Exhibit
10.18


 


August 14,
1999


 


 


Personal And
Confidential


 


Dennis G.
Blanchett, M.D.


 


Dear Doctor
Blanchett:


 


On behalf of the
Board of Directors of BioMedicines, Inc., I would like to offer you the
position of Executive Director of Biometrics. Initially you will report to me
in this capacity. This reporting relationship is, however, subject to change as
we have discussed.


 


In your role as
Executive Director, you will have principal responsibility for


 


•                                          planning
and performing the analyses of all preclinical and clinical data


•                                          contributing
to all regulatory filings from pre-IND to post-marketing and including, in
particular, the preparation of marketing applications worldwide


•                                          creating
an appropriate and cost-effective data management infrastructure, in terms of
both personnel and equipment, that is appropriate changing company needs


•                                          determining
which data management tasks should be performed exclusively by internal staff,
which exclusively by external vendors, and which should be shared between
internal and external staff


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


•                                          management
information systems including the management of the company’s computer network
as well as its telecommunications systems


•                                          the
hiring and subsequent management of personnel in your group


•                                          accurate
and timely budgetary planning and execution


•                                          other
facilities related activities as may be assigned from time to time


 


In your role as
Executive Director, and with particular consideration for your medical training
and experience, you will also have shared responsibility with colleagues in
preclinical development and manufacturing, clinical affairs, regulatory
affairs, and business development for


 


•                                          contributing
to the planning and execution of drug development activities worldwide


•                                          evaluating
potential product acquisitions for the company


•                                          participating
in partnering discussions, whether 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 Board has
directed me to indicate to you its particular hope that you will contribute
constructively to the success of your colleagues and fellow members of senior
management of the company and that the evaluation of your performance will
include an assessment of such constructive contributions.


 


This letter will
serve to confirm the terms of your employment with BioMedicines, such
employment to begin on 1 September, 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.
As used herein, the term “Company” refers to BioMedicines, Inc.


 


1.                                      Compensation.


 


(a)                                  Salarv. Sign-on bonus and Expense
Reimbursements.  You will be
paid a monthly salary of $12,000.00. You will be eligible for a cash bonus of
up to 10% of your base pay. Changes in base pay or the payment of bonuses are
at the discretion of the Board. Currently, salary payments are made twice a
month. In addition, adjustments, if any, in your annual salary will be based on
your performance and applicable Company policies. A one-time sign-on bonus of
$8,000 will be paid if you respond favorably to this offer within seven (7)
days of receiving same. Should you not remain an employee for at least 12
months, however, the sign-on bonus must be repaid to the company prorata at the
rate of 1/120 of $8,000 for each partial or full month of service less than 12
months. In addition, all reasonable business expenses will be reimbursed so
long as they are incurred in the ordinary course of business.


 


(b)                                  Stock Options.  It will be recommended that you receive an
option to purchase up to 48,000 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 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 of options will occur only after you have satisfactorily completed 12
months of employment (i.e., options on 10,000 shares will vest only on the
first anniversary of your employment). Thereafter, vesting will occur monthly
as noted above.


 


Other terms, or
terms that become applicable after the date of this letter, will appear in the
BioMedicines Stock Option Plan of which you will receive a copy in the event
you accept this offer. In this regard, you may anticipate that a portion of
your options will vest solely as a function of satisfactory and continued
employment with the company (“time-based options”) and that the remainder will
vest in accordance with both specific performance criteria as well as time (‘performance
options”).


 


In this regard it
will be recommended to the Board that 50% of options (or 24,000 shares) will be
time-based options and that vesting shall begin on the date of your employment
(or other such date as the Board may decide). It will also be recommended that
the remaining 50% will be performance options and will enter the vesting pool
when, beginning after the date of your employment, you make substantive
contributions to the successful filing of an IND (6,000 shares), the successful
filing of a New Drug Application (NDA) or equivalent for the European Union
(9,000 shares), the approval of an NDA or equivalent (12,000 shares). In the
case of an


 


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IND, “successful”
means that clinical testing can begin. In the case of an NDA or equivalent, “successful”
means that the regulatory agency accepts the documents for filing whether or
not there shall subsequently be an approval of said NDA. For performance
options, vesting eligibility shall begin on the date of the related event but
shall be retroactive to the date of your initial employment with 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 options.
However, such acceleration is at the sole discretion of the Board.


 


(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.


 


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 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.


 


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


 


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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.


 


To accept this offer,
please sign in the space below, 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.


 


Yours sincerely,


 


 


	
  /s/ SM Moran

  	
   

  
	
   

  
	
   

  
	
  Mark Moran, M.D.

  
	
  Chief Executive
  Officer

  



 


Accepted by:


 


 


	
  /s/ Dennis G.
  Blanchett

  	
   

  
	
  Dennis G.
  Blanchett, M.D.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Date

  



 


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PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT


 


 


August 14,
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:

  	
  August 14,
  1999

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Dennis G.
  Blanchett

  	
   

  	
  By:

  	
  /s/ SM Moran

  
	
  Dennis G.
  Blanchett, M.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/ Dennis G.
  Blanchett

  	
   

  
	
  Dennis G.
  Blanchett, M.D.

  



 


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EXHIBIT B


 


§ 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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