Exhibit 10.4
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
T HIS S ECOND A MENDED AND R ESTATED E MPLOYMENT A GREEMENT (the “ Agreement ”) is
entered into effective as of December 18, 2008, by and between
W ILLIAM
D. Y OUNG (the “ Executive ”)
and M ONOGRAM B IOSCIENCES , I NC . (formerly V IROLOGIC , I NC .,),
a Delaware corporation (the “ Company
”).
W HEREAS , Executive and the Company are parties to an
Amended and Restated Employment Agreement dated September 20,
2007 (the “ Prior Agreement ”);
and
W HEREAS , Executive and the Company desire to amend and
restate the Prior Agreement and accept the rights and covenants
hereof in lieu of their rights and covenants under the Prior
Agreement.
N OW ,
T HEREFORE
, in consideration of these premises
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. D UTIES AND S COPE OF E MPLOYMENT .
(a) Position . For the term of his employment
under this Agreement (“ Employment ”),
the Company agrees to employ the Executive in the position of
Chairman and Chief Executive Officer. The Executive shall report to
the Company’s Board of Directors (the
“Board”).
(b) Obligations to the Company . During the
term of his Employment, the Executive shall devote his full
business efforts and time to the Company; provided, however, that
this shall not preclude the Executive from serving as a
non-executive member of the board of directors of up to three other
companies to the extent such other companies do not compete with
the Company and that such service does not materially impact the
ability of the Executive to fulfill his obligations to the Company.
The Executive shall comply with the Company’s policies and
rules, as they may be in effect from time to time during the term
of his Employment.
(c) No Conflicting Obligations . The
Executive represents and warrants to the Company that he is under
no obligations or commitments, whether contractual or otherwise,
that are inconsistent with his obligations under this Agreement.
The Executive represents and warrants that he will not use or
disclose, in connection with his employment by the Company, any
trade secrets or other proprietary information or intellectual
property in which the Executive or any other person has any right,
title or interest and that his employment by the Company as
contemplated by this Agreement will not infringe or violate the
rights of any other person or entity. The Executive represents and
warrants to the Company that he has returned all property and
confidential information belonging to any prior
employers.
2. C ASH AND I NCENTIVE C OMPENSATION .
(a) Salary . Commencing January 5, 2009,
the Company shall pay the Executive as compensation for his
services a base salary at a gross annual rate of $449,100, payable
in accordance with the Company’s standard payroll schedule.
(The compensation specified in this Subsection (a), together with
any increases in such compensation that the Company may grant from
time to time, is referred to in this Agreement as “
Base Compensation ”.)
1.
(b) Incentive Bonuses . The Executive shall
be eligible to be considered for an annual incentive bonus as part
of the Company’s bonus program based on objective or
subjective criteria established by the Board after consultation
with Executive. Such bonus shall be contingent upon
Executive’s continued employment through the end of the bonus
period and Executive shall have no right to any pro rata portion of
the bonus. The determinations of the Board with respect to such
bonus shall be final and binding.
3. V ACATION AND E XECUTIVE B ENEFITS . During the term of his Employment, the
Executive shall be eligible for paid vacations in accordance with
the Company’s standard policy for similarly situated
employees, as it may be amended from time to time. During the term
of his Employment, the Executive shall be eligible to participate
in any employee benefit plans maintained by the Company for
similarly situated employees, subject in each case to the generally
applicable terms and conditions of the plan in question and to the
determinations of any person or committee administering such
plan.
4. B USINESS E XPENSES . During the term of his Employment, the
Executive shall be authorized to incur necessary and reasonable
travel, entertainment and other business expenses in connection
with his duties hereunder. The Company shall reimburse the
Executive for such expenses upon presentation of an itemized
account and appropriate supporting documentation, all in accordance
with the Company’s generally applicable policies.
5. T ERM OF E MPLOYMENT .
(a) Basic Rule . Executive will remain
employed with the Company until the date when the Executive’s
Employment terminates pursuant to Subsection (b) below. The
Executive’s Employment with the Company shall be “at
will,” and either the Executive or the Company may terminate
the Executive’s Employment at any time, for any reason, with
or without Cause. Any contrary representations, which may have been
made to the Executive shall be superseded by this Agreement. This
Agreement shall constitute the full and complete agreement between
the Executive and the Company on the “at will” nature
of the Executive’s Employment, which may only be changed in
an express written agreement signed by the Executive and a duly
authorized officer of the Company.
(b) Termination
. The Company may terminate the
Executive’s Employment at any time and for any reason (or no
reason), and with or without Cause, by giving the Executive notice
in writing. The Executive may terminate his Employment by giving
the Company 14 days’ advance notice in writing. The
Executive’s Employment shall terminate automatically in the
event of his death or permanent disability.
(c) Rights Upon Termination . Except as
expressly provided in Section 6, upon the termination of the
Executive’s Employment pursuant to this Section 5, the
Executive shall only be entitled to the compensation, benefits and
reimbursements described in Sections 2, 3 and 4 for the period
preceding the effective date of the termination. The payments under
this Agreement shall fully discharge all responsibilities of the
Company to the Executive.
2.
(d) Termination of Agreement . This Agreement
shall terminate when all obligations of the parties hereunder have
been satisfied. The termination of this Agreement shall not limit
or otherwise affect any of the Executive’s obligations under
Section 7.
6. T ERMINATION B ENEFITS .
(a) Severance Pay . If the Company terminates
the Executive’s Employment for any reason other than for
Cause, or if Employment is terminated by the death or permanent
disability of the Executive, in either case whether such
termination occurs prior or subsequent to a Change in Control, then
the Company shall:
(i) pay the Executive the greater of
(a) $499,000 (the “Fixed Amount” )
or (b) his Base Compensation, over a period of twelve
(12) months following the termination of his Employment (the
“ Continuation Period ”), which amount
shall be paid in accordance with the Company’s standard
payroll procedures; and
(ii) if the Executive elects to continue his health
insurance coverage under the Consolidated Omnibus Budget
Reconciliation Act (“ COBRA ”) following
the termination of his Employment, then the Company shall pay the
Executive’s monthly premium under COBRA until the earliest of
(i) the close of the Continuation Period or (ii) the
expiration of the Executive’s continuation coverage under
COBRA.
(b) Covered Termination Benefits . In the
event of a Covered Termination, Executive shall receive a severance
payment equal to (i) one times the greater of (x) the
Fixed Amount or (y) his Base Compensation, plus (ii) the
amount of the target bonus established for the Executive for the
last completed fiscal year immediately preceding the Covered
Termination. Such amount shall be subject to all required tax
withholding and shall be paid in a lump sum upon the later of
(a) Executive’s compliance with subsection
(c) below or (b) the effective date of the related Change
in Control.
(c) General Release
. Any other provision of this
Agreement notwithstanding, subsections (a) and (b) above
shall only apply if the Executive (i) has executed a general
release (in the form attached hereto as Exhibit A) of all known and
unknown claims that he may then have against the Company or persons
affiliated with the Company, and such general release has become
effective no later than forty-five (45) days after the date on
which Executive’s Employment was terminated, and
(ii) has agreed not to prosecute any legal action or other
proceeding based upon any of such claims.
(d) Definitions
(i) “ Cause .” For all
purposes under this Agreement, “Cause” shall
mean:
(1) Unauthorized use or intentional disclosure of
the confidential information or trade secrets of the
Company;
(2) Any material breach of this Agreement or the
Employee Proprietary Information Agreement between the Executive
and the Company;
3.
(3) Conviction of, or a plea of “guilty”
or “no contest” to, a felony under the laws of the
United States or any state thereof;
(4) Misappropriation of the assets of the Company or
other acts of dishonesty;
(5) Engagement in substance abuse which
substantially impairs Executive’s ability to perform the
duties and obligations of Executive’s employment or causes
material harm to the reputation of the Company;
(6) Personal engagement in any act of moral
turpitude that causes material harm to the reputation of the
Company;
(7) Commencement of employment with another employer
while Executive is an employee of the Company without the prior
consent of the Board of Directors; or
(8) Material misconduct or gross negligence in the
performance of duties assigned to the Executive under this
Agreement.
(ii) “ Change in Control .”
For all purposes under this Agreement, “Change in
Control” shall mean:
(1) a sale or other disposition of all or
substantially all of the assets of the Company;
(2) a merger or consolidation in which the Company
is not the surviving entity and in which the stockholders of the
Company immediately prior to such consolidation or merger own less
than fifty percent (50%) of the surviving entity’s
voting power immediately after the transaction;
(3) a reverse merger in which the Company is the
surviving entity but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash
or otherwise, and in which the stockholders of the Company
immediately prior to such reverse merger own less than fifty
percent (50%) of the Company’s voting power immediately
after the transaction;
(4) an acquisition by any person, entity or group
within the meaning of Section 13(d) or 14(d) of the Exchange
Act, or any comparable successor provisions (excluding any employee
benefit plan, or related trust, sponsored or maintained by the
Company or subsidiary of the Company or other entity controlled by
the Company) of the beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least
fifty percent (50%) of the voting power entitled to vote in
the election of Directors; or
(5) in the event that the individuals who, as of the
date of this Agreement, are members of the Company’s Board
(the “ Incumbent B
