EXHIBIT 10.19


 


BIOMEDICINES, INC.


 


3 September 1999


 


PERSONAL AND CONFIDENTIAL


 


Peter J. Langecker, M.D., Ph.D.


 


Dear Doctor Langecker:


 


On behalf of the Board of Directors of BioMedicines, Inc. (the
“Company”), I would like to offer you the position of Chief Medical Officer and
Vice President Clinical Affairs. In these capacities you will report to me.


 


In your role as Chief Medical Officer and Vice President Clinical
Affairs, you will have principal responsibility for: 


 


•           planning
and directing the clinical development of all Company projects


 


•           supervising
the Biometrics Group - Dennis Blanchett, M.D., Executive Director of
Biometrics, shall report to you in this capacity


 


•           establishing
a clinical development infrastructure that is both cost-effective and
appropriate to the Company’s needs at any given time


 


•           selecting
and managing external vendors for those projects whose clinical aspects are
performed in whole or in part externally


 


•           evaluating
potential product acquisitions for the Company


 


•           participating
in partnering discussions, for in- or out-licensing


 


•           contributing
to safety management practices and activities for the Company


 


•           helping
to ensure compliance with good scientific practices in all areas for which you
are responsible or to which you may contribute


 


•           the
hiring and subsequent management of personnel in your groups


 


•           accurate
and timely budgetary planning and execution


 


In your role as Vice President you will also be a member of the
Company’s Senior Management Team with joint responsibility for recommending
Company strategy to the Board as well as setting Company policies.


 


The Board has also directed me to indicate to you its particular desire
that you will contribute creatively, constructively and cordially to the
success of your colleagues and fellow members of the Senior Management Team. I
share this view regarding the importance of such cooperative activities and
would indicate that the Board also believes that all Company officers should be
evaluated on the basis of both individual and cooperative achievement. 


 


This letter will serve to confirm the terms of your employment with
BioMedicines, such employment to begin on 15 October, 1999, or sooner by mutual
agreement. If the terms


 





















 


discussed below are acceptable to you, please sign this confirmation
letter where indicated and return it to me, retaining a copy for your records. 


 


1.             COMPENSATION.


 


(a)           SALARY, AND EXPENSE
REIMBURSEMENTS. You will be paid a monthly salary of $19,250.00. You will be
eligible for a cash bonus of up to twenty percent (20%) of your base pay.
Changes in base pay or the payment of bonuses are made at the discretion of the
Board upon receipt of recommendations from the Compensation Committee.
Currently, salary payments are made twice a month. In addition, all reasonable
business expenses will be reimbursed so long as they are incurred in the
ordinary course of business and consistent with the then-applicable Company
policies.


 


(b)           STOCK OPTIONS. It will
be recommended that you receive an option to purchase up to one hundred thirty
thousand (130,000) shares of common stock, such number and related purchase
price to be approved by the Board of Directors at the sole discretion of the
Board. Such approval is not automatic.


 


It is anticipated that eighty thousand (80,000) shares of this grant,
if approved, will vest at the rate of approximately 2.083% per month (i.e., 25%
per year), subject to the condition that vesting for the first 12 months will
occur only after you have satisfactorily completed 12 months of employment
(i.e., options on 20,000 shares will vest only on the first anniversary of your
employment). Thereafter, vesting will occur monthly as noted above. Options on
these eighty thousand shares shall be identified as “time-based options.”


 


It is anticipated that up to fifty (50,000) thousand shares will become
eligible for vesting according to the following general schedule*:


 


•           substantive
contribution to a successful United States (U.S.) Investigational New Drug
Application (IND) filing defined as regulatory approval to begin clinical
testing - 5,000 shares


 


•           substantive
contribution to drug development such that the Board approves the initiation of
phase III testing in the United States - 5,000 shares


 


•           substantive
contribution to the acceptance of a U.S. New Drug Application (NDA) for filing
- 15,000 shares


 


•           substantive
contribution to the approval of a U.S. NDA - 20,000 shares


 


•           inventing
a new use for a product such that a new patent application is filed in the
United States and assigned to Company - 10,000 shares


 


•           co-inventing
with another Company employee a new use for a product such that a new patent
application is filed in the United States and assigned to Company - 5,000
shares


 


•           identifying
a new product licensing opportunity and then contributing substantially to the
inlicensing of said product into the Company’s portfolio - 25,000 shares


 


Options on these fifty thousand shares shall be identified as
“event-based options.”


 


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*- Upon achievement of the goals stated above, vesting shall be made
retroactive to the date of your initial full-time employment with the Company.


 


The strike price of both the time-based and event-based options shall
be $0.225 per share.


 


In the event that, outside the U.S., the equivalent of a U.S. IND is
filed, phase III testing begins, a marketing application is filed or approved,
then 50% of the number of shares identified above shall become eligible for
vesting with the remaining 50% becoming eligible when the related event occurs
in the U.S.


 


Other terms, or terms that become applicable after the date of this
letter, will appear either in the BioMedicines Stock Option Plan of which you
will receive a copy in the event you accept this offer or in a separate
communication to you from the Company.


 


Please note that in the event of a stock split or “reverse split” the
number of options and the option price may be adjusted.


 


Under certain circumstances you may be eligible for acceleration of
vesting of your time-based options. These circumstances and the amount of
acceleration are: 1) accelerated vesting in fifty percent (50%) of as yet
unvested time-based options in the event of a merger or acquisition of the
Company where control of the Company changes and you continue to be employed in
a substantially similar capacity after the merger or acquisition 2) accelerated
vesting in 100% of your unvested time-based shares in the event that you are
not offered continued employment in a substantially similar capacity after the
merger or acquisition. Such acceleration, however, remains at the sole
discretion of the Board.


 


Subject to the sole discretion of the Board, you may also be eligible
to receive additional options from time to time during your continued
satisfactory employment with the Company. In this event, the number of options
and any conditions of the grant(s) shall be communicated to you.


 


(c)           HEALTH BENEFITS. Health
insurance coverage for you will be provided under the Company’s group health
plan. You will be entitled to all health and medical benefits as are provided
to other employees. In addition, you will be entitled to participate in the
Company’s 401k plan and all other sponsored employee benefit plans as and when
they are adopted by BioMedicines.


 


(d)           VACATION, HOLIDAYS AND
SICK LEAVE. You will receive three (3) weeks of paid vacation per year as
described in the Company’s Policy Manual. You are encouraged to plan for and to
take, under appropriate circumstances, the vacation time to which you are entitled.
Sick leave and holidays will be provided in accordance with the Company’s
policies, which will be announced from time to time.


 


(e)           OTHER COMPENSATION
MATTERS. In the event that you relocate from your current residence to a home
that is both more than thirty-five miles distant from your current residence
and nearer to the Company premises, you will be eligible to receive a one-time
payment of


 


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fifteen thousand dollars ($15,000), which may be utilized at your
discretion to assist with the cost of relocation.


 


In addition, the company will provide to you on a one-time basis a loan
of up to three hundred thousand dollars ($300,000) with a term of five years
and at an interest rate of the prevailing rate for fixed-rate, first mortgages
at the time of the loan. Payments on the loan shall be due monthly. However,
each interest payment shall be forgiven when due subject to continued
satisfactory employment with the Company. If at the end of five years you remain
an employee of the Company, then the Company will agree to extend the loan for
an additional three years, again subject to continuous satisfactory employment.
The loan shall be secured with a second mortgage on the property that you may
choose to acquire. Only the original first mortgage may be senior to this
second mortgage held by the Company and the sum of the first mortgage and this
loan may not exceed the purchase price of the residence purchased with the
loan. Moreover, subject to continued satisfactory employment with the Company,
the principal of the loan shall be forgiven at the anniversary of the loan as
follows: 


 


year 1 - ten thousand dollars ($10,000);


year 2 - twenty thousand dollars ($20,000);


year 3 - thirty thousand dollars ($30,000);


year 4 - forty thousand dollars ($40,000).


 


The maximal total forgiveness shall, therefore, be one hundred thousand
dollars ($100,000).


 


The unpaid principal balance shall be due and payable


 


•           sixty
(60 days) of the date you voluntarily cease to be a full-time employee of the
Company or are dismissed for cause


•           upon
the sale of the property on which the second mortgage is held by the Company


•           or
in the event that you declare personal bankruptcy.


 


In addition, you will agree to prepay a portion of the loan with up to
thirty percent (30%) of the proceeds from the sale of any Company stock.


 


The note on the property shall be generally consistent with the terms
of the this paragraph (e) but shall, however, be the definitive agreement
regarding the terms of the loan and its repayment.


 


However, should you choose not to accept all of or part of this loan,
then you shall be eligible to receive a one-time cash payment of up to thirty
thousand dollars, adjusted pro rata, for the amount of the loan not accepted.


 


2.             TERMINATION. You or
the Company may terminate the employment relationship at any time, for any
reason, with or without good cause.


 


3.             NON-COMPETE
REQUIREMENTS AND OUTSIDE ACTIVITIES. You agree that, while serving as an
employee of the Company, you will not engage in any activity which is
competitive with the Company and will give your sole and only loyalty to the
Company. It is understood that buying


 


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and selling of securities of any public company does not constitute a
violation of this agreement. An investment in a private company other than, or
not affiliated with, the Company may be construed as a violation of this
non-compete clause unless you have received the prior approval of the Board of
Directors or Chief Executive Officer of the Company, as appropriate. It is
understood that any reasonable obligations that you may have to assist or
cooperate with a previous employer in legal proceedings, in the issuance of
patents or prosecution of patent applications, or in compliance with requests
from governmental authorities do not constitute violations of this agreement,
provided that these obligations are not fulfilled on Company time and do not
adversely impact in a material way the performance of your current duties to
the Company.


 


You may also serve as a Director in another company with the prior
approval of the Chief Executive Officer again provided that such directorial
obligations are not fulfilled on Company time and do not adversely impact in a
material way the performance of your duties to the Company.


 


4.             PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT. Your acceptance of this offer is
contingent upon the execution of the Company’s Proprietary Information and
inventions Agreements, copies of which are enclosed for your review and
execution.


 


5.             ARBITRATION. Any
controversy between the parties hereto involving the construction or
application of any terms, covenants or conditions of this Agreement, or any
claims arising out of or relating to this Agreement or the breach thereof or
with your employment with the Company or any termination of that employment,
except with respect to prejudgment remedies, will be submitted to and settled
by final and binding arbitration in San Francisco, California, in accordance
with the Model Employment Dispute Resolution Rules of the American Arbitration
Association (the “Rules”) then in effect, any arbitrator shall be selected
pursuant to such Rules and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.


 


Please note that the offer is conditional until proof of eligibility
for employment in California according to all applicable local, state, and
federal laws.


 


To accept this offer, please sign in the space below within seven (7)
days of the date of this offer, indicating your acceptance and agreement to the
terms contained herein. No amendment or modification of the terms of this
letter will be valid unless made in writing and signed by you and an authorized
officer of the Company.


 


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Peter, on a personal note, I have found our several discussions to be
both congenial and thought-provoking and I know that the Board members whom you
have met feel the same. It is my hope that you will accept this offer and take
a leading role in the management of BioMedicines.


 


	
   

  	
  Yours, sincerely

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mark Moran, M.D.

  
	
   

  	
  Chief Executive Officer

  



 


 


	
  Accepted by:

  	
   

  
	
   

  	
   

  
	
  /s/ Peter J. Langecker, M.D.

  	
   

  
	
  Peter J. Langecker, M.D., Ph.D.

  	
   

  
	
   

  	
   

  
	
  September 4, 1999

  	
   

  
	
  Date

  	
   

  



 


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PROPRIETARY INFORMATION AND INVENTIONS
AGREEMENT


 


3 September, 1999


 


BioMedicines, Inc.


1301 Marina Village Parkway Suite 200


Alameda, CA 94501


 


Gentlemen:


 


The following confirms an agreement between me and BioMedicines, Inc.,
a Delaware corporation (the “Company,” which term includes the Company’s
subsidiaries, successors and assigns), which is a material part of the
consideration for my employment by the Company:


 


1.             “Proprietary Information”
is information that was or is developed by, became or becomes known by, or was
or is assigned or otherwise conveyed to the Company, and which has commercial
value in the Company’s business. Proprietary Information includes, without
limitation, trade secrets, financial information, product plans, customer
lists, marketing plans and strategies, forecasts and other business
information, improvements, inventions, business strategies, formulas, product
ideas, works of authorship, processes, copyrightable or patentable material,
schematics, biological material (including cell lines, antibodies, c-DNAs,
antisense nucleotides, proteins, vectors, new chemical entities, media,
reagents and related materials) and techniques for their handling and use,
computer programs, algorithms, techniques, schematics, know-how and data, and
any other confidential or proprietary information of the Company or its
customers or clients which I have been, or may be exposed to, or have learned
or may learn of from time to time in connection with or as a result of my
capacity as a consultant to the Company or during the term of this Agreement.
Proprietary Information shall not include information that is through no
improper action or inaction by me, generally available to the public. I
understand that my employment creates a relationship of confidence and trust
between me and the Company with respect to Proprietary Information of the
Company or its customers which may be learned by me during the period of my
employment.


 


2.             In consideration of
my employment by the Company and the compensation received by me from the
Company from time to time, I hereby agree as follows:


 


(a)           All Proprietary
Information and all patents, copyrights, trade secret rights, and other rights
(including throughout, without limitation, any extensions, renewals,
continuations or divisions of any of the foregoing) in connection therewith
shall be the sole property of the Company. I hereby assign to the Company any
rights I may have or acquire in such Proprietary Information. At all times,
both during my employment by the Company and after its termination, I will keep
in confidence and trust and will not use or disclose any Proprietary
Information or anything relating to it without the written consent of the
Company, except as may be necessary in the ordinary course of performing my
duties to the Company.


 


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(b)           In the event of the
termination of my employment by me or by the Company for any reason, I shall
return all documents, records, apparatus, equipment and other physical
property, or any reproduction of such property, whether or not pertaining to
Proprietary Information, furnished to me by the Company or produced by myself
or others in connection with my employment, to the Company immediately as and
when requested by the Company.


 


(c)           I will promptly
disclose to the Company, or any persons designated by it, all “Inventions,”
which includes all improvements, inventions, formulas, ideas, works of
authorship, processes, computer programs, algorithms, techniques, schematics,
know-how and data, whether or not patentable, made or conceived or reduced to
practice or developed by me, either alone or jointly with others, during the
term of my employment and for three (3) months thereafter. To the extent the
Company does not have rights therein hereunder, such disclosure shall be
received by the Company in confidence and does not extend the assignment made
in Section (e) below.


 


(d)           During the term of my
employment and for one (1) year thereafter, I will not encourage or solicit any
employee of the Company to leave the Company for any reason or to devote less
than all of any such employee’s efforts to the affairs of the Company, provided
that the foregoing shall not affect any responsibility I may have as an
employee of the Company with respect to the bona fide hiring and firing of
Company personnel.


 


(e)           I agree that all
inventions which I make, conceive, reduce to practice or develop (in whole or
in part, either alone or jointly with others) during my employment shall be the
sole property of the Company to the maximum extent permitted by Section 2870 of
the California Labor Code, a copy of which is attached herewith, and to the
extent permitted by law shall be “works made for hire.” The Company shall be
the sole owner of all patents, copyrights, trade secret rights, and other
intellectual property or other rights in connection therewith. I hereby assign
to the Company any rights I may have or acquire in such Inventions. I agree to
perform, during and after my employment, all acts deemed necessary or desirable
by the Company to permit and assist it, at the Company’s expense, in obtaining
and enforcing patents, copyrights, trade secret rights or other rights on such
inventions and/or any other inventions I have or may at any time assign to the
Company in any and all countries. Such acts may include, but are not limited
to, execution of documents and assistance or cooperation in legal proceedings.
With respect to any and all matters arising out of or relating to my employment
or consultancy with the Company, I hereby irrevocably designate and appoint the
Company and its duly authorized officers and agents, as my agents and
attorneys-in-fact to act for and in my behalf and instead of me, to execute and
file any applications or related filings and to do all other lawfully permitted
acts to further the prosecution and issuance of patents, copyrights, trade
secret rights or other rights thereon with the same legal force and effect as
if executed by me.


 


(f)            I attach hereto a
complete list of all inventions or improvements to which I claim ownership
and/or that I desire to remove from the operation of this Agreement, and I
covenant that such list is complete. If no such list is attached to this
Agreement, I represent that I have no such inventions and improvements at the
time of signing this Agreement. I understand that any such list shall not
contain information that breaches an obligation of confidentiality with a
former employer.


 


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(g)           I represent that my
performance of all the terms of this Agreement will not breach any agreement or
obligation to keep in confidence proprietary information acquired by me in
confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree I will not enter into, any agreement either written
or oral in conflict herewith or in conflict with my


employment with the Company.


 


3.             In consideration of
the foregoing, the Company agrees that it will not request as part of my
employment that I divulge or make use of confidential information of any of my
former employers that has commercial value to the former employer who developed
such information.


 


4.             This Agreement shall
be effective as of the first day of my employment by the Company, and shall be
binding upon me, my heirs, executors, assigns, and administrators and shall
inure to the benefit of the Company, its subsidiaries, successors and assigns.


 


Accepted and Agreed to:


 


 


	
  Dated:

  	
  September 4, 1999

  	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Peter J. Langecker, M.D.

  	
   

  	
  By:

  	
    /s/ Mark Moran

  	
   

  
	
  Peter J. Langecker, M.D., Ph.D.

  	
   

  	
  Mark Moran, M.D.

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
  BioMedicines, Inc.

  



 


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EXHIBIT A


 


1.             The following is a
complete list of all inventions or improvements relevant to the subject matter
of my employment by BioMedicines, Inc. (the “Company”) that have been made or
conceived or first reduced to practice by me alone or jointly with others prior
to my employment by the Company that I desire to remove from the operation of
the Company’s Proprietary Information and Inventions Agreement.


 


ý            No
inventions or improvements.


 


2.             I propose to bring to
my employment the following materials and documents of a former employer:


 


ý            No
materials or documents.


 


	
  /s/ Peter J. Langecker, M.D.

  	
   

  
	
  Peter J. Langecker, M.D., Ph.D.

  	
   

  



 


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EXHIBIT B


 


SECTION 2870. APPLICATION OF PROVISION PROVIDING THAT EMPLOYEE SHALL
ASSIGN OR OFFER TO ASSIGN RIGHTS IN INVENTION TO EMPLOYER.


 


(a)           Any provision in an
employment agreement which provides that an employee shall assign, or offer to
assign, any of his or her rights in an invention to his or her employer shall
not apply to an invention that the employee developed entirely on his or her
own time without using the employer’s equipment, supplies, facilities, or trade
secret information except for those inventions that either:


 


(1)           Relate at the time of
conception or reduction to practice of the invention to the employer’s
business, or actual or demonstrably anticipated research or development of the
employer.


 


(2)           Result from any work
performed by the employee for the employer.


 


(b)           To the extent a
provision in an employment agreement purports to require an employee to assign
an invention otherwise excluded from being required to be assigned under
subdivision (a), the provision is against the public policy of this state and
is unenforceable.


 


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