EXHIBIT 10.7
EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement is entered into as of January 21, 1998 (the
"Effective Date"), by and between XENOGEN CORPORATION, a California corporation
(the "Company"), and XXXXX XXXXXX (the "Employee").
1. At-Will Employment. The Employee's employment with the Company is for
------------------
an unspecified duration and constitutes "at-will" employment. The Employee
acknowledges that the employment relationship may be terminated at any time,
with or without good cause or for any or no cause, at the option either of the
Company or the Employee, with or without notice. Employee will devote his full
business time and attention to his employment with the Company with the
exception of time spent on other business endeavors; provided, however, Employee
-------- -------
will not serve as an executive officer or have operational responsibility for
any other business.
2. Salary. For all services to be rendered by the Employee to the
------
Company, the Company agrees to pay the Employee an annual salary of $175,000 in
accordance with the Company's standard payroll policies.
3. Benefits. During the Employee's employment with the Company, the
--------
Employee shall be entitled to participate in employee benefit plans or programs
of the Company ("Benefit Plans"), if any, to the extent that the Employee's
position, tenure, salary, age, health and other qualifications make the Employee
eligible to participate, subject to the rules and regulations applicable
thereto.
4. Life Insurance. The Company will pay a $25,000 annual premium for
--------------
split dollar life insurance on behalf of the Employee.
5. Termination of Employment.
-------------------------
(a) Voluntary Resignation/Termination For Cause. If the Employee
-------------------------------------------
voluntarily resigns or is terminated by the Company for Cause (as defined
below), then:
(i) no salary will be paid for the periods following the date
of termination;
(ii) no benefits will be paid or provided for the periods
following the date of termination; and
(iii) the number of shares exercisable under the Employee's
outstanding options, if any, and the Company's right to repurchase the
Employee's outstanding Common Stock shall be measured as of the date of
termination.
(b) Termination Without Cause. If the Employee is terminated by the
-------------------------
Company without Cause (as defined below) within one year from the date of the
Agreement, then:
(i) the Employee's annual salary will continue to be paid in
accordance with the Company's standard payroll policies for six months following
the date of termination;
(ii) the Employee will continue to receive benefits pursuant to
the Company's Benefit Plans, provided that such Benefit Plans permit
continuation post-termination, at the Company's expense for six months following
the date of termination; and
(iii) the number of shares exercisable under the Employee's
outstanding options, if any, and the Company's right to repurchase the
Employee's outstanding Common Stock shall be measured as if the termination
occurred six months from the actual date of termination; provided, however, that
-------- -------
the Company's right to repurchase 250,000 shares of Common Stock issued to the
Employee in conjunction with the Series C Preferred Stock Purchase Agreement of
even date herewith and subject to that certain Restricted Stock Purchase
Agreement of even date herewith shall be determined as of the actual date of
termination.
The post-employment payments and benefits under Sections 5(b)(i) and (ii)
shall be terminated prior to one year from the date of termination upon the
acceptance by the Employee of new employment.
(c) Termination Without Cause. If the Employee is terminated by the
-------------------------
Company without Cause (as defined below) following one year from the date of
this Agreement and prior to two years from the date of this Agreement, then:
(i) the Employee's annual salary will continue to be paid in
accordance with the Company's standard payroll policies for nine months
following the date of termination;
(ii) the Employee will continue to receive benefits pursuant to
the Company's Benefit Plans, provided that such Benefit Plans permit
continuation post-termination, at the Company's expense for nine months
following the date of termination; and
(iii) the number of shares exercisable under the Employee's
outstanding options, if any, and the Company's right to repurchase the
Employee's outstanding Common Stock shall be measured as if the termination
occurred nine months from the actual date of termination; provided, however,
-------- -------
that the Company's right to repurchase 250,000 shares of Common Stock issued to
the Employee in conjunction with the Series C Preferred Stock Purchase Agreement
of even date herewith and subject to that certain Restricted Stock Purchase
Agreement of even date herewith shall be determined as of the actual date of
termination.
The post-employment payments and benefits under Sections 5(c)(i) and (ii)
shall be terminated prior to one year from the date of termination upon the
acceptance by the Employee of new employment.
(d) Termination Without Cause. If the Employee is terminated by the
-------------------------
Company without Cause (as defined below) following two years from the date of
this Agreement, then:
(i) the Employee's annual salary will continue to be paid in
accordance with the Company's standard payroll policies for one year following
the date of termination;
(ii) the Employee will continue to receive benefits pursuant to
the Company's Benefit Plans, provided that such Benefit Plans permit
continuation post-termination, at the Company's expense for one year following
the date of termination; and
(iii) the number of shares exercisable under the Employee's
outstanding options, if any, and the Company's right to repurchase the
Employee's outstanding Common Stock shall be measured as if the termination
occurred one year from the actual date of termination; provided, however, that
-------- -------
the Company's right to repurchase 250,000 shares of Common Stock issued to the
Employee in conjunction with the Series C Preferred Stock Purchase Agreement of
even date herewith and subject to that certain Restricted Stock Purchase
Agreement of even date herewith shall be determined as of the actual date of
termination.
The post-employment payments and benefits under Sections 5(d)(i) and (ii)
shall be terminated prior to one year from the date of termination upon the
acceptance by the Employee of new employment.
(e) As used in this Agreement, Cause shall mean:
(i) the Employee's failure to substantially perform the duties
associated with the Employee's position;
(ii) the Employee's personally engaging in conduct that the
Employee reasonably should know or that the Employee intends to be seriously
injurious to the Company, its affiliates or employees;
(iii) a material and willful violation of a federal or state law
or regulation applicable to the business of the Company;
(iv) the Employee's being convicted of a felony under the laws
States or any State, or the misappropriation of material property belonging
to, the Company or its affiliates; or
(v) the Employee knowingly and intentionally breaching in any
material respect the terms of the Employee's Proprietary Information Agreement.
6. Arbitration. Any dispute or controversy arising under or in
-----------
connection with this Agreement shall be settled exclusively by arbitration in
Palo Alto, California, in accordance with the rules of the American Arbitration
Association then in effect by an arbitrator selected by both parties within 20
days after either party has notified the other in writing that it desires a
dispute between them to be settled by arbitration. In the event the parties
cannot agree on such arbitrator within such 20-day period, each party shall
select an arbitrator and inform the other party in writing of such arbitrator's
name and address within 5 days after the end of such 20-day period and the two
arbitrators so selected shall select a third arbitrator within 15 days
thereafter; provided, however, that in the event of a failure by either party to
-------- -------
select an arbitrator and notify the other party of such selection within the
time period provided above, the arbitrator selected by the other party shall be
the sole arbitrator of the dispute. Each party shall pay its own expenses
associated with such arbitration, including the expense of any arbitrator
selected by such party and the Company will pay the expenses of the jointly
selected arbitrator. The decision of the arbitrator or a majority of the panel
of arbitrators shall be binding upon the parties and judgment in accordance with
that decision may be entered in any court having jurisdiction thereover.
Punitive damages shall not be awarded.
7. Notices. For purposes of this Agreement, notices and other
-------
communications provided for in this Agreement shall be in writing and shall be
delivered personally or sent by United States certified mail, return receipt
requested, postage prepaid, to the address set forth on the signature pages to
this Agreement.
8. Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the internal substantive laws of the State of California without
reference to choice or conflicts of law.
9. Counterparts. This Agreement may be executed in one or more
------------
counterparts, none of which need contain the signature of more than one party
hereto, and each of which shall be deemed to be an original, and all of which
together shall constitute a single agreement.
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.
"COMPANY" "EMPLOYEE"
By: /s/ Xxxxxx Xxxxxx Contag /s/ Xxxxx Xxxxxx
-------------------------------- ----------------------------------
Xxxxx Xxxxxx
Title:_____________________________
Address: Address:
___________________________________ __________________________________
___________________________________ __________________________________
Xenogen Employee Matters
"Xxxxx Xxxxxx"
June 10 1997
Mr. Xxxxx Xxxxxx
000 Xxxxx Xxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Dear Xxxxx:
The purpose of this letter is to set forth the terms of the cash and equity
compensation to be provided to you in connection with your consulting services
to Xenogen Corporation ("Xenogen"). Our understanding is as follows:
1. Consulting Fee.
--------------
You to be paid an annual consulting fee of $100,000 per year. You will
be available to Xenogen to work two days a week under this
arrangement. The fee to be paid you will accrue until Xenogen has
obtained equity financing of at least $2,000,000, at which time it may
be repaid or converted into equity at your sole option. In connection
with the consulting agreement, you will sign Xenogen's standard
proprietary information agreements and confidentiality agreements.
Your consulting agreement may be terminated by either party at any
time.
2. Founder Stock Purchase Agreement.
--------------------------------
You will be entitled to purchase up to 400,000 shares of Xenogen
Common Stock at a purchase price of $0.05 per share. The stock
purchased by you will be subject to a right of repurchase held by
Xenogen which will lapse as to 1/4 of the shares 1 year following your
engagement as a consultant and an additional 1/48 on the first day of
each month thereafter, based upon your continued service to Xenogen as
a consultant or employee. The 400,000 shares is 11.93% of the
currently outstanding stock (all common stock and preferred stock
outstanding plus options issued under Xenogen's stock plan). If you
wish, these 400,000 shares may be issued to him in the form of an
option exercisable at $0.05 per share vesting over a period of four
years.
Xxxxx Xxxxxx
June 10, 1997
Page 2
3. Stock Purchase Warrant.
----------------------
Xenogen will issue to you a warrant to purchase the securities sold in
Xenogen's next equity financing. The number of shares for which the
warrant shall be exercisable shall be equal to 15% of the shares sold
in such financing. The exercise price of the warrant shall be 125% of
the price paid by the purchasers in Xenogen's next equity financing.
The warrant will have a term of five years and will contain a net
exercise provision.
If you have any questions regarding the foregoing, please feel free to
contact me at any time.
Very truly yours,
XENOGEN CORPORATION
/s/ Xxxxxx Xxxxxx Contag
Xxxxxx Xxxxxx
President
Agreed and accepted this
10th day of June, 1997
/s/ Xxxxx Xxxxxx
------------------------
Xxxxx Xxxxxx
