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EXHIBIT 10.15
June 1, 1997
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Employment Agreement
Dear ▇▇▇▇▇▇:
Sangamo BioSciences, Inc. proposes to enter into the following
employment agreement ("Agreement") with you.
I have incorporated the terms we have discussed regarding your
employment into this agreement and the proposed terms and conditions are set
forth below. If the terms of the Agreement are satisfactory, please indicate
your acceptance of the Agreement by executing this letter and returning it to
me.
1. Definitions. The terms defined in this section shall have the
meanings set forth below for purposes of this Agreement.
a. "Board of Directors" shall mean the Board of Sangamo
BioSciences, Inc.
b. "Sangamo" or "Company" shall mean Sangamo BioSciences,
Inc.
c. "Employee" shall refer to you, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
d. "Without Cause" shall mean that Sangamo has without
"Cause," as defined below, and without the Employee's
written consent:
(1) terminated the Employee's services with the
Company;
(2) materially reduced the Employee's duties,
responsibilities and status with Sangamo;
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(3) reduced the Employee's base salary by more than
five percent (except pursuant to Company
mandated pay cuts or pay reductions which are
uniformly applied to the Company's management);
or
(4) required that the Employee be based at a
location more than 40 miles from the Employee's
home location.
e. "Cause" shall mean misconduct, including but not limited
to the following:
(1) embezzlement, theft, misuse of confidential
information or any other illegal or improper act
by the Employee against Sangamo;
(2) conduct that constitutes a material breach of
Sangamo policy, after thirty (30) days' notice
and failure to cure;
(3) unauthorized conduct that causes, or could
potentially cause, harm to the health or safety
of other Employees; and/or
(4) any other unauthorized conduct that causes, or
could potentially cause, material harm to the
business or reputation of Sangamo, after thirty
(30) days' notice and failure to cure.
f. "Change of Control" solely for purposes of this Agreement
shall mean any transaction or series of related
transactions in which (i) substantially all of the assets
of the Company are sold; or (ii) any merger,
reorganization or acquisition in which the stockholders of
the Company immediately prior to such transaction or
series of related transactions hold less than 51% of the
equity securities of the surviving entity (or any parent
thereof) immediately after such transaction, unless, such
surviving entity elects in writing to assume this
Agreement and the obligations of the Company hereunder in
its entirety.
2. Duties and Obligations.
a. The Employee shall serve as the Company's President and
Chief Executive Officer which title was approved at the
Company's Board of Directors (the "Board") meeting on
April 5, 1997. Employee's duties shall include overseeing
all corporate functions and directing the organization to
ensure the attainment of the goals and objectives set
forth from time to time by the Board of Directors.
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b. Employee agrees to abide by the terms and conditions of
the Company's standard Proprietary Information and
Inventions Agreement between Employee and the Company.
Employee further agrees that at all times both during his
employment by the Company and after his Termination
(hereinafter as defined in Section 6(a)), he will keep in
confidence and trust, and will not use or disclose, except
as directed by the Company, any confidential or
proprietary information of the Company.
c. Employee agrees to indemnify and hold the Company harmless
against any liability, damage, claims, or suits and
related costs and expenses that may arise directly or
indirectly out of Employee's Termination of any prior
employment relationship or agreement. Further, Employee
represents that he has not entered into, and agrees not to
enter into, any agreement in conflict with the terms of
this Agreement or his employment with the Company.
3. Devotion of Time to the Company's Business.
a. Employee shall devote substantially all of his business
time, attention, knowledge, skills and interests to the
business of the Company and the Company shall be entitled
to all of the benefits and profits arising from or
incident to such work, services and advice of Employee.
b. During the term of this Agreement, Employee shall not,
whether directly or indirectly, render any services of a
commercial or professional nature to any other person or
organization, whether for compensation or otherwise,
without the prior consent of the Board of Directors.
c. During the term of this Agreement, Employee shall not,
directly or indirectly, engage or participate in any
business that is in competition with the business of the
Company.
4. Compensation and Benefits.
a. Base Compensation. Beginning June 1, 1997, the Company
shall pay to Employee an annual salary of one hundred
seventy-five thousand dollars ($175,000), less all
applicable withholdings, prorated for any partial
employment period and payable in equal monthly
installments in accordance with the Company's payroll
schedule. The Compensation Committee of the Board shall
annually review the then-current level of Employee's
salary to determine the amount, if any, of salary change,
provided that the foregoing shall not serve to exempt
Employee from any Company mandated pay cuts or pay
reductions which are uniformly applied to the Company's
management, any pay increase or pay cut will be effective
as of December 31 of the year such adjustment is made and
the Board shall advise Employee of such adjustment, if
any.
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b. Bonus. The Employee will be eligible to receive a cash
bonus in addition to the Employee's current base salary.
The Compensation Committee of the Board shall annually
review the contributions of the Employee to the Company
and determine the appropriate bonus, with the initial
bonus target being 50% of the Employee's base salary. The
actual bonus may be more or less than the target amount
based upon the Employee's achievements over the year,
provided that in no event shall the actual bonus be less
than $43,750 during the first year of this Agreement.
c. Long Term Loan. In lieu of any relocation or recruiting
expenses, the Employee will receive a loan of two hundred
fifty thousand dollars ($250,000). This loan shall be
forgiven annually on a pro-rated basis over a four-year
period beginning January 1, 1999 and shall bear interest
at the minimum rate otherwise imputed thereto by the
Internal Revenue Service. Upon any Termination of Employee
other than for Cause, the Company agrees to forgive any
remaining amount of the loan payoff made as part of this
Agreement. Should the Employee resign without cause, the
remaining balance will be due and payable within ninety
(90) days.
d. Benefits. At the time of this Agreement or for such time
as otherwise provided in this Agreement, Employee shall be
entitled to participate in such fringe benefits that are
available to employees of the Company at that time,
including: family health insurance, dental insurance,
group term life insurance, short-term disability
insurance, long-term disability insurance, vacation pay,
sick pay, 401(k) and other benefits that may be added to
the Company's benefit program from time to time.
(1) Life Insurance. In addition to the group term
life insurance coverage provided to all
employees of the Company, the Company will
assist you in providing additional life
insurance protection through the establishment
of a split-dollar life insurance program, as
detailed in the Split-Dollar Life Insurance
Agreement included as Attachment A.
(2) Disability Insurance. In addition to the
short-term and long-term disability insurance
coverage provided to all employees of the
Company, the Company will assist you in
providing additional long-term disability
insurance protection through the purchase of an
individual policy that will, without offsets for
social security, workers' compensation or other
disability benefits, provide insurance coverage
in the amount of $3,500 per year. Upon your
resignation or Termination from employment, this
disability insurance policy and any dividends
accrued thereon shall be released to you or your
successor employer upon written request.
e. Stock Options. Upon entering this Agreement, the Employee
shall receive stock options totalling Two Hundred Thousand
(200,000) shares of the Company's Common Stock (the
"Option Shares") under the Company's 1996 Stock Option
Plan (the "Plan"), which options shall have an exercise
price of $0.10 per share,
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and from time to time may be granted additional stock
options. If there is a Change of Control all unvested
stock options will vest and Employee will have up to three
years to exercise the stock options.
f. Stock Bonus. Upon completion of a financing or financings
totalling at least $7,000,000 on terms and conditions
acceptable to the Board of Directors, the Employee shall
receive a one-time stock bonus of One Hundred Fifty
Thousand (150,000) shares of the Company's Common Stock.
5. Eligibility for Severance Benefits.
a. General Rule. Except as otherwise provided in this
Agreement, should the employment of the Employee be
terminated Without Cause, the Employee shall be entitled
to Severance Benefits as set forth in Section 6. A Change
of Control shall be deemed to be a Termination Without
Cause.
b. Death or Disability. If the Employee dies after he has
ceased to be an Employee but prior to receiving full
payment of his Severance Benefits (as defined in Section
6(a)(i), if any, any portion of the Severance Benefits
that remains to be paid shall be paid to the surviving
spouse of the Employee, or, if there is no surviving
spouse, to the Employee's estate.
6. Termination of Employment.
a. The Company may terminate Employee's employment under this
Agreement at any time, for any reason, with or Without
Cause by giving written notice of its intent to terminate
the employment (a "Termination").
(1) Should the Employee be terminated Without Cause,
the Company will thereafter pay twelve (12) months
base salary and a pro-rated bonus to the Employee
(the "Severance Benefits").
b. Continue Insurance Coverage. Sangamo shall continue to
provide the Employee and his family with medical and
dental insurance coverage by paying the COBRA payments for
a period equal to twelve (12) months. Notwithstanding the
foregoing, to the maximum extent permitted by law, the
number of months of continued insurance coverage provided
to the Employee under this section shall reduce the number
of months of continued coverage that must be made
available to the Employee (and his dependents, if
applicable) under COBRA.
c. Time and Form of Payment. The Employee shall not be
entitled to receive Severance Benefits during any period
in which he remains an Employee. The Employee must elect
to have his Severance Benefits paid in one of the
following ways:
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(1) A single lump sum distribution paid upon, or as
soon as reasonably practicable after the
Termination of his employment; or
(2) A deferred lump sum distribution paid in January of
the year following the year his employment
terminates; or
(3) Two installments, which do not have to be of equal
amounts, with the first paid upon, or as soon as
reasonably practicable after, the Termination of
his employment and the second paid in January of
the year following the year his employment
terminates.
Election of one of the above methods is
accomplished by providing written notice to the Company of
such election within fifteen calendar days of the
Employee's Termination. If no election is made within that
period, the Severance Benefits will automatically be paid
pursuant to Section 6(e)(1). Without regard to the payment
method elected, no interest shall accrue or be paid with
respect to the amount of the Employee's Severance
Benefits.
d. Reductions. The Severance Benefits paid to the
Employee shall be reduced to the extent legally
permissible by any amount that the Employee owes to
the he Company on the date he ceases to be an
Employee.
Except for any payments for earned salary, accrued
but unused vacation, 401(k) Plan distributions, and the
above mentioned Severance Benefits, if applicable, neither
party will be obligated to pay the other any payment as a
result of, or in connection with, the Termination of
Employee's employment with Sangamo (including but not
limited to any salary or benefits following the date of
Termination).
7. Miscellaneous.
a. Governing Law. This Agreement shall be interpreted,
construed, governed and enforced according to the laws of
the State of California.
b. Attorneys' Fees. In the event of any controversy, claim or
dispute between the parties, arising out of or relating to
this Agreement or the breach hereof, or the interpretation
hereof, each party shall bear its own legal fees and
expenses. Notwithstanding the foregoing, in the event of a
finding by any court having jurisdiction over such matter
that any party initiating an action under this Agreement
failed to have a reasonable prospect of prevailing on its
claim, the court shall have discretion to award the
prevailing party attorneys' fees and costs incurred by it
with respect to such claim or action. The "prevailing
party" means the party determined by the court to have
most nearly prevailed, even if such party did not prevail
in all matters, not necessarily the one in whose favor a
judgment is rendered.
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c. Amendments. No amendment or modification of the terms or
conditions of this Agreement shall be valid unless in
writing and signed by the parties hereto.
d. Severability. All agreements and covenants contained
herein are severable, and in the event any of the above
shall be held to be invalid or unenforceable, this
Agreement shall be interpreted as if such invalid
agreements or covenants were not contained herein.
e. Successors and Assigns. The rights and obligations of the
Company under this Agreement shall inure to the benefit of
and shall be binding upon the successors and assigns of
the Company. The Employee shall not be entitled to assign
any of his rights or obligations under this Agreement.
f. Entire Agreement. This Agreement, along with any other
Agreements set forth herein, including without limitation,
the Proprietary Information and Inventions Agreement,
constitutes the entire agreement between the parties with
respect to the employment of Employee.
If you have any questions, please do not hesitate to call me at (415)
▇▇▇-▇▇▇▇.
Very truly yours,
SANGAMO BIOSCIENCES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Board of Directors
AGREED TO AND ACCEPTED BY:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇
Employee
Date:
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ATTACHMENT A
SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
This agreement, made and entered into this 1st day of June, 1997 by
and between Sangamo BioSciences, Inc., a Delaware corporation, hereinafter
referred to as the "Company," and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇, hereinafter referred to
as the "Executive" and "Insured."
Whereas the Executive has been a trusted and valued employee of the
Company for a number of years and the Company highly values the efforts,
abilities and accomplishments of the Executive; and
Whereas the Company is concerned with the welfare of its employees
and their families and believes it is meritorious to assist them in providing
for their financial security; and
Whereas the Board of Directors of the Company has determined that it
would be in the Company's best interest to participate in a Split-Dollar
Insurance Plan with the Executive; and
Whereas the Executive has acquired a life insurance policy with a
face amount of $2,000,000; and
Whereas, the Company and the Executive desire to make said insurance
policy subject to a Split-Dollar arrangement;
Now therefore, the parties hereto mutually agree as follows:
I. Title to Policy and Incidents of Ownership
The Executive shall be the owner of the policy and shall have all
incidents of ownership except those assigned pursuant to the provisions of
Article III for security purposes only, including but not limited to:
A. The right to designate and to change the beneficiary.
B. The right to receive and to have his successor or assigns receive any
amount in excess of the amount payable to the Company as hereinafter provided in
Article IV at the time of the death of the insured; and
C. The right, at any time, to repay the amounts hereinafter described in
Article II, thereby releasing any claim which the Company might have against
such contract.
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The intention of the parties is that the Company possess no policy
rights or incidents of ownership, other than those assigned as security for the
indebtedness, which will permit the Company to unilaterally impair the right or
interests of the Executive, or his designee or assignee in any way.
The Executive hereby agrees, however, that while this agreement is
in effect, he shall notify the Company of any intent to exercise any right of
ownership in the policy other than the right to change the beneficiary at least
thirty (30) days prior to the exercise of such right of ownership.
II. Premium Payments
A. The Company will pay the premium of the policy. The Company's portion
for this premium will be a minimum of $12,000 annually for split-dollar life.
Such premium may be paid annually or more frequently as the Company may elect.
The Company's premium payments shall be remitted to the insurer before the
expiration of the grace period for premium payments. The Executive may repay any
amount of such premiums advanced for his benefit at any time.
B. The total amount of such payments by the Company, less the total
amount of any repayments by the Executive shall constitute an indebtedness to
the Company.
III. Security
A. In order to secure the repayment of the indebtedness, the Executive
agrees to execute a Collateral Assignment of the insurance policy in a form
approved by the insurance company and shall deliver physical custody of the
policy to the Company.
B. In the event of the termination of this agreement, pursuant to the
provisions of Article V hereof, the Company shall, upon receipt of an amount
equal to the total amount of the indebtedness then due to the Company, cancel
and release the Collateral Assignment of the insurance policy and redeliver
physical custody thereof to the Executive.
In the event the Executive does not satisfy the indebtedness to the
Company within thirty (30) of the termination of this agreement, the Company
shall have the right, without further notice to the Executive, to exercise its
right as Collateral Assignee to obtain a cash loan from the Insurer in
accordance with the loan provisions of the policy, provided, however, that the
total amount of any cash loan or loans so obtained shall not exceed the total
amount of the indebtedness of the Executive then due under the terms of this
agreement.
IV. Death Benefits
A. The portion of the death benefit to be paid to the Company shall be
the amount equal to the net cash surrender value of the policy up to, but not
exceeding, the then remaining balance of any indebtedness incurred for the
purposes of paying premiums under the policy. Such value shall be determined as
of the end of the period for which premiums have been paid.
B. The portion of the death benefit payable to the beneficiary or
beneficiaries designated by the Executive shall be the balance of the proceeds,
if any as provided in the policy.
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V. Term
This agreement shall be effective as of the date of this agreement
and shall continue until terminated by the death of the insured or mutual
agreement of the parties hereto.
VI. Amendment
This agreement may be amended at any time by the mutual consent of
the parties hereto.
VII. Applicable Law
This agreement shall be governed by the laws of the State of
California.
VIII. Benefit
This agreement shall be binding upon the parties hereto, the
Executive's heirs, executors and administrators, and either party's successors
or assigns. The parties hereto hereby agree for themselves, their heirs,
executors, administrators, successors or assigns to execute any and all
instruments and to perform all acts which may be necessary and proper to carry
out the purposes of this agreement.
IX. Administrator
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall serve as the administrator of this plan.
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IN WITNESS WHEREOF, the parties have executed this agreement on the
date indicated.
Company
SANGAMO BIOSCIENCES, INC.
By:
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Witness
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Executive
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇
Witness
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ATTACHMENT B
PREMIUM SCHEDULE FOR SPLIT-DOLLAR LIFE INSURANCE POLICY
Royal Maccabees Life Insurance Company
Diplomat MFC
FPAL-892
AN ILLUSTRATION OF PROJECTED VALUES AND BENEFITS
Insured: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇ Agent: ▇▇▇▇▇ ▇. ▇▇▇▇
Male, Age 40
Rating Class: Preferred Non-Smoker
Mode of Premium Payment: Annual
End Year Age Premium Death Benefit
1 41 12,000 2,000,000
2 42 12,000 2,000,000
3 43 12,000 2,000,000
4 44 12,000 2,000,000
5 45 12,000 2,000,000
6 46 12,000 2,000,000
7 47 12,000 2,000,000
8 48 12,000 2,000,000
9 49 12,000 2,000,000
10 50 12,000 2,000,000
