Exhibit 10.2

 

[g193331kki001.jpg]

 

September 20, 2013

 

John Poyhonen

6645 Santolina Court

San Diego, CA 92130

 

Dear John:

 

This letter will reflect the terms of your ongoing employment with Senomyx, Inc.
(the “Company”) following your promotion to the position of Chief Executive
Officer of the Company following the retirement of Kent Snyder.  Following your
promotion, you will also continue to serve as the Company’s President.  The
following terms apply and will constitute your employment agreement with the
Company (the “Agreement”).

 

1.                                      EMPLOYMENT.

 

1.1          Term.  The term of this Agreement shall begin on your first day in
your new role as Chief Executive Officer, currently anticipated to be on or
about January 2, 2014 (your “Promotion Date”), and shall continue until
terminated in accordance with Section 4 herein.

 

1.2          Title.  You shall have the title of President and Chief Executive
Officer and shall report to the Company’s Board of Directors (the “Board”).  You
shall serve in such other capacity or capacities as the Company may from time to
time prescribe.

 

1.3          Duties.  You shall do and perform all services, acts or things
necessary or advisable to manage and conduct the business of the Company and
which are normally associated with the position of President and Chief Executive
Officer, consistent with the bylaws of the Company.  As a Company employee, you
will be expected to comply with Company policies and acknowledge in writing that
you have read the Company’s Employee Handbook.  The Company’s Employee Handbook
may be modified from time to time at the sole discretion of the Company.

 

1.4          Location.  Unless otherwise agreed in writing, you shall perform
services pursuant to this Agreement at the Company’s offices located in San
Diego, California, or at any other place at which the Company maintains an
office; provided, however, that the Company may from time to time require you to
travel temporarily to other locations in connection with the Company’s business.

 

--------------------------------------------------------------------------------

 

2.                                      LOYAL AND CONSCIENTIOUS PERFORMANCE;
NONCOMPETITION.

 

2.1          Loyalty.  During your employment by the Company you shall devote
your full business energies, interest, abilities and productive time to the
proper and efficient performance of your duties under this Agreement.

 

2.2          Covenant not to Compete.  Except with the prior written consent of
the Company’s Board, you will not, while employed by the Company, or during any
period during which you are receiving compensation or any other consideration
from the Company, engage in competition with the Company and/or any of its
affiliates, subsidiaries, or joint ventures currently existing or which shall be
established during your employment by the Company (collectively, “Affiliates”)
either directly or indirectly, in any manner or capacity, as adviser, principal,
agent, affiliate, promoter, partner, officer, director, employee, stockholder,
owner, co-owner, consultant, or member of any association or otherwise, in any
phase of the business of developing, manufacturing and marketing of products or
services which are in the same field of use or which otherwise compete with the
products or services or proposed products or services of the Company and/or any
of its Affiliates.

 

2.3          Agreement not to Participate in Company’s Competitors.  During your
employment by the Company, you agree not to acquire, assume or participate in,
directly or indirectly, any position, investment or interest known by you to be
adverse or antagonistic to the Company, its business or prospects, financial or
otherwise or in any company, person or entity that is, directly or indirectly,
in competition with the business of the Company or any of its Affiliates. 
Ownership by you, as a passive investment, of less than two percent (2%) of the
outstanding shares of capital stock of any corporation with one or more classes
of its capital stock listed on a national securities exchange or publicly traded
on the Nasdaq Stock Market or in the over-the-counter market shall not
constitute a breach of this paragraph.

 

3.                                      COMPENSATION.

 

3.1          Base Salary.  The Company shall pay you a base salary of five
hundred thousand dollars ($500,000) per year, less payroll deductions and all
required withholdings, payable in regular periodic payments in accordance with
Company policy.

 

3.2          Bonus.  In addition to your base salary, you will be eligible to
receive an annual discretionary bonus as determined by the Board. The target
bonus payout will be equal to sixty percent (60%) of your then current base
salary based upon your performance against specific milestones to be defined by
the Company. In addition to the compensation set forth above, you will be
eligible for your cash incentive bonus under the Company’s 2013 Executive Bonus
Plan (the “2013 Bonus Plan”), based on your target bonus of 45% of your base
salary (as in effect for the 2013 calendar year). The determination of the
actual bonus under the 2013 Bonus Plan, if any, remains subject to the final
determination by the Compensation Committee of the Board (the “Committee”) of
the Company’s corporate goal achievement as well as the Committee’s
discretionary authority under the 2013 Bonus Plan; but in any event will be
determined for you using the same methodology applied to all of the Company’s
officers (other than the target bonus amount). We anticipate that this will
occur during the first quarter of 2014 and your bonus will be paid to you at the
same time as bonuses, if any, are paid to the Company’s other officers.

 

--------------------------------------------------------------------------------

 

3.3          Stock Options.  You shall be granted, pursuant to the terms of the
Company’s  then applicable equity incentive plan (the “Plan”), an option to
purchase up to five-hundred thousand (500,000) shares of the common stock of the
Company (the “Option”).  In accordance with the Company’s Stock Option Grant
Policy, the Option shall be granted effective as of the first 15th of the month
following your Promotion Date (the “Grant Date”).  The Option shall be an
incentive stock option to the extent permitted by applicable Federal income tax
law.  The exercise price of the Option will be equal to the fair market value of
the common stock of the Company on the Grant Date (determined in accordance with
the terms of the Plan). The Option will vest over four (4) years so long as you
provide service to the company in accordance with the Plan, with twenty-five
percent (25%) of the total shares subject to the Option vesting at the end of
the one-year anniversary of the Grant Date and thereafter an additional
1/48th of the total shares subject to the Option vesting on each one-month
anniversary of the one-year anniversary of the Grant Date.  The Option will be
governed by a separate Stock Option Agreement and the Plan.

 

3.4          Employment Taxes.  All of your compensation shall be subject to
customary withholding taxes and any other employment taxes as are commonly
required to be collected or withheld by the Company.

 

3.5          Vacation; Benefits.  You will be entitled to up to thirty (30) days
of Paid Time Off per year.  In addition, you shall, in accordance with Company
policy and the terms of the applicable plan documents, be eligible to
participate in other benefits plans made available to the Company’s management
employees.

 

4.                                      TERMINATION.

 

4.1          Termination By the Company.  Your employment with the Company may
be terminated under the following conditions:

 

4.1.1       Termination for Death or Disability.  Your employment with the
Company shall terminate effective upon the date of your death or Complete
Disability.  “Complete Disability” shall mean the inability of you to perform
your duties under this Agreement because you have become permanently disabled
within the meaning of any policy of disability income insurance covering
employees of the Company then in force.  In the event the Company has no policy
of disability income insurance covering employees of the Company in force when
you become disabled, the term Complete Disability shall mean the inability of
the you to perform your duties under this Agreement by reason of any incapacity,
physical or mental, which the Board, based upon medical advice or an opinion
provided by a licensed physician acceptable to the Board, determines to have
incapacitated you from satisfactorily performing all of your usual services for
the Company for a period of at least ninety (90) days during any twelve (12)
month period (whether or not consecutive).  Based upon such medical

 

--------------------------------------------------------------------------------

 

advice or opinion, the determination of the Board shall be final and binding and
the date such determination is made shall be the date of such Complete
Disability for purposes of this Agreement.  If your employment shall be
terminated by death or Complete Disability, the Company shall pay to you, and/or
your heirs, your base salary and accrued and unused vacation benefits earned
through the date of termination at the rate in effect at the time of
termination, less standard deductions and withholdings, and the Company shall
thereafter have no further obligations to you and/or your heirs under this
Agreement.

 

4.1.2       Termination by the Company For Cause.  The Company may terminate
your employment under this Agreement for Cause.  “Cause” for the Company to
terminate your employment shall mean the occurrence of any of the following
events:

 

(i)            your substantial and repeated failure to satisfactorily perform
your job duties which in the reasonable good faith determination of the Company
demonstrates gross unfitness to serve the Company, such as continued flagrant
absences from the Company and demonstrable and substantial lapses of duty;

 

(ii)           your refusal or failure to follow lawful directions of the Board;

 

(iii)         your conviction of a felony or a crime involving moral turpitude;

 

(iv)          your engaging or in any manner participating in any activity which
is directly competitive with or injurious to the Company or any of its
Affiliates or which violates any material provisions of Section 5 hereof or your
Proprietary Information and Inventions Agreement with the Company; or

 

(v)           your commission of any fraud against the Company, its Affiliates,
employees, agents, collaborators or customers or use or intentional
appropriation for your personal use or benefit of any funds or properties of the
Company.

 

If your employment shall be terminated by the Company for Cause, the Company
shall pay the your base salary and accrued and unused vacation benefits earned
through the date of termination at the rate in effect at the time of
termination, less standard deductions and withholdings, and the Company shall
thereafter have no further obligations to you under this Agreement.

 

4.1.3       Termination by the Company Without Cause.  You shall be an at-will
employee.  The Company may terminate your employment under this Agreement at any
time and for any reason or no reason.  However, if the Company terminates your
employment without Cause (i) the Company shall pay you your base salary and
accrued and unused vacation earned through the date of termination at the rate
then in effect, less standard deductions and withholdings and (ii) the Company
shall continue to pay to you as severance, on the Company’s regular pay days and
in accordance with the Company’s normal payroll practices, your base salary then
in effect for a period of twelve (12) months following the date of termination
(subject to any delay in payment described below), less standard deductions and
withholdings; provided that in order to be eligible for said severance payments
pursuant to the foregoing clause (ii) you shall be required to execute and
deliver to the Company a release of claims substantially in the

 

--------------------------------------------------------------------------------

 

form of Exhibit A (the “Release”) within the time period specified therein, but
in no event later than forty-five days following your termination of employment
and you shall not be eligible to receive any such severance payment or
acceleration until the date on which said release shall become effective (the
“Release Effective Date”).  Notwithstanding any other payment schedule set forth
in this Agreement, none of the payments described in this Section 4.1.3 (the
“Severance Benefits”) will be paid or otherwise delivered prior to the Release
Effective Date.  On the first regular payroll pay day following the Release
Effective Date, the Company will pay you the Severance Benefits you would
otherwise have received under this Agreement on or prior to such date but for
the delay in payment related to the effectiveness of the Release, with the
balance of the Severance Benefits being paid as originally scheduled.

 

4.2          Termination By You.  As an at-will employee, you may resign your
employment at any time.  You agree to give the Company thirty (30) days advance
written notice of any such resignation, delivered to the Board.  Subject to the
terms of that certain Amended and Restated Change in Control Agreement dated
December 31, 2008, as amended from time to time(the “Change in Control
Agreement”), upon such resignation, the Company shall pay you your base salary
and accrued and unused vacation earned through the date upon which the Company,
in its sole discretion, accepts such resignation, and you shall not be entitled
to any other benefit or compensation and the Company shall have no further
obligations to you under this Agreement.

 

4.3          Termination by Mutual Agreement of the Parties.  Your employment
pursuant to this Agreement may be terminated at any time upon mutual agreement,
in writing.  Any such termination of employment shall have the consequences
specified in such writing.

 

4.4          Survival of Certain Provisions.  Sections 2.2 and 5 shall survive
the termination of this Agreement.

 

4.5          Application of Section 409A.  Notwithstanding anything to the
contrary set forth herein, any Severance Benefits that constitute “deferred
compensation” within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) and the regulations and other guidance thereunder
and any state law of similar effect (collectively “Section 409A”) shall not
commence in connection with your termination of employment unless and until you
have also incurred a “separation from service” (as such term is defined in
Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the
Company reasonably determines that such amounts may be provided to you without
causing you to incur the additional 20% tax under Section 409A. It is intended
that each installment of the Severance Benefits payments provided for in this
Agreement is a separate “payment” for purposes of Treasury Regulation
Section 1.409A-2(b)(2)(i).  For the avoidance of doubt, it is intended that
payments of the Severance Benefits set forth in this Agreement satisfy, to the
greatest extent possible, the exemptions from the application of Section 409A
provided under Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-1(b)(9). 
However, if the Company (or, if applicable, the successor entity thereto)
determines that the Severance Benefits constitute “deferred compensation” under
Section 409A and you are, on the termination of service, a “specified employee”
of the Company or any successor entity thereto, as such term is defined in

 

--------------------------------------------------------------------------------

 

Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to
avoid the incurrence of the adverse personal tax consequences under
Section 409A, the timing of the Severance Benefit payments shall be delayed
until the earlier to occur of: (i) the date that is six months and one day after
your Separation From Service, or (ii) the date of your death (such applicable
date, the “Specified Employee Initial Payment Date”), the Company (or the
successor entity thereto, as applicable) shall (A) pay to you a lump sum amount
equal to the sum of the Severance Benefit payments that you would otherwise have
received through the Specified Employee Initial Payment Date if the commencement
of the payment of the Severance Benefits had not been so delayed pursuant to
this Section and (B) commence paying the balance of the Severance Benefits in
accordance with the applicable payment schedules set forth in this Agreement.

 

5.                                      CONFIDENTIAL AND PROPRIETARY
INFORMATION; NONSOLICITATION.

 

5.1          As a condition of employment you agree to abide by the Company’s
standard Proprietary Information and Inventions Agreement.

 

5.2          While employed by the Company and for one (1) year thereafter, you
agree that in order to protect the Company’s trade secrets and confidential and
proprietary information from unauthorized use, you will not, either directly or
through others, solicit or attempt to solicit any employee, consultant or
independent contractor of the Company to terminate his or her relationship with
the Company in order to become an employee, consultant or independent contractor
to or for any other person or business entity.

 

6.                                      ASSIGNMENT AND BINDING EFFECT.

 

This Agreement shall be binding upon and inure to the benefit of you and your
heirs, executors, personal representatives, assigns, administrators and legal
representatives.  Because of the unique and personal nature of your duties under
this Agreement, neither this Agreement nor any rights or obligations under this
Agreement shall be assignable by you.  This Agreement shall be binding upon and
inure to the benefit of the Company and its successors, assigns and legal
representatives.

 

7.                                      CHOICE OF LAW.

 

This Agreement shall be construed and interpreted in accordance with the
internal laws of the State of California.

 

8.                                      INTEGRATION.

 

This Agreement, including the Change in Control Agreement, contains the
complete, final and exclusive agreement of the parties hereto relating to the
terms and conditions of your employment and the termination of your employment,
and supersedes all prior and contemporaneous oral and written employment
agreements or arrangements between the parties hereto, including, without
limitation, that certain Employment Letter Agreement dated September 8, 2003 by
and between you and the Company. To the extent this Agreement conflicts with the
Proprietary Information and Inventions Agreement, the Proprietary Information
and Inventions Agreement controls.

 

--------------------------------------------------------------------------------

 

9.                                      AMENDMENT.

 

This Agreement cannot be amended or modified except by a written agreement
signed by you and the Chairman of the Board of the Company.

 

10.                               WAIVER.

 

No term, covenant or condition of this Agreement or any breach thereof shall be
deemed waived, except with the written consent of the party hereto against whom
the wavier is claimed, and any waiver or any such term, covenant, condition or
breach shall not be deemed to be a waiver of any preceding or succeeding breach
of the same or any other term, covenant, condition or breach.

 

11.                               SEVERABILITY.

 

The finding by a court of competent jurisdiction of the unenforceability,
invalidity or illegality of any provision of this Agreement shall not render any
other provision of this Agreement unenforceable, invalid or illegal.  Such court
shall have the authority to modify or replace the invalid or unenforceable term
or provision with a valid and enforceable term or provision which most
accurately represents the intention of the parties hereto with respect to the
invalid or unenforceable term or provision.

 

12.                               INTERPRETATION; CONSTRUCTION.

 

The headings set forth in this Agreement are for convenience of reference only
and shall not be used in interpreting this Agreement.  This Agreement has been
drafted by legal counsel representing the Company, but you have been encouraged
to consult with, and have consulted with, your own independent counsel and tax
advisors with respect to the terms of this Agreement.  The parties hereto
acknowledge that each party hereto and its counsel has reviewed and revised, or
had an opportunity to review and revise, this Agreement, and any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

 

13.                               REPRESENTATIONS AND WARRANTIES.

 

You represent and warrant that you are not restricted or prohibited,
contractually or otherwise, from entering into and performing each of the terms
and covenants contained in this Agreement, and that your execution and
performance of this Agreement will not violate or breach any other agreements
between you and any other person or entity.

 

14.                               COUNTERPARTS.

 

This Agreement may be executed in two counterparts, each of which shall be
deemed an original, all of which together shall contribute one and the same
instrument.

 

15.                               LITIGATION COSTS.

 

Should any claim be commenced between the parties hereto or their personal
representatives concerning any provision of this Agreement or the rights and
duties of any person

 

--------------------------------------------------------------------------------

 

in relation to this Agreement, the party hereto prevailing in such action shall
be entitled, in addition to such other relief as may be granted to a reasonable
sum as and for that party’s attorney’s fees in such action.

 

If you accept the terms described above, please sign and date this letter in the
space provided below and return it to me no later than September 23, 2013.

 

 

Sincerely,

 

Senomyx, Inc.

 

 

 

 

 

By:

/s/ KENT SNYDER

 

 

 

 

Name:

Kent Snyder

 

 

 

Title:

Chief Executive Officer and Chairman of the Board

 

 

 

 

 

 

Agreed and Accepted:

 

 

 

/s/ JOHN POYHONEN

 

JOHN POYHONEN

 

 

 

 

 

Dated:

September 20, 2013

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

RELEASE AND WAIVER OF CLAIMS

 

In consideration of the payments and other benefits set forth in section 4.1.3
of the ongoing employment letter, dated September 20, 2013, between
Senomyx, Inc. (the “Company”) and John Poyhonen (“Employee”), to which this form
is attached, Employee hereby furnishes the Company with the following release
and waiver.

 

Employee hereby releases, and forever discharges the Company, its officers,
directors, agents, employees, stockholders, successors, assigns and affiliates,
of and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys’ fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, arising at any time prior to and
including Employee’s employment termination date with respect to any claims
relating to Employee’s employment and the termination of Employee’s employment,
including but not limited to, claims pursuant to any federal, state or local law
relating to employment, including, but not limited to, discrimination claims,
claims under the California Fair Employment and Housing Act, and the Federal Age
Discrimination in Employment Act of 1967, as amended (“ADEA”), the Federal
Americans with Disabilities Act or claims for wrongful termination, breach of
the covenant of good faith, contract claims, tort claims, and wage or benefit
claims, including but not limited to, claims for salary, bonuses, commissions,
stock, stock options, vacation pay, fringe benefits, severance pay or any form
of compensation.  Notwithstanding the above, this Release and Waiver does not
release any claims Employee may have (i) for indemnification pursuant to and in
accordance with the applicable statutes and the applicable terms of the
charters, articles of incorporation or bylaws of the Company or under any
indemnification agreements or insurance coverage, (ii) in vested pension and
retirement benefits under the terms of qualified employee pension benefit plans,
(iii) for accrued benefits under the terms of applicable employment agreements
or employee benefit plans, and (iv) for any claims under any state Workers’
Compensation laws and any state unemployment benefits laws.

 

Employee also acknowledges that Employee has read and understood Section 1542 of
the California Civil Code which reads as follows:  “A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.”  Employee hereby expressly
waives and relinquishes all rights and benefits under that section and any law
of any jurisdiction of similar effect with respect to any claims Employee may
have against the Company.

 

Employee acknowledges that, among other rights, Employee is waiving and
releasing any rights Employee may have under ADEA, that this waiver and release
is knowing and voluntary, and that the consideration given for this waiver and
release is in addition to anything of value to which Employee was already
entitled as an employee of the Company.  Employee further acknowledges that
Employee has been advised, as required by the Older Workers Benefit Protection
Act, that:  (a) the waiver and release granted herein does not relate to claims
which may arise after this release and waiver is executed; (b) Employee has the
right to consult with an

 

--------------------------------------------------------------------------------

 

attorney prior to executing this release and waiver (although Employee may
choose voluntarily not to do so); and (c) if on the date of execution of this
release and waiver Employee is age 40 or older, then (I) Employee has twenty-one
(21) days from the date Employee receives this release and waiver, in which to
consider this release and waiver (although Employee may choose voluntarily to
execute this release and waiver earlier); and (II) Employee has seven (7) days
following the execution of this release and waiver to revoke Employee’s consent
to this release and waiver.  This release and waiver shall be effective as of
the date of execution hereof; provided that if on the date of execution of this
release and waiver Employee is age 40 or older, then this release and waiver
shall not be effective until the foregoing seven (7) day revocation period has
expired.  The date as of which this release and waiver is effective as aforesaid
shall be deemed the “Effective Date” hereof.

 

Date:

September 23, 2013

 

By:

/s/ JOHN POYHONEN

 

 

John Poyhonen

 

--------------------------------------------------------------------------------