EX-10.26 EMPLOYMENT AGREEMENT FRANK THOMAS 3/30/04

EX-10.26 9 b49788a2exv10w26.txt EX-10.26 EMPLOYMENT AGREEMENT FRANK THOMAS 3/30/04 EXHIBIT 10.26 March 30, 2004 Frank Thomas 12867 Wendover Drive Plymouth, MI 48170 Dear Frank: It is my pleasure to offer you the position of Chief Financial Officer at Critical Therapeutics, Inc. (the "Company"). As you know, I am excited about the contributions that I expect you will make to the success of the Company. Accordingly, if you accept this offer, I would like us to agree that you could start at Critical Therapeutics, Inc. on or before April 26, 2004 (the "Start Date"). Duties and Extent of Service As Chief Financial Officer, you will have responsibility for performing those duties as are customary for, and are consistent with, such position, as well as those duties as I may from time to time designate. You will report to me. As you know, your employment will be contingent upon your agreeing to abide by the rules, regulations, instructions, personnel practices, and policies of the Company and any changes therein that the Company may adopt from time to time, and your execution of the Company's standard Nondisclosure, Developments, and Non-Competition Agreement. Compensation In consideration of your employment with the Company, the Company will pay you a base starting salary of $215,000 per year, payable in accordance with the Company's standard payroll practices. You will also be eligible for a performance based annual bonus in accordance with the Company's current bonus policy. You will be entitled to three weeks paid vacation annually. You will also be entitled to participate in such employee benefit plans and fringe benefits as may be offered or made available by the Company to its employees. We will help with your relocation expenses as follows: realtor fees, temporary accommodations for up to six months, family visits to house search as agreed upon, shipment of your belongings, closing costs, travel costs to and from your existing home for up to six months. Your relocation expense reimbursement will be grossed up. Stock Options At the first meeting of the Company's Board of Directors following your Start Date, it is my intention that the Company will grant to you a stock option (the "Option") under the Company's 2003 Equity Incentive Plan (the "Plan) to purchase an aggregate of 800,000 shares (the "Option Shares") of the Company's common stock, $0.001 par value per share (the "Common Stock"), at an exercise price equal to the fair market value of the Common Stock, as determined by the Board of Directors of the Company on the date of the grant of the Option (the "Grant Date"). This offer is contingent upon approval by the Board of Directors of your option grant specifically. Promptly after the Grant Date, the Company and you will execute and deliver to each other the Company's then standard form of stock option agreement, evidencing the Option and the terms thereof. As you know, the Option shall be subject to, and governed by, the terms and provisions of the Plan and your stock option agreement. Fifteen percent of your options will vest immediately and the remainder will vest according to our current 4 year vesting schedule. Nondisclosure, Developments and Non-Competition As you know, prior to commencing, and as a condition to your employment with the Company, all employees, including myself, are required to agree to sign a copy of the Company's standard Nondisclosure, Developments, and Non-Competition Agreement. I will be asking you to sign this agreement after you have accepted the terms of this offer below and prior to or on your Start Date. No Conflicting Obligation and Obligations By accepting this offer letter, you represent and warrant that the performance by you of any or all of the terms of this letter agreement and the performance by you of your duties as an employee of the Company do not and will not breach or contravene (i) any agreement or contract (including, without limitation, any employment or consulting agreement, any agreement not to compete or any confidentiality or nondisclosure agreement) to which you are or may become a party on or at an time after the Start Date or (ii) any obligation you may otherwise have under applicable law to any former employer or to any person to whom you have provided, provide or will provide consulting services. You acknowledge that the employment relationship between the Company and you is at-will, and that the Company and you are each free to sever the employment relationship at any time and for whatever reason. Severance If you are asked to leave your position for any reason other than cause, you will be eligible for a severance benefit of one year's salary. I trust that you find the terms as stated above acceptable. If so, I want to express my level of enthusiasm in bringing you on-board to this exciting new venture. I know that we will build a team capable of moving our technology through the research and development process and into the market place, creating substantial value at the same time. Your involvement as a member of this team is a critical component of this anticipated success. Please acknowledge your acceptance of this offer and the terms of this letter agreement by signing below and returning a copy to me. Sincerely, /s/ Paul Rubin Paul Rubin, M.D. Chief Executive Officer I hereby acknowledge that I have had a full and adequate opportunity to read, understand and discuss the terms and conditions contained in this letter agreement prior to signing hereunder. Date this 19th day of April, 2004 /s/ Frank E. Thomas ________________________ Frank Thomas