Exhibit 10.1
[Nektar Letterhead]
May 13, 2008
Xxxxxxx X. Xxxxxxxx
[Address]
[Address]
Dear Bharatt:
I am pleased and excited to offer you the position of Chief Operating
Officer and Head of the PEGylation Business Unit at Nektar Therapeutics
("Nektar" or the "Company") reporting directly to me. You will also be Chairman
of Nektar India. Accordingly, I present you with this offer letter agreement
setting forth certain terms and conditions of your employment. Capitalized terms
used herein and not defined shall have the meanings ascribed to them in the
Company's Change of Control Severance Benefit Plan, as it may be amended from
time to time (the "COC Plan").
As Chief Operating Officer, you shall have the general powers and
duties of management usually vested in the office of chief operating officer of
a corporation of the size and nature of Nektar. Your principal place of
employment will be 000 Xxxxxxxxxx Xxxx, Xxx Xxxxxx, Xxxxxxxxxx.
Your annual cash compensation will consist of two components: base
salary and an annual performance bonus. Your base salary will be $475,000 on an
annual basis and paid in accordance with Xxxxxx's regular payroll schedule. Your
annual performance bonus target each year will be at least 60% of your annual
base salary for each annual period and shall be $285,000 in 2008 and not
pro-rated for your partial period of service in 2008 ("Target Annual Bonus").
Your base salary and Target Annual Bonus shall be subject to annual performance
review by the Compensation Committee of the Board of Directors ("Compensation
Committee") in consultation with me for appropriate upward adjustment. The
actual amount of your annual performance bonus will range from 0% to 200% of the
Target Annual Bonus based on the Compensation Committee's assessment in
consultation with me of the achievement of a combination of annual corporate
objectives and your achievement of personal objectives agreed upon by you and me
at the beginning of each annual performance period; provided that your
objectives for your partial period of service in 2008 will be agreed upon by you
and I as soon as practicable following your start date. Your annual performance
bonus for the prior year will be paid in the first calendar quarter of each year
within the period of time required to avoid taxes and penalties under Section
409A of the Internal Revenue Code.
Subject to approval by the Compensation Committee prior to and
effective as of your first day of full-time employment with Nektar, which shall
be on or soon after May 19, 2008 or on such other date as we otherwise may
mutually agree ("Start Date"), you will be granted a stock option to purchase
500,000 shares of Nektar common stock (the "Initial Option", which together with
any subsequent stock options you may receive, are the "Stock Options") under
Xxxxxx's 2000 Equity Incentive Plan (the "2000 Plan"). The maximum number of
shares subject to the Stock Options will be granted as incentive stock options
within the meaning of Section 422 of the Internal Revenue Code to the extent
permissible under Section 10(d) of the 2000 Plan. The remainder of shares
subject to the Stock Options will be granted as non-statutory stock options. The
exercise price will be set at the closing price of Xxxxxx's common stock on
Nasdaq on your Start Date in the case of the Initial Option or at the date
determined by the Compensation Committee in the case of any subsequent Stock
Options. The shares subject to the Initial Option will vest according to a
4-year vesting schedule for so long as you provide Continuous Service (as
defined in the 2000 Plan) to the Company with 25% of the shares subject to the
Initial Option vesting on the one year anniversary of your Start Date and the
remainder vesting monthly on a pro-rata basis over the following 3 years.
In addition, you will also be entitled to a one-time sign-on bonus of
$50,000 on "grossed up" basis (i.e. the total you receive after applicable
withholding will be $50,000) included with your first regular payroll payment
following your Start Date.
You will be eligible for annual equity awards, in the sole discretion
of the Compensation Committee, based on the Compensation Committee's review, in
consultation with me, of your individual performance and annual equity
compensation levels of senior executive officers with similar roles at
comparator companies as analyzed by a reputable, nationally-recognized,
independent compensation consultancy firm.
Commencing with your first day of employment, you will be eligible to
participate in Xxxxxx's executive benefits program including medical, dental and
vision insurance, term life insurance, 401(k), the flexible health spending
plan, short & long-term disability upon the terms specified in those plans, and
the COC Plan.
Your employment is by continued mutual agreement and may be terminated
at will with or without cause by either you or Nektar at any time with or
without advanced notice. You will also be required to enter into Xxxxxx's
standard Employment Agreement, a copy of which is attached as Exhibit A hereto.
In the event of your death or Disability (as defined in the 2000 Plan),
(a) 50% of the unvested shares under your Stock Options will automatically vest
in the event of your Disability and 100% shall automatically vest in the event
of your death, (b) Nektar will pay to you or your estate, as applicable, all
unreimbursed expenses, all of your then accrued but unpaid base salary, and your
target bonus prorated for the portion of the last year in which you were
employed by Nektar prior to death or Disability, and (c) you and your dependents
shall be entitled to continued medical, dental, and vision insurance for
yourself and your dependents, at your or their expense, at the same level of
coverage as was provided to you and your dependents under Xxxxxx's insurance and
benefits plans immediately prior to the termination by electing COBRA
continuation coverage in accordance with applicable law.
In the event your employment is terminated for reasons not related to a
Change of Control (a) by the Company without Cause; or (b) by you for a Good
Reason Resignation, then you and the Company will meet in good faith to discuss
the terms of an appropriate separation. In any event, at a minimum, the Company
will enter into a severance arrangement with you which will include the
following: (i) a fully effective waiver and release in such form as the Company
may reasonably require, (ii) a cash severance payment equal to your total annual
cash compensation target (defined as your current monthly base salary annualized
for 12 months, plus your bonus target multiplied by the expected pay-out
percentage used by the Company for its GAAP financial statements in the previous
calendar quarter, but not to exceed 100%), payable in accordance with the
severance payment schedule described in the COC Plan and subject to such delay
in payment required for compliance with Section 409A, (iii) pro-rata vesting
credit (based on conversion of the vesting schedule to a monthly vesting
schedule) on your Initial Option through the date of termination if your
termination occurs prior to the first anniversary of your Start Date based on
months completed since your Start Date, (iv) the exercise period for all or any
portion of the vested and unexercised portion of your Stock Options shall be for
a period of 18 months following the termination date, and (v) the Company shall
pay all applicable COBRA payments for you and your family for one year after the
termination date (such payments shall cease in the event that you become
eligible for comparable benefits with another employer).
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In compliance with the terms of the Federal Immigration Reform and
Control Act, you will be required to provide us with proof of authorization to
work and proof of identity.
The terms, compensation and benefits set forth in this letter, which
shall be governed by California law, without reference to principles of
conflicts of laws, may not be reduced without your prior written consent and
shall be binding upon and inure to the benefit of (a) your heirs, executors, and
legal representatives upon your death and (b) any person or entity which at any
time, whether by purchase, merger, or otherwise, directly or indirectly acquires
all or a majority of the assets, business, capital stock, or voting stock of the
Nektar. Any such person or entity shall be deemed substituted for the Nektar
under this letter for all purposes.
Xxxxxxx, I am delighted at the prospect of your leadership at Nektar as
Chief Operating Officer and Head of the PEGylation Business Unit. Please feel
free to call me if you have any questions and I look forward to working with
you.
Sincerely,
/s/ Xxxxxx X. Xxxxx
Xxxxxx W. Xxxxx
President and Chief Executive Officer
OFFER ACCEPTED:
/s/ Xxxxxxx X. Xxxxxxxx May 17, 2008
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Xxxxxxx X. Xxxxxxxx Date
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EXHIBIT A
EMPLOYEE AGREEMENT
In consideration of my employment or continued employment by Nektar
Therapeutics, its subsidiaries or affiliates (collectively, the "Company"), I,
Xxxxxxx X. Xxxxxxxx residing at [Address], agree as of the date I was first
employed by Company as follows:
1. Entire Agreement: This Agreement sets forth the complete and entire
agreement between Company and me and supersedes any and all previous oral or
written communications, discussions and agreements between Company and me with
respect to the subject of this Agreement.
2. Employment:
a. Duty of Loyalty. During the period of my employment by the Company,
I shall devote my full time and best efforts to the business of the Company, and
I shall neither pursue any business opportunity outside the Company nor take any
position with any organization other than as authorized in writing by the Chief
Executive Officer of the Company. While employed by the Company, I will avoid
all conflicts of interest and will not compete with the Company or undertake
other acts of disloyalty.
b. Change in Jobs. I agree that all of my obligations under this
Agreement will remain in full force and effect should I receive a promotion,
demotion or experience a change in job title or duties while employed by the
Company.
c. Employment at Will. I agree that this Agreement does not guarantee
my continued employment with the Company. I acknowledge that, unless I enter
into a written employment agreement with the Company that provides for a
specified period of employment, I am employed "at-will," meaning that either the
Company or I may terminate the employment relationship at any time, for any or
no reason, with or without cause or prior notice.
3. Assignment of Developments:
a. Assignment to Company. If at any time or times during my employment
or other association with the Company, I shall (either alone or with others)
make, conceive, create, discover, invent or reduce to practice any development
that (i) relates to the business of the Company or any of the products or
services being explored, developed, manufactured or sold by the Company or which
may be used in relation therewith; or (ii) results from tasks assigned to me by
the Company; or (iii) results from the use of premises or personal property
(whether tangible or intangible) owned, leased or contracted for by the Company
(hereinafter collectively referred to as "Developments"), then all such
Developments and the benefits thereof are and shall immediately become the sole
and absolute property of the Company and its assigns, as works made for hire or
otherwise. I shall promptly disclose to the Company (or any persons designated
by it) each such Development. I hereby assign all rights (including, but not
limited to, rights to inventions, patentable subject matter, copyrights and
trademarks) I may have or may acquire in the Developments, as well as all
benefits and/or rights resulting therefrom, to the Company and its assigns
without further compensation and shall communicate, without cost or delay, and
without disclosing to others the same, all available information relating
thereto (with all necessary plans and models) to the Company.
b. Requirement to Provide Assistance. I agree to assist the Company, or
its designee, at the Company's expense, in every proper way to secure the
Company 's rights in the Developments and any copyrights, patents, trademarks,
and trade secret rights or other intellectual property rights in connection with
any such Developments in any and all countries, including the disclosure to the
Company of all pertinent information and data with respect thereto, the
execution of all applications, specifications, oaths, assignments and all other
instruments which the Company shall deem necessary in order to apply for and
obtain such rights and in order to assign and convey to the Company, its
successors, assigns, and nominees the sole and exclusive rights, title and
interest in and to such Developments, and any copyrights, patents, trademark and
other intellectual property rights relating thereto. I further agree that my
obligation to execute or cause to be executed, when it is in my power to do so,
any such instrument or papers shall continue after the termination of this
Agreement. If the Company is unable, because of my mental or physical incapacity
or for any other reason, to secure my signature to apply for or to pursue any
application for any United States or foreign patents or copyright registrations
covering Developments or original works of authorship assigned to the Company as
above, then I hereby irrevocably designate and appoint the Company and its duly
authorized officers and agents as my agent and attorney in fact, to act for and
in my behalf and stead to execute and file any such applications and to do all
other lawfully permitted acts to further the prosecution and issuance of letters
patent or copyright registrations thereon with the same legal force and effect
as if executed by me.
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c. Works Made For Hire. I will promptly disclose to the Company all
material which I produce, compose or write, individually or in collaboration
with others, which arises out of work delegated to me by the Company. I agree
that all such material constitutes a work for hire, and at the expense of the
Company, I will assign to the Company all my interest in such copyrightable
material and will sign all papers and do all other acts necessary to assist the
Company to obtain copyrights on such material in any and all countries.
d. Ongoing Notice Obligation. I agree that for a period of one (1) year
following the termination of my employment for any reason, I will notify the
Company immediately of any and all creations, discoveries, inventions or other
developments made by me (either alone or with others) that relate to the
business of the Company or relate to research and development in which I was
involved during the course of my employment by the Company. Any such creation,
discovery, invention or other development relating to the Company's business
made by me (either alone or with others) within one (1) year following the
termination of my employment shall be presumed to be owned by the Company.
e. Inventions Not Assigned to Company. I understand and acknowledge
that the assignment of Developments under this Agreement does not apply to an
invention which qualifies fully for protection under section 2870 California
Labor Code section, a copy of which is attached as Appendix A, which pertains to
any rights I may have acquired in connection with an invention, discovery or
improvement that was developed entirely on my own time for which no equipment,
supplies, facilities or trade secret information of the Company was used and (a)
that does not relate directly or indirectly to the business of the Company or to
the Company's actual or demonstrably anticipated research or development, or (b)
that does not result from any work performed by me for the Company.
f. Disclosure of Prior Inventions. I represent that the creations,
discoveries, inventions or other developments identified in Appendix B attached
hereto ("Prior Developments"), if any, comprise all the Prior Developments that
I made or conceived prior to my employment by the Company, which Prior
Developments are excluded from this Agreement. I understand that it is only
necessary to list the title of such Prior Developments and the purpose thereof,
but not details of the Prior Development itself. IF THERE ARE ANY SUCH
DEVELOPMENTS TO BE EXCLUDED, THE UNDERSIGNED SHOULD INITIAL HERE; OTHERWISE IT
WILL BE DEEMED THAT THERE ARE NO SUCH EXCLUSIONS.
4. Nondisclosure of Confidential Information: I shall not at any time,
whether during or after the termination of my employment, reveal to any person
or entity any Confidential Information except to employees of the Company who
need to know such Confidential Information for the purposes of their employment,
or as otherwise authorized by the Company in writing. The term "Confidential
Information" shall include any information concerning the organization, business
or finances of the Company or of any third party which the Company is under an
obligation to keep confidential that is maintained by the Company as
confidential. Such Confidential Information shall include, but is not limited
to, trade secrets or confidential information respecting methods, know-how,
techniques, systems, processes, specifications, blueprints, formulae, devices,
models, software programs, works of authorship, customer lists, partner lists,
customer information, financial information, pricing or commission information,
business plans, projects, plans and proposals. I shall keep confidential all
matters entrusted to me and shall not use or attempt to use any Confidential
Information except as may be required in the ordinary course of performing my
duties as an employee of the Company, nor shall I use any Confidential
Information in any manner which may injure or cause loss or may be calculated to
injure or cause loss to the Company, whether directly or indirectly.
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5. Nonsolicitation of Customers, Partners and Employees: I agree that
the Company has invested substantial time, effort and expense in compiling its
confidential and trade secret information and in assembling its present
personnel. In order to protect the confidentiality of the Company's sensitive
information, I agree that, during my employment and for one (1) year thereafter,
I shall not do the following:
a. approach, contact or otherwise communicate in any way with any
customer or partner of the Company with the use or assistance of Confidential
Information of the Company that I obtained during my employment for the purpose
of engaging in or assisting in soliciting business from that customer or
partner;
b. solicit, approach, counsel or attempt to induce any person who is
then in the employ of the Company to leave the employ of the Company; or
c. aid, assist or counsel any other person, firm or corporation to do
any of the above.
6. Return of Property: I shall keep on Company's premises (except when
required elsewhere in connection with the conduct of Company's business) and
shall deliver to Company upon termination of my employment all writings related
to the business of Company, and all documents, equipment, materials and other
personal property belonging to Company. I further agree not to make or retain
any copy, duplication, facsimile, reproduction or replication of any of the
foregoing except as necessary to perform my duties as an employee of the
Company.
7. No Violation Of Prior Trade Secret Or Non-Competition Agreements: I
represent that the performance of all the terms of this Agreement as an employee
of this Company will not conflict with, and will not breach, any other
development assignment agreement, confidentiality agreement, employment
agreement or non-competition agreement to which I am or have been a party. To
the extent that I have confidential information or materials of any former
employer of mine, I acknowledge that the Company has directed me to not disclose
such confidential information or materials to the Company or any of its
employees, and that the Company prohibits me from using said confidential
information or materials in any work that I may perform for the Company, and I
will not bring with me to the Company, and will not use or disclose any
confidential, proprietary information, or trade secrets acquired by me prior to
my employment with the Company. I will not disclose to the Company or any of its
employees, or induce the Company or any of its employees to use, any
confidential or proprietary information or material belonging to any previous
employers or others, nor will I bring to the Company or use in connection with
my work for the Company copies of any software, computer files, or any other
copyrighted or trademarked materials except those owned by or licensed to the
Company. I am not a party to any other agreement that will interfere with my
full compliance with this Agreement. I further agree not to enter into any
agreement, whether written or oral, in conflict with the provisions of this
Agreement.
8. Choice of Law: This Agreement shall be construed and governed by the
laws of the state in which I am primarily assigned to perform my job for, or
engagement with, the Company and shall in all respects be interpreted, enforced
and governed under the internal and domestic laws of such state.
9. No Waiver: The waiver of any breach of this Agreement shall not
constitute a waiver of subsequent similar of dissimilar breaches of this
Agreement, or a waiver of any of the obligations contained herein.
10. Assignment: The Company shall have the right to assign this
Agreement to its successors and assigns, and all covenants and agreements
hereunder shall inure to the benefit of and be enforceable by said successors
and assigns.
11. Right to Notify: I recognize the right of Company to notify any
third party of the existence of this Agreement and/or its provisions and/or my
agreeing to it.
12. Severability: Should a provision or part of a provision of this
Agreement be found as a matter or law to be invalid, such finding shall not have
the effect of invalidating the remainder of this Agreement and the provision or
part thereof as to which such finding of invalidity is made shall be interpreted
so as to be ineffective only to the extent of such invalidity without
invalidating the remainder of such provision or part thereof or any of the other
provisions of this Agreement.
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13. Breach: I agree that any breach of this Agreement by me will cause
irreparable damage to the Company and that in the event of such breach the
Company shall have, in addition to any and all remedies of law, the right to an
injunction, specific performance or other equitable relief to prevent the
violation of my obligations hereunder. The Company may apply for such injunctive
relief in any court of competent jurisdiction without the necessity of posting
any bond or other security.
EMPLOYEE: NEKTAR THERAPEUTICS:
Signed: By:
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Name: Title: SVP, Human Resources
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Dated: Dated:
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APPENDIX A
Section 2870 of California Labor Code: Application of provision providing that
employee shall assign or offer to assign rights in invention to employer.
a. Any provision and employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities or trade secret information except for those
inventions that either:
1 Relate at the time of conception or reduction to practice of
the invention to the employer's business, or actual or
demonstrably anticipated research or development of the
employer; or
2 Result from any work performed by the employee for the
employer.
b. To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be +assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.
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APPENDIX B
PRIOR INVENTIONS
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