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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
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("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
