Exhibit 10.18

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7000 Shoreline Court, Suite 371

South San Francisco, CA  94080

(650) 800-3636

www.achaogen.com

October 19, 2016

 

Gary Loeb

[Address]

 

Dear Gary:

 

I am pleased to offer you a position with Achaogen, Inc. (the “Company”), as
General Counsel reporting directly to me.  Your position with the Company
pursuant to the terms and conditions of this letter will commence no later than
November 15, 2016 (the “Start Date”).  You will have duties and
responsibilities, consistent with your position within the Company, as will
reasonably be assigned to you by me.  You agree to perform your duties
faithfully and to the best of your abilities and to devote your full business
efforts and time to the Company.  Furthermore, while employed by the Company,
you agree to not actively engage in any other employment, occupation or
consulting activity for any direct or indirect remuneration without prior
approval of the CEO and Board of Directors.  

 

The Company reserves the right to conduct background and reference checks on all
of its potential employees.  Your job offer, therefore, is contingent upon a
clearance of such a background investigation and reference check.

 

Salary.  While employed by the Company, you will receive as compensation for
your services a base salary at the annualized rate of three hundred and sixty
thousand dollars ($360,000).  Your salary will be paid periodically in
accordance with the Company’s normal payroll practices and will be subject to
annual review and the usual, required withholding.

 

Performance Bonus.  In addition to your base salary, you will be eligible to
receive a bonus of up to 35% of your base salary starting 2017 based upon yours
and the Company’s performance, as determined by the Company, against specific
milestones to be defined by the Company.  Your bonus will be determined based on
corporate performance with respect to 70% and individual performance with
respect to 30%. You must be employed at the time of payment to be eligible to
receive this bonus.

 

Stock Option.  Subject to approval by the Board of Directors, you will be
granted options to purchase seventy-one thousand (71,000) shares of the
Company's common stock (the “Stock Option Grant”) comprised of two separate
grants to purchase 57,000 shares (the “Time-Based Option”) and 14,000 shares
(the “Performance-Based Option”), with different vesting schedules as described
below.

 

The Time-Based Option will have a per share exercise price equal to the closing
trading price per share of the Company’s common stock as of the date of the
grant and, subject to

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your continued service the Company through each vesting date, the Option will
vest in accordance with the following vesting schedule:

• 1/4th of the shares subject to the Option will vest on the first anniversary
of your employment start date (such start date, the "Vesting Commencement
Date"); and

• 1/48th of the shares subject to the Option will vest on each of the next 36
months thereafter on the same day of the month as the Vesting Commencement Date.

The Performance-Based Option will also have a per share exercise price equal to
the closing trading price per share on the date of grant and, subject to your
continued service with the Company through each vesting date, the Performance
Option will vest in accordance with the following vesting schedule:

 

•

The number of shares initially subject to the Performance-Based Option shall
vest on the 30th consecutive date the closing trading price per share of the
Company’s common stock equals or exceeds $12 (40% of the Performance-Based
Option), $25 (40% of the Performance-Based Option), and $55 (20% of the
Performance-Based Option). The price hurdles will be appropriate adjusted to
reflect any stock splits, reverse stock splits or other equity restructurings.

 

The Option will be subject to the terms and conditions of one of the Company’s
current equity incentive plans pursuant to which it is granted and the
applicable option agreement between you and the Company, both of which are
incorporated herein by reference.

 

Restricted Stock Units (RSUs). Subject to approval by the Board of Directors,
you will be granted awards of fifteen thousand (15,000) RSUs (the “RSU Grant”),
comprised of two separate grants of 12,000 RSUs (the “Time-Based RSUs”) and
3,000 RSUs (the “Performance-Based RSUs”), with different vesting schedules as
described below. Each RSU entitles you to receive one share of the Company
common stock upon vesting.

 

Subject to your continued service with the Company through each vesting date,
the Time-Based RSUs will vest in accordance with the following vesting schedule:

• 1/4th of the total number of Time-Based RSUs initially subject to the grant
will vest on each of the first four anniversaries of the vesting commencement
date, which will be one of the pre-established quarterly vesting dates and will
be set forth in the RSU agreement evidencing your grant.

 

Subject to your continued service with the Company through each vesting date,
the Performance-Based RSUs will vest in accordance with the following vesting
schedule:

 

•

The number of shares initially subject to the Performance-Based RSUs shall vest
on the 30th consecutive date the closing trading price per share of the
Company’s common stock equals or exceeds $12 (40% of the Performance-Based
RSUs), $25 (40% of the Performance-Based RSUs), and $55 (20% of the
Performance-Based RSUs). The price hurdles will be appropriate adjusted to
reflect any stock splits, reverse stock splits or other equity restructurings.

 

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The RSUs will be subject to the terms and conditions of one of the company’s
current equity incentive plans and an RSU agreement to be entered into between
you and the Company, both of which are incorporated herein by reference.

 

Severance Agreement. In connection with your commencement of employment with the
Company, you are eligible to enter into the Change in Control Severance
Agreement attached to this offer letter as Exhibit A.

 

Employee Benefit Plans. As a Company employee, you are also eligible to receive
certain employee benefits pursuant to the terms of Company benefit plans as they
may exist from time to time.

 

At-Will Employment.  You should understand that your employment with the Company
is “at-will” and is for no specified period.  As a result, you are free to
resign at any time, for any reason, with or without cause.  Similarly, the
Company is free to conclude its employment relationship with you at any time,
for any reason, with or without cause.  This is the full and complete agreement
between us 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 writing signed by you and the CEO.

Confidential Information/Arbitration.  You will be required to sign and comply
with the attached At‑Will Employment, Confidential Information, Invention
Assignment and Arbitration Agreement (the “Confidentiality Agreement”) as a
condition of your employment. The Confidentiality Agreement requires, among
other things, the assignment of patent rights to any invention made during your
employment at the Company and non‑disclosure of Company proprietary
information.  We also ask that you disclose to the Company any and all
agreements relating to your prior employment that may affect your eligibility to
be employed by the Company or limit the manner in which you may be employed.  It
is the Company's understanding that any such agreements will not prevent you
from performing the duties of your position and you represent that such is the
case.  You further agree not to bring any third party confidential information
to the Company, including that of your former employer, and that in performing
your duties for the Company you will not in any way utilize any such
information.

Federal Immigration.  For purposes of federal immigration law, you will be
required to provide to the Company documentary evidence of your identity and
eligibility for employment in the United States.  Such documentation must be
provided to us within three (3) business days of your date of hire, or our
employment relationship with you may be terminated.

 

Arbitration of Disputes.  In the event of any dispute or claim relating to or
arising out of our employment relationship, you and the Company agree that
(i) any and all disputes between you and the Company shall be fully and finally
resolved by binding arbitration, (ii) you are waiving any and all rights to a
jury trial but all court remedies will be available in arbitration, (iii) all
disputes shall be resolved by a neutral arbitrator who shall issue a written
opinion, (iv) the arbitration shall provide for adequate discovery, and (v) the
Company shall be responsible for the arbitrator's fees and costs to the extent
they exceed any fee or cost that the Company would be required to bear if the
action were brought in an applicable federal or state court.  Please note that
we must receive your signed Agreement before your first day of employment

 

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Governing Laws.  This letter will be governed by the laws of the state of
California, with the exception of its conflict of laws provisions.

This offer letter, the Confidentiality Agreement or existing confidential
information agreement, as applicable, between you and the Company, as well as
the equity incentive plan and stock option agreement related to the Option,
represent the entire agreement and understanding between you and the Company
concerning your employment relationship with the Company, and supersede in their
entirety any and all prior representations or agreements and any representations
made during your recruitment, interviews or pre‑employment negotiations, whether
written or oral.  This letter, including, but not limited to, its at‑will
employment provision, may not be modified or amended except by a written
agreement signed by the Board (or its authorized designee) and you.

To confirm your acceptance and agreement to the terms set forth in this offer
letter please sign, date, and return this letter to me.  Please call Zeryn
Sarpangal, at [phone number] if you have any questions.  

 

 

 

 

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I am excited to welcome you to the Company, and I look forward to your
participation in the Company’s future success.

 

 

Sincerely,

 

 

 

 

/s/ Kenneth Hillan

Kenneth Hillan

Chief Executive Officer

Achaogen, Inc.                                                              

 

Accepted and agreed to this_____ day of____________, 2016

 

 

/s/ Gary Loeb

Applicant Signature

 

Enclosures:

Duplicate Original Letter

 

At-Will Employment, Confidential Information, Invention Assignment and

 

Arbitration Agreement

 

 

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