EXHIBIT
10.24


 


RIGEL
PHARMACEUTICALS, INC.


 


AMENDED
AND RESTATED EMPLOYMENT AGREEMENT


 


THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is
entered by and between Dr. Donald G. Payan (“Executive”) and RIGEL
PHARMACEUTICALS, INC. (the “Company”), a Delaware corporation on November 13,
2008 (the “Effective Date”).  This Agreement shall replace and supersede
that certain Employment Agreement between Executive and the Company entered
into effective as of December 17, 2007 (the “Prior
Agreement”).


 


WHEREAS,
The Company and Employee previously entered into the Prior
Employment Agreement and desire to amend and restate the Prior Agreement in its
entirety as set forth herein, effective as of the Effective Date, in order to
clarify the application of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) to
the benefits provided to Executive under the Prior Agreement.


 


NOW,
THEREFORE, in consideration of the mutual promises and
covenants contained herein, it is hereby agreed by and between the parties
hereto as follows, effective as of the Effective Date:


 


1.             EMPLOYMENT
BY THE COMPANY.


 


1.1          Title and
Responsibilities.  Subject to the
terms set forth herein, Executive will continue to be employed by the Company
as the person responsible for all of the Company’s scientific research;
currently, the Executive holds the title of Executive Vice President, Chief
Scientific Officer.  Executive will
report to the Company’s Chief Executive Officer and the Company’s Board of
Directors (the “Board”).
During his employment with the Company, Executive will devote his best efforts
and substantially all of his business time and attention (except for vacation
periods and reasonable periods of illness or other incapacity permitted by the
Company’s general employment policies) to the business of the Company.


 


1.2          At-Will Employment. 
Executive’s relationship with the Company is at-will.  The Company will have the right to terminate
this Agreement and Executive’s employment with the Company at any time with or without
Cause (as defined below), and with or without advance notice.  In addition, the Company retains the
discretion to modify the terms of Executive’s employment, including but not
limited to position, duties, reporting relationship, office location, compensation,
and benefits, at any time.  Executive’s
at-will employment relationship may only be changed in a written agreement
approved by the Board and signed by Executive and a duly authorized officer of
the Company.


 

















 


1.3          Company Employment
Policies.  The employment
relationship between the parties will continue to be governed by the general
employment policies and procedures of the Company, including those relating to
the protection of confidential information and assignment of inventions.


 


2.             COMPENSATION.


 


2.1          Salary.  Executive will earn a base salary in 2008 at
an annualized rate of $483,000, payable on the Company’s standard payroll
dates.  Executive will be considered for
annual increases in base salary in accordance with Company policy.


 


2.2          Target Bonus.  Subject to annual review by the Board or a
duly authorized committee thereof (either, the “Committee”),
Executive will be eligible to earn a target annual bonus of up to fifty percent
(50%) of Executive’s base salary (the “Target  Bonus”).  Whether Executive earns a Target Bonus, and
if so, in what amount, will be determined solely by the Committee in its
discretion.  Executive must remain an
active employee through the time the Committee determines bonus amounts for
executives of the Company in order to earn any bonus.


 


2.3          Equity Awards.  Executive’s
current compensatory equity awards are not affected by this Agreement and will
remain in effect in accordance with the terms of the applicable award
agreements and stock plan(s).


 


2.4          Standard Company
Benefits.  Executive will be entitled
to participate in the Company’s employee benefits and compensation plans which
may be in effect from time to time and provided by the Company to its
executives, under the terms and conditions of such benefit and compensation
plans.


 


3.             CONFIDENTIAL
INFORMATION.


 


3.1          Intellectual Property.         As a condition of his
continued employment, Executive must continue to comply with the Employee
Proprietary Information and Inventions Agreement (the “Proprietary Agreement”)
he has executed previously.  Nothing in
this Agreement is intended to modify in any respect the Proprietary Agreement,
and the Proprietary Agreement will remain in full force and effect.


 


3.2          Solicitation.          As a condition of
receiving the Severance Benefits (as defined below), Executive agrees that for
one (1) year following the termination of employment with the Company,
Executive will not personally initiate or participate in the solicitation of
any employee of the Company or any of its affiliates to terminate his or her
relationship with the Company or any of its affiliates in order to become an
employee for any other person or business entity.


 


4.             TERMINATION
OF EMPLOYMENT; CHANGE OF CONTROL


 


4.1          Termination Without
Cause or Resignation for Good Reason — No Change of Control.  If the Company terminates Executive’s
employment at any time 


 


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without Cause (and other
than as a result of death or disability), or if Executive resigns from all
positions he then holds with the Company for Good Reason, and such termination
is not a “Qualifying Termination” (as defined below), and provided further that
such termination is a “separation from service” (as defined under Treasury
Regulation Section 1.409A-1(h)), Executive will be eligible for the
following severance benefits (the “Severance Benefits”):  (i) the Company will make a lump sum
severance payment to Executive in an amount equal to two (2) years of
Executive’s then-current base salary plus 200% of the Eligible Bonus, where the
Eligible Bonus is an average of the percent earned of the Target Bonus for
performance for the last two year multiplied by the current Target Bonus,
subject to withholdings and deductions, (ii) if Executive timely elects
continued health insurance coverage pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (together with any applicable state law
of similar effect, “COBRA”), the Company will pay the full amount of Executive’s COBRA
premiums for Executive’s continued coverage under the Company’s group health
plans, including coverage for Executives’s eligible dependents for
eighteen (18) months following the date his employment terminates or until such
earlier date as he becomes eligible for health insurance coverage from another
source (provided that Executive must promptly inform the Company, in writing,
if he becomes eligible for health insurance coverage from another source within
eighteen (18) months after the termination) or otherwise ceases to be eligible
for COBRA, (iii) acceleration of all then-outstanding compensatory equity
awards, and (iv) a modification of the post-termination exercise period of
such equity awards until the earlier of (a) the original end of the term
of each such award (generally 10 years from the date of grant) or (b) the
one (1) year anniversary of the date of the termination of
employment.  Executive will not be
entitled to the Severance Benefits unless and until the requirements set forth
in Section 5 of this Agreement are satisfied.


 


(a)           Definition of Cause.  For purposes of this Agreement, “Cause” will mean: (1) an
intentional action or intentional failure to act by Executive that was
performed in bad faith and to the material detriment of the business of the
Company; (2) Executive’s intentional refusal or intentional failure to act
in accordance with any lawful and proper direction or order of his or her
superiors that has not been cured within ten (10) days after written
notice from the Company, or that has caused irreparable damage incapable of
cure; (3) Executive’s habitual or gross neglect of the duties of
employment that has not been cured within ten (10) days after written
notice from the Company, or that has caused irreparable damage incapable of
cure; (4) Executive’s indictment, charge, or conviction of a felony or any
crime involving moral turpitude, or participation in any act of theft or
dishonesty, in each case, that has had or could reasonably be expected to have
a material detrimental effect on the business of the Company; or (5) Executive’s
violation of any material provision of the Proprietary Agreement or violation
of any material provision of any other written Company policy or procedure.


 


(b)           Definition of Change of
Control.  For purposes of this
Agreement, a “Change of Control” has the
meaning set forth in the Severance Plan (as defined below).


 


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(c)           Definition of
Resignation for Good Reason.  For
purposes of this Agreement, a “Resignation for Good
Reason” means Executive has resigned from all positions he
then-holds with the Company (or any successor thereto) if (1):  (i)     there is a material diminution of Executive’s
authority, including but not limited to decision-making authority,
duties, or responsibilities; (ii)     there
is a material reduction in the Executive’s annual base compensation (including
the base salary and target bonus opportunity), where material is considered greater than 5%; (iii)   the Executive is required
to relocate his primary work location to a facility or location that would
increase the Executive’s one way commute distance by more than twenty (20)
miles from the Executive’s primary work location as
of immediately prior to such change; (iv) a material
diminution in the authority, duties, or responsibilities of the supervisor to whom
the Executive is required to report,
including a requirement that the Executive report to a corporate officer
or employee instead of reporting directly to the board of directors of a
corporation (or similar governing body with respect to an entity other than a
corporation); (v)  a material diminution in the budget over
which the Executive retains authority; (vi)  the Executive is required, as a condition to continued
service, to enter into any agreement with the Company or a successor thereto
regarding confidentiality, non-competition, non-solicitation or other similar
restrictive covenant that is materially more restrictive than under the
Proprietary Agreement; (vii)  the
Company materially breaches its obligations under this Plan or any
then-effective written employment agreement with the Executive; or (viii) any
acquirer, successor or assign of the Company fails to assume and perform, in
all material respects, the obligations of the Company hereunder; and (2) the
Executive provides written notice to the Company’s General Counsel within the
60-day period immediately following such action; and (3) such action is
not remedied by the Company within thirty (30) days following the Company’s
receipt of such written notice; and (4) the Executive’s resignation is
effective not later than sixty (60) days after the expiration of such thirty
(30) day cure period.


 


4.2          Qualifying Termination
Upon Change of Control.  Executive
will be an “Eligible Employee” under the Company’s Change of Control Severance
Plan (the “Severance Plan”).  Upon a “Qualifying Termination” (as defined
in the Severance Plan), Executive will not receive any part of the Severance
Benefits and instead Executive’s rights to receive any severance pay or post-termination
benefit continuation will be only as set forth in the Severance Plan and as
otherwise required by applicable law.


 


4.3          Other Terminations.
If, at any time, the Company terminates Executive’s employment at any time for
Cause or as a result of death or disability, or if Executive resigns other than
for Good Reason, Executive’s salary will cease on the date of termination, and
Executive will not be entitled to any Severance Benefits, severance pay, pay in
lieu of notice or any other such compensation, or any accelerated vesting of
any equity awards, other than payment of accrued salary and such other accrued
benefits as expressly required in such event by applicable law or the terms of
any applicable Company benefit plans or new agreements made at that time.


 


(a)           Certain Offsets.  The Company will reduce Executive’s Severance
Benefits, in whole or in part, by any other severance benefits, pay in lieu of 


 


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notice, or other similar
benefits payable to Executive by the Company that become payable in connection
with Executive’s termination of employment, including but not limited to any
payments that are owed pursuant to (i) any other severance plan, policy or
practice, or any individually negotiated employment contract or agreement with
the Company relating to severance benefits, in each case, as is in effect on
Executive’s termination date, (ii) any applicable legal requirement,
including, without limitation, the Worker Adjustment and Retraining Notification
Act (the “WARN Act”), or (iii) any
Company policy or practice providing for Executive to remain on the payroll
without being in active service for a limited period of time after being given
notice of the termination of Executive’s employment.  The termination payments and benefits
provided under this Agreement are intended to satisfy, to the greatest extent
possible, any and all statutory obligations that may arise out of Executive’s
termination of employment.  In the
Company’s sole discretion, such reductions may be applied on a retroactive
basis, with severance benefits previously paid being recharacterized as
payments pursuant to the Company’s statutory obligation.  If Executive is indebted to the Company at
his or her termination date, the Company reserves the right to offset any
severance payments to Executive by the amount of such indebtedness.


 


4.4          Code Section 409A. 
If the Company (or, if applicable, the successor entity thereto)
determines that the severance payments and benefits provided under this
Agreement or the Severance Plan (any such payments, the “Plan Payments”)
constitute “deferred compensation” under Code Section 409A (together, with
any state law of similar effect, “Section 409A”) and if Executive is a “specified
employee” of the Company or any successor entity thereto, as such term is
defined in Section 409A(a)(2)(B)(i) (a “Specified Employee”), then, solely to
the extent necessary to avoid the incurrence of the adverse personal tax
consequences under Section 409A, the timing of the Plan Payments will be
delayed as follows:  on the earliest to
occur of (1) the date that is six months and one day after the “separation
from service” (as such term is defined in Section 1.409A-1(h) of the
Treasury Regulations), and (2) the date of Executive’s death (such
earliest date, the “Delayed
Initial Payment Date”), the Company (or the successor entity
thereto, as applicable) will (i) pay to Executive a lump sum amount equal
to the sum of the Plan Payments that Executive would otherwise have received through
the Delayed Initial Payment Date if the commencement of the payment of the Plan
Payments had not been delayed pursuant to this Section 4.4 and (ii) commence
paying the balance of the Plan Payments in accordance with the applicable
payment schedules set forth in this Agreement or the Severance Plan, as
applicable.  Prior to the imposition of
any delay on the Plan Payments as set forth above, it is intended that (A) each
installment of the Plan Payments be regarded as a separate “payment” for
purposes of Treasury Regulations Section 1.409A-2(b)(2)(i), (B) all
Plan Payments satisfy, to the greatest extent possible, the exemptions from the
application of Section 409A provided under Treasury Regulations Sections
1.409A-1(b)(4) and 1.409A-1(b)(9)(iii), and (C) the Plan Payments
consisting of COBRA premiums also satisfy, to the greatest extent possible, the
exemption from the application of Section 409A provided under Treasury
Regulations Section 1.409A-1(b)(9)(v).


 


5.             RELEASE.  As a condition of receiving the Severance
Benefits, Executive will execute and return to the Company, a release
substantially in the form attached hereto 


 


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as EXHIBIT A within
the time frame set forth therein (the “Release”)
and such release must become effective in accordance with its terms, but not
later than the 60th day following the termination of employment (with the
Company having the authority, in its discretion, to modify the form of the
release to comply with applicable law) and Executive will continue to comply
with his obligations under the Proprietary Agreement.  Notwithstanding the payment schedules set
forth herein, no Severance Benefits will be paid prior to the effective date of
the Release (the “Release Date”), but rather on
the first regular payroll pay day following the Release Date, the Company will
pay Executive the Severance Benefits Executive would otherwise have received on
or prior to such date but for the delay in Severance Benefits related to the
effectiveness of the Release, with the balance of the Severance Benefits being
paid as originally scheduled.  In no
event will the commencement of the payment of the Severance Benefits occur
later than March 15 of the year following the year in which the “separation
from service” (as such term is defined in Section 1.409A-1(h) of the
Treasury Regulations) occurs.


 


6.             GENERAL
PROVISIONS.


 


6.1          Notices.  Any notices provided hereunder must be in
writing and will be deemed effective upon the earlier of personal delivery (including,
personal delivery by facsimile transmission), delivery by express delivery
service (e.g. Federal Express), or the third day after mailing by first class
mail, to the Company at its primary office location and to Executive at his
address as listed on the Company payroll (which address may be changed by
either party by written notice).


 


6.2          Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, and such invalid, illegal
or unenforceable provision will be reformed, construed and enforced in such
jurisdiction so as to render it valid, legal, and enforceable consistent with
the intent of the parties insofar as possible.


 


6.3          Waiver.  If either party should waive any breach of
any provisions of this Agreement, he or it will not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.


 


6.4          Entire Agreement.  This Agreement, including its exhibits,
constitutes the entire agreement between Executive and the Company regarding
the subject matter hereof.  As of the
Effective Date, this Agreement supersedes and replaces any and all other
agreements, promises, or representations, written or otherwise, between
Executive and the Company with regard to this subject matter, including the
Existing Agreement.  This Agreement is
entered into without reliance on any agreement, promise, or representation,
other than those expressly contained or incorporated herein, and, except for
those changes expressly reserved to the Company’s or Board’s discretion in this
Agreement, the terms of this Agreement cannot be modified or amended except in
a 


 


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writing signed by
Executive and a duly authorized officer of the Company which is approved by the
Board.


 


6.5          Counterparts.  This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.  Signatures transmitted via
facsimile will be deemed the equivalent of originals.


 


6.6          Headings and
Construction.  The headings of the
sections hereof are inserted for convenience only and will not be deemed to
constitute a part hereof or to affect the meaning thereof.  For purposes of construction of this
Agreement, any ambiguities will not be construed against either party as the
drafter.


 


6.7          Successors and Assigns.  This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive, the Company, and their
respective successors, assigns, heirs, executors and administrators, except
that Executive may not assign any of his duties hereunder and he may not assign
any of his rights hereunder without the written consent of the Company.


 


6.8          Arbitration.  To provide a mechanism for rapid and
economical dispute resolution, Executive and the Company agree that any and all
disputes, claims, or causes of action, in law or equity, arising from or
relating to this Agreement (including the Release) or its enforcement,
performance, breach, or interpretation, or arising from or relating to
Executive’s employment with the Company or the termination of Executive’s
employment with the Company, will be resolved, to the fullest extent permitted
by law, by final, binding, and confidential arbitration held in San Francisco,
California, and conducted by JAMS, Inc. (“JAMS”), under its then-applicable Rules and
Procedures.  By agreeing to this arbitration procedure, both Executive and the Company
waive the right to resolve any such dispute through a trial by jury or judge or
by administrative proceeding. 
Executive will have the right to be
represented by legal counsel at any arbitration proceeding at his expense.  The arbitrator will:  (a) have the authority to compel
adequate discovery for the resolution of the dispute and to award such relief
as would otherwise be available under applicable law in a court proceeding; and
(b) issue a written statement signed by the arbitrator regarding the
disposition of each claim and the relief, if any, awarded as to each claim, the
reasons for the award, and the arbitrator’s essential findings and conclusions
on which the award is based.  The Company
will bear all fees for the arbitration, except for any attorneys’ fees or costs
associated with Executive’s personal representation.  The arbitrator, and not a court, will also be
authorized to determine whether the provisions of this paragraph apply to a
dispute, controversy or claim sought to be resolved in accordance with these
arbitration procedures.  Notwithstanding
the provisions of this paragraph, the parties are not prohibited from seeking
injunctive relief in a court of appropriate jurisdiction to prevent irreparable
harm on any basis, pending the outcome of arbitration.  Any awards or orders in such
arbitrations may be entered and enforced as judgments in the federal and the
state courts of any competent jurisdiction.


 


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6.9          Governing Law.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of
the State of California without regard to conflicts of laws principles.


 


6.10        Term.     This Agreement will automatically terminate on December 31,
2010; provided that no such termination shall affect the right to any unpaid
benefit due the Executive under this Agreement.


 


6.11        Exhibits.


 


Exhibit A — Release Agreement


 


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IN WITNESS WHEREOF,
the parties have executed this AMENDED AND RESTATED EMPLOYMENT AGREEMENT effective as
of the Effective Date written above.


 


	
  RIGEL PHARMACEUTICALS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Dolly Vance

  	
   

  
	
   

  	
  Dolly
  Vance

  	
   

  
	
   

  	
  Senior VP, General Counsel, Corporate Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  DR. DONALD G. PAYAN

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Donald G. Payan

  	
   

  
				



 














 


EXHIBIT A


 


RELEASE
AGREEMENT


 


I
understand and agree completely to the terms set forth in the Rigel
Pharmaceuticals, Inc. Employment Agreement (the “Agreement”).


 


I understand that this
Release, together with the Agreement, constitutes the complete, final and
exclusive embodiment of the entire agreement between the Company, affiliates of
the Company and me with regard to the subject matter hereof.  I am not relying on any promise or
representation by the Company or the Employers that is not expressly stated
therein.  Certain capitalized terms used
in this Release are defined in the Agreement.


 


I hereby confirm my
obligations under my Proprietary Agreement with the Company and/or the
Employer.


 


Except as otherwise set
forth in this Release, I hereby generally and completely release the Company,
the Employers, and their current and former directors, officers, employees,
stockholders, shareholders, partners, agents, attorneys, predecessors,
successors, parent and subsidiary entities, insurers, affiliates, and assigns
(collectively, the “Released Parties”) from any
and all claims, liabilities and obligations, both known and unknown, that arise
out of or are in any way related to events, acts, conduct, or omissions
occurring prior to my signing this Agreement (collectively, the “Released Claims”).  The Released Claims include, but are not
limited to:  (1) all claims arising
out of or in any way related to my employment with the Company, the Employers
or their affiliates, or the termination of that employment; (2) all claims
related to my compensation or benefits, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock,
stock options, or any other ownership interests in the Company, the Employers,
or their affiliates; (3) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing;
(4) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all
federal, state, and local statutory claims, including claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) (“ADEA”), the
federal Employee Retirement Income Security Act of 1974 (as amended), and the
California Fair Employment and Housing Act (as amended).  Notwithstanding the foregoing, the following
are not included in the Released Claims (the “Excluded
Claims”): (1) any rights or claims for indemnification I
may have pursuant to any written indemnification agreement with the Company to
which I am a party, the charter, bylaws, or operating agreements of the
Company, or under applicable law;  or (2) any
rights which are not waivable as a matter of law.  In addition, nothing in this Release prevents
me from filing, cooperating with, or participating in any proceeding before the
Equal Employment Opportunity Commission, the Department of Labor, or the
California Department of Fair Employment and Housing, except that I hereby
waive my 


 

















 


right to any monetary benefits in connection with any such claim,
charge or proceeding.  I hereby represent
and warrant that, other than the Excluded Claims, I am not aware of any claims
I have or might have against any of the Released Parties that are not included
in the Released Claims.


 


I acknowledge that I am
knowingly and voluntarily waiving and releasing any rights I may have under the
ADEA.  I also acknowledge that the
consideration given for the Released Claims is in addition to anything of value
to which I was already entitled.  I
further acknowledge that I have been advised by this writing, as required by
the ADEA, that: (a) the Released Claims do not apply to any rights or
claims that arise after the date I sign this Release; (b) I should consult
with an attorney prior to signing this Release (although I may choose
voluntarily not to do so); (c) I have twenty-one (21) days to consider
this Release (although I may choose to voluntarily to sign it sooner); (d) I
have seven (7) days following the date I sign this Release to revoke the
Release by providing written notice to an officer of the Company; and (e) the
Release will not be effective until the date upon which the revocation period
has expired unexercised, which will be the eighth day after I sign this Release
(“Effective Date”).


 


I acknowledge that I have
read and understand Section 1542 of the California Civil Code which reads
as follows: “A general release does not extend to claims
which the creditor does not know or suspect to exist in his 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.”  I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims hereunder.


 


I hereby represent that I
have been paid all compensation owed and for all hours worked, I have received
all the leave and leave benefits and protections for which I am eligible, and I
have not suffered any on-the-job injury for which I have not already filed a
workers’ compensation claim.


 


I acknowledge that to
become effective, I must sign and return this Release to the Company so that it
is received not later than twenty-one (21) days following the date it is
provided to me, and I must not revoke it thereafter.


 


	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  



 


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