Exhibit 10.1

 

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

 

This Amended and Restated Change in Control Agreement (the “Agreement”) is made
as of December         , 2008 (the “Effective Date”) between Senomyx, Inc., a
Delaware corporation (the “Company”), and                           
(“Employee”).  This Agreement hereby amends and supersedes in its entirety the
Change in Control Agreement entered into by and between the Company and Employee
that was originally established in March 2008 (the “Prior Agreement”).

 

RECITALS

 

WHEREAS, the Company and the Employee desire to amend and restate the Prior
Agreement in its entirety to clarify the application of Section 409A of the
Internal Revenue Code to Employee’s benefits provided under the Prior Agreement,
effective as of the Effective Date.

 

NOW THEREFORE, for good and valuable consideration, the sufficiency of which is
hereby acknowledged, Employee and the Company (each, a “Party,” and
collectively, the “Parties”) agree as follows:

 

1.                                      BENEFITS IN THE EVENT OF A CHANGE IN
CONTROL.  If (i) a Change in Control (defined below) occurs and (ii) during the
period beginning one (1) month prior to the effective date of such Change in
Control and ending eighteen (18) months after the effective date of such Change
in Control, Employee’s employment with the Company is terminated either (A) by
the Company without Cause (defined below) (not including death or Disability (as
defined below)) or (B) by Employee for Good Reason (defined below) (not
including death or Disability), then, without further action by Employee or the
Company, Employee shall be entitled to the benefits set forth below:

 

(a)           The vesting applicable to all options to purchase shares of the
Company’s capital stock (“Options”) and all shares of the Company’s capital
stock which are subject to the Company’s right to repurchase such shares
(“Restricted Stock”) held by Employee as of the effective date of such
termination shall be accelerated in full such that Employee shall have the right
to exercise in accordance with the terms thereof all or any portion of such
Options (notwithstanding any vesting schedule set forth in such Options) and any
such Company repurchase rights with respect to such Restricted Stock shall lapse
in full; and

 

(b)           Employee shall be entitled to receive a lump sum cash payment in
an amount equal to one hundred percent (100%) of Employee’s Annual Pay (as
defined below), payable on the Effective Date specified in the Release (as
defined below) delivered by Employee to the Company following such Change in
Control.  The foregoing payments shall be subject to standard deductions and
withholdings.

 

(c)           Assuming the Employee timely and accurately elects to continue his
health insurance benefits under the Consolidated Omnibus Budget Reconciliation
Act of 1985 (“COBRA”), the Company shall pay the insurer the applicable COBRA
premiums on behalf of Employee and his family (the “COBRA Payments”) until the
earliest of (i) the end of the 12 month period following Employee’s termination,
(ii) the expiration of the Employee’s

 

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continuation coverage under COBRA and any applicable state COBRA-like statute
that provides mandated continuation coverage or (iii) the date the Employee
becomes eligible for health insurance benefits of a subsequent employer. For the
avoidance of doubt, it is intended that the COBRA Payments are exempt from the
application of Section 409A of the Internal Revenue Code.

 

2.             RELEASE.  Notwithstanding the foregoing, the Employee shall not
receive any of the severance payments or benefits set forth under Section 1,
unless upon Employee’s termination of employment the Employee furnishes the
Company with a waiver and release of claims  in a form acceptable to the Company
and substantially as attached hereto as Exhibit A (the “Release”) within the
applicable time period set forth therein, but in no event later than forty-five
(45) days following termination of the Employee’s employment, and permits such
Release to become effective in accordance with its terms (such date, the
“Release Effective Date”).  If a majority of the Board of Directors of the
Company (the “Board”) determines in good faith that the Employee has breached
any provision of his Proprietary Information and Inventions Agreement with the
Company or any provision of this Agreement or the Release, the Company shall be
excused from the obligation to provide any severance payment under Section 1 and
the Company shall be entitled to full recovery of any severance payment already
provided to the Employee under Section 1.

 

3.             DEFINITIONS.  For purposes of this Agreement, capitalized terms
used herein shall have the following meanings:

 

(a)           “Annual Pay” shall mean the sum of the Employee’s (i) base salary
in effect on the date of termination and (ii) the last annual bonus paid to the
Employee by the Company prior to the date of termination.

 

(b)           “Cause” means the occurrence of any of the following:  (i) the
Employee’s commission of any felony or any crime involving fraud, dishonesty or
moral turpitude under the laws of the United States or any state thereof;
(ii) the Employee’s attempted commission of, or participation in, a fraud or act
of dishonesty against the Company; (iii) the Employee’s intentional and material
violation of any contract or agreement between the Employee and the Company or
any statutory duty owed to the Company; (iv) the Employee’s unauthorized use or
disclosure of the Company’s confidential information or trade secrets or (v) the
Employee’s gross misconduct.  The determination that a termination is for Cause
shall be made by the Company in its discretion.  Any determination by the
Company that the employment of the Employee was terminated by reason of
dismissal without Cause for the purposes of determining benefits under this
Agreement shall have no impact upon any determination of the rights or
obligations of the Company or such Employee for any other purpose.

 

(c)           “Change in Control” means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following
events:

 

(i)            any Exchange Act Person (as defined in the Company’s Amended and
Restated 2004 Equity Incentive Plan (the “Plan”)) becomes the owner, directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then outstanding securities
other than by virtue of a merger,

 

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consolidation or similar transaction.  Notwithstanding the foregoing, a Change
in Control shall not be deemed to occur (A) on account of the acquisition of
securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person from the Company in a transaction or series of related
transactions the primary purpose of which is to obtain financing for the Company
through the issuance of equity securities or (B) solely because the level of
Ownership (as defined in the Plan) held by any Exchange Act Person (the “Subject
Person”) exceeds the designated percentage threshold of the outstanding voting
securities as a result of a repurchase or other acquisition of voting securities
by the Company reducing the number of shares outstanding, provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of voting securities by the Company, and after such
share acquisition, the Subject Person becomes the Owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred,
increases the percentage of the then outstanding voting securities Owned by the
Subject Person over the designated percentage threshold, then a Change in
Control shall be deemed to occur;

 

(ii)           there is consummated a merger, consolidation or similar
transaction involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving
Entity (as defined in the Plan) in such merger, consolidation or similar
transaction or (B) more than fifty percent (50%) of the combined outstanding
voting power of the parent of the surviving Entity in such merger, consolidation
or similar transaction, in each case in substantially the same proportions as
their Ownership of the outstanding voting securities of the Company immediately
prior to such transaction;

 

(iii)         the stockholders of the Company approve or the Board approves a
plan of complete dissolution or liquidation of the Company, or a complete
dissolution or liquidation of the Company shall otherwise occur;

 

(iv)          there is consummated a sale, lease, license or other disposition
of all or substantially all of the consolidated assets of the Company and its
Subsidiaries (as defined in the Plan), other than a sale, lease, license or
other disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
stockholders of the Company in substantially the same proportions as their
Ownership of the outstanding voting securities of the Company immediately prior
to such sale, lease, license or other disposition; or

 

(v)            individuals who, on the date of this Agreement, are members of
the Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the members of the Board; provided, however, that if the appointment
or election (or nomination for election) of any new Board member was approved or
recommended by a majority vote of the members of the Incumbent Board then still
in office, such new member shall, for purposes of this Agreement, be considered
as a member of the Incumbent Board.

 

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(d)           “Disability” shall mean Employee’s failure or inability, for
reasons of health, to perform Employee’s usual and customary duties on behalf of
the Company in the usual and customary manner for a total of more than ninety
(90) consecutive business days (excluding Saturdays, Sundays and holidays (days
during which the Company is closed due to a recognized holiday)).

 

(e)           “Good Reason” shall mean the occurrence of any of the following
events or conditions:  (i) (A) a change in the Employee’s status, title,
position or responsibilities (including reporting responsibilities) which
represents an adverse change from the Employee’s status, title, position or
responsibilities as in effect at any time within ninety (90) days preceding the
date of a Change in Control or at any time thereafter; (B) the assignment to the
Employee of any duties or responsibilities which are inconsistent with the
Employee’s status, title, position or responsibilities as in effect at any time
within ninety (90) days preceding the date of a Change in Control or at any time
thereafter; or (C) any removal of the Employee from or failure to reappoint or
reelect the Employee to any of such offices or positions (unless such removal or
failure to reappoint or reelect is (1) in connection with the termination of the
Employee’s employment for Cause, (2) as a result of the Employee’s Disability or
death, or (3) by the Employee other than as a result of termination for Good
Reason); (ii) a reduction in the Employee’s annual base compensation; or
(iii) the Company’s requiring the Employee to relocate to any place outside a
fifty (50) mile radius of the Employee’s current work site, excluding in any
event reasonably required travel on the business of the Company or its
affiliates. Notwithstanding the foregoing, in no event shall Good Reason be
satisfied solely because the Employee retains the same position held prior to
the Change in Control but in a distinct legal entity or business unit of a
larger entity following the Change in Control.

 

4.             GOLDEN PARACHUTE TAXES.  If any payment or benefit Employee would
receive pursuant to a Change in Control from the Company or otherwise
(“Payments”) would (i) constitute a “parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and
(ii) but for this sentence, be subject to the excise tax imposed by Section 4999
of the Code (the “Excise Tax”), then such Payments shall be equal to the Reduced
Amount.  The “Reduced Amount” shall be either (x) the largest portion of the
Payment that would result in no portion of the Payment being subject to the
Excise Tax or (y) the largest portion, up to and including the total, of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in Employee’s receipt, on an
after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax. If a reduction
in payments or benefits constituting “parachute payments” is necessary so that
the Payment equals the Reduced Amount, reduction shall occur in the following
order:  reduction of cash payments; cancellation of accelerated vesting of stock
awards; reduction of employee benefits.  In the event that acceleration of
vesting of stock award compensation is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of the date of grant of
Employee’s stock awards.

 

The accounting firm engaged by the Company for general audit purposes as of the
day prior to the effective date of the Change in Control shall perform the
foregoing calculations.  If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Change in Control, the Company shall appoint a

 

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nationally recognized accounting firm to make the determinations required
hereunder.  The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.

 

The accounting firm engaged to make the determinations hereunder shall provide
its calculations, together with detailed supporting documentation, to the
Company and Employee within fifteen (15) calendar days after the date on which
Employee’s right to a Payment is triggered (if requested at that time by the
Company or Employee) or such other time as requested by the Company or
Employee.  If the accounting firm determines that no Excise Tax is payable with
respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish the Company and Employee with an opinion reasonably
acceptable to Employee that no Excise Tax will be imposed with respect to such
Payment.  Any good faith determinations of the accounting firm made hereunder
shall be final, binding and conclusive upon the Company and Employee.

 

5.             APPLICATION OF CODE SECTION 409A.

 

Notwithstanding anything to the contrary set forth herein, any payments and
benefits provided under this Agreement (the “Change in Control Benefits”) that
constitute “deferred compensation” within the meaning of Section 409A of 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 Employee’s termination of employment unless and until Employee has 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 Employee without
causing Employee to incur the additional 20% tax under Section 409A.  Such
determination by the Company shall be made no later than ten (10) days following
Employee’s termination of employment.

 

Notwithstanding anything to the contrary set forth herein, if the Company (or,
if applicable, the successor entity thereto) determines that any Change in
Control Benefits constitute “deferred compensation” under Section 409A and
Employee is, on the termination of Employee’s 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 such Change in Control Benefits payment shall be
delayed until the earlier to occur of: (i) the date that is six months and one
day after Employee’s Separation From Service, or (ii) the date of Employee’s
death (such applicable date, the “Specified Employee Initial Payment Date”), the
Company (or the successor entity thereto, as applicable) shall pay to Employee a
lump sum amount equal to the sum of such Change in Control Benefits payment that
Employee would otherwise have received through the Specified Employee Initial
Payment Date if the payment of such Change in Control Benefits had not been so
delayed pursuant to this Section.

 

Notwithstanding any other payment schedule set forth in this Agreement, none of
the Change in Control Benefits will be paid or otherwise delivered prior to the
Release Effective Date.  Except to the extent that payments may be delayed until
the Specified Employee Initial Payment Date pursuant to the preceding paragraph,
on the first regular payroll pay day following the Release Effective Date, the
Company will pay Employee the Change in Control Benefits

 

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Employee would otherwise have received under the Agreement on or prior to such
date but for the delay in payment related to the Release Effective Date.

 

6.             GENERAL PROVISIONS.

 

(a)           This Agreement shall be governed by the laws of the State of
California (without regard to principles of conflict of laws).

 

(b)           Any notice, demand or request required or permitted to be given by
either the Company or Employee pursuant to the terms of this Agreement shall be
in writing and shall be deemed given when delivered personally or deposited in
the U.S. mail, First Class with postage prepaid, and addressed to the parties at
such addresses as have been previously furnished by the Parties or such other
address as a Party may request by notifying the other in writing.

 

(c)           The rights and obligations of Employee under this Agreement may
not be transferred or assigned without the prior written consent of the Company.

 

(d)           This Agreement is meant to supplement the terms of stock option
agreement(s) or other agreement(s) pursuant to which Employee acquired the
Options, as well as any written employment agreement between the Company and
Employee; provided, however that any Change in Control Benefits payable in cash
by the Company to Employee pursuant to this Agreement shall be reduced (but not
below zero) by any severance benefits payable in cash by the Company to Employee
under any other policy, plan, program, agreement or arrangement, including,
without limitation, a contract between Employee and any entity, covering
Employee.

 

(e)           Any Party’s failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent any Party from thereafter enforcing each and every other
provision of this Agreement.  The rights granted the Parties herein are
cumulative and shall not constitute a waiver of any Party’s right to assert all
other legal remedies available to it under the circumstances.

 

(f)            Employee agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.

 

(g)           In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired.

 

(h)           This Agreement, in whole or in part, may be modified, waived or
amended upon the written consent of the Company and Employee.

 

(i)            This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one
instrument.

 

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IN WITNESS WHEREOF, the undersigned have set their hand as of the date first
above written.

 

EMPLOYEE

 

SENOMYX, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

 

 

 

 

Title:

 

 

[SIGNATURE PAGE TO CHANGE IN CONTROL AGREEMENT]

 

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EXHIBIT A

 

RELEASE AND WAIVER OF CLAIMS

 

In consideration of the payments and other benefits set forth in the Amended and
Restated Change in Control Agreement dated December       , 2008, between
Senomyx, Inc. (the “Company”) and                          (“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

 

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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:

 

 

By:

 

 

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