Exhibit 10.1

 

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March 16, 2019

 

William J. Grossman

[address]

 

Dear Bill:

 

On behalf of Arcus Biosciences, Inc. (“Arcus” or the “Company”), I am pleased to
invite you to join the Company in the role of Chief Medical Officer.  Below are
details of the compensation and benefits program that we offer, as well as other
terms of your employment with Arcus.  Where noted, this offer incorporates the
terms and conditions of the Severance and Change in Control Agreement (the
“Severance Agreement”).  In the event of a conflict between such agreement and
this offer, the terms of this offer shall control.  Should you have any
questions regarding any part of this offer, or wish to receive additional
details, please let us know and we can provide more information for you.  

 

1.Position.  Your title will be Chief Medical Officer, and you will report to
the Company’s Chief Executive Officer, Terry Rosen, Ph.D.  This is a full-time
position.  By signing this letter agreement, you confirm to the Company that you
have no contractual commitments or other legal obligations that would prohibit
you from performing your duties for the Company. You will be allowed to manage
your passive personal investments and to serve on corporate, civic, charitable
and industry boards or committees, provided that such activities do not
interfere in any material respect with the performance of your duties and
responsibilities hereunder as determined in the sole discretion of the
Company.  You shall also be allowed to serve on for-profit boards of directors
or for-profit advisory committees if such service is approved in advance by the
Company.  

2.Cash Compensation.  Your annualized base salary will be $440,000, less payroll
deductions and all required tax withholdings, payable in accordance with the
Company’s standard payroll schedule (“Base Salary”).  Your Base Salary will also
be subject to upward adjustment pursuant to the Company’s employee compensation
policies in effect from time to time.  In addition, you will be eligible to
receive an annual bonus with a target bonus of 40% of your Base Salary (“Annual
Bonus”), which shall be based on goal achievement during the applicable
performance year, subject to approval of the Company’s Board of Directors.  The
goals for your first year of employment will be established by you and the
Company’s Chief Executive Officer within 30 days following your start date, and
within sixty (60) days of the start of each calendar year thereafter.  For
calendar year 2019, you will eligible to receive the entirety of your Annual
Bonus (rather than a pro-rated bonus) regardless of the fact that you will not
have been employed by the Company for a full calendar year this year.  The
Annual Bonus will be paid to you in accordance with the Company’s annual
performance review and bonus payment schedule.  

 

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3.Sign-on Bonus.  The Company will provide you with a one-time sign-on bonus of
$200,000, to be paid shortly following your first day of employment. This amount
is subject to all required payroll deductions and tax withholdings. In the event
you resign from Arcus without Good Reason (as defined in the Severance
Agreement) within one (1) year of your start date, you will be required to repay
the pro-rated portion of these payments based on the number of months you were
employed by the Company prior to your resignation.

4.Employee Benefits. As a regular employee of the Company, you will be eligible
to participate in a number of Company-sponsored benefits. In addition, you will
be entitled to paid vacation in accordance with the Company’s vacation policy,
as in effect from time to time.  You will also be entitled to Directors and
Officers Liability Insurance on the same terms and conditions as offered to
other executive officers of the Company and indemnification in accordance with
the Company’s Indemnification Agreement, which will be supplied to you for
execution upon your start date with the Company.

5.Equity Awards. An important component of your compensation includes the
opportunity for ownership in the Company.  To that end, subject to the approval
of our Board of Directors (the “Board”), Arcus will grant you an option to
purchase 400,000 shares of the Company’s Common Stock with an exercise price
equal to the fair market value as of the date of grant (the “Option”), as
determined by the Board.  The Option will be subject to the terms and conditions
of the Company’s 2018 Equity Incentive Plan and your grant agreement.  Your
grant agreement will reflect a four-year vesting schedule, under which 1/48th of
the total will vest each month, until either the Option is fully vested or you
are no longer a service provider to the Company, whichever occurs first.  You
will also be eligible to participate in and receive additional stock option or
equity award grants under the Company’s equity incentive plans from time to time
at the discretion of the Board/CEO, and in accordance with the terms and
conditions of such plans.

6.Severance Benefits.

(a)In the event you are subject to an Involuntary Termination (as such term is
defined in the Severance Agreement) within twelve months following, a Change in
Control of the Company (as such term is defined in the Severance Agreement), you
will be entitled to receive salary continuation, bonus payment, COBRA benefits,
and accelerated vesting of your equity awards in accordance with the Severance
Agreement, which will be supplied to you for execution upon your start date with
the Company.

(b)In the event you are subject to an Involuntary Termination (as such term is
defined in the Severance Agreement), which termination is not in connection with
a Change in Control of the Company (as defined in the Severance Agreement), you
will be entitled to receive (i) your Base Salary for a period of six (6) months,
generally in accordance with the Company’s standard payroll procedures; (ii)
your Annual Bonus for the fiscal year prior to the year in which the termination
occurs (provided that such bonus has not already been paid by the Company) and
your Annual Bonus for the fiscal year in which the termination occurs, prorated
based on the number of days you were employed by the Company during such fiscal
year; (iii) accelerated vesting of six (6) months of your equity awards from the
Company; and (iv)  if you timely elect continued coverage under COBRA, the
Company shall pay the same portion of the monthly premium under COBRA as it pays
for active employees and their eligible dependents until the earliest of (a) the
last day of the period ending on the date that is six (6) months following your

 

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termination, (b) the expiration of your continuation coverage under COBRA or (c)
the date when you become eligible for substantially equivalent health insurance
coverage in connection with new employment. Notwithstanding the foregoing, if
the Company determines in its sole discretion that it cannot provide the
foregoing subsidy of COBRA coverage without potentially violating or causing the
Company to incur additional expense as a result of noncompliance with applicable
law (including, without limitation, Section 2716 of the Public Health Service
Act), the Company instead will pay you a taxable monthly payment in an amount
equal to the monthly COBRA premium that you would be required to pay to continue
the group health coverage in effect on the date of your termination for you and
your eligible dependents pursuant to the Company’s health insurance plans in
which you or your eligible dependents participated as of the day of your
termination (which amount shall be based on the premium for the first month of
COBRA coverage), which payments shall be made regardless of whether you elect
COBRA continuation coverage. For purposes of this paragraph, “Cause” shall have
the meaning ascribed to it in the Severance Agreement.

7.Proprietary Information and Inventions Agreement.  You will abide by the
Company’s strict policy that prohibits any new employee from using or bringing
with him/her all prior employers’ proprietary information, trade secrets,
proprietary materials, and/or processes. Upon starting employment with the
Company, you will be required to sign a Proprietary Information and Invention
Assignment Agreement indicating, among other things, your agreement with this
policy.   

8.Employment Relationship.  Employment with the Company is for no specific
period of time.  Your employment with the Company will be “at will,” meaning
that either you or the Company may terminate your employment at any time and for
any reason, with or without cause.  Any contrary representations that may have
been made to you are superseded by this letter agreement.  This is the full and
complete agreement between you and the Company on this term.  Although your job
duties, title, compensation and benefits, as well as the Company’s personnel
policies and procedures, may change from time to time, the “at will” nature of
your employment may only be changed in an express written agreement signed by
you and a duly authorized officer of the Company (other than you).

This offer is contingent upon our verification of your employment history,
education credentials, and successful completion of a background
check.  Furthermore, this offer is subject to satisfactory proof of your
identity and right to work in the United States. Any intentional
misrepresentation concerning these items may result in actions up to and
including revocation of this offer or termination of your employment at Arcus.

 

* * * * *

You may indicate your agreement with these terms and accept this offer by
signing and dating this letter agreement and returning it to me no later than
March 29, 2019.  Please note that this offer, if not accepted by you, will
expire on March 29, 2019.

 

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Very truly yours,

 

 

 

Arcus Biosciences, Inc.

 

By:

 

/s/ Terry Rosen

 

 

Terry Rosen, CEO

 

I have read and accept this employment offer:

 

/s/ William Grossman

Signature of William Grossman

 

Dated:

 

16 March 2019