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EXHIBIT 10.49
July 29, 1998
L. Xxxxx Xxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xxxxx:
As we have discussed, the following sets forth the terms of your new
consultancy relationship with LXR Biotechnology Inc. (the "Company").
Retention as Consultant; Termination as Employee: Compensation.
Effective as of the date of this letter (the "Letter Agreement") and up
to July 29, 2001 (the "Termination Date"), you are retained as a consultant to
the Company. By signing below, you agree to be retained as a consultant and you
agree that any officer, and employment relationship with the Company is
terminated as of the date of this letter. Your services as a consultant will
include, for example, completing projects that you are currently handling and
other projects as mutually agreed.
Compensation for your services as a consultant and for all other
agreements, releases and covenants contained in this Letter Agreement shall
consist solely of (i) cash payments in the amount of $20,000 per month to be
paid in accordance with the Company's regular payroll schedule, (ii) payment of
the benefits described below, and (iii) the grant of the option set forth below.
The Company will reimburse you for any reasonable expenses incurred by you in
the course of consulting for the Company, including any conferences attended at
the request of the Company, provided that all such expenses are approved in
advance by the Company and that requests for reimbursement are in a form
acceptable to the Company. You agree that you have received all compensation to
which you are entitled for services previously rendered, whether as an employee,
consultant or in any other capacity, and you agree that the compensation to be
paid to you in the future pursuant to this paragraph is in full satisfaction of
all amounts owed to you for services you are to perform in the future as a
consultant to the Company. Although you are responsible for the payment of all
state, federal and local taxes applicable to such compensation and benefits,
unless instructed otherwise in writing by you or required by law, the Company
will continue to withhold from the cash payments specified in item (i) of this
paragraph an amount for state and federal income taxes (but
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July 29, 1998
not FICA and other state and federal withholdings) in accordance with current
payroll practice.
You may terminate the Letter Agreement upon 30 days prior written
notice to the Company. The Company may terminate the Letter Agreement upon
providing 30 days prior written notice if you breach any material term of this
Letter Agreement; provided, however, that the Company shall not be entitled to
terminate this Letter Agreement if, to the reasonable satisfaction of the
Company, you cure the breach within 10 days from the date such notice is
provided to you and you provide written notice to the Company within such 10 day
period that you have cured such breach and describing how you have done so. In
the event of a termination pursuant to this paragraph, (i) you shall not be
entitled to any further cash compensation, (ii) all other benefits being
provided to you by the Company shall cease, and (iii) the option granted to you
pursuant to this Letter Agreement and all options held by you shall cease
vesting and you shall have 90 days thereafter to exercise such option.
Benefits.
For 18 months after the date hereof, the Company will pay COBRA
premiums for you and your dependents under the Company's medical and dental
plans provided you remain eligible under the plans and applicable law. After
such 18 month period, the Company will pay directly to you an amount equal to
such COBRA premiums and obtaining benefits after such date will be your
responsibility. Since you are no longer employed by the Company, you will not
accrue vacation or any other benefits.
Grant of Stock Option.
Effective as of April 20, 1998 (the "Grant Date"), the Company granted
you an option to purchase Three Hundred Thousand (300,000) shares of Common
Stock of the Company. The grant of this option was contingent upon you signing
an option agreement and upon approval by the stockholders of the Company of a
proposal acted upon at the June 11, 1998 Annual Meeting of Stockholders and such
proposal has been approved by the stockholders.
This stock option is intended not to qualify as an incentive stock
option ("ISO") within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended. The exercise price of this option is $3.3125, which was the
closing price of the Common Stock of the Company as listed on the American Stock
Exchange on the business day immediately preceding the Grant Date. This stock
option is granted pursuant to and subject to the terms and conditions of the
1993 Stock Option Plan, as amended, and hereby incorporated by reference. You
agree to enter into the Stock Option Grant Agreement attached hereto as Exhibit
A, which provides, among other things, that the
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stock option shall vest 25% on April 20, 1999 (the "Initial Vesting Date") and
2.083 1/3% at the end of each month thereafter; provided, however, that vesting
on the option granted pursuant to this Letter Agreement and all other options
you hold will stop on the day you cease to consult to the Company and vested
options must be exercised within 90 days from the date you cease to consult.
Certain of the options previously granted to you were intended to
qualify as ISOs. The tax laws applicable to ISOs require that, to maintain the
ISO status of your vested options, you must exercise your vested ISOs within
three months of the date your employment was terminated, i.e., before October
29, 1998. Please be aware that consultants are not eligible for ISOs and any of
your options that vest after October 29, 1998 will therefore be considered
"nonqualified stock options."
At the time of exercise of any options, the Company will withhold all
state, federal and local taxes subject to withholding obligations that the
Company determines are applicable. You should consult a tax advisor regarding
the tax treatment of your options, and by signing below you acknowledge that you
have consulted such an advisor or that you have knowingly chosen not to consult
such an advisor.
Invention Assignment.
Please take the time to review the obligations set forth in the
Employee Invention Assignment and Confidentiality Agreement attached hereto as
Exhibit B, which you have previously executed and are currently bound by. By
signing below, you confirm that you have been bound by the terms of such
Employee Invention Assignment and Confidentiality Agreement at all times during
your employment by the Company and that you have continuing obligations under
such agreement. Please examine areas in which you might have stored Company
proprietary information, including, among other places, personal computers and
computer disks, saved e-mail communications and personal files, as all Company
materials must be returned to the Company. Also, remember that you likely know
some proprietary information regarding the Company, and it is your legal
responsibility not to disclose this information to anyone.
You hereby irrevocably transfer and assign to the Company any and all
of your right, title, and interest in and to "Inventions" (as defined below),
including but not limited to all copyrights, patent rights, trade secrets and
trademarks. Inventions will be the sole property of the Company. For the
purposes of this Letter Agreement, the term "Inventions" will mean all
discoveries, inventions, improvements, developments, products, processes,
procedures, techniques, formulae, computer programs, drawings, designs, notes,
documents, information and materials made, conceived, developed or reduced to
practice by you, alone or with others, in the field of apoptosis, including
without limitation Inventions resulting from your services to the Company or
funded in whole or in part by the Company or which result from your use of any
premises or
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resources owned, leased or contracted for by the Company; provided, that if you
create an "Invention" that falls within the scope of this assignment solely
because it is within the field of apoptosis, and such Invention does not relate
to any products or research of the Company, the Company will consider reasonably
any request by you to retain such Invention. The Company will have the sole
right to determine the treatment of any Inventions, including the right to keep
them as trade secrets, to file and execute patent applications on them, to use
and disclose them without prior patent application, to file registrations for
copyrights or trademarks on them in its own name, or to follow any other
procedure that the Company deems appropriate.
You agree: (i) to disclose all Inventions to the Company promptly, in
writing; (ii) to cooperate with and assist the Company to apply for and to
prosecute, and to execute any applications and/or assignments and/or other
documents reasonably necessary to obtain or maintain, any patent, copyright,
trademark or other statutory protection for Inventions in the Company's name as
the Company deems appropriate; (iii) to deliver to the Company evidence for
interference purposes or other legal proceedings and to testify in any
interference or other legal proceedings and to otherwise assist the Company
related thereto, whenever requested to do so by the Company; and (iv) to
otherwise treat all Inventions as "Confidential Information," as defined below.
You hereby grant the Company a limited power of attorney to execute any
documents necessary or appropriate to effectuate the Company's rights hereunder.
If you have any questions as to whether a given invention, discovery or the like
qualifies as an "Invention" hereunder, you will inform the Company of the nature
of such invention or discovery for determinations to whether such is an
Invention.
Confidential Information.
You acknowledge that in the past and in the future while acting as a
consultant you will acquire information and materials from the Company and
knowledge about the Company's business, products, techniques, experimental work,
customers, clients and suppliers. You further acknowledge that all such
knowledge, information and materials acquired before or after the date of this
Letter Agreement, the existence, terms and conditions of this Letter Agreement,
and the Inventions at all time have been and will continue to be trade secrets
and confidential and proprietary information of Company (collectively, the
"Confidential Information"). Confidential Information will not include, however,
any information which is or becomes part of the public domain through no fault
of yours or which you can demonstrate by competent evidence was already known to
you or which is disclosed to you by a third party owing no duty of
confidentiality to the Company or that the Company regularly gives to third
parties without restriction on use or disclosure.
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To ensure the continued confidentiality of the Confidential
Information, you agree as follows: (i) to hold all Confidential Information in
strict confidence; not to disclose it to others or use it in any way,
commercially or otherwise, except in performing the consulting services
hereunder, and not to allow any unauthorized person access to it; (ii) to take
all action reasonably necessary to protect the confidentiality of the
Confidential Information including, without limitation, implementing and
enforcing operating procedures to minimize the possibility of unauthorized use
or copying of the Confidential Information; and (iii) that Confidential
Information furnished to you by the Company or produced by you or others in
connection with the services performed hereunder will be and remain the sole
property of the Company. You agrees to return all Confidential Information and
any materials or other property provided by the Company promptly, at the
Company's request, upon expiration of this Letter Agreement, or upon termination
of your services. You agree not to retain any Confidential Information or
reproductions thereof, or other such property or materials, after such request,
expiration or termination.
Covenant Not to Compete.
During the term of this Letter Agreement, you will not directly or
indirectly assist any person, business or enterprise which is engaged in
research or development related to the field of apoptosis without the express
prior written consent of the Company, which consent will not be unreasonably
withheld if the proposed activity does not compete or interfere with the
business of the Company. During the term of this Letter Agreement you will not
in any manner interfere with the operations, business, research or contractual
relations of the Company. For purposes of this paragraph, to "assist" is defined
as follows: (i) to be an officer, director, employee, partner, shareholder
(other than a holder of less than 1% of the voting power of a public company,
where you have no other relationship to such public company), principal, agent,
representative or consultant for such person or entity, or to carry on any
similar activities for such person or entity, in whatever capacity; (ii) to
promote or endorse or allow your name to be used in any Annual Report, Quarterly
Report, Private Placement Memorandum or advertisement of such entity; or (iii)
to solicit or attempt to solicit business or other opportunities on behalf of
such entity. For purposes of this paragraph, "interfere" shall include but not
be limited to taking any actions detrimental to the Company or its business,
disparaging the Company or its management, questioning the Company's legal
rights, including its rights to assets, or preventing or hindering the Company's
employees in the performance of their duties.
Nothing herein will prohibit you from servicing as an expert in
malpractice cases or on Boards of charitable organizations or from soliciting or
accepting support for research conducted by you at charitable organizations;
provided that such activities do not require or result in the disclosure of any
Confidential Information.
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Release, Etc.
By signing below, and in consideration of the payments, benefits and
option described above, you agree that the Company has satisfied all obligations
to you. You and your representatives, heirs, successors and assigns, do hereby
release, acquit and forever discharge the Company, and its affiliates,
subsidiaries, divisions and related companies, and the past, present and future
employees, agents, officers, directors, stockholders, partners, heirs,
executors, administrators, successors and assigns of all of the foregoing (all
hereinafter "Releasees"), from and against any and all claims, rights, demands,
actions, obligations, liabilities and causes of action -- whether asserted or
unasserted, whether known or unknown, and/or whether brought directly by or on
behalf of you or brought derivatively or in some other representative capacity
by you on behalf of the Company or others -- of any and every kind, nature and
character whatsoever, known or unknown, that you (or persons you may purport to
represent) may now have, that you (or persons you may purport to represent) has
ever had or that you (or persons you may purport to represent) may in the future
claim to have against Releasees, or any of them, including but not limited to
claims arising under the Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967, California's Fair Employment and Housing Act, and any
claims of discrimination arising under any federal, state or local law, and
those arising from or in any way connected with or related to the employment of
you by Releasees, or any of them, the termination of that employment, the lack
of such employment, or any claims of discrimination or retaliation, and all acts
or omissions of Releasees, or any of them, whatsoever heretofore occurring or
arising.
As to the matters released above, you waive all rights or benefits
under Section 1542 of the California Civil Code, which provides as follows: "A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
By signing below, you agree, for yourself and for each of your
representatives, heirs, successors and assigns, not to assert any claims,
rights, demands, actions, obligations, liabilities or causes of action -whether
brought directly by or on behalf of you, or brought derivatively by you on
behalf of the Company or others -- of any and every kind, nature and character
whatsoever, that you may now have, that you have ever had or that may exist in
the future, or that you believe the Company or others may now have, have ever
had or may in the future have, against Releasees, except claims based on breach
of this Letter Agreement by the Company.
By signing below, you expressly state that you have been given a period
of at least 21 days within which to consider the release set forth above. You
are advised to consult with an attorney prior to signing below. Your release
does not become effective until 7
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days after you sign this Letter Agreement. You understand that you may revoke
the release at any time during the 7 days following the date you sign this
Letter Agreement. It is agreed that any such revocation must be received in
writing by the Company within said 7 day period in order to be effective. If you
revoke the release, as of the date of such revocation this Letter Agreement
shall be terminated, the option granted pursuant to this Letter Agreement shall
terminate and you shall not be entitled to any other compensation or benefits.
Miscellaneous.
Except for agreements related to confidential information of, any
assignment of inventions to, the Company, and any outstanding loan(s), this
Letter Agreement supersedes and replaces all prior understandings and agreements
between you and the Company. The obligations set forth in this Letter Agreement
under the captions "Invention Assignment" and "Confidential Information" will
survive any expiration or termination of this Letter Agreement.
You acknowledge that the Company will have no adequate remedy at law if
you violate your obligations set forth in this Letter Agreement under the
captions "Invention Assignment," "Confidential Information" and "Covenant Not To
Compete." In such event, the Company will have the right, in addition to any
other rights it may have, to obtain in any court of competent jurisdiction
injunctive relief to restrain any breach or threatened breach of this Letter
Agreement.
Any notice required or permitted hereunder will be given in writing and
will be deemed effectively given as follows: (a) upon personal delivery; (b)
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); (c) one (1) business day after its
deposit with any return receipt express courier (prepaid); or (d) one (1)
business day after transmission by fax or telecopier, addressed to the other
party at its address (or facsimile number, in the case of transmission by
telecopier) as shown on the first page hereof or on the records of the Company,
or to such other address as such party may designate in writing from time to
time to the other party. Any notice to the Company shall be addressed to the
President.
Upon submission of a request for reimbursement of expenses in a form
reasonably acceptable to the Company, the Company will reimburse you for
attorney fees related to the negotiation of this Letter Agreement, limited to
the lesser of $1200 or the amount of expenses actually incurred.
As soon as practicable after you sign this Letter Agreement, the
Company will allow you or your designee access to the Company's premises so that
you and the Company can identify, by mutual agreement, equipment brought with
you to the Company at the time of your original employment. Once identified, if
such equipment is
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not being used by the Company it will be promptly returned to you; if it is
being used, it will be returned to you at the earlier of the date such property
ceases to be used by the Company or the termination of this Agreement.
This Letter Agreement will be construed and enforced in accordance with
the internal laws of the State of California, excluding that body of laws
pertaining to conflict of laws. If any provision of this Letter Agreement is
determined by a court of law to be illegal or unenforceable, then such provision
will be enforced to the maximum extent possible and the other provisions will
remain in full force and effect.
Sincerely,
G. Xxxx Xxxx
Interim Chief Executive Officer
AGREED AND ACCEPTED:
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L. Xxxxx Xxxxx
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