March 17, 2003
Xx. Xxxxxx X. Xxxxx
Exelixis, Inc.
000 Xxxxxx Xxx
Xxxxx Xxx Xxxxxxxxx, XX 00000-0000
Dear Xxx:
As we discussed, I have received and accepted your resignation with regret. I
understand your desire to spend more time with your family at this moment. In
view of our desire to have your continued services as an employee until your
resignation and, subsequently, as a consultant, I am writing this letter to set
forth the substance of the agreement (the "Agreement") that Exelixis, Inc. (the
"Company") has reached with you.
1. Resignation. Your resignation from your employment with the Company
shall be effective the earlier of March 31, 2003 or any earlier date that you
determine to terminate your employment relationship (the "Resignation Date"). On
the Resignation Date, the Company will pay you all accrued salary, and all
accrued and unused vacation earned through the Resignation Date, subject to the
customary payroll deductions and required withholdings. You are entitled to
these payments regardless of whether or not you sign this Agreement. Further,
you acknowledge that, as of the date you sign this Agreement, you have received
your bonus for 2002.
2. Transition Period. From the date of this Agreement through the
Resignation Date (the "Transition Period") you will serve as the Company's
Executive Vice President of Pharmaceuticals at your current base salary and
benefits, except that no additional vacation time shall accrue during the
Transition Period. During the Transition Period, you will be expected to work at
least 50% of a full-time schedule to perform your regular duties and any
transition duties as assigned by the Company's Chief Executive Officer ("CEO");
and the Company will allow you to devote reasonable time during work hours to
other activities, provided that they do not unreasonably interfere with your job
duties. During the Transition Period, you may not accept a position with or
render services to a Competitor with the Company.
3. Consulting. The Company agrees to retain you, and you agree to make
yourself available to perform services, as a consultant to the Company, under
the terms specified below.
(a) Consulting Period. The Company hereby engages you as a consultant
for the nine (9) month period following the Resignation Date (the "Consulting
Period"), provided that on or after the Resignation Date, you promptly sign and
return to the Company the supplemental release of claims, as referenced in
paragraph 16 below.
(b) Consulting Services. During the Consulting Period, you agree to
make yourself available, by telephone, or in person, to provide consulting
services to the Company as requested by the CEO of the Company up to a maximum
of ten (10) days per month. You agree to exercise the highest degree of
professionalism and to utilize your expertise and creative talents in performing
these services. The consulting services shall be performed at a location
designated by the Company in the Company's discretion.
(c) No Agency or Employment Relationship. During the Consulting
Period, you will be an independent contractor and will not be considered an
agent or an employee of the Company; you will not have authority to make any
representation, contract, or commitment on behalf of the Company and shall not
purport to have any such authority; and you will not be entitled to any of the
benefits which the Company may make available to its employees, such as group
insurance, workers' compensation insurance coverage, profit sharing, or
retirement benefits, other than continuing post-employment benefits provided by
this Agreement or by law, such as COBRA benefits.
(d) Consulting Fees. During the Consulting Period, the Company will
pay you consulting fees in the amount of $30,000, each month (the "Consulting
Fees"). The Consulting Fees will be paid on or before the fifteenth day of the
month following the completion of each full month during the Consulting Period.
(e) Taxes and Withholding. Because you will perform your consulting
services as an independent contractor, the Company will not withhold from the
Consulting Fees any amount for taxes, social security or other payroll
deductions. The Company will report your Consulting Fees on IRS Form 1099. You
acknowledge that you will be entirely responsible for payment of any taxes which
may be due with regard to the Consulting Fees, and you hereby indemnify and hold
the Company harmless from any liability that may be assessed by any taxing
authority with respect to the Consulting Fees, with the exception of the
employer's share of social security, if any.
(f) Protection of Consulting Information. You agree that, during the
Consulting Period and thereafter, you will not use or disclose any confidential
or proprietary information or materials of the Company which you obtain or
develop in the course of performing consulting services for the Company, except
with the written permission of the Company's CEO. Any and all work product you
create in connection with your consulting services will be the sole and
exclusive property of the Company. You hereby assign to the Company all right,
title, and interest in all inventions, techniques, processes, materials, and
other intellectual property developed in the course of performing consulting
services for the Company.
4. Other Work Activities. During the Consulting Period: (i) you may engage
in employment, consulting or other work relationships in addition to your work
for the Company other than for or on behalf of a Competitor; (ii) the Company
shall not require you to render consulting services at times and places that
unreasonably interfere with your ability to engage in other such work
relationships; and (iii) you shall not, directly or indirectly, for yourself or
any other person or entity, solicit, recruit, induce, or encourage any of the
Company's employees to leave their employment with the Company, nor to undertake
employment with a Competitor. The Company agrees that the following noncompete
provision will not be breached by interviewing for or otherwise pursuing
employment with a Competitor of the Company during the Consulting Period, so
long as you do not provide services of any kind to the Competitor. For purposes
of this Agreement, a Competitor shall be defined as the following companies: 1)
Celera, 2) Millenium, 3) Tularik, 4) Cytokinetics. The CEO will have discretion
to determine the location at which you perform your services during the
Transition Period.
5. Health Insurance. To the extent provided by the federal COBRA law and by
the Company's current group health insurance policies, after the Resignation
Date you will be eligible to continue your group health insurance benefits at
your own expense. Later, you may be able to convert to an individual policy
through the provider of the Company's health insurance, if you wish. As part of
this Agreement, if you timely elect continued coverage of your group health
insurance under the COBRA law, the Company will pay 100% of your COBRA premiums
for coverage for you and your dependents through December 31, 2003.
6. Stock Options. Under the terms of your stock option agreement, the
Company's 2000 Equity Incentive Plan (the "Plan") and this Agreement, continued
vesting of any unvested stock options you may possess will cease as of the
Resignation Date. Your right to exercise any vested option shares, and all other
rights and obligations with respect to your stock option(s), will be as set
forth in your stock option agreement and the Plan; provided, however, that if
you sign the supplemental release as set forth in paragraph 16 below, the
Company shall extend the period during which you may exercise any vested option
shares to eighteen (18) months following the Resignation Date.
7. Other Compensation Or Benefits. You acknowledge that, except as
expressly provided in this Agreement, you will not receive any additional
compensation, severance, or benefits after the Resignation Date, except for any
vested rights you may have under a written group benefit plan of the Company
(e.g., 401(k) account).
8. Expense Reimbursements. You agree that, within thirty (30) days of the
Resignation Date, you will submit your final documented expense reimbursement
statement reflecting all business expenses you incurred through the Resignation
Date, if any, for which you seek reimbursement. The Company will reimburse you
for these expenses pursuant to its regular business practice. Documented
expenses incurred during the Consulting Period with the Company's authorization
will also be reimbursed pursuant to the Company's regular business practice.
9. Return Of Company Property. By the Resignation Date, you will return to
the Company all Company documents (and all copies thereof) and other Company
property in your possession or control, including, but not limited to, files,
notes, notebooks, correspondence, memoranda, records, plans, forecasts, reports,
studies, proposals, agreements, financial information, business development
information, investor relations information, sales and marketing information,
research and development information, personnel information, specifications,
drawings, computer-recorded information, equipment and other tangible property
(including, but not limited to, computers, credit cards, entry cards,
identification badges, and keys), and any materials of any kind that contain or
embody any proprietary or confidential information of the Company (and all
reproductions thereof in whole or in part). You agree to make a diligent search
to locate all such materials.
10. Proprietary Information Obligations. Both during and after your
employment you will refrain from any unauthorized use or disclosure of the
Company's proprietary or confidential information or materials. You acknowledge
and will comply with your continuing obligations under your Proprietary
Information and Inventions Agreement (attached as Exhibit B).
11. Confidentiality. The provisions of this Agreement will be held in
strictest confidence by you and the Company and will not be publicized or
disclosed in any manner whatsoever; provided, however, that: (a) you may
disclose this Agreement in confidence to your immediate family; (b) the parties
may disclose this Agreement in confidence to their respective attorneys,
accountants, auditors, tax preparers, and financial advisors; (c) the Company
may disclose this Agreement as necessary to fulfill standard or legally required
corporate reporting or disclosure requirements; (d) you may disclose the
existence of this Agreement to potential employers; and (e) the parties may
disclose this Agreement insofar as such disclosure may be necessary to enforce
its terms or as otherwise required by law. In particular, and without
limitation, you agree not to disclose the terms of this Agreement to any current
or former Company employee.
12. Nondisparagement. You and the Company (through its officers and
directors) agree not to disparage the other party or its officers, directors,
employees, shareholders, and agents, in any manner likely to be harmful to that
party or its business, business reputation, or personal reputation; provided
that both you and the Company may respond accurately and fully to any question,
inquiry or request for information when required by legal process.
13. No Admissions. The promises in consideration of this Agreement shall
not be construed to be an admission of any liability or obligation by either
party to the other party or to any other person, and the parties make no such
admissions.
14. Release Of Claims. In exchange for the consideration under this
Agreement to which you would not otherwise be entitled, and except as provided
in this Agreement, you hereby generally and completely release the Company and
its predecessors, successors, parent, subsidiary and affiliated entities, and
their directors, officers, employees, shareholders, partners, agents, insurers,
and assigns from any and all claims, liabilities and obligations, both known and
unknown, arising from or in any way related to events, acts, conduct, or
omissions occurring at any time prior to and including the date you sign this
Agreement. This general release includes, but is not limited to: (a) all claims
arising from or in any way related to your employment with the Company or the
termination of that employment; (b) all claims related to your compensation or
benefits from the Company, including salary, bonuses, commissions, vacation pay,
expense reimbursements, severance pay and benefits, fringe benefits, stock,
stock options, or any other ownership interests in the Company; (c) all claims
for breach of contract, wrongful termination, and breach of the implied covenant
of good faith and fair dealing; (d) all tort claims, including claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(e) all federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys' fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, and the California Fair Employment and
Housing Act (as amended). Notwithstanding the release in the preceding sentence,
you shall not hereby surrender any right you may have to indemnification by the
Company pursuant to the by-laws of the Company, applicable law, or your
Indemnity Agreement with the Company dated January 16, 2002.
15. Section 1542 Waiver. In granting the release herein, which includes
claims which may be unknown to you at present, you acknowledge that you have
read and understand Section 1542 of the California Civil Code:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.
You hereby expressly waive and relinquish all rights and benefits under that
section and any law or legal principle of similar effect in any jurisdiction
with respect to the releases granted herein, including but not limited to the
release of unknown and unsuspected claims granted in this Agreement.
16. Employment References. You agree to direct any individual or entity
seeking an employment reference for you from the Company to Xxxxxx Xxxxxxx.
17. Supplemental Release. As part of this Agreement you agree to promptly
sign and deliver to the Company a supplemental release of claims (the
"Supplemental Release") in the form attached hereto as Exhibit A, on or after
the Resignation Date.
18. Arbitration. To ensure rapid and economical resolution of any disputes
which may arise under this Agreement, you and the Company agree that any and all
disputes or controversies of any nature whatsoever arising from or regarding the
interpretation, performance, enforcement or breach of this Agreement shall be
resolved, to the fullest extent permitted by law, by confidential, final and
binding arbitration conducted by Judicial Arbitration and Mediation Services,
Inc. ("JAMS"), before a single arbitrator, in San Francisco, California, under
the then-applicable JAMS rules. By agreeing to this arbitration procedure, both
you and the Company waive the right to resolve any such dispute through a trial
by jury, judge or administrative proceeding. The parties shall bear equally the
costs and fees of the arbitration; however, the arbitrator, in his or her sole
discretion, shall be authorized to determine whether and to what extent a party
is the prevailing party, and if so, to award to that prevailing party
reimbursement for its reasonable attorneys' fees, disbursements (including,
without limitation, expert witness fees and expenses), and costs arising from
the arbitration. The arbitrator, and not a court, shall also be authorized to
determine whether the provisions of this paragraph apply to a dispute,
controversy or claim sought to be resolved in accordance with these arbitration
procedures. Nothing in this Agreement is intended to prevent either you or the
Company from obtaining injunctive relief in court to prevent irreparable harm
pending the conclusion of any such arbitration.
19. Miscellaneous. This Agreement, including its exhibits, constitutes the
complete, final and exclusive embodiment of the entire agreement between you and
the Company with regard to its subject matter. It is entered into without
reliance on any promise or representation, written or oral, other than those
expressly contained herein, and it supersedes any other such agreements,
promises, warranties or representations, written or oral, including but not
limited to your employment offer letter dated January 4, 2002. This Agreement
may not be modified or amended except in a writing signed by both you and a duly
authorized officer of the Company. This Agreement will bind the heirs, personal
representatives, successors and assigns of both you and the Company, and inure
to the benefit of both you and the Company, their heirs, successors and assigns.
If any provision of this Agreement is determined to be invalid or unenforceable,
in whole or in part, this determination will not affect any other provision of
this Agreement and the provision in question will be modified so as to be
rendered enforceable in a manner consistent with the intent of the parties
insofar as possible. This Agreement will be deemed to have been entered into and
will be construed and enforced in accordance with the laws of the State of
California as applied to contracts made and to be performed entirely within
California. Any ambiguity in this Agreement shall not be construed against
either party as the drafter. Any waiver of a breach of this Agreement shall be
in writing and shall not be deemed to be a waiver of any prior or successive
breach. This Agreement may be executed in counterparts and facsimile signatures
will suffice as original signatures.
If this Agreement is acceptable to you, please sign below and return the
original to me by February 21, 2003.
We wish you the very best in your future endeavors.
Sincerely,
EXELIXIS, INC.
By: /s/Xxxxxx Xxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
Exhibit A: Supplemental Release
I HAVE READ, UNDERSTAND AND AGREE FULLY TO THE FOREGOING AGREEMENT:
/s/ Xxx Xxxxx
--------------------------------
Xxxxxx X. Xxxxx
17th Mar 2003
--------------------------------
Date
EXHIBIT A
SUPPLEMENTAL RELEASE AGREEMENT
(To be signed on or after the Resignation Date)
I understand that my employment with Exelixis, Inc. Corporation (the "Company")
terminated effective March 31, 2003 (the "Resignation Date"). The Company has
agreed that if I choose to sign this Supplemental Release Agreement ("Release"),
the Company will pay me certain benefits and engage me to perform certain
consulting services pursuant to the terms of the Resignation letter agreement
dated January 31, 2003 (the "Agreement"). I understand that I am not entitled
to such benefits or consulting arrangement unless I sign this Release and return
it to the Company. I understand that, regardless of whether I sign this
Release, the Company will pay me all of my accrued salary and vacation through
the Resignation Date, to which I am entitled by law.
In consideration for the benefits and consulting arrangement I am receiving
under the Agreement, as described therein, I hereby generally and completely
release the Company and its parents, subsidiaries, successors, predecessors and
affiliates, and its and their directors, officers, employees, shareholders,
agents, attorneys, predecessors, insurers, affiliates and assigns, from any and
all claims, liabilities and obligations, both known and unknown, that arise out
of or are in any way related to events, acts, conduct, or omissions occurring at
any time prior to and including the date I sign this Release. This general
release includes, but is not limited to: (a) all claims arising out of or in any
way related to my employment with the Company or the termination of that
employment; (b) all claims related to my compensation or benefits, including
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (c) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (d) all tort
claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and local
statutory claims, including claims for discrimination, harassment, retaliation,
attorneys' fees, or other claims arising under the federal Civil Rights Act of
1964 (as amended), the federal Americans with Disabilities Act of 1990 (as
amended), the federal Family and Medical Leave Act, the California Family Rights
Act, and the California Fair Employment and Housing Act (as amended).
In releasing claims unknown to me at present, I am waiving all rights and
benefits under Section 1542 of the California Civil Code, and any law or legal
principle of similar effect in any jurisdiction: "A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
I accept and agree to the terms and conditions stated above:
/s/ Xxxxxx X. Xxxxx 31st March 2003
------------------------------------ -----------------------------------
Xxxxxx X. Xxxxx Date
