Document:

PILIA EMPLOYMENT AGREEMENT

Exhibit 10.7

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (the "Agreement") is entered into
effective as of this 1st day of October, 2001 (the "Effective Date"),
by and between NaPro BioTherapeutics, Inc., a Delaware corporation (the
"Company"), and Patricia A. Pilia, Ph.D. ("Executive").
Certain capitalized terms used in this Agreement have the meaning set forth in
Paragraph 17 of this Agreement.

 

RECITALS

 

A. WHEREAS, Executive is currently employed by the Company;
and

 

B. WHEREAS, the Company desires to secure the continued
services of Executive as an employee of the Company, and to provide for certain
compensation and benefit arrangements for Executive in the event of Executive's
termination of employment under certain circumstances, and Executive is willing
to enter into this Agreement and perform such services.

 

TERMS AND CONDITIONS

 

In consideration of the respective covenants and agreements
of the parties contained in this Agreement, the parties agree as follows:

 

1. Employment Services. The Company hereby
agrees to engage Executive, and Executive hereby agrees to perform services for
the Company, on the terms and conditions set forth in this Agreement. During the
Employment Period (as defined below), the Company and Executive agree that
Executive will serve as an executive officer of the Company in the position of
Executive Vice President and Secretary with the duties, responsibilities and
authority as set forth on Schedule A, or will have such other executive title
and such other executive duties, responsibilities and authority as Executive and
the Company may agree upon from time to time, and will perform such services of
an executive and administrative character to the Company and its present or
future Subsidiaries consistent with the duties of the Company's other
executive officers, as the Company's Board of Directors (the
"Board") may from time to time direct (the "Employment
Services") or the Bylaws of the Company may provide. The Employment
Services shall commence upon the Effective Date of this Agreement and terminate
as provided in Paragraph 6 (the "Employment Period").

 

2. Performance.

 

(a) Executive shall report to the Board of Directors, and
Executive shall devote her best efforts and her full business time and attention
(except for permitted vacation periods) to the business of the Company and its
Subsidiaries; provided, however, that upon prior agreement by the Board of
Directors, and subject to the terms of this Agreement, Executive may engage in
independent activities in areas unrelated to the Company's business or the
Company's actual or demonstrably anticipated business; and provided, further,
that no such independent activities shall materially detract from the
essentially full time commitment of Executive to the business and affairs of the
Company. Executive shall perform her duties and responsibilities to the best of
her abilities in a diligent, trustworthy, businesslike and professional manner.

 

(b) Unless the Company and Executive otherwise agree,
Executive shall perform the Employment Services at the Company's executive
offices and traveling on business as Executive and the Company shall reasonably
deem necessary.

 

3. Compensation.

 

(a) During the Employment Period, the Company will pay
Executive for the Employment Services a base salary (the "Base
Salary") at the annual rate of two hundred and ten thousand dollars
($210,000) or such other increased rate as the compensation committee of the
Board or Board committee performing equivalent functions (the "Compensation
Committee") (or if the Board has no Compensation Committee at the time,
then the Board) may designate from time to time, such salary to be paid at such
periods as salary is paid to other executive officers of the Company. The
Compensation Committee (or the Board, if applicable) shall review the Base
Salary of the Executive at least annually on the anniversary of the Effective
Date and may, in its sole discretion, increase (but not decrease) such Base
Salary from time to time. Payment of the Base Salary shall be subject to the
customary withholding tax and other employment taxes as required with respect to
compensation paid by a corporation to an employee.

 

(b) Executive may receive an annual bonus in such amount, if
any, as the Compensation Committee (or if the Board has no Compensation
Committee at the time, then the Board), in its discretion, may award to
Executive, based upon Executive's and the Company's performance during each
year of the Employment Period.

 

(c) The Executive shall be entitled to receive such stock
options during the Employment Period as determined from time to time by the
Compensation Committee (or if the Board has no Compensation Committee at the
time, then the Board).

 

4. Reimbursement for Expenses. The Company
shall promptly reimburse Executive for all reasonable out-of-pocket expenses
incurred by him in the course of performing her duties under this Agreement,
subject to the Company's reasonable requirements with respect to reporting and
documentation of such expenses.

 

5. Benefits. Executive shall be entitled to all
fringe benefits offered by the Company and to participate in all of the Company's
employee benefit programs both on the same basis as available to executives of
the Company, and shall be entitled to such other benefits as may from time to
time be made available to Executive. The Company shall use commercially
reasonable best efforts to obtain and keep directors' and officers'
liability insurance coverage in effect in an amount equivalent to that of a
well-insured, similarly-situated company; provided, however, that the failure to
obtain and keep such insurance in effect after the Company has exercised such
commercially reasonable best efforts shall not be a breach of the Company's
obligations under this Agreement. During the Employment Period, Executive shall
be entitled to four weeks of paid vacation during each year of the Employment
Period and may carry over up to four weeks of vacation from one year to the next
succeeding year only.

 

6. Term and Termination.

 

(a) Except as otherwise provided in this Agreement, the
Employment Period shall terminate upon the earlier of:

 

  
    (i) three years from the Effective Date hereof (the
    "Initial Term"); provided, however, that the Employment Period
    shall be extended by one year after the Initial Term and each year
    thereafter on the anniversary of the Effective Date of this Agreement (each
    such extension, a "Renewal Term") unless either Executive or the
    Board shall have given written notice to the other party no later than 180
    days prior to the commencement of any Renewal Term of her or its desire to
    terminate the Employment Period on the date prior to the commencement of
    such Renewal Term;

     

    (ii) Executive's incapacity or permanent disability
    (which in either case shall be deemed to occur only in the event Executive
    is unable to perform the Employment Services for 180 days in any 12-month
    period) or death;

     

    (iii) termination by Executive voluntarily or for Good
    Reason (as defined below);

     

    (iv) termination by the Company with or without Cause (as
    defined below).

     

  

(b) If (i) the Employment Period is terminated by the Company
without Cause, (ii) the Company fails to renew this Agreement, or (iii)
Executive resign for Good Reason, and provided that Executive has not breached
the provisions of Paragraphs 9, 10, 12, 13, 14, or 16 hereof in a manner that
could adversely affect the Company, the Company shall make the following
payments to Executive within 15 days after the Termination Effective Date (as
defined below), subject in each case to any applicable payroll or other taxes
required to be withheld: (i) a lump sum amount equal to Executive's Base
Salary based on Executive's Base Salary for the 12-month period immediately
preceding the Termination Effective Date; and (ii) a lump sum amount in cash
equal to any accrued but unpaid salary and bonus through the Termination
Effective Date and unpaid salary with respect to any vacation days accrued but
not taken as of the Termination Effective Date. IN addition, under the
circumstances specified in this Paragraph 6(b), all stock options granted to the
Executive prior to October 1, 2001, that have not expired but otherwise would
not be exercisable as of the Termination Effective Date because of vesting
requirements, shall be deemed fully vested and shall become fully exercisable as
of the Termination Effective Date under the terms of the applicable stock option
plan under which such stock options originally were granted. At Executive's
election, the Company shall continue to provide Executive medical, dental and
any other health insurance, life insurance, accidental death and dismemberment
insurance and disability protection no less favorable to Executive and Executive's
dependents covered thereby (including that Executive shall remain obligated to
continue to pay any costs or expenses which Executive would otherwise be
obligated to pay pursuant to such insurance or other protections provided
pursuant to Paragraph 5 as in existence on the Termination Effective Date) until
the first to occur of (i) the date of Executive's re-employment and subsequent
opportunity to participate in any health insurance program with comparable
coverage provided by such new employer, including without limitation, coverage
with respect to any pre-existing conditions or (ii) eighteen months after such
Termination Effective Date.

 

(c) If a Change of Control (as defined below) occurs or is
anticipated, and (i) the Employment Period is terminated by the Company without
Cause, (ii) Executive resigns for Good Reason, or (iii) the Company fails to
renew this Agreement, and provided that Executive has not breached the
provisions of Paragraphs 9, 10, 12, 13, 14, or 16 hereof in a manner that could
adversely affect the Company, then the Company shall make the following payments
to Executive within 15 days after the Termination Effective Date (as defined
below), subject in each case to any applicable payroll or other taxes required
to be withheld: (i) a lump sum amount equal to two hundred percent (200%) of
Executive's Base Salary based on Executive's Base Salary for the 12-month
period immediately preceding the Termination Effective Date; (ii) a lump sum
amount in cash equal to any accrued but unpaid salary and bonus through the
Termination Effective Date and unpaid salary with respect to any vacation days
accrued but not taken as of the Termination Effective Date; and (iii) a lump sum
amount equal to the greater of 100% of the prior year's bonus or 75% of the
Executive's Base Salary, based on Executive's Base Salary for the 12-month
period immediately preceding the Termination Effective Date. At Executive's
election, the Company shall continue to provide Executive medical, dental and
any other health insurance, life insurance, accidental death and dismemberment
insurance and disability protection no less favorable to Executive and Executive's
dependents covered thereby (including that Executive shall remain obligated to
continue to pay any costs or expenses which Executive would otherwise be
obligated to pay pursuant to such insurance or other protections provided
pursuant to Paragraph 5 as in existence on the date of such termination) until
the first to occur of (i) the date of Executive's re-employment and subsequent
opportunity to participate in any health insurance program with comparable
coverage provided by such new employer, including without limitation, coverage
with respect to any pre-existing conditions or (ii) eighteen months after such
Termination Effective Date.

 

(d) Except as provided in Paragraphs 6(b) or (c), upon
termination of the Employment Period, Executive shall be entitled to receive
only (i) accrued but unpaid salary and bonus through the date of such
termination and (ii) unpaid salary with respect to any vacation days accrued but
not taken as of the date of such termination.

 

(e) For purposes of this Agreement, "Cause" shall
mean (i) the conviction (or plea of nolo contendere) of a felony or a crime
involving moral turpitude or the commission of any other act which has an
adverse effect on the Company and which involves dishonesty, disloyalty or fraud
with respect to the Company or any of its Subsidiaries, (ii) conduct bringing
the Company or any of its Subsidiaries into substantial public disgrace or
disrepute, including, without limitation, such conduct resulting from repeated
acts of alcohol or drug abuse, (iii) continued failure by Executive to
substantially perform her duties as reasonably directed by the Board for a
period of 15 days after the Board has made a written demand for substantial
performance which specifically identifies the manner in which the Board believes
that Executive has not substantially performed her duties, or (iv) gross
negligence or misconduct not in good faith with respect to the Company or any of
its Subsidiaries that materially and adversely affects the Company, or (v) any
other material breach of this Agreement which is not cured within 15 days after
Executive's receipt of written notice thereof.

 

(f) For purposes of this Agreement, termination of the
Employment Period by Executive for "Good Reason" shall mean
termination by Executive (i) within 90 days after Executive has been assigned,
without Executive's consent, to any duties substantially inconsistent with
Executive's position, duties, responsibilities or status with the Company as
contemplated in Paragraph 1 of this Agreement; (ii) in anticipation of or
following a Change of Control, upon failure of the Company to pay Executive an
annual bonus equal to the average amount of such annual bonus paid to Executive
during the three fiscal years of the Company immediately preceding the year in
which the Change of Control occurs; (iii) following a reduction of Executive's
Base Salary in anticipation of or following a Change of Control; (iv) if
Executive is required to regularly perform the duties of Executive's
employment more than 50 miles from Boulder, Colorado; or (v) upon a material
breach of this Agreement by the Company which is not cured within 30 days after
the Company's receipt of written notice thereof. Executive shall provide
written notice to the Company of any and all grounds that Executive alleges
constitute "Good Reason" and the Company shall have 30 days after
receipt of such written notice to cure any such alleged grounds for "Good
Reason". If, following the expiration of such 30 day period, Executive
still believes that "Good Reason" exists for Executive's termination
of Employment, the provisions of Paragraph 7 shall apply.

 

(g) For purposes of this Agreement, a "Change of
Control" shall mean (i) any consolidation or merger of the Company in which
the Company is not the surviving or continuing corporation or pursuant to which
shares of the Company's common stock would be converted into cash, securities
or other property, other than a merger of the Company in which the holders of
the Company's common stock immediately prior to the merger have (directly or
indirectly) at least an 80% ownership interest in the outstanding common stock
of the surviving corporation immediately after the merger, (ii) the acquisition
by any person, together with all affiliates and associates of such person, of
beneficial ownership of securities of the Company that represent twenty five
percent (25%) or more of the outstanding voting securities of the Company, other
than an acquisition of newly-issued voting securities directly from the Company
in a single transaction or series of related transactions as a result of which
the holders of the Company's voting securities immediately prior to the
consummation of such transaction or series of related transactions continue to
hold securities representing a majority of the voting power of all of the
Company's outstanding voting securities, (iii) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company, (iv) the stockholders of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company, (v) as a result of, or in connection with, any cash tender offer,
exchange offer, merger or other business combination, sale of assets, or an
accumulation, directly or indirectly, by any person or group (other than the
Company, any Subsidiary, or any employee benefit plan sponsored or maintained by
the Company or any Subsidiary, or any trustee of such plan acting as trustee) of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities, the members of the Board
immediately prior to the first public announcement relating to such event shall
thereafter cease to constitute a majority of the Board, or (vi) as a result of,
or in connection with, any proxy or consent solicitation or contested election,
one or more members of the Board are elected in opposition to the nominees of
the Board.

 

(h) Promptly (but in any event within 20 days) following any
termination of the Employment Period, and as of that date, the Company will
notify Executive of the itemized and aggregate cash value of the payments and
benefits, as determined under Section 280G of the Internal Revenue Code (the
"Code"), received or to be received by Executive in connection with
the termination of Executive's employment (whether payable pursuant to the
terms of this Agreement or otherwise). At the same time, the Company shall
advise Executive of the portion of such payments or benefits which constitute
parachute payments within the meaning of the Code and which may subject
Executive to the payment of excise taxes pursuant to Section 4999 and the
expected amount of such taxes (such payments or benefits being hereinafter
referred to as "Parachute Payments").

 

(i) Notwithstanding the provisions of Paragraph 6(c) hereof,
if all or any portion of the payments or benefits provided under Paragraph 6(c)
either alone or together with other payments or benefits which Executive has
received or is then entitled to receive from the Company and any of its
Subsidiaries would constitute Parachute Payments, such payments or benefits
provided to Executive under Paragraph 6(c) shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code; but only if, by reason of such reduction, Executive's
net after tax benefit shall exceed the net after tax benefit if such reduction
were not made. "Net after tax benefit" for purposes of this Paragraph
6(i) shall mean the sum of (i) the total amount payable to Executive under
Paragraph 6(c) hereof, plus (ii) all other payments and benefits which Executive
has received or is then entitled to receive from the Company and any of its
subsidiaries that would constitute a Parachute Payment, less (iii) the amount of
federal income taxes payable with respect to the payment and benefits described
in (i) and (ii) above calculated at the maximum marginal income tax rate for
each year in which such payments and benefits shall be paid to Executive (based
upon the rate in effect for such year as set forth in the Code at the
Termination Date), less (iv) the amount of excise taxes imposed with respect to
the payments and benefits described in (i) and (ii) above by Section 4999 of the
Code.

 

For purposes of this Paragraph 6(i), Executive's base
amount, the present value of the Parachute Payments, the amount of the excise
tax and all other appropriate matters shall be determined by the Company's
independent auditors in accordance with the principles of Section 280G of the
Code and based upon the advice of tax counsel selected by the Company, which tax
counsel shall be reasonably satisfactory to Executive, provided, however, that
the applicable federal rate used for the purposes of calculating the present
value of the Parachute Payments shall be the federal rate in effect on the date
of this Agreement.

 

7. Notice of Certain Termination. In the event
that either (i) the Company shall terminate Executive for Cause or (ii)
Executive shall terminate for Good Reason, then any such termination shall be
communicated by written notice to the other party hereto. Any such notice shall
specify (x) the effective date of termination of the Employment Period, which,
except as otherwise provided in Paragraph 6(f), shall not be more than 30 days
after the date the notice is delivered (the "Termination Effective
Date") and (y) in reasonable detail the facts and circumstances underlying
a determination that the termination is for Cause or for Good Reason, as the
case may be. If within 15 days after any notice of termination of Executive for
Cause by the Company is given, or if within 15 days after the Company's 30 day
cure period under Paragraph 6(f) has expired, the party receiving such notice
notifies the other party that a good faith dispute exists concerning the
characterization of the termination, the Termination Effective Date shall be the
date on which such dispute is finally resolved either by written agreement of
the parties or by binding arbitration conducted pursuant to the rules of the
American Arbitration Association. Notwithstanding the pendency of any such
dispute, the Company shall continue Executive and Executive's dependents as
participants in all medical, dental and any other health insurance, life
insurance, accidental death and dismemberment insurance and disability
protection plans of the Company in which Executive and Executive's dependents
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved. Benefits provided under this Paragraph 7 are in
addition to all other amounts due under this Agreement and shall not be offset
against, or reduce any other amounts due under, this Agreement.

 

8. Insurance. The Company may, at its election
and for its benefit, insure Executive against accidental death, and Executive
shall submit to such physical examination and supply such information as may be
required in connection therewith.

 

9. Non-disclosure of Confidential Information.

 

(a) Unless Executive first secures written consent from the
Company pursuant to procedures implemented by Company after the date hereof,
Executive shall not disclose or use at any time, either during the Employment
Period or thereafter, any Confidential Information (as defined in Paragraph 17)
except to the extent Executive reasonably believes is necessary to disclose or
use such Confidential Information in performing the Employment Services.
Executive further agrees that Executive will use Executive's commercial best
efforts to safeguard the Confidential Information and protect it against
disclosure, misuse, espionage, loss and theft, including, without limitation,
causing recipients of Confidential Information to enter into non-disclosure
agreements with the Company. Subject to the provisions of Paragraphs 10 and 13,
nothing herein shall be construed to prevent Executive from using Executive's
general knowledge and skill after termination of this agreement, whether
Executive acquired such knowledge or skill before or during the Employment
Period.

 

(b) In the event the Company has entered into confidentiality
agreements with third parties (not including Company employees) which contain
provisions different from those set forth in this Agreement, Executive agrees,
in addition to the provisions of Paragraph 9(a), to comply with any such
different provisions of which Executive is notified by the Company.

 

10. Company Ownership of Intellectual Property.
Executive hereby assigns to the Company all right, title and interest in and to
all Intellectual Property (as defined in Paragraph 17) contributed to or
conceived or made by Executive during the Employment Period and prior to the
Employment Period during the period Executive was employed by or engaged in
research or development activities for or with the Company or its predecessors
and affiliates (whether alone or jointly with others) to the extent such
Intellectual Property is not owned by the Company as a matter of law. Executive
shall promptly and fully communicate to the Company all Intellectual Property
conceived, contributed to or made by Executive and shall cooperate with the
Company to protect the Company's interests in such Intellectual Property
including, without limitation, providing assistance in securing patent
protection and copyright registrations and signing all documents reasonably
requested by the Company, even if such request occurs after the Employment
Period. The Company shall pay Executive's reasonable expenses of cooperating
with the Company in protecting the Company's interests in such Intellectual
Property unless the subject matter of the requested cooperation is related to
actions taken or failed to be taken by Executive wrongfully or otherwise not in
good faith.

 

11. Executive's Rights. Paragraph 10 of this
Agreement does not apply to an invention for which no equipment, supplies,
facilities or trade secret information of the Company was used and which was
developed entirely on Executive's own time, unless (a) the invention relates (i)
to the business of the Company, or (ii) to the Company's actual or
demonstrably anticipated material research or development, or (b) the invention
results from any work performed by Executive for the Company.

 

12. Return of Materials. Upon Termination of
the Employment Period, or at any time reasonable requested by the Company,
Executive shall promptly deliver to the Company all copies of Confidential
Information in Executive's possession and control, including written records,
manuals, lab notebooks, customer and supplier lists and all other materials
containing any Confidential Information. If the Company requests, Executive
shall provide written confirmation that Executive has returned all such
materials. Subject to the provisions of this Agreement, including, without
limitation, Paragraph 11, notwithstanding anything in this Agreement to the
contrary, upon termination of the Employment Period, the Company, at Executive's
request, shall promptly return to Executive any equipment or other materials
owned by Executive then being used by or then in the possession of the Company.

 

13. Non-Competition. Executive acknowledges and
agrees that Executive is considered to be part of the professional, managerial
and executive staff of the Company whose duties include the formulation and
execution of management policy, and that in the course of Executive's duties,
Executive is permitted access to Intellectual Property, which includes, among
other things, trade secrets of the Company that the Company seeks to protect
from dissemination and disclosure. Executive acknowledges and agrees that during
the Employment Period and for a period of five years thereafter (the
"Non-compete Period"), Executive will not, without the prior written
consent of the Company, directly or indirectly, provide products or services
substantially similar to the Employment Services to any business or entity that
provides or offers or demonstrably plans to provide or offer, products or
services that (i) are the same as or substantially similar to the products or
services provided by the Company at any time during the Employment Period, (ii)
relate to the Company's Intellectual Property (whether the Company acquired
such Intellectual Property pursuant to this Agreement or otherwise), or (iii)
relate to any subject matter of the Company's actual or demonstrably
anticipated material research and development during the Employment Period,
including without limitation, taxol, taxanes and any other compounds, within any
geographical area in which the Company or any of its subsidiaries provide or
plan to provide such products or services.

 

14. Non-Solicitation. Executive acknowledges
and agrees that during the Non-compete Period, Executive will not (a) solicit,
induce or attempt to induce, directly or indirectly, any employee of the Company
to leave the employment of the Company to work for Executive or for any other
person, firm or corporation or (b) hire any employee of the Company.

 

15. Acknowledgment of Reasonableness. Executive
acknowledges and agrees that the limitations set forth in Paragraphs 13 and 14
are reasonable with respect to scope, duration and geographic area and are
properly required for the protection of the legitimate business interest of the
Company.

 

16. Further Assistance. During the Non-compete
Period, Executive will not make any disclosure or other communication to any
person, issue any public statements or otherwise cause to be disclosed any
information which is designed, intended or might reasonably be anticipated to
discourage any persons from doing business with the Company or otherwise have a
negative impact or adverse effect on the Company, except to the extent such
disclosure is required by law. During the Non-compete Period, Executive will
provide assistance reasonably requested by the Company in connection with
actions taken by Executive during the Employment Period, including but not
limited to assistance in connection with any lawsuits or other claims against
the Company arising from events during the Employment Period, provided that the
Company shall reimburse all reasonable expenses (including without limitation,
reasonable loss of compensation from other sources resulting from such
assistance during normal business hours).

 

17. Certain Definitions.

 

"Affiliate" and "Associate" have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on the
date of this Agreement (the "Exchange Act Rules"), and
"Beneficial Ownership" has the meaning ascribed to such term in Rule
13d-3 of the Exchange Act Rules.

 

"Confidential Information" means all
information (whether or not specifically labeled or identified as confidential),
in any form or medium, that is disclosed to, or developed or learned by
Executive during the Employment Period and prior to the Employment Period during
the period Executive was employed by or engaged in research or development
activities for or with the Company or its predecessors and affiliates or that
relates to the business, products, services, customers, research or development
of the Company, its Subsidiaries, its Affiliates, or third parties with whom the
Company, its Subsidiaries or its Affiliates does business or from whom the
Company or its Affiliates receives information. Confidential Information shall
not include any information that (i) has become publicly known through no
wrongful act or breach of any obligation of confidentiality, as evidenced by
written records or documents; or (ii) was rightfully received by Executive on a
non-confidential basis from a third party (provided that such third party is not
known to Executive to be bound by a confidentiality agreement with the Company
or another party), as evidenced by written records or documents.

 

"Intellectual Property" means any idea,
invention, design, development, device, method or process (whether or not
patentable or reduced to practice or including Confidential Information) and all
related patents and patent applications, any copyrightable work or mask work
(whether or not including Confidential Information) and all related
registrations and applications for registration, and all other proprietary
rights.

 

"Subsidiaries" means any corporation of
which the securities having a majority of the voting power in electing directors
are, at the time of determination, owned by the Company, directly or through one
of more Subsidiaries.

 

18. Executive Representations. Executive hereby
represents and warrants to the Company that (a) the execution, delivery and
performance of this Agreement by Executive does not and will not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which he is bound,
and (b) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms.

 

19. Company Representations. The Company hereby
represents and warrants to Executive that (a) the execution, delivery and
performance of this Agreement by the Company does not and will not conflict
with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Company is a party or by which it
is bound, and (b) upon the execution and delivery of this Agreement by
Executive, this Agreement shall be the valid and binding obligation of the
Company, enforceable in accordance with its terms.

 

20. Severability and Modification. If any provision of
this Agreement shall be held or declared to be illegal, invalid or
unenforceable, such illegal, invalid or unenforceable provision shall not affect
any other provision of this Agreement, and the remainder of this Agreement shall
continue in full force and effect as though such provision had not been
contained in this Agreement. If the scope of any provision in this Agreement is
found to be broad to permit enforcement of such provision to its full extent,
Executive consents to judicial modification of such provision and enforcement to
the maximum extent permitted by law.

 

21. Notices. Except as otherwise expressly set forth
in this Agreement, all notices, requests and other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be given (and, except as otherwise provided in this Agreement,
shall be deemed to have been duly given if so given) when delivered if given in
person or by telegram, three days after being mailed by first class registered
or certified mail, return receipt requested, postage prepaid, or one day after
being sent prepaid via reputable overnight courier to the parties at the
following addresses (or such other address as shall be furnished in writing by
like notice; provided, however, that notice of change of address
shall be effective only upon receipt):

 

Notices to Executive

Patricia A. Pilia, Ph.D.

c/o NaPro BioTherapeutics, Inc.

6304 Spine Road, Unit A

Boulder, Colorado 80301

 

Notices to Company

NaPro BioTherapeutics, Inc.

6304 Spine Road, Unit A

Boulder, Colorado 80301

 

Attn VP, General Counsel

 

22. Entire Agreement. This Agreement contains
the entire agreement between parties with respect to the subject matter hereof
and supersedes any previous understandings or agreements, whether written or
oral, regarding such subject matter.

 

23. Governing Law. All questions concerning the
construction, validity and interpretations of this Agreement will be governed by
the internal law, and not the law of conflicts, of the State of Colorado.

 

24. Survival. Paragraphs 6, 9, 10, 11, 12, 13,
14 and 16 and any other provision of this Agreement which by its terms could
survive termination of the Employment Period shall survive and continue in full
force in accordance with their terms notwithstanding any termination of the
Employment Period.

 

25. Counterparts. This Agreement may be
executed in separate counterparts, each of which is deemed to be an original and
all of which taken together constitute one and the same agreement.

 

26. Successors and Assigns. This Agreement is
intended to bind and inure to the benefit of and be enforceable by Executive,
the Company and their respective successors and assigns; provided that in no
event shall Executive's obligations under this Agreement be delegated or
transferred by Executive, nor shall Executive's rights be subject to
encumbrance or to the claims of Executive's creditors. This Agreement is for
the sole benefit of the parties hereto and shall not create any rights in third
parties other than Executive's spouse or beneficiary as expressly set forth
herein.

 

27. Remedies. Except as otherwise provided in
this Agreement, (i) each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights to which it may be entitled and (ii) disputes under this Agreement
not finally resolved in writing by the parties within sixty days after one party
gives notice in good faith to the other party that a bona fide dispute exists
shall be resolved pursuant to binding arbitration conducted in Denver, Colorado
in accordance with the rules of the American Arbitration Association. The
prevailing party in any such arbitration shall be entitled to have its costs and
expenses (including reasonable attorney's fees and expenses) relating to such
arbitration paid by the other party if the arbitrator(s) conducting such
arbitration so determine. Notwithstanding the foregoing, the parties agree and
acknowledge that money damages may not be an adequate remedy for breach of the
provisions of this Agreement and that any party may in its sole discretion apply
to any court of law or equity of competent jurisdiction for specific performance
and/or injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement. The prevailing party in any suit shall be entitled
to recover reasonable attorneys fees and costs from the other party.

 

28. Modifications and Waivers. No provision of
this Agreement may be modified, altered or amended except by an instrument in
writing executed by the parties hereto. No waiver by either party hereto of any
breach by the other party hereto of any term or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar terms or provisions at the time or at any prior or subsequent time.

 

29. Headings. The headings contained herein are
solely for the purpose of reference, are not part of this Agreement and shall
not in any way affect the meaning or interpretation of this Agreement.

 

30. Notification of Subsequent Employer.
Executive agrees that the Company may present a copy of this Agreement to any
third party.

 

31. UNDERSTAND AGREEMENT. EXECUTIVE REPRESENTS
AND WARRANTS THAT (a) EXECUTIVE HAS READ AND UNDERSTOOD EACH AND EVERY PROVISION
OF THIS AGREEMENT, (b) EXECUTIVE HAS HAD THE OPPORTUNITY TO OBTAIN ADVICE FROM
LEGAL COUNSEL OF EXECUTIVE'S CHOICE, OTHER THAN COUNSEL TO THE COMPANY (WHO IS
NOT REPRESENTING THE EXECUTIVE), IN ORDER TO INTERPRET ANY AND ALL PROVISIONS OF
THIS AGREEMENT, (c) EXECUTIVE HAS HAD THE OPPORTUNITY TO ASK THE COMPANY
QUESTIONS ABOUT THIS AGREEMENT AND ANY OF SUCH QUESTIONS EXECUTIVE HAS ASKED
HAVE BEEN ANSWERED TO EXECUTIVE'S SATISFACTION, AND (d) EXECUTIVE HAS BEEN
GIVEN A COPY OF THIS AGREEMENT.

 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.

 

EXECUTIVE

/s/

 Patricia A. Pilia, Ph.D. 

 

 

 

NAPRO BIOTHERAPEUTICS, INC.

By:       /s/

  Gordon Link, Vice President and Chief Financial OfficerLARSON EMPLOYMENT AGREEMENT

Exhibit 10.9

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT (the "Agreement") is entered into
effective as of this 1st day of October, 2001 (the "Effective Date"),
by and between NaPro BioTherapeutics, Inc., a Delaware corporation (the
"Company"), and Kai P. Larson ("Executive"). Certain
capitalized terms used in this Agreement have the meaning set forth in Paragraph
17 of this Agreement.

 

RECITALS

 

A. WHEREAS, Executive is currently employed by the Company;
and

 

B. WHEREAS, the Company desires to secure the continued
services of Executive as an employee of the Company, and to provide for certain
compensation and benefit arrangements for Executive in the event of Executive's
termination of employment under certain circumstances, and Executive is willing
to enter into this Agreement and perform such services.

 

TERMS AND CONDITIONS

 

In consideration of the respective covenants and agreements
of the parties contained in this Agreement, the parties agree as follows:

 

1. Employment Services. The Company hereby
agrees to engage Executive, and Executive hereby agrees to perform services for
the Company, on the terms and conditions set forth in this Agreement. During the
Employment Period (as defined below), the Company and Executive agree that
Executive will serve as an executive officer of the Company in the position of
Vice President, General Counsel with the duties, responsibilities and authority
as set forth on Schedule A, or will have such other executive title and such
other executive duties, responsibilities and authority as Executive and the
Company may agree upon from time to time, and will perform such services of an
executive and administrative character to the Company and its present or future
Subsidiaries consistent with the duties of the Company's other executive
officers, as the Company's Board of Directors (the "Board") may from
time to time direct (the "Employment Services") or the Bylaws of the
Company may provide. The Employment Services shall commence upon the Effective
Date of this Agreement and terminate as provided in Paragraph 6 (the
"Employment Period").

 

2. Performance.

 

(a) Executive shall report to the Chief Executive Officer (or
person acting in a similar capacity if the Company has no Chief Executive
Officer), and Executive shall devote his best efforts and his full business time
and attention (except for permitted vacation periods) to the business of the
Company and its Subsidiaries; provided, however, that upon prior agreement by
the Chief Executive Officer, and subject to the terms of this Agreement,
Executive may engage in independent activities in areas unrelated to the Company's
business or the Company's actual or demonstrably anticipated business; and
provided, further, that no such independent activities shall materially detract
from the essentially full time commitment of Executive to the business and
affairs of the Company. Executive shall perform his duties and responsibilities
to the best of his abilities in a diligent, trustworthy, businesslike and
professional manner.

 

(b) Unless the Company and Executive otherwise agree,
Executive shall perform the Employment Services at the Company's executive
offices and traveling on business as Executive and the Company shall reasonably
deem necessary.

 

3. Compensation.

 

(a) During the Employment Period, the Company will pay
Executive for the Employment Services a base salary (the "Base
Salary") at the annual rate of one hundred and eighty thousand dollars
($180,000) or such other increased rate as the compensation committee of the
Board or Board committee performing equivalent functions (the "Compensation
Committee") (or if the Board has no Compensation Committee at the time,
then the Board) may designate from time to time, such salary to be paid at such
periods as salary is paid to other executive officers of the Company. The
Compensation Committee (or the Board, if applicable) shall review the Base
Salary of the Executive at least annually on the anniversary of the Effective
Date and may, in its sole discretion, increase (but not decrease) such Base
Salary from time to time. Payment of the Base Salary shall be subject to the
customary withholding tax and other employment taxes as required with respect to
compensation paid by a corporation to an employee.

 

(b) Executive may receive an annual bonus in such amount, if
any, as the Compensation Committee (or if the Board has no Compensation
Committee at the time, then the Board), in its discretion, may award to
Executive, based upon Executive's and the Company's performance during each
year of the Employment Period.

 

(c) The Executive shall be entitled to receive such stock
options during the Employment Period as determined from time to time by the
Compensation Committee (or if the Board has no Compensation Committee at the
time, then the Board).

 

4. Reimbursement for Expenses. The Company
shall promptly reimburse Executive for all reasonable out-of-pocket expenses
incurred by him in the course of performing his duties under this Agreement,
subject to the Company's reasonable requirements with respect to reporting and
documentation of such expenses.

 

5. Benefits. Executive shall be entitled to all
fringe benefits offered by the Company and to participate in all of the Company's
employee benefit programs both on the same basis as available to executives of
the Company, and shall be entitled to such other benefits as may from time to
time be made available to Executive. The Company shall use commercially
reasonable best efforts to obtain and keep directors' and officers'
liability insurance coverage in effect in an amount equivalent to that of a
well-insured, similarly-situated company; provided, however, that the failure to
obtain and keep such insurance in effect after the Company has exercised such
commercially reasonable best efforts shall not be a breach of the Company's
obligations under this Agreement. During the Employment Period, Executive shall
be entitled to four weeks of paid vacation during each year of the Employment
Period and may carry over up to four weeks of vacation from one year to the next
succeeding year only.

 

6. Term and Termination.

 

(a) Except as otherwise provided in this Agreement, the
Employment Period shall terminate upon the earlier of:

 

  
    (i) two years from the Effective Date hereof (the
    "Initial Term"); provided, however, that the Employment Period
    shall be extended by one year after the Initial Term and each year
    thereafter on the anniversary of the Effective Date of this Agreement (each
    such extension, a "Renewal Term") unless either Executive or the
    Board shall have given written notice to the other party no later than 180
    days prior to the commencement of any Renewal Term of his or its desire to
    terminate the Employment Period on the date prior to the commencement of
    such Renewal Term;

     

    (ii) Executive's incapacity or permanent disability
    (which in either case shall be deemed to occur only in the event Executive
    is unable to perform the Employment Services for 180 days in any 12-month
    period) or death;

     

    (iii) termination by Executive voluntarily or for Good
    Reason (as defined below);

     

    (iv) termination by the Company with or without Cause (as
    defined below).

     

  

(b) If (i) the Employment Period is terminated by the Company
without Cause, (ii) the Company fails to renew this Agreement, or (iii)
Executive resign for Good Reason, and provided that Executive has not breached
the provisions of Paragraphs 9, 10, 12, 13, 14, or 16 hereof in a manner that
could adversely affect the Company, the Company shall make the following
payments to Executive within 15 days after the Termination Effective Date (as
defined below), subject in each case to any applicable payroll or other taxes
required to be withheld: (i) a lump sum amount equal to Executive's Base
Salary based on Executive's Base Salary for the 12-month period immediately
preceding the Termination Effective Date; and (ii) a lump sum amount in cash
equal to any accrued but unpaid salary and bonus through the Termination
Effective Date and unpaid salary with respect to any vacation days accrued but
not taken as of the Termination Effective Date. In addition, under the
circumstances specified in this Paragraph 6(b), all stock options granted to the
Executive prior to October 1, 2001, that have not expired but otherwise would
not be exercisable as of the Termination Effective Date because of vesting
requirements, shall be deemed fully vested and shall become fully exercisable as
of the Termination Effective Date under the terms of the applicable stock option
plan under which such stock options originally were granted. At Executive's
election, the Company shall continue to provide Executive medical, dental and
any other health insurance, life insurance, accidental death and dismemberment
insurance and disability protection no less favorable to Executive and Executive's
dependents covered thereby (including that Executive shall remain obligated to
continue to pay any costs or expenses which Executive would otherwise be
obligated to pay pursuant to such insurance or other protections provided
pursuant to Paragraph 5 as in existence on the Termination Effective Date) until
the first to occur of (i) the date of Executive's re-employment and subsequent
opportunity to participate in any health insurance program with comparable
coverage provided by such new employer, including without limitation, coverage
with respect to any pre-existing conditions or (ii) eighteen months after such
Termination Effective Date.

 

(c) If a Change of Control (as defined below) occurs or is
anticipated, and (i) the Employment Period is terminated by the Company without
Cause, (ii) Executive resigns for Good Reason, or (iii) the Company fails to
renew this Agreement, and provided that Executive has not breached the
provisions of Paragraphs 9, 10, 12, 13, 14 or 16 hereof in a manner that could
adversely affect the Company, then the Company shall make the following payments
to Executive within 15 days after the Termination Effective Date (as defined
below), subject in each case to any applicable payroll or other taxes required
to be withheld: (i) a lump sum amount equal to two hundred percent (200%) of
Executive's Base Salary based on Executive's Base Salary for the 12-month
period immediately preceding the Termination Effective Date; (ii) a lump sum
amount in cash equal to any accrued but unpaid salary and bonus through the
Termination Effective Date and unpaid salary with respect to any vacation days
accrued but not taken as of the Termination Effective Date; and (iii) a lump sum
amount equal to the greater of 100% of the prior year's bonus or 75% of the
Executive's Base Salary, based on Executive's Base Salary for the 12-month
period immediately preceding the Termination Effective Date. At Executive's
election, the Company shall continue to provide Executive medical, dental and
any other health insurance, life insurance, accidental death and dismemberment
insurance and disability protection no less favorable to Executive and Executive's
dependents covered thereby (including that Executive shall remain obligated to
continue to pay any costs or expenses which Executive would otherwise be
obligated to pay pursuant to such insurance or other protections provided
pursuant to Paragraph 5 as in existence on the date of such termination) until
the first to occur of (i) the date of Executive's re-employment and subsequent
opportunity to participate in any health insurance program with comparable
coverage provided by such new employer, including without limitation, coverage
with respect to any pre-existing conditions or (ii) eighteen months after such
Termination Effective Date.

 

(d) Except as provided in Paragraphs 6(b) or (c), upon
termination of the Employment Period, Executive shall be entitled to receive
only (i) accrued but unpaid salary and bonus through the date of such
termination and (ii) unpaid salary with respect to any vacation days accrued but
not taken as of the date of such termination.

 

(e) For purposes of this Agreement, "Cause" shall
mean (i) the conviction (or plea of nolo contendere) of a felony or a crime
involving moral turpitude or the commission of any other act which has an
adverse effect on the Company and which involves dishonesty, disloyalty or fraud
with respect to the Company or any of its Subsidiaries, (ii) conduct bringing
the Company or any of its Subsidiaries into substantial public disgrace or
disrepute, including, without limitation, such conduct resulting from repeated
acts of alcohol or drug abuse, (iii) continued failure by Executive to
substantially perform his duties as reasonably directed by the Board for a
period of 15 days after the Board has made a written demand for substantial
performance which specifically identifies the manner in which the Board believes
that Executive has not substantially performed his duties, or (iv) gross
negligence or misconduct not in good faith with respect to the Company or any of
its Subsidiaries that materially and adversely affects the Company, or (v) any
other material breach of this Agreement which is not cured within 15 days after
Executive's receipt of written notice thereof.

 

(f) For purposes of this Agreement, termination of the
Employment Period by Executive for "Good Reason" shall mean
termination by Executive (i) within 90 days after Executive has been assigned,
without Executive's consent, to any duties substantially inconsistent with
Executive's position, duties, responsibilities or status with the Company as
contemplated in Paragraph 1 of this Agreement; (ii) in anticipation of or
following a Change of Control, upon failure of the Company to pay Executive an
annual bonus equal to the average amount of such annual bonus paid to Executive
during the three fiscal years of the Company immediately preceding the year in
which the Change of Control occurs; (iii) following a reduction of Executive's
Base Salary in anticipation of or following a Change of Control; (iv) if
Executive is required to regularly perform the duties of Executive's
employment more than 50 miles from Boulder, Colorado; or (v) upon a material
breach of this Agreement by the Company which is not cured within 30 days after
the Company's receipt of written notice thereof. Executive shall provide
written notice to the Company of any and all grounds that Executive alleges
constitute "Good Reason" and the Company shall have 30 days after
receipt of such written notice to cure any such alleged grounds for "Good
Reason". If, following the expiration of such 30 day period, Executive
still believes that "Good Reason" exists for Executive's termination
of Employment, the provisions of Paragraph 7 shall apply.

 

(g) For purposes of this Agreement, a "Change of
Control" shall mean (i) any consolidation or merger of the Company in which
the Company is not the surviving or continuing corporation or pursuant to which
shares of the Company's common stock would be converted into cash, securities
or other property, other than a merger of the Company in which the holders of
the Company's common stock immediately prior to the merger have (directly or
indirectly) at least an 80% ownership interest in the outstanding common stock
of the surviving corporation immediately after the merger, (ii) the acquisition
by any person, together with all affiliates and associates of such person, of
beneficial ownership of securities of the Company that represent twenty five
percent (25%) or more of the outstanding voting securities of the Company, other
than an acquisition of newly-issued voting securities directly from the Company
in a single transaction or series of related transactions as a result of which
the holders of the Company's voting securities immediately prior to the
consummation of such transaction or series of related transactions continue to
hold securities representing a majority of the voting power of all of the
Company's outstanding voting securities, (iii) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company, (iv) the stockholders of the
Company approve any plan or proposal for the liquidation or dissolution of the
Company, (v) as a result of, or in connection with, any cash tender offer,
exchange offer, merger or other business combination, sale of assets, or an
accumulation, directly or indirectly, by any person or group (other than the
Company, any Subsidiary, or any employee benefit plan sponsored or maintained by
the Company or any Subsidiary, or any trustee of such plan acting as trustee) of
securities of the Company representing 25% or more of the combined voting power
of the Company's then outstanding securities, the members of the Board
immediately prior to the first public announcement relating to such event shall
thereafter cease to constitute a majority of the Board, or (vi) as a result of,
or in connection with, any proxy or consent solicitation or contested election,
one or more members of the Board are elected in opposition to the nominees of
the Board.

 

(h) Promptly (but in any event within 20 days) following any
termination of the Employment Period, and as of that date, the Company will
notify Executive of the itemized and aggregate cash value of the payments and
benefits, as determined under Section 280G of the Internal Revenue Code (the
"Code"), received or to be received by Executive in connection with
the termination of Executive's employment (whether payable pursuant to the
terms of this Agreement or otherwise). At the same time, the Company shall
advise Executive of the portion of such payments or benefits which constitute
parachute payments within the meaning of the Code and which may subject
Executive to the payment of excise taxes pursuant to Section 4999 and the
expected amount of such taxes (such payments or benefits being hereinafter
referred to as "Parachute Payments").

 

(i) Notwithstanding the provisions of Paragraph 6(c) hereof,
if all or any portion of the payments or benefits provided under Paragraph 6(c)
either alone or together with other payments or benefits which Executive has
received or is then entitled to receive from the Company and any of its
Subsidiaries would constitute Parachute Payments, such payments or benefits
provided to Executive under Paragraph 6(c) shall be reduced to the extent
necessary so that no portion thereof shall be subject to the excise tax imposed
by Section 4999 of the Code; but only if, by reason of such reduction, Executive's
net after tax benefit shall exceed the net after tax benefit if such reduction
were not made. "Net after tax benefit" for purposes of this Paragraph
6(i) shall mean the sum of (i) the total amount payable to Executive under
Paragraph 6(c) hereof, plus (ii) all other payments and benefits which Executive
has received or is then entitled to receive from the Company and any of its
subsidiaries that would constitute a Parachute Payment, less (iii) the amount of
federal income taxes payable with respect to the payment and benefits described
in (i) and (ii) above calculated at the maximum marginal income tax rate for
each year in which such payments and benefits shall be paid to Executive (based
upon the rate in effect for such year as set forth in the Code at the
Termination Date), less (iv) the amount of excise taxes imposed with respect to
the payments and benefits described in (i) and (ii) above by Section 4999 of the
Code.

 

For purposes of this Paragraph 6(i), Executive's base
amount, the present value of the Parachute Payments, the amount of the excise
tax and all other appropriate matters shall be determined by the Company's
independent auditors in accordance with the principles of Section 280G of the
Code and based upon the advice of tax counsel selected by the Company, which tax
counsel shall be reasonably satisfactory to Executive, provided, however, that
the applicable federal rate used for the purposes of calculating the present
value of the Parachute Payments shall be the federal rate in effect on the date
of this Agreement.

 

7. Notice of Certain Termination. In the event
that either (i) the Company shall terminate Executive for Cause or (ii)
Executive shall terminate for Good Reason, then any such termination shall be
communicated by written notice to the other party hereto. Any such notice shall
specify (x) the effective date of termination of the Employment Period, which,
except as otherwise provided in Paragraph 6(f), shall not be more than 30 days
after the date the notice is delivered (the "Termination Effective
Date") and (y) in reasonable detail the facts and circumstances underlying
a determination that the termination is for Cause or for Good Reason, as the
case may be. If within 15 days after any notice of termination of Executive for
Cause by the Company is given, or if within 15 days after the Company's 30 day
cure period under Paragraph 6(f) has expired, the party receiving such notice
notifies the other party that a good faith dispute exists concerning the
characterization of the termination, the Termination Effective Date shall be the
date on which such dispute is finally resolved either by written agreement of
the parties or by binding arbitration conducted pursuant to the rules of the
American Arbitration Association. Notwithstanding the pendency of any such
dispute, the Company shall continue Executive and Executive's dependents as
participants in all medical, dental and any other health insurance, life
insurance, accidental death and dismemberment insurance and disability
protection plans of the Company in which Executive and Executive's dependents
were participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved. Benefits provided under this Paragraph 7 are in
addition to all other amounts due under this Agreement and shall not be offset
against, or reduce any other amounts due under, this Agreement.

 

8. Insurance. The Company may, at its election
and for its benefit, insure Executive against accidental death, and Executive
shall submit to such physical examination and supply such information as may be
required in connection therewith.

 

9. Non-disclosure of Confidential Information.

 

(a) Unless Executive first secures written consent from the
Company pursuant to procedures implemented by Company after the date hereof,
Executive shall not disclose or use at any time, either during the Employment
Period or thereafter, any Confidential Information (as defined in Paragraph 17)
except to the extent Executive reasonably believes is necessary to disclose or
use such Confidential Information in performing the Employment Services.
Executive further agrees that Executive will use Executive's commercial best
efforts to safeguard the Confidential Information and protect it against
disclosure, misuse, espionage, loss and theft, including, without limitation,
causing recipients of Confidential Information to enter into non-disclosure
agreements with the Company. Subject to the provisions of Paragraphs 10 and 13,
nothing herein shall be construed to prevent Executive from using Executive's
general knowledge and skill after termination of this agreement, whether
Executive acquired such knowledge or skill before or during the Employment
Period.

 

(b) In the event the Company has entered into confidentiality
agreements with third parties (not including Company employees) which contain
provisions different from those set forth in this Agreement, Executive agrees,
in addition to the provisions of Paragraph 9(a), to comply with any such
different provisions of which Executive is notified by the Company.

 

10. Company Ownership of Intellectual Property.
Executive hereby assigns to the Company all right, title and interest in and to
all Intellectual Property (as defined in Paragraph 17) contributed to or
conceived or made by Executive during the Employment Period and prior to the
Employment Period during the period Executive was employed by or engaged in
research or development activities for or with the Company or its predecessors
and affiliates (whether alone or jointly with others) to the extent such
Intellectual Property is not owned by the Company as a matter of law. Executive
shall promptly and fully communicate to the Company all Intellectual Property
conceived, contributed to or made by Executive and shall cooperate with the
Company to protect the Company's interests in such Intellectual Property
including, without limitation, providing assistance in securing patent
protection and copyright registrations and signing all documents reasonably
requested by the Company, even if such request occurs after the Employment
Period. The Company shall pay Executive's reasonable expenses of cooperating
with the Company in protecting the Company's interests in such Intellectual
Property unless the subject matter of the requested cooperation is related to
actions taken or failed to be taken by Executive wrongfully or otherwise not in
good faith.

 

11. Executive's Rights. Paragraph 10 of this
Agreement does not apply to an invention for which no equipment, supplies,
facilities or trade secret information of the Company was used and which was
developed entirely on Executive's own time, unless (a) the invention relates (i)
to the business of the Company, or (ii) to the Company's actual or
demonstrably anticipated material research or development, or (b) the invention
results from any work performed by Executive for the Company.

 

12. Return of Materials. Upon Termination of
the Employment Period, or at any time reasonable requested by the Company,
Executive shall promptly deliver to the Company all copies of Confidential
Information in Executive's possession and control, including written records,
manuals, lab notebooks, customer and supplier lists and all other materials
containing any Confidential Information. If the Company requests, Executive
shall provide written confirmation that Executive has returned all such
materials. Subject to the provisions of this Agreement, including, without
limitation, Paragraph 11, notwithstanding anything in this Agreement to the
contrary, upon termination of the Employment Period, the Company, at Executive's
request, shall promptly return to Executive any equipment or other materials
owned by Executive then being used by or then in the possession of the Company.

 

13. Non-Competition. Executive acknowledges and
agrees that Executive is considered to be part of the professional, managerial
and executive staff of the Company whose duties include the formulation and
execution of management policy, and that in the course of Executive's duties,
Executive is permitted access to Intellectual Property, which includes, among
other things, trade secrets of the Company that the Company seeks to protect
from dissemination and disclosure. Executive acknowledges and agrees that during
the Employment Period and for a period of five years thereafter (the
"Non-compete Period"), Executive will not, without the prior written
consent of the Company, directly or indirectly, provide products or services
substantially similar to the Employment Services to any business or entity that
provides or offers or demonstrably plans to provide or offer, products or
services that (i) are the same as or substantially similar to the products or
services provided by the Company at any time during the Employment Period, (ii)
relate to the Company's Intellectual Property (whether the Company acquired
such Intellectual Property pursuant to this Agreement or otherwise), or (iii)
relate to any subject matter of the Company's actual or demonstrably
anticipated material research and development during the Employment Period,
including without limitation, taxol, taxanes and any other compounds, within any
geographical area in which the Company or any of its subsidiaries provide or
plan to provide such products or services.

 

14. Non-Solicitation. Executive acknowledges
and agrees that during the Non-compete Period, Executive will not (a) solicit,
induce or attempt to induce, directly or indirectly, any employee of the Company
to leave the employment of the Company to work for Executive or for any other
person, firm or corporation or (b) hire any employee of the Company.

 

15. Acknowledgment of Reasonableness. Executive
acknowledges and agrees that the limitations set forth in Paragraphs 13 and 14
are reasonable with respect to scope, duration and geographic area and are
properly required for the protection of the legitimate business interest of the
Company.

 

16. Further Assistance. During the Non-compete
Period, Executive will not make any disclosure or other communication to any
person, issue any public statements or otherwise cause to be disclosed any
information which is designed, intended or might reasonably be anticipated to
discourage any persons from doing business with the Company or otherwise have a
negative impact or adverse effect on the Company, except to the extent such
disclosure is required by law. During the Non-compete Period, Executive will
provide assistance reasonably requested by the Company in connection with
actions taken by Executive during the Employment Period, including but not
limited to assistance in connection with any lawsuits or other claims against
the Company arising from events during the Employment Period, provided that the
Company shall reimburse all reasonable expenses (including without limitation,
reasonable loss of compensation from other sources resulting from such
assistance during normal business hours).

 

17. Certain Definitions.

 

"Affiliate" and "Associate" have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on the
date of this Agreement (the "Exchange Act Rules"), and
"Beneficial Ownership" has the meaning ascribed to such term in Rule
13d-3 of the Exchange Act Rules.

 

"Confidential Information" means all
information (whether or not specifically labeled or identified as confidential),
in any form or medium, that is disclosed to, or developed or learned by
Executive during the Employment Period and prior to the Employment Period during
the period Executive was employed by or engaged in research or development
activities for or with the Company or its predecessors and affiliates or that
relates to the business, products, services, customers, research or development
of the Company, its Subsidiaries, its Affiliates, or third parties with whom the
Company, its Subsidiaries or its Affiliates does business or from whom the
Company or its Affiliates receives information. Confidential Information shall
not include any information that (i) has become publicly known through no
wrongful act or breach of any obligation of confidentiality, as evidenced by
written records or documents; or (ii) was rightfully received by Executive on a
non-confidential basis from a third party (provided that such third party is not
known to Executive to be bound by a confidentiality agreement with the Company
or another party), as evidenced by written records or documents.

 

"Intellectual Property" means any idea,
invention, design, development, device, method or process (whether or not
patentable or reduced to practice or including Confidential Information) and all
related patents and patent applications, any copyrightable work or mask work
(whether or not including Confidential Information) and all related
registrations and applications for registration, and all other proprietary
rights.

 

"Subsidiaries" means any corporation of
which the securities having a majority of the voting power in electing directors
are, at the time of determination, owned by the Company, directly or through one
of more Subsidiaries.

 

18. Executive Representations. Executive hereby
represents and warrants to the Company that (a) the execution, delivery and
performance of this Agreement by Executive does not and will not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which he is bound,
and (b) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms.

 

19. Company Representations. The Company hereby
represents and warrants to Executive that (a) the execution, delivery and
performance of this Agreement by the Company does not and will not conflict
with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Company is a party or by which it
is bound, and (b) upon the execution and delivery of this Agreement by
Executive, this Agreement shall be the valid and binding obligation of the
Company, enforceable in accordance with its terms.

 

20. Severability and Modification. If any provision of
this Agreement shall be held or declared to be illegal, invalid or
unenforceable, such illegal, invalid or unenforceable provision shall not affect
any other provision of this Agreement, and the remainder of this Agreement shall
continue in full force and effect as though such provision had not been
contained in this Agreement. If the scope of any provision in this Agreement is
found to be broad to permit enforcement of such provision to its full extent,
Executive consents to judicial modification of such provision and enforcement to
the maximum extent permitted by law.

 

21. Notices. Except as otherwise expressly set forth
in this Agreement, all notices, requests and other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be given (and, except as otherwise provided in this Agreement,
shall be deemed to have been duly given if so given) when delivered if given in
person or by telegram, three days after being mailed by first class registered
or certified mail, return receipt requested, postage prepaid, or one day after
being sent prepaid via reputable overnight courier to the parties at the
following addresses (or such other address as shall be furnished in writing by
like notice; provided, however, that notice of change of address
shall be effective only upon receipt):

 

Notices to Executive

Kai P. Larson

c/o NaPro BioTherapeutics, Inc.

6304 Spine Road, Unit A

Boulder, Colorado 80301

 

Notices to Company

NaPro BioTherapeutics, Inc.

6304 Spine Road, Unit A

Boulder, Colorado 80301

Attn VP, Chief Financial Officer

 

22. Entire Agreement. This Agreement contains
the entire agreement between parties with respect to the subject matter hereof
and supersedes any previous understandings or agreements, whether written or
oral, regarding such subject matter.

 

23. Governing Law. All questions concerning the
construction, validity and interpretations of this Agreement will be governed by
the internal law, and not the law of conflicts, of the State of Colorado.

 

24. Survival. Paragraphs 6, 9, 10, 11, 12, 13,
14 and 16 and any other provision of this Agreement which by its terms could
survive termination of the Employment Period shall survive and continue in full
force in accordance with their terms notwithstanding any termination of the
Employment Period.

 

25. Counterparts. This Agreement may be
executed in separate counterparts, each of which is deemed to be an original and
all of which taken together constitute one and the same agreement.

 

26. Successors and Assigns. This Agreement is
intended to bind and inure to the benefit of and be enforceable by Executive,
the Company and their respective successors and assigns; provided that in no
event shall Executive's obligations under this Agreement be delegated or
transferred by Executive, nor shall Executive's rights be subject to
encumbrance or to the claims of Executive's creditors. This Agreement is for
the sole benefit of the parties hereto and shall not create any rights in third
parties other than Executive's spouse or beneficiary as expressly set forth
herein.

 

27. Remedies. Except as otherwise provided in
this Agreement, (i) each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights to which it may be entitled and (ii) disputes under this Agreement
not finally resolved in writing by the parties within sixty days after one party
gives notice in good faith to the other party that a bona fide dispute exists
shall be resolved pursuant to binding arbitration conducted in Denver, Colorado
in accordance with the rules of the American Arbitration Association. The
prevailing party in any such arbitration shall be entitled to have its costs and
expenses (including reasonable attorney's fees and expenses) relating to such
arbitration paid by the other party if the arbitrator(s) conducting such
arbitration so determine. Notwithstanding the foregoing, the parties agree and
acknowledge that money damages may not be an adequate remedy for breach of the
provisions of this Agreement and that any party may in its sole discretion apply
to any court of law or equity of competent jurisdiction for specific performance
and/or injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement. The prevailing party in any suit shall be entitled
to recover reasonable attorneys fees and costs from the other party.

 

28. Modifications and Waivers. No provision of
this Agreement may be modified, altered or amended except by an instrument in
writing executed by the parties hereto. No waiver by either party hereto of any
breach by the other party hereto of any term or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar terms or provisions at the time or at any prior or subsequent time.

 

29. Headings. The headings contained herein are
solely for the purpose of reference, are not part of this Agreement and shall
not in any way affect the meaning or interpretation of this Agreement.

 

30. Notification of Subsequent Employer.
Executive agrees that the Company may present a copy of this Agreement to any
third party.

 

31. UNDERSTAND AGREEMENT. EXECUTIVE REPRESENTS
AND WARRANTS THAT (a) EXECUTIVE HAS READ AND UNDERSTOOD EACH AND EVERY PROVISION
OF THIS AGREEMENT, (b) EXECUTIVE HAS HAD THE OPPORTUNITY TO OBTAIN ADVICE FROM
LEGAL COUNSEL OF EXECUTIVE'S CHOICE, OTHER THAN COUNSEL TO THE COMPANY (WHO IS
NOT REPRESENTING THE EXECUTIVE), IN ORDER TO INTERPRET ANY AND ALL PROVISIONS OF
THIS AGREEMENT, (c) EXECUTIVE HAS HAD THE OPPORTUNITY TO ASK THE COMPANY
QUESTIONS ABOUT THIS AGREEMENT AND ANY OF SUCH QUESTIONS EXECUTIVE HAS ASKED
HAVE BEEN ANSWERED TO EXECUTIVE'S SATISFACTION, AND (d) EXECUTIVE HAS BEEN
GIVEN A COPY OF THIS AGREEMENT.

 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.

 

EXECUTIVE

/s/

 Kai P. Larson

 

 

 

NAPRO BIOTHERAPEUTICS, INC.

By:       /s/

  Gordon Link, Vice President and Chief Financial Officer

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