Employment Agreement - Rigel Pharmaceuticals Inc. and Donald G. Payan
RIGEL PHARMACEUTICALS
24 WINDSOR DRIVE, HILLSBOROUGH. CA 94010
PHONE/FAX: 415-579-4638
January 16, 1997
Dr. Donald G. Payan
RE: EMPLOYMENT AGREEMENT
Dear Don:
Rigel Pharmaceuticals, Inc. (the "Company") is pleased to offer you
the position of Vice President Research and Chief Operating Officer of the
Company beginning January 16, 1997 ("Effective Date") on the terms set forth
below (the "Agreement").
As Vice President Research and COO, you will perform the duties
customarily associated with this position, and such duties as may be assigned
to you by the Company's President and CEO. Of course, the Company may change
your position, duties and work location from time to time, as it deems
necessary.
Your annual salary will be $185,000 ("Base Salary"), less standard deductions
and withholdings, paid semi-monthly. You will be expected to work as required
to complete your job duties.
In addition, upon formal approval by the Board, the Company will issue
to you 750,000 shares of Company founders common stock as described in the
Company's Stock Purchase Agreement (the "Founders Stock"). This Founders
Stock will be subject to the repuchase provisions contained in the Stock
Purchase Agreement (the "Purchase Option"). If your employment with the
Company is terminated without cause within three years, then the Founders
Stock which remains subject to the Purchase Option will immediately lapse
according to the following: (i) in the event at least one-third (1/3) of the
Founders Stock remains subject to the Purchase Option, then the Purchase
Option shall lapse with respect to one-third (1/3) of the Founders Stock; or
(ii) in the event less than one-third (1/3) of the Founders Stock remains
subject to the Purchase Option, then the Purchase Option shall lapse with
respect to all such Founders Stock.
In addition to your salary and equity compensation, on the Effective
Date the Company will provide you with sick and vacation leave, medical and
dental insurance coverage, and any other benefits consistent with Company
policy for exempt, full-time employees. Details about these benefits are
available for your review. The Company reserves the right to modify your
compensation and benefits from time to time, as it deems necessary.
<PAGE>
Dr. Donald G. Payan
January 16, 1997
Page 2
The Company agrees to reimburse you for reasonable documented business
expenses pursuant to Company policy.
You will be expected to abide by all of the Company's policies and
procedures. As a condition of your employment, you also agree to sign and
comply with the Company's Proprietary Information and Inventions Agreement
(attached hereto as Exhibit A).
By accepting this offer, you represent and warrant that you are not a
parry to any agreement with any third party or prior employer which would
conflict with or inhibit your performance of your duties with the Company.
Either you or the Company may terminate your employment relationship at
any time for any reason whatsoever, with or without cause or advance notice.
This at-will employment relationship cannot be changed except in a writing
signed by a duly authorized officer of the Company. If the Company terminates
your employment without cause, the Company will make severance payments to
you in the form of continuation of your base salary in effect on the
Effective Date for one (1) year following your separation from the Company.
These payments will be made on the Company's ordinary payroll dates, and will
be subject to standard payroll deductions and withholdings. In the event of
such termination, you will not be entitled to any additional compensation or
benefits beyond what is provided in this paragraph and in the paragraph above
relating to acceleration of Founders Stock vesting. If you resign or your
employment is terminated for cause, all compensation and benefits will cease
immediately, and you will receive no severance benefits. For purposes of this
Agreement, "cause" shall mean misconduct, including: (i) conviction of any
felony or any crime involving moral turpitude or dishonesty; (ii)
participation in a fraud or act of dishonesty against the Company; (iii)
material breach of the Company's policies; (iv) damage to the Company's
property; (v) material breach of this Agreement or your Proprietary
Information and Inventions Agreement; or (vi) conduct by you which in the
good faith and reasonable determination of the Board demonstrate s gross
unfitness to serve.
You agree that, for one (1) year following the termination of your
employment with the Company, you will not personally initiate or participate
in the solicitation of any employee of the Company or any of its affiliates
to terminate his or her relationship with the Company or any of its
affiliates in order to become an employee for any other person or business
entity.
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, whether of law or fact of any nature whatsoever
(including, but not limited to, all state and federal statutory and
discrimination claims), with the sole exception of those dispute, which may
arise from your Proprietary Information and inventions Agreement, arising
from or regarding your employment
<PAGE>
Dr. Donald G. Payan
January 16, 1997
Page 3
or the termination thereof, or the interpretation, performance, enforcement
or breach of this Agreement shall be resolved by confidential, final and
binding arbitration under the then-existing Rules of Practice and Procedure
of Judicial Arbitration and Mediation Services, Inc., which shall be
conducted in San Francisco, California.
This Agreement, including Exhibit A constitutes the complete, final and
exclusive embodiment of the entire agreement between you and the Company with
respect to the terms and conditions of your employment. This Agreement is
entered into without reliance upon any promise, warranty or representation,
written or oral, other than those expressly contained herein, and it
supersedes any other such promises, warranties, representations or
agreements. It may not be amended or modified except by a written instrument
signed by you and a duly authorized officer of the Company. 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. This Agreement shall be construed and interpreted in accordance
with the laws of the State of California and shall be deemed drafted by both
parties.
As required by law, this offer of employment is subject to satisfactory
proof of your right to work in the United States.
If you choose to accept our offer under the terms described above,
please sign below and return this letter to me.
We look forward to a productive and enjoyable work relationship.
Very truly yours,
RIGEL PHARMACEUTICALS, INC.
By: /s/James M. Gower
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James M. Gower
ACCEPTED BY: /s/Donald G. Payan
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Donald G. Payan
DATE: 1/16/97
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