Document:

Exhibit 10.5

 

ACORDA

Therapeutics

 

August 11, 2002

 

Dr. Ron Cohen

145 West 58th Street

New York, NY 10019

 

Dear Ron:

 

We are delighted to
present this letter agreement, setting out the terms of your continued
employment with Acorda Therapeutics, Inc. (the “Company”) as President,
Director and Chief Executive Officer.  If
these terms are acceptable, please sign and date the copy of this letter
provided herewith and return it to me at your first convenience.  If you accept the terms offered herein, this
Agreement shall be deemed to be effective as of January 1, 2002 (the “Effective
Date”).

 

1.                                      Employment.

 

You will be employed by
the Company, as President and Chief Executive Officer.  As President and Chief Executive Officer you
will have overall responsibility for all aspects of the Company’s
business.  You will report directly to
the Board of the Director’s of the Company (the “Board”).  You will also serve as a member of the Board.

 

2.                                      Base
Salary.

 

In consideration for your
services under this Agreement, you shall be paid an annual base salary of Two
Hundred and Eighty Thousand Dollars ($280,000), to be paid in accordance with
the Company’s standard payroll practices. Your base salary shall be reviewed
annually by the Board and any increase to your base salary shall be determined
by the Board based on your performance and the Company’s overall performance.

 

3.                                      Annual
Bonus.

 

You shall be eligible to
receive an annual bonus in an amount determined by the Board in its sole
discretion based on your performance.

 

4.                                      Benefits;
Perquisites; Reimbursement of Expenses.

 

In addition to those
payments set forth above, you shall be entitled to the following benefits and
payments:

 

(a)                                  Employee Benefit Plans Generally.  You shall be entitled to participate in all
employee benefit plans which the Company provides or may establish from time to
time for the benefit of its senior executives.

 

(b)                                 Vacation.  You shall
be entitled to paid vacation in accordance with the Company’s vacation policy
as that policy may be amended from time to time.

 

 

(c)                                  Perquisites and Reimbursement of Expenses.  You shall be entitled to all perquisites
offered to senior executives of the Company. 
In addition, you shall be entitled to reimbursement for all ordinary and
reasonable out-of-pocket business expenses which are incurred by you in
furtherance of the Company’s business, in accordance with the policies adopted
from time to time by the Company.

 

(d)                                 Insurance.  You shall
be covered by a Directors and Officers Liability Insurance policy that generally
covers the directors and officers of the Company, provided by the Company at
its expense.  You shall cooperate in all
respects with the Company’s efforts to obtain and maintain key person life
insurance on your life.

 

(e)                                  Legal Fees.  The
Company shall reimburse you for legal fees incurred in connection with the
negotiation and drafting of this Agreement, up to a maximum of  Five Thousand Five Dollars ($5,500).

 

5.                                      Stock
Options.

 

You shall be eligible to
receive annual performance-based stock option grants to purchase shares of the
Company’s common stock.  The number of
annual options granted shall be determined by the Board, based on the
achievement of individual performance objectives and the Company’s achievement
of its goals and objectives.  All such
options shall be granted pursuant to and in accordance with the terms of the
Acorda Therapeutics, Inc. 1999 Employee Stock Option Plan and/or any additional
or replacement plan adopted by the Board (the “Plan(s)”) except as such terms
may be specifically modified herein. 
Unless otherwise provided for in any option agreement, all options
granted to you shall vest in 16 equal quarterly installments, beginning with
the first day of the quarter next following the date the option is
granted.  Unless otherwise limited by IRS
rules governing the issuance of incentive options to principal stockholders of
the Company, all options shall be exercisable for 10 years following the date
of grant.  You shall be eligible to exercise
all options granted on a cashless basis, and otherwise in accordance with the
terms of the Plan(s).

 

6.                                      Term;
Termination.

 

(a)                                  Term.  The term of
this Agreement shall continue for a period of one year following the Effective
Date, unless earlier terminated as provided herein, and shall be automatically
renewed for successive one year terms unless the Company or you provide written
notice of its or your determination not to renew this Agreement at least 60
days prior to the expiration of the then current term. A determination by you
or the Company not to renew this Agreement based upon Good Reason or Without
Cause, as the case may be, shall be deemed a termination of employment for
purposes of Section 6(c) and the terms thereof shall apply.

 

2

 

(b)                                 Death or Disability. 
Your employment with the Company shall terminate as of the date of your
death or the date you are determined to be “Disabled.”  Upon such termination, the following shall
apply:

 

(i)                                     The
Company shall pay to you or your estate, as the case may be, (A)  all amounts due and owing as of the date of
termination and (B) your base salary through the end of the third month
following the date your employment is terminated.

 

(ii)                                  If
you or your eligible spouse and dependents timely elect health care
continuation coverage (“COBRA Coverage”), the Company shall pay the monthly
premiums for such coverage for the duration of the applicable COBRA Coverage
period.

 

(iii)                               65%
of all unvested stock options shall become immediately vested and shall remain
exercisable by you or your estate, as the case may be, for 48 months following
the termination date.

 

For these purposes, you
shall be considered to be Disabled if you are unable to perform the substantial
functions of your position for 180 consecutive days or more in a 12 month
period, unless a greater period is required by law.  A determination of disability shall be made
jointly by a physician of your choice and a physician of the Company’s choice.  If both physicians can not agree on whether
you are Disabled, a third physician chosen by the first two shall make the
final and binding determination.

 

(c)                                  Termination of Your Employment by the Company Without Cause or
Voluntary Termination by You With Good Reason.  If the Company terminates your employment
without Cause or if you terminate your employment with Good Reason the
following shall apply:

 

(i)                                     The
Company shall pay to you your base salary for a period of one (1) year
following the date of such termination (the “Severance Period”).  You shall be under no obligation to secure
alternative employment during the Severance Period, and payment of your base
salary shall be made without regard to any subsequent employment you may
obtain.

 

(ii)                                  The
Company shall also pay you a bonus equal to the last annual bonus you received
multiplied by a fraction, the numerator of which shall be the number of days in
the calendar year elapsed as of the termination date and the denominator of
which shall be 365.

 

(iii)                               If
you or your eligible spouse and dependents timely elect COBRA Coverage, the
Company shall pay the monthly premiums for such coverage during the Severance
Period; provided that, if you elect coverage under a subsequent employer’s
group health insurance plan during the Severance Period, payment of such
premiums shall cease.

 

3

 

(iv)                              All
stock options granted to you hereunder or under any other agreement shall
become immediately and fully vested as of the termination date, and shall
remain exercisable for 48 months following such date.

 

(d)                                 Termination of Your Employment by the Company With Cause or by You
Without Good Reason.  The
Company may terminate your employment with Cause or you may resign at any
time.  In such case, you shall be paid
all amounts due for services rendered under this Agreement up until the
termination date.  Thereafter, no further
payments shall be made to you under this Agreement.  All stock options granted to you hereunder or
under any other agreement that are fully vested as of the date of your
termination shall remain exercisable for ninety (90) days from the termination
date.  If you dispute the grounds for
your termination, your vested options will remain exercisable until ninety (90)
day after the date the dispute is resolved. 
All unvested options shall be forfeited.

 

(e)                                  Cause.  As used
herein, “Cause” means that you have:

 

(i)                                     committed
gross negligence in connection with your duties as set forth herein or
otherwise with respect to the business and affairs of the Company, which gross
negligence has a material adverse effect on the business of the Company or your
ability to perform your duties under this Agreement;

 

(ii)                                  committed
fraud in connection with your duties as set forth herein or otherwise with
respect to the business and affairs of the Company;

 

(iii)                               engaged
in “willful misconduct” with respect to the business and affairs of the
Company.  For purposes of this Agreement,
“willful misconduct” means misconduct committed with actual knowledge that your
actions violate directions and instructions of the Board, which directions and
instructions are legal and consistent with the Agreement;

 

(iv)                              materially
breached your duties under this Agreement, which breach has a material adverse
effect on the business of the Company or your ability to perform your duties
under the Agreement; or

 

(v)                                 been
found by a court of competent jurisdiction to have committed or plead guilty to
an unlawful act whether or not related to the business of the Company if the
commission of such act has a material adverse effect either on (a) your ability
to perform your duties under the Agreement or (b) the reputation and goodwill
of the Company.

 

“Cause” shall be found only by a majority of the full
Board and only after you have received notice from the Board, have had an
opportunity to

 

4

 

discuss the issues with the Board, have had an
opportunity to be heard generally and through counsel, and have been given a 30
day period to cure, where cure is feasible.

 

(f)                                    Good Reason.  As used
herein, “Good Reason” means that:

 

(i)                                     the
Company has materially breached this Agreement;

 

(ii)                                  you
are removed or not appointed as a member the Board;

 

(iii)                               the
Company fails to acquire the assignment of this Agreement by an acquiring
entity;

 

(iv)                              your
position has been materially reduced or you have been assigned duties that are
materially inconsistent with your duties as set forth herein or which
materially impair your ability to perform the services contemplated hereunder;
or

 

(v)                                 the
Company relocates its offices more than 60 miles from Hawthorne, New York.

 

(vi)                              Termination
for Good Reason may occur only after you have given the Board notice and 30
days to cure, where cure is feasible.

 

7.                                      Change
in Control.

 

(a)                                  Subject
to the provisions of this Section 7, the vesting of your options upon a Change
of Control shall be governed by the terms of the Plans and your option
agreements, but in no event shall less than 65% of your then unvested stock
options become immediately vested and exercisable.

 

(b)                                 Voluntary Termination by You After a Change in Control Without Good
Reason.  If you voluntarily
terminate your employment following the effective date of the Change in Control
the following shall apply:

 

(i)                                     The
Company shall pay to you your base salary for a period of one (1) year
following the date of such termination (the “Change in Control Severance
Period”).  You shall be under no
obligation to secure alternative employment during the Change in Control
Severance Period, and payment of your base salary shall be made without regard
to any subsequent employment you may obtain;

 

(ii)                                  The
Company shall also pay you a bonus equal to the last annual bonus you received
multiplied by a fraction, the numerator of which shall be the number of days in
the calendar year elapsed as of the termination date and the denominator of
which shall be 365.  Should the Company
revise its compensation schedule, you will be paid a pro-rata bonus as
reasonably determined under the compensation system then in place;

 

5

 

(iii)                               If
you or your eligible spouse and dependents timely elect COBRA Coverage, the
Company shall pay the monthly premiums for such coverage during the Change in
Control Severance Period; provided that, if you elect coverage under a
subsequent employer’s group health insurance plan during the Change in Control
Severance Period, payment of such premiums shall cease; and

 

(iv)                              65%
of all outstanding options shall vest as of the termination date and shall
remain exercisable for 48 months following such date.

 

(c)                                  If
you voluntarily terminate your employment after a Change in Control with Good
Reason, then Paragraph 6(c) shall apply in lieu of Paragraph 7(b).

 

(d)                                 Change in Control Defined. 
A Change in Control shall be deemed to have occurred if:

 

(i)                                     there
is a consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation; or there is any other merger or
consolidation if, after such merger or consolidation shareholders of the
Company immediately prior to such merger or consolidation hold less than 50% of
the voting stock of the surviving entity;

 

(ii)                                  there
is a sale or transfer of all or substantially all of the assets of the Company
in one or a series of transactions or there is a complete liquidation or
dissolution of the Company; or

 

(iii)                               any
individual or entity or group acting in concert and affiliates thereof,
acquires, directly or indirectly, more than 50% of the outstanding shares of
voting stock of the Company; provided that this subsection (iii) shall not
apply to an underwritten public offering of the Company’s securities.

 

8.                                      Confidentiality/Noncompetition.

 

(a)                                  During
the term of your employment and for an additional period of five years after
you are no longer employed by the Company, you will not reveal, divulge or make
known to any individual, partnership, joint venture, corporation or other
business entity (other than the Company or its affiliates) or use for your own
account any customer lists, trade secrets or any confidential information of
any kind (“Protected Information”) used by the Company or any of its commonly
controlled affiliates in the conduct of the Company’s business and made known
to you by reason of your employment with the Company or any of its affiliates
(whether or not developed, devised or otherwise created in whole or in part by
your efforts); provided, that Protected Information shall not include
information that shall become known to the public or the trade without
violation of this Section 8(a); and provided, further, that you
shall not violate this Section 8(a) if Protected Information is disclosed by
you at the direction of the Company or if you are required to provide Protected
Information in any legal proceeding or by order of any court.

 

6

 

(b)                                 During
the term of your employment and for an additional period of one year after you are no longer employed by the Company, you
will not, directly or indirectly, engage in a Competitive Business, including
owning or controlling an interest in (except as a passive investor owning less
than two percent (2%) of the equity securities of a publicly-owned company), or
acting as director, officer or employee of, or consultant to, any individual,
partnership, joint venture, corporation or other business entity known to you
to be engaged in a Competitive Business. “Competitive Business” shall mean the
development of therapeutics for spinal cord injuries, multiple sclerosis and other
central nervous system conditions for which the Company is actively seeking to
develop therapeutics during the term of this Agreement; provided, however, that
notwithstanding the aforesaid, you shall not be prohibited from acting in any
of the aforesaid capacities for or with respect to any subsidiary, division,
affiliate or unit (each, a “Unit”) of an entity if that Unit itself is not
engaged in a Competitive Business, irrespective of whether some other Unit of
such entity engages in such competition (as long as you do not engage in a
Competitive Business for such other Unit).

 

(c)                                  During
the term of your employment and for an additional period of one year after you
are no longer employed by the Company, you shall not knowingly employ or
solicit, encourage or induce any person (except your spouse, if applicable) who
at any time within 90 days prior to the termination of your employment shall
have been an employee of the Company or any of its commonly controlled
affiliates, to become employed by or associated with any individual,
partnership, joint venture, corporation or other business entity other than the
Company, and you shall not knowingly approach any such employee for such
purpose or authorize or knowingly approve the taking of such actions by any other
individual, partnership, joint venture, corporation or other business entity or
knowingly assist any such individual, partnership, joint venture, corporation
or other business entity in taking such action.

 

(d)                                 You
acknowledge that the provisions of this Section 8 are reasonable and necessary
for the protection of the Company and that each provision, and the period or
periods of time and types and scope of restrictions on the activities specified
herein are, and are intended to be divisible. 
In the event that any provision of this Agreement, including any
sentence, clause or part hereof, shall be deemed contrary to law or invalid or
unenforceable in any respect by a court of competent jurisdiction, the
remaining provisions shall not be affected, but shall, subject to the
discretion of such court, remain in full force and effect and any invalid and
unenforceable provisions shall be deemed, without further action on the part of
the parties hereto, modified, amended and limited to the extent necessary to render
the same valid and enforceable.

 

(e)                                  You
acknowledge that the Company will be irrevocably damaged if the covenants
contained herein are not specifically enforced. 
Accordingly, you agree that, in addition to any other relief to which
the Company may be entitled, the Company shall be entitled to seek and obtain
injunctive relief from a court of competent jurisdiction for the purposes of
restraining you from any actual or threatened breach of such covenants.

 

7

 

9.                                      Miscellaneous
Provisions.

 

(a)                                  Notices.  All notices
and other communications hereunder between you and the Company shall be in
writing, shall be addressed to the receiving party’s address of record (or to
such other address as a party may designate by notice hereunder), and shall be
either (i) delivered by hand, (ii) made by telecopy, (iii) sent by overnight
courier, or (iv) sent by certified mail, return receipt requested, postage
prepaid.

 

(b)                                 Modifications and Amendments.  The terms and provisions of this Agreement
may be modified or amended only by written agreement executed by the parties
hereto.

 

(c)                                  Waivers and Consents. 
The terms and provisions of this Agreement may be waived, or consent for
the departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to
be or shall constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be
effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.

 

(d)                                 Assignment.  This
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees.  This
Agreement  may not be assigned or pledged
by you.  In the event of the merger or
consolidation of the Company (whether or not the Company is the surviving or
resulting corporation), the transfer of all or substantially all the assets of
the Company, or the voluntary or involuntary dissolution of the Company, the
surviving or resulting corporation or the transferee or transferees of the
Company’s assets shall be bound by this and the Company shall take all actions
necessary to ensure that such corporation, transferee or transferees assume and
are bound by its provisions.

 

(e)                                  Severability.  The
parties intend this Agreement to be enforced as written.  However, if any portion or provision of this
Agreement shall to any extent be declared illegal or unenforceable by a duly
authorized court of proper jurisdiction, then the remainder of this Agreement,
or the application of such portion or provision in circumstances other than
those as to which it is so declared illegal or unenforceable, shall not be
affected thereby, and each portion and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.

 

(f)                                    Choice of Law.  This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and governed by the law of the State of New York,
without giving effect to the conflict of law principles thereof.

 

(g)                                 Entire Agreement. 
This Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof and supersede all prior agreements
and understandings of the parties hereto, oral or written, with respect to the
subject matter hereof. Notwithstanding the preceding sentence, the provisions
of the Acorda Therapeutics, Inc. Restricted Stock Purchase Agreement (dated
March 1995) and the Series A Preferred Stock Purchase Agreement shall remain in
effect pursuant to their respective terms

 

8

 

(h)                                 Arbitration.  Any
dispute or controversy between you and the Company,  arising out of or relating to this Agreement
or the breach of this Agreement, shall be settled by arbitration administered
by the American Arbitration Association (“AAA”) in accordance with its
Employment Disputes Arbitration Rules then in effect, and judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.  Any arbitration shall be held
before a single arbitrator who shall be selected by the mutual agreement of you
and the Company, unless the parties are unable to agree to an arbitrator, in
which case, the arbitrator will be selected under the procedures of the AAA.  The arbitrator shall have the authority to
award any remedy or relief that a court of competent jurisdiction could order
or grant, including, without limitation, the issuance of an injunction.  However, either party may, without
inconsistency with this arbitration provision, apply to any court having
jurisdiction over such dispute or controversy and seek interim provisional,
injunctive or other equitable relief until the arbitration award is rendered or
the controversy is otherwise resolved. 
Except as necessary in court proceedings to enforce this arbitration
provision or an award rendered hereunder, to obtain interim relief, as required
by law, or the party’s immediate family and legal and financial advisors,
neither a party nor an arbitrator may disclose the existence, content or
results of any arbitration hereunder without the prior written consent of you
and the Company. The Company shall pay all costs and fees associated with such
arbitration, including all arbitration fees, the arbitrator’s fees, attorneys’
fees and all costs.

 

If the terms of this
Agreement are acceptable to you please sign where indicated below.  It is understood and acknowledged that a fax
signature will be considered to be valid as an original.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  Acorda
  Therapeutics, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Pinney

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed to and accepted:

  	
   

  
	
   

  	
   

  
	
  /s/ Ron Cohen

  	
   

  	
   

  
	
   

  	
   

  
	
  Dr. Ron Cohen

  	
   

  
	
   

  	
   

  
	
  Date:  

  	
  8/12/02

  	
   

  	
   

  
						

 

9Exhibit
10.6

ACØRDA

THERAPEUTICS

 

September 26, 2005

Dr. Ron Cohen

246 Harriman Road

Irvington, NY 10533

                Re:  Amendment to August 11, 2002 Employment
Agreement

Dear Ron:

                This letter serves
as an amendment to your employment letter, dated August 11, 2002, with Acorda
Therapeutics, Inc. (the “Agreement”), in accordance with paragraph 9(b) of the
Agreement.  Specifically, the Agreement
is amended as follows, effective September 26, 2005:

                1.             Base
Salary.  Paragraph 2 of the
Agreement is amended so that your base salary is Three Hundred Five Thousand
Dollars ($305,000) instead of Two Hundred Eighty Thousand Dollars ($280,000).

                2.             Equity
Compensation.  Paragraph 5 of
the Agreement is amended so that your equity compensation may be awarded in the
form of stock options, stock appreciation rights, and/or restricted stock,
rather than only in the form of stock options. 
In addition, paragraphs 6(b)(iii), 6(c)(iv), 6(d), 7(a), and 7(b)(iv) of
the Agreement are amended so that all references to the vesting or acceleration
of stock options shall include the vesting or acceleration (or the removal of
all restrictions on) stock appreciation rights and restricted stock.

                3.             Termination
of Your Employment by the Company Without Cause or
Voluntary Termination by You With Good Reason.  Paragraph 6(c)(i)-(iii)
of the Agreement is amended to read in its entirety as follows:

 

(c)           Termination of Your Employment by the
Company Without Cause or Voluntary Termination by You
With Good Reason.  If the Company terminates your employment
without Cause or if you terminate your employment with Good Reason the
following shall apply:

(i)            The
Company shall pay to you a single lump sum payment equal to the base salary you
would have received during the fifteen-month period immediately following the
date of your termination (the “Severance Period”) had your employment not
terminated.  Such payment shall be made
no later than thirty days following termination of employment.  You shall
be under no obligation to secure alternative employment during the Severance
Period, and you will be entitled to retain this payment without regard to any
subsequent employment you may obtain.

(ii)       The
Company shall also
pay you a bonus equal to the last annual bonus you received multiplied by a
fraction, the numerator of which shall be the number of days in the calendar
year elapsed as of the termination date and the denominator of which shall be
365.  Such payment shall also be made no
later than thirty days following termination of employment.

 (iii)      If
you or your eligible
spouse and dependents timely elect COBRA Coverage, the Company shall pay the
monthly premiums for such coverage during the Severance Period; provided that,
if you elect coverage under a subsequent employer’s group health insurance plan
during the Severance Period, payment of such premiums shall cease.  However, to the extent the Company cannot pay
COBRA premiums for a period of time following your termination without
subjecting you or your eligible spouse or dependents to the adverse tax
consequences of Section 409A of the Internal Revenue Code, you or your eligible
spouse or dependents will pay such COBRA premiums subject to being reimbursed
by the Company at such time as the Company can reimburse those premiums
consistent with the requirements of Section 409A.

 

Except as provided in this letter, the Agreement
remains in full force and effect.  If this
amendment is acceptable, please sign and date the copy of this letter provided
herewith and return it to me at your earliest convenience.

 

Sincerely,

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Acorda Therapeutics, Inc.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ David Lawrence

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  David Lawrence

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Financial Officer

  
										

 

	
  Agreed to and accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Ron Cohen

  	
   

  	
   

  
	
  Ron Cohen

  	
   

  	
   

  
	
   

  
	
  Date: September 26, 2005

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