Exhibit 10.1

 

LOGO [g734047pg2.jpg]

7000 Shoreline Court, Suite 371

South San Francisco, CA 94080

(650) 800-3636

www.achaogen.com

June 23, 2014

Ian Friedland

[PRIVATE ADDRESS]

Dear Ian:

I am pleased to offer you a position with Achaogen, Inc. (the “Company”), as
Chief Medical Officer reporting directly to me. Your position with the Company
pursuant to the terms and conditions of this letter will commence no later than
July 28, 2014 (the date you actually commence employment with the Company, 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 the Board of Directors of the
Company (the “Board”).

The Company reserves the right to conduct background and credit investigations
and reference checks on all of its potential employees. Your job offer,
therefore, is contingent upon a clearance of any such background 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 four hundred and five thousand
dollars ($405,000). Your salary will be paid periodically in accordance with the
Company’s normal payroll practices and will be subject to annual review,
required withholding and authorized deductions.

Performance Bonus. In addition to your base salary, you will be eligible to
receive a discretionary bonus for 2014 of up to 30% of your base salary
(pro-rated for your 2014 tenure) based upon your performance, as determined by
the Company, against specific milestones to be defined by the Company. We do not
have a formal bonus plan in place at the present time, but anticipate
implementing one in future years.

Stock Option. Subject to approval by the Board, you will be granted options
purchase a total of 150,000 shares of the Company’s common stock (the “Stock
Option Grants”) comprised of two separate grants to purchase 97,500 shares (the
“Time-Based Option”) and 52,500 shares (the “Performance-Based Option”), with
different vesting schedules as described below.

 

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

 

  •   1/4th of the total number of shares initially subject to the Option will
vest on the first anniversary of your Start Date; and

 

  •   1/48th of the total number of shares initially subject to the Option will
vest on each of the next 36 months thereafter on the same day of the month as
your Start 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:

 

  •   1/3 of the total 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 $33 (33
1/3% of the Performance-Based Option), $55 (33 1/3% of the Performance-Based
Option), and $77 (33 1/3% of the Performance-Based Option). The price hurdles
will be appropriate adjusted to reflect any stock splits, reverse stock splits
or other equity restructurings.

Each Stock Option Grant will be subject to the terms and conditions of the 2014
Equity Incentive Award Plan and the applicable option agreement between you and
the Company, both of which are incorporated herein by reference.

Sign-on Bonus. If you remain employed with the Company for one year you become
entitled to a one-time payment in the amount of seventy thousand dollars
($70,000). The Company will advance this amount to you within your first 30 days
of employment. The payment will be processed through our payroll department,
with all appropriate taxes withheld. If you voluntarily terminate your
employment before your one- year anniversary, you will owe Company the entire
amount advanced to you, and by signing this agreement, you agree to repay any
unpaid advanced amounts within 10 business days following employment
termination.

Relocation. You are eligible to receive relocation reimbursement for your
relocation expenses (to include travel, shipment of household goods and closing
costs on the sale of your home) from Lexington, MA to the San Francisco Bay
Area, California up to a maximum of one hundred thousand dollars ($100,000). The
reimbursement of closing costs on the sale of your home is considered taxable
income and will be grossed up by seventy five percent to cover income taxes.

By signing this agreement, you agree to repay the relocation assistance,
prorated based on termination date, if you voluntarily terminate your employment
for reasons within your control, within two years of your start date.

Temporary Housing. We will provide you with temporary housing of the Company’s
choosing, for up to six (6) months. This benefit is considered taxable income.

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.

 

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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.

Severance. If earlier than three (3) months prior to a Change of Control (as
defined below) or after twelve (12) months following a Change of Control, the
Company or its successor terminates your employment other than for Cause (as
defined below), death or disability, and you deliver to the Company a release of
claims in a form acceptable to the Company (a “Release”) that becomes effective
and irrevocable within sixty (60) days after your termination of employment,
then you shall be entitled to receive: (A) continuing payments of your base
salary (less applicable withholding taxes) at the rate, then in effect, for a
period of six (6) months from the date of such termination, to be paid
periodically in accordance with the Company’s normal payroll policies; and
(B) 25% of the then unvested portion of the Time-Based Option, and any other
stock options or other equity awards that vest solely based on continuous
service, shall immediately vest and become exercisable.

Change of Control Severance. If within three (3) months prior to or twelve
(12) months following a Change of Control (i) you resign from your employment
with the Company or its successor for Good Reason (as defined below), or
(ii) the Company or its successor terminates your employment other than for
Cause, death or disability, and you deliver a Release that becomes effective and
irrevocable within sixty (60) days following your termination of employment,
then you shall be entitled to receive: (A) continuing payments of base salary
(less applicable withholding taxes) at the rate then in effect for a period of
twelve (12) months from the date of such termination, to be paid periodically in
accordance with the Company’s normal payroll policies; and (B) 100% of the then
unvested portion of the Stock Option Grants, and any other stock options or
other equity awards held by you, shall immediately vest and, if applicable,
become exercisable.

If your employment with the Company terminates voluntarily by you (except upon
resignation for Good Reason as provided in the preceding sentence), by the
Company for Cause or due to your death or disability, then (i) all vesting of
the then unvested portion of the Stock Option Grants, and any other stock
options and other equity awards, will cease immediately and all payments of
compensation by the Company to you hereunder will terminate immediately (except
as to amounts already earned).

For purposes of this offer letter, “Cause” is defined as (i) an act of
dishonesty made by you in connection with your responsibilities as an employee,
(ii) your conviction of, or plea of nolo contendere to, a felony, your gross
misconduct, or (iii) your continued substantial violations of your employment
duties after you have received a written demand for performance from the Company
which specifically sets forth the factual basis for the Company’s belief that
you have not substantially performed your duties.

For purposes of this offer letter, “Change of Control” of the Company is defined
as: (i) the acquisition of the Company by another entity by means of any
transaction or series of related transactions (including, without limitation,
any stock acquisition, reorganization, merger or

 

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consolidation but excluding any sale of stock for capital raising purposes)
other than a transaction or series of transactions in which the holders of the
voting securities of the Company outstanding immediately prior to such
transaction continue to retain (either by such voting securities remaining
outstanding or by such voting securities being converted into voting securities
of the surviving entity or its parent), as a result of shares in the Company
held by such holders prior to such transaction, at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity or its parent, as applicable, outstanding immediately
after such transaction or series of transactions; (ii) a sale, lease or other
conveyance of all or substantially all of the assets of the Company; or
(iii) any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntarily.

For purposes of this offer letter, “Good Reason” is defined as your resignation
within thirty (30) days following the expiration of the Company cure period
(discussed below) following the occurrence of one or more of the following,
without your express written consent: (i) a material reduction in your annual
base salary unless such reduction is part of a Company-wide reduction for
similarly situated persons where the reduction applied to you is substantially
similar to the reduction for the other similarly situated employees; (ii) the
material reduction of your duties or responsibilities relative to your duties or
responsibilities in effect immediately prior to such reduction; provided,
however, that a reduction in duties or responsibilities solely by virtue of the
Company being acquired and made part of a larger entity (as, for example, when
the Chief Medical Officer of the Company remains as such for the operations of
the Company following a Change of Control but is not made the Chief Medical
Officer of the acquiring corporation) shall not constitute “Good Reason”; or
(iii) a material change in the geographic location at which you must perform
services (it being understood that a relocation of fifty (50) miles or less is
not material). Before you may resign for Good Reason, (A) you must provide the
Company with written notice within ninety (90) days of the initial occurrence of
the event that you believe constitutes Good Reason specifically identifying the
acts or omissions constituting the grounds for Good Reason and (B) the Company
must have an opportunity within thirty (30) days following delivery of such
notice to cure the Good Reason condition.

Section 409A. Notwithstanding anything to the contrary in this offer letter, no
severance pay or benefits to be paid or provided to you, if any, pursuant to
this offer letter that, when considered together with any other severance
payments or separation benefits, are considered deferred compensation under
Section 409A of the Code and the final regulations and any guidance promulgated
thereunder (such Code section along with such regulations and guidance, “Section
409A” and such separation payments and benefits subject to Section 409A, the
“Deferred Payments”) will be paid or otherwise provided until you have a
“separation from service” within the meaning of Section 409A.

Any severance payments or benefits under this offer letter that constitute
Deferred Payments will be paid on, or, in the case of installments, will
commence on, the sixtieth (60th) day following your separation from service, or,
if later, such time as required by the following paragraph. Any installment
payments that would have been made to you during the sixty (60), day period
immediately following your separation from service but for the preceding
sentence will be paid to you on the sixtieth (60th) day following your
separation from service and the remaining payments shall be made as provided in
this offer letter.

Notwithstanding anything to the contrary in this offer letter, if you are a
“specified employee” within the meaning of Section 409A at the time of your
separation from service, then the Deferred Payments which are otherwise due to
you on or within the six (6) month period following your

 

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separation from service will accrue, to the extent required, during such six
(6) month period and will become payable in a lump sum payment on the date six
(6) months and one (1) day following the date of your separation from service or
on the date of your death, if earlier. All subsequent Deferred Payments, if any,
will be payable in accordance with the payment schedule applicable to each
payment or benefit. Each payment and benefit payable under this offer letter is
intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2)
of the Treasury Regulations.

The foregoing provisions are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein will be interpreted to so comply. You and the Company
agree to work together in good faith to consider amendments to this offer letter
and to take such reasonable actions which are necessary, appropriate or
desirable to avoid imposition of any additional tax or income recognition prior
to actual payment to you under Section 409A.

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

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

 

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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 under which the Stock Option Grants are made and stock
option agreements evidencing the Stock Option Grants, 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 CEO 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.

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 CEO Achaogen, Inc

Accepted and agreed to this 24 day of June, 2014

 

/s/ Ian Friedland Applicant Signature

 

Enclosures: Duplicate Original Letter

At-Will Employment, Confidential Information, Invention Assignment and
Arbitration Agreement

 

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