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EXHIBIT 10.1
June 4, 1998
Xxxxxxx X. Xxxxxxx, Ph.D.
00000 Xxxxx Xxxxx Xxxx
Xx Xxxxx, Xxxxxxxxxx 00000
Dear Xxxxxxx:
This letter and the attached Exhibits set forth the terms and conditions of our
agreement (the "Agreement") regarding your continued employment with SIBIA
Neurosciences, Inc. ("SIBIA").
You have been given a special assignment with the title
of Vice President through March 31, 1999, or earlier if SIBIA elects to
terminate your employment at any time or for any reason prior to March 31, 1999
(the "Term"). During the Term, you shall be a part-time exempt employee of SIBIA
and your sole responsibility to SIBIA will be to work with SIBIA's outside
counsel in the litigation with Cadus Pharmaceutical Corporation and in any other
litigation matters involving SIBIA's intellectual property rights that arise
during the Term. Although you will no longer have managerial responsibility for
research activities within SIBIA, you will continue to report directly to me
throughout the Term.
During the Term, you will continue to receive your current base salary, subject
to standard deductions and withholding, and you will be entitled to continue
your participation in SIBIA's employee benefit plans, regardless of whether you
obtain additional employment outside of SIBIA. You will not, however, continue
to accrue vacation or sick time after the Effective Date of this Agreement. At
the end of the Term, you will receive payment for all accrued vacation benefits
earned through the Effective Date of this Agreement. You will continue to be
bound by SIBIA's employment policies, procedures and practices throughout the
Term.
Upon the Effective Date of this Agreement (as defined below), SIBIA agrees that
it will forgive your outstanding employee loan in the amount of Forty Three
Thousand Six Hundred Dollars ($43,600). You agree and understand that you will
be responsible for any applicable tax consequences as a result of SIBIA's
forgiveness of the loan and agree that you will indemnify and hold SIBIA
harmless with respect to any such potential tax liability or other
consequence(s) of such forgiveness.
If you elect to terminate your employment with SIBIA at any time during the
Term, you will only be entitled to receive accrued salary and all accrued and
unused vacation benefits earned prior to such termination, subject to standard
payroll deductions and withholdings.
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Xxxxxxx X. Xxxxxxx, Ph.D.
June 4, 1998
Page 2
If, however, (i) you remain an employee throughout the Term, (ii) you continue
to work with outside counsel in good faith, and (iii) at the end of the Term you
execute a waiver and release of claims (a form of which is attached hereto as
Exhibit A), SIBIA will provide you with (A) salary continuation at a rate
equivalent to your current base salary for six (6) months, (B) continued medical
benefits under COBRA for six (6) months, and (C) accelerated vesting of your
stock options dated November 10, 1994 covering 58,750 total shares at .85 cents
per share, May 9, 1995 covering 7,050 total shares at $1.45 per share and
February 22, 1996 covering 8,225 total shares at $1.91 per share which shall
become exercisable in accordance with their terms solely to the extent such
stock options would have been exercisable had you remained an employee of SIBIA
through May 9, 1999 (the "Severance Benefits"). The Severance Benefits will
commence immediately upon the conclusion of the Term, so long as you execute the
release attached hereto as Exhibit A, and will be paid on SIBIA's regular
payroll dates, subject to standard payroll deductions and withholdings. In the
event that SIBIA elects to terminate your employment earlier than September 30,
1998, you shall be entitled to receive additional Severance Benefits such that
you receive salary continuation and medical benefits under COBRA through March
31, 1999, regardless of whether you obtain other employment before March 31,
1999.
Although your stock options will continue to vest during the Term, except as
provided above, the vesting of the shares under your stock options shall cease
at the end of the Term. You will be entitled to exercise your vested shares in
accordance with the terms and conditions of the applicable stock option plan.
You agree and acknowledge that you will continue to be bound by the terms and
conditions of the Security Agreement dated February 21, 1996 between you and the
Salk Institute Biotechnology/Industrial Associates, Inc.
You agree and acknowledge that you will continue to be bound by the terms and
conditions of the Agreement in Respect of Confidential Information and Agreement
in Respect of Inventions and Patent Rights, copies of which are attached hereto
as Exhibit B.
In exchange for the promises and covenants set forth in this Agreement, you
hereby release, acquit, and forever discharge SIBIA, its parents and
subsidiaries, and their officers, directors, agents, servants, employees,
attorneys, shareholders, partners, successors, assigns, affiliates, customers,
and clients of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys' fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising out of or in any
way related to agreements, acts or conduct at any time prior to the Effective
Date of this Agreement, including, but not limited to: all such claims and
demands directly or indirectly arising out of or in any way connected with
SIBIA's employment of you, including claims or demands related to salary,
bonuses, commissions, stock, stock options, or any other ownership interests in
the Company, vacation pay, fringe benefits, expense reimbursements, severance
pay, or any form of compensation; claims pursuant to any federal,
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Xxxxxxx X. Xxxxxxx, Ph.D.
June 4, 1998
Page 3
state or local law or cause of action including, but not limited to, the
California Fair Employment and Housing Act, the federal Civil Rights Act of
1964, as amended; the federal Age Discrimination in Employment Act of 1967, as
amended; the federal Americans With Disabilities Act; tort law; contract law;
wrongful discharge; discrimination; harassment; fraud; defamation; emotional
distress; and breach of the implied covenant of good faith and fair dealing.
You further acknowledge that you are knowingly and voluntarily waiving and
releasing any rights you may have under the Age Discrimination in Employment Act
of 1967 ("ADEA"). You also acknowledge that the consideration given for the
waiver and release in the preceding paragraphs hereof is in addition to anything
of value to which you were already entitled. Since you are more than forty (40)
years of age when this release is signed, you hereby provide the further
acknowledgment that you are advised by this writing, as required by the Older
Workers Benefit Protection Act, that: (a) your waiver and release do not apply
to any rights or claims that may arise after the Effective Date of this release;
(b) you have the right to consult with an attorney prior to executing this
release (although you may voluntarily choose not to do so); (c) you may have at
least twenty-one (21) days to consider this Agreement (although you may by your
own choice execute this release earlier); (d) you have seven (7) days following
the execution of this release to revoke this release; and (e) this Agreement
shall not be effective until the date upon which the revocation period has
expired, therefore making the effective date the eighth day after this release
is signed by you (the "Effective Date").
In giving this release, which includes claims which may be unknown to you at
present, you hereby acknowledge that you have read and understand Section 1542
of the Civil Code of the State of California which reads as follows:
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 this
section and any law or legal principle of similar effect in any jurisdiction
with respect to claims released hereby.
You and SIBIA agree that the provisions of this Agreement are personal and
confidential and shall be held in the strictest confidence, and neither you nor
SIBIA will be permitted to discuss the terms of the Agreement except insofar as
such disclosure may be necessary to enforce the terms of this Agreement or as
otherwise required by law.
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Xxxxxxx X. Xxxxxxx, Ph.D.
June 4, 1998
Page 4
This Agreement shall be deemed to have been entered into and shall 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. This
Agreement, including Exhibits A and B, constitutes the complete, final and
exclusive embodiment of the entire agreement between you and SIBIA with regard
to the subject matter hereof and supercedes all prior oral or written agreements
between the parties. This Agreement may not be modified except in a writing
signed by you and a duly authorized officer of SIBIA. You agree that you have
carefully read this Agreement and have been afforded the opportunity to be
advised of its meaning and consequences and have signed the same of your own
free will.
If a court of competent jurisdiction determines that any term or provision of
this Agreement is invalid or unenforceable, in whole or in part, then the
remaining terms and provisions hereof shall be unimpaired. The court will have
the authority to modify or replace the invalid or unenforceable term or
provision with a valid and enforceable term or provision that most accurately
represents the parties' intention with respect to the invalid or unenforceable
term or provision.
Please confirm your assent to the foregoing terms and conditions of our
agreement by signing and returning to me the two copies of this letter which are
enclosed herewith. Upon my receipt thereof, I will forward to you a fully
executed duplicate original.
Sincerely,
SIBIA NEUROSCIENCES, INC.
/s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx, Ph.D.
Chief Executive Officer
* * * * *
HAVING READ AND REVIEWED THE FOREGOING, I HEREBY AGREE TO AND ACCEPT THE TERMS
AND CONDITIONS AS STATED ABOVE.
Dated: June 9, 1998 /s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx, Ph.D.
Exhibit A: Release and Waiver of Claims
Exhibit B: Proprietary Information and Inventions Agreement
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EXHIBIT A
RELEASE AND WAIVER OF CLAIMS
In consideration of the payments and other benefits set forth in the
Agreement dated May 22, 1998, to which this form is attached, I hereby furnish
SIBIA NEUROSCIENCES, INC. (the "Company") with the following release and waiver.
I hereby release, and forever discharge the Company, its parents and
subsidiaries, and their officers, directors, agents, servants, employees,
attorneys, stockholders, partners, successors, assigns, affiliates, customers
and clients of and from any and all claims, liabilities, demands, causes of
action, costs, expenses, attorneys' fees, damages, indemnities and obligations
of every kind and nature, in law, equity, or otherwise, known and unknown,
suspected and unsuspected, disclosed and undisclosed, arising at any time prior
to and including my employment termination date with respect to any claims
relating to my employment and the termination of my employment, including but
not limited to, claims pursuant to any federal, state or local law relating to
employment, including, but not limited to, discrimination claims, claims under
the California Fair Employment and Housing Act, and the Federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"), or claims for
wrongful termination, breach of the covenant of good faith, contract claims,
tort claims, and wage or benefit claims, including but not limited to, claims
for salary, bonuses, commissions, stock, stock options, vacation pay, fringe
benefits, severance pay or any form of compensation.
I acknowledge that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this waiver and release is knowing and
voluntary, and that the consideration given for this waiver and release is in
addition to anything of value to which I was already entitled as an employee of
the Company. I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the waiver and release granted
herein does not relate to claims which may arise after this agreement is
executed; (b) I have the right to consult with an attorney prior to executing
this agreement (although I may choose voluntarily not to do so); (c) I have
twenty-one (21) days from the date I receive this agreement, in which to
consider this agreement (although I may choose voluntarily to execute this
agreement earlier); (d) I have seven (7) days following the execution of this
agreement to revoke my consent to the agreement; and (e) this agreement shall
not be effective until the seven (7) day revocation period has expired.
In giving this release, which includes claims which may be unknown to me at
present, I hereby acknowledge that I have read and understand Section 1542 of
the Civil Code of the State of California which reads as follows:
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 hereby expressly waive and relinquish all rights and benefits under this
section and any law or legal principle of similar effect in any jurisdiction
with respect to claims released hereby.
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Xxxxxxx X. Xxxxxxx, Ph.D.
June 4, 1998
Page 2
Dated:
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Xxxxxxx X. Xxxxxxx, Ph.D.
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EXHIBIT B
AGREEMENT IN RESPECT OF CONFIDENTIAL INFORMATION
AND
AGREEMENT IN RESPECT OF INVENTIONS AND PATENT RIGHTS
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THE SALK INSTITUTE BIOTECHNOLOGY/INDUSTRIAL ASSOCIATES, INC.
AGREEMENT IN RESPECT OF CONFIDENTIAL INFORMATION
AGREEMENT made and entered into this 12th day of October, 1982,
by and between The Salk Institute Biotechnology/Industrial Associates, Inc.
(hereinafter referred to as "SIBIA") and the undersigned employee of SIBIA
(hereinafter referred to as "Employee").
WITNESSETH:
In consideration of the salary or wages received by Employee and
as a condition upon, and a part of the consideration for, the employment or
continuation of employment of Employee, but without limitation upon SIBIA's
right to terminate Employee's employment, Employee covenants and agrees not to
disclose at any time either during or subsequent to said employment directly or
indirectly to anyone not an officer or employee of SIBIA, except as the chief
executive officer of SIBIA or an agent of said officer acting under proper
authority may direct, and not to use at any time either during or subsequent to
said employment, except in the course of said employment, any secret or
confidential information of SIBIA (whether or not developed by Employee), or
secret or confidential information of any third party possessed by SIBIA, unless
Employee shall first secure the consent of SIBIA in writing or unless Employee
shall be involuntarily required to so disclose or use by a court having
competent jurisdiction.
Employee further covenants and agrees that every document,
notation, record, diary, memorandum, work sheet, drawing and the like containing
information of or pertinent to any operation, procedure, process, apparatus
composition, formula, research, development, investigation or the like, or any
method of accounting or manner of doing business, of SIBIA (or containing any
other secret or confidential information of SIBIA) and made or acquired by
Employee during said employment is and shall be the sole and exclusive property
of SIBIA, and that Employee will deliver same (and each and every copy,
abstract, summary or reproduction of same made by or for Employee or acquired by
Employee) at any time SIBIA may so request and in any event prior to or at the
termination of said employment.
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It is understood and agreed by Employee that all information of
SIBIA developed or used by its officers or employees or acquired by SIBIA from
anyone not an officer or employee shall be considered to be secret or
confidential to the extent and for so long as such information is not available
to the general public.
Executed the day and year first above written to be effective as
of the date of employment of Employee by SIBIA.
THE SALK INSTITUTE BIOTECHNOLOGY/
WITNESSES: INDUSTRIAL ASSOCIATES, INC.
[SIG] By /s/ XX XXXXX
-------------------------------- -----------------------------------------
/s/ XXXXXXX X. XXXXXXX
-------------------------------- -----------------------------------------
Signature of Employee
Xxxxxxx X. Xxxxxxx
-----------------------------------------
Typed or printed name of Employee
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THE SALK INSTITUTE BIOTECHNOLOGY/INDUSTRIAL ASSOCIATES, INC.
AGREEMENT IN RESPECT OF INVENTIONS AND PATENT RIGHTS
AGREEMENT made and entered into this 1st day of December, 1981, by
and between THE SALK INSTITUTE BIOTECHNOLOGY/INDUSTRIAL ASSOCIATES, INC., a
Delaware corporation (hereinafter referred to as "SIBIA") and the undersigned
Employee of said SIBIA (hereinafter referred to as "Employee"):
WITNESSETH:
In consideration of the salary or wages received by Employee and
as a condition upon, and a part of the consideration for, the employment or
continuation of employment of Employee, but without limitation upon SIBIA's
right to terminate Employee's employment. Employee hereby assigns and transfers
onto SIBIA, and agrees that SIBIA shall be the owner of all inventions,
discoveries and improvements heretofore or hereafter conceived, developed or
made by Employee, either alone or with others, in whole or in part during
Employee's employment by SIBIA, or written six months thereafter (1) which are
useful in or directly related to SIBIA's business or to SIBIA's actual or
demonstrably anticipated research or development or (2) WHICH RELATE TO, or are
conceived, developed or made in the course of Employee's employment or (3) which
are conceived, developed or made from work performed during, or by reason of
trade secrets obtained from such employment, PROVIDED HOWEVER THAT THIS
AGREEMENT
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SHALL NOT APPLY TO ANY INVENTIONS WHICH ARE NOT SUBJECT TO ASSIGNMENT UNDER
SECTION 2870 OF ARTICLE 3.5 OF CHAPTER 2 OF THE LABOR CODE OF THE STATE OF
CALIFORNIA. SIBIA's business is understood to be principally that of biological
and biochemical research and development but includes and shall include all
other lawful operations and activities now or hereafter carried on or undertaken
by SIBIA.
For the same consideration, Employee hereby agrees to disclose
promptly and in writing to any officials or representatives designated by SIBIA
to receive such disclosure all inventions, discoveries, improvements and devices
heretofore or hereafter conceived or made by Employee alone or with others
during Employee's employment to which SIBIA is entitled as above provided, and
agrees not to disclose such inventions, discoveries, improvements or devices to
any others, except as required by his employment, without the express consent of
SIBIA. Employee further agrees that during his employment by SIBIA or any time
thereafter, he will, upon the request of SIBIA, execute proper assignments to
SIBIA of any and all such inventions, discoveries, improvements and devices to
which SIBIA is entitled as above provided, and will execute all papers and
perform all other lawful acts which SIBIA may deem necessary or advisable for
the preparation, prosecution, procurement and maintenance of patent applications
and patents of the United States and foreign countries for such inventions,
discoveries, improvements and devices to which SIBIA is entitled as above
provided, and will execute any
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and all proper documents which shall be required or necessary to vest title in
SIBIA to such inventions, discoveries, improvements and devices and all patent
applications and patents relating thereto. It is understood and agreed that all
expenses in connection with such patent applications or patents shall be borne
by SIBIA, but SIBIA shall be under no obligation to protect by patent any such
invention, discovery, improvement or device, except at its own discretion and to
such extent as SIBIA shall deem desirable. Employee shall not be entitled to any
additional compensation, other than his regular salary or wages, for any
services rendered by Employee as herein provided during the term of his
employment but, if any services by Employee as herein provided shall be required
by SIBIA thereafter, SIBIA shall pay Employee at a reasonable rate for all time
actually consumed by him and will reimburse him for any reasonable expenses
incurred by him.
Employee covenants and agrees not to disclose at any time either
during or subsequent to said employment directly or indirectly to anyone not an
officer or employee of SIBIA and not to use any time either during or subsequent
to said employment, except in the course of said employment, any secret or
confidential information of SIBIA (whether or not developed by Employee) unless
he shall first secure the consent of SIBIA in writing or unless he shall be
involuntarily required to do so by a Court having jurisdiction. Employee further
covenants and agrees that every document,
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notation, record, diary, memorandum, work sheet, drawing, and the like
containing information of or pertinent to any operation, procedure, process,
apparatus, composition, formula, research, development, investigation, or the
like, or any method of accounting or manner of doing business of SIBIA (or
containing any other secret or confidential information of SIBIA) and made or
acquired by Employee during said employment, is and shall be the sole and
exclusive property of SIBIA, and that Employee will deliver same (and each and
every copy, abstract, summary, or reproduction of same made by or for Employee
or acquired by Employee) at any time SIBIA may so request and in any event prior
to or at the termination of said employment. It is understood and agreed by
Employee that all information of SIBIA developed or used by its officers or
employees or acquired by SIBIA from anyone not an officer or employee shall be
considered to be either secret or confidential to the extent and for so long as
such information is not available to the general public.
To encourage inventive thinking on the part of its employees, and
as additional compensation for the assignment of inventions or discoveries to
XXXXX, XXXXX agrees to pay to Employee, if the invention or discovery is sole,
or to Employee-inventors jointly if the invention or discovery is joint, the sum
of at least One Hundred Dollars ($100.00) if and when a United States patent is
filed by SIBIA covering each invention or discovery made by Employee
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and the further sum of at least Two Hundred Dollars ($200.00) if and when a
United States patent issues thereon; provided, however, that SIBIA shall not be
obligated to pay such sum to Employee for any patent application or patent which
it may file or obtain which contains essentially the same disclosure or
represents merely a slight improvement, modification, or variation of an
invention covered by a previous application or patent of Employee, the question
of whether or not any such application or patent covers any such improvement,
modification, or variation to be determined solely by SIBIA. It is understood
that nothing contained herein is to be construed as requiring SIBIA to file
patent applications on any invention or discovery accepted by it and it is
further understood that no payment shall be made for any foreign patents which
may be obtained covering any such inventions or discoveries.
Employee represents that he has not previously assumed any
obligations inconsistent with those of this Agreement and has no interest in any
trade secrets or patent rights relating to SIBIA's business, unless this clause
is stricken and details are provided on the reverse side of this sheet.
This Agreement may be amended by mutual consent of the parties on
thirty (30) days' notice by SIBIA to the Employee stating the substance of the
proposed amendment and upon failure to agree upon the amendment within thirty
(30) days after the date of the notice, this Agreement will
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automatically be terminated as to both parties; provided, however, that this
Agreement shall remain in full force and effect after the date of such
termination with respect to all inventions of the Employee prior to said date of
termination.
The terms, covenants and provisions hereof shall extend to and be
binding upon the parties hereto, their heirs, personal representatives, assigns
and successors in interest.
This Agreement shall be governed by the laws of the State of
California.
Executed the day and year first above written.
THE SALK INSTITUTE BIOTECHNOLOGY/
INDUSTRIAL ASSOCIATES, INC.
By [SIG]
--------------------------------------
/s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Signature of Employee
Xxxxxxx X. Xxxxxxx
-----------------------------------------
Type or print name of Employee here
WITNESSES:
[SIG]
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[SIG]
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