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EXHIBIT 10.9
AMENDMENT
AMENDMENT dated as of March 8, 1996 between Aurora Biosciences
Corporation, a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxx
("Rink").
Reference is made to that certain letter (the "Letter") dated January
23, 1996 relating to the principal terms on which Rink would join the Company.
WHEREAS, the Company was formed as of January 22, 1996 and merged with
Aurora Biosciences, Inc., a California corporation ("Aurora"), on February 14,
1996 to reincorporate Aurora in Delaware, and Rink has joined the Company.
WHEREAS, on or about the date hereof, certain persons and entities (the
"Purchasers") are purchasing shares of Series A, Series B and Series C
Preferred Stock of the Company (the "Preferred Stock"), which purchases will
benefit the Company and its present stockholders and employees.
WHEREAS, it is a condition to the obligations of the Purchasers to
purchase the Preferred Stock that Rink and the Company enter into this
Amendment, and they are willing to do so.
NOW THEREFORE, in consideration of the foregoing and the agreements
contained herein, and intending to be legally bound hereby, the Company and
Rink hereby agree as follows (references to "you" herein shall mean Rink):
1. The second sentence of the paragraph of the letter captioned
"Bonuses" is hereby amended by deleting it in its entirety and replacing it
with the following:
You will also be entitled to an additional one-time bonus of $25,000
payable upon the Company closing a corporate partner collaboration within one
year of the closing of the Company's first round of financing with committed
payments to the Company by such corporate partner greater than $2,000,000
(excluding equity purchases and the pending collaborations with Sequana and
Packard), provided that you are employed as chief executive officer of the
Company at the time of such closing.
2. The paragraph of the Letter captioned "Outside Activities" is
hereby amended by deleting the second sentence of such paragraph in its
entirety and replacing it with the following:
It is further acknowledged that you will occasionally provide
additional consulting services to companies which are not in competition with
the Company
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and that you are currently serving on the Board of Directors of four
companies other than the Company, none of which is in competition with
the Company. Notwithstanding the foregoing, with the exception of the 4
days a month you are committed to provide consulting services to Amylin
and customary Board of Directors duties related to the four other Boards
of which you are currently a member, you will devote substantially all
of your business time, attention and services to the faithful discharge
of your duties and responsibilities for the Company and, in any event,
such time as is necessary to so faithfully discharge such duties and
responsibilities. In addition, you will not serve on the Board of
Directors of any company for which you not currently a Board member
without the prior consent of a majority of the members of the Company's
Board of Directors (excluding you if you are then a member of the
Board).
3. The paragraph of the Letter captioned "Employment at Will" is
hereby amended by deleting it in its entirety and replacing it with the
following:
Termination of
Employment by You: Subject to the provisions of the paragraphs captioned
"Termination After Three Years" and "Termination of
Employment by You Without Advance Notice" below, you may
terminate your employment with the Company upon at least
six months' prior written notice to the Company. During
such notice period, you will, in addition to continuing
to perform your responsibilities (except to the extent
determined by the Company's Board of Directors), assist
the Company in the transition to a successor officer.
In the event you decide to terminate your employment,
you shall not be entitled to any severance or other
termination benefits. Subject to the provisions of the
paragraphs captioned "Termination After Three Years" and
"Termination of Employment by You Without Advance
Notice" below, you agree that you will not terminate
your employment with the Company without providing at
least six months' prior written notice to the Company.
Termination of
Employment by You
Without Advance
Notice: It is understood that you may terminate your employment
with the Company without the requirement of six months'
prior written notice to the Company under the following
circumstances: (i) your death; (ii) your disability or
other physical or mental incapacity which renders you
unable to perform your responsibilities for the Company
for any 90 work days in any 180 day period; (iii) a
Change of Control Transaction (as defined below) in
which stockholders of the Company
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immediately before such event do not own more than 50%
of the surviving company following such event; (iv) a
significant reduction in your responsibilities and
powers as chief executive officer and president or your
removal from either position of chief executive officer
or president; (v) serious and continuing medical
conditions involving a member of your immediate family
which requires such amount of your attention as to make
it impracticable for you to continue to perform your
responsibilities for the Company; or (vi) such other
unforeseeable personal circumstances beyond your control
which the Board of Directors of the Company (excluding
you if you are then a member of the Board), in its sole
discretion, reasonably determines result in your
inability to perform your responsibilities for the
Company. To the extent the requirement of six months'
notice is not applicable, you will make reasonable
efforts to effect an efficient transition of your
responsibilities and duties to a successor. Following
termination of your employment in the event of one of
the following situations, you will not be entitled to
any severance or termination benefits.
Termination by the
Company for Cause: The Company may immediately terminate your employment
"for cause" at any time without any prior written
notice to you. Termination shall constitute a
termination "for cause" if such termination is for one
or more of the following causes, as found by the Board
of Directors of the Company by a resolution duly adopted
by a majority of its members, excluding you if you are
then a member of the Board (a copy of which resolution
shall be delivered to you):
(i) your substantial and continuing failure to
render services to the Company substantially in
accordance with your responsibilities, which
materially and adversely affects or could
reasonably be expected to materially and
adversely affect the business, prospects,
financial condition, operations, property or
affairs of the Company, after 30 days' notice
from the Board of Directors of the Company (so
long as such failure is continuing), such notice
setting forth in reasonable detail the nature of
such failure;
(ii) the commission by you of an act of willful
misconduct, fraud or embezzlement, which results
in material loss, damage or injury to the
Company, whether directly or indirectly, or the
commission by you of any other action with the
intent to injure materially the Company which
could, in the reasonable opinion of the Board of
Directors, result in material harm to the
Company;
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(iii) if you are convicted of a felony, either in
connection with the performance of your
responsibilities for the Company or which shall
materially adversely affect your ability to
perform your responsibilities for the Company;
or
(iv) the commission of an act which constitutes
unfair competition with the Company or with the
intent of inducing any third party to breach a
material contract with the Company or the
willful and materially injurious unauthorized
disclosure of any trade secret or confidential
information of the Company.
In the event of a termination "for cause"
pursuant to the provisions of clauses (i)
through (iv) above, inclusive, you shall be
entitled to no severance or other termination
benefits except as required by law.
Termination by
Company without Cause: Subject to the provisions of the paragraph
captioned "Termination After Three Years" below,
the Company may terminate your employment with
the Company other than "for cause" upon at least
six months' prior written notice to you. During
such notice period, you will, in addition to
continuing to perform your responsibilities
(except to the extent determined by the
Company's Board of Directors), assist the
Company in the transition to a successor
officer. Following such notice period, you
shall not be entitled to any severance or other
termination benefits except as required by law.
Notwithstanding the foregoing but subject to the
provisions of the paragraph captioned
"Termination After Three Years" below, the
Company may terminate your employment on less
than six months' notice, but in such event, the
Company will continue to pay you, as a severance
payment, your salary, based on your base salary
and in accordance with the Company's normal
payroll practices, during the period from the
date your employment terminates until the date
which is six months following the date on which
the Company gave you notice of termination;
provided that the Company may terminate such
severance payment in the event you commit any
action described in clauses (ii) or (iv) of the
preceding paragraph. Except as set forth in the
preceding sentence, the Company will have no
further obligation to you following termination
of your employment, except as may be imposed by
law.
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Termination After
Three Years: On and after March 1, 1999, if you are still
employed with the Company on such date, your
employment with the Company will be at-will,
meaning that it may be terminated at any time by
you or the Company upon written notice to the
other, and following such termination you will
not be entitled to any severance or other
termination benefits except as required by law.
General Provisions
Relating to Termination: For purposes of the preceding five paragraphs,
termination of your position as Chairman of the
Board shall not constitute termination of your
employment with the Company. In addition, for
purposes of the paragraph captioned "Termination
by Company without Cause", your employment will
not be considered to have been terminated by the
Company if the Company is acquired (a "Change of
Control Transaction"), whether by merger,
consolidation, sale of substantially all its
assets or otherwise.
4. Rink represents to the Company that he is not bound by any agreement or
any other existing or previous business relationship which conflicts
with, or may conflict with, his carrying on of the business of the
Company.
5. The provisions contained in this Amendment together with the Letter
constitute the entire understanding of the parties relating to the
subject matter hereof and supersede and cancel all agreements, written
or oral, made prior to the date hereof relating to such subject matter,
including, without limitation, Section 10.5 of that certain Employee
Proprietary Information and Inventions Agreement between Rink and the
Company. Except as expressly amended above, the Letter shall remain in
full force and effect. Rink acknowledges that, as of the date of this
Amendment, he has no right to acquire any equity securities of the
Company other than the 615,000 shares purchased pursuant to that certain
Restricted Stock Purchase Agreement between Rink and the Company dated
February 14, 1996.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
AURORA BIOSCIENCES CORPORATION /s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx
By: /s/ Xxxx X. Xxxxxxxx
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Title: VP Finance
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[AURORA BIOSCIENCES, INC. LETTERHEAD]
January 23, 1996
Xxxxxxx X. Xxxx, M.A., M.D., Sc.D.
0000 Xx Xxxxx Xxxx. #0
Xx Xxxxx, XX 00000
Dear Xxx:
This letter is a formal offer setting forth the principal terms for you to join
Aurora Biosciences, Inc., a to-be-formed California corporation (the
"Company"), which will be located in San Diego, California.
Position: Chairman, President and Chief Executive Officer
Initial
Responsibilities: Serve as the Company's chairman and chief executive
officer responsible for all aspects of the Company's
operations and reporting to the Board of Directors.
Compensation: Your monthly compensation will be $20,833.33 per month.
Bonuses: You will be entitled to a $25,000 bonus payable upon the
Company closing a first round of financing with a
premoney valuation in excess of $3,000,000. You will
also be entitled to an additional one-time bonus of
$25,000 payable upon the Company closing a corporate
partner collaboration within one year of the closing of
the Company's first round of financing with committed
payments to the Company greater than $2,000,000
(excluding equity purchases and the pending
collaborations with Sequana and Packard).
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Xxxxxxx X. Xxxx, M.A., M.D., Sc.D.
January 23, 1996
Equity: You will be entitled to purchase at fair market value
------- twenty and one-half percent (20.5%) of the common stock
of the Company (615,000) shares set aside for founders,
initial employees, consultants and directors (a total of
three million (3,000,000) shares. As of January 31,
1996, forty five thousand twelve (45,012) of your shares
will be vested. Of the remaining shares, five hundred
thousand four hundred (500,400) shares and sixty nine
thousand five hundred eighty eight (69,588) shares will
vest monthly over a three-year period at the rate of one
thirty-sixth (1/36) of such shares each month beginning
February 1, 1996 based on your continued service as the
Company's Chief Executive Officer and Chairman,
respectively.
Benefits: You will be entitled to receive standard medical and
--------- dental insurance benefits for yourself similar to those
typically afforded in similar-sized biotechnology
companies. In addition, the Company will pay the
premiums on a $500,000 term life insurance policy and a
disability insurance policy. The Company will also make
its best efforts to obtain Directors and officers
liability insurance under terms and conditions which the
Board of Directors find to be reasonable. You will also
be provided with a Company-paid mobile phone.
Vacation: You will be entitled to 22 days per year of paid
--------- personal leave. If Aurora establishes a Company policy
to close between Christmas and News Year's, such time
off will not count against the 22 days.
Outside Activities: It is acknowledged that you are committed to spend up
------------------- to 4 days a month providing consulting services to
Amylin Pharmaceuticals, Inc. and that you have a
non-compete agreement with Amylin. It is further
acknowledged that you will occasionally provide
additional consulting services and that you are
currently serving on the Board of Directors of other
companies which are not in competition with Aurora.
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Xxxxxxx X. Xxxx, M.A., M.D., Sc.D.
January 23, 1996
Employment at Will: Your employment will be at will, which means it may be
terminated at any time by you or the Company with or
without cause.
Start Date: February 1, 1996.
I am excited about Aurora's prospects for success, and I look forward to your
joining the Company.
Sincerely,
/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Founding Chairman and
Chief Executive Officer
SIGNED AND AGREED TO:
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx, M.A., M.D., Sc.D.
Date: 1/29/96
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