Employment agreement btwn Xenogen and Pamela R. Contag, Ph.D.




 EXHIBIT 10.7 
  
 EMPLOYMENT AGREEMENT 
  

This Employment Agreement is entered into as of January 21, 1998 (the “Effective Date”), by and between XENOGEN CORPORATION, a California
corporation (the “Company”), and PAMELA CONTAG (the “Employee”). 
  
 1. At-Will Employment. The Employee’s employment with the Company is for an unspecified duration and constitutes “at-will” employment. The Employee acknowledges that the employment relationship
may be terminated at any time, with or without good cause or for any or no cause, at the option either of the Company or the Employee, with or without notice. Employee will devote her full business time and attention to her employment with the
Company hereunder. 
  
 2. Salary. For all services to be
rendered by the Employee to the Company, the Company agrees to pay the Employee an annual salary of $175,000 in accordance with the Company’s standard payroll policies. 
  
 3. Benefits. During the Employee’s employment with the Company, the Employee shall be entitled to participate in
employee benefit plans or programs of the Company (“Benefit Plans”), if any, to the extent that the Employee’s position, tenure, salary, age, health and other qualifications make the Employee eligible to participate, subject to the
rules and regulations applicable thereto. 
  
 4. Automobile
Allowance. The Company will provide the Employee with an automobile allowance of $600 per month; provided, however, that such allowance will be terminated (i) on the date on which the Employee’s employment with the Company
ceases, either voluntarily or involuntarily or (ii) after December 31, 1998 upon the affirmative action of the Board of Directors. 
  
 5. Home Mortgage Assistance. 
  
 (a) At any time prior to December 31, 1998, the Company will loan the Employee $100,000 (the “Loan”) to be evidenced by a promissory note
bearing interest at the rate of 6% per annum and secured by a Deed of Trust on the home. The Loan will only be made contemporaneously with or following the purchase by Employee of a home in reasonable proximity to the Company’s principal
offices in Alameda, where employee is employed. Provided that the Employee’s employment has not been terminated prior to the applicable date (either voluntarily or involuntarily), the Loan will be forgiven as follows: (i) on January 1, 1999,
$15,000 of principal and all accrued interest, (ii) on January 1, 2000, $15,000 of principal and all accrued interest, (iii) on January 1, 2001, $15,000 of principal and all accrued interest and (iv) on January 1, 2002, $55,000 and all accrued
interest. 
  
 (b) Notwithstanding Section 5(a), the Loan is
payable within ninety (90) days of the earlier of: (i) the date on which the Employee’s employment with the Company ceases, either voluntarily or involuntarily or (ii) the date on which the Employee sells the property securing such Loan.









 6. Termination of Employment. 
  
 (a) Voluntary Resignation/Termination For Cause. If the Employee voluntarily resigns or is terminated by the Company
for Cause (as defined below), then: 
  
 (i) no salary will be
paid for the periods following the date of termination; 
  
 (ii)
no benefits will be paid or provided for the periods following the date of termination; and 
  
 (iii) the number of shares exercisable under the Employee’s outstanding options, if any, and the Company’s right to repurchase the Employee’s outstanding Common Stock shall be measured as of the date of
termination. 
  
 (b) Termination Without Cause. If the
Employee is terminated by the Company without Cause (as defined below) within one year from the date of the Agreement, then: 
  
 (i) the Employee’s annual salary will continue to be paid in accordance with the Company’s standard payroll policies for six months following
the date of termination; 
  
 (ii) the Employee will continue to
receive benefits pursuant to the Company’s Benefit Plans, provided that such Benefit Plans permit continuation post-termination, at the Company’s expense for six months following the date of termination; and 
  
 (iii) the number of shares exercisable under the Employee’s outstanding
options, if any, and the Company’s right to repurchase the Employee’s outstanding Common Stock shall be measured as if the termination occured six months from the actual date of termination; provided, however, that the
Company’s right to repurchase 100,000 shares of Common Stock issued to the Employee in conjunction with the Series C Preferred Stock Purchase Agreement of even date herewith and subject to that certain Restricted Stock Purchase Agreement of
even date herewith shall be determined as of the actual date of termination. 
  
 The post-employment payments and benefits under Sections 6(b)(i) and (ii) shall be terminated prior to one year from the date of termination upon the acceptance by the Employee of new employment. 
  
 (c) Termination Without Cause. If the Employee is terminated by the
Company without Cause (as defined below) following one year from the date of this Agreement and prior to two years from the date of this Agreement, then: 
  
 (i) the Employee’s annual salary will continue to be paid in accordance with the Company’s standard payroll policies for nine months following
the date of termination; 
  
 (ii) the Employee will continue to
receive benefits pursuant to the Company’s Benefit Plans, provided that such Benefit Plans permit continuation post-termination, at the Company’s expense for nine months following the date of termination; and 
  

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 (iii) the number of shares exercisable under the Employee’s outstanding options, if any, and the
Company’s right to repurchase the Employee’s outstanding Common Stock shall be measured as if the termination occured nine months from the actual date of termination; provided, however, that the Company’s right to
repurchase 100,000 shares of Common Stock issued to the Employee in conjunction with the Series C Preferred Stock Purchase Agreement of even date herewith and subject to that certain Restricted Stock Purchase Agreement of even date herewith shall be
determined as of the actual date of termination. 
  
 The
post-employment payments and benefits under Sections 6(c)(i) and (ii) shall be terminated prior to one year from the date of termination upon the acceptance by the Employee of new employment. 
  
 (d) Termination Without Cause. If the Employee is terminated by the
Company without Cause (as defined below) following two years from the date of this Agreement, then: 
  
 (i) the Employee’s annual salary will continue to be paid in accordance with the Company’s standard payroll policies for one year following the
date of termination; 
  
 (ii) the Employee will continue to
receive benefits pursuant to the Company’s Benefit Plans, provided that such Benefit Plans permit continuation post-termination, at the Company’s expense for one year following the date of termination; and 
  
 (iii) the number of shares exercisable under the Employee’s outstanding
options, if any, and the Company’s right to repurchase the Employee’s outstanding Common Stock shall be measured as if the termination occured one year from the actual date of termination; provided, however, that the
Company’s right to repurchase 100,000 shares of Common Stock issued to the Employee in conjunction with the Series C Preferred Stock Purchase Agreement of even date herewith and subject to that certain Restricted Stock Purchase Agreement of
even date herewith shall be determined as of the actual date of termination. 
  
 The post-employment payments and benefits under Sections 6(d)(i) and (ii) shall be terminated prior to one year from the date of termination upon the acceptance by the Employee of new employment. 
  
 (e) As used in this Agreement, Cause shall mean: 
  
 (i) the Employee’s failure to substantially perform the duties
associated with the Employee’s position; 
  
 (ii) the
Employee’s personally engaging in conduct that the Employee reasonably should know or that the Employee intends to be seriously injurious to the Company, its affiliates or employees; 
  
 (iii) a material and willful violation of a federal or state law or regulation applicable to the business of the Company;

  

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 (iv) the Employee’s being convicted of a felony under the laws of the United States or any State,
or the misappropriation of material property belonging to, the Company or its affiliates; or 
  
 (v) the Employee knowingly and intentionally breaching in any material respect the terms of the Employee’s Proprietary Information Agreement. 
  
 7. Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Palo Alto, California, in accordance with the rules of the American Arbitration Association then in effect by an arbitrator selected by both parties within 20 days after either party has notified the other in writing
that it desires a dispute between them to be settled by arbitration. In the event the parties cannot agree on such arbitrator within such 20-day period, each party shall select an arbitrator and inform the other party in writing of such
arbitrator’s name and address within 5 days after the end of such 20-day period and the two arbitrators so selected shall select a third arbitrator within 15 days thereafter; provided, however, that in the event of a failure by
either party to select an arbitrator and notify the other party of such selection within the time period provided above, the arbitrator selected by the other party shall be the sole arbitrator of the dispute. Each party shall pay its own expenses
associated with such arbitration, including the expense of any arbitrator selected by such party and the Company will pay the expenses of the jointly selected arbitrator. The decision of the arbitrator or a majority of the panel of arbitrators shall
be binding upon the parties and judgment in accordance with that decision may be entered in any court having jurisdiction thereover. Punitive damages shall not be awarded. 
  
 8. Notices. For purposes of this Agreement, notices and other communications provided for in this Agreement shall be
in writing and shall be delivered personally or sent by United States certified mail, return receipt requested, postage prepaid, to the address set forth on the signature pages to this Agreement. 
  
 9. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal substantive laws of the State of California without reference to choice or conflicts of laws. 
  
 10. Counterparts. This Agreement may be executed in one or more counterparts, none of which need contain the signature of more than one party
hereto, and each of which shall be deemed to be an original, and all of which together shall constitute a single agreement. 
  

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 IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its
duly authorized officer, as of the day and year first above written. 
  

					
	 “COMPANY”
	  	 	 	 “EMPLOYEE”

			
	 By: /s/ David W. Carter

	  	 	 	 /s/ Pamela Reilly Contag


	 	  	 	 	 Pamela Contag

	 Title:

	  	 	 	 
			
	 Address:
	  	 	 	 Address:

			
	
	  	 	 	

			
	
	  	 	 	


  

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