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EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT, by and between Xxxxx Xxxxxxx, M.D. (the "Employee") and
Anergen, Inc., a California corporation (the "Company"), shall become effective
as of May 27, 1996.
In consideration of the mutual covenants herein contained, and in
consideration of the employment of Employee by the Company, the parties agree as
follows:
1. Duties and Scope of Employment.
(a) Position. The Company agrees to employ the Employee
under the terms of this Agreement in the position of President and Chief
Executive Officer. Employee shall report to the Board of Directors. In addition,
Employee shall be elected to the Board of Directors of the Company as of the
effective date and shall be nominated for re-election at each meeting of the
shareholders where directors are elected during the term of this Agreement.
Employee agrees to resign from the Board of Directors upon termination of
employment with the Company.
(b) Obligations and Duties. During the term of this
Agreement, the Employee shall devote his full business efforts and time to the
Company and shall use his best efforts to promote and protect the business
interests of the Company. Specifically, Employee's responsibilities will be to
manage the operations of the Company; to build and maintain an outstanding and
harmonious working team of both scientific and business employees; to secure,
promote and maintain the appropriate financing and capital structure of the
Company; to manage and direct the strategic development of the Company's
business plan and its implementation; and to oversee the overall scientific
affairs of the Company. The foregoing, however, shall not preclude the Employee
from engaging in appropriate civic, charitable or religious activities or from
devoting a reasonable amount of time to private investments, writing of books,
journals and/or articles, and making public appearances or from serving on the
boards of directors of other entities, as long as such activities and service do
not interfere or conflict with his responsibilities to the Company and do not
represent business conflicts with the Company's business.
(c) Rules, Regulations and Policies. Employee shall
comply with all of the Company's reasonable rules and regulations applicable to
the employees of the Company and with all of the Company's reasonable policies
established by its management and Board of Directors.
2. Compensation. Beginning on the effective date of this
Agreement, the Employee shall be paid a base salary (the "Base Compensation") of
$250,000 annually, paid in bi-monthly payments. Employee shall also be eligible
at the end of 12 months to receive a performance bonus of up to 25% of the Base
Compensation at the direction of the Board of Directors. The bonus shall be
determined based upon full or partial completion of reasonable goals established
by mutual agreement between the Employee and the Board of Directors. The
Employee's base salary and bonus shall be reviewed by the Board of Directors for
possible increases annually.
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3. Employee Benefits.
(a) General. During the term of his employment under this
Agreement, Employee will be entitled to receive all employee benefits currently
and hereafter provided to senior management at the Company including medical,
dental, and life insurance so long as and to the extent these benefits exist,
provided that Employee is otherwise eligible and insurable in accordance to the
terms of such plan(s), and subject in each case to the generally applicable
terms and conditions of the plan or program in question and to the
administrative determinations of any committee or the Board of Directors
administering such plan or program. Employee will be eligible for participation
in the Company's Employee Stock purchase plan on the next enrollment date, which
is October 1, 1996. Employee may participate in the Company's 401(k) plan
beginning on July 1, 1997, which is the next enrollment date after one year from
date of employment. The Board will provide Employee with an equivalent benefit
to offset any loss resulting from unavailability of immediate enrollment in the
plan.
(b) Stock Awards. Through the Company Stock Option Plan,
Employee will be granted options to acquire an aggregate 400,000 shares of
Common Stock of the Company at a price per share on May 14, 1996, the date of
acceptance of employment. These options will vest over a four-year period at the
rate of 6/48th of the shares after 6 months, and 1/48th per share per month
thereafter. The options will be subject to the standard terms and conditions
under the stock option plan.
4. Business Expenses and Travel. During the term of his
employment under this Agreement, the Employee shall be authorized to incur
necessary and reasonable travel, entertainment and other business expenses in
connection with his duties hereunder. The Company shall reimburse the Employee
for such expenses upon presentation of an itemized account and appropriate
supporting documentation, all in accordance with the Company's generally
applicable policies.
5. Definitions. As used herein, the following definitions shall
apply:
(a) "Cause" shall mean the termination of employment of
Employee shall have taken place as a result of (i) Employee's continued failure
to substantially perform his principal duties (other than as a result of
Disability) after thirty (30) days' written notice from the Company specifying
the nature of Employee's failure and demanding that such failure be remedied;
(ii) Employee's material and continuing breach of his obligations to the Company
set forth in this Agreement or the Proprietary Information Agreement after
thirty (30) days' written notice from the Company specifying the nature of
Employee's breach and demanding that such breach be remedied (unless such breach
by its nature cannot be cured, in which case notice and an opportunity to cure
shall not be required); (iii) Employee's being convicted of a felony or (iv) act
or acts of dishonesty undertaken by Employee and intended to result in
substantial gain or personal enrichment of Employee at the expense of the
Company.
(b) "Change in Control" shall mean the occurrence of any
of the following events:
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(i) The stockholders of the Company approve a
merger or consolidation of the Company with any other corporation or entity,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity or
such surviving entity's parent outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets, except a sale to an
entity of which at least fifty percent (50%) of the total voting power
represented by the voting securities of such entity are held by stockholders of
the Company at the time of such sale.
(ii) The acquisition by any Person as Beneficial
Owner (as such terms are defined in the Securities Exchange Act of 1934, as
amended), directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the total voting power represented by the
Company's then outstanding voting securities.
(iii) A majority of the Board of Directors of the
Company in office at the beginning of any thirty-six (36) month period is
replaced during the course of such thirty-six (36) month period (other than by
voluntary resignation of individual directors in the ordinary course of
business) and such replacement was not initiated by the Board of Directors of
the Company as constituted at the beginning of such thirty-six (36) month period
and as changed during such period to add directors approved by the incumbent
Board of Directors.
(c) "Constructive Termination" shall mean (i) a material
reduction in Employee's salary, title, bonus opportunity or benefits not agreed
to by Employee (except in connection with a decrease to be applied because the
Company's performance has decreased and which is also applied to other officers,
and excluding the substitution of substantially equivalent compensation and
benefits), (ii) a significant reduction in Employee's responsibilities not
agreed to by Employee, or (iii) a change in reporting from the Board of
Directors to another officer.
(d) "Disability" shall mean that the Employee, at the
time notice is given, has been unable to perform his duties under this Agreement
for a period of not less than ninety (90) days consecutively as the result of
his incapacity due to physical or mental illness. In the event that the Employee
resumes the performance of substantially all of his duties hereunder before the
termination of his employment under Section 6(b)(iii) becomes effective, the
notice of termination shall automatically be deemed to have been revoked.
6. Termination of Employment.
(a) Termination by the Company. The Company may terminate
Employee's employment at any time, for any reason or for no reason, with fifteen
(15) days advance notice in writing.
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(i) Termination Without Cause. If the Company
terminates Employee's employment for any reason whatsoever, including a
Constructive Termination, and other than voluntary termination of Employment or
Termination for Cause, the provisions of Section 7(a) shall apply.
(ii) Termination for Cause. If the Company
terminates Employee's employment for Cause, the provisions of Section 7(b) shall
apply.
(iii) Termination on Death or Disability. If the
Company terminates Employee's employment as a result of Employee's Death or
Disability, the provisions of Section 7(c) shall apply.
(iv) Constructive Termination. If any of the
circumstances which are described in Section 5(c) occur when the Company
terminates Employee's employment, the Employee shall be deemed to be terminated
without Cause and the provisions of Section 7(a) shall apply.
(b) Voluntary Termination by the Employee. The Employee
may terminate his employment voluntarily by giving the Company thirty (30) days'
advance notice in writing, at which time the provisions of Section 7(b) shall
apply. However, if the Employee terminates his employment pursuant to this
Section 6(b) as a result of a Constructive Termination, the provisions of
Section 7(a) shall apply, provided the Employee has provided written notice to
the Company reasonably specifying the reasons why a Constructive Termination has
occurred and the Company has not cured (retroactively where possible) such
Constructive Termination within twenty (20) days after receipt of such notice.
(c) Waiver of Notice. Any waiver of notice shall be valid
only if it is made in writing and expressly refers to the applicable notice
requirement in this Section 6.
7. Payments Upon Termination of Employment.
(a) Payments Upon Termination Pursuant to Section 6(a)(i)
and Constructive Termination. If, during the term of this Agreement, the
Employee's employment is terminated by the Company pursuant to Section 6(a)(i)
or voluntarily by Employee under Section 6(b) as a result of a Constructive
Termination, the Employee shall be entitled to receive the following:
(i) Severance Payment. The Company shall
continue to pay to the Employee his Base Compensation and provide medical,
dental and life insurance benefits for twelve (12) months following termination
(the "Severance Payment"). Such Base Compensation amount shall be determined
with reference to the Base Compensation in effect for the month in which the
date of employment termination occurs.
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(ii) Stock Options. The stock options referred to
in Section 3(b) shall be exercisable to the extent that reflects an additional
twelve (12) months of vesting from the date of termination. Employee shall have
six (6) months from the date of termination of employment in which to exercise
any non-qualified stock option and three (3) months from the date of termination
of employment to exercise any incentive stock option.
(iii) Method of Payment. The Severance Payment
shall be made in monthly installments.
(iv) Payment in Lieu of Contract Damages. The
Severance Payment shall be in lieu of any further payments to the Employee and
any further accrual of benefits with respect to periods subsequent to the date
of the employment termination.
(v) No Duty To Mitigate. The Employee shall not
be required to mitigate the amount of any payment contemplated by this Section
7(a) (whether by seeking new employment or in any other manner).
(b) Termination By Company for Cause or Voluntary
Termination. If the Employee's employment is terminated pursuant to Section
6(a)(ii) or voluntarily (other than a Constructive Termination) pursuant to
Section 6(b), no compensation or payments will be paid or provided to the
Employee for the periods following the date when such a termination of
employment is effective. Notwithstanding the preceding sentence, the Employee's
rights under the benefit plans and option agreements of the Company shall be
determined under the provisions of those plans and agreements, provided Employee
shall have six (6) months from the date of termination of employment in which to
exercise any non-qualified stock option and three (3) months from the date of
termination of employment to exercise any incentive stock option in each case to
the extent such options are exercisable as of the date of termination.
(c) Termination on Death or Disability. If the Employee's
employment is terminated because of Employee's Death or Disability (as defined
in Section 3(c) herein), then no payments for the period following such
termination shall be owed under this Agreement and Employee shall receive
severance and disability payments as provided in the Company's standard benefit
plans. Employee's stock options shall be exercisable as provided in the option
agreement.
(d) Termination After a Change in Control. In the event
that after a Change in Control the Employee's employment is terminated pursuant
to Section 6(a)(i) or voluntarily by Employee under Section 6(b) as a result of
a Constructive Termination, then the provisions of Section 7(a) shall apply
except that the accelerated vesting of the exercisability of stock options shall
be twenty-four (24) months instead of twelve (12) months or such longer period
than twenty-four (24) months for which accelerated vesting may be granted
without incurring Federal excise tax imposed pursuant to Section 4996 of the
Internal Revenue Code (or without increasing any such excise tax otherwise
payable without regard to such additional vesting), and provided Employee shall
receive acceleration of less options than twenty-four (24) months if Employee
would receive a greater
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after tax benefit as a result of any such excise tax than if Employee received
acceleration of the full twenty-four (24) months.
8. Proprietary Information. The Employee agrees to comply fully
with the Company's policies relating to non-disclosure of the Company's trade
secrets and proprietary information and processes, as set out in the Proprietary
Information Agreement set out as Exhibit B hereto.
9. Non-Competition. For the twelve (12) month period after
termination of this Agreement for any reason, Executive shall not provide
services, whether for compensation or otherwise, as an officer, director,
employee, consultant or in any other capacity to any person or company that
competes with the products, projects or technology which on the date of
termination are actively being pursued by the Company for the diagnosis,
prevention or treatment of disease. In this regard, Executive acknowledges that
this period of time, scope of business and geographic extent are reasonably
necessary to protect the legitimate business interest of the Company. In the
event Executive breaches this Section, Executive agrees that all obligations of
the Company to make the Severance Payment and to accelerate options upon the
termination shall immediately terminate and Executive shall repay any amounts
paid to Executive after the date Executive breached this Section and return any
shares issued upon exercise of any options which were accelerated. The foregoing
shall be the sole remedy for any breach of this provision.
10. No Conflicts. Employee covenants that he is not subject to any
agreement or obligation that conflicts with or would be breached by the
provisions of this Agreement.
11. Successors.
(a) Company's Successors. The Company shall require in
any agreement through which any successor to the Company (whether directly or
indirectly and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) acquires all or substantially all of the Company's business and/or
assets such successor to assume this Agreement and agree expressly to perform
this Agreement in the same manner and to the same extent as the Company would be
required to perform it in the absence of a succession. For all purposes under
this Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by this Agreement by
operation of law.
(b) Employee's Successors. This Agreement and all rights
of the Employee hereunder shall inure to the benefit of, and be enforceable by,
the Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
12. Notice. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or five days after being mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall
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be addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Chief Executive Officer.
13. Termination of Agreement. This Agreement shall terminate upon
the earlier of (i) the date that all obligations of the parties hereunder have
been satisfied or (ii) May __, 2000. A termination of this Agreement pursuant to
the preceding sentence shall be effective for all purposes, except that such
termination shall not affect the payment or provision of compensation or
benefits on account of a termination of employment occurring prior to or upon
the termination of this Agreement. No payments under this Agreement shall be
required for any termination of employment occurring after May __, 2000. The
parties contemplate that at the end of the four year term of this Agreement, the
parties will negotiate a new agreement for a further term of employment. In the
event that a new agreement is not reached between the parties, this Agreement
shall continue to govern the terms of Employee's employment until a new
agreement is entered into.
14. Miscellaneous Provisions.
(a) Waiver. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by the Employee and by the Chief Executive
Officer or a director of the Company authorized by the Board of Directors. No
waiver by either party of any breach of, or of compliance with, any condition or
provision of this Agreement by the other party shall be considered a waiver of
any other condition or provision or of the same condition or provision at
another time.
(b) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof, except for the
Indemnification Agreement and Proprietary Information Agreement between the
Employee and the Company, each of which shall remain in full force and effect
notwithstanding termination of this Agreement. This Agreement shall supersede
the provisions regarding acceleration of vesting after a Change in Control as
defined and provided in any stock options.
(c) Choice of Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of California.
(d) Severability. The invalidity or unenforceability of
any provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.
(e) Arbitration. Any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by arbitration
in San Mateo County, California, in accor dance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
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(f) No Assignment of Benefits. The rights of any person
to payments or benefits under this Agreement shall not be made subject to option
or assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (f) shall be
void.
(g) Employment At Will; Limitation of Remedies. The
Company and the Employee acknowledge that the Employee's employment is at will,
as defined under applicable law. If the Employee's employment terminates for any
reason, the Employee shall not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this Agreement.
(h) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable taxes.
(i) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
ANERGEN, INC.
/s/ XXXXX X. XXXXXXX, M.D. By: /s/ XXXXXX XXXXXXX
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Xxxxx X. Xxxxxxx, M.D.
Print Name: Xxxxxx Xxxxxxx
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Title: Director
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