Amended and Restated Employment Agreement for Andrew Cheng
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this Agreement) is made by and between Akero Therapeutics, Inc., a Delaware corporation with its principal place of business at 170 Harbor Way, South San Francisco, CA 94080 (the Company), and Andrew Cheng (the Executive) and is effective as of the closing of the Companys first underwritten public offering of its equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the Effective Date). Except with respect to the Restrictive Covenants Agreement and the Equity Documents (each as defined below), this Agreement supersedes in all respects all prior agreements between the Executive and the Company regarding the subject matter herein, including without limitation (i) the Employment Agreement between the Executive and the Company dated August 7, 2018 (the Prior Agreement), and (ii) any offer letter, employment agreement or severance agreement.
WHEREAS, the Company desires to continue to employ the Executive and the Executive desires to continue to be employed by the Company on the new terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive, and the Executive hereby accepts employment, upon the terms and subject to the conditions hereinafter set forth. At all times, the Executives employment with the Company will continue to be at- will, meaning that the Executives employment may be terminated by the Company or the Executive at any time and for any reason, with or without cause, subject to the terms of this Agreement.
2. JOB TITLES AND DUTIES.
(a) Title. The Executive shall continue to be employed as Chief Executive Officer and President of the Company and shall be a member of the Companys Board of Directors (the Board). The Executive shall serve on the Board so long as Executive is Chief Executive Officer of the Company. To the extent applicable, the Executive shall be deemed to have resigned from all officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon the termination of the Executives employment for any reason. The Executive shall execute any documents in reasonable form as may be requested to confirm or effectuate any such resignations.
(b) Duties. The Executive shall have responsibilities and duties as may from time to time be prescribed by the Board and shall report solely and directly to the Board. The Executive shall devote substantially all of his time to the performance of his duties during normal working hours and at all other times which may be reasonably necessary for the proper performance of his duties. The Executive will not engage in any other employment, any additional consulting or other business activities (whether full-time or part-time), without the prior approval of the Board, provided that the Executive may manage his personal and family
investments, engage in religious, charitable and other community activities and, subject to the reasonable approval of the Board, sit on for-profit boards, so long as such activities do not interfere or conflict with the Executives obligations to the Company. The Company hereby acknowledges and approves the Executives service as a director on the boards of Syntimmune, Inc. and Trucode Gene Repair, Inc. and his service as a consultant to Gilead Sciences, Inc. and/or Kronos Bio, Inc.
(c) Location. The Executive shall continue to work out of the Companys offices located in San Francisco, CA. The Company shall provide the Executive with suitable office space in San Francisco and hire and retain an administrative assistant to work at the direction of the Executive.
3. TERM. The Executives employment hereunder shall commence on the Effective Date and shall continue until it is terminated in accordance with the provisions of Section 6 (the Term).
4. COMPENSATION AND BENEFITS. Until the termination of the Executives employment hereunder, in consideration for the services of the Executive hereunder, the Company shall compensate the Executive as follows:
(a) Base Salary. The Company shall pay the Executive, in accordance with the Companys standard payroll practices as in effect from time to time, a base salary (the Base Salary). The Base Salary will be paid at an annual rate of $475,000. Notwithstanding the foregoing, at the discretion of the Board, the Company may increase the Base Salary at any time (and such increased amount shall be treated as Base Salary under this Agreement).
(b) Incentive Bonus. The Executive shall be eligible to receive an annual bonus with a target of 50% of the Base Salary (the Target Bonus). The amount of any such bonus shall be in the sole discretion of the Board. If a bonus is awarded for any year, it shall be paid in a lump sum in cash no later than March 15 of the following year. Except as set forth herein, the Executive must be employed by the Company on the date of payment in order to receive any bonus that has been awarded to him. Notwithstanding the foregoing, at the Boards discretion the Company may award other bonus compensation and/or increase the Target Bonus from time to time.
(c) Vacation. The Executive shall be entitled to four weeks vacation each calendar year, which shall accrue ratably over the course of the year and must be used in accordance with the Companys vacation policy as may be in effect from time to time.
(d) Equity. Any equity awards held by the Executive shall continue to be governed by the terms and conditions of the Companys applicable equity incentive plan(s) and the applicable award agreement(s) governing the terms of such equity awards held by the Executive (collectively, the Equity Documents); provided that notwithstanding anything to the contrary in the Equity Documents, in the event of (i) the Executives death, (ii) termination of Executives employment due to disability (as defined below), or (iii) the Executives termination of his employment hereunder with Good Reason (as defined below), 100% of any unvested shares under the incentive and non-qualified stock options granted to the Executive on
September 8, 2018, October 18, 2018 and January 19, 2019 (the Initial Equity Awards) shall vest upon the Executives Date of Termination (as defined below). In addition, upon the earlier of (x) six (6) months after the consummation of a Sale Event (as defined in the Companys 2019 Stock Option and Incentive Plan, as amended and restated thereafter from time to time, or its successor (the Plan)) and (y) termination of the Executives employment upon or following the consummation of a Sale Event for any reason other than for Cause, 100% of any unvested shares of the Initial Equity Awards shall vest effective as the date of the event set forth in (x) or (y), as applicable. Notwithstanding anything to the contrary in the Plan or any stock option agreement, in the event that the Executives employment is terminated without Cause or the Executive terminates his employment with Good Reason, the Executive shall have until the earlier of (i) the original 10-year expiration date for such vested stock options as provided in the applicable Equity Documents, or (ii) twelve (12) months following the Executives Date of Termination to exercise any stock options that have vested as of the Date of Termination (the Extended Exercise Period); provided that any stock option subject to this Extended Exercise Period shall cease to be treated for tax purposes as an incentive stock option.
(e) Other Benefits. The Executive shall be entitled to participate in all benefit programs that the Company establishes and makes available to its executives to the extent that the Executives position, tenure, salary, age, health and other qualifications make him eligible to participate. Such participation shall be subject to (i) the terms of the applicable plan documents and (ii) generally applicable Company policies.
(f) Section 409A.
(i) Anything in this Agreement to the contrary notwithstanding, if at the time of the Executives separation from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the Code), the Company determines that the Executive is a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executives separation from service would be considered deferred compensation subject to the twenty percent (20%) additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (x) six (6) months and one (1) day after the Executives separation from service, or (y) the Executives death.
(ii) The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.
(iii) All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the
Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year. Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
(iv) To the extent that any payment or benefit described in this Agreement constitutes non-qualified deferred compensation under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executives termination of employment, then such payments or benefits shall be payable only upon the Executives separation from service. The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).
(v) The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.
(vi) If under this Agreement an amount is to be paid in installments, each installment shall be treated as a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii).
5. EXPENSES. The Company shall reimburse the Executive for all reasonable expenses of types authorized by the Company and incurred by the Executive in the performance of his duties hereunder. The Executive shall comply with such budget limitations and approval and reporting requirements with respect to expenses as the Company may establish from time to time, including any established travel policies; provided that Executive shall be entitled to travel business class (if available) or first class (if business class is not available) on all flights longer than four (4) hours in duration. Following the Executives prompt submission of appropriate documentation, the Company shall reimburse the Executive for reasonable legal fees incurred in connection with the negotiation and execution of this Agreement in an amount not to exceed $5000.00.
6. TERMINATION. The Executives employment hereunder may be terminated without any breach of this Agreement under the following circumstances:
(a) Death or Disability. The Executives employment hereunder shall terminate upon the death of the Executive or, at the option of the Company, in the event of the Executives disability. The Executive shall be deemed to have incurred a disability if an independent medical doctor (selected jointly by the Company and the Executive) certifies that the Executive has for 90 consecutive days or 180 days (which need not be consecutive) in any 12-month period been disabled in a manner which makes him unable to perform the essential functions of his then existing position or positions with or without a reasonable accommodation.
Under such circumstances, the Executive hereby agrees to submit to medical examination by such medical doctor.
(b) Termination by the Company for Cause. For purposes of this Agreement, a termination of the Executives employment by the Company shall be for Cause if such termination is as a result of one or more of the following having occurred:
(i) the Executive shall have committed an act of fraud, misappropriation or breach of fiduciary duty against the Company or any of its affiliates; or
(ii) the Executive shall have been convicted of, or pleaded guilty or nolo contendere to, any crime triable upon indictment or involving moral turpitude; or
(iii) the Executive shall have been chronically absent from work for reasons that were not excused, other than as a result of his physical or mental illness, which shall mean a failure to be present and available, during normal work hours, wherever his duties are required to be performed; or
(iv) the Executive shall have refused, after written notice, to obey any lawful direction by the Board which is consistent with the Executives duties hereunder; or
(v) the Executive shall have breached materially any of the provisions or representations of this Agreement.
No finding of Cause shall be effective until after the Board adopts a resolution by a vote of at least a majority of its members to terminate the Executive for Cause after giving the Executive and his attorney a reasonable opportunity to be heard by the Board and, none of the events described in clauses (iii), (iv) or (v) shall constitute Cause unless the Board shall have notified Executive in writing describing the event(s) which it believes constitute Cause and then only if Executive shall have failed to cure such events within 30 days after such written notice is given to Executive. Executive may not be terminated for Cause as a result of actions or inactions based upon the advice of counsel to the Company.
(c) Termination by the Company without Cause. The parties agree that the Company may terminate the Executives employment hereunder without Cause upon written notice, subject to the terms set out in Section 7 below. Any termination by the Company of the Executives employment under this Agreement that does not constitute a termination for Cause under Section 6(b) and does not result from the death or disability of the Executive under Section 6(a) shall be deemed a termination without Cause.
(d) Termination by the Executive with Good Reason. The Executive may resign with Good Reason. Good Reason shall mean the occurrence, without the Executives prior written consent, of any of the events or circumstances set forth in clauses (i) through (v) below; provided, however, that a termination with Good Reason by the Executive can only occur if (x) the Executive has given the Company a written notice indicating the existence of a condition giving rise to Good Reason, and the Company has not cured the condition giving rise to Good Reason within 30 days after receipt of such notice (the Cure Period), and (y) such notice is given within 60 days after the Executives actual knowledge of the initial occurrence of
the condition giving rise to Good Reason and termination with Good Reason occurs within 180 days after the Executives actual knowledge of the initial occurrence of the condition giving rise to Good Reason. The conditions giving rise to Good Reason are as follows: (i) a diminution in the Executives rate of Base Salary (including any increases to the initial Base Salary specified in this Agreement) or Target Bonus opportunity described in Section 4(b) (including any increases to the initial Target Bonus opportunity specified in this Agreement); (ii) a material diminution in the Executives authority, title or responsibilities (including reporting) (including removal from the Board, other than following a vote of the Companys public shareholders); (iii) a material breach by the Company of this Agreement or any equity award agreement; (iv) the failure of a successor to the Company to expressly agree to assume this Agreement; or (v) the requirement of Executive to relocate to a location that is not located within 50 miles of the Companys offices in San Francisco, CA. If the Company cures the condition giving rise to Good Reason during the Cure Period, Good Reason shall be deemed not to have occurred.
(e) Termination by the Executive other than with Good Reason. The Executive may resign upon written notice to the Company in circumstances that do not constitute Good Reason.
Upon the termination of the Executives employment for any reason, the Company shall pay or provide the Executive (A) the Base Salary payable to Executive under Section 4 through the Date of Termination, (B) any bonus for the fiscal year immediately preceding the year in which the Date of Termination occurs that is due and owed to the Executive that remains unpaid (payable when bonuses for such fiscal year are paid to other senior executives of the Company), (C) any expense reimbursements under Section 5 for expenses reasonably incurred in the performance of the Executives duties prior to the Date of Termination (payable pursuant to the Companys expense reimbursement policy), (D) the value of any accrued but unused vacation accrued through the Date of Termination, and (E) any accrued or vested benefits pursuant to the terms of any employee benefit plans of the Company or its affiliates ((A) through (E) collectively, the Accrued Benefits).
7. SEVERANCE PAY AND BENEFITS.
(a) Severance Pay and Benefits upon Termination by the Company without Cause or by the Executive with Good Reason outside the Change in Control Period. During the Term, if the Executives employment is terminated by the Company without Cause as provided in Section 6(c), or the Executive terminates employment with Good Reason as provided in Section 6(d), each outside of the Change in Control Period (as defined below), then in addition to the Accrued Benefits, and subject to (i) the Executive signing a separation agreement and release in substantially the form attached hereto as Exhibit A (the Separation Agreement and Release), and (ii) the Separation Agreement and Release becoming irrevocable, all within 60 days after the Date of Termination (or such shorter period as set forth in the Separation Agreement and Release):
(i) The Company shall pay the Executive an amount equal to 12 months of the Executives Base Salary (the Severance Amount); and
(ii) subject to the Executives copayment of premium amounts at the applicable active employees rate and the Executives proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA), the Company shall pay to the group health plan provider, the COBRA provider or the Executive a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company until the earliest of (A) the 12 month anniversary of the Date of Termination; (B) the Executives eligibility for group medical plan benefits under any other employers group medical plan; or (C) the cessation of the Executives continuation rights under COBRA; provided, however, if the Company determines that it cannot pay such amounts to the group health plan provider or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payments to payroll payments directly to the Executive for the time period specified above. Such payments shall be subject to tax-related deductions and withholdings and paid on the Companys regular payroll dates.
The amounts payable under Section 7(a), to the extent taxable, shall be paid out in substantially equal installments in accordance with the Companys payroll practice over 12 months commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount, to the extent it qualifies as non-qualified deferred compensation within the meaning of Section 409A of the Code, shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).
(b) Severance Pay and Benefits upon Termination by the Company without Cause or by the Executive with Good Reason within the Change in Control Period. The provisions of this Section 7(b) shall apply in lieu of, and expressly supersede, the provisions of Section 7(a) if the Company terminates the Executives employment without Cause as provided in Section 6(c) or if the Executive terminates his employment with Good Reason as provided in Section 6(d), in either case within the Change in Control Period. These provisions shall terminate and be of no further force or effect after the Change in Control Period. During the Term, if during the Change in Control Period the Executives employment is terminated by the Company without Cause as provided in Section 6(c) or the Executive terminates employment with Good Reason as provided in Section 6(d), then, subject to the signing of the Separation Agreement and Release by the Executive and the Separation Agreement and Release becoming fully effective, all within the time frame set forth in the Separation Agreement and Release but in no event more than 60 days after the Date of Termination:
(i) The Company shall pay the Executive a lump sum in cash in an amount equal to the sum of (A) 18 months of the Executives then current Base Salary (or the Executives Base Salary in effect immediately prior to the Change in Control, if higher) plus (B) 1.5 times the Executives Target Bonus for the then-current year (the Change in Control Payment);
(ii) notwithstanding anything to the contrary in any applicable option agreement or other stock-based award agreement, all time-based stock options and other stock-based awards subject to time-based vesting held by the Executive (the Time-Based Equity Awards) shall immediately accelerate and become fully exercisable or nonforfeitable as of the later of (i) the Date of Termination or (ii) the date of the Separation Agreement and Release becoming fully effective (the Accelerated Vesting Date); provided that any termination or forfeiture of the unvested portion of such Time-Based Equity Awards that would otherwise occur on the Date of Termination in the absence of this Agreement will be delayed until the Effective Date of the Separation Agreement and Release and will only occur if the vesting pursuant to this subsection does not occur due to the absence of the Separation Agreement and Release becoming fully effective within the time period set forth therein. Notwithstanding the foregoing, no additional vesting of the Time-Based Equity Awards shall occur during the period between the Executives Date of Termination and the Accelerated Vesting Date; and
(iii) subject to the Executives copayment of premium amounts at the applicable active employees rate and the Executives proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA), the Company shall pay to the group health plan provider, the COBRA provider or the Executive a monthly payment equal to the monthly employer contribution that the Company would have made to provide health insurance to the Executive if the Executive had remained employed by the Company until the earliest of (A) the 18 month anniversary of the Date of Termination; (B) the Executives eligibility for group medical plan benefits under any other employers group medical plan; or (C) the cessation of the Executives continuation rights under COBRA; provided, however, if the Company determines that it cannot pay such amounts to the group health plan provider or the COBRA provider (if applicable) without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then the Company shall convert such payments to payroll payments directly to the Executive for the time period specified above. Such payments shall be subject to tax-related deductions and withholdings and paid on the Companys regular payroll dates.
The amounts payable under this Section 7(b), to the extent taxable, shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payments to the extent they qualify as non-qualified deferred compensation within the meaning of Section 409A of the Code, shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.
(a) Other Limitations. Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company or its affiliates to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code and the applicable regulations thereunder (the Aggregate Payments), would be subject to the excise tax imposed by Section 4999 of the
Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Executive receiving a higher After Tax Amount (as defined below) than the Executive would receive if the Aggregate Payments were not subject to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (i) cash payments not subject to Section 409A of the Code; (ii) cash payments subject to Section 409A of the Code; (iii) equity-based payments and acceleration; and (iv) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. § 1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treasury Regulation §1.280G-1, Q&A- 24(b) or (c). For purposes of this Section 8(a), the After Tax Amount means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Executive as a result of the Executives receipt of the Aggregate Payments. For purposes of determining the After Tax Amount, the Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes, unless the Accounting Firm (as defined below) reasonably determines that a different marginal rate shall apply. The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to this Section 8(a) shall be made by a nationally recognized accounting firm or such other firm selected by the Company and reasonably acceptable to the Executive (the Accounting Firm), which shall provide detailed supporting calculations both to the Company and the Executive within fifteen (15) business days of the employment termination date, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive. If the Accounting Firm is selected prior to a Change in Control, it may not be changed without the express written consent of the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent manifest error. For purposes of determinations, no portion of the Total Payments shall be taken into account which, in the opinion of the Accounting Firm, (A) does not constitute a parachute payment within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) or (B) constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the base amount (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation. The costs of obtaining such determination and all related fees and expenses (including related fees and expenses incurred in any later audit) shall be borne by the Company. The parties shall cooperate in good faith in seeking the opinion of the Accounting Firm (or an expert retained by the Accounting Firm) with respect to the value for purposes of Section 280G of the Code of any post-employment non-competition or other restrictive covenant to which Executive is then subject. Notwithstanding the foregoing, if (i) the Company is not publicly traded prior to the occurrence of a change in control such that the private company exception pursuant to Q & A #7 of the regulations promulgated under Section 280G of the Code is applicable and (ii) the Executive requests that the Company seek shareholder approval of the
portion of any payments to be made to the Executive which are parachute payments under Section 280G and exceed 2.99 times his base amount (as such term is defined in Section 280G) in order that, upon obtaining such approval, all of the payments will be exempt from the excise taxes imposed under Sections 280G and 4999 of the Code, the Company shall use its reasonable best efforts to obtain such approval.
(b) Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
Change in Control shall mean a Sale Event as defined in the Plan, but only to the extent such Sale Event is also a change in control event within the meaning of Section 409A of the Code and the regulations promulgated thereunder.
Change in Control Period shall mean the 12-month period immediately following the occurrence of the first event constituting a Change in Control.
Date of Termination shall mean (i) if the Executives employment is terminated by death, the date of death; (ii) if the Executives employment is terminated on account of disability under Section 6(a) or by the Company for Cause under Section 6(b), the date on which Notice of Termination is given; (iii) if the Executives employment is terminated by the Company under Section 6(c) without Cause, the date on which a Notice of Termination is given or the date otherwise specified by the Company in the Notice of Termination; (iv) if the Executives employment is terminated by the Executive under Section 6(d) with Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period, and (v) if the Executives employment is terminated by the Executive under Section 6(e) other than with Good Reason, 30 days after the date on which a Notice of Termination is given. Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement.
Notice of Termination shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon. Except for termination due to the Executives death, any termination of the Executives employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the other party hereto.
(c) Captions. The captions of sections or subsections of this Agreement are for reference only and shall not affect the interpretation or construction of this Agreement.
(d) Notices. All notices and other communications hereunder shall be in writing, and shall be deemed to have been duly given if delivered personally or if mailed by certified mail, return receipt requested, postage prepaid or sent by telecopy, electronic (PDF) transmission, or recognized delivery service, to the relevant address set forth below, or to such other address as the recipient of such notice or communication shall have specified to the other party hereto by notice given in accordance with this Section 8(d):
If to the Company, to:
Akero Therapeutics, Inc.
170 Harbor Way
South San Francisco, CA 94080
ATTN: Board of Directors
If to the Executive, to:
At the address on file with the Company
(e) Restrictive Covenants Agreement. The terms of the Confidentiality, Developments and Non-Solicitation Agreement dated August 7, 2018 (the Restrictive Covenants Agreement) shall continue to be in full force and effect, the terms and conditions of which are incorporated herein by reference.
(f) Withholding; Tax Effect. All payments made by the Company to the Executive under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law. Nothing in this Agreement shall be construed to require the Company to make any payments to compensate the Executive for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.
(g) Severability. If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired.
(h) Waivers. No delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege.
(i) Counterparts. This Agreement may be executed in multiple counterparts, including by electronic (PDF) transmission, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(j) Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. The Company may only assign this Agreement to any successor (whether through a sale or merger of stock or assets or otherwise), parent, subsidiary or affiliated entity of the Company, or in connection with any other form of reorganization of the Company; provided that if the Executive remains employed or becomes employed by the Company, the purchaser or any of their affiliates in connection with any such transaction, then the Executive shall not be entitled to any payments, benefits or vesting pursuant to Section 7(a) or 7(b) of this Agreement solely as a result of such assignment. The Executive shall not have the right to assign Executives duties under this Agreement or this Agreement.
(k) Entire Agreement. Except with respect to the Equity Documents, this Agreement (together with the Restrictive Covenants Agreement, which is incorporated by reference herein) contains the entire understanding of the parties, supersedes all prior agreements and understandings relating to the subject matter hereof, including without limitation the Prior
Agreement, and may not be amended except by a written instrument hereafter signed by each of the parties hereto.
(l) Governing Law. This Agreement and the performance hereof shall be construed and governed in accordance with the laws of the State of California applicable to contracts executed and performed entirely in such State, without giving effect to principles of conflict of laws. Any dispute regarding the enforceability or breach of this Agreement shall be adjudicated in a federal or state court of competent jurisdiction in San Francisco, California.
(m) Contract Construction. Where the context of this Agreement so requires, use of masculine gender pronouns shall be deemed to mean or include the feminine or neuter gender, and vice versa, and use of the word person shall be deemed to mean or include individual persons, entities, trusts and governmental bodies and agencies, and vice versa. Definitions in this Agreement apply equally to both the singular and the plural forms of the defined terms. It is the intent of the parties that this Agreement shall not be construed for or against any party by reason of the authorship or alleged authorship of any provisions hereof or by reason of the status of the respective parties.
(n) Indemnification. Executive shall be indemnified and provided advancement of expenses to the fullest extent permitted by the Companys by-laws, certificate of incorporation, and applicable law for his actions and omissions in his rendering of services to or on behalf of the Company hereunder.
(o) D & O Insurance. Executive shall be covered by the Companys directors and officers or other third party liability insurance policy or policies covering directors and officers of the Company on terms no less favorable than provided to such other individuals. Such coverage shall also include post-employment tail coverage to the fullest extent provided under any such policy.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused this Agreement to be duly executed as of the Effective Date.
AKERO THERAPEUTICS, INC.
Signature Page to Employment Agreement
FORM OF RELEASE