Exhibit
10.17


 


November 30,
1997


 


 


PERSONAL AND
CONFIDENTIAL


 


Thomas R. Alessi,
Ph.D.


 


Dear Dr. Alessi:


 


On behalf of the
Board of Directors of BioMedicines, Inc., it is with great pleasure that I
would like to offer you the position of Executive Director, Regulatory Affairs
and Product Development. You will initially report to me in this capacity. This
reporting relationship is, however, potentially subject to change as we have
discussed. In your role as Executive Director, you will have responsibility for
Quality Assurance and will also have initial responsibility for Project
Management.


 


This letter will
serve to confirm the terms of your employment with BioMedicines, such
employment to begin 1 December, 1997. 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)                                  Salary and Expense Reimbursements. You will be paid a monthly salary of $10,333.33, less
applicable withholdings. Currently, salary payments are made once a month, at
the end of each month. Changes, if any, in your annual salary will be based on
your performance and applicable Company policies. 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 their sole discretion. Such approval is not
automatic. It is anticipated that this grant, if approved, will vest at the
rate of 2.083% per month (i.e., 25% per year), subject to the condition that
the first 12 months of options will vest only after you have satisfactorily
completed 12 months of employment (i.e. options on 12,000 shares will vest on
the first anniversary of your employment). In the event of a stock split or “reverse
split” the number of options and the option price will be adjusted
appropriately.


 


Accelerated
Vesting


 


In addition, as a further
incentive to you while you are an employee, it will be recommended to the Board
of Directors that vesting accelerate (such that you will be fully vested) in
the following number of shares associated with the stated events in which you
play a material role:


 





















 


•                                          2,000
shares in event that the first U.S. IND for a product is successfully filed and
approved by the U.S. FDA, so that clinical testing can begin in the United
States at the Company’s sole discretion or


 


•                                          2,000
shares in the event that clinical testing for any product first begins outside
the United States


 


•                                          4,000
shares in the event that a first marketing application is filed for a product


 


•                                          8,000
shares in the event that a first marketing application is approved.


 


Moreover, in the event
that you are dismissed without cause (see Termination below), it will be
recommended that acceleration will still apply in the event that, for a project
in whose management you played a material role, an IND is filed, clinical
testing begins or a marketing application is filed or approved within 90 days
of your dismissal without good cause. The only exception to this will be the
need for the Company to correct a material error on your part to facilitate the
filing, initiation of testing or the approval.


 


These proposed
accelerations can apply only once to any of the Company’s products, whether or
not multiple formulations or indications are pursued. These proposed
accelerations will not apply to any product for which your involvement is
considered not to be material, whether or not such events transpire.


 


In addition, in the event
that the Company is fully acquired or that substantially all of the Company’s
assets are acquired or transferred in a merger or acquisition, it will be
recommended that vesting in 1/2 (50%) of your remaining unvested options will
accelerate at the closing of the merger or acquisition. If you are not offered
a position in the surviving or acquiring entity that is substantially the same
in salary, benefits, and responsibilities as the position you held immediately
prior to closing, then it will be recommended that vesting in all (100%) of
your remaining unvested options will accelerate.


 


You understand and
acknowledge, however, that the Board of Directors remains free to change the
terms of the grant and vesting schedule at any time for any reason at its
sole discretion.


 


(c)                                  Health Benefits. Health insurance coverage for you
will be provided under the Company’s group health plan when and if such a plan
is adopted by the Company. 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 401 k plan and all other sponsored employee
benefit plans as they are adopted by BioMedicines.


 


(d)                                  Vacation, Holidays and Sick Leave.
You will receive three (3) weeks of paid vacation per year. Vacation time is
not cumulative. As a result, 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.


 


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2.                                      Termination. You or the Company
may terminate the employment relationship at any time, for any reason, with or
without good cause. However, if the Company terminates your employment without
good cause, the Company will continue to pay your monthly salary on the regular
monthly basis for three (3) months from the date of your termination, less all
applicable withholdings. Unvested options, if any, will also continue to vest
for the same three (3) months from the date of your termination. For purposes
of this Agreement, “good cause” means gross misconduct, wrongful acts or
omissions that may adversely affect the Company’s business, neglect of duties,
breach of any terms or conditions of this Agreement or the Company’s Proprietary
Information Agreement, death, or any disability that renders you incapable of
diligently or expeditiously performing all of your essential duties and
obligations to the Company for any period of three (3) consecutive months or a
total of one hundred twenty (120 days, whether or not consecutive) in any
twelve (12) month period.


 


3.                                      Non-Compete 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, Dr. Alessi,
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 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.


 


3





















 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ SM Moran

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Mark Moran,
  M.D., M.B.A.

  
	
   

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Thomas R.
  Alessi

  	
   

  	
   

  
	
  Thomas R.
  Alessi, Ph..D.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dec. 5, 1997

  	
   

  	
   

  
	
  Date

  	
   

  



 


4





















 


PROPRIETARY
INFORMATION


AND INVENTIONS
AGREEMENT


 


November 30,
1997


 


 


BioMedicines, Inc.


909 Marina Village
Parkway #583


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.


 


(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


 


5





















 


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
attorneysin-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.


 


(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


 


6





















 


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:

  	
  Dec. 5, 1997

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Thomas R.
  Alessi

  	
   

  	
  By:

  	
  SM Moran

  
	
  Thomas R.
  Alessi, Ph.D.

  	
   

  	
   

  	
  Mark Moran, M.D.,
  M.B.A.

  
	
   

  	
   

  	
   

  	
  President and
  CEO

  
	
   

  	
   

  	
   

  	
  BioMedicines,
  Inc.

  
						



 


7





















 


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:  File for pending patent
application No. 08/738,167 entitled:


 


“methods of using butyric
acid or butyric acid derivations to protect against hair loss”


 


o                                    No materials or
documents.


 


 


	
  /s/ Thomas R.
  Alessi, Ph.D.

  	
   

  
	
  Thomas R.
  Alessi, Ph.D.

  



 


8





















 


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.