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EXHIBIT 10.6
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Executive Employment Agreement
("Agreement") is
effective as of January 1, 2005 ("Effective Date"), by and
between Structural
GenomiX, Inc., with its principal place of business at 10505
Roselle Street, San
Diego, California 92121 ("SGX"), a Delaware corporation, and
Michael Grey, who
resides at ___________________________________________________
("Executive").
This Agreement amends and restates and supercedes and terminates
in its entirety
that certain Employment Agreement dated September 4, 2001 by and
between SGX and
Executive, as amended by that certain letter agreement dated
December 20, 2004
(together, the "Prior Agreement").
The parties agree as follows:
1. Employment. SGX hereby employs Executive, and Executive
hereby accepts
such employment, upon the terms and conditions set forth
herein.
2. Duties.
2.1. Position; Duties and Responsibilities. Executive is
employed in
the position of President and Chief Executive Officer and shall
have the duties
and responsibilities assigned by the Board of Directors of SGX
(the "Board").
Executive is responsible for overseeing the business and
operations of SGX and
doing and performing all services, acts, or things reasonably
necessary or
advisable to accomplish the objectives and complete the tasks
assigned to
Executive by the Board. Executive shall serve as the leader and
principal
officer of the executive team and shall report directly to the
Board. Executive
shall perform faithfully and diligently such duties, as well as
such other
duties as the Board shall reasonably assign from time to time.
SGX reserves the
right to modify Executive's position and duties at any time in
its sole and
reasonable discretion.
2.2. Best Efforts/Full-time. Executive will expend Executive's
best
efforts on behalf of SGX, and will abide by all policies and
decisions made by
SGX, as well as all applicable federal, state and local laws,
regulations or
ordinances. Executive will act in the best interest of SGX at
all times.
Executive shall devote Executive's full business time and
efforts to the
performance of Executive's assigned duties, unless Executive
notifies SGX in
advance of Executive's intent to engage in other paid work and
receives SGX'
express written consent to do so. SGX consents to the continuing
service by
Executive on the Boards of Directors of Achillion
Pharmaceuticals, Inc. and
Epimmune, Inc. Executive must not engage in any work, paid or
unpaid, that
creates an actual or potential conflict of interest with SGX. If
SGX believes a
conflict exists, SGX may ask Executive to choose whether to
discontinue the
other work or resign employment with SGX.
2.3. Board Seat. Executive shall continue to serve as a member
of the
Board.
2.4. Work Location. Executive's principal place of work shall
be
located in San Diego, California, at SGX' offices or as
reasonably assigned by
SGX.
3. Term. The employment relationship pursuant to this Agreement
shall be
for an initial term commencing on the Effective Date set forth
above and
continuing for the period of one (1) year and for consecutive
one year terms
thereafter unless sooner terminated in accordance with paragraph
7 below.
4. Compensation.
4.1. Salary. As compensation for the proper and satisfactory
performance of all duties to be performed by Executive
hereunder, SGX shall pay
to Executive an initial annualized Base Salary of Three Hundred
Fifty Thousand
($350,000) per year, payable in accordance with the normal
payroll practices of
SGX, less required deductions for state and federal withholding
tax, social
security and all other employment taxes and payroll deductions.
In the event
Executive's employment under this Agreement is terminated by
either party, for
any reason, Executive will be entitled to receive the Base
Salary prorated to
the date of termination.
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4.2. Incentive Compensation. Executive will be eligible to
receive
incentive compensation. If SGX, in its sole and absolute
discretion, grants
executive incentive compensation, the terms, amount and payment
of such, if any,
will be determined solely by SGX.
4.3. Stock Options. Executive will receive a stock option or
stock
options to purchase that number of shares of SGX common stock
that, together
with Executive's currently outstanding stock options, if any, is
equal to 3.5%
of the Fully Diluted Capitalization (as defined below) of SGX
after giving
effect to the Next Equity Financing (as defined below), at a
price per share
equal to the fair market value of SGX' common stock on the date
of grant of each
such stock option as shall be determined by the Board in its
sole and absolute
discretion. 25% of the shares subject to such stock options
shall be fully
vested as of the date of grant and the remaining shares subject
to such stock
options shall vest over three years after the vesting
commencement date in equal
monthly installments (subject to acceleration of vesting under
certain
circumstances as set forth in subparagraphs 7.2 and 7.4(a)
below). Such stock
options shall be subject to the terms and conditions of SGX'
2000 Equity
Incentive Plan (the "Incentive Plan") and SGX' form of stock
option agreement.
The Board shall grant such stock options as soon as reasonably
practicable after
the number of shares issuable in connection with such Next
Equity Financing is
ascertainable and the vesting commencement date of all such
stock options shall
be the Effective Date. The offer of such stock options is
conditioned upon
Executive's acceptance of this Agreement and will be in
accordance with the
terms and requirements of the Incentive Plan and SGX' form of
stock option
agreement. "Fully Diluted Capitalization" as used in this
subparagraph 4.3 shall
mean the fully-diluted capitalization of SGX calculated on an
as-converted basis
and including all outstanding preferred stock, common stock,
warrants, all
options authorized under equity incentive plans (whether or not
granted or
vested), and securities issuable upon conversion of outstanding
convertible
notes, if any (but excluding shares issuable upon conversion of
the Millennium
convertible note). "Next Equity Financing" as used in this
subparagraph 4.3
shall mean the next private equity financing of SGX primarily
for capital
raising purposes that raises at least $5 million of new
investment and occurs
prior to the completion of an initial public offering of SGX'
securities, and
such Next Equity Financing shall include the aggregate number of
shares to be
issued in connection with such financing (including, if the
financing occurs in
multiple tranches, the aggregate number of shares that are
issued in all
tranches for which there is a contractual commitment to fund on
the part of the
investors in such Next Equity Financing as of the initial
closing thereof). Any
obligation of SGX that remains outstanding under this
subparagraph 4.3 to grant
any additional stock options to Executive shall terminate and be
of no further
force or effect upon the earlier to occur of (i) immediately
prior to the
closing of an initial public offering of SGX' securities or (ii)
immediately
prior to the consummation of a Change of Control (as defined
below).
4.4. Cash Bonus Program. As Executive Vice President and
Chief
Business Officer, Executive is eligible to earn a cash bonus
equal to 35% of
Executive's base salary, or $122,500, provided Executive meets
the eligibility
requirements and performance objectives set forth in SGX' bonus
program, which
are determined in SGX' sole discretion.
4.5. Performance and Salary Review. SGX will periodically
review
Executive's performance. Executive's salary and/or other
compensation will be
reviewed yearly and may be adjusted from time to time in SGX'
sole and absolute
discretion.
5. Customary Fringe Benefits. Executive will be eligible for all
customary
and usual fringe benefits generally available to executives of
SGX subject to
the terms and conditions of SGX' benefit plan documents. SGX
reserves the right
to modify or eliminate the fringe benefits on a prospective
basis, at any time,
effective upon notice to Executive.
6. Business Expenses. Executive will be reimbursed for all
out-of-pocket
business expenses reasonably incurred in the performance of
Executive's duties
on behalf of SGX. To obtain reimbursement, expenses must be
submitted promptly
with appropriate supporting documentation in accordance with
SGX' policies.
7. Termination of Employment.
7.1. Termination for Cause by SGX. Although SGX anticipates a
mutually
rewarding employment relationship with Executive, SGX may
terminate Executive's
employment immediately at any time for cause. Cause includes,
but is not limited
to, one or more of the following: (a) acts or omissions deemed
by SGX to
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constitute gross negligence, recklessness, willful misconduct or
dishonesty on
the part of Executive with respect to Executive's obligations
under this
Agreement or otherwise relating to the business of SGX; (b)
Executive's willful,
material breach of this Agreement; (c) Executive's conviction or
entry of a plea
of guilty or nolo contendere for fraud, misappropriation or
embezzlement, or of
any felony; (d) Executive's material breach of fiduciary duty
toward SGX; (e)
Executive's material breach of any element of SGX' Confidential
Information and
Invention Assignment Agreement, including without limitation,
Executive's theft,
dilution, or other misappropriation or careless treatment of
SGX' proprietary
information; (f) Executive's inability to perform all of the
essential functions
and duties of Executive's position, with or without reasonable
accommodation
other than for reason of temporary illness; or (g) Executive's
death. In the
event Executive's employment is terminated in accordance with
this subparagraph
7.1, Executive shall be entitled to receive only the Base Salary
then in effect,
prorated to the date of termination, and any benefits, including
any benefits
under the Bonus Plan and Incentive Plan, and expense
reimbursements to which
Executive is entitled by virtue of his prior employment with SGX
(collectively
referred to as "Standard Entitlements."). All other SGX
obligations to Executive
pursuant to this Agreement will become automatically terminated
and completely
extinguished. Executive will not be entitled to receive the
Severance Payment or
any part thereof described in subparagraph 7.2 below.
7.2. Termination Without Cause By SGX/Severance. SGX may
terminate
Executive's employment under this Agreement without cause at any
time on thirty
(30) days' advance written notice to Executive. In the event of
such
termination, Executive will receive the Standard Entitlements,
plus a severance
payment equivalent to twelve months of Executive's Base Salary
then in effect on
the date of termination (the "Severance Payment") payable in
accordance with
SGX' regular payroll cycle, and the vesting of any outstanding
stock options
will be accelerated by 12 months, provided that Executive: (a)
complies with all
surviving provisions of this Agreement as specified in
subparagraph 16.7 below;
(b) executes a full general release, releasing all claims, known
or unknown,
that Executive may have against SGX arising out of or any way
related to
Executive's employment or termination of employment with SGX;
and (c) agrees to
act as a consultant for SGX for up to a maximum of sixty (60)
days, without
additional compensation, if requested to do so by SGX. All other
SGX obligations
to Executive pursuant to
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