistance to
the Company. Your employment with the Company will be as an employee “at
will”.  As such, no written or verbal statement will be construed to create a
real or implied contract of continued employment.

 
 
10.
Upon termination of your employment for any reason, all compensation and
benefits will cease immediately (except as specifically provided in Section 11
below), and you will receive no additional payments from the Company other than
your accrued base salary through your last day of work and accrued and unused
vacation benefits earned through the date of your termination.

 
 
 
11.
If, and only if, the Company terminates your employment without “cause” (as
defined in below), you will be entitled to the following:

 
 
a.           severance payments equal to twelve (12) months of your annualized
base salary (“Severance Payment”), paid in equal installments over the course of
the 12-month period following your employment; provided, however, that in order
to receive the Severance Payment and the other benefits described in Sections 11
b. and 11 c. below, you will be required to execute and not rescind a general
release in favor of the Company in a form prepared by and acceptable to the
Company.  As used in this agreement, “cause” shall mean that one or more of the
following has occurred: (1) you have committed a crime punishable as a felony;
(2) you have engaged in fraud, dishonesty, gross negligence, or other
misconduct, including but not limited to use of controlled substances; (3) you
have failed to perform or uphold your responsibilities under this agreement or
comply with reasonable directives of the Board; or (4) you have materially
breached this agreement or any other agreement with the Company, including but
not limited to the Confidentiality and Restrictive Covenant Agreement; (5) you
have violated a written Company policy, including but not limited to violation
of the Code of Ethics; or (6) you have engaged in conduct that reflects poorly
upon you or the Company.
 
 
b.           continuation of the group health, dental, vision, and prescription
drug coverages in which you are enrolled at the time your employment terminates
with the Company, pursuant to the continuation coverage requirements of the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”); Company agrees to
subsidize 100% of the COBRA premiums of such COBRA coverage until the twelve
month anniversary of the date upon which your employment with the Company
terminates, provided you are eligible for and elect such continuation
coverage(s).
 
 
c.            to the extent the date of your termination of employment occurs
after the close of a calendar year but before the bonus payment date for
 

 
 

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such year, you shall be eligible to receive any annual incentive bonus award for
the completed calendar year to the extent you have earned such award based upon
the achievement of objectives in accordance with the terms and conditions of the
Company’s annual incentive plan.

 
 
12.
This offer is a conditional offer contingent upon Delcath’s completion of a
satisfactory background check and drug screen by you.  This offer is also
conditioned upon your acceptance and agreement to the enclosed Confidentiality
and Restrictive Covenant Agreement.  Please sign both copies of the
Confidentiality and Restrictive Covenant Agreement and return them to me for
signature on behalf of Delcath.

 
 
13.
On your first day, you will be required to complete the U.S. Government
Eligibility form (Form I-9) and provide documents that verify your identity and
employment eligibility.  Enclosed is a copy of the documents that may be
provided to establish your right to work in the United States.

 
 
14.
This agreement is governed by and will be construed in accordance with the laws
of the State of New York.  The parties agree that any action relating to this
agreement will be instituted and prosecuted exclusively in a federal or state
court located in the State of New York, New York County.  Delcath and you
irrevocably consent to submit to the personal jurisdiction of the state and
federal courts of New York and agree not to bring any action relating to this
agreement in any other court.

 
 
15.
When signed by you, this offer letter will become a legally binding
agreement.  This agreement (including the Confidentiality and Restrictive
Covenant Agreement, the Stock Option grant letter and the Restricted Stock grant
letter referred to above) contains the entire agreement relating to the subject
matter hereof.  No modification, discharge or waiver of this agreement will be
binding on Delcath unless agreed to in writing signed by an officer of
Delcath.  This agreement automatically will inure to the benefit of Delcath, its
successors and assigns.

 

We are pleased that you will be joining Delcath and are confident your skills
and talents will become valued assets to our organization.  If you agree with
the terms outlined above, please sign below where indicated whereupon this
letter will become a binding agreement.  Please return the original to my
attention by March 13, 2012, along with the two signed copies of the Employee
Confidentiality and Restrictive Covenant Agreement.
 
We look forward to having you join our team.
 
Sincerely,
 
/s/ Peter Benoit
 
Peter Benoit
Director, Human Resources
 

 
 

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I, Jennifer Simpson PhD, agree and accept this offer of employment with Delcath
Systems, Inc.
 

 
/s/ Jennifer Simpson
 
Date:
3/9/12
       
(Signature)
     

 
 
 

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