Offer Letter by and between the Registrant and Stephen Hill, dated May 9, 2019
May 9, 2019
Offer of Employment by Lyell Immunopharma, Inc.
I am very pleased to confirm our offer to you of employment with Lyell Immunopharma, Inc. (the Company). I am delighted to offer you a position as Chief Technical Operations Officer at Lyell Immunopharma, Inc. The opportunity to work with you to build one of the worlds great companies whose goal is nothing less than to develop curative therapies for solid tumors is one I am thrilled to have and know that your contributions will help ensure that we will achieve our ambitions. Your proposed start date is Wednesday June 19, 2019. You will report to Liz Homans, President. You will be based out of our Seattle, WA office. The terms of our offer and the benefits currently provided by the Company are as follows:
1. Cash Compensation.
(a) Starting Salary. Your starting salary will be four hundred twenty-five thousand dollars ($425,000) year and will be subject annual review.
(b) Sign-on Bonus Advance. The Company will pay you a Sign-On bonus advance of three hundred thousand dollars ($300,000), less applicable tax and other withholding within thirty (30) days after your start date. The Sign-On Bonus Advance will be advanced, and will not be earned until you have completed three (3) years of employment with the Company. Your acceptance of the signing bonus constitutes your agreement to repay the full amount of the signing bonus within thirty (30) days of your termination date if you resign your employment with the Company for any reason, or are terminated by the Company for Cause, prior to completing three (3) years of service.
(c) Target Annual Bonus. In addition, you will be eligible for an incentive bonus of 50% of your base salary for the fiscal year of the Company during which you commence employment, based on the achievement of performance objectives to be determined by the Companys Board of Directors (the Board). Your bonus for the fiscal year in which your employment began will not be prorated, and you will be eligible for the full bonus. Thereafter, you will be eligible to receive an annual bonus in such amount and upon such terms as shall be determined by the Board. Any bonus for a fiscal year will be considered earned and paid within 3 months after the close of that fiscal year, but only if you are still employed by the Company at the time of payment. The determinations of the Board with respect to your bonus will be final and binding.
(d) Relocation Support.
(i) You are also eligible to receive relocation reimbursement of up to one hundred thousand dollars ($100,000) per the terms of the attached Lyell Officer relocation overview (the Lyell Officer Relocation Overview). The relocation reimbursement is intended to offset the costs of your relocation to Seattle as described in the Lyell Officer Relocation Overview.
(ii) Should you resign your employment for any reason, or should the Company terminate your employment for Cause within twelve (12) months after your first day of employment, you agree to reimburse the Company 100% of the relocation reimbursement paid to you; should you resign your employment for any reason, or should the Company terminate your employment for Cause between twelve (12) and twenty-four (24) months after your first day of employment, you agree to reimburse the Company 50% of the relocation reimbursement paid to you; and further agree that the Company may deduct such amount from your final paycheck to the fullest extent permitted by law.
(iii) If you are required to repay the relocation reimbursement or any portion thereof to the Company, you will be required to repay the gross amount, which includes amounts withheld for taxes and any other applicable payroll deductions. You also understand that your ability to deduct a portion of your relocation costs is subject to specific limits and other IRS requirements, including the requirement that you must be able to substantiate your expenses by keeping copies of your receipts. You understand that if you are audited by the IRS or any State Tax Agency, you alone and not the Company will be liable for any taxes, interest, or penalties due if any of the deductions are denied for any reason, including if you fail to keep copies of receipts. You understand that you cannot rely on the Company or any employee of the Company for advice regarding the proper tax treatment of your relocation reimbursements, and that you are responsible for obtaining independent advice from your own personal tax advisor.
2. Benefits. In addition, you will be eligible to participate in regular health insurance, bonus and other employee benefit plans established by the Company for its employees from time to time.
The Company reserves the right to change or otherwise modify, in its sole discretion, the preceding terms of employment.
3. Termination of Employment Without Cause or for Good Reason.
(a) If (1) the Company terminates your employment without Cause, or (2) you resign for Good Reason (each, as defined on Appendix A hereto), then you shall receive the following termination payments and benefits:
(i) an amount equal to twelve (12) months salary, at the rate in effect immediately prior to termination, payable in accordance with the terms below (collectively, the Severance Payments);
(ii) (1) unpaid Salary earned through the date of termination, (2) unused vacation that has accrued and would be payable under the Companys standard policy ((1) and (2), collectively, the Accrued Obligations), and (3) any discretionary bonus that the Company had determined to pay to you but which had not yet been paid to you as of the date of your termination, payable in a lump sum on the next regularly scheduled payroll date following the date on which your employment terminated; and
(iii) the employer portion of COBRA continuation coverage, so long as you have not become actually covered by the medical plan of a subsequent employer during any such month and are otherwise entitled to COBRA continuation coverage, with such payments for up to a maximum of twelve (12) months following the date of termination. After such period, you are responsible for paying the full cost for any additional COBRA continuation coverage to which you are then entitled.
(b) As a condition to receiving the payments and benefits under this Section 3 other than the Accrued Obligations, You shall timely execute (and not revoke within the applicable revocation period) a general release and waiver of all claims against the Company, which release and waiver shall be in substantially the form attached hereto as Appendix B. Such release and waiver shall be delivered to the Company (or, with respect to a Change in Control, any surviving or successor employer (Successor Employer) thereto) and become effective and irrevocable within sixty (60) days after the date of termination.
(c) Notwithstanding anything herein, including Appendix A, to the contrary, termination of employment by you will not be for Good Reason unless (1) you notify the Company in writing of the existence of the condition which you believe constitutes Good Reason within thirty (30) days of the initial existence of such condition (which notice specifically identifies such condition), (2) the Company fails to remedy such condition within thirty (30) days after the date on which it receives such notice (the Remedial Period), and (3) you actually terminate employment within thirty (30) days after the expiration of the Remedial Period and before the Company remedies such condition. If you terminate employment before the expiration of the Remedial Period or after the Company remedies the condition (even if after the end of the Remedial Period), then your termination will not be considered to be for Good Reason. Notwithstanding anything herein to the contrary, termination of your employment shall not be for Cause unless the Company notifies you in writing within ten (10) days of the date of termination that your termination was for Cause.
(d) Subject to Section 3(b), Severance Payments under Section 3(a)(i) shall be paid to you through the Companys normally scheduled payroll, beginning with the first payroll period following the 60th day after the date on which your employment was terminated without Cause or you resigned for Good Reason.
4. Confidentiality. As an employee of the Company, you will have access to certain confidential information of the Company and you may, during the course of your employment, develop certain information or inventions that will be the property of the Company. To protect the interests of the Company, you will need to sign the Companys standard Employee Invention Assignment and Confidentiality Agreement as a condition of your employment. We
wish to impress upon you that we do not want you to, and we hereby direct you not to, bring with you any confidential or proprietary material of any former employer or to violate any other obligations you may have to any former employer. During the period that you render services to the Company, you agree to not engage in any employment, business or activity that is in any way competitive with the business or proposed business of the Company. You will disclose to the Company in writing any other gainful employment, business or activity that you are currently associated with or participate in that competes with the Company. You will not assist any other person or organization in competing with the Company or in preparing to engage in competition with the business or proposed business of the Company.
5. No Breach of Obligations to Prior Employers. You represent that your signing of this offer letter, agreement(s) concerning stock options granted to you, if any, under the Plan (as defined below) and the Companys Employee Invention Assignment and Confidentiality Agreement and your commencement of employment with the Company will not violate any agreement currently in place between yourself and current or past employers.
6. Equity Grant. We will recommend to the Board of Directors of the Company that you be granted a stock option to purchase up to 500,000 shares of Common Stock of the Company (the Option). The Option will be granted under the Companys 2018 Equity Incentive Plan (the Plan) and associated form of stock option agreement, and will have an exercise price equal to the fair market value of the Companys Common Stock, as determined by the Board of Directors on the date the Board approves each Option, as applicable. The Option will vest at the rate of twenty five percent (25%) of the shares at the end of your first anniversary with the Company, and an additional 1/48th of the shares per month thereafter, so long as you remain employed by the Company. In addition, if your employment is terminated without Cause, or you resign for Good Reason, in each case within twelve (12) months after a Change in Control (each, as defined on Appendix A hereto), 100% of the then-unvested shares under the Option shall immediately vest. However, the grant of such option by the Company is subject to the Boards approval and this promise to recommend such approval is not a promise of compensation and is not intended to create any obligation on the part of the Company. Further details on the Plan and any specific option grant to you will be provided upon approval of such grant by the Companys Board of Directors.
7. At Will Employment. While we look forward to a long and profitable relationship, should you decide to accept our offer, you will be an at-will employee of the Company, which means the employment relationship can be terminated by either of us for any reason, at any time, with or without prior notice and with or without cause. Any statements or representations to the contrary (and, indeed, any statements contradicting any provision in this letter) should be regarded by you as ineffective. Further, your participation in any stock option or benefit program is not to be regarded as assuring you of continuing employment for any particular period of time. Any modification or change in your at will employment status may only occur by way of a written employment agreement signed by you and the Chief Executive Officer of the Company.
8. Authorization to Work. Please note that because of employer regulations adopted in the Immigration Reform and Control Act of 1986, within three (3) business days of starting your new position you will need to present documentation demonstrating that you have authorization to work in the United States. If you have questions about this requirement, which applies to U.S. citizens and non-U.S. citizens alike, you may contact our personnel office.
9. Arbitration. You and the Company agree to submit to mandatory binding arbitration any and all claims arising out of or related to your employment with the Company and the termination thereof, including, but not limited to, claims for unpaid wages, wrongful termination, torts, stock or stock options or other ownership interest in the Company, and/or discrimination (including harassment) based upon any federal, state or local ordinance, statute, regulation or constitutional provision (collectively, Arbitrable Claims).
THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS.
This Agreement does not restrict your right to file administrative claims you may bring before any government agency where, as a matter of law, the parties may not restrict the employees ability to file such claims (including, but not limited to, the National Labor Relations Board, the Equal Employment Opportunity Commission and the Department of Labor). However, the parties agree that, to the fullest extent permitted by law, arbitration shall be the exclusive remedy for the subject matter of such administrative claims. The arbitration shall be conducted in Santa Clara County, California through JAMS before a single neutral arbitrator, in accordance with the JAMS employment arbitration rules then in effect. The JAMS rules may be found and reviewed at http://www.jamsadr.com/rules-employment-arbitration. If you are unable to access these rules, please let me know and I will provide you with a hardcopy. The arbitrator shall issue a written decision that contains the essential findings and conclusions on which the decision is based.
10. Background Check. This offer is contingent upon a satisfactory verification of criminal, education, driving and/or employment background. This offer can be rescinded based upon data received in the verification.
11. Entire Agreement. This offer, once accepted, constitutes the entire agreement between you and the Company with respect to the subject matter hereof and supersedes all prior offers, negotiations and agreements, if any, whether written or oral, relating to such subject matter. You acknowledge that neither the Company nor its agents have made any promise, representation or warranty whatsoever, either express or implied, written or oral, which is not contained in this agreement for the purpose of inducing you to execute the agreement, and you acknowledge that you have executed this agreement in reliance only upon such promises, representations and warranties as are contained herein
12. Acceptance. This offer will remain open until May 16, 2019. If you decide to accept our offer, and I hope you will, please sign the enclosed copy of this letter in the space indicated and return it to me. Your signature will acknowledge that you have read and understood and agreed to the terms and conditions of this offer letter and the attached documents, if any. Should you have anything else that you wish to discuss, please do not hesitate to call me.
We look forward to the opportunity to welcome you to the Company.
|Very truly yours,|
|Rick Klausner, CEO|
I have read and understood this offer letter and hereby acknowledge, accept and agree to the terms as set forth above and further acknowledge that no other commitments were made to me as part of my employment offer except as specifically set forth herein.
Capitalized terms used below that are not defined in this Appendix A have the meanings set forth in the offer letter (the Agreement) between you (Executive) and the Company, to which this Appendix A is attached. As used in the Agreement:
1. Cause means:
(a) Executive is indicted for, convicted of, or pleads guilty or nolo contendere to, a felony or crime involving moral turpitude;
(b) Executive engages in conduct that constitutes willful gross negligence, willful misconduct, or unsatisfactory performance in carrying out the Executives duties under this Agreement, and, if curable, such breach remains uncured following fifteen (15) days prior written notice given by the Company to the Executive specifying such conduct;
(c) Executive has breached any covenant or any material provision of any agreement with the Company, including among other things, a willful and material breach of written Company policy, and, if curable, such breach remains uncured following fifteen (15) days prior written notice specifying such breach given by the Company to the Executive;
(d) Executives material violation of federal law or state law that the Board reasonably determines has had or is reasonably likely to have a material detrimental effect on the Companys reputation or business;
(e) Executives act of fraud or dishonesty in the performance of the Executives job duties.
2. Change in Control means any transaction or series of related transactions pursuant to which any individual or entity acquires (a) more than fifty percent (50%) of the issued and outstanding equity securities of the Company or (b) all or substantially all of the assets of the Company (in either case, whether by merger, consolidation, sale, exchange, issuance, transfer or redemption of the Companys equity securities by sale, exchange or transfer of the Companys consolidated assets or otherwise).
3. Good Reason means:
(a) that Executive, without Executives express, written consent, has incurred a material reduction in authority, title, duties or responsibilities at the Company or a successor employer (with respect to a termination in connection with a Change in Control, relative to Executives authority, title, duties or responsibilities immediately prior to the Change in Control); including without limitation any requirement that Executive report to any person(s) other than the Board;
(b) that Executive, without Executives express, written consent, has suffered a material breach of this Agreement by the Company or a successor employer;
(c) that Executive, without Executives express, written consent, has been required to relocate or travel more than fifty (50) miles from Executives then current place of employment in order to continue to perform the duties and responsibilities of Executives position (not including customary travel as may be required by the nature of Executives position);
(d) that Executive, without Executives express, written consent, has incurred a material reduction of work space designed to cause Executive to resign, other than a reduction in work space generally applicable to all senior executives of the Company;
(e) that Executive, without Executives express, written consent, has been directed by the Board to violate knowingly and intentionally any material state, federal or foreign law, rule or regulation applicable to the Company.
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FORM OF RELEASE
In consideration for the payments and benefits to be provided pursuant to Section 3 of the offer letter (the Agreement) entered into by and between Stephen Hill (Executive) and Lyell Immunopharma, Inc., a Delaware corporation (the Company), with an effective date of June 19, 2019, Executive agrees to the following:
(a) Executive represents that Executive has not filed any complaints, charges or lawsuits against the Company with any governmental agency or any court.
(b) Executive expressly waives all claims, whether known or unknown, against the Company and releases the Company, and any of the Companys past, present or future parent, affiliated, related, and/or subsidiary entities, and all of the past and present directors, stockholders, officers, general or limited partners, employees, agents, and attorneys, and agents and representatives of such entities, and employee benefit plans in which Executive is or has been a participant by virtue of his or her employment with the Company (collectively, the Releasees), from any and all claims, debts, demands, accounts, judgments, rights, causes of action, equitable relief, damages, costs, charges, complaints, obligations, promises, agreements, controversies, suits, expenses, compensation, responsibility and liability of every kind and character whatsoever (including attorneys fees and costs), whether in law or equity, known or unknown, asserted or unasserted, suspected or unsuspected (collectively, Claims), including but not limited to claims arising from the California Constitution; Title VII of the Civil Rights Act of 1964 (42 U.S.C. §2000e); Sections 1981 through 1988 of Title 42 of the United States Code; the California Fair Employment and Housing Act (Cal. Govt. Code §12900 et seq.); the Americans with Disabilities Act; the Age Discrimination in Employment Act (29 U.S.C. §§621-633a) (ADEA); the Older Workers Benefit Protection Act; Section 132a of the California Labor Code; The Employee Retirement Income Security Act of 1974 (ERISA) (except for any vested benefits under any tax qualified benefit plan); the Immigration Reform and Control Act; The Worker Adjustment and Retraining Notification Act; the Fair Credit Reporting Act; the Family Medical Leave Act; any claims under California or other state laws, and any other federal, state or local law, rule, regulation or ordinance; any public policy, contract, tort or common law; or, any basis for recovering costs, fees, or other expenses including attorneys fees; and claims of intentional infliction of emotional distress; breach of implied contract; or any other statute or common law principle of similar effect, known or unknown, which Executive now has, owns, or holds, or claims to have, own or hold, or which Executive at any time heretofore had, owned, or held, or claimed to have, own, or hold or which Executive at any time hereinafter may have, own, or hold, or claim to have, own, or hold, against each or any of Executives Releasees, including without limitation claims of wrongful discharge, breach of express or implied contract, fraud, misrepresentation, defamation, or liability in tort, and claims of any kind that may be brought in any court or administrative agency, arising from acts, events, or circumstances occurring on or before the date of this Agreement. (the Release); provided, however, notwithstanding anything to the contrary set forth herein, that this Release shall not extend to (i) benefit claims under employee pension benefit plans in which Executive is a participant by virtue of Executives employment with the Company or its subsidiaries or to benefit claims under employee welfare benefit plans for occurrences (e.g., medical care, death, or onset of disability) arising after the execution of this Release by Executive, (ii) Executives rights under any stock option or other equity incentive agreement between Executive and Company (or any successor thereto) or under the stock option plans of the Company (or any successor thereto), (iii) any rights to ownership as a stockholder of the Company (or any successor thereto); (iv) Executives rights under the Agreement; (v) any rights pursuant to an agreement entered into in connection with a Change in Control (as defined in the Agreement) (including, without limitation, agreements entered into between the Company and any acquirer of the Company) or otherwise accruing to Executive as a result of, or related to a Change in Control, (vi) any claims Executive may have for indemnification pursuant to the Companys certificate of incorporation, bylaws, law, contract or Company policy, (vii) any claims for coverage under any
applicable directors and officers insurance policy in accordance with the terms of such policy, or (viii) any claims arising from events that occur solely after the date Executive signs this Release. Nothing in this Release precludes Executive from entitlement to any monetary recovery awarded by the Securities and Exchange Commission in connection with any action asserted by the Securities and Exchange Commission.
California Civil Code Section 1542 Waiver. Executive expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the California Civil Code, and to the extent applicable any similar laws or statutes of any and all other States, and does so understand and acknowledge the significance and consequence of such specific waiver of Section 1542 of the California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
Immunity under the Defend Trade Secrets Act of 2016. The federal Defend Trade Secrets Act of 2016 provides immunity in certain circumstances to Company employees, contractors, and consultants for limited disclosures of Company trade secrets. Specifically, Company employees, contractors, and consultants may disclose trade secrets:
in confidence, either directly or indirectly, to a Federal, State, or local government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or
in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
Additionally, Company employees, contractors, and consultants who file retaliation lawsuits for reporting a suspected violation of law may also use and disclose related trade secrets in the following manner:
the individual may disclose the trade secret to his/her attorney, and
the individual may use the information in related court proceeding, as long as the individual files documents containing the trade secret under seal, and does not otherwise disclose the trade secret except pursuant to court order.
Executive understands that this Release includes a release of claims arising under the Age Discrimination in Employment Act (ADEA). Executive understands and warrants that Executive has been given a period of twenty-one (21) days to review and consider this Release or forty-five (45) days if Executives termination is part of a group reduction in force. Executive further warrants that Executive understands that, with respect to the release of age discrimination claims only, Executive has a period of seven days (7) after execution of this Release to revoke the release of age discrimination claims by notice in writing to the Company.
EXECUTIVE ACKNOWLEDGES ALL OF THE FOLLOWING:
(A) I HAVE CAREFULLY READ AND HAVE VOLUNTARILY SIGNED THIS RELEASE;
(B) I FULLY UNDERSTAND THE FINAL AND BINDING EFFECT OF THIS RELEASE, INCLUDING THE WAIVER OF CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT; AND
(C) PRIOR TO SIGNING THIS RELEASE, I HAVE BEEN ADVISED OF MY RIGHT TO CONSULT, AND HAVE BEEN GIVEN ADEQUATE TIME TO REVIEW MY LEGAL RIGHTS WITH AN ATTORNEY OF MY CHOICE.
|Executive Name (Print)|