EXHIBIT 10.24
RIGEL PHARMACEUTICALS,
INC.
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (“ Agreement ”) is
entered by and between Dr. Donald G. Payan (“
Executive ”) and RIGEL PHARMACEUTICALS,
INC. (the “ Company ”), a Delaware
corporation on November 13, 2008 (the “ Effective
Date ”). This Agreement shall replace and
supersede that certain Employment Agreement between Executive and
the Company entered into effective as of December 17, 2007
(the “ Prior Agreement ”).
WHEREAS, The Company and Employee previously entered into
the Prior Employment Agreement and desire to amend and restate the
Prior Agreement in its entirety as set forth herein, effective as
of the Effective Date, in order to clarify the application of
Section 409A of the Internal Revenue Code of 1986, as amended
(the “ Code ”) to the benefits provided
to Executive under the Prior Agreement.
NOW, THEREFORE
, in consideration of the mutual
promises and covenants contained herein, it is hereby agreed by and
between the parties hereto as follows, effective as of the
Effective Date:
1.
EMPLOYMENT BY THE
COMPANY.
1.1
Title and
Responsibilities .
Subject to the terms set forth herein, Executive will continue to
be employed by the Company as the person responsible for all of the
Company’s scientific research; currently, the Executive holds
the title of Executive Vice President, Chief Scientific
Officer. Executive will report to the Company’s Chief
Executive Officer and the Company’s Board of Directors (the
“ Board ”). During his employment with
the Company, Executive will devote his best efforts and
substantially all of his business time and attention (except for
vacation periods and reasonable periods of illness or other
incapacity permitted by the Company’s general employment
policies) to the business of the Company.
1.2
At-Will Employment.
Executive’s
relationship with the Company is at-will. The Company will
have the right to terminate this Agreement and Executive’s
employment with the Company at any time with or without Cause (as
defined below), and with or without advance notice. In
addition, the Company retains the discretion to modify the terms of
Executive’s employment, including but not limited to
position, duties, reporting relationship, office location,
compensation, and benefits, at any time. Executive’s
at-will employment relationship may only be changed in a written
agreement approved by the Board and signed by Executive and a duly
authorized officer of the Company.
1.3
Company Employment
Policies . The
employment relationship between the parties will continue to be
governed by the general employment policies and procedures of the
Company, including those relating to the protection of confidential
information and assignment of inventions.
2.
COMPENSATION.
2.1
Salary. Executive will earn a base salary in 2008
at an annualized rate of $483,000, payable on the Company’s
standard payroll dates. Executive will be considered for
annual increases in base salary in accordance with Company
policy.
2.2
Target Bonus.
Subject to annual review by
the Board or a duly authorized committee thereof (either, the
“ Committee ”), Executive will be
eligible to earn a target annual bonus of up to fifty percent (50%)
of Executive’s base salary (the “ Target
Bonus ”). Whether Executive earns a
Target Bonus, and if so, in what amount, will be determined solely
by the Committee in its discretion. Executive must remain an
active employee through the time the Committee determines bonus
amounts for executives of the Company in order to earn any
bonus.
2.3
Equity Awards.
Executive’s current
compensatory equity awards are not affected by this Agreement and
will remain in effect in accordance with the terms of the
applicable award agreements and stock plan(s).
2.4
Standard Company
Benefits.
Executive will be entitled to participate in the Company’s
employee benefits and compensation plans which may be in effect
from time to time and provided by the Company to its executives,
under the terms and conditions of such benefit and compensation
plans.
3.
CONFIDENTIAL
INFORMATION.
3.1
Intellectual Property.
As a condition of his continued
employment, Executive must continue to comply with the Employee
Proprietary Information and Inventions Agreement (the “
Proprietary Agreement ”) he has executed
previously. Nothing in this Agreement is intended to modify
in any respect the Proprietary Agreement, and the Proprietary
Agreement will remain in full force and effect.
3.2
Solicitation.
As a condition of receiving the
Severance Benefits (as defined below), Executive agrees that for
one (1) year following the termination of employment with the
Company, Executive 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.
4.
TERMINATION OF EMPLOYMENT; CHANGE
OF CONTROL
4.1
Termination Without Cause or
Resignation for Good Reason — No Change of
Control. If the
Company terminates Executive’s employment at any
time
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without Cause (and other than as a result of
death or disability), or if Executive resigns from all positions he
then holds with the Company for Good Reason, and such termination
is not a “Qualifying Termination” (as defined below),
and provided further that such termination is a “separation
from service” (as defined under Treasury Regulation
Section 1.409A-1(h)), Executive will be eligible for the
following severance benefits (the “ Severance
Benefits ”): (i) the Company will make a
lump sum severance payment to Executive in an amount equal to two
(2) years of Executive’s then-current base salary plus
200% of the Eligible Bonus, where the Eligible Bonus is an average
of the percent earned of the Target Bonus for performance for the
last two year multiplied by the current Target Bonus, subject to
withholdings and deductions, (ii) if Executive timely elects
continued health insurance coverage pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (together
with any applicable state law of similar effect, “
COBRA ”), the Company will pay the full amount
of Executive’s COBRA premiums for Executive’s continued
coverage under the Company’s group health plans, including
coverage for Executives’s eligible dependents for eighteen
(18) months following the date his employment terminates or until
such earlier date as he becomes eligible for health insurance
coverage from another source (provided that Executive must promptly
inform the Company, in writing, if he becomes eligible for health
insurance coverage from another source within eighteen (18) months
after the termination) or otherwise ceases to be eligible for
COBRA, (iii) acceleration of all then-outstanding compensatory
equity awards, and (iv) a modification of the post-termination
exercise period of such equity awards until the earlier of
(a) the original end of the term of each such award (generally
10 years from the date of grant) or (b) the one (1) year
anniversary of the date of the termination of employment.
Executive will not be entitled to the Severance Benefits unless and
until the requirements set forth in Section 5 of this
Agreement are satisfied.
(a)
Definition of Cause.
For purposes of this
Agreement, “ Cause ” will mean:
(1) an intentional action or intentional failure to act by
Executive that was performed in bad faith and to the material
detriment of the business of the Company;
(2) Executive’s intentional refusal or intentional
failure to act in accordance with any lawful and proper direction
or order of his or her superiors that has not been cured within ten
(10) days after written notice from the Company, or that has
caused irreparable damage incapable of cure;
(3) Executive’s habitual or gross neglect of the duties
of employment that has not been cured within ten (10) days
after written notice from the Company, or that has caused
irreparable damage incapable of cure; (4) Executive’s
indictment, charge, or conviction of a felony or any crime
involving moral turpitude, or participation in any act of theft or
dishonesty, in each case, that has had or could reasonably be
expected to have a material detrimental effect on the business of
the Company; or (5) Executive’s violation of any
material provision of the Proprietary Agreement or violation of any
material provision of any other written Company policy or
procedure.
(b)
Definition of Change of
Control. For
purposes of this Agreement, a “ Change of
Control ” has the meaning set forth in the Severance
Plan (as defined below).
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(c)
Definition of Resignation for
Good Reason. For
purposes of this Agreement, a “ Resignation for Good
Reason ” means Executive has resigned from all
positions he then-holds with the Company (or any successor thereto)
if (1): (i) there is a material
diminution of Executive’s authority, including but not limited to decision-making
authority, duties, or responsibilities;
(ii) there is a material reduction in
the Executive’s annual base compensation (including the base
salary and target bonus opportunity), where material is considered greater than
5%; (iii) the Executive is
required to relocate his primary work location to a facility or
location that would increase the Executive’s one way commute
distance by more than
twenty (20) miles from the Executive’s
primary work location as of immediately prior to such change;
(iv)
a material diminution in the authority, duties, or responsibilities
of the supervisor to whom
the Executive is required to report ,
including a requirement that the Executive report to a
corporate officer or employee instead of reporting directly to the
board of directors of a corporation (or similar governing body with
respect to an entity other than a corporation); (v) a
material diminution in the budget over which the
Executive retains authority; (vi) the Executive is
required, as a condition to continued service, to enter into any
agreement with the Company or a successor thereto regarding
confidentiality, non-competition, non-solicitation or other similar
restrictive covenant that is materially more restrictive than under
the Proprietary Agreement; (vii) the Company materially
breaches its obligations under this Plan or any then-effective
written employment agreement with the Executive; or
(viii) any acquirer,
successor or assign of the Company fails to assume and perform, in
all material respects, the obligations of the Company hereunder;
and (2) the Executive provides written notice to the
Company’s General Counsel within the 60-day period
immediately following such action; and (3) such action is not
remedied by the Company within thirty (30) days following the
Company’s receipt of such written notice; and (4) the
Executive’s resignation is effective not later than sixty
(60) days after the expiration of such thirty (30) day cure
period.
4.2
Qualifying Termination Upon
Change of Control. Executive will be an “Eligible
Employee” under the Company’s Change of Control
Severance Plan (the “ Severance Plan
”). Upon a “Qualifying Termination” (as
defined in the Severance Plan), Executive will not receive any part
of the Severance Benefits and instead Executive’s rights to
receive any severance pay or post-termination benefit continuation
will be only as set forth in the Severance Plan and as otherwise
required by applicable law.
4.3
Other Terminations
. If, at any time, the Company
terminates Executive’s employment at any time for Cause or as
a result of death or disability, or if Executive resigns other than
for Good Reason, Executive&r
