Exhibit 10.10

 

TRACON PHARMACEUTICALS, INC. SEVERANCE PLAN

SEVERANCE AGREEMENT

This Severance Agreement (the “Agreement”) is entered into effective May 29,
2018 (the “Effective Date”), by and between Mark Wiggins (“you” or “your”) and
TRACON Pharmaceuticals, Inc. (the “Company”) pursuant to the TRACON
Pharmaceuticals, Inc. Severance Plan (“Plan”).  Capitalized terms used herein
but not otherwise defined have the meanings set forth in the Plan.  

You are a Covered Employee (as defined in the Plan) and participant in the Plan
as provided by the Plan.  This Agreement is the Severance Agreement described in
the Plan and this Agreement enumerates the Plan benefits that may be provided to
you as a Covered Employee as referenced in Section II of the Plan.  All
provisions of this Agreement are subject to and governed by the terms of the
Plan.  In the event of any conflict in terms between the Plan and this
Agreement, the terms of the Plan shall prevail and govern.

In consideration of the mutual covenants and promises made in this Agreement,
you and the Company agree as follows:  

1.Certain Definitions.  In addition to terms defined elsewhere herein or in the
Plan, the following terms have the following terms have the following meanings
when used in this Agreement:

(a)“Base Salary” means your then current base pay (excluding incentive pay,
premium pay, commissions, overtime, bonuses and other forms of variable
compensation), at the rate in effect during the last regularly scheduled payroll
period immediately preceding the date of your Qualifying Termination, and
determined prior to any reduction in base pay that would permit you to
voluntarily resign employment for Good Reason or any reduction in your base pay
which occurs following a Change in Control.

(b)“Board” means the Company’s Board of Directors.

(c)“Cause” means the occurrence of one or more of the following:  

(i)Your commission of fraud or other unlawful conduct in your performance of
duties for the Company;

(ii)your conviction of, or a plea of guilty or nolo contendere to, a felony or
other crime (except for misdemeanors which are not materially injurious to the
business or reputation of the Company or a Company affiliate); or

(iii)your willful refusal to perform in any material respect your duties and
responsibilities for the Company or a Company affiliate or your failure to
comply in any material respect with the terms of any agreement between you and
the Company, including any proprietary information and assignment of inventions
agreement or and the policies and procedures of the Company or a Company
affiliate at which you are employed or serve as an officer and/or director if
such refusal or failure causes or reasonably expects to cause injury to the
Company or a Company affiliate;

(iv)fraud or other illegal conduct in your performance of duties for the Company
or a Company affiliate;

 

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

 

(v)any conduct by you which is materially injurious to the Company or a Company
affiliate or materially injurious to the business reputation of the Company or a
Company affiliate.  

The foregoing events are an exhaustive list for which your employment can be
terminated by the Company for Cause for purposes of this Agreement.  Prior to
your termination for Cause at any time within 12 months following a Change in
Control, you will be provided with written notice from the Company describing
the conduct forming the basis for the alleged Cause and to the extent curable as
determined by the Board in its good faith discretion, an opportunity of 15 days
to cure such conduct before the Company may terminate you for Cause.  If the
Board determines that the Cause event is curable, you may during this 15 day
period present your case to the full Board before any termination for Cause is
finalized by the Company.  Any termination for “Cause” will not limit any other
right or remedy the Company may have under this Agreement or otherwise.

(a)“Change in Control Related Termination” means that a Qualifying Termination
where your Termination Date occurs on or within 12 months after a Change in
Control.

(b)“Change in Control” has the meaning as defined in the Company's 2015 Equity
Incentive Plan.  For purposes of this Agreement, only the first Change in
Control occurring after the Effective Date will be a “Change in Control.”

(c) “Company” shall mean TRACON Pharmaceuticals, Inc., a Delaware corporation,
and shall include any successor company following a Change in Control.  

(d)“Good Reason” means a resignation of your employment after the first
occurrence of any one or more of the following events without your written
consent.  

(i)a material diminution in your responsibilities, duties or authority;

(ii)a material diminution in your Base Salary; or

(iii)a relocation of the Company’s principal place of business where you are
assigned to work outside of the San Diego metropolitan area;

provided, however that your resignation will only be for Good Reason if each of
the following additional conditions is met: (i) you provide the Company with
written notice describing in detail the basis and underlying facts supporting
your belief that a Good Reason event has occurred within 45 days of the initial
existence of such Good Reason event, (ii) the Company has not cured or remedied
the Good Reason event within 30 days after its receipt of your written notice,
and (iii) your resignation occurs within ninety (90) days of the initial
existence of the Good Reason event.  This “Good Reason” definition and process
is intended to comply with the safe harbor provided under Treasury Regulation
Section 1.409A-1(n)(2)(ii) and shall be interpreted accordingly.

(e)“Non-Change in Control Related Termination” means a Qualifying Termination
that is not a Change in Control Related Termination.

(f)“Qualifying Termination” means a termination of your employment by the
Company without Cause or your resignation of employment for Good Reason.  A
Qualifying Termination does not include any termination of your employment due
to death or disability.

 

-2-

 

 

 

 

 

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

 

(g)“Separation Agreement” means the separation agreement and general release of
all claims in substantially the form attached as Exhibit A hereto, with such
other changes as the Company may reasonably require in order to provide for an
effective release of claims, and delivered to you no later than five days
following your Termination Date.

(h)“Target Bonus” means the applicable percentage of your annual Base Salary
that you were eligible to earn as an annual bonus for the year including your
Termination Date, and calculated without giving effect to any reduction in your
Base Salary that would give rise to your right to resign for Good Reason or any
reduction in Base Salary implemented following a Change in Control.

(i)“Termination Date” means your last day of employment with the Company.

2.Non-Change in Control Related Termination of Employment. If your employment is
terminated due to a Non-Change in Control Related Termination, you will be
eligible to receive the severance benefits provided in this Section 2, provided
that you must: (i) within not later than forty-five (45) days after your
Termination Date, execute and deliver to the Company the Separation Agreement
and permit it to become effective in accordance with its terms, and (ii) remain
in full compliance with the terms of such Separation Agreement.  Upon any breach
of the terms of your Separation Agreement, severance benefits provided under
this Section 2 will immediately cease.

(a)You will receive a severance payment equal to nine months of your Base Salary
(“Cash Severance”).  The Cash Severance shall be paid to you in substantially
equal installments in accordance with the Company’s regular payroll practices
over the nine month period following your Termination Date; provided, however,
the first payment shall be made on the 60th day following your Termination Date
and such first installment shall be in an amount to cover the first two months
of Cash Severance payments otherwise scheduled to occur following your
Termination Date.

(b)Provided that you timely elect COBRA coverage and you continue to timely pay
the same portion (if any) of the necessary group health insurance premium that
you were responsible to pay as of immediately before your Termination Date, the
Company shall continue to pay the Company portion of the premiums for your
Company group health insurance coverage for you and your dependents (the “COBRA
Premiums”) until the earlier of: (i) nine months following the Termination Date,
(ii) the date you are provided with other group health insurance coverage, or
(iii) the date you cease to be eligible for COBRA coverage (the “COBRA Payment
Period”).  For purposes of this Agreement, COBRA Premiums do not include amounts
paid by you for coverage under a Section 125 health care reimbursement account
plan.  Notwithstanding the foregoing, if the Company determines, in its sole
discretion, that it cannot pay the COBRA Premiums without potentially incurring
financial costs or penalties under applicable law (including, without
limitation, Section 2716 of the Public Health Service Act), the Company instead
shall pay you on the first day of each calendar month following the Termination
Date, a fully taxable cash payment equal to the applicable COBRA Premiums for
that month, subject to applicable tax withholdings for the remainder of the
COBRA Payment Period.  

(c)In addition to the Cash Severance and COBRA Premiums, all of your outstanding
equity awards that are subject to vesting solely upon the passage of time and
your continued employment with the Company shall be accelerated in accordance
with their applicable vesting schedules as if you had completed an additional
nine months of employment as of your Termination Date.

3.Change in Control Related Termination of Employment. If your employment is
terminated due to a Change in Control Related Termination, you will be eligible
to receive severance benefits provided in this Section 3, provided that you
must: (i) within not later than forty-five (45) days after your Termination
Date, execute and deliver to the Company the Separation Agreement and permit it

 

-3-

 

 

 

 

 

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

 

to become effective in accordance with its terms, and (ii) remain in full
compliance with the terms of such Separation Agreement.  Upon any breach of the
terms of your Separation Agreement, severance benefits provided under this
Section 3 will immediately cease.

(a)You will receive a severance payment equal to your annual Base Salary and
Target Bonus (“CIC Cash Severance”).  The CIC Cash Severance shall be paid to
you in substantially equal installments in accordance with the Company’s regular
payroll practices over the twelve month period following your Termination Date;
provided, however, the first payment shall be made on the 60th day following
your Termination Date and such first installment shall be in an amount to cover
the first two months of CIC Cash Severance payments otherwise scheduled to occur
following your Termination Date.

(b)Provided that you timely elect COBRA coverage and you continue to timely pay
the same portion (if any) of the necessary group health insurance premium that
you were responsible to pay as of immediately before your Termination Date, the
Company shall continue to pay the Company portion of the premiums for your
Company group health insurance coverage for you and your dependents (the “COBRA
Premiums”) until the earlier of: (i) twelve months following the Termination
Date, or (ii) the date you are provided with other group health insurance
coverage (the “CIC COBRA Payment Period”).  For purposes of this Agreement,
COBRA Premiums do not include amounts paid by you for coverage under a Section
125 health care reimbursement account plan.  Notwithstanding the foregoing, if
the Company determines, in its sole discretion, that it cannot pay the COBRA
Premiums without potentially incurring financial costs or penalties under
applicable law (including, without limitation, Section 2716 of the Public Health
Service Act), the Company instead shall pay you on the first day of each
calendar month following the Termination Date, a fully taxable cash payment
equal to the applicable COBRA Premiums for that month, subject to applicable tax
withholdings for the remainder of the CIC COBRA Payment Period.  

(c)In addition to the Cash Severance and COBRA Premiums, all of your outstanding
equity awards that are subject to vesting solely upon the passage of time and
your continued employment with the Company shall be accelerated such that 100%
of such outstanding equity awards shall be deemed immediately vested and
exercisable as of your Termination Date.

4.Assignability; Binding Nature.  Commencing on the Effective Date, this
Agreement will be binding upon you and the Company.  This Agreement may not be
assigned by you except that your rights to compensation and benefits hereunder,
subject to the limitations of this Agreement, may be transferred by will or
operation of law.  No rights or obligations of the Company under this Agreement
may be assigned or transferred except in the event of a merger or consolidation
in which the Company is not the continuing entity, or the sale or liquidation of
all or substantially all of the assets of the Company provided that the assignee
or transferee is the successor to all or substantially all of the assets of the
Company and assumes the Company’s obligations under this Agreement contractually
or as a matter of law.  The Company will require any such purchaser, successor
or assignee to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such purchase, succession or assignment had taken place.  Your rights and
obligations under this Agreement shall not be transferable by you by assignment
or otherwise provided, however, that if you die, all amounts then payable to you
hereunder shall be paid in accordance with the terms of this Agreement to your
devisee, legatee or other designee or, if there be no such designee, to your
estate.

5.Governing Law.  This Agreement is governed by the Employee Retirement Income
Security Act of 1974, as amended, and, to the extent applicable, the laws of the
State of Delaware, without reference to the conflict of law provisions
thereof.  

 

-4-

 

 

 

 

 

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

 

6.Taxes.  The Company shall have the right to withhold and deduct from any
payment hereunder any federal, state or local taxes of any kind required by law
to be withheld with respect to any such payment.  The Company (including without
limitation members of its Board) shall not be liable to you or other persons as
to any unexpected or adverse tax consequence realized by you and you shall be
solely responsible for the timely payment of all taxes arising from this
Agreement that are imposed on you.  This Agreement is intended to comply with
the applicable requirements of Internal Revenue Code (the "Code") Section 409A
and shall be limited, construed and interpreted in a manner so as to comply
therewith.  Each payment made pursuant to any provision of this Agreement shall
be considered a separate payment and not one of a series of payments for
purposes of Code Section 409A.  While it is intended that all payments and
benefits provided under this Agreement to you will be exempt from or comply with
Code Section 409A, the Company makes no representation or covenant to ensure
that the payments under this Agreement are exempt from or compliant with Code
Section 409A.  The Company will have no liability to you or any other party if a
payment or benefit under this Agreement is challenged by any taxing authority or
is ultimately determined not to be exempt or compliant.  In addition, if upon
your Termination Date, you are then a “specified employee” (as defined in Code
Section 409A), then solely to the extent necessary to comply with Code Section
409A and avoid the imposition of taxes under Code Section 409A, the Company
shall defer payment of “nonqualified deferred compensation” subject to Code
Section 409A payable as a result of and within six (6) months following your
Termination Date until the earlier of (i) the first business day of the seventh
month following your Termination Date or (ii) ten (10) days after the Company
receives written confirmation of your death.  Any such delayed payments shall be
made without interest.  

7.Section 280G.  Limitation on Payments.  If any payment or benefit you will or
may receive from the Company or otherwise (a "280G Payment") would (i)
constitute a "parachute payment" within the meaning of Section 280G of 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 any such 280G Payment pursuant to this
Agreement (a "Payment") 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 (after reduction) being subject to the Excise Tax
or (y) the largest portion, up to and including the total, of the Payment,
whichever amount (i.e., the amount determined by clause (x) or by clause (y)),
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 your receipt, on an after-tax basis, of the greater
economic benefit notwithstanding that all or some portion of the Payment may be
subject to the Excise Tax.  If a reduction in a Payment is required pursuant to
the preceding sentence and the Reduced Amount is determined pursuant to clause
(x) of the preceding sentence, the reduction shall occur in the manner (the
"Reduction Method") that results in the greatest economic benefit for you.  If
more than one method of reduction will result in the same economic benefit, the
items so reduced will be reduced pro rata (the "Pro Rata Reduction Method").

Notwithstanding any provision of the preceding paragraph to the contrary, if the
Reduction Method or the Pro Rata Reduction Method would result in any portion of
the Payment being subject to taxes pursuant to Section 409A of the Code that
would not otherwise be subject to taxes pursuant to Section 409A of the Code,
then the Reduction Method and/or the Pro Rata Reduction Method, as the case may
be, shall be modified so as to avoid the imposition of taxes pursuant to Section
409A of the Code as follows:  (A) as a first priority, the modification shall
preserve to the greatest extent possible, the greatest  economic benefit for you
as determined on an after-tax basis; (B) as a second priority, Payments that are
contingent on future events (e.g., being terminated without cause), shall be
reduced (or eliminated) before Payments that are not contingent on future
events; and (C) as a third priority, Payments that are "deferred compensation"
within the meaning of Section 409A of the Code shall be reduced (or eliminated)
before Payments that are not deferred compensation within the meaning of Section
409A of the Code.

 

-5-

 

 

 

 

 

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

 

Unless you and the Company agree on an alternative accounting firm or law firm,
the accounting firm engaged by the Company for general tax compliance 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 nationally recognized
accounting or law firm to make the determinations required hereunder.  The
Company shall bear all expenses with respect to the determinations by such
accounting or law firm required to be made hereunder.  The Company shall use
commercially reasonable efforts to cause the accounting or law firm engaged to
make the determinations hereunder to provide its calculations, together with
detailed supporting documentation, to you and the Company within fifteen (15)
calendar days after the date on which your right to a 280G Payment becomes
reasonably likely to occur (if requested at that time by you or the Company) or
such other time as requested by you or the Company.  

If you receive a Payment for which the Reduced Amount was determined pursuant to
clause (x) of the first paragraph of this Section 7 and the Internal Revenue
Service determines thereafter that some portion of the Payment is subject to the
Excise Tax, you shall promptly return to the Company a sufficient amount of the
Payment (after reduction pursuant to clause (x) of the first paragraph of this
Section 7 so that no portion of the remaining Payment is subject to the Excise
Tax.  For the avoidance of doubt, if the Reduced Amount was determined pursuant
to clause (y) of the first paragraph of this Section 7, you shall have no
obligation to return any portion of the Payment pursuant to the preceding
sentence.

8.No Change in At-Will Status.  Your employment with the Company is and shall
continue to be at-will, as defined under applicable law.  If your employment
terminates for any reason, you shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement or
required by applicable law, or as may otherwise be established under the
Company’s then existing employee benefit plans or policies at the time of
termination.  Nothing in this Agreement modifies your at-will employment status
and either you or the Company can terminate the employment relationship at any
time, with or without Cause.

9.Entire Agreement. Except as otherwise specifically provided in this Agreement,
the Plan and this Agreement (and the agreements referenced herein) contain all
the legally binding understandings and agreements between you and the Company
pertaining to the subject matter of this Agreement and supersedes all such
agreements, whether oral or in writing, previously discussed or entered into
between the parties.  

10.Covenants

(a) (a) As a condition of this Agreement and to your receipt of any
post-employment benefits, you agree that you will fully and timely comply with
all of the covenants set forth in this Section 10(a) (which shall survive your
termination of employment and termination or expiration of this Agreement):

(i)You will fully comply with all obligations under the proprietary information
and inventions agreement between you and the Company (as amended from time to
time, the “Confidentiality Agreement”) and further agree that the provisions of
the Confidentiality Agreement shall survive any termination or expiration of
this Agreement or termination of your employment or any subsequent service
relationship with the Company;

(ii)Within five (5) days of the Termination Date, you shall return to the
Company all Company confidential information including, but not limited to,
intellectual property, etc. and you shall not retain any copies, facsimiles or
summaries of any Company proprietary information;

 

 

-6-

 

 

 

 

 

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

 

(iii)You will not at any time during or following your employment with the
Company, make (or direct anyone to make) any disparaging statements (oral or
written) about the Company, or any of its affiliated entities, officers,
directors, employees, stockholders, representatives or agents, or any of the
Company’s products or services or work-in-progress, that are harmful to their
businesses, business reputations or personal reputations; provided that nothing
in this Section 10(a)(iii) will be interpreted or construed to prevent you from
giving truthful testimony to any law enforcement officer, court, administrative
proceeding or as part of an investigation by any governmental agency;

(iv)You agree that, upon the Company’s request and without any payment
therefore, you shall reasonably cooperate with the Company (and be available as
necessary) after the Termination Date in connection with any matters involving
events that occurred during your period of employment with the Company.

(b)You also agree that you will fully and timely comply with all of the
covenants set forth in this Section 10(b) (which shall survive your termination
of employment and termination or expiration of this Agreement):

(i)You will fully pay off any outstanding amounts owed to the Company no later
than their applicable due date or within thirty days of your Termination Date
(if no other due date has been previously established);

(ii)Within five (5) days of the Termination Date, you shall return to the
Company all Company property including, but not limited to, computers, cell
phones, pagers, keys, business cards, etc.;

(iii)Within fifteen (15) days of the Termination Date, you will submit any
outstanding expense reports to the Company on or prior to the Termination Date;
and

(iv)As of the Termination Date, you will no longer represent that you are an
officer, director or employee of the Company and you will immediately
discontinue using your Company mailing address, telephone, facsimile machines,
voice mail and e-mail.

(c)You acknowledge that (i) upon a violation of any of the covenants contained
in Section 10 of this Agreement or (ii) if the Company is terminating your
employment for Cause, the Company would as a result sustain irreparable harm,
and, therefore, you agree that in addition to any other remedies which the
Company may have, the Company shall be entitled to seek equitable relief
including specific performance and injunctions restraining you from committing
or continuing any such violation; and

11.Offset.  Any Severance or other payments or benefits made to you under this
Agreement may be reduced, in the Company’s discretion, by any amounts you owe to
the Company provided that any such offsets do not violate Code Section 409A.  To
the extent you receive severance or similar payments and/or benefits under any
other Company plan, program, agreement, policy, practice, or the like, or under
the WARN Act or similar state law, the payments and benefits due to you under
this Agreement will be correspondingly reduced on a dollar-for-dollar basis (or
vice-versa) in a manner that complies with Code Section 409A.  

12.Notice.  Any notice that the Company is required to or may desire to give you
shall be given by personal delivery, recognized overnight courier service,
email, telecopy or registered or certified mail, return receipt requested,
addressed to you at your address of record with the Company, or at such other
place as you may from time to time designate in writing.  Any notice that you
are required or may

 

-7-

 

 

 

 

 

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

 

desire to give to the Company hereunder shall be given by personal delivery,
recognized overnight courier service, email, telecopy or by registered or
certified mail, return receipt requested, addressed to the Company’s Chief
Executive Officer at its principal office, or at such other office as the
Company may from time to time designate in writing.  The date of actual delivery
of any notice under this Section 10 shall be deemed to be the date of delivery
thereof.

13.Waiver; Severability.  No provision of this Agreement may be amended or
waived unless such amendment or waiver is agreed to by you and the Company in
writing.  No waiver by you or the Company of the breach of any condition or
provision of this Agreement will be deemed a waiver of a similar or dissimilar
provision or condition at the same or any prior or subsequent time.  Except as
expressly provided herein to the contrary, failure or delay on the part of
either party hereto to enforce any right, power, or privilege hereunder will not
be deemed to constitute a waiver thereof.  In the event any portion of this
Agreement is determined to be invalid or unenforceable for any reason, the
remaining portions shall be unaffected thereby and will remain in full force and
effect to the fullest extent permitted by law.

14.Voluntary Agreement.  You acknowledge that you have been advised to review
this Agreement with your own legal counsel and other advisors of your choosing
and that prior to entering into this Agreement, you have had the opportunity to
review this Agreement with your attorney and other advisors and have not asked
(or relied upon) the Company or its counsel to represent you or your counsel in
this matter.  You further represent that you have carefully read and understand
the scope and effect of the provisions of this Agreement and that you are fully
aware of the legal and binding effect of this Agreement.  This Agreement is
executed voluntarily by you and without any duress or undue influence on the
part or behalf of the Company.  

By signing below, you expressly acknowledge that you (i) have received a copy of
the Plan and its Summary Plan Description, (ii) understand the terms of the Plan
and this Agreement, (iii) are voluntarily entering into this Agreement and (iv)
are agreeing to be bound by the terms of the Plan and this Agreement.

 

-8-

 

 

 

 

 

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

 

Please acknowledge your acceptance and understanding of this Agreement by
signing and returning it to the undersigned.  A copy of this signed Agreement
will be sent to you for your records.

 

ACKNOWLEDGED AND AGREED:

 

 

 

 

 

TRACON PHARMACEUTICALS, INC.

MARK WIGGINS

 

 

/s/ Charles P. Theuer

/s/ Mark Wiggins

BY:  Charles P. Theuer, President and CEO    

 

 

 

 

SMRH:427756689.3

 

[Signature Page to Severance Agreement]

 

 

 

 

 

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

 

EXHIBIT A

 

SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS

This Separation Agreement and General Release, dated [DATE] (the
“Agreement”),  is made pursuant to that certain Severance Agreement dated
[DATE], 2018 (the “Severance Agreement”) entered into by and between Mark
Wiggins ("Employee") on the one hand, and TRACON Pharmaceuticals, Inc. (the
"Company"), on the other.  This Agreement is entered into in consideration for
and as condition precedent to the Company providing separation benefits to
Employee pursuant to the Severance Agreement.  It is understood and agreed that
the Company is not otherwise obligated to provide such benefits under the terms
of the Severance Agreement and that the Company is doing so as a direct result
of Employee’s willingness to agree to the terms hereof.  Collectively, Employee
and the Company shall be referred to as the "Parties."

1.Employee was formerly employed by the Company.  Employee's employment with the
Company ended effective [DATE] (the "Termination Date").  

2.The purpose of this Agreement is to resolve any and all disputes relating to
Employee's employment with the Company, and the termination thereof (the
"Disputes").  The Parties desire to resolve the above-referenced Disputes, and
all issues raised by the Disputes, without the further expenditure of time or
the expense of contested litigation.  Additionally, the Parties desire to
resolve any known or unknown claims as more fully set forth below.  For these
reasons, they have entered into this Agreement.

3.Employee acknowledges and agrees that Employee has received all wages due to
Employee through the Termination Date, including but not limited to all accrued
but unused vacation, bonuses, commissions, options, benefits, and monies owed by
the Company to Employee.  Employee further agrees and acknowledges that Employee
has been fully paid and reimbursed for any and all business expenses which
Employee incurred during his/her employment with the Company.  

4.The Company expressly denies any violation of any federal, state or local
statute, ordinance, rule, regulation, policy, order or other law.  The Company
also expressly denies any liability to Employee.  This Agreement is the
compromise of disputed claims and nothing contained herein is to be construed as
an admission of liability on the part of the Company hereby released, by whom
liability is expressly denied.  Accordingly, while this Agreement resolves all
issues referenced herein, it does not constitute an adjudication or finding on
the merits of the allegations in the Disputes and it is not, and shall not be
construed as, an admission by the Company of any violation of federal, state or
local statute, ordinance, rule, regulation, policy, order or other law, or of
any liability alleged in the Disputes.

5.In consideration of and in return for the promises and covenants undertaken by
the Company and Employee herein and the releases given by Employee herein:

a.[The Company has previously granted to Employee the following options
(collectively, the “Options”) to purchase shares of the Company’s common stock
(the “Shares”) under the Company’s 2015 Equity Incentive Plan (the “Plan”): 
[List all Option Grants].  As of the Termination Date of [DATE], a total of
[_______] shares underlying Employee's stock options are vested (collectively,
the "Vested Stock Options").  The remaining shares underlying Employee's stock
options are unvested and have been forfeited and canceled as of the Termination
Date.  Employee has until the date that is ninety (90) days after the
Termination Date to exercise any or all of the Vested Options (the “Option
Termination Date”).  Any portion of Employee's Vested Stock Options that remain
unexercised as of the Option Termination Date shall be forfeited and canceled as
of such date.]

Exhibit A-1

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

 

b.In addition to any compensation otherwise due Employee for actual work
performed up to and including the Termination Date, Employee shall receive
severance compensation as outlined in Section ____ of the Severance
Agreement.  Pursuant to Section ____ of the Severance Agreement, Employee will
receive a total sum of $_______, less standard withholdings, representing
[_____] month[s] of Employee’s base salary [and Employee’s Target Bonus] (the
“Severance Pay”).  The Severance Pay shall be paid to Employee in cash, in
substantially equal monthly installments, payable over the [_____] month period
following the Termination Date; provided, however, the first payment shall be
made on the 60th day following the Termination Date and such first installment
shall be in an amount to cover the first two months following the Termination
Date.  As a condition to receiving and continuing to receive the Severance Pay,
Employee must (i) within but not later than forty-five (45) days after the
Termination Date, execute and deliver to the Company this Agreement, (ii) permit
this Agreement to become effective, and (iii) remain in full compliance with
this Agreement and the Severance Agreement.  Employee shall not be entitled to
accrue any additional leave or other benefits subsequent to the Termination
Date.

c.Provided Employee timely elects continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), and Employee
continues to timely pay the same portion (if any) of the necessary group health
insurance premium that Employee was responsible to pay as of immediately before
the Termination Date, the Company shall continue to pay the Company portion of
the premiums for Employee’s Company group health insurance coverage for Employee
and Employee’s dependents through [DATE], which represents [_____] month[s]
following the Termination Date.  Thereafter, Employee shall be eligible to
continue his or her group health insurance coverage at his or her own cost in
accordance with COBRA.  If at any time subsequent to the Termination Date,
Employee obtains group health insurance coverage through another employer,
Employee shall immediately notify the Company that he or she has obtained such
coverage and the Company shall no longer be required to pay any premiums for
Employee's group health insurance coverage as of the date that Employee's new
group health insurance coverage begins.

d.Any tax liabilities resulting from or arising out of the benefits to Employee
referred to in paragraphs 5a, 5b and 5c, above, shall be the sole and exclusive
responsibility of Employee.  Employee agrees to indemnify and hold the Company
and the others released herein harmless from and for any tax liability
(including, but not limited to, assessments, interest, and penalties) imposed on
the Company by any taxing authority on account of the Company failing to
withhold for tax purposes any amount from the benefits made as consideration of
this Agreement.

6.Except for any rights created by this Agreement, in consideration of and in
return for the promises and covenants undertaken herein by the Company, and for
other good and valuable consideration, receipt of which is hereby acknowledged:

a.Employee does hereby acknowledge full and complete satisfaction of and does
hereby release, absolve and discharge the Company, and each of its parents,
subsidiaries, divisions, related companies and business concerns, past and
present, as well as each of its partners, trustees, directors, officers, agents,
attorneys, servants and employees, past and present, and each of them
(hereinafter collectively referred to as "Releasees") from any and all claims,
demands, liens, agreements, contracts, covenants, actions, suits, causes of
action, grievances, wages, vacation payments, severance payments, obligations,
commissions, overtime payments, debts, profit sharing claims, expenses, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, whether known or unknown to Employee which Employee now owns or holds
or has at any time owned or held as against Releasees, or any of them, including
specifically but not exclusively and without limiting the generality of the
foregoing, any and all claims, demands, grievances, agreements, obligations and
causes of action, known or unknown, suspected or unsuspected by Employee: (1)
arising out of or in any way connected

Exhibit A-2

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

 

with the Disputes; or (2) arising out of Employee's employment with the Company;
or (3) arising out of or in any way connected with any claim, loss, damage or
injury whatever, known or unknown, suspected or unsuspected, resulting from any
act or omission by or on the part of the Releasees, or any of them, committed or
omitted on or before the Effective Date hereof.  Additionally, Employee in any
future claims may not use against Releasees as evidence any acts or omissions by
or on the part of the Releasees, or any of them, committed or omitted on or
before the Effective Date hereof, and no such future claims may be based on any
such acts or omissions.  Also without limiting the generality of the foregoing,
Employee specifically releases the Releasees from any claim for attorneys'
fees.  EMPLOYEE ALSO SPECIFICALLY AGREES AND ACKNOWLEDGES EMPLOYEE IS WAIVING
ANY RIGHT TO RECOVERY BASED ON STATE OR FEDERAL AGE, SEX, PREGNANCY, RACE,
COLOR, NATIONAL ORIGIN, MARITAL STATUS, RELIGION, VETERAN STATUS, DISABILITY,
SEXUAL ORIENTATION, MEDICAL CONDITION OR OTHER ANTI-DISCRIMINATION LAWS,
INCLUDING, WITHOUT LIMITATION, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE
AGE DISCRIMINATION IN EMPLOYMENT ACT,  THE EQUAL PAY ACT, THE AMERICANS WITH
DISABILITIES ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, THE CALIFORNIA
FAMILY RIGHTS ACT, CALIFORNIA LABOR CODE SECTION 970, THE FAMILY AND MEDICAL
LEAVE ACT, THE EMPLOYEE RETIREMENT INCOME SECURITY ACT, THE WORKER ADJUSTMENT
AND RETRAINING ACT, THE FAIR LABOR STANDARDS ACT, AND ANY OTHER SECTION OF THE
CALIFORNIA LABOR OR GOVERNMENT CODE, ALL AS AMENDED, WHETHER SUCH CLAIM BE BASED
UPON AN ACTION FILED BY EMPLOYEE OR BY A GOVERNMENTAL AGENCY.  This release does
not release claims that cannot be released as a matter of law.

7.Employee agrees and understands as follows:  It is the intention of Employee
in executing this instrument that it shall be effective as a bar to each and
every claim, demand, grievance and cause of action hereinabove specified.  In
furtherance of this intention, Employee hereby expressly waives any and all
rights and benefits conferred upon Employee by the provisions of Section 1542 of
the California Civil Code and expressly consents that this Agreement shall be
given full force and effect according to each and all of its express terms and
provisions, including those relating to unknown and unsuspected claims, demands
and causes of action, if any, as well as those relating to any other claims,
demands and causes of action hereinabove specified.  Section 1542 provides:

"A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor."

Having been so apprised, Employee nevertheless hereby voluntarily elects to and
does waive the rights described in Civil Code section 1542 and elects to assume
all risks for claims that now exist in Employee's favor, known or unknown, that
are released under this Agreement.

8.Employee agrees:  (l) the fact of and the terms and conditions of this
Agreement; and (2) any and all actions by Releasees taken in accordance
herewith, are confidential, and shall not be disclosed, discussed, publicized or
revealed by the parties or their attorneys to any other person or entity,
including but not limited to radio, television, press media, newspapers,
magazines, professional journals and professional reports, excepting only the
Parties' accountants, lawyers, immediate family members (mother, father,
brother, sister, child, spouse), the persons necessary to carry out the terms of
this Agreement or as required by law.  Should Employee be asked about the
Disputes or this Agreement, Employee shall limit Employee's response, if any, by
stating that the matters have been amicably resolved.

Exhibit A-3

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

 

9.Nothing in this Agreement prevents Employee from filing a charge or complaint
with the Equal Employment Opportunity Commission, the California Department of
Fair Employment and Housing, the National Labor Relations Board, the
Occupational Safety and Health Administration, the Securities and Exchange
Commission or any other federal, state or local governmental agency or
commission (collectively, the “Government Agencies”).  This Agreement does not
limit Employee’s ability to communicate with any Government Agencies or
otherwise participate in any investigation or proceeding that may be conducted
by any Government Agencies.  While this Agreement does not limit Employee’s
right to receive an award for information provided to the Securities and
Exchange Commission, Employee understands and agrees that, to maximum extent
permitted by law, Employee is otherwise waiving any and all rights Employee may
have to individual relief based on any claims that Employee has released and any
rights Employee has waived by signing this Agreement.  

10.Employee agrees not to make any derogatory, disparaging or negative comments
about the Company, its products, officers, directors, or employees; provided
that nothing in this Section 10 will be interpreted or construed to prevent
Employee from giving truthful testimony to any law enforcement officer, court,
administrative proceeding or as part of a government investigation.

 

11.If any provision of this Agreement or application thereof is held invalid,
the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provision or
application.  To this end, the provisions of this Agreement are severable.

12.Employee agrees and understands that this Agreement may be treated as a
complete defense to any legal, equitable, or administrative action that may be
brought, instituted, or taken by Employee, or on Employee's behalf, against the
Company or the Releasees, and shall forever be a complete bar to the
commencement or prosecution of any claim, demand, lawsuit, charge, or other
legal proceeding of any kind against the Company and the Releasees.

13.This Agreement and all covenants and releases set forth herein shall be
binding upon and shall inure to the benefit of the respective Parties hereto,
their legal successors, heirs, assigns, partners, representatives, parent
companies, subsidiary companies, agents, attorneys, officers, employees,
directors and shareholders.

14.The Parties hereto acknowledge each has read this Agreement, that each fully
understands its rights, privileges and duties under the Agreement, that each has
had an opportunity to consult with an attorney of its choice and that each
enters this Agreement freely and voluntarily.

15.This Agreement may not be released, discharged, abandoned, changed or
modified in any manner, except by an instrument in writing signed by Employee
and an officer of the Company.  The failure of any Party to enforce at any time
any of the provisions of this Agreement shall in no way be construed as a waiver
of any such provision, nor in any way to affect the validity of this Agreement
or any part thereof or the right of any Party thereafter to enforce each and
every such provision.  No waiver of any breach of this Agreement shall be held
to be a waiver of any other or subsequent breach.

16.This Agreement and the provisions contained herein shall not be construed or
interpreted for or against any party hereto because that party drafted or caused
that party's legal representative to draft any of its provisions.

Exhibit A-4

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

 

17.In the event of litigation arising out of or relating to this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs.

18.Employee acknowledges Employee may hereafter discover facts different from,
or in addition to, those Employee now knows or believes to be true with respect
to the claims, demands, liens, agreements, contracts, covenants, actions, suits,
causes of action, wages, obligations, debts, expenses, damages, judgments,
orders and liabilities herein released, and agrees the release herein shall be
and remain in effect in all respects as a complete and general release as to all
matters released herein, notwithstanding any such different or additional facts.

19.The undersigned each acknowledge and represent that no promise or
representation not contained in this Agreement has been made to them and
acknowledge and represent that this Agreement and the Severance Agreement
contains the entire understanding between the Parties and contains all terms and
conditions pertaining to the compromise and settlement of the subjects
referenced herein.  The undersigned further acknowledge that the terms of this
Agreement are contractual and not a mere recital.

20.Employee expressly acknowledges, understands and agrees that this Agreement
includes a waiver and release of all claims which Employee has or may have under
the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §621, et
seq. (“ADEA”).  The terms and conditions of Paragraphs 20 through 22 apply to
and are part of the waiver and release of ADEA claims under this
Agreement.  Company hereby advises Employee in writing to discuss this Agreement
with an attorney before signing it.  Employee acknowledges the Company has
provided Employee at least forty-five days within which to review and consider
this Agreement before signing it.  If Employee elects not to use all forty-five
days, then Employee knowingly and voluntarily waives any claim that Employee was
not in fact given that period of time or did not use the entire forty-five days
to consult an attorney and/or consider this Agreement.

21.Within three calendar days of signing and dating this Agreement, Employee
shall deliver the signed original of this Agreement to [_____________] of the
Company.  However, the Parties acknowledge and agree that Employee may revoke
this Agreement for up to seven calendar days following Employee's execution of
this Agreement and that it shall not become effective or enforceable until the
revocation period has expired.  The Parties further acknowledge and agree that
such revocation must be in writing addressed to and received
by  [_____________]of the Company not later than midnight on the seventh day
following execution of this Agreement by Employee.  If Employee revokes this
Agreement under this Paragraph, this Agreement shall not be effective or
enforceable and Employee will not receive the benefits described above,
including those described in Paragraph 5.

22.If Employee does not revoke this Agreement in the timeframe specified in
Paragraph 21 above, the Agreement shall be effective at 12:00:01 a.m. on the
eighth day after it is signed by Employee (the "Effective Date").

23.This Agreement is intended to be exempt from the requirements of section 409A
of the Internal Revenue Code of 1986 as amended (“Section 409A”) and will be
interpreted accordingly.  While it is intended that all payments and benefits
provided under this Agreement to Employee or on behalf of Employee will be
exempt from Section 409A, the Company makes no representation or covenant to
ensure that such payments and benefits are exempt from or compliant with Section
409A.  The Company will have no liability to Employee or any other party if a
payment or benefit under this Agreement is challenged by any taxing authority or
is ultimately determined not to be exempt from or compliant with Section 409A.

Exhibit A-5

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

 

24.This Agreement may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original and such counterparts shall
together constitute one and the same Agreement.

25.This Agreement shall be construed in accordance with, and be deemed governed
by, the Employee Retirement Income Security Act of 1974, as amended, and, to the
extent applicable, the laws of the State of Delaware, without reference to the
conflict of law provisions thereof.  

26.The Company executes this Agreement for itself and on behalf of all other
respective Releasees.

 

Exhibit A-6

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

 

I have read the foregoing Separation Agreement and General Release of All
Claims, consisting of [____] pages, and I accept and agree to the provisions
contained therein and hereby execute it voluntarily and with full understanding
of its consequences.

PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A GENERAL RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS.

Dated: ___________

Mark Wiggins

 

Dated:___________

 

 

TRACON Pharmaceuticals, Inc.

Name:
Title:

 

 

 

 

[Signature Page to Separation Agreement and General Release of All Claims]