10Q Q1 2001 EXH10.147




                                                          Exhibit 10.147



EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement
("Agreement") is entered into as of the 14th day of
December, 2000 (the "Effective Date"), by and between Douglas
Altschuler ("Executive") and Axys Pharmaceuticals, Inc. (the
"Company").

WHEREAS, the Company desires to employ Executive to
provide personal services to the Company, and wishes to provide Executive with
certain compensation and benefits in return for Executive's services; and

WHEREAS, Executive wishes to be employed by the
Company and provide personal services to the Company in return for certain
compensation and benefits.

NOW, THEREFORE, in consideration of the mutual
promises and covenants contained herein, it is hereby agreed by and between the
parties hereto as follows:




	

DEFINITIONS

For purposes of the, Agreement, the following terms arc
defined as follows:



	"Board" means the Board of Directors of
the Company.


	"Cause" means:



	Executive's intentional action or intentional failure to
act that was performed in bad faith and to the material detriment of the
business of the Company;


	Executive's intentional refusal or intentional failure to
act in accordance with any lawful and proper direction or order of the Board or
the appropriate individual to whom Executive reports;


	Executive's willful and habitual neglect of Executive's
duties of employment;


	Executive's violation of any noncompetition or
noninterference agreement that Executive has entered into with the Company;
or


	Executive's conviction of a felony crime involving moral
turpitude;

provided, however, that if any of the foregoing events
under clauses (a), (b), (c) or (d) above is capable of being cured, the Company
shall provide written notice to Executive describing the nature of such event
and Executive shall thereafter have ten (10) business days to cure such
event.


	"Change in Control" means the occurrence
of any of the following events:



	a dissolution, liquidation or sale of all or
substantially all of the assets of the Company;


	a merger or consolidation in which the Company is not the
surviving corporation;


	a reverse merger in which the Company is the surviving
corporation but shares outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise; or


	the acquisition by any person, entity or group within the
meaning of Section 13(d) or 14(d) of the Exchange Act, or any comparable
successor provisions (excluding any employee benefit plan, or related trust,
sponsored or maintained by the Company or any affiliate of the Company) of the
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, or comparable successor rule) of securities of the Company
representing at least fifty percent (50%) of the combined voting power entitled
to vote in the election of directors.


	"Company" means Axys Pharmaceuticals,
Inc. or, following a Change in Control, the surviving entity resulting from such
transaction.


	"Covered Termination" means (i) an
Involuntary Termination Without Cause that occurs at any time, without regard to
a Change in Control, or (ii) a voluntary termination for Good Reason that
occurs on or after the effective date of a Change in Control.


	"Exchange Act" means the Securities
Exchange Act of 1934, as amended.


	"Good Reason" means that any of the
following are undertaken without Executive's express written consent.



	the assignment to Executive of any duties or
responsibilities that results in any diminution or adverse change of Executive's
position, status, circumstances of employment or scope of
responsibilities;


	a reduction by the Company in Executive's annual base
salary as in effect on the effective date of the Change in Control;


	the taking of any action by the Company that would
adversely affect Executive's participation in, or reduce Executive's benefits
under, the Company's benefit plans (including equity benefits) as of the
effective date of the Change in Control, except to the extent the benefits of
all other executives of the Company are similarly reduced;


	a relocation of Executive's principal office to a
location more than forty (40) miles from the location at which Executive was
performing Executive's duties as of the effective date of the Change in Control,
except for required travel by Executive on the Company's business;


	any material breach by the Company of any provision of
this Agreement; or


	any failure by the Company to obtain the assumption of
this Agreement by any successor or assign of the Company.


	"Involuntary Termination Without Cause"
means Executive's dismissal or discharge other than for Cause.  The termination
of Executive's employment as a result of Executive's death or disability will
not be deemed to be an Involuntary Termination Without Cause.


	

EMPLOYMENT BY THE COMPANY



	Position and Duties.  Subject to terms set forth
herein, the Company agrees to employ Executive in the position of Vice
President, General Counsel and Assistant Secretary and Executive hereby accepts
such employment.  Executive shall serve in an executive capacity and shall
perform such duties as are customarily associated with the position of Vice
President, General Counsel and Assistant Secretary and such other duties as are
assigned to Executive by the Company's Chief Executive Officer.  Executive will
report to the Chief Executive Officer.  During the term of Executive's
employment with the Company, Executive will devote Executive's best efforts and
substantially all of Executive's business time and attention (except for
vacation periods as set forth herein and reasonable periods of illness or other
incapacities permitted by the Company's general employment policies or as
otherwise set forth in this Agreement) to the business of the Company.


	Employment at Will.  Both the Company and
Executive shall have the right to terminate Executive's employment with the
Company at any time, with or without Cause, and without prior notice.  If
Executive's employment with the Company is terminated, Executive will be
eligible to receive severance benefits to the extent provided in this
Agreement.


	Employment Policies.  The employment relationship
between the parties shall also be governed by the, general employment policies
and practices of the Company, including those relating to protection of
confidential information and assignment of inventions, except that when the
terms of this Agreement differ from or are in conflict with the Company's
general employment policies or practices, this Agreement shall
control.


	

COMPENSATION



	Base Salary.  Executive shall receive for services to
be rendered hereunder an annual base salary of $230,000.00, payable on the
regular payroll dates of the Company, subject to increase in the sole discretion
of the Board of Directors.


	Annual Bonus.  Executive will be eligible for an
annual bonus up to twenty-five percent (25%) of Executive's then current annual
base salary upon achievement of reasonable goals specified by the Board (the
"Target Bonus").  Such goals shall be set forth in writing by the
Board prior to the close of the first quarter of each fiscal year of the
Company, with fifty percent (50%) of such goals to be dependent on Executive's
individual performance and fifty percent (50%) of such goals to be dependent on
the Company's performance.


	Standard Company Benefits.  Executive shall be
entitled to all rights and benefits for which Executive is eligible under the
terms and conditions of the standard Company benefits and compensation practices
that may be in effect from time to time and are provided by the Company to its
executive employees generally.


	Stock Options.  Executive has been granted options
to purchase 70,000 shares of the Company's common stock effective as of the
Effective Date pursuant to the terms and conditions of the Company's stock
option plan and form stock option agreement thereunder, which options shall
constitute incentive stock options within the meaning of Section 422(b) of the
Internal Revenue Code to the extent permissible under applicable law.  Upon the
earlier of (i) a Change of Control or (ii) March 1, 2001, Executive shall be
granted additional options to purchase 30,000 shares of the Company's common
stock effective as of such date pursuant to the terms and conditions of the
Company's stock option plan and form stock option agreement thereunder, which
options shall constitute incentive stock options within the meaning of Section
422(b) of the Internal Revenue Code to the extent permissible under applicable
law.


	

SEVERANCE AND CHANGE IN CONTROL BENEFITS



	Severance Benefits.  If Executive's employment
terminates due to a Covered Termination after the date of execution of this
Agreement, Executive shall receive any annual base salary and bonus compensation
that has accrued but is unpaid as of the date of such Covered Termination.
Within thirty (30) days following the date on which the Release described in
Section 4.4 below becomes effective in accordance with its terms, Executive
shall also receive a lump sum payment equal to the sum of (i) one hundred
percent (100%) of Executive's annual base salary as in effect during the last
regularly scheduled payroll period immediately preceding the Covered Termination
and (ii) one hundred percent (100%) of Executive's Target Bonus in effect for
the year in which Executive's employment terminates, all of the foregoing
subject to applicable tax withholding.  In addition, following a Covered
Termination, Executive and Executive's covered dependents shall be eligible to
continue their health care benefit Coverage as permitted by COBRA (Internal
Revenue Code Section 4980B) at the same cost to Executive as in effect
immediately prior to the Covered Termination for the one (1)-year period
following the Covered Termination.  Executive shall be entitled to maintain
coverage for Executive and Executive's eligible dependents at Executive's own
expense or the balance of the period that Executive is entitled to coverage
under COBRA.


	Acceleration of Vesting of Outstanding Stock
Options.  If Executive's employment with the Company terminates due to a
Covered Termination within eighteen (18) months following the effective date of
a Change in Control, then any options to purchase the Company's common stock
granted to Executive shall become immediately fully vested and exercisable as of
the date of such Covered Termination.


	Parachute Payments.  If any payment or benefit
Executive would receive in connection with a Change in Control from the Company
or otherwise ("Payment") would (i) constitute a "parachute
payment within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code'), and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then such Payment shall be reduced to the Reduced
Amount.  The "Reduced Amount shall be either (x) the largest portion of the
Payment that would result in no portion of the Payment being subject to the
Excise Tax or (y) the largest portion, up to and including the total of the
Payment, whichever amount, after taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all computed
at the highest applicable marginal rate), results in Executive's receipt, on an
after-tax basis, of the greater amount of the Payment notwithstanding that all
or some portion of the Payment may be subject to the Excise Tax.  If a reduction
in payments or benefits constituting "parachute payments" is necessary
so that the Payment equals the Reduced Amount, reduction shall occur in the
following order unless Executive elects in writing a different order
(provided, however, that such election shall be subject to Company
approval if made on or after the effective date of the Change in Control);
reduction of cash payments; cancellation of accelerated vesting of stock awards;
reduction of employee benefits.  In the event that acceleration of vesting of
stock award compensation is to be reduced, such acceleration of vesting shall be
cancelled in the reverse order of the date of grant of Executive's stock awards
unless Executive, elects in writing a different order for cancellation.

The accounting firm engaged by the Company for general audit
purposes as of the day prior to the effective date of the Change in Control
shall perform the foregoing calculations.  If the accounting firm so engaged by
the Company is serving as accountant or auditor for the individual, entity or
group effecting the Change in Control, the Company shall appoint a nationally
recognized accounting firm to make the determinations required hereunder.  The
Company shall bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder.

The accounting firm engaged to make the determinations
hereunder shall provide its calculations, together with detailed supporting
documentation, to the Company and Executive within fifteen (15) calendar days
after the date on which Executive's right to a Payment is triggered (if
requested at that time by the Company or Executive) or such other time as
requested by the Company or Executive.  If the accounting firm determines that
no Excise Tax is payable with respect to a Payment, either before or after the
application of the Reduced Amount, it shall furnish the Company and Executive
with an opinion reasonably acceptable to Executive that no Excise Tax will be
imposed with respect to such Payment.  Any good faith determinations of the
accounting firm made hereunder shall be final, binding and conclusive upon the
Company and Executive.


	Release.  Upon the occurrence of a Covered
Termination, and prior to the receipt of any benefits under Section 4.1
(except pursuant to the first sentence thereof) and Section 4.2 on account
of the occurrence of such Covered Termination, Executive shall execute a Release
(the "Release") in the form attached hereto as Exhibit A or
Exhibit B, as appropriate.  Such Release shall specifically relate to all
of Executive's rights and claims in existence, at the time of such execution and
shall confirm Executive's obligations under the Company's standard form of
proprietary information agreement.  It is understood that Executive has a
certain period to consider whether to execute such Release, and Executive may
revoke such Release within seven (7) business days after execution.  In the
event Executive does not execute such Release within the applicable period, or
if Executive revokes such Release within the subsequent seven (7) business day
period, none of the aforesaid benefits shall be payable under this Agreement and
this Agreement shall be null and void.


	Mitigation.  Executive shall not be required to
mitigate damages or the amount of any payment provided under this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Executive as a result of employment by another employer or by any retirement
benefits received by Executive after the date of the Covered Termination, or
otherwise.


	

PROPRIETARY INFORMATION OBLIGATIONS



	Agreement.  Executive agrees to execute and abide by
the Proprietary Information and Inventions Agreement attached hereto as
Exhibit C.


	Remedies.  Executive's duties under the
Proprietary Information and Inventions Agreement shall survive termination of
Executive's employment with the Company and the termination of this Agreement.
Executive acknowledges that a remedy at law for any breach or threatened breach
by Executive of the provisions of the Proprietary Information and Inventions
Agreement would be inadequate, and Executive therefore agrees that the Company
shall be entitled to injunctive relief in case of any such breach or threatened
breach.


	

OUTSIDE ACTIVITIES



	Except with the prior written consent of the Board
and except for consulting arrangements previously approved in writing by the
Company, Executive shall not during the term of this Agreement undertake or
engage in any other employment, occupation of business enterprise, other than
ones in which Executive is a passive investor.  Executive may engage in civic
and not-for-profit activities so long as such activities do not materially
interfere with the performance of Executive's duties hereunder.


	During the term of Executive's employment by the Company,
except on behalf of the Company, Executive shall not directly or indirectly,
whether as an officer, director, stockholder, partner, proprietor, associate,
representative, consultant (except for consulting arrangements previously
approved in writing by the Company), or in any capacity whatsoever engage in,
become financially interested in, be employed by or have any business connection
with any other person, corporation, firm, partnership or other entity whatsoever
which were known by Executive to compete directly with the Company, throughout
the world, in any line of business engaged in (or planned to be engaged in) by
the Company; provided, however, that anything above to the contrary
notwithstanding, Executive may own, as a passive investor, securities of any
competitor corporation, so long as Executive's direct holdings in any one such
corporation shall not in the aggregate constitute more than 1% of the voting
stock of such corporation.


	

GENERAL PROVISIONS

While employed by the Company, and for one (1) year
immediately following the date on which Executive terminates employment or
otherwise ceases providing services to the Company.  Executive agrees not to
interfere with the business of the Company by soliciting or attempting to
solicit any employee of the Company to terminate such employee's employment in
order to become an employee, consultant or independent contractor to or for any
competitor of the Company.  Executive's duties under this Article 7 shall
survive termination of Executive's employment with the Company and the
termination of this Agreement.


	

GENERAL PROVISIONS



	Notices.  Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of personal delivery
(including personal delivery by telex) or the third day after waiting by first
class mail, to the Company at its primary office location and to Executive at
Executive's address as listed on the Company payroll.


	Severability.  Whenever possible, each provision
of this Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provisions had never been contained
herein.


	Waiver.  If either party should waive any breach
of any provisions of this Agreement, they shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.


	Complete Agreement.  This Agreement and its
Exhibit A, Exhibit B and Exhibit C constitute the entire
agreement between Executive and the Company and are the complete, final, and
exclusive embodiment of their agreement with regard to this subject matter.
They are entered into without reliance on any promise or representation other
than those expressly contained herein or therein, and they cannot be modified or
amended except in a writing signed by an officer of the Company.


	Counterparts.  This Agreement may be executed in
separate counterparts, any one of which need not contain signatures of more than
one party, but all of which taken together will constitute one and the same
Agreement.


	Readings.  The headings of the sections hereof are
inserted for convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning thereof.


	Successors and Assigns.  This Agreement is
intended to bind and inure to the benefit of and be enforceable by Executive and
the Company, and their respective successors, assigns, heirs, executors and
administrators, except that Executive may not assign any of Executive's duties
hereunder and Executive may not assign any of Executive's tights hereunder,
without the written consent of the Company, which shall not be withheld
unreasonably.


	Arbitration.  Unless otherwise prohibited by law
or specified below, all disputes, claims and causes of action, in law or equity,
arising from or relating to this Agreement or its enforcement, performance,
breach, or interpretation shall be resolved solely and exclusively by final and
binding arbitration held in San Francisco County, California through Judicial
Arbitration & Mediation Services/Endispute ("JAMS") under the then
existing JAMS arbitration rules.  However, nothing in this section is intended
to prevent either patty from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any such arbitration.  Each party in
any such arbitration shall be responsible for its own attorneys' fees, costs and
necessary disbursement; provided, however, that if one party refuses to
arbitrate and the other party seeks to comply arbitration by court order, if
such other party prevails, it shall be entitled to recover reasonable attorneys'
fees, costs and necessary disbursements.  Pursuant to California Civil Code
Section 1717, each party warrants that it was represented by counsel in the
negotiation and execution of this Agreement, including the attorneys' fees
provision herein.


	Attorneys' Fees.  If either party hereto brings
any action to enforce rights hereunder, each party in any such action shall be
responsible for its own attorneys' fees and costs incurred in connection with
such action.


	Choice of Law.  All questions concerning the
construction, validity and interpretation of this Agreement will be governed by
the law of the State of California.



 

IN WITNESS WHEREOF, the parties have executed this
Agreement on the day and year first above written.

AXYS PHARMACEUTICALS, INC.


 

 

By:  Paul J. Hastings


Date:  March 26, 2001


 











Accepted and agreed this

26th day of March, 2001


 

/s/ Douglas Altschuler

DOUGLAS ALTSCHULER


 

Exhibit A: Release (Individual Termination)

Exhibit B: Release (Group Termination)

Exhibit C: Proprietary Information and Inventions Agreement















EXHIBIT A

RELEASE

(INDIVIDUAL TERMINATION)

Certain capitalized terms used in this Release are
defined in the Executive Employment Agreement (the "Agreement") which
I have executed and of which this Release is a part.

I hereby confirm my obligations under the Company's
proprietary information and inventions agreement.

I acknowledge that I have read and understand
Section 1542 of the California Civil Code which reads as follows: 
"A general release does not extend to claims which
the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor." 



I hereby expressly waive and relinquish all rights and
benefits under that section and any law of any jurisdiction of similar effect
with respect to my release of any claims I may have against the Company.

Except as otherwise set forth in this Release, in
consideration of benefits I will receive under the Agreement, I hereby release,
acquit and forever discharge the Company, its parents and subsidiaries, and
their officers, directors, agents, servants, employees, shareholders,
successors, assigns and affiliates, of and from any and all claims, liabilities,
demands, causes of action, costs, expenses, attorneys' fees, damages,
indemnities and obligations of every kind and nature in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed (other than any claim for indemnification I may have as a result of
any third party action against me based on my employment with the Company),
arising out of or in any way related to agreements, events, acts or conduct at
any time prior to and including the date I execute this Release, including, but
not limited to all such claims and demands directly or indirectly arising out of
or in any way connected with my employment with the Company or the termination
of that employment, including but not limited to, claims of intentional and
negligent infliction of emotional distress, any and all tort claims for personal
injury, claims or demands related to salary, bonuses, commissions, stock, stock
options, or any other ownership interests in the Company, vacation pay, fringe
benefits, expense reimbursements, severance pay, or any other form of
compensation, claims pursuant to any federal, state or local law or cause, of
action including, but not limited to, the federal Civil Rights Act of 1964, as
amended; the federal Age Discrimination in Employment Act of 1967, as amended
("ADEA"); the federal Employee Retirement Income Security Act of 1974,
as amended, the federal Americans with Disabilities Act of 1990, the California
Fair Employment and Housing Act, as amended, tort law, contract law, statutory
law, common law, wrongful discharge, discrimination fraud, defamation, emotional
distress, and breach of the implied covenant of good faith and fair dealing;
provided, however, that nothing in this paragraph shall be construed in
any way to release the Company from its obligation to indemnify me pursuant to
the Company's indemnification obligation pursuant to agreement or applicable
law.

I acknowledge that I am knowingly and voluntarily waiving and
releasing any rights I may have under ADEA.  I also acknowledge that the
consideration given under the Agreement for the waiver and release in the
preceding paragraph hereof is in addition to anything of value to which I was
already entitled.  I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (A) my waiver and release do not
apply to any rights or claims that may arise on or after the date I execute this
Release; (B) I have the right to consult with an attorney prior to
executing this Release; (C) I have twenty-one (21) days to consider
this Release (although I may choose to voluntarily execute this Release
earlier); (D) I have seven (7) days following the execution of this
Release by the patties to revoke the Release; and (E) this Release shall
not be effective until the date upon which the revocation period has expired,
which shall be the eighth (8th) day after this Release is executed by
me.
DOUGLAS ALTSCHULER


 

 

Date:_______________________ 

























EXHIBIT B

RELEASE

(GROUP TERMINATION)

Certain capitalized terms used in this Release are
defined in the Executive Employment Agreement (the "Agreement") which
I have executed and of which this Release is a part.

I hereby confirm my obligations under the Company's
proprietary information and inventions agreement.

I acknowledge that I have read and understand
Section 1542 of the California Civil Code which reads as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor." I hereby expressly waive and relinquish all rights and
benefits under that section and any law of any jurisdiction of similar effect
with respect to my release of any claims I may have against the Company.

Except as otherwise set forth in this Release, in
consideration of benefits I will receive under the Agreement.  I hereby release,
acquit and forever discharge the Company, its parents and subsidiaries, and
their officers, directors, agents, servants, employees, shareholders,
successors, assigns and affiliates, of and from any and all claims, liabilities,
demands, causes of action, costs, expenses, attorneys' fees, damages,
indemnities and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed (other than any claim for indemnification I may have as a result of
any third party action against me based on my employment with the Company),
arising out of or in any way related to agreements, events, acts or conduct at
any time prior to and including the date I execute this Release, including, but
not limited to: all such claims and demands directly or indirectly arising out
of or in any way connected with my employment with the Company or the
termination of that employment, including but not limited to, claims of
intentional and negligent infliction of emotional distress, any and all tort
claims for personal injury, claims or demands related to salary, bonuses,
commissions, stock, stock options, or any other ownership interests in the
Company, vacation pay, fringe benefits, expense reimbursements, severance pay,
or any other form of compensation; claims pursuant to any federal, state or
local law or cause of action including, but not limited to, the federal Civil
Rights Act of 1964, as amended, the federal Age Discrimination in Employment Act
of 1967, as amended ("ADEA"), the federal Employee Retirement Income
Security Act of 1974, as amended; the federal Americans with Disabilities Act of
1990, the California Fair Employment and Housing Act, as amended; tort law,
contract law; statutory law; common law, wrongful discharge, discrimination,
fraud, defamation, emotional distress, and breach of the implied covenant of
good faith and fair dealing; provided, however, that nothing in this
paragraph shall be construed in any way to release the Company from its
obligation to indemnify me pursuant to the Company's indemnification obligation
pursuant to agreement or applicable law.

I acknowledge that I am knowingly and voluntarily waiving and
releasing any rights I may have under ADEA.  I also acknowledge that the
consideration given under the Agreement for the waiver and release in the
preceding paragraph hereof is in addition to anything of value to which I was
already entitled.  I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (A) my waiver arid release do not
apply to any rights or claims that may arise on or after the date I execute this
Release; (B) I have the right to consult with an attorney prior to
executing this Release, (C) I have forty-five (45) days to consider this
Release (although I may choose to voluntarily execute this Release earlier),
(D) I have seven (7) days following the execution of this Release by the
parties to revoke the Release: (E) this Release shall not be effective
until the date upon which the revocation period has expired, which shall be the
eighth day (8th) after this Release is executed by me; and (F) I have
received with this Release a detailed list of the job titles and ages of all
employees who were terminated in this group termination and the ages of all
employees of the Company in the same job classification or organizational unit
who were not terminated.
DOUGLAS ALTSCHULER


 

Date:_______________________


























EXHIBIT C

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT