Executive Employment Agreement, effective as of September 6, 2018, between the Registrant and Victor Perlroth
Exhibit 10.11
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (the Agreement), is entered into as of September 6, 2018 (the Effective Date), by and between Kodiak Sciences Inc., a Delaware corporation (the Company), and Victor Perlroth, M.D. (the Executive).
RECITALS
WHEREAS, the Company desires to continue to employ the Executive, and the Executive desires to continue to be employed by the Company, for such purposes and upon the terms and conditions hereinafter provided; and
WHEREAS, the parties wish to establish the terms of the Executives continued employment with the Company and set out fully their respective rights, obligations and duties.
NOW, THEREFORE, in consideration of the promises and the terms and conditions set forth in this Agreement, the parties hereby agree as follows:
AGREEMENT
1. Employment by the Company.
(a) Title and Capacity. The Company and Executive hereby agree to continue the Executives employment with the Company, effective as of the Effective Date, under the terms set forth in this Agreement. The Executive will continue to serve as the Chairman and Chief Executive Officer of the Company, reporting to the Companys Board of Directors (the Board). During the Executives employment with the Company, the Executive will devote substantially all of Executives business time and attention to the business of the Company, except for vacation periods and reasonable periods of illness or other incapacities permitted by the Companys general employment policies, or as otherwise set forth herein.
(b) Duties and Location. The Executive shall perform such duties as are ordinary, customary and necessary in such role as carried out for a biopharmaceutical company and consistent with the Companys objectives to discover, develop, obtain approval, commercialize and sell its own pharmaceutical products, and to become registered to sell its securities to the public. The Executive shall perform any duties as are assigned to the Executive from time to time, consistent with the Bylaws of the Company and as required by the Board. The Company reserves the right to reasonably require the Executive to perform Executives duties at places other than its corporate headquarters from time to time, and to require reasonable business travel.
(c) Company Policies. The employment relationship between the parties shall also be governed by the general employment policies and practices of the Company that are made available to Executive, except that when the terms of this Agreement differ from or are in conflict with such general employment policies or practices, this Agreement shall control.
2. Compensation and Benefits.
(a) Base Salary. The Company agrees to pay the Executive for services rendered an annual base salary of Three Hundred Ninety-Nine Thousand Two Hundred and Twenty-Eight Dollars ($399,228) (increasing to Five Hundred and Sixteen Thousand Dollars ($516,000) effective upon the IPO), subject to payroll withholding and deductions, and payable in accordance with Companys customary payroll practice (the Base Salary). The Base Salary shall be reviewed periodically by the compensation committee of the Board; provided, however, that any such review will not necessarily result in an adjustment to the Base Salary. Any change in the Base Salary must be approved by the Board.
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(b) Targeted Incentive Bonus. The Executive is eligible to earn, in addition to the Base Salary and subject to the terms hereof and at the full discretion of the Board, a targeted incentive bonus of forty-five percent (45%) of Base Salary) (increasing to fifty percent (50%) of Base Salary effective upon the IPO), subject to all applicable withholdings and deductions (the Targeted Incentive Bonus). Whether Executive earns a Targeted Incentive Bonus award shall be determined by the Board in its discretion, based on the Executives and the Companys performance against goals during the applicable fiscal year. The Targeted Incentive Bonus performance goals will be set by the Chief Executive Officer in conjunction with the Companys Board of Directors or its authorized committee (in either case, the Committee) at the beginning of each fiscal year. Subject to the terms of this Agreement, the Executive will not earn any bonus if Executives employment terminates for any reason before the end of the fiscal year. Any Targeted Incentive Bonus, if earned, shall be payable no earlier than the first payroll period in the new fiscal year, but in no event later than the end of the first quarter following the applicable fiscal year.
(c) Equity. Executive will be eligible to receive Company equity awards pursuant to any plans or arrangements the Company may have in effect from time to time. The Committee will determine in its discretion whether Executive will be granted any Company equity awards and the terms of any Company equity award in accordance with the terms of any applicable plan or arrangement that may be in effect from time to time.
(d) Benefits. The Executive (and, where applicable, the Executives qualified dependents) will be eligible to participate in health insurance and other employee benefit plans and policies established by the Company for its executive team from time to time on substantially the same terms as are made available to other such employees of the Company generally. The Executives participation (and the participation of the Executives qualified dependents) in the Companys benefit plans and policies will be subject to the terms of the applicable plan documents and the Companys generally applied policies, and the Company in its sole discretion may from time to time adopt, modify, interpret or discontinue such plans or policies.
(e) Expenses. The Company will reimburse the Executive for all reasonable and necessary expenses incurred by the Executive in connection with the Executives discharge of the Companys business, in accordance with the applicable Company policy as may be amended from time to time.
(f) Termination of Benefits. Except as set forth in Section 3 or as otherwise specified herein or in any other agreement between the Executive and the Company, if the Executives employment is terminated by the Company for any reason, with or without Cause, or if the Executive resigns the Executives employment voluntarily, with or without Good Reason, no compensation or other payments will be paid or provided to the Executive for periods following the Termination Date (as defined below) when such a termination of employment is effective, provided that any rights the Executive may have under the Companys benefit plans shall be determined under the provisions of such plans. If the Executives employment terminates as a result of the Executives death or Disability, no compensation or payments will be made to the Executive or to the Executives estate, as the case may be, other than any Accrued Compensation (as defined below) and those benefits to which the Executive may otherwise be entitled under the benefit plans of the Company.
3. Compensation and Benefits Upon Termination of Employment. Upon termination of the Executives employment (such date of termination being referred to as the Termination Date), the Company will pay the Executive the compensation and benefits as described in this Section 3.
(a) General Benefits Upon Termination. The Company will pay the Executive, or Executives estate, as the case may be, all accrued but unpaid Base Salary, earned and awarded but unpaid Targeted Incentive Bonus compensation, approved but unpaid business expenses, and accrued but unused vacation (collectively, the Accrued Compensation), if any.
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(b) Termination without Cause or for Good Reason. In the event that the Company terminates the Executives employment without Cause or, in the event the Executive terminates Executives employment for Good Reason: (i) the Executive shall be eligible to receive: (A) a lump sum payment equal to eighteen (18) months of Base Salary, subject to payroll withholding and deductions (Severance Payment), (B) a lump sum payment equal to the maximum Targeted Incentive Bonus, prorated for the portion of the fiscal year elapsed as of the Termination Date (or, if such termination occurs during the Corporate Transaction Period (as defined below), the payment shall be calculated without any proration, and by multiplying the maximum Targeted Incentive Bonus by one hundred fifty percent (150%)) (Severance Bonus Amount), and (C) the benefits set forth in Section 3(d), and (ii) the Executive shall be entitled to acceleration of vesting of such portion of the Executives outstanding Company equity awards as would have vested in the twelve (12)-month period following the Termination Date had the Executive continued to be employed by the Company for such period (or if such termination occurs simultaneously with or within twenty-four (24) months after a Corporate Transaction, acceleration of vesting of one hundred percent (100%) of the unvested portion of such Company equity awards), provided, however that in each case the receipt of the Severance Payment, the Severance Bonus Amount, benefits and accelerated vesting is expressly contingent upon the Executives execution and delivery of a release and waiver of claims agreement drafted by and satisfactory to counsel for the Company (the Release) executed and becoming effective within sixty (60) days following the Termination Date. The Severance Payment, Severance Bonus Amount, and benefits shall be paid or commence on the first payroll period following the date the Release becomes effective (the Payment Commencement Date). The foregoing notwithstanding, if the 60th day following the Termination Date occurs in the calendar year following the termination, then the Payment Commencement Date shall be no earlier than January 1st of such subsequent calendar year. The provision of payments and benefits pursuant to this Section shall be subject to the terms and conditions set forth on Exhibit A.
(c) Definitions.
(i) Corporate Transaction means any (A) consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization in which the members/shareholders of the Company prior to such consolidation, merger or reorganization shall own less than fifty percent (50%) of the voting equity of the continuing or surviving entity after such consolidation, merger or reorganization, (B) any transaction or series of related transactions to which the Company is a party, in which in excess of fifty percent (50%) of the Companys voting equity securities is transferred, except for bona fide sales of the Companys equity securities to investors for primarily fundraising purposes, or (C) a sale of substantially all of the assets of the Company.
(ii) Corporate Transaction Period means the period beginning three (3) months prior to a Corporate Transaction and ending twenty-four (24) months after such Corporate Transaction.
(iii) Cause means (A) Executives conviction of, including pleading guilty or nolo contendere to, any felony or any crime involving dishonesty; (B) Executives intentional participation in any fraud or act of dishonesty against the Company; (C) a material violation by Executive of any of the Companys written policies or other serious misconduct, in each case that results in or is reasonably likely to result in material harm to Company that is not cured within thirty (30) days following written notice of Cause from the Company provided that a cure is possible; (D) Executives willful and continued failure substantially to perform any of Executives job duties that is not cured within thirty (30) days following written notice of Cause from the Company; (E) conduct by Executive which, in the good faith and reasonable determination of
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the Board, demonstrates gross unfitness to serve that is not cured within thirty (30) days following written notice of Cause from the Company provided a cure is possible; or (F) Executives material breach of any agreement with the Company (or its subsidiaries or successors) that is not cured within thirty (30) days following written notice of such breach from the Company. In the event the Cause definition in this agreement differs from the Cause definition in the Plan, the definition in this Agreement shall control.
(iv) Good Reason means the occurrence of any one or more of the following events without the prior written consent of the Executive: (A) a material reduction in Base Salary or Targeted Incentive Bonus opportunity, or benefits, provided that any reduction in Base Salary (and any reduction in the dollar amount of the Executives Targeted Incentive Bonus opportunity resulting from such reduction in Base Salary) that is related to a cross-executive team base salary reduction shall not constitute Good Reason; (B) a material reduction in Executives title, duties, or responsibilities or change in reporting line; provided that a reassignment following a Corporate Transaction to a position that is substantially similar to the position held prior to the Corporate Transaction shall not constitute a material reduction in job responsibilities or duties; (C) a relocation of Executives primary work location that increases Executives one-way commute by more than fifty (50) miles; (D) failure of the successor company to assume obligations contained in any equity compensation agreement in place between Executive and the Company at the time of the Corporate Transaction; (F) any written directive given to Executive by the Board that is in conflict with Executives professional medical obligations or otherwise in violation of applicable law or regulation, in all cases, of which the Board has knowledge of such obligations or law or regulation prior to the issuance of such directive; or (G) the Companys material breach of any equity compensation agreement in place between Executive and the Company or this Agreement; provided, however, that no such event or condition shall constitute Good Reason unless (i) the Executive gives the Company a written notice of termination for Good Reason not more than ninety (90) days after the initial existence of the condition, (ii) the grounds for termination (if susceptible to correction) are not corrected by the Company within thirty (30) days of its receipt of such notice, and (iii) the Termination Date occurs within ninety (90) days following the Companys receipt of such notice.
(v) IPO means the effective date of the registration statement on Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Companys Common Stock.
(d) Benefits Continuation.
(i) COBRA. If the Executives employment is terminated pursuant to Section 3(b) and provided that the Executive is eligible for and elects to continue receiving group health and dental insurance pursuant to the federal COBRA law, 29 U.S.C. § 1161 et seq., the Company will, for an eighteen (18)-month period following the Payment Commencement Date (the Benefits Continuation Period), continue to pay the share of the premium for such coverage that is paid by the Company for active and similarly situated employees who receive the same type of coverage. The remaining balance of any premium costs shall be paid by the Executive on a monthly basis for as long as, and to the extent that, the Executive remains eligible for COBRA continuation.
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(ii) Special Cash Payments. If the Company determines, in its sole discretion, that it cannot pay its share of the COBRA premiums without a substantial risk of violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company instead shall pay to Executive, on the first day of each calendar month, a fully taxable cash payment equal to the Companys share of the applicable COBRA premiums for that month, subject to applicable tax withholdings, for the remainder of the Benefits Continuation Period.
(iii) Alternative Eligibility. The above notwithstanding, in the event the Executive becomes eligible for health insurance benefits from a new employer during the Benefits Continuation Period, the Companys obligations under this Section 3(d) shall immediately cease and the Executive shall not be entitled to any additional monthly premium payments for health insurance coverage. Similarly, in the event the Executive becomes eligible for dental insurance benefits from a new employer during the Benefits Continuation Period, the Companys obligations under this Section 3(d) shall immediately cease and the Executive shall not be entitled to any additional monthly premium payments for dental insurance benefits. The Executive hereby represents that Executive will notify the Company in writing within three (3) days of becoming eligible for health or dental insurance benefits from a new employer during the Benefits Continuation Period.
(e) Death. This Agreement shall automatically terminate upon the death of the Executive and all monetary obligations of Company under Section 3 of this Agreement shall be prorated to the Termination Date and paid to the Executives estate.
(f) Disability. The Company may terminate the Executives employment for Disability if the Executive is unable, due to a physical or mental impairment, to perform the essential functions of the Executives job position, with or without reasonable accommodation, for a period of ninety (90) consecutive calendar days, or for at least sixty-five (65) business days within a twelve (12)-month period, provided that the Company shall terminate for Disability only in compliance with the Family Medical Leave Act, and the Americans with Disabilities Act. Any dispute regarding the existence of Disability shall be resolved by a panel of three (3) physicians, which shall consist of one physician selected by the Company, one physician selected by the Executive, and one physician selected by such other two physicians. A termination of employment pursuant to this Section 3(f) shall constitute a termination for Cause.
4. Acceleration of Vesting Following a Corporate Transaction. If on the date twenty-four (24) months immediately following the consummation of any Corporate Transaction the Executive is providing services to the acquiring company (or its subsidiaries or parent) as either an employee or a consultant, then one hundred percent (100%) of the Executives outstanding Company equity awards that remain unvested shall vest, effective as of the second anniversary of the Corporate Transaction subject to the execution of a Release and it becoming effective.
5. At-Will Employment. The Executive will continue to be an at-will employee of the Company, which means the employment relationship can be terminated by either the Executive or the Company for any reason, at any time, with or without prior notice and with or without Cause or Good Reason. The Company makes no promise that the Executives employment will continue for any particular period of time, nor is there any promise that it will be terminated only under particular circumstances. No raise or bonus, if any, shall alter the Executives status as an at-will employee or create any implied contract of employment. Discussion of possible or potential benefits in future years is not an express or implied promise of continued employment. No manager, supervisor or officer of the Company has the authority to change the Executives status as an at-will employee. The at-will nature of the employment relationship with the Executive can only be altered by a written agreement signed by the Executive and an authorized member of the Board.
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6. Director and Officer Liability Insurance; Indemnification. During the Executives employment hereunder, the Executive shall be entitled to the same indemnification and director and officer liability insurance as the Company and its affiliates maintain for other corporate officers.
7. Employee Confidential Information and Inventions Assignment Agreement. The Executive shall execute and deliver the Companys standard Employee Confidential Information and Inventions Assignment Agreement set forth as Exhibit B hereto.
8. Attention to Duties; Conflict of Interest. Except with the prior written consent of the Company, the Executive will not while employed by the Company undertake or engage in any other employment, occupation or business enterprise, other than (i) ones in which the Executive is a passive investor or (ii) ones that do not materially interfere with the performance of Executives duties hereunder. The Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of Executives duties hereunder. The Company has consented to the Executives pursuit of the external obligations set forth in Exhibit C hereto, provided, however, that such activities do not materially interfere with the performance of the Executives duties under this Agreement, are not competitive with the Companys business, and do not cause a conflict of interest (any such issue an External Conflict). The existence of an External Conflict shall be determined in the sole discretion of the Board, based upon a reasonable discussion of the potential issue with the Executive. Upon written notice of the Companys withdrawal of consent to external activities because of an External Conflict, the Executive shall cease the external activities either immediately (in the case of competition or conflict of interest), or within a reasonable period not longer than thirty (30) days, otherwise further pursuit of such external activities shall be deemed Cause for termination under Section 3(c)(iii)(F). Other than those set forth in Exhibit C, the Executive represents that the Executive has no other outstanding commitments inconsistent with any of the terms of this Agreement or the services to be rendered to the Company. While employed by the Company, the Executive shall not, directly or indirectly, whether as a partner, employee, creditor, shareholder, or otherwise, promote, participate or engage in any activity or other business competitive with the Companys business. The Executive shall not invest in any company or business which competes in any manner with the Company, except as a passive investor, and for so long as Executives direct holdings in any one such corporation shall not in the aggregate constitute more than two and a half percent (2.5%) of the voting stock of such corporation.
9. General Provisions.
(a) Severability. If any provision of this Agreement shall be found by any court of competent jurisdiction to be invalid or unenforceable, then the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable and to the extent that to do so would not deprive one of the parties of the substantial benefit of its bargain. Such provision shall, to the extent allowable by law and the preceding sentence, be modified by such court so that it becomes enforceable and, as modified, shall be enforced as any other provision hereof, all the other provisions continuing in full force and effect.
(b) No Waiver. The failure by either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way affect the right to require such performance or compliance at any time thereafter. The waiver by either party of a breach of any provision hereof shall not be taken or held to be a waiver of any preceding or succeeding breach of such provision or as a waiver of the provision itself. No waiver of any kind shall be effective or binding, unless it is in writing and is signed by the party against whom such waiver is sought to be enforced.
(c) Assignment. This Agreement and all rights hereunder are personal to the Executive and may not be transferred or assigned by the Executive at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate or successor, or in connection with any sale, transfer or other disposition of all or substantially all of its business and assets; provided, however, that any such assignee assumes the Companys obligations hereunder.
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(d) Withholding. All sums payable to the Executive hereunder shall be reduced by all federal, state, local and other withholding and similar taxes and payments required by applicable law.
(e) Entire Agreement. This Agreement, including the exhibits and agreements referred to herein (which are deemed incorporated by reference herein) constitute the entire and only agreement and understanding between the parties governing the terms and conditions of employment of the Executive with the Company and this Agreement supersedes and cancels any and all previous contracts, arrangements or understandings governing the terms and conditions of the Executives employment by the Company. In the event of any conflict between the terms of any other agreement between the Executive and the Company entered into prior to the Effective Date, the terms of this Agreement shall control.
(f) Amendment. This Agreement may be amended, modified, superseded, cancelled, renewed or extended only by an agreement in writing executed by both parties hereto.
(g) Headings. The headings contained in this Agreement are for reference purposes only and shall in no way affect the meaning or interpretation of this Agreement. In this Agreement, the singular includes the plural, the plural included the singular, the masculine gender includes both male and female references, and the word or is used in the inclusive sense.
(h) Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including, personal delivery by overnight courier, facsimile transmission, or the third day after mailing by first class mail) to the Company at its primary office location and to the Executive at Executives address as listed on the Company payroll (which address may be changed by written notice).
(i) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which, taken together, constitute one and the same agreement.
(j) Governing Law, Forum Selection. This Agreement and the rights and obligations of the parties hereto shall be construed in accordance with the laws of the State of California without giving effect to the principles of conflict of laws. Any action, suit or other legal proceeding that is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be commenced only in a state or federal court located in Santa Clara County, California, and the Company and the Executive each consents to the jurisdiction of such a court.
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IN WITNESS WHEREOF, the Company and the Executive have executed this Executive Employment Agreement as of the date first above written.
KODIAK SCIENCES INC. | ||
By: | /s/ Felix Baker | |
Felix Baker, Ph.D. Board member |
VICTOR PERLROTH, M.D.: |
/s/ Victor Perlroth |
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EXHIBIT A
PAYMENTS SUBJECT TO SECTION 409A
1. Subject to this Exhibit A, any severance payments and benefits that may be due under the Agreement shall begin only upon the date of the Executives separation from service (determined as set forth below) which occurs on or after the termination of the Executives employment. The following rules shall apply with respect to distribution of the severance payments and benefits, if any, to be provided to the Executive under the Agreement, as applicable:
(a) It is intended that each installment of the severance payments and benefits under the Agreement provided under shall be treated as a separate payment for purposes of Section 409A. Neither the Company nor the Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.
(b) If, as of the date of the Executives separation from service from the Company, the Executive is not a specified employee (within the meaning of Section 409A), then each installment of the severance payments or benefits shall be made on the dates and terms set forth in the Agreement.
(c) If, as of the date of the Executives separation from service from the Company, the Executive is a specified employee (within the meaning of Section 409A), then:
(i) Each installment of the severance payments and benefits due under the Agreement that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when the Executives separation from service occurs, be paid within the short-term deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A and shall be paid at the time set forth in the Agreement; and
(ii) Each installment of the severance payments and benefits due under the Agreement that is not described in this Exhibit A, Section 1(c)(i) and that would, absent this subsection, be paid within the six-month period following the Executives separation from service from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, the Executives death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following the Executives separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of payments and benefits if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of the Executives second taxable year following the taxable year in which the separation from service occurs.
2. The determination of whether and when the Executives separation from service from the Company has occurred shall be made and in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely for purposes of this Exhibit A, Section 2, Company shall include all persons with whom the Company would be considered a single employer under Section 414(b) and 414(c) of the Code.
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3. The Company makes no representation or warranty and shall have no liability to the Executive or to any other person if any of the provisions of the Agreement (including this Exhibit) are determined to constitute deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section.
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EXHIBIT B
EMPLOYEE CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT
In consideration of my employment or continued employment by Kodiak Sciences Inc., its subsidiaries, parents, affiliates, successors and assigns (together Company), and the compensation paid to me now and during my employment with Company, I hereby enter into this Employee Confidential Information and Invention Assignment Agreement (the Agreement) and agree as follows:
CALIFORNIA
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CALIFORNIA
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CALIFORNIA
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CALIFORNIA
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CALIFORNIA
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CALIFORNIA
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This Agreement will be effective as of September 6, 2018.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE COMPLETELY FILLED OUT EXHIBIT 1 TO THIS AGREEMENT.
/s/ John Borgeson | 9/21/2018 | |||
John Borgeson | Date | |||
SUP and CFO | ||||
ACCEPTED AND AGREED TO: |
By: | /s/ Victor Perlroth | 9/21/2018 | ||||
Victor Perlroth, M.D. | Date |
CALIFORNIA
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EXHIBIT 1
EXCLUDED INVENTIONS
TO: | Kodiak Sciences Inc. (Company) | |
FROM: | Victor Perlroth, M.D. | |
DATE: | September 6, 2018 | |
SUBJECT: | Excluded Inventions (See Section 2.2 of the Agreement) |
I. | Disclosable Excluded Inventions. Except as listed in Section II below, the following is a complete list describing all existing Inventions, if any, that may relate to Companys business or actual or demonstrably anticipated research or development and that were made by me or acquired by me prior to the commencement of my employment with, and which are not to be assigned to Company: |
☒ | No inventions or improvements. |
☐ | See below: |
☐ | Additional sheets attached. |
II. | Confidential Excluded Inventions. Due to a prior confidentiality agreement, I cannot complete the disclosure under Section I above with respect to inventions or improvements generally listed below, the intellectual property rights and duty of confidentiality with respect to which I owe to the following party(ies): |
Invention or Improvement | Party(ies) | Relationship |
1. | ||||||||||||
2. | ||||||||||||
3. |
☐ | Additional sheets attached. |
III. | Limited Exclusion Notification. |
NOTICE REQUIRED BY CALIFORNIA LABOR CODE SECTION 2872:
This is to notify you in accordance with Section 2872 of the California Labor Code, as set forth in Attachment 1, that the foregoing Agreement between you and Company does not require you to assign or offer to assign to Company any Invention that you develop entirely on your own time without using Companys equipment, supplies, facilities or trade secret information, except for those Inventions that either:
a. | Relate at the time of conception or reduction to practice to Companys business, or actual or demonstrably anticipated research or development; or |
b. | Result from any work performed by you for Company. |
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To the extent a provision in the foregoing Agreement purports to require you to assign an Invention otherwise excluded from the preceding paragraph, the provision is against the public policy of this state and is unenforceable.
This limited exclusion does not apply to any patent or Invention covered by a contract between Company and the United States or any of its agencies requiring full title to such patent or Invention to be in the United States.
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Attachment 1
California Labor Code Provisions
Section 2870. (a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employers equipment, supplies, facilities, or trade secret information except for those inventions that either:
(1) Relate at the time of conception or reduction to practice of the invention to the employers business, or actual or demonstrably anticipated research or development of the employer; or
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.
Section 2871. No employer shall require a provision made void and unenforceable by Section 2870 as a condition of employment or continued employment. Nothing in this article shall be construed to forbid or restrict the right of an employer to provide in contracts of employment for disclosure, provided that any such disclosures be received in confidence, of all of the employees inventions made solely or jointly with others during the term of his or her employment, a review process by the employer to determine such issues as may arise, and for full title to certain patents and inventions to be in the United States, as required by contracts between the employer and the United States or any of its agencies.
Section 2872. If an employment agreement entered into after January 1, 1980, contains a provision requiring the employee to assign or offer to assign any of his or her rights in any invention to his or her employer, the employer must also, at the time the agreement is made, provide a written notification to the employee that the agreement does not apply to an invention which qualifies fully under the provisions of Section 2870. In any suit or action arising thereunder, the burden of proof shall be on the employee claiming the benefits of its provisions.
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EXHIBIT 2
SECTION 7 OF THE DEFEND TRADE SECRETS ACT OF 2016
. . . An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that(A) is made(i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. . . . An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual(A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.
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EXHIBIT C
PERMITTED EXTERNAL ACTIVITIES
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