exhibit_10-5.htm


    Exhibit
      10.5

    AMENDED
      AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

     

    This
      Amended And Restated Executive Employment Agreement
(“Agreement”), originally made by and between
Bionovo, Inc. (the “Company”)
      and
Isaac Cohen (“Executive”), effective
      as of January 1, 2008 (the “Effective Date”), is
      hereby amended and restated in its entirety effective as of January 1, 2008
      to
      read as follows:

     

    Recitals

     

    Whereas,
      Executive is currently employed by the Company as its Chief Executive
      Officer;

     

    Whereas,
      Executive’s prior employment agreement with the Company, dated July 1, 2004,
      expired as of July 1, 2007; and

     

    Whereas,
      the Company desires to continue to employ Executive as its Chief Executive
      Officer, and Executive is willing to continue such employment by the Company,
      on
      the terms and subject to the conditions set forth in this
      Agreement.

     

    Agreement

     

    Now,
      Therefore, in consideration of the mutual promises and subject to the
      terms and conditions set forth herein, the parties hereto agree as
      follows:

     

    
      	
              1.  

            	
              POSITION;
                DUTIES; LOCATION.

            


    

     

    Executive
      agrees to be employed by and to serve the Company as its Chief Executive
      Officer, and the Company agrees to employ Executive in such
      capacities.  Executive shall have the powers and shall perform the
      services and duties that are customarily associated with these
      positions.  Executive agrees to devote substantially all of
      Executive’s time, energy and ability to the business of the
      Company.  Executive may devote such time that Executive deems
      appropriate for managing Executive’s own investment portfolio and may with the
      approval of the Board of Directors of the Company (the
“Board”) be a member of the board of directors of a
      for-profit company, non-profit, civic or charitable organizations so long as
      such service does not materially interfere or conflict with Executive’s duties
      hereunder.  Executive shall perform the duties assigned to Executive
      to the best of Executive’s ability and in the best interests of
      Company.  Executive will report to, be responsible to and obey the
      lawful directives of the Board.  Executive shall be based in
      Emeryville, California, except for required travel on the Company’s
      business.

     

    
      	
              2.  

            	
              COMPENSATION
                AND OTHER BENEFITS.

            


    

     

    In
      consideration of Executive’s employment, and except as otherwise provided
      herein, Executive shall receive from the Company the compensation and benefits
      described in this Section 2.  Executive authorizes the Company to
      deduct and withhold from all compensation paid to Executive any and all sums
      required to be deducted or withheld by the Company pursuant to the provisions
      of
      any federal, state, or local law, regulation, ruling, or ordinance, including,
      but not limited to, income tax withholding and payroll taxes.

     

    2.1  Base
      Salary.  Subject to the terms and conditions set forth
      herein, the Company agrees to pay Executive an annual base salary equal to
      Three
      Hundred Seventy-Five Thousand Dollars ($375,000), less standard payroll
      deductions and withholdings, payable on the Company’s regular payroll schedule
      (as may be adjusted pursuant to this Agreement from time to time, the
“Base Salary”).  The Company agrees that
      Executive’s base salary will be reviewed annually by the Board and, if
      appropriate (as determined by the Board in its sole discretion), will be
      increased therefrom.

     

    2.2  Bonus.  Executive
      shall be eligible to earn a bonus for each calendar year in an amount up to
      forty percent (40%) of Executive’s Base Salary.  Whether Executive
      receives any such bonus, and the amount of any such bonus, shall be determined
      by the Board (or a committee thereof) in its sole discretion, based upon its
      evaluation of Executive’s performance and the performance of the Company during
      the year, and such other factors and conditions as the Board (or a committee
      thereof) deems relevant.  Any such bonus shall be payable within the
      first sixty (60) days of the calendar year immediately following the year for
      which the bonus has been awarded.  Bonuses are not deemed earned and
      payable unless Executive is employed by the Company on the payment
      date.  Accordingly, Executive will not earn any bonus (including a
      prorated bonus) for the year if Executive’s employment terminates for any reason
      before any bonus is paid.

     

    2.3  Equity.  Executive
      shall be eligible for additional equity grants in the future from time to time
      as shall be determined by the Board (or a committee thereof) in its sole
      discretion, and subject to such vesting, exercisability, and other provisions
      as
      the Board (or a committee thereof) may determine in its sole
      discretion.

     

    2.4  Paid
      Time Off.  Executive shall be entitled to accrue four (4)
      weeks of paid vacation during each calendar year, prorated for partial
      years.  Any accrued vacation not taken during the year may be carried
      forward to subsequent years; provided that Executive may not accrue more than
      ten (10) weeks of unused vacation at any time.  Executive will be
      eligible for twenty (20) sick days per calendar year.  Sick days will
      not be carried over to the following year, nor will they be paid out upon
      termination.

     

    2.5  Automobile.  The
      Company will pay for Executive’s leased vehicle in an amount not to exceed Seven
      Hundred Fifty Dollars ($750) per month.

     

    2.6  Other
      Benefits.  Executive shall be eligible to participate in such
      of the Company’s benefit plans as may be made available to executives of the
      Company, including, without limitation, health plans, dental plans, vision
      plans
      and retirement plans (if any), subject to the terms and conditions of such
      plans.  With respect to life insurance, the Company shall pay
      Executive’s premiums for up to $1,000,000 in coverage, with Executive
      responsible for paying the premiums for any coverage over that
      amount.

     

    2.7  Reimbursement
      for Expenses.  The Company shall reimburse Executive for all
      reasonable out-of-pocket business expenses incurred by Executive for the purpose
      of and in connection with the performance of her services pursuant to this
      Agreement.  Executive shall be entitled to such reimbursement upon the
      presentation by Executive to the Company of vouchers or other statements
      itemizing such expenses in reasonable detail consistent with the Company’s
      policies.

     

    
      	
              3.  

            	
              TERMINATION;
                SEVERANCE.

            


    

     

    3.1  Termination.  Either
      the Company or Executive may terminate Executive’s employment at any time, with
      or without Cause or Good Reason, subject to the terms and conditions set forth
      herein.

     

    3.2  Compensation
      and Benefits upon Termination.  Upon the termination of
      Executive’s employment for any reason, the Company shall pay Executive all of
      Executive’s accrued and unused vacation and unpaid Base Salary earned through
      Executive’s last day of employment (the “Separation
      Date”).

     

    3.3  Termination
      for Cause.  The Company shall be entitled to terminate
      Executive’s employment for Cause (as defined herein) immediately upon written
      notice to Executive.  In that event, the Company shall pay Executive
      the compensation set forth in Section 3.2 of this Agreement, and Executive
      shall
      not be entitled to any further compensation from the Company, including
      severance benefits.

     

    3.4  Termination
      Without Cause.  The Company shall be entitled to terminate
      Executive’s employment without Cause (as defined herein) immediately upon
      written notice to Executive.  In that event, and provided such
      termination constitutes a “separation from service” (within the meaning of
      Treasury Regulation Section 1.409A-1(h)), Executive shall be eligible for the
      following severance benefits:

     

    (a)  Severance
      Payments.  The Company shall pay Executive severance in an
      amount equal to (i) One year of Executive’s Base Salary, plus (ii) an amount
      equal to Executive’s target bonus for the year, prorated for the number of
      months during the calendar year that Executive was actually employed by the
      Company.  This amount shall be paid in substantially equal
      installments on the Company’s regular payroll schedule (subject to standard
      deductions and withholdings) over the twelve (12) month period following the
      Separation Date; provided, however, that no payments will be made prior to
      the
      effective date of the release referenced in Section 3.8 below.  On the
      first payroll date following the effective date of the release, the Company
      will
      pay Executive the payments that Executive would have received on or prior to
      such date in a lump sum under the original schedule but for the delay in the
      effectiveness of the release, with the balance of the cash severance being
      paid
      as originally scheduled.  Each such installment will be deemed a
      separate “payment” for purposes of Section 409A of the Internal Revenue
      Code.

     

    (b)  COBRA
      Payments.  If Executive timely elects continued coverage
      under COBRA, then the Company shall pay the COBRA premiums necessary to continue
      Executive’s health insurance coverage in effect for herself and her eligible
      dependents on the Separation Date for a period of twelve (12) months following
      the Separation Date, provided that such COBRA reimbursement shall terminate
      on
      such earlier date as Executive is no longer eligible for COBRA
      coverage.

     

    (c)  Termination
      Without Cause Following a Change in Control.  If the Company
      terminates Executive’s employment without Cause on or within twelve (12) months
      after the effective date of a Change in Control (as defined herein), and
      provided such termination constitutes a “separation from service” (within the
      meaning of Treasury Regulation Section 1.409A-1(h)), then Executive shall
      receive the severance payments set forth in Section 3.4(a) and (b), on the
      schedules set forth in those Sections, provided, however, that the
      target bonus amount described in Section 3.4(a) shall not be prorated, and
      therefore Executive shall receive an amount equal to Executive’s target bonus
      for the year in which Executive’s employment is
      terminated.  Additionally, the Company shall accelerate the vesting of
      any unvested shares subject to any stock options granted to Executive after
      the
      Effective Date such that all shares shall be deemed fully vested and exercisable
      as of Executive’s last day of employment.

     

    3.5  Termination
      upon Death or Disability.  The Agreement shall terminate
      immediately upon Executive’s death or Disability (as defined
      herein).  In that event, the Company shall pay Executive the
      compensation set forth in Section 3.2 of this Agreement, and Executive shall
      not
      be entitled to any further compensation from the Company, including severance
      benefits.

     

    3.6  Resignation
      Without Good Reason.  Executive shall be entitled to resign
      without Good Reason (as defined herein) at any time upon written notice to
      the
      Company thirty (30) days prior to the effective date of such resignation, which
      date shall be specified in Executive’s notice of resignation.  In that
      event, the Company shall pay Executive the compensation set forth in Section
      3.2
      of this Agreement, and Executive shall not be entitled to any further
      compensation from the Company, including severance benefits.

     

    3.7  Resignation
      for Good Reason.  Executive shall be entitled to resign for
      Good Reason (as defined herein) at any time.  In that event, and
      provided such termination constitutes a “separation from service” (within the
      meaning of Treasury Regulation Section 1.409A-1(h)), Executive shall be entitled
      to the compensation set forth in Section 3.2 of this Agreement, as well as
      the
      severance benefits set forth in Sections 3.4(a) and (b) of this
      Agreement.  If such resignation for Good Reason occurs within twelve
      (12) months after the effective date of a Change in Control (as defined herein),
      then Executive shall receive the severance benefits as set forth in Section
      3.4(c).

     

    3.8  Release.  As
      a condition to receipt of any severance benefits under this Agreement, Executive
      shall be required to provide the Company with an effective general release
      of
      any and all known and unknown claims against the Company and its officers,
      directors, Executives, shareholders, parents, subsidiaries, successors, agents,
      attorneys and affiliates, in a form acceptable to the
      Company.  Executive must execute this release, and allow it to become
      effective, within thirty (30) days after Executive’s last day of employment with
      the Company.

     

    3.9  Section
      409A Compliance.  Notwithstanding the foregoing, if the
      Company (or, if applicable, the successor entity thereto) determines that the
      severance payments and benefits provided above upon a separation from service
      constitute “deferred compensation” under Section 409A of the Internal Revenue
      Code (together, with any state law of similar effect, “Section 409A”) and if
      Executive is a “specified employee” of the Company or any successor entity
      thereto as of the separation from service, as such term is defined in Section
      409A(a)(2)(B)(i) (a “Specified Employee”), then,
      solely to the extent necessary to avoid the incurrence of the adverse personal
      tax consequences under Section 409A, the timing of the severance (or any portion
      thereof) shall be delayed as follows: on the earlier to occur of (i) the date
      that is six months and one day after the date of separation of service or
      (ii) the date of Executive’s death (such earlier date, the
“Delayed Initial Payment Date”), the Company (or the
      successor entity thereto, as applicable) shall (A) pay to Executive a lump
      sum
      amount equal to the sum of the severance payments that Executive would otherwise
      have received through the Delayed Initial Payment Date if the commencement
      of
      the payment of the severance had not been delayed pursuant to this paragraph
      and
      (B) commence paying the balance of the severance in accordance with the payment
      schedule set forth above.  It is intended that each installment of the
      severance payments and benefits provided for in this Agreement is a separate
      “payment” for purposes of Section 409A. For the avoidance of doubt, it is
      intended that the severance satisfies, to the greatest extent possible, the
      exemptions from the application of Section 409A provided under Treasury
      Regulation 1.409A-1(b)(4) and 1.409A-1(b)(9).

     

    3.10  Definitions.  For
      purposes of this Agreement, the following definitions shall apply:

     

    (a)  Disability.  The
      term “disability” shall mean a physical or mental
      disability that renders Executive unable to perform one or more of the essential
      functions of her job, as determined by the Board in its sole discretion, for
      a
      period of 180 days during any 365-day period.

     

    (b)  Cause.“Cause”
      shall mean: (i) theft, forgery, fraud, misappropriation, embezzlement, moral
      turpitude or any other act of material misconduct by Executive against the
      Company or any of its affiliates which causes material damage to the Company;
      (ii) willful and knowing violation by Executive of any rules or regulations
      of
      any governmental or regulatory body, which is or could reasonably be expected
      to
      be materially injurious to the Company; (iii) conviction of Executive of, or
      plea of guilty or nolo contendere by Executive to, a felony or any crime of
      theft, forgery, fraud, misappropriation, embezzlement or moral turpitude; (iv)
      continued failure to perform substantially Executive’s duties for the Company;
      provided, however, that Executive must receive reasonable written notification
      of the Company’s intended actions specifically describing the alleged events,
      activities or omissions giving rise thereto, and a reasonable opportunity (of
      not less than fourteen (14) days) to cure such breach (if capable of cure);
      or
      (v) any breach by Executive of this Agreement or other agreements between
      Executive and the Company that causes a material adverse consequence on the
      business, properties, assets, results of operations, or condition (financial
      or
      otherwise) of the Company taken as a whole; provided, however, that Executive
      must receive reasonable written notification of the Company’s intended actions
      specifically describing the alleged events, activities or omissions giving
      rise
      thereto, and thirty (30) days to cure such breach (if capable of
      cure).

     

    (c)  

     

    (d)  Good
      Reason.  “Good Reason” shall mean
      the Company: (i) materially reduces Executive’s responsibilities without
      Executive’s consent; (ii) materially reduces Executive’s Base Salary or
      materially and adversely affects the working conditions of Executive; or (iii)
      materially breaches a material term of this Agreement; provided, however, that
      Executive must provide the Company with written notification of the alleged
      events, activities or omissions providing the basis for Executive’s resignation
      within thirty (30) days following the first knowledge of such events, activities
      or omissions, allow the Company thirty (30) days to cure such events, activities
      or omissions (if curable) and resign no later than thirty (30) days after the
      expiration of the cure period.

     

    (e)  Change
      in Control.  A “Change in Control”
means the consummation, in a single transaction
      or in a series of related
      transactions, of any one or more of the following events:

     

    (i)  a
      sale,
      lease or other disposition of all or substantially all of the assets of the
      Company, other than a sale, lease or other disposition of all or substantially
      all of the assets of the Company to an entity, more than fifty percent (50%)
      of
      the combined voting power of the voting securities of which are owned by
      stockholders of the Company in substantially the same proportions as their
      ownership of the outstanding voting securities of the Company immediately prior
      to such sale, lease or other disposition;

     

    (ii)  a
      merger,
      consolidation or similar transaction involving (directly or indirectly) the
      Company and, immediately after the consummation of such merger, consolidation
      or
      similar transaction, the stockholders of the Company immediately prior thereto
      do not own, directly or indirectly, either (A) outstanding voting securities
      representing more than fifty percent (50%) of the combined outstanding voting
      power of the surviving entity in such merger, consolidation or similar
      transaction or (B) more than fifty percent (50%) of the combined outstanding
      voting power of the parent of the surviving entity in such merger, consolidation
      or similar transaction, in each case in substantially the same proportions
      as
      their ownership of the outstanding voting securities of the Company immediately
      prior to such transaction; or

     

    (iii)  any
      “Exchange Act Person” becomes the owner, directly or
      indirectly, of securities of the Company representing more than fifty percent
      (50%) of the combined voting power of the Company’s then outstanding securities
      other than by virtue of a merger, consolidation or similar
      transaction.  An “Exchange Act Person” means any natural person,
      entity or “group” (within the meaning of Section 13(d) or 14(d) of the
      Securities Exchange Act of 1934, as amended), except that “Exchange Act Person”
shall not include (1) the Company or any subsidiary of the Company, (2) any
      employee benefit plan of the Company or any subsidiary of the Company or any
      trustee or other fiduciary holding securities under an employee benefit plan
      of
      the Company or any subsidiary of the Company, (3) an underwriter temporarily
      holding securities pursuant to an offering of such securities, (4) an entity
      owned, directly or indirectly, by the stockholders of the Company in
      substantially the same proportions as their ownership of stock of the Company;
      or (5) any natural person, entity or “group” (within the meaning of Section
      13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) that, as
      of
      the effective date of this Plan, is the owner, directly or indirectly, of
      securities of the Company representing more than fifty percent (50%) of the
      combined voting power of the Company’s then outstanding securities.

     

    
      	
              4.  

            	
              PROPRIETARY
                INFORMATION AND INVENTIONS
                AGREEMENT.

            


    

     

    Executive
      shall be required to continue compliance with her obligations under the
      proprietary information and inventions agreement that Executive previously
      executed with the Company.

     

    
      	
              5.  

            	
              COMPANY
                POLICIES.

            


    

     

    Executive
      shall be required to continue compliance with the Company’s policies and
      procedures established by the Company from time to time.

     

    
      	
              6.  

            	
              ASSIGNABILITY.

            


    

     

    This
      Agreement is binding upon and inures to the benefit of the parties and their
      respective heirs, executors, administrators, personal representatives,
      successors and assigns.  The Company may assign its rights or delegate
      its duties under this Agreement at any time and from time to
      time.  However, the parties acknowledge that the availability of
      Executive to perform services and the covenants provided by Executive hereunder
      are personal to Executive and have been a material consideration for the Company
      to enter into this Agreement.  Accordingly, Executive may not assign
      any of Executive’s rights or delegate any of Executive’s duties under this
      Agreement, either voluntarily or by operation of law, without the prior written
      consent of the Company, which may be given or withheld by the Company in its
      sole and absolute discretion.

     

    
      	
              7.  

            	
              NOTICES.

            


    

     

    All
      notices and other communications under this Agreement shall be in writing and
      shall be given by facsimile, first class mail (certified or registered with
      return receipt requested), or Federal Express overnight delivery, and shall
      be
      deemed to have been duly given three days after mailing or twenty-four (24)
      hours after transmission of a facsimile or Federal Express overnight delivery
      (if the receipt of the facsimile or Federal Express overnight delivery is
      confirmed).

     

    
      	
              8.  

            	
              ARBITRATION.

            


    

     

    To
      ensure
      the timely and economical resolution of disputes that may arise in connection
      with Executive’s employment with the Company, Executive and the Company agree
      that any and all disputes, claims, or causes of action arising from or relating
      to the enforcement, breach, performance, negotiation, execution, or
      interpretation of this Agreement, Executive’s employment, or the termination of
      Executive’s employment, shall be resolved to the fullest extent permitted by law
      by final, binding and confidential arbitration, by a single arbitrator, in
      San
      Francisco, California, conducted by JAMS under the then applicable JAMS
      rules.  By agreeing to this arbitration procedure, both Executive and
      the Company waive the right to resolve any such dispute through a trial by
      jury
      or judge or administrative proceeding.  The arbitrator shall: (a) have
      the authority to compel adequate discovery for the resolution of the dispute
      and
      to award such relief as would otherwise be permitted by law; and (b) issue
      a
      written arbitration decision, to include the arbitrator’s essential findings and
      conclusions and a statement of the award.  The arbitrator shall be
      authorized to award any or all remedies that Executive or the Company would
      be
      entitled to seek in a court of law.  The Company shall pay all JAMS’
arbitration fees in excess of the amount of court fees that would be required
      if
      the dispute were decided in a court of law.  Nothing in this Agreement
      is intended to prevent either Executive or the Company from obtaining injunctive
      relief in court to prevent irreparable harm pending the conclusion of any such
      arbitration.

     

    
      	
              9.  

            	
              MISCELLANEOUS.

            


    

     

    9.1  Entire
      Agreement.  This Agreement contains the full, complete, and
      exclusive embodiment of the entire agreement of the parties with regard to
      the
      subject matter hereof and supersedes all prior communications, representations,
      or agreements, oral or written, and all negotiations, conversations or
      discussions between or among the parties relating to this
      Agreement.  Executive has not entered into this Agreement in reliance
      on any representations, written or oral, other than those contained
      herein.  Any ambiguity in this document shall not be construed against
      either party as the drafter.

     

    9.2  Amendment.  This
      Agreement may not be amended except by an instrument in writing duly executed
      by
      the parties hereto.

     

    9.3  Applicable
      Law; Choice of Forum.  This Agreement has been made and
      executed under, and will be construed and interpreted in accordance with, the
      laws of the State of California.

     

    9.4  Provisions
      Severable.  Every provision of this Agreement is intended to
      be severable from every other provision of this Agreement.  If any
      provision of this Agreement is held to be invalid, illegal or unenforceable,
      in
      whole or in part, such invalidity, illegality or unenforceability shall not
      affect the other provisions of this Agreement; and this Agreement shall be
      construed as if such invalid, illegal or unenforceable provision had never
      been
      contained herein except to the extent that such provision may be construed
      and
      modified so as to render it valid, lawful, and enforceable in a manner
      consistent with the intent of the parties to the extent compatible with the
      applicable law as it shall then appear.

     

    9.5  Non-Waiver
      of Rights and Breaches.  Any waiver by a party of any breach
      of any provision of this Agreement will not be deemed to be a waiver of any
      subsequent breach of that provision, or of any breach of any other provision
      of
      this Agreement.  No failure or delay in exercising any right, power,
      or privilege granted to a party under any provision of this Agreement will
      be
      deemed a waiver of that or any other right, power or privilege.  No
      single or partial exercise of any right, power or privilege granted to a party
      under any provision of this Agreement will preclude any other or further
      exercise of that or any other right, power or privilege.

     

    9.6  Headings.  The
      headings of the Sections and Paragraphs of this Agreement are inserted for
      ease
      of reference only, and will have no effect in the construction or interpretation
      of this Agreement.

     

    9.7  Counterparts.  This
      Agreement and any amendment or supplement to this Agreement may be executed
      in
      two or more counterparts, each of which will constitute an original but all
      of
      which will together constitute a single instrument.  Transmission by
      facsimile of an executed counterpart signature page hereof by a party hereto
      shall constitute due execution and delivery of this Agreement by such
      party.

     

    9.8  Indemnification.  In
      addition to any rights to indemnification to which Executive is entitled under
      the Company’s Charter and By-Laws, the Company shall indemnify Executive at all
      times during and after Executive’s employment to the maximum extent permitted
      under applicable state law.

     

    In
      Witness Whereof, the parties hereto have caused this Agreement, as
      amended and restated herein, to be duly executed on the dates below, effective
      as of the Effective Date.

     

    Bionovo,
      Inc.                                                                           Isaac
      Cohen

     

    By:       /s/
      Tom Chesterman,
      MBA                                     By:/s/
      Isaac Cohen

     

    Name:  Tom
      Chesterman, MBA

    Title:   
      Senior Vice President

    
      Chief
        Financial Officer,

      Secretary

    

     

    Date:                      
      12.31.08