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[SIGNAL PHARMACEUTICALS, INC. LETTERHEAD] EXHIBIT 10.25
June 13, 1995
Xxxx. X. Xxxxxxxxx
P.O. Box 9664
Rancho Santa Fe, CA 92067
Dear Xxxx:
It is my pleasure to offer you the position of Executive Vice President
at Signal Pharmaceuticals, Inc. This letter ("Letter Agreement") will serve to
confirm the offer of the terms of your employment with Signal Pharmaceuticals,
Inc. ("Signal" or the "Company"), such employment to begin June 13, 1995. If the
terms discussed below are acceptable to you, please sign this Letter Agreement
where indicated and return it to me at the above address.
1. Duties and Obligations.
Your position at the Company will be Executive Vice President
Corporate Development of the Company. In that capacity, you will be responsible
for all corporate, product and clinical development as well as all commercial
operations of the Company. You will report to and follow the instructions of the
President of the Company.
You agree that to the best of your ability and experience you
will at all times loyally and conscientiously perform all of the duties and
obligations required of and from you pursuant to the express and implicit terms
hereof, and to the reasonable satisfaction of the Company.
2. Compensation.
a. Salary. You will be paid a monthly salary of $14,583.33
less applicable withholdings ($175,000 annually;
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hereafter "Salary"). The Company will reimburse all reasonable business expenses
that are incurred in the ordinary course of business and in accordance with the
Company's policies as in effect from time to time. You may also be entitled to
increases in your salary in accordance with the Company's policy and as are
adopted and approved by the Board of Directors from time to time.
b. Bonus. In the event that the Company closes a corporate
partnering transaction during the first year of your employment (or series of
transactions) in which the total amount to be received by the Company equals at
least $25 million (including all up-front fees, equity investments and
milestones, but not royalties), then you will be awarded a bonus of 25% of your
annual salary. A 30% bonus will be paid if the total value of such transactions
equal or exceed $35 million. Subsequent bonus plans will be designed annually
and will be performance based.
x. Xxxxxxxxx. In the event that the Company determines that
you have not made sufficient progress toward the Company's business development
goals after completion of 9 months of employment and the Company terminates your
employment, then the Company will agree to provide you with a severance payment
of 3 additional months of salary and non-salary benefits.
d. Non-Salary Benefits. You will be eligible for corporate
benefits such as health and disability insurance, vacation, etc. as provided for
by the Company.
e. Equity.
i) You will be granted an option, under Signal's
1993 Stock Option Plan (the "Plan"), to purchase 170,000 shares of the Company's
Common Stock at the fair market value on the date of grant. The option will be
immediately exercisable; provided, however, that the Company will have a
repurchase right with respect to such shares which will lapse and the option
will vest as to 20% of the shares upon completion of 12 full months of
employment and as to the remaining shares at a rate of 5% per quarter over the
next four years.
ii) Subject to amendment of the Plan, you will be
granted an additional option to purchase 100,000 shares of the Company's Common
Stock at the fair market value on the date
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of grant. The option will be immediately exercisable; provided, however, that
subject to (A), below, the Company's repurchase right with respect to the shares
will lapse and the option will vest as to 25% of the shares upon completion of
15 full months of employment and as to the remaining shares at the rate of 5%
per quarter over the next 3 3/4 years.
A) In the event that the Company has not closed a
corporate partnering transaction (or series of transactions) in which the total
amount to be received by the Company equals at least $25 million (including all
up-front fees, equity investments and milestone payments, but not royalties)
within 9 months of the date of your employment, then the option described in
section (e)(iii) shall, if not previously exercised, be canceled as to 25% of
the shares, or if the option was previously exercised, then up to 25% of the
shares so purchased shall be repurchasable by the Company at cost. If such a
transaction has not been closed within 12 months of the date of your employment,
then the option will be canceled or the shares will become repurchasable, as
applicable, as to an additional 25% of the shares. If such a transaction has not
been closed within 15 months of the date of your employment, then the option
will be canceled or the shares will become repurchasable, as applicable, as to
the remaining 50% of the shares.
iii) Subject to amendment of the Plan, you will be
granted an additional option to purchase 50,000 shares of the Company's Common
Stock at the fair market value on the date of grant. The option will be
immediately exercisable; provided, however, that subject to (A), below, the
Company's repurchase right with respect to the shares will lapse and the shares
will vest as to 40% of the shares upon completion of 24 full months of
employment and as to the remaining shares at the rate of 5% per quarter over the
next 3 years.
A) In the event that the Company has not closed a
second corporate partnering transaction (or series of transactions) in which the
total amount to be received by the Company equals at least $10 million
(including all up-front fees, R & D support, equity investments but, not
royalties and milestone payments) within 24 months of the date of your
employment, then the option shall, if not previously exercised, be canceled in
its
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entirety, or if the option was previously exercised, then the shares so
purchased shall be repurchasable by the Company at cost.
iv) The terms of each of the foregoing otpions will
be reflected in a definitive Stock Option Agreement between you and the Company.
3. Term.
a) Notwithstanding anything in this Agreement to the
contrary, employment with the Company is "at will," not for a specific term, and
can be terminated by you or by the Company at any time for any reason, with or
without cause, subject to the termination provisions set forth herein. Any
contrary representations which may have been made or which may be made to you
are superseded by this offer.
b) In the event that your employment is terminated by the
Company then you will immediately resign from all positions with the Company.
c) Except as specifically set forth in Section 2(c) hereof,
in the event that you resign or your employment is terminated by the Company,
the Company's obligations hereunder will immediately terminate.
4. Devotion of Entire Business Time to the Company's Business.
a) During the term of your employment, you will devote all
of your business time and attention to the business of the Company and the
Company will be entitled to all of the benefits and profits arising from or
incident to all such work, services and advice.
b) During the term of your employment, prior to rendering
any services of a commercial or professional nature to any person or
organization, whether for compensation or otherwise, you will notify the
President and the Board of Directors of the Company.
c) During the term of your employment, you will not,
directly or indirectly, either as an employee, employer,
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consultant, agent, principal, partner, stockholder, corporate officer, director,
or in any other individual or representative capacity, engage or participate in
any business that is competitive in any manner whatsoever with the business of
the Company.
5. Proprietary Information and Inventions Agreement; Outside
Activities. Your acceptance of this offer is contingent upon the execution of
the Company's Proprietary Information and Inventions Agreement, a copy of which
will be provided for your review and execution prior to the commencement of your
employment.
6. Approvals. The terms of this Letter Agreement is subject to the
approval of the Company's Board of Directors and to applicable legal and
accounting requirements.
If you accept this offer, the terms described in this Letter Agreement
will be the terms of your employment. Any additions or modifications of these
terms would have to be in writing and signed by yourself and an authorized
officer of the Company.
The terms of this offer and the Proprietary Information and Inventions
Agreement must be agreed to as a condition of your employment. To accept this
offer, please sign below.
We look forward to working with you to make Signal a success. If there
are any aspects of our offer which you would like clarified, please let me know.
Very truly yours,
/s/ XXXX X. XXXXX
Xxxx X. Xxxxx, Ph.D.
I accept this offer on the foregoing terms.
/s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
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