Document:

exv10w7

 

Exhibit 10.7

Amended and Restated Employment Agreement

April 21, 2005

James H. Meade, Ph.D.

Dear Jim:

This Amended and Restated Employment Agreement (this “Agreement”), on its Effective Date (as
defined below), amends, restates and supercedes your prior Letter of Employment dated January 5,
2004 between Avalon Pharmaceuticals, Inc. (the “Company”) and you (the “Prior Letter Agreement”).
This Agreement shall be effective and shall supercede the Prior Letter Agreement concurrently with
the effective date of the first registration statement filed by the Company to register shares of
its common stock for sale to the public through one or more underwriters (the “Effective Date”).
Notwithstanding the foregoing, this Agreement shall not become effective, shall be deemed null and
void and shall not supercede the Prior Letter Agreement if (i) the Effective Date does not occur
prior to January 1, 2006 or (ii) your employment is terminated by the Company or by you for any
reason prior to the Effective Date. If this Agreement does not become effective, the Prior Letter
Agreement shall remain in full force and effect in accordance with its terms. The terms of your
employment are as follows:

	 	 	 
	Job Title:

	 	Vice President of Business Development
	 
	 	 
	Reporting to:

	 	Kenneth C. Carter, President & CEO
	 
	 	 
	Starting Date:

	 	January 1, 2004
	 
	 	 
	Initial Starting Salary:

	 	$200,000 per annum, subject to adjustment
from time to time in the Company’s
discretion
	 
	 	 
	Classification:

	 	Exempt
	 
	 	 
	Equity:

	 	Subject to the approval of the Compensation
Committee of the Company’s Board of
Directors, the Company will grant you
options for 200,000 shares of Avalon
Pharmaceuticals, Inc. Common Stock under
the Company’s Stock Option Plan. These
options will vest over a five (5) year
period. The options will be available to
you retroactively only upon the successful
completion of the 90-day Introductory
Period. The terms and conditions for any
options will be those in the Company’s
Plan, or as set by the Board.
	 
	 	 
	Bonus Plan:

	 	Eligibility and distribution of bonus is
based on the achievement of corporate and
individual objectives in accordance with
the approved Avalon Pharmaceuticals

 

 

	 	 	 
	

	 	Compensation Plan. You will be eligible for
a bonus up to 25% of your base pay
depending upon the completion of the
approved goals.
	 
	 	 
	Benefits:

	 	The Company provides a comprehensive
benefits program, which includes standard
medical and dental benefits, long- and
short-term disability coverage, a 401(K)
plan, and Employee Assistance Program, and
a flexible benefits plan. Paid time off is
also available to all employees. These
programs will be provided in accordance
with the terms and conditions set forth in
each plan, and are subject to change at the
Company’s discretion. Provided that
underwriting approves your application, you
will also receive benefit of Avalon’s
salary continuation plan for executives.
	 
	 	 
	Relocation:

	 	The Company will pay for your moving
expenses as outlined in Attachment A.
	 
	 	 
	Termination:

	 	Upon termination for any reason, the
Company shall pay you within two weeks of
such termination, your current base salary
earned through the termination date, plus
accrued vacation, if any, and other
benefits or payments, if any, to which you
are entitled as provided in accordance with
the terms and conditions of such benefit
plan. In the event you are terminated by
the Company after the 90-day Introductory
Period without “Cause” (as herein defined),
or if you terminate your employment with
the Company for “Good Reason” (as
hereinafter defined), the Company shall
continue to pay you your bi-weekly rate in
effect at the time of termination for a
period of six (6) months (“Severance”);
provide you with outplacement services;
provide and pay the Company’s portion of
your health insurance for a period of six
months following such termination. You
shall not be required to mitigate damages
by seeking employment elsewhere. If you are
terminated with cause, the Company shall
pay you only your current base salary
earned through the termination date, plus
accrued vacation, if any, to which you are
entitled as provided in accordance with the
terms and conditions of such benefit plan.
	 
	 	 
	

	 	“Cause” shall include (i) your conviction
of a felony,

2

 

	 	 	 
	

	 	either in connection with the
performance of your obligations to the
Company or otherwise, which adversely
affects your ability to perform such
obligations or materially adversely affects
the business activities, reputation,
goodwill or image of the Company, (ii) your
willful disloyalty, deliberate dishonesty,
breach of fiduciary duty to the company
(iii) your breach of the terms of this
Agreement, or your failure or refusal to
use your best efforts to carry out any
material tasks that do not violate any
other term of this agreement, provided such
tasks are assigned to you by the Company in
accordance with the terms hereof, which
breach or failure continues for a period of
more than thirty (30) days after your
receipt of written notice thereof from the
Company, (iv) the commission by you of any
act of fraud, embezzlement or deliberate
disregard of a rule or policy of the
Company known to you or contained in a
policy and procedure manual provided to you
which results in material loss, damage or
injury to the Company, or (v) the material
breach by you of any of the material
provisions of the Confidentiality
Assignment of Inventions and
Non-Competition Agreement.
	 
	 	 
	

	 	Termination of your employment by you shall
constitute termination for “Good Reason” if
such termination occurs (a) within eighteen
months of a “Change in Control” (as
hereinafter defined) (b) within three
months of a material diminution in your
responsibilities as Vice President of
Business Development, provided that such
diminution is not in connection with the
termination of your employment for Cause,
(c) within three months of your principal
work location changing to be more than 50
miles from your then current residence; or
(d) in the event you should die while an
employee of the Company. The Company shall
notify you, within 10 days of receipt of
your notice of intent to terminate your
employment for Good Reason, if the Company
disagrees with your intent to terminate
pursuant to this paragraph.
	 
	 	 
	

	 	A “Change in Control” shall be deemed to
have occurred if either: (i) any “person”
(including, without

3

 

	 	 	 
	

	 	limitation, any
individual, sole proprietorship,
partnership, trust, corporation,
association, joint venture, or other
entity, whether or not incorporated), or
“group” of persons (as such terms are used
in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended
(the “Exchange Act”)), becomes, after the
date hereof, the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities
of the Company representing fifty percent
(50%) or more of the combined voting power
of the Company’s then outstanding
securities; (ii) during any two (2) year
period, individuals who constitute the
Board of Directors at the beginning of such
period, together with any new directors
elected or appointed during the period
whose election or appointment resulted from
a vacancy on the Board of Directors caused
by the retirement, death, or disability of
a director and whose election or
appointment was approved by a vote of at
least a majority of the directors then
still in office who were directors at the
beginning of the period, cease for any
reason to constitute a majority of the
Board of Directors; (iii) the Company
sells, assigns, conveys, transfers, leases
or otherwise disposes of all or
substantially all of its assets to any
person; (iv) the Company consolidates with,
or merges with or into another entity, or
any entity consolidates with, or merges
with or into, the Company (a “Merger”), in
which the owners of outstanding voting
stock of the Company immediately prior to
such Merger do not represent at least a
majority of the voting power in the
surviving entity after the Merger; or (v)
the stockholders of the Company approve a
plan of liquidation or dissolution.
	 
	 	 
	Conflict:

	 	You hereby acknowledge that you are not a
party to any agreement that in any way
prohibits or imposes any restrictions on
your employment with the Company, and your
acceptance hereof will not breach any
agreements to which you are a party.
	 
	 	 
	Employment Requirements And

Period:

	 	If you accept this position, you will be an
employee at will, meaning you are not
obligated to remain employed at the Company
for any specific period of time. Likewise,
the Company is not obligated to

4

 

	 	 	 
	

	 	employ you for any specific period.
	 
	 	 
	Other Provisions:

	 	Employment will be contingent upon your
signing the Avalon Pharmaceuticals, Inc.
Confidentiality, Assignment of Inventions
and Non-Competition Agreement. You also
agree to be bound by all personnel policies
that may be adopted from time to time.

I look forward to having you as part of the team and believe you will play an important role in the
growth of the Company.

Sincerely,

ON BEHALF OF AVALON PHARMACEUTICALS, INC.:

	 	 	 
	/s/
Kenneth C. Carter

	 	April 21, 2005
	 

	 	 
	Kenneth C. Carter

	 	Date
	President & CEO
	 	 
	 
	 	 
	ACCEPTED:
	 	 
	/s/
James H. Meade

	 	April 21, 2005
	 

	 	 
	James H. Meade

	 	Date

5

 

Attachment A

Moving Assistance & Relocation

James H. Meade

January 7, 2004

Sale of house

	 	•  	Realtor fees, not to exceed 6% unless authorization is obtained for a higher rate
	 
	 	•  	Closing costs, including attorney fees and stamp taxes

Move

	 	•  	Moving costs, including packing, unpacking, transportation, declared value insurance
	 
	 	   	Employee must submit 3 bids from moving companies to Avalon
	 
	 	   	Avalon will provide insurance on the declared value of your household goods
	 
	 	•  	Reimbursement of up to $7,800 temporary housing. The Company is not obligated to pay
this allowance if it is not utilized
	 
	 	   	Does not include cost of phone, food or utilities
	 
	 	•  	Storage of household goods, if necessary, for up to 90 days while in temporary housing

Purchase of new house

	 	•  	Reimbursement of mileage (@ 36¢ per mile) and tolls for either James H. or Karen M.
Meade for trips between New Jersey and Maryland up to a maximum of $1,000
	 
	 	•  	Closing costs of new home
	 
	 	•  	Additional reimbursable fees include: title search, customary legal, notary,
recording, transfer, necessary pre-purchase home inspections and other approved closing
fees
	 
	 	•  	Reimbursement up to a maximum of $1,000 for miscellaneous one-time expenses associated
with moving into a new house (e.g. cost of re-keying the house, fees to establish
telephone, gas, electric, cable services, etc.)
	 
	 	•  	Reimbursement of origination fees not to exceed $2,000.00

1

 

	 	•  	Discount points will be excluded

Avalon Pharmaceuticals will gross-up relocation expenses, which are not deductible pursuant to
Federal income tax law. In addition to the Federal income tax liability, Avalon Pharmaceuticals
will gross-up certain reimbursed relocation expenses which you are unable to deduct in full or in
part pursuant to state income tax law. If you are subject to additional FICA tax due to
reimbursement of non-deductible relocation expenses, you will be grossed-up for the appropriate
amount.

Initials

_______

_______

2exv10w8

 

Exhibit 10.8

Amended and Restated Employment Agreement

April 21, 2005

Paul E. Young, Ph.D.

Dear Paul:

This Amended and Restated Employment Agreement (this “Agreement”), on its Effective Date (as
defined below), amends, restates and supercedes your prior Letter of Employment dated January 6,
2004 between Avalon Pharmaceuticals, Inc. (the “Company”) and you (the “Prior Letter Agreement”).
This Agreement shall be effective and shall supercede the Prior Letter Agreement concurrently with
the effective date of the first registration statement filed by the Company to register shares of
its common stock for sale to the public through one or more underwriters (the “Effective Date”).
Notwithstanding the foregoing, this Agreement shall not become effective, shall be deemed null and
void and shall not supercede the Prior Letter Agreement if (i) the Effective Date does not occur
prior to January 1, 2006 or (ii) your employment is terminated by the Company or by you for any
reason prior to the Effective Date. If this Agreement does not become effective, the Prior Letter
Agreement shall remain in full force and effect in accordance with its terms. The terms of your
employment are as follows:

	 	 	 
	Title:

	 	Vice President of Research
	 
	Reporting to:

	 	Kenneth C. Carter, President & CEO
	 
	Date of Promotion:

	 	January 1, 2004
	 
	Initial Starting Salary:

	 	$195,000 per annum, subject to adjustment from
time to time in the Company’s discretion
	 
	Classification:

	 	Exempt
	 
	 	 
	Equity:

	 	Subject to the approval of the Compensation
Committee of the Company’s Board of Directors,
the Company will grant you options for an
additional 145,125 shares of Avalon
Pharmaceuticals, Inc. Common Stock under the
Company’s Stock Option Plan. These options will
vest over a four (4) year period. The terms and
conditions for any options will be those in the
Company’s Plan, or as set by the Board.
	 
	 	 
	Bonus Plan:

	 	Eligibility and distribution of bonus is based on
the achievement of corporate and individual
objectives in accordance with the approved Avalon
Pharmaceuticals Compensation Plan. You will be
eligible for a bonus up to 25% of your base pay
depending upon the

 

 

	 	 	 
	

	 	completion of the approved goals.
	 
	 	 
	Benefits:

	 	The Company provides a comprehensive benefits
program, which includes standard medical and
dental benefits, long- and short-term disability
coverage, a 401(K) plan, and a flexible benefits
plan. Paid time off is also available to all
employees. These programs will be provided in
accordance with the terms and conditions set
forth in each plan, and are subject to change at
the Company’s discretion. You will continue to
receive these benefits, which have been
previously provided to you during your employment
at Avalon. Provided that underwriting approves
your application, you will also receive benefit
of Avalon’s salary continuation plan for
executives.
	 
	 	 
	Termination:

	 	Upon termination for any reason, the Company
shall pay you within two weeks of such
termination, your current base salary earned
through the termination date, plus accrued
vacation, if any, and other benefits or payments,
if any, to which you are entitled as provided in
accordance with the terms and conditions of such
benefit plan. In the event you are terminated by
the Company without “Cause” (as herein defined),
or if you terminate your employment with the
Company for “Good Reason” (as hereinafter
defined), continue to pay you your bi-weekly rate
in effect at the time of termination for a period
of six (6) months (“Severance”); provide you with
outplacement services; provide and pay the
Company’s portion of your health insurance for a
period of six months following such termination.
You shall not be required to mitigate damages by
seeking employment elsewhere. If you are
terminated with cause, the Company shall pay you
only your current base salary earned through the
termination date, plus accrued vacation, if any,
to which you are entitled as provided in
accordance with the terms and conditions of such
benefit plan.
	 
	 	 
	

	 	“Cause” shall include (i) your conviction of a
felony, either in connection with the performance
of your obligations to the Company or otherwise,
which adversely affects your ability to perform
such obligations or materially adversely affects
the business

2

 

	 	 	 
	

	 	activities, reputation, goodwill or
image of the Company, (ii) your willful
disloyalty, deliberate dishonesty, breach of
fiduciary duty to the company (iii) your breach
of the terms of this Agreement, or your failure
or refusal to use your best efforts to carry out
any material tasks that do not violate any other
term of this agreement, provided such tasks are
assigned to you by the Company in accordance with
the terms hereof, which breach or failure
continues for a period of more than thirty (30)
days after your receipt of written notice thereof
from the Company, (iv) the commission by you of
any act of fraud, embezzlement or deliberate
disregard of a rule or policy of the Company
known to you or contained in a policy and
procedure manual provided to you which results in
material loss, damage or injury to the Company,
or (v) the material breach by you of any of the
material provisions of the Confidentiality
Assignment of Inventions and Non-Competition
Agreement.
	 
	 	 
	

	 	Termination of your employment by you shall
constitute termination for “Good Reason” if such
termination occurs (a) within eighteen months of
a “Change in Control” (as hereinafter defined)
(b) within three months of a material diminution
in your responsibilities as a Vice President of
Research (provided that such diminution is not in
connection with the termination of your
employment for Cause), (c) within three months of
your principal work location changing to be more
than 50 miles from your current residence; or (d)
in the event you should die while an employee of
the Company. The Company shall notify you,
within 10 days of receipt of your notice of
intent to terminate your employment for Good
Reason, if the Company disagrees with your intent
to terminate pursuant to this paragraph.
	 
	 	 
	

	 	A “Change in Control” shall be deemed to have
occurred if either: (i) any “person” (including,
without limitation, any individual, sole
proprietorship, partnership, trust, corporation,
association, joint venture, or other entity,
whether or not incorporated), or “group” of
persons (as such terms are used in

3

 

	 	 	 
	

	 	Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)), becomes, after
the date hereof, the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the
Company representing fifty percent (50%) or more
of the combined voting power of the Company’s
then outstanding securities; (ii) during any two
(2) year period, individuals who constitute the
Board of Directors at the beginning of such
period, together with any new directors elected
or appointed during the period whose election or
appointment resulted from a vacancy on the Board
of Directors caused by the retirement, death, or
disability of a director and whose election or
appointment was approved by a vote of at least a
majority of the directors then still in office
who were directors at the beginning of the
period, cease for any reason to constitute a
majority of the Board of Directors; (iii) the
Company sells, assigns, conveys, transfers,
leases or otherwise disposes of all or
substantially all of its assets to any person;
(iv) the Company consolidates with, or merges
with or into another entity, or any entity
consolidates with, or merges with or into, the
Company (a “Merger”), in which the owners of
outstanding voting stock of the Company
immediately prior to such Merger do not represent
at least a majority of the voting power in the
surviving entity after the Merger; or (v) the
stockholders of the Company approve a plan of
liquidation or dissolution.
	 
	 	 
	Conflict:

	 	You hereby acknowledge that you are not a party
to any agreement that in any way prohibits or
imposes any restrictions on your employment with
the Company, and your acceptance hereof will not
breach any agreements to which you are a party.
	 
	 	 
	Other Provisions:

	 	Continued employment will be contingent upon your
signing the Avalon Pharmaceuticals, Inc.
Confidentiality, Assignment of Inventions and
Non-Competition Agreement dated January 5, 2004.
You also agree to be bound by all personnel
policies that may be adopted from time to time.
Finally, you will remain an employee at will,
meaning you are not obligated to remain employed
at the company for any

4

 

	 	 	 
	

	 	specific period of time. Likewise, the Company is not obligated to employ
you for any specific period.

5

 

	 	 	 	 	 
	Sincerely,
	 	 	 	 
	 
	 	 	 	 
	ON BEHALF OF AVALON PHARMACEUTICALS, INC.:  
	/s/ Kenneth C. Carter
	 	April 21, 2005
	 

	 	 	 	 
	Kenneth C. Carter

	 	Date	 	 
	President & CEO
	 	 	 	 
	 
	 	 	 	 
	ACCEPTED:
	 	 	 	 
	/s/ Paul E. Young
	 	April 21, 2005
	 

	 	 	 	 
	Paul E. Young

	 	Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]