Ms. Denise L. McNairn Dear Denise:
Exhibit 10.1
September
7, 2010
Xx.
Xxxxxx X. XxXxxxx
Dear
Xxxxxx:
I am very pleased to provide you with
the amended and restated terms of your continued employment with Response
Genetics, Inc. (“Response Genetics” or the “Company”), which shall supersede and
replace the terms set forth in the Company’s offer in that certain letter
agreement between you and the Company dated February 20,
2007. The details of the Company’s offer of continued employment (the
“Offer”) are set forth below. Please contact Xxxxxxxx Xxxxxxxxx if
you have any questions about the terms in this Offer. We look forward
to continuing to work with you.
1. Position. Your position will be
Vice President and General Counsel (“GC”), reporting to the Company’s Chief
Executive Officer (“CEO”). You will work at our Maryland
location. As a Response Genetics employee, we expect that you will
perform any and all duties and responsibilities associated with your position in
a satisfactory manner and to the best of your abilities at all times.
Your principle responsibilities will
include the following: (1) overall management of legal operations of the
Company; (2) provide legal counsel regarding transactional matters, primarily
including drafting, reviewing and negotiating agreements related to: licensing
of intellectual property and related collaborations, the transfer of biological
materials, various service agreements performed for the Company by third party
vendors such as outside laboratories and other consultants; (3) identifying and
securing intellectual property protection for inventions and discoveries made by
or licensed to the Company, including developing strategy for the Company on how
to develop an area and to strengthen patents to support the Company’s business;
(4) work with outside counsel to file and prosecute U.S. and foreign patent
applications; (5) provide counsel to internal management with respect to
fulfilling contractual obligations under licensing and collaboration agreements;
(6) participation in road show; and (7) performing responsibilities that are
normally associated with the General Counsel position and as otherwise may be
assigned to you from time to time by the CEO or upon the authority of the Board
of Directors of the Company (the “Board”).
2. Term. The
amended and restated terms of your continued employment with Response Genetics
will become effective on the date you accept this Offer by executing this letter
below and returning the executed copy to Xxxxxxxx Xxxxxxxxx (“Commencement
Date”). Thereafter, you will be expected to devote all of your
working time to the performance of your duties at Response Genetics throughout
your employment. Your current term of employment will continue
through February 19, 2011, with automatic one (1) year renewal terms
thereafter (collectively, the “Term”) unless the Company or you give written
notice to the other of at least ninety (90) days prior to the expiration of any
Term of such party’s election not to further extend this
Agreement. Any termination of your employment will be governed by the
terms set forth in this Agreement.
3. Compensation
and Benefits. Your base pay shall be
at an annual rate of $255,000 which is payable bi-weekly, minus customary
deductions for federal and state taxes and the like.
(a) You will be eligible to receive an
annual target bonus, in the Company’s discretion and based upon the Company’s
Bonus Plan applicable to officers and key employees, of up to 35% of your base
salary, based upon the Company meeting certain targets and your meeting certain
personal objectives as agreed upon by the CEO and approved by the
Board. The target bonus will be calculated and awarded within 45 days
of the end of the Company’s fiscal year.
(b) In
connection with the commencement of your employment in 2007, you were granted an
option to purchase shares equal to 1.0% of the Company’s shares then outstanding
(the “Option”), subject to the terms and conditions of the Company’s 2006 Stock
Plan and Standard Form of Option Agreement. In the event of a Change in Control
as defined herein, 100% of your Option shall at that time fully accelerate and
become exercisable. Change of Control means the occurrence of any of
the following events:
(i) Ownership. Any
“Person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company’s
then outstanding voting securities (excluding for this purpose any such voting
securities held by the Company or its Affiliates or by any employee benefit plan
of the Company) pursuant to a transaction or a series of related transactions
which the Board does not approve; or
(ii) Merger/Sale
of Assets. (A) A merger or consolidation of the Company whether or
not approved by the Board, 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 or the parent of such
corporation) at least 50% of the total voting power represented by the voting
securities of the Company or such surviving entity or parent of such
corporation, as the case may be, outstanding immediately after such merger or
consolidation; or (B) the stockholders of the Company approve an agreement for
the sale or disposition by the Company of all or substantially all of the
Company’s assets; or
(iii) Change
in Board Composition. A change in the composition of the Board, as a
result of which fewer than a majority of the directors are Incumbent
Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the Commencement Date, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company).
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(c) Payment
Upon Change of Control. In the event a Change of Control occurs
during your employment, you shall be entitled to severance benefits consisting
of a cash payment that is equivalent to nine (9) months salary at your then
current annual rate of pay to be paid bi-weekly, minus customary deductions for
federal and state taxes and the like, for nine (9) months following the date of
the Change of Control. If at the time a payment is to be made under
this Section 3(c), it is determined that you are deemed to be a "specified
employee" of the Company (within the meaning of Section 409A of the Code, as
amended, and any successor statute, regulation and guidance thereto ("Code
Section 409A")), then limited only to the extent necessary to comply with the
requirements of Code Section 409A, any payments to which you may become entitled
under Section 3(c) which are subject to Code Section 409A (and not otherwise
exempt from its application) will be withheld until the first (1st) business day
of the seventh (7th) month following the termination of your employment, at
which time you shall be paid an aggregate amount equal to the accumulated, but
unpaid, payments otherwise due to you under the terms of this Section
3(c). If any payment or benefit you would receive under this
Agreement, when combined with any other payment or benefit you receive pursuant
to a Change of Control ("Payment") would (i) constitute a "parachute payment"
within the meaning of Section 280G of the Code, and (ii) but for this sentence,
be subject to the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then such Payment shall be either (x) the full amount of such Payment or
(y) such lesser amount (with cash payments being reduced before stock option
compensation) as would result in no portion of the Payment being subject to the
Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal state and local employments taxes, income taxes, and the
Excise Tax results in your receipt, on an after-tax basis, of the greater amount
of the Payment notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax.
(d) In
addition to your compensation, you may take advantage of various benefits
currently offered by the Company generally to its employees. Any such
benefits may be modified or changed from time to time at the sole discretion of
the Company. Where a particular benefit is subject to a formal plan
(for example, medical insurance), eligibility to participate in and receive any
particular benefit is governed solely by the applicable formal plan
document.
You will
be granted twenty (20) paid time off days (“PTO” days) for your use for vacation
, personal or sick leave. Vacation should be scheduled upon consultation with
the Chief Executive Officer and with advance notice. Should you leave
the Company’s employment, you will be paid an amount in cash in respect of your
accrued but unused PTO days, in accordance with the Company’s PTO policy and
California law, in each case as in effect as of the date of such termination.
The Company will also observe 10 holidays per year, for which you will be
paid.
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4. Severance.
In the
event you are terminated without “Cause” as such term is defined below, or in
the event that you resign “For Good Reason” as such term is defined below, you
shall be entitled to severance equivalent to nine (9) months salary at your then
current annual rate of pay to be paid except as set forth in Section 4(e) below,
bi-weekly, minus customary deductions for federal and state taxes and the like,
for nine (9) months following the date of the Change of Control, provided you
exercise a release in a form satisfactory to the Company.
(b) Severance
benefits shall not be paid if (i) you terminate your employment voluntarily,
other than For Good Reason; or (ii) you are terminated for Cause.
(c) For
purposes of this Offer, “Cause” shall mean termination for:
(i) engaging
in dishonesty or misconduct that is injurious to the Company; or
(ii) your
conviction or entry of nolo contendere to any felony or crime involving moral
turpitude, material fraud or embezzlement of the Company's property or a charge
or indictment of any other felony; or
(iii) your
breach of any of the material terms of this Agreement, including the
confidentiality obligations set forth herein.
(d) For
purposes of this Offer, “For Good Reason” shall mean your resignation
following:
(i) a
material breach by the Company of its obligations hereunder, provided you have
first given notice to the Company of such alleged breach and the Company has
failed to cure same within ten (10) days of receipt of such notice;
or
(ii) your
compensation and benefits are materially reduced; or
(iii) the
imposition of a requirement by the Company that you relocate your principal
office to a location outside of the State of Maryland that necessitates a change
in your home residence.
(e) Notwithstanding
any other provision with respect to the timing of payments under this Section 4,
if, at the time of your termination, you are deemed to be a "specified employee"
of the Company within the meaning of Code Section 409A, then limited only to the
extent necessary to comply with the requirements of Code Section 409A, any
payments to which you may become entitled under Section 4 which are subject to
Code Section 409A (and not otherwise exempt from its application) will be
withheld until the first (1st) business day of the seventh (7th) month following
your termination of employment, at which time you shall be paid an aggregate
amount equal to the accumulated, but unpaid, payments otherwise due to you under
the terms of Section 4.
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(f) The
Company does not guarantee the tax treatment or tax consequences associated with
any payment or benefit set forth in this Agreement, including but not limited to
consequences related to Code Section 409A. You and the Company agree
to both negotiate in good faith and jointly execute an amendment to modify this
Agreement to the extent necessary to comply with the requirements of Code
Section 409A; provided that no such
amendment shall increase the total financial obligation of the Company under
this Agreement. In the event that the Company determines in good
faith that it is required to withhold taxes from any payment or benefit already
provided to you, you agree to pay on demand the amount the Company has
determined to the Company.
5. Indemnity. The
Company shall indemnify you and hold you harmless from any and all claims
arising from or relating to your performance of your duties hereunder to the
fullest extent permitted by law and/or the Company’s Directors and Officers
Liability Insurance or other applicable document.
6. Your
Certifications To Response Genetics. As a condition of your
employment:
(a) You
hereby certify to Response Genetics that you are free to enter into and fully
perform the duties of your position and that you are not subject to any
employment, confidentiality, non-competition or other agreement that would
restrict your employment by Response Genetics. You further hereby
certify that your signing this letter of employment with Response Genetics does
not violate any order, judgment or injunction applicable to you, or conflict
with or breach any agreement to which you are a party or by which you are
bound.
(b) You
hereby certify that all facts you have presented or will present to Response
Genetics are accurate and true. This includes, but is not limited to,
all oral and written statements you have made (including those pertaining to
your education, training, qualifications, licensing and prior work experience)
on any job application, resume or c.v., or in any interview or
discussion with Response Genetics.
7. Confidentiality,
Non-Solicitation and Assignment of Inventions.
(a) Definition:
“Confidential Information” means all Response Genetics proprietary information,
technical data, trade secrets, know-how and any idea in whatever form, tangible
or intangible, including without limitation, research, product plans, customer
and client lists, developments, inventions, processes, technology, designs,
drawings, marketing and other plans, business strategies and financial data and
information. “Confidential Information” shall also mean information
received by Response Genetics from customers or clients or other third parties
subject to a duty to keep confidential.
(b) Duty Not to
Disclose: In connection with your employment by Response
Genetics, you will be exposed to and have access to the Company’s Confidential
Information. You agree to hold all Confidential Information in strict
confidence and trust for the sole benefit of Response Genetics and not to,
directly or indirectly, disclose, use, copy, publish, summarize, or remove any
Confidential Information from the Company’s premises, except as specifically
authorized in writing by the Company and in connection with the usual course of
your employment. This duty supplements, but does not supersede, your
professional and ethical obligations as the Company’s counsel.
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(c) Documents and
Materials: You further agree that you will return all Confidential
Information, including all copies and versions of such Confidential Information
(including but not limited to information maintained on paper, disk, CD-ROM,
network server, or any other retention device whatsoever) and other property of
the Company, to the Company immediately upon cessation of your employment with
the Company. These terms are in addition to any statutory or common
law obligations that you may have relating to the protection of the Company’s
Confidential Information or its property. These restrictions shall
survive the termination of your employment with Response Genetics.
(d) Assignment of
Inventions: You agree and acknowledge that all assignments of inventions
shall be governed by that certain Proprietary Rights Agreement dated February
20, 2007 between you and the Company.
(e) Nonsolicitation. During
your employment and for a period of one (1) year thereafter, you will not hire
or solicit or encourage, or cause others to solicit or encourage, any employees
of the Company to terminate their employment with the Company.
8. Employment
Terms. All Company employees are required, as a condition to
your employment with the Company, to (i) sign and return a satisfactory I-9
Immigration form providing sufficient documentation establishing your employment
eligibility in the United States; (ii) satisfactory proof of your identity as
required by United States law; and (iii) abide by the Company’s Personnel
Policies and Procedures as created by the Company and amended from time to
time.
9. Assignment. This Agreement is
not assignable by you but may be assigned by the Company without your prior
consent.
10. Miscellaneous. This letter constitutes
the Company’s entire offer regarding the terms and conditions of your
prospective employment with Response Genetics. It supersedes any
prior agreements, including without limitation the employment letter between you
and the Company dated February 20, 2007, or other promises or statements
(whether oral or written) regarding the terms of employment. The
terms of your employment shall be governed by the law of the State of
California.
You may
accept this offer of employment by signing the enclosed additional copy of this
letter. Your signature on the copy of this letter and your submission
of the signed copy to me will evidence your agreement with the terms and
conditions set forth herein. This offer will expire on September 14,
2010, unless accepted by you prior to such date by directing the signed offer
letter to the attention of Xxxxxxxx Xxxxxxxxx.
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We are
pleased to offer you the opportunity to continue as an employee of Response
Genetics, and we look forward to continuing to work together. We are
confident that you will continue to make an important contribution to our unique
and exciting enterprise.
| Sincerely, | |||
| /s/ Xxxxxxxx Xxxxxxxxx | |||
| Xxxxxxxx Xxxxxxxxx | |||
Agreed
to and Acknowledged:
/s/ Xxxxxx
XxXxxxx
Signature
9/10/2010
Date
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