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.


 

















 


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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