EMPLOYMENT OFFER
Exhibit 10.7
EMPLOYMENT OFFER
March 25, 2010
Wenkang Qi, PhD
[address]
RE: Offer of Employment
Wenkang Qi:
I am pleased to offer you a position with M2 Medical, Inc. (the “Company”) as a Vice President of Research and Development reporting to Phillip Hopper, President and Chief Executive Officer, effective April 19, 2010. You will be paid an annual salary of $240,000.00, which will be paid bi-monthly in accordance with the Company’s normal payroll procedures. As an employee, you will also be eligible to receive certain benefits, as detailed below. You should note that the Company may modify any salary, benefit, reporting structure, or bonus as it deems necessary to support its business needs.
At-Will Employment
The Company is excited about your acceptance of this new role and looks forward to working with you on meeting our business objectives. Nevertheless, you should be aware that your employment with the Company is for no specified term and constitutes “at-will” employment. This means that your employment can be terminated by you or by the Company at any time, with or without advance notice, and for any or no particular reason or cause. It also means that your job duties, title, responsibilities, reporting level, compensation and benefits, location of your employment, as well as the Company’s personnel policies and procedures, may be changed with or without notice at any time in the sole discretion of the Company. The at-will nature of your employment relationship shall remain unchanged during your tenure as an employee, and may only be changed by the expressed written agreement that is signed by you and by the Company’s Chief Executive Officer.
Equity and Stock Options
If you decide to join us, it will be recommended at the first meeting of the Compensation Committee (the “Committee”) of the Company’s Board of Directors following your start date that the Company grant you an option to purchase 320,000 of the Company’s Common Stock at
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a price per share equal to the fair market value per share of the Common Stock on the date of grant, as determined by the Board of Directors and will be subject to the terms and conditions which include but are not limited to, vesting and prerequisites for exercising the options. Twenty-five percent (25%) of the Shares subject to the option shall vest twelve (12) months after the date your vesting begins, no shares shall vest before such date, and no rights to any vesting shall be earned or accrued prior to such date. The remaining shares shall vest monthly over the next 36 months in equal monthly amounts., subject to your continuing eligibility. This option grant shall be subject to the terms and conditions of the Company’s Stock Option Plan and Stock Option Agreement, including vesting requirements.
Benefits
You are eligible to participate in Company benefit programs that the Company provides to its full-time regular employees, subject to the availability and terms and conditions of such benefits and benefit plans. During the first year of service, you will be eligible to accrue 15 days of vacation, in accordance with the Company’s vacation policy set forth in the Employee Handbook. Please review the Company’s vacation policy carefully for more information regarding vacation accrual and usage, including accrual rates for subsequent years of service.
Discretionary Bonus
In addition to your salary, stock options, and benefits, the Company may decide to award you an annual bonus. The Company maintains full and absolute discretion over the decision to award any bonus, and the amount of any bonus, based upon various factors that include, but are not limited to, your performance and the Company’s performance. To the extent the Company decides to award you a bonus, such bonus will be paid to you no later than two and one-half (2 1⁄2) months following the end of the calendar year in which such bonus was earned.
Signing Bonus
The Company will provide a signing bonus in the amount of $48,000, paid in one lump sum on June 30, 2010, which shall be expressly subject to the condition subsequent of your continued employment for a period of at least one year following your hire date. The signing bonus is taxable, and all regular payroll taxes will be withheld. If you (i) voluntarily terminate your employment or (ii) are terminated for Cause (as defined below) prior to April 19, 2011, you will be responsible for repayment of this signing bonus, with the repayment amount prorated based upon the number of months of completed service. You agree to enter into a contemporaneous agreement with the Company for such repayment upon such separation from employment, if applicable, and agree to allow for an automatic deduction of such repayment from any contractual severance entitlement, if any.
Severance
Notwithstanding and without limiting the at-will nature of your employment, in the event you separate from employment other than for Cause (as defined below), and subject to your timely execution and return of a Separation Agreement and Release (“Release”) in form and substance acceptable to the Company in its discretion, the Company agrees to provide you the greater of (i) severance in the form of payments equivalent to continuation of your base salary from the
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date of your separation through and including April 19, 2011 (the actual dates of payments to be extended as necessary to commence following the effective date of the Release, subject to your execution within any proscribed deadline for the Release); or (ii) severance in the form of payments equivalent to continuation of your base salary and COBRA expense reimbursement for a period of three (3) months following the effective date of the Release.
For purposes of this Employment Offer, “Cause” is defined as (i) an act of dishonesty made by you in connection with your responsibilities as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (iii) your gross misconduct, (iv) your unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (v) your willful breach of any obligations under any written agreement or covenant with the Company, including this Agreement; or (vi) your continued failure to perform your employment duties after you have received a written demand of performance from the Company that specifically sets forth the factual basis for the Company’s belief that you have not substantially performed your duties.
Conditions
The terms provided by this Employment Offer, and any employment resulting therefrom, are conditioned upon your full satisfaction of each of the following:
| • | You must return this Employment Offer, signed and initialed by you without modification, to me no later than March 31, 2010, after which time this offer will expire. |
| • | You must disclose to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your position and you represent that such is the case. Moreover, you agree that, during the term of your employment with the Company, you will not engage in any other employment, occupation, consulting, or other business activity directly related to the business in which the Company is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to the Company. Similarly, you agree not to bring any third-party confidential information to the Company, including that of your former employer, and that you will not in any way utilize any such information in performing your duties for the Company. By signing and accepting this offer, you represent and warrant that: (i) you are not subject to any pre-existing contractual or other legal obligation with any person, company or business enterprise which may be an impediment to, or a conflict of interest with, your employment with the Company, or your providing services to the Company as its employee; (ii) you do not have, and shall not bring onto the Company’s premises, or use in the course of your employment with the Company, any confidential or proprietary information of another person, company or business enterprise to whom you previously provided services; and (iii) you will not, at any time during your employment with the Company, breach any obligation or agreement that you have entered into with any third party, including your former employers. |
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| • | You must sign and return, prior to your start date, the enclosed At-Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (Attachment A), indicating your full agreement to, and ongoing compliance with, the terms of that agreement, which include, among other provisions, the assignment of patent rights to any invention made during your employment at the Company, and non-disclosure of the Company’s proprietary information. In the event of any dispute or claim relating to or arising out of our employment relationship, you and the Company agree to an arbitration in which (i) you are waiving any and all rights to a jury trial but all court remedies will be available in arbitration, (ii) we agree that all disputes between you and the Company shall be folly and finally resolved by binding arbitration, (iii) all disputes shall be resolved by a neutral arbitrator who shall issue a written opinion, (iv) the arbitration shall provide for adequate discovery, and (v) the Company shall pay all but $320 of the arbitration fees. |
| • | For purposes of federal immigration laws (including the Immigration Reform and Control Act), you must provide the Company with documentary evidence of your identity and eligibility for employment in the United States (your “Right to Work” documentation). Our employment relationship with you may terminate if Right to Work documentation is not be provided to the Company within three (3) business days of your hire date. By signing below, you acknowledge and agree to maintain any Right to Work documentation, and acknowledge and agree to provide such documentation to the Company as necessary. You, and not the Company, are responsible for any costs associated with the renewal or replacement of any Right to Work document, including, but not limited to, work visas. |
| • | The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. This Employment Offer, therefore, is contingent upon a clearance of such a background investigation and/or reference check, if any. |
| • | The Company reserves the right to screen all of its potential employees for illicit drug use. This Employment Offer, therefore, is contingent upon a completion and clearance of any requested pre-employment drug screening. |
| • | As a Company employee, you will be expected to abide by Company rules and standards. You will be specifically required to sign an acknowledgment that you have read and that you understand the Company’s rules of conduct. |
Choice of Law
This Agreement shall be interpreted and enforced in accordance with the laws of the State of California, without regard to conflict of laws or provisions thereof. This agreement submits all disputes arising hereunder to the exclusive jurisdiction and venue of the federal and state courts located in the county in which Company operations are located, currently Santa Clara County, California.
This agreement, and the rights and obligations of the parties thereto, shall be binding upon and inure to the benefit of the parties and their respective heirs, successors and assigns.
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Entire Agreement
If you accept this Employment Offer and satisfy its conditions, then this Employment Offer and the written agreements referenced herein shall constitute the complete agreement between you and the Company with respect to the terms and conditions of your employment. This Employment Offer expressly cancels and supersedes any representations, whether written or oral, not contained or expressly referenced in writing herein. Except as otherwise specified in this Employment Offer, the terms and conditions of your employment may not be changed, except by a writing signed by the Company’s Chief Executive Officer.
We look forward to your acceptance of this Employment Offer and mutually rewarding relationship. If you accept this offer, please date and sign below and return this Employment Offer to me no later than March 31, 2010. Please retain a copy of this Employment Offer for your records.
If you have any questions regarding this Employment Offer, please feel free to contact me.
Sincerely,
/s/ Phillip Hopper
Phillip Hopper
Chief Executive Officer
M2 Medical, Inc.
Acknowledgment and Acceptance of Employment Offer
I accept employment with M2 Medical, Inc. and acknowledge and fully agree to the terms and conditions set forth in this Employment Offer:
| Dated: 3/31/10 | /s/ Wenkang Qi | |||||
| WENKANG QI | ||||||
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