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EXHIBIT 10.11
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of __________ by and between
Xxxxxxx Xxxxxx, a resident of California ("Xxxxxx"), and VaxGen, Inc. a Delaware
corporation (the "Company").
WITNESSETH:
WHEREAS, the Company desires to continue to employ Xxxxxx as the Senior
Vice President of Research and Development and Xxxxxx desires to be so employed.
WHEREAS, the Company and Xxxxxx desire to set forth in writing the terms
of their agreement with respect to Xxxxxx'x continued employment.
WHEREAS, this Agreement replaces and supersedes the Employment Agreement
executed by and between Xxxxxx and the Company on October, 1997.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties agree as follows:
1. Term. Xxxxxx'x employment, which began on November 15, 1997, will
continue in its initial term of three years, expiring on November 14, 2000.
Thereafter, Xxxxxx'x employment will be automatically renewed for successive
one-year terms, unless notice of termination is given by either party to the
other at least thirty days before the expiration of the then current term.
2. Duties. Xxxxxx will perform such executive and administrative duties
consistent with his position as Senior Vice President of Research and
Development of the Company as are reasonably assigned to him by the Board and
will be given such executive and administrative powers and authority as may be
needed to carry out those duties. Xxxxxx shall report directly to the President
of VaxGen. Xxxxxx will be responsible as Senior Vice President of Research and
Development for all activities regarding research in the basic sciences and in
clinical research (including laboratory clinical support) required for the
Company's development of its HIV vaccine, as well as other products. The Company
will provide to Xxxxxx an office, laboratory space and staff in South San
Francisco as are required for the performance of his duties. Xxxxxx agrees to
serve as Director of the Company and the Company agrees to cause Xxxxxx to be
elected to the Board of Directors.
3. Compensation. The Company will pay Xxxxxx an annual base salary of
$200,000. Xxxxxx'x annual base salary will be payable in equal installments not
less frequently than monthly. Xxxxxx shall be entitled to an annual bonus of up
to 30% of salary, such bonus to be determined solely by the Company's Board of
Directors. Xxxxxx'x salary and bonus will be considered annually for potential
increase by the Compensation Committee of the Board of Directors.
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4. Stock Options.
(a) Initial Stock Option Grant. Xxxxxx received incentive and
non-qualified options to purchase 200,000 shares of Common Stock of VaxGen at
$7.00 per share (with as many shares allocated to an incentive stock option as
is permissible under applicable laws). The stock options will continue to be
administered according to the VaxGen Stock Option Plan and shall vest over time
as indicated in the Stock Option Plan; provided, however, that the option
agreements shall provide that the vesting of the options shall accelerate in
full immediately upon occurrence of any of the following events: (i) Change of
Control (as defined below) of VaxGen; (ii) full enrollment of Phase III clinical
trials of VaxGen B/E and B/B vaccines or (iii) termination of Xxxxxx'x
employment without cause or by Xxxxxx for Good Reason (as defined below). Upon
an occurrence of event described in (iii) above, the right to exercise all
nonqualified stock options shall be extended to one year from the date of
termination.
(b) Change of Control. In the event the Company undergoes a
change of control (a "Change of Control") by virtue of (a) its sale or exchange
of stock (resulting in the shareholders of the Company holding less than 50% of
its outstanding equity and underlying options and warrants) in a transaction or
series of transactions occurring in any 12 month period, and/or (b) Genentech
increases its holding in the Company to a level of 50% or more of the Company's
outstanding equity, underlying options and warrants in a transaction or series
of transactions, in addition to the acceleration of vesting as described in
paragraph 4(a) above, Xxxxxx shall receive a one time bonus of 75,757 shares of
common stock.
(c) Stock Option Bonus. Xxxxxx shall be entitled to an annual
stock option bonus of a grant of up to 15,000 additional stock options, such
bonus to be determined solely by the Company's Board of Directors.
5. Success Bonus. In recognition of the success of the Company, Xxxxxx
shall received a one-time success bonus. Success shall be considered to have
been achieved if either of the following tests is met (either of which shall be
an Event of Success): (i) the public market valuation of a share of the
Company's stock as computed on a 30-day trailing average is equal to or greater
than 4 times the valuation of the initial private placement ($7.00 per share),
or (ii) there is an acquisition of the Company through tender offer or otherwise
in which all shareholders have the opportunity to participate and realize a
value equal to or greater than 4 times the valuation of the initial private
placement ($7.00 per share). The Company shall notify Xxxxxx when an Event of
Success has occurred. In either case, Xxxxxx shall be entitled to receive a
success bonus of 125,000 shares of common stock which shall be delivered to
Xxxxxx at Xxxxxx'x request within 24 months of becoming entitled to receive such
shares. The effective date of this section shall be the date on which the
transfer of control occurs.
6. Expenses. The Company will reimburse Xxxxxx for travel, entertainment
and other expenses reasonably incurred by him in connection with his employment
under this Agreement upon presentation of appropriate vouchers or receipts.
7. Benefits. Xxxxxx shall have the right, on the same basis as other
members of senior management of VaxGen, to participate in and to receive
benefits under any of VaxGen's
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employee benefit plans, in effect from time to time. In addition, Xxxxxx shall
be entitled to the benefits afforded to other members of senior management under
VaxGen's vacation, holiday and business expense reimbursement policies.
8. Early Termination of Employment. Employment under this Agreement will
terminate prior to expiration of the term upon any of the following:
(a) Death. Xxxxxx'x employment hereunder shall terminate upon his
death.
(b) Disability. The Company may terminate Xxxxxx'x employment
hereunder if he has been unable to perform his duties hereunder for a period of
six consecutive months and if he has not resumed on a full-time basis the
performance of such duties within thirty days after written notice from the
Company of its intent to terminate his employment due to disability.
(c) Cause. The Company may terminate Xxxxxx'x employment
hereunder for Cause. For purposes of this Agreement, the term "Cause" means (1)
willful and repeated failure by Xxxxxx to perform his duties hereunder which is
not remedied within thirty days after written notice from the Company, (ii)
conviction of Xxxxxx for a felony, or (iii) Xxxxxx'x dishonesty that is
demonstrably injurious to the Company.
(d) Termination by Xxxxxx. Xxxxxx may terminate his employment
hereunder for Good Reason. For purposes of this Agreement, the term "Good
Reason" shall mean (1) the Company substantially reducing Xxxxxx'x duties,
position, authority or responsibility hereunder and not reinstating the same
within thirty days after written notice from Xxxxxx, or (ii) breach by the
Company of its obligations under this Agreement if not remedied within thirty
days after written notice from Xxxxxx.
9. Benefits Upon Termination.
(a) Voluntary Termination, Termination for Cause Due to Death or
Disability. In the event of Xxxxxx'x voluntary termination from employment with
VaxGen or termination of Xxxxxx'x employment as a result of his death or
disability or for Cause, Xxxxxx shall be entitled to no compensation or benefits
from VaxGen other than those earned under paragraph 3 above through the date of
his termination or in the case of any stock options, vested through the date of
his termination.
(b) Termination Without Cause or For Good Reason: If Xxxxxx'x
employment is terminated by VaxGen for any reason other than for cause or by
Xxxxxx for Good Reason, Xxxxxx shall be entitled to the following separation
benefits:
(i) all accrued compensation (including pro-rated target
bonus) and benefits through the date of termination;
(ii) continued payment of Xxxxxx'x salary at his Base
Salary rate, less applicable withholding, for twelve (12) months following his
termination; and
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(iii) acceleration of vesting of his options as provided
in paragraph 4(a) above.
10. Restrictive Covenants.
(a) Confidential Information. Xxxxxx acknowledges that, during
the course of his employment with the Company, he will have access to
confidential information and biological materials not generally known outside
the Company (whether conceived or developed by Xxxxxx or others) and
confidential information and biological materials entrusted to the Company by
third parties, including, without limitations, trade secrets, techniques,
formulae, biological materials, marketing and other business plans, data,
strategies and forecasts (collectively, "Confidential Information"). Any
Confidential Information conceived or developed by Xxxxxx during employment will
be the exclusive property of the Company. Except as may be necessary in
connection with the Company's business, Xxxxxx will not (during or after his
employment with the Company) disclose Confidential Information to any third
person, firm or entity or use Confidential Information for his own purposes or
for the benefit or any third person, firm or entity. In his work for the
Company, Xxxxxx will refrain from unauthorized use or disclosure of information
and biological materials owned by former employers or other third parties.
(b) Inventions. Xxxxxx will promptly disclose to the Company any
discoveries, inventions, formulae and techniques, whether or not patentable,
made, conceived or first reduced to practice by him, either alone or together
with others, during his employment with the Company (collectively, the
"Inventions"). Xxxxxx hereby assigns to the Company all of his right, title and
interest in and to any Inventions. Xxxxxx will execute such documents and take
such other actions as may be reasonably requested by the Company (at the
Company's expense) to enable the Company to apply for, obtain, maintain and
enforce patents on any of the Inventions or to facilitate the transfer or
assignment of any of the Company's rights with respect to the Inventions and
patents.
(c) Company Documents. Upon the termination of his employment,
Xxxxxx will deliver to the Company all documents and other tangible property
containing Confidential Information which are then in his possession or control.
(d) Covenant Not to Compete. Xxxxxx acknowledges that his duties
hereunder and the services he will provide to the Company are of a special,
unique, unusual and extraordinary character, which gives this Agreement
particular value to the Company, and that it would be difficult to employ any
individual or individuals to replace Xxxxxx in the performance of such duties
and services. Therefore, during employment with the Company, and for a one year
period following termination of employment, Xxxxxx will not, directly or
indirectly, enter into, organize, control, engage in, be employed by, serve as a
consultant to, be an officer or director of or have any direct or indirect
investment in any business, person, partnership, association, firm or
corporation engaged in any business activity (including, but not limited to,
research, development, manufacturing, selling, leasing, licensing or providing
services) which is competitive with the business and/or scientific activities
that the Company is developing or
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exploiting during Xxxxxx'x employment with the Company. Nothing contained in
this Agreement shall be construed to prevent Xxxxxx from owning at any time,
directly or indirectly, as much as 5% of any class of equity securities issued
by any corporation or other entity which are publicly traded and registered
under the Securities and Exchange Act of 1934, as amended.
11. Indemnification. The Company will indemnify Xxxxxx to the fullest
extent permitted by law and will hold him harmless from and against any claim,
liability or expense (including reasonable attorneys' fees) made against or
incurred by Xxxxxx in connection with his relationship with the Company. This
obligation will include, without limitation, prompt payment in advance of any
and all costs of defending the same, including attorney's fees.
12. No Impediment to Agreement. Except as otherwise disclosed herein,
Xxxxxx hereby represents to the Company that he is not, as of the date hereof,
and will not be, during employment with the Company, employed under contract,
oral or written, by any other person, firm or entity and is not and will not be
bound by the provisions of any restrictive covenant or confidentiality agreement
which would constitute an impediment to, or restriction upon, his ability to
enter into this Agreement and to perform the duties of his employment.
13. Notices. Any notice under this Agreement must be in writing and will
be deemed to have been given when personally delivered or mailed by first-class
or express mail to the recipient at the following address (or such other address
as shall be specified by prior written notice):
To the Company: VaxGen, Inc.
Attn: Xxxxxx X. Xxxxxxx
50 0 Xxxxxx Xxxxxxxxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
Copy to: Xx. Xxxxxxx Xxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, XX 00000
14. Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law. If any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or the interpretation of this Agreement in any other jurisdiction.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the xxx of the State of Delaware, without regard to the law of
conflicts.
16. Successors and Assigns. The services and duties to be performed by
Xxxxxx hereunder are personal and may not be assigned. This Agreement shall be
binding upon and inure to the benefit of the Company, its successors and
assigns, and Xxxxxx, his heirs. and representatives.
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17. Complete Agreement. This Agreement constitutes the entire agreement
between the parties concerning the subject matter hereof and supersedes all
prior agreements between the parties concerning the subject matter hereof.
18. Waiver. Failure by either party to insist upon strict adherence to
any one or more of the provisions of this Agreement on one or more occasions
shall not be construed as a waiver, nor shall it deprive that party of the right
to require strict compliance thereafter.
19. Survival. The obligations set forth in paragraphs 10(a) and 11 shall
survive termination of this Agreement.
20. Amendments. No amendment hereto, or waivers or releases of
obligations or liabilities hereunder, shall be effective unless agreed to in
writing by the parties hereto
21. Withholding. The Company may deduct and withhold from the payments
to be made to Xxxxxx hereunder any amounts required to be deducted and withheld
by the Company under the provisions of any statute, law, regulation or ordinance
now or hereafter enacted.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.
VaxGen, Inc.
By:
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Its:
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Xxxxxxx Xxxxxx
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