Exhibit 10.1
[Nektar Letterhead]
May 13, 2008
Bharatt M. Chowrira
[Address]
[Address]
Dear Bharatt:
I am pleased and excited to offer you the position of Chief
Operating
Officer and Head of the PEGylation Business Unit at Nektar
Therapeutics
("Nektar" or the "Company") reporting directly to me. You will also
be Chairman
of Nektar India. Accordingly, I present you with this offer letter
agreement
setting forth certain terms and conditions of your employment.
Capitalized terms
used herein and not defined shall have the meanings ascribed to
them in the
Company's Change of Control Severance Benefit Plan, as it may be
amended from
time to time (the "COC Plan").
As Chief Operating Officer, you shall have the general powers
and
duties of management usually vested in the office of chief
operating officer of
a corporation of the size and nature of Nektar. Your principal
place of
employment will be 201 Industrial Road, San Carlos, California.
Your annual cash compensation will consist of two components:
base
salary and an annual performance bonus. Your base salary will be
$475,000 on an
annual basis and paid in accordance with Nektar's regular payroll
schedule. Your
annual performance bonus target each year will be at least 60% of
your annual
base salary for each annual period and shall be $285,000 in 2008
and not
pro-rated for your partial period of service in 2008 ("Target
Annual Bonus").
Your base salary and Target Annual Bonus shall be subject to annual
performance
review by the Compensation Committee of the Board of Directors
("Compensation
Committee") in consultation with me for appropriate upward
adjustment. The
actual amount of your annual performance bonus will range from 0%
to 200% of the
Target Annual Bonus based on the Compensation Committee's
assessment in
consultation with me of the achievement of a combination of annual
corporate
objectives and your achievement of personal objectives agreed upon
by you and me
at the beginning of each annual performance period; provided that
your
objectives for your partial period of service in 2008 will be
agreed upon by you
and I as soon as practicable following your start date. Your annual
performance
bonus for the prior year will be paid in the first calendar quarter
of each year
within the period of time required to avoid taxes and penalties
under Section
409A of the Internal Revenue Code.
Subject to approval by the Compensation Committee prior to and
effective as of your first day of full-time employment with Nektar,
which shall
be on or soon after May 19, 2008 or on such other date as we
otherwise may
mutually agree ("Start Date"), you will be granted a stock option
to purchase
500,000 shares of Nektar common stock (the "Initial Option", which
together with
any subsequent stock options you may receive, are the "Stock
Options") under
Nektar's 2000 Equity Incentive Plan (the "2000 Plan"). The maximum
number of
shares subject to the Stock Options will be granted as incentive
stock options
within the meaning of Section 422 of the Internal Revenue Code to
the extent
permissible under Section 10(d) of the 2000 Plan. The remainder of
shares
subject to the Stock Options will be granted as non-statutory stock
options. The
exercise price will be set at the closing price of Nektar's common
stock on
Nasdaq on your Start Date in the case of the Initial Option or at
the date
determined by the Compensation Committee in the case of any
subsequent Stock
Options. The shares subject to the Initial Option will vest
according to a
4-year vesting schedule for so long as you provide Continuous
Service (as
defined in the 2000 Plan) to the Company with 25% of the shares
subject to the
Initial Option vesting on the one year anniversary of your Start
Date and the
remainder vesting monthly on a pro-rata basis over the following 3
years.
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In addition, you will also be entitled to a one-time sign-on bonus
of
$50,000 on "grossed up" basis (i.e. the total you receive after
applicable
withholding will be $50,000) included with your first regular
payroll payment
following your Start Date.
You will be eligible for annual equity awards, in the sole
discretion
of the Compensation Committee, based on the Compensation
Committee's review, in
consultation with me, of your individual performance and annual
equity
compensation levels of senior executive officers with similar roles
at
comparator companies as analyzed by a reputable,
nationally-recognized,
independent compensation consultancy firm.
Commencing with your first day of employment, you will be eligible
to
participate in Nektar's executive benefits program including
medical, dental and
vision insurance, term life insurance, 401(k), the flexible health
spending
plan, short & long-term disability upon the terms specified in
those plans, and
the COC Plan.
Your employment is by continued mutual agreement and may be
terminated
at will with or without cause by either you or Nektar at any time
with or
without advanced notice. You will also be required to enter into
Nektar's
standard Employment Agreement, a copy of which is attached as
Exhibit A hereto.
In the event of your death or Disability (as defined in the 2000
Plan),
(a) 50% of the unvested shares under your Stock Options will
automatically vest
in the event of your Disability and 100% shall automatically vest
in the event
of your death, (b) Nektar will pay to you or your estate, as
applicable, all
unreimbursed expenses, all of your then accrued but unpaid base
salary, and your
target bonus prorated for the portion of the last year in which you
were
employed by Nektar prior to death or Disability, and (c) you and
your dependents
shall be entitled to continued medical, dental, and vision
insurance for
yourself and your dependents, at your or their expense, at the same
level of
coverage as was provided to you and your dependents under Nektar's
insurance and
benefits plans immediately prior to the termination by electing
COBRA
continuation coverage in accordance with applicable law.
In the event your employment is terminated for reasons not related
to a
Change of Control (a) by the Company without Cause; or (b) by you
for a Good
Reason Resignation, then you and the Company will meet in good
faith to discuss
the terms of an appropriate separation. In any event, at a minimum,
the Company
will enter into a severance arrangement with you which will include
the
following: (i) a fully effective waiver and release in such form as
the Company
may reasonably require, (ii) a cash severance payment equal to your
total annual
cash compensation target (defined as your current monthly base
salary annualized
for 12 months, plus your bonus target multiplied by the expected
pay-out
percentage used by the Company for its GAAP financial statements in
the previous
calendar quarter, but not to exceed 100%), payable in accordance
with the
severance payment schedule described in the COC Plan and subject to
such delay
in payment required for compliance with Section 409A, (iii)
pro-rata vesting
credit (based on conversion of the vesting schedule to a monthly
vesting
schedule) on your Initial Option through the date of termination if
your
termination occurs prior to the first anniversary of your Start
Date based on
months completed since your Start Date, (iv) the exercise period
for all or any
portion of the vested and unexercised portion of your Stock Options
shall be for
a period of 18 months following the termination date, and (v) the
Company shall
pay all applicable COBRA payments for you and your family for one
year after the
termination date (such payments shall cease in the event that you
become
eligible for comparable benefits with another employer).
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In compliance with the terms of the Federal Immigration Reform
and
Control Act, you will be required to provide us with proof of
authorization to
work and proof of identity.
The terms, compensation and benefits set forth in this letter,
which
shall be governed by California law, without reference to
principles of
conflicts of laws, may not be reduced without your prior written
consent and
shall be binding upon and inure to the benefit of (a) your heirs,
executors, and
legal representatives upon your death and (b) any person or entity
which at any
time, whether by purchase, merger, or otherwise, directly or
indirectly acquires
all or a majority of the assets, business, capital stock, or voting
stock of the
Nektar. Any such person or entity shall be deemed substituted for
the Nektar
under this letter for all purposes.
Bharatt, I am delighted at the prospect of your leadership at
Nektar as
Chief Operating Officer and Head of the PEGylation Business Unit.
Please feel
free to call me if you have any questions and I look forward to
working with
you.
Sincerely,
/s/ Howard W. Robin
Howard W. Robin
President and Chief Executive Officer
OFFER ACCEPTED:
/s/ Bharatt M. Chowrira
May 17, 2008
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Bharatt M. Chowrira
Date
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EXHIBIT A
EMPLOYEE AGREEMENT
In consideration of my employment or continued employment by
Nektar
Therapeutics, its subsidiaries or affiliates (collectively, the
"Company"), I,
Bharatt M. Chowrira residing at [Address], agree as of the date I
was first
employed by Company as follows:
1. Entire Agreement: This Agreement sets forth the complete and
entire
agreement between Company and me and supersedes any and all
previous oral or
written communications, discussions and agreements between Company
and me with
respect to the subject of this Agreement.
2. Employment:
a. Duty of Loyalty. During the period of my employment by the
Company,
I shall devote my full time and best efforts to the business of the
Company, and
I shall neither pursue any business opportunity outside the Company
nor take any
position with any
