exv10w41



 





Exhibit 10.41


 


 


June 15, 2004




 




 




Mr. William F. Spengler

11980 Thurloe Drive

Timonium, MD 21093



Dear Bill:



I am very pleased to offer you employment with Guilford Pharmaceuticals on the
following terms:





	 	1.	 	Your title will be Executive Vice President, Chief Financial
Officer. In this capacity, you will report directly to me, Chairman,
Chief Executive Officer and President. You will have responsibility
for Finance and Accounting, Treasury, Investor and Public Relations,
Information Services, and Purchasing. You will also work closely
with the Audit Committee of the Board of Directors and serve as a
member of Guilford’s Executive Committee.
	 
	 	2.	 	In consideration of your services, the Company will provide the
following compensation:






	 	a.	 	Salary: Your salary will be $27,083.33 per
month (an annual rate of $325,000), payable in semi-monthly
increments. Your performance and salary will be reviewed
annually according to our performance review program and you
will be eligible for pro-rata consideration for 2004, payable in
March, 2005.
	 
	 	b.	 	Annual Incentive Plan: As an officer of the
Company, you will be eligible to participate in any incentive
plan the Board of Directors may adopt from time to time for
executive officers of the Company. Our incentive plan is based
on attainment of corporate objectives and is further influenced
by individual performance. Your annual target incentive is 40%
and you will be eligible for pro-rata participation for 2004.
Bill, I believe that with your help and leadership we will make
important progress in achieving our goals and the corresponding
incentive awards.





 









 





William F. Spengler

June 15, 2004

Page 2 of 4



 




	 	c.	 	Joining Stock Options: Subject to the approval of the
Board of Directors, the Company will award you options to purchase
125,000 shares of its common stock, subject to the terms and
conditions of the Company’s standard stock option agreement. The
price of the options will be the closing price of Guilford’s stock
on the trading date immediately preceding your first day of
employment with the Company. These options will vest as follows:
25% of your options will vest on the first anniversary of the
grant. The remaining options vest monthly over the next 36
months. Ongoing Option Awards: You will be eligible to receive
further stock options, if any, pursuant to stock option plans
approved by the Board of Directors from time to time.
	 
	 	d.	 	Executive Change in Control Severance
Agreement: As an Executive of Guilford Pharmaceuticals
Inc., you will be entitled to certain benefits in the event of a
change in control of the Company, as set forth in the attached
Executive Change in Control Severance Agreement. Essentially,
under certain conditions, you could receive an amount equal to
two times your then-current annual salary, accelerated vesting
of outstanding options, and Benefits continuation for up to two
years.






	 	3.	 	Additional Benefits. In addition to the compensation
described above, you will be eligible for the following benefits:






	 	a.	 	Supplemental Disability Insurance: In
addition to the group disability insurance offered by Guilford,
as a Vice President of the Company, you will be eligible to
apply for a supplemental long-term disability policy paid for by
Guilford and underwritten by Principal Life Insurance Company.
This plan is subject to standard underwriting requirements.
Please see the attached summary example of this important
benefit.
	 
	 	b.	 	Insurance: The Company offers comprehensive
medical, dental, vision, life, accidental death, short-term and
long-term disability insurance as described in the Employee
Benefits Overview.
	 
	 	c.	 	Financial Planning Assistance: You will be
reimbursed up to $5,000 each calendar year for financial
planning services provided by a qualified tax accountant,
financial planner or other similar service.
	 
	 	d.	 	Vacation and Holidays: You will be entitled
to 20 vacation days during your first year of employment;
thereafter, a vacation day will be added annually, up to a
maximum of 25 vacation days. Also, the Company offers paid
specified holidays (currently 11).





 









 





William F. Spengler

June 15, 2004

Page 3 of 4



 




	 	e.	 	401(k) Plan: You may elect to join Guilford’s
401(k) Plan at the quarterly enrollment date following your date
of hire. You will be eligible to receive the Company match
subject to the terms and conditions of such plan as may be in
effect from time to time. Guilford currently matches 50% of the
first 6% of employee salary deferral in the form of newly issued
Guilford stock. You may reallocate the Company match to other
funds within the plan once the quarterly match has been made.
The annual maximum contribution for 2004 is $13,000. An
additional $3,000 may be contributed for those at age 50,
subject to IRS limitations.
	 
	 	f.	 	Employee Stock Purchase Plan: From time to
time, Guilford offers the opportunity to participate in an
Employee Stock Purchase Plan. If you elect to participate, you
may contribute from 1% to 15% of your regular salary to purchase
            shares under the Plan. However, you may not purchase more than
$25,000 worth of Guilford stock during any calendar year.




	 	4.	 	
Other Conditions of Employment. This offer of
employment at will is conditioned on:










	 	(i)	 	continuing compliance with relevant
requirements under the Immigration Reform Act of 1986,
including presentation of documentation that proves your
identity and legal right to work in the United States within
three days of your start of employment;
	 
	 	(ii)	 	your signing a Patent and Confidentiality
Agreement in connection with your employment by the Company;
	 
	 	(iii)	 	successful completion of a background
investigation; and
	 
	 	(iv)	 	your taking and successfully passing the
included drug screen, which should be scheduled at your
earliest convenience and our expense.






	 	5.	 	Executive Severance: In the event your employment
is terminated by Guilford other than for cause* or change in
control, you would be entitled to severance payments in the form of
a continuation of your then-current base salary for up to 18
months. Such payments would cease upon your commencement of paid
employment or consultancy during the severance period. Receipt of
this benefit is conditioned upon the execution of Separation
Agreement and General Release, a copy of which is attached for your
review.





 









 






William F. Spengler

June 15, 2004

Page 4 of 4



 




During the severance period, the Company would also reimburse you for
the cost of continuation of any health and life insurance coverage
available at the time of the termination of employment, provided that
the Company reserves the right to provide substantially equivalent
alternative coverage to the extent reasonably available upon conversion
from full-time employment. Such continuing coverage is conditioned upon
your reasonable cooperation in complying with any necessary application
procedures. Remaining benefits of employment, including your
eligibility for any incentive program and the vesting of unvested
options would cease at termination and not continue to accrue during the
severance period.


As we discussed Bill, I look forward to working with you and to the
considerable contributions I know you will make on behalf of Guilford. I am
committed to ensuring that we take full advantage of your abilities and to that
end, we will review the breadth and scope of your responsibilities early in the
New Year. Together we can determine what next steps make the most sense for
Guilford.



Bill, all of us at Guilford are very enthusiastic about your joining our team.
Please feel free to review the details of this letter with Marge Contessa or me
should you have any questions. I look forward to seeing you on Wednesday.




Sincerely,




/s/ Craig R. Smith, M.D.

Craig R. Smith, M.D.

Chairman, Chief Executive Officer and President



Enclosures




cc: M. M. Contessa



I accept this offer and agree to comply with all Guilford Pharmaceuticals Inc.
corporate policies and procedures, which may be in effect from time to time.




Agreed to and accepted:




/s/ William F. Spengler

William F. Spengler



/s/ June 17, 2004

Date



“Cause”: (i) conviction of a crime involving fraud or theft against the
Employer or a crime involving moral turpitude; or (ii) a finding by the
Board that an Executive has (x) compromised trade secrets or other
proprietary information of the Employer, (y) willfully failed or refused
to perform material assigned duties, or (z) engaged in gross or willful
misconduct that causes substantial and material harm to the business and
operations of the Employer.