EX-10.17



 Exhibit 10.17 
  





 
 7000 Shoreline Court, Suite 371 

South San Francisco, CA 94080 
 (650)
800-3636 
 www.achaogen.com 
 February 13,
2014 
 Derek Bertocci 
 [Personal Address] 

Dear Derek: 
 I am pleased to offer you a position with
Achaogen, Inc. (the “Company”), as Chief Financial Officer reporting directly to me. Your position with the Company pursuant to the terms and conditions of this letter will commence no later than February 18, 2014 (the date you
actually commence employment with the Company, the “Start Date”). You will have duties and responsibilities, consistent with your position within the Company, as will reasonably be assigned to you by me. You agree to perform your duties
faithfully and to the best of your abilities and to devote your full business efforts and time to the Company. Furthermore, while employed by the Company, you agree to not actively engage in any other employment, occupation or consulting activity
for any direct or indirect remuneration without prior approval of the CEO and the Board of Directors of the Company (the “Board”). 
 The Company
reserves the right to conduct background and credit investigations and reference checks on all of its potential employees. Your job offer, therefore, is contingent upon a clearance of any such background and credit investigation and reference check.

 Salary. While employed by the Company, you will receive as compensation for your services a base salary at the annualized rate of
three hundred and ten thousand dollars ($310,000). Your salary will be paid periodically in accordance with the Company’s normal payroll practices and will be subject to annual review, required withholding and authorized deductions. 

Performance Bonus. In addition to your base salary, you will be eligible to receive a discretionary bonus for 2014 of up to 30%
of your base salary (pro-rated for your 2014 tenure) based upon your performance, as determined by the Company, against specific milestones to be defined by the Company. We do not have a formal bonus plan in place at the present time, but anticipate
implementing one in future years. 
 Stock Option. Subject to approval by the Board, you will be granted options purchase a total of
1,375,000 shares of the Company’s common stock (the “Stock Option Grants”) comprised of two separate grants to purchase 893,750 shares (the “Time-Based Option”) and 481,250 shares (the “Performance-Based Option”),
with different vesting schedules as described below. 
 The Time-Based Option will have an exercise price equal to the fair market value per
share on the date of grant, as determined by the Board, and, subject to your continued service with the Company through each vesting date, the Option will vest in accordance with the following vesting schedule: 

  









	 	•	 	1/4th of the total number of shares initially subject to the Option will vest on the first anniversary of your Start Date; and 


 

	 	•	 	1/48th of the total number of shares initially subject to the Option will vest on each of the next 36 months thereafter on the same day of the month as your Start
Date. 

 The Performance-Based Option will also have an exercise price equal to the fair market value per share on the date of
grant, as determined by the Board, and, subject to your continued service with the Company through each vesting date, the Performance Option will vest in accordance with the following vesting schedule: 

 

	 	•	 	1/3 of the total number of shares initially subject to the Performance-Based Option shall vest on the 30th consecutive date the fair market value of a share of the
Company’s common stock is reaches each of $3 (33 1/3% of the Performance-Based Option), $5 (33 1/3% of the Performance-Based Option), and $7 (33 1/3% of the Performance-Based Option). So long as the Company’s common stock is not publicly
traded, the fair market value of the common stock will be determined by the Board. In the event the Company’s common stock becomes publicly traded, the fair market value of the common stock will be determined based on the closing trading price
of the stock. The price hurdles will be appropriate adjusted to reflect any stock splits, reverse stock splits or other equity restructurings. 


Each Stock Option Grant will be subject to the terms and conditions of the Company equity incentive plan pursuant to which it is granted and the applicable
option agreement between you and the Company, both of which are incorporated herein by reference. 
 Employee Benefit Plans. As a
Company employee, you are also eligible to receive certain employee benefits pursuant to the terms of Company benefit plans as they may exist from time to time. 

At-Will Employment. You should understand that your employment with the Company is “at-will” and is for no specified period. As
a result, you are free to resign at any time, for any reason, with or without cause. Similarly, the Company is free to conclude its employment relationship with you at any time, for any reason, with or without cause. This is the full and complete
agreement between us on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time-to-time, the “at-will” nature of your employment may only
be changed in an express writing signed by you and the CEO. 

Severance. If earlier than three
(3) months prior to a Change of Control (as defined below) or after twelve (12) months following a Change of Control, the Company or its successor terminates your employment other than for Cause (as defined below), death or disability, and
you deliver to the Company a release of claims in a form acceptable to the Company (a “Release”) that becomes effective and irrevocable within sixty (60) days after your termination of employment, then you shall be entitled to
receive: (A) continuing payments of severance pay (less applicable withholding taxes) at a rate equal to your base salary rate, as then in effect, for a period of six (6) months from the date of such termination, to be paid periodically in
accordance with the Company’s normal payroll policies; and (B) 25% of the then unvested portion of the Time-Based Option, and any other time-based stock options or other equity awards, shall immediately vest and become exercisable.

 Change of Control Severance. If within, three (3) months prior to or, twelve (12) months following a Change of Control
(i) you resign from your employment with the Company or its successor for Good  

  
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 Reason (as defined below), or (ii) the Company or its successor terminates your employment other than for
Cause, death or disability, and you deliver a Release that becomes effective and irrevocable within sixty (60) days following your termination of employment, then you shall be entitled to receive: (A) continuing payments of severance pay
(less applicable withholding taxes) at a rate equal to your base salary rate, as then in effect, for a period of twelve (12) months from the date of such termination, to be paid periodically in accordance with the Company’s normal payroll
policies; and (B) 100% of the then unvested portion of the Stock Option Grants, and any other stock options or other equity awards held by you, shall immediately vest and, if applicable, become exercisable. 

If your employment with the Company terminates voluntarily by you (except upon resignation for Good Reason as provided in the preceding sentence), by the
Company for Cause or due to your death or disability, then (i) all vesting of the then unvested portion of the Stock Option Grants, and any other stock options and other equity awards, will cease immediately and all payments of compensation by
the Company to you hereunder will terminate immediately (except as to amounts already earned), and you will only be eligible for severance benefits in accordance with the Company’s established policies, if any, as then in effect. 

For purposes of this offer letter, “Cause” is defined as (i) an act of dishonesty made by you in connection with your responsibilities
as an employee, (ii) your conviction of, or plea of nolo contendere to, a felony, your gross misconduct, or (iv) your continued substantial violations of your employment duties after you have received a written demand for
performance from the Company which specifically sets forth the factual basis for the Company’s belief that you have not substantially performed your duties. 

For purposes of this offer letter, “Change of Control” of the Company is defined as: (i) the acquisition of the Company by another
entity by means of any transaction or series of related transactions (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a
transaction or series of transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting
securities being converted into voting securities of the surviving entity or its parent), as a result of shares in the Company held by such holders prior to such transaction, at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity or its parent, as applicable, outstanding immediately .after such transaction or series of transactions; (ii) a sale, lease or other conveyance of all or substantially all of the
assets of the Company; or (iii) any liquidation, dissolution or winding up of the Company, whether voluntary or involuntarily. 
 For purposes of this
offer letter, “Good Reason” is defined as your resignation within thirty (30) days following the expiration of the Company cure period (discussed below) following the occurrence of one or more of the following, without your
express written consent: (i) a material reduction in your annual base salary unless such reduction is part of a Company-wide reduction for similarly situated persons where the reduction applied to you is substantially similar to the reduction
for the other similarly situated employees; (ii) the material reduction of your duties or responsibilities relative to your duties or responsibilities in effect immediately prior to such reduction; provided, however, that a reduction in duties
or responsibilities solely by virtue of the Company being acquired and made part of a larger entity (as, for example, when the Chief Financial Officer of the Company remains as such for the operations of the Company following a Change of Control but
is not made the Chief Financial Officer of the acquiring corporation) shall not constitute “Good Reason”; or (iii) a material change in the geographic location at which you must perform services (it being understood that a relocation
of 

  
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 fifty (50) miles or less is not material). Before you may resign for Good Reason, (A) you must provide
the Company with written notice within ninety (90) days of the initial occurrence of the event that you believe constitutes Good Reason specifically identifying the acts or omissions constituting the grounds for Good Reason and (B) the
Company must have an opportunity within thirty (30) days following delivery of such notice to cure the Good Reason condition. 

Section 409A. Notwithstanding anything to the contrary in this offer letter, no severance pay or benefits to be paid or provided to you, if any,
pursuant to this offer letter that, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A of the Code and the final regulations and any guidance promulgated
thereunder (such Code section along with such regulations and guidance, “Section 409A” and such separation payments and benefits subject to Section 409A, the “Deferred Payments”) will be paid or otherwise
provided until you have a “separation from service” within the meaning of Section 409A. 
 Any severance payments or benefits under this
offer letter that constitute Deferred Payments will be paid on, or, in the case of installments, will commence on, the sixtieth (60th) day following your separation from service, or, if
later, such time as required by the following paragraph. Any installment payments that would have been made to you during the sixty (60), day period immediately following your separation from service but for the preceding sentence will be paid to
you on the sixtieth (60th) day following your separation from service and the remaining payments shall be made.as provided in this offer letter. 

Notwithstanding anything to the contrary in this offer letter, if you are a “specified employee” within the meaning of Section 409A at the time
of your separation from service, then the Deferred Payments which are otherwise due to you on or within the six (6) month period following your separation from service will accrue, to the extent required, during such six (6) month period
and will become payable in a lump sum payment on the date six (6) months and one (1) day following the date of your separation from service or on the date of your death, if earlier. All subsequent Deferred Payments, if any, will be payable
in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under this offer letter is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations. 
 The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and
benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. You and the Company agree to work together in good faith to consider amendments to
this offer letter and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A. 

Confidential Information/Arbitration. You will be required to sign and comply with the attached At-Will
Employment, Confidential Information, Invention Assignment and Arbitration Agreement (the “Confidentiality Agreement”) as a condition of your employment. The Confidentiality Agreement requires, among other things, the assignment of patent
rights to any invention made during your employment at the Company and non-disclosure of Company proprietary information. We also ask that you disclose to the Company any and all agreements relating to your
prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements will not prevent you from performing the duties of your
position and you represent that such is the case. You further agree not to bring any third party confidential information to the Company, including that of your former employer, and that in performing your duties for the Company you will not in any
way utilize any such information. 

  
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 Federal Immigration. For purposes of federal immigration law, you will be required to
provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with
you may be terminated. 
 Arbitration of Disputes. In the event of any dispute or claim relating to or arising out of our employment
relationship, you and the Company agree that (i) any and all disputes between you and the Company shall be fully and finally resolved by binding arbitration, (ii) you are waiving any and all rights to a jury trial but all court remedies
will be available in arbitration, (iii) all disputes shall be resolved by a neutral arbitrator who shall issue a written opinion, (iv) the arbitration shall provide for adequate discovery, and (v) the Company shall be responsible for
the arbitrator’s fees and costs to the extent they exceed any fee or cost that the Company would be required to bear if the action were brought in an applicable federal or state court. Please note that we must receive your signed Agreement
before your first day of employment 
 Governing Laws. This letter will be governed by the laws of the state of California, with the
exception of its conflict of laws provisions. 
 This offer letter, the Confidentiality Agreement or existing confidential information agreement, as
applicable, between you and the Company, as well as the equity incentive plan under which the Stock Option Grants are made and stock option agreements evidencing the Stock Option Grants, represent the entire agreement and understanding between you
and the Company concerning your employment relationship with the Company, and supersede in their entirety any and all prior representations or agreements and any representations made during your recruitment, interviews or pre-employment negotiations, whether written or oral. This letter, including, but not limited to, its at-will employment provision, may not be modified or amended except by a
written agreement signed by the CEO and you. 
 To confirm your acceptance and agreement to the terms set forth in this offer letter please sign, date, and
return this letter to me. 
 I am excited to welcome you to the Company, and I look forward to your participation in the Company’s future success. 

Sincerely, 
  

	
	 /s/ Kenneth Hillan

	Kenneth Hillan
	 CEO & CMO
 Achaogen, Inc


 Accepted and agreed to this 14th day of February, 2014 

 

	
	 /s/ Derek Bertocci


 Applicant Signature 
  

	Enclosures:	Duplicate Original Letter 

 At-Will Employment, Confidential Information, Invention Assignment
and Arbitration 
 Agreement 

  
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