Exhibit 10.16

logo [g20140221222758713312.jpg]

 

 

 

July 5, 2013

Andrew Powell

**** ****** ****

*** **** ** *****

Re:

Employment with lnterMune, Inc. Dear Andrew:

On behalf of lnterMune, Inc., I am pleased to extend to you this official offer
of employment with lnterMune as Executive Vice President, General Counsel &
Corporate Secretary, reporting to Daniel Welch, Chairman of the Board, CEO &
President in our Brisbane, California office beginning on August TBD, 2013.
lnterMune may change your position, duties, supervisor and work location from
time to time as it deems appropriate. This position is a full-time, exempt
position.

Your employment is subject to proof of your legal right to work in the United
States, and to your completing the INS Employment Eligibility Verification Form
1-9. Your employment also is subject to successful verification of your
professional references, and to our standard pre-employment process, which
includes completion of an employment application and successful completion of a
standard background check.

Compensation

If you accept this offer and begin employment, you will receive an initial base
salary of $32,916.67 per month (equivalent to $395,000.00 per year), paid on a
semi-monthly basis on our regular paydays. Deductions required by law or
authorized by you will be taken from each paycheck.

Additionally, you will be eligible to participate in our discretionary incentive
bonus program designed to provide a financial reward for achieving performance
goals. The incentive plan will be based on two criteria: your individual
performance against your goals as determined by your manager and lnterMune’s
performance as determined by lnterMune’s senior management. For 2013,your target
bonus will be 40% of your base pay.

In addition, the Company will provide you with a one-time sign-on bonus of
$50,000, less all required deductions, to be paid one month following your first
day of employment. Upon successful completion of six months of employment, you
also will receive a one-time bonus payment of $50,000, less all required
deductions. The sign-on bonuses are subject to repayment in full if your
employment terminates for cause, or if you voluntarily resign, before one year.

INTERMUNE, Inc.

3280 Bayshore Boulevard

Brisbane, CA 94005-1021

Tel : (415) 466-2200

Fax: (415) 466-2300

 

 

 

logo [g20140221222758759312.jpg]

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

Andrew Powell

July 5,2013

Page 2

 

The Company will also provide you with a one month miscellaneous expense
allowance of $32,916.67 minus all required deductions, for your relocation
expenses.

You also will be eligible to participate in lnterMune’s Equity Incentive Plan.
Following commencement of your employment, a grant of an option to purchase up
to 125,000 shares of Common Stock and an award of up to 30,000 shares of
Restricted Stock under lnterMune’s Equity Incentive Plan will be recommended to
the Compensation Committee of the lnterMune Board of Directors on your behalf.
All option grants are subject to final approval by the Compensation Committee of
the lnterMune Board of Directors. The shares will vest over a period of four
years beginning on the date of your employment and the option exercise price
will be the NASDAQ closing price of lnterMune’s common stock on the fifth
business day of the month following the month in which you begin employment (in
your case, September 6,2013). The exercise of any options will be subject in all
respects to the terms of your stock option agreement and the Equity Incentive
Plan.

In addition, the Company has awarded you 24,000 Performance Based Restricted
Stock Units. The 2013 Annual Equity Grant attachment provides vesting
information for these PBRSUs.

Relocation

lnterMune has retained Mobility Services International (MSI) to provide you with
a standard relocation package which includes up to ninety days of temporary
housing. lnterMune will provide up to an additional thirty days of temporary
housing if required. Relocation expenses paid by the Company are subject to
repayment in full if your employment ends before one year due to your voluntary
resignation or your termination for “Cause,” as that term is defined below.

—

“Cause” means any of the following: (a) willful refusal to follow lawful and
reasonable corporate policy or Chief Executive Officer directives; or (b)
willful failure, negligence or refusal to perform duties; or (c) willful act
that intentionally or materially injures the reputation or business of the
Company; or (d) willful breach of confidentiality that has a material adverse
affect on the Company; or (e) fraud or embezzlement; or (f) indictment for
criminal activity.

Employee Benefits

As a full-time employee, you will be eligible for paid time-off benefits, such
as sick leave and holidays, in accordance with our policies for similarly
situated employees. You also will be eligible to participate in lnterMune’s
employee benefit plans, in accordance with the terms and eligibility
requirements of those plans. Currently, lnterMune maintains group health
insurance, vision and dental plans,a short and long-term disability plan, a
Flexible Spending Account plan, a group Life Insurance and AD&D plan, a 401(k)
savings plan, a Long Term Care plan and an Employee Stock Purchase Plan.

lnterMune reserves the right to modify,amend or discontinue any benefit plan at
any time,in its sole discretion. You may receive such other benefits as we may
determine from time to time, in our sole discretion.

 

 

Benefits upon Separation

Severance Pay in the Event of Termination (Not For Cause) Absent a Change in
Control of lnterMune. As a member of the lnterMune’s Leadership Team, you will
be entitled to the following benefits in the event your employment is terminated
by lnterMune other than for “Cause” or in the event of a “Change in Control” of
lnterMune (as those terms are defined below). Although you at all times will
remain an at-will employee of lnterMune, lnterMune agrees that in the event your
employment is terminated by the Company other than for “Cause” prior to, or more
than 12 months after, a “Change in Control” of lnterMune, you will receive the
following benefits subject to your delivery to the Company of a general release
in a form acceptable to lnterMune that becomes effective and irrevocable within
60 days following your termination of employment:

—

If you have completed less than one (1) full year of service as of the date of
your termination of employment, you will receive twelve (12)) months’ base
salary at your final rate of pay, payable in a single cash lump sum on the 60th
day following your termination of employment; in the event you elect COBRA
continuation coverage, lnterMune will reimburse you for, or directly pay, your
COBRA premiums until the earlier of twelve (12) months following your
termination of employment or the date you become eligible for coverage under
another employer’s health plans; and six (6) months immediate acceleration of
vesting of each of your outstanding equity grants, whether stock options or
restricted shares

 

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

Andrew Powell

July 5,2013

Page 3

 

—

If you have completed at least one (1) year but less than two (2) years of
service, as of the date of your termination of employment, you will receive
twelve (12)) months’ base salary at your final rate of pay, payable in
substantially equal installments in accordance with lnterMune’s standard payroll
practices commencing on the 60th day following your termination of employment
(with the first installment inclusive of any installments that would otherwise
have been made during the 60 days following your termination of employment); in
the event you elect COBRA continuation coverage, lnterMune will reimburse you
for, or directly pay, your COBRA premiums until the earlier of twelve (12)
months following your termination of employment or the date you become eligible
for coverage under another employer’s health plans; and nine (9) months
immediate acceleration of vesting of each of your outstanding equity grants,
whether stock options or restricted shares

—

If you have completed two (2) years of service or more as of the date of your
termination of employment, you will receive twelve (12)) months’ base salary at
your final rate of pay, payable in substantially equal installments in
accordance with lnterMune’s standard payroll practices commencing on the 60th
day following your termination of employment (with the first installment
inclusive of any installments that would otherwise have been made during the 60
days following your termination of employment); in the event you elect COBRA
continuation coverage, lnterMune will reimburse you for, or directly pay, your
COBRA premiums until the earlier of twelve (12) months following your
termination of employment or the date you become eligible for coverage under
another employer’s health plans; and twelve (12) months immediate acceleration
of vesting of each of your outstanding equity grants, whether stock options or
restricted shares

—

If such termination not for Cause occurs in the second half of the calendar
year, you also will receive a pro rata share of your target bonus for that year
payable in a cash lump sum on the 60th day following your termination of
employment.

 

 

The acceleration of vesting provided for in this section of this agreement is
intended to be in lieu of any acceleration rights provided in any operative
stock option agreement or restricted stock agreement you sign, and in addition
to any acceleration rights provided in the operative Equity Incentive Plan
documents. All other terms and conditions applicable to your equity grants,
e.g., with regard to exercise after termination, forfeiture, etc., will continue
to be governed by the operative stock option agreement, restricted stock
agreement and Equity Incentive Plan document.

Compensation upon Change in Control of lnterMune. In the event that with the 12
month period commencing on a Change in Control of the Company: (i) your
employment is terminated by lnterMune or its successor without Cause, or (ii)
you resign your employment with lnterMune for “Good Reason” , you will receive
the following benefits subject to your delivery to the Company of a general
release in a form acceptable to lnterMune that becomes effective and irrevocable
within 60 days following your termination of employment:

(a) Cash Compensation: Two (2) years base salary at your final rate of pay
payable in a single cash lump sum on the 60th day following your termination of
employment and in the event you elect COBRA continuation coverage, lnterMune
will reimburse you for, or directly pay, your COBRA premiums until the earlier
of the second anniversary of your termination of employment or the date you
become eligible for coverage under another employer’s health plans. In the event
your termination of employment occurs in the second half of the calendar year,
you also will receive a pro rata share of your target bonus for that year
payable in a single cash lump sum on the 60th day following your termination of
employment.

(b) Options or Restricted Share Grants: Vesting of all outstanding equity grants
(including lnterMune stock option grants, lnterMune restricted stock grants, and
any grants made by the acquiring entity) will immediately accelerate. All other
terms and conditions applicable to your equity grants, e.g., with regard to
exercise after termination, forfeiture, etc., will continue to be governed by
the operative stock option agreement, restricted stock agreement and Equity
Incentive Plan documents.

Section 409A

Notwithstanding any provision to the contrary in this letter, no amount deemed
deferred compensation subject to Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), shall be payable pursuant to the preceding two
paragraphs unless your termination of employment constitutes a “separation from
service” with the Company within the meaning of Section 409A of the Code and the
Department of Treasury regulations and other guidance promulgated thereunder.

Further notwithstanding any provision to the contrary in this letter, if you are
deemed by the Company at the time of your separation from service to be a
“specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to
the extent delayed commencement of any portion of the benefits to which you are
entitled under this letter is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of your
benefits shall not be provided to you prior to the earlier of (i) the expiration

 

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

Andrew Powell

July 5,2013

Page 4

 

of the six-month period measured from the date of the your “separation from
service” with the Company (as such term is defined in the Treasury Regulations
issued under Section 409A of the Code) or (ii) the date of your death. Upon the
first business day following the expiration of the applicable Code Section
409A(a)(2)(B)(i) period, all payments deferred pursuant to this paragraph shall
be paid in a lump sum to you, and any remaining payments due under the letter
shall be paid as otherwise provided herein.

 

 

To the extent that any reimbursements payable pursuant to this letter are
subject to the provisions of Section 409A of the Code, any such reimbursements
payable to you pursuant to this letter shall be paid to you no later than
December 31 of the year following the year in which the expense was incurred,
the amount of expenses reimbursed in one year shall not affect the amount
eligible for reimbursement in any subsequent year, and your right to
reimbursement under this letter will not be subject to liquidation or exchange
for another benefit.

Definitions

For purposes of this letter, “Cause” shall mean any of the following:

—

Willful refusal to follow lawful and reasonable corporate policy or Chief
Executive Officer directives; or

—

Willful failure, gross neglect or refusal to perform duties; or

—

Willful act that intentionally or materially injures the reputation or business
of the Company; or

—

Willful breach of confidentiality that has a material adverse affect on the
Company; or

—

Fraud or embezzlement; or

—

Indictment for criminal activity.

For purposes of this letter, “Change in Control” shall mean any of the
following:

—

A sale, lease or other disposition of all or substantially all of the securities
or assets of the Company; or

—

A merger or consolidation in which the Company is not the surviving corporation;
or

—

A reverse merger in which the Company is the surviving corporation but the
shares of Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise.

For purposes of this letter, “Good Reason” shall mean any of the following
undertaken without your written consent:

—

a material diminution in your duties, title or compensation, or

—

a requirement that you relocate more than 80 km (50 miles) from your
then-current employment location

Notwithstanding the foregoing, you shall not have “Good Reason” to resign your
employment unless you provide lnterMune with written notice specifying the
condition giving rise to Good Reason within 90 days after its initial
occurrence, lnterMune fails to cure the condition giving rise to Good Reason
within 30 days of its receipt of such written notice (the “cure period”) and
your resignation is effective within 30 days after the expiration of lnterMune’s
cure period.

 

 

Other Terms and Conditions of Employment

Employment with lnterMune is at will. “Employment at will” means that you are
free to resign from your employment at any time, for any reason or no reason,
with or without cause and with or without notice. Similarly, lnterMune may
terminate your employment at any time for any legal reason, with or without
cause and with or without notice. By accepting this offer of employment, you
agree that your employment is at will, and acknowledge that no one,other than
the Chief Executive Officer of lnterMune, has the authority to promise you
anything to the contrary and that any such agreement must be in writing and
signed by both you and the Chief Executive Officer of lnterMune to be effective.

We believe that your employment with lnterMune requires a full-time commitment.
Employment with any other entity, or for yourself in competition with lnterMune,
is not permitted unless expressly authorized by lnterMune in writing.

 

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

Andrew Powell

July 5,2013

Page 5

 

As an lnterMune employee, you will be expected to abide by company rules and
regulations and acknowledge in writing that you have read and agree to abide by
the provisions of lnterMune’s Employee Handbook.

During the course of your employment, you may create, develop or have access to
confidential information belonging to lnterMune, including trade secrets and
proprietary information, such as clinical and other scientific data, customer
information, business plans, marketing plans, unpublished financial information,
software, source codes, and personnel information. You agree that as a condition
of your employment with lnterMune, you will sign and comply with the enclosed
lnterMune Proprietary Information and Inventions Agreement, which contains
certain commitments regarding confidentiality. By accepting employment with
lnterMune, you also agree to keep all lnterMune information strictly
confidential, and not to use it or disclose it to any person or entity, except
as is necessary in the ordinary course of performing your work. You further
acknowledge that your obligation to protect our confidential information from
disclosure exists both during your employment and after it ends. You also agree
that at the termination of your employment, for any reason, you will return to
us all copies (including electronic copies) of any documents or other materials
you have that refer to or contain lnterMune’s confidential information,
including notebooks, manuals, letters and customer lists.

In your work for lnterMune, you will be expected not to use or disclose any
confidential information, including trade secrets, of any former employer or
other person to whom you have an obligation of confidentiality. You agree to act
in accordance with any valid non-disclosure agreements to which you may be
subject. You will be expected to use only that information which is generally
known and used by persons with training and experience comparable to your own,
which is common knowledge in the industry or otherwise legally in the public
domain, or which is otherwise provided or developed by lnterMune. By accepting
this offer of employment, you acknowledge that you will be able to perform your
duties within these guidelines. You further agree that you will not bring onto
lnterMune’s premises any unpublished documents or property belonging to any
former employer or other person to whom you have an obligation of
confidentiality.

You also agree, if you accept this offer of employment, that for a period of two
years after your employment ends, you will not solicit any lnterMune employee or
consultant to leave his or her employment or consulting relationship with
lnterMune in order to begin employment or a consulting relationship with any
company or business in actual or potential competition with lnterMune.

The terms described in this letter, together with your Proprietary Information
and Inventions Agreement, replace all prior agreements, understandings, and
promises between lnterMune and you, whether oral or written, concerning the
terms and conditions of your employment with lnterMune. Any modification of this
agreement will be effective only if it is in writing and is signed by both you
and the Chief Executive Officer of lnterMune.

Andrew, I am pleased to extend this offer of employment to you, and hope that
your association with lnterMune will be successful and rewarding. Please
indicate your acceptance of this offer by signing this letter below and
returning the letter as soon as possible. A copy of this letter is enclosed for
your records.

Sincerely,

lnterMune, Inc.

 

/s/ Paul Arata

Paul Arata

Executive Vice President, Human Resources & Administration

I understand and agree to the foregoing terms and conditions of employment with
lnterMune, Inc.

 

/s/ Andrew Powell

  

7/7/13

Andrew Powell

  

Date