Exhibit 10.1


 





 


SECOND AMENDED AND
RESTATED EMPLOYMENT AGREEMENT


 


THIS SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT is effective as of March 10, 2008 (“Effective Date”) by and between LIPID SCIENCES, INC., a
Delaware corporation (the “Company”), and
S. LEWIS MEYER, Ph.D., an individual (the “Employee”) and
amends and restates in its entirety that certain Amended and Restated
Employment Agreement of March 1, 2007 by and between the Company and
Employee.  The Company and the Employee
are each sometimes referred to as a “Party” and together as the “Parties.”


 


W I T N E S S E T H:


 


WHEREAS, the Parties previously entered into an
Amended and Restated Employment Agreement dated as of March 1, 2007
pursuant to which the Company agreed to employ Employee and Employee agreed to
be employed by the Company pursuant to certain terms and conditions; and


 


WHEREAS, the Company desires to continue to employ the
Employee in the manner hereinafter specified and to make provision for payment
of reasonable compensation to the Employee for such services, and the Employee
is willing to be employed by the Company to perform the duties incident to such
employment upon the terms and conditions hereinafter set forth; and


 


WHEREAS, the Parties desire to enter into this
Agreement as of the Effective Date setting forth the terms and conditions of
the continued employment relationship of the Employee with the Company during
the Term (as hereinafter defined).


 


NOW, THEREFORE, in consideration of the foregoing
premises, the mutual covenants, terms and conditions set forth herein, and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:


 


1.                                      EMPLOYMENT AND DUTIES


 


(a)           General.  Effective as of the Effective Date, the
Company hereby continues to employ the Employee as Chief Executive Officer and
President of the Company and the Employee agrees upon the terms and conditions
herein set forth to continue to be employed by the Company.  The Employee shall diligently perform all of
the duties normally accorded to such position and shall report directly to the
Board of Directors of the Company (the “Board”).


 


(b)           Services.  During the Term, the Employee shall well and
faithfully serve the Company, and shall devote substantially all of his
business time and attention to the performance of the duties of such employment
and the advancement of the best interests of the 


 

















 


Company and shall not,
directly or indirectly, render services to any other person or organization for
which he receives compensation without the prior written approval of the
Board.  No such approval shall be
required in connection with services the Employee performs with respect to
other persons and entities, including, but not limited, to Lexrite Labs and the
Ambient Capital Group, provided that the aggregate amount of time spent on
these services does not exceed a maximum of eight hours per week and that such
services do not contravene the provisions of Section 5 hereof.  The Employee hereby agrees to refrain from
engaging in any activity that does, shall or could reasonably be deemed to
conflict with the best interests of the Company.


 


(c)           Location of Employment.  The Employee’s place of employment shall be
at the office of the Company located in Pleasanton, California, but the
Employee shall travel to the extent and to the places necessary for the
performance of his duties to the Company.


 


2.                                      TERM OF EMPLOYMENT


 


The term of the Employee’s employment under this
Agreement shall begin as of the Effective Date written above and continue until
April 14, 2009 (the “Term”).


 


3.                                      COMPENSATION AND OTHER
BENEFITS


 


Subject to the provisions of this Agreement including
without limitation the termination provisions contained in Section 4, the
Company shall pay and provide the following compensation and other benefits to
the Employee during the Term as compensation for all services rendered
hereunder:


 


(a)           Salary.  The Company shall continue to pay to the
Employee a salary (the “Salary”) at a
rate of $290,000 per annum, payable to the Employee in accordance with the
normal payroll practices of the Company as are in effect from time to
time.  The amount of the Salary shall be
reviewed annually by the Compensation Committee of the Board and may be
increased on the basis of the review.


 


(b)           Annual Performance Bonus.  The Employee shall be eligible to earn an
annual discretionary cash bonus (the “Annual Bonus”)
in an amount and subject to such other terms and conditions, including
performance objectives, as are determined, by the Board.


 


(c)           Expenses.  The Company shall pay or reimburse the
Employee for all reasonable out-of-pocket expenses incurred by the Employee in
connection with his employment hereunder upon submission of appropriate
documentation or receipts in accordance with the policies and procedures of the
Company as are in effect from time to time. 
No expense payment or reimbursement under this Section 3(d) shall
be “grossed up” or increased to take into account any tax liability incurred by
the Employee as a result of such payment or reimbursement.


 


(d)           Retirement, Welfare and Fringe
Benefits.  The Employee shall be
eligible to participate in the retirement, medical, disability and life
insurance plans applicable to senior officers of the Company generally in accordance
with the terms of such plans as in effect from time to time.  The foregoing shall not be construed to limit
the ability of the Company or any of its affiliates to amend, modify or
terminate any such benefit plans, policies or programs at any time and from
time to time.


 


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(e)           Vacation.  The Employee shall be entitled to annual
vacation in accordance with the Company’s policies applicable to senior
officers of the Company generally as are in effect from time to time.


 


4.                                      TERMINATION OF
EMPLOYMENT


 


Subject to the notice and other provisions of this Section 4,
the Company shall have the right to terminate the Employee’s employment
hereunder, and the Employee shall have the right to resign, at any time for any
reason or for no stated reason.


 


(a)           Termination for Cause or
Resignation.  (i) If, prior to
the expiration of the Term, the Employee’s employment is terminated by the
Company for “Cause” (as
hereinafter defined) or if the Employee resigns from his employment hereunder,
the Employee shall be entitled to payment of (A) his Salary accrued up to
and including the date of termination or resignation, and (B) any
unreimbursed expenses.  Except to the
extent required by the terms of the benefits provided under Section 3(e) or
applicable law, the Employee shall have no right under this Agreement or
otherwise to receive any other compensation or to participate in any other
plan, program or arrangement after such termination or resignation of
employment with respect to the year of such termination or resignation and
later years.


 


(ii)           Termination for “Cause” shall mean a
termination of the Employee’s employment with the Company because of (A) a
plea of guilty or nolo contendere
to, or conviction for, the commission of a felony offense by the Employee; (B) the
involvement by the Employee as a party to any litigation or regulatory
proceeding or in any other circumstance known to the general public that, in
the good faith determination of the Board, is reasonably certain to subject the
Employee, the Company or its affiliates to disrepute, ridicule, contempt or
scandal or that is reasonably certain to reflect unfavorably upon the
reputation of the Employee, the Company or its affiliates or the Company’s
products or technologies; (C) the willful and continued failure to perform
in any material respect the Employee’s duties; (D) an intentional act of
fraud, embezzlement, theft or a material and dishonest act against the Company
or its affiliates; or (E) a material breach by the Employee of the terms
and provisions of the Agreement.


 


(iii)          Termination of the Employee’s
employment for Cause shall be communicated by delivery to the Employee of a
written notice from the Company stating that the Employee will be terminated for
Cause, specifying the particulars thereof and the effective date of such
termination.  In the cases of Sections
4(a)(ii)(B), 4(a)(ii)(C) and 4(a)(ii)(E), the Employee shall have thirty
(30) business days from the date of receipt of such notice to effect a cure of
the actions constituting Cause, or to effect a cure of the adverse effect such
actions.  Upon cure or correction thereof
by the Employee to the reasonable satisfaction of the Company, the action shall
no longer constitute Cause for purposes of this Agreement.  The date of a resignation by the Employee
shall be the date specified in a written notice of resignation from the
Employee to the Company.  The Employee
shall provide at least 90 days’ advance written notice of his resignation.


 


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(b)                                 Termination without Cause.


 


(i)            If,
prior to or at any time following the expiration of the Term, the Company
terminates the Employee’s employment for any reason other than Disability or
Cause (such termination or resignation being hereinafter referred to as a “Termination without Cause”), the Employee shall be entitled
to (A) payment of his Salary accrued up to and including the date of such
Termination without Cause, (B) payment of any unreimbursed expenses, and (C) severance,
subject to the Employee’s execution and delivery of a release in the form then
deemed appropriate by the Company and in exchange for consulting services of
the Employee, consisting of (1) continuation of his Salary, at the rate in
effect on the date of the Termination without Cause, for 12 months commencing
on the date next following the date of the Termination without Cause (the “Severance Period”) and (2) continued participation on
the same terms and conditions as are in effect immediately prior to the
Termination without Cause in the Company’s health and medical plans provided to
the Employee pursuant to Section 3(e) above at the time of such
Termination without Cause through the expiration of the Severance Period, or
until the Employee becomes eligible to participate in a subsequent employer’s
benefit plan, whichever occurs first. 
For the avoidance of doubt, Employee is entitled to the benefits of
subsections (A), (B) and (C) herein if Employee’s employment is
terminated without Cause at any time on or after the Effective Date.  Anything herein to the contrary
notwithstanding, the Company shall have no obligation to continue to maintain
during the Severance Period any plan, program or level of benefits solely as a
result of the provisions of this Agreement, but this provision shall apply with
respect to any substitute or replacement plan.


 


(ii)           The date of termination of employment
without Cause shall be the date specified in a written notice of termination to
the Employee. For the avoidance of doubt, Employee’s employment will continue
until the date specified in the written notice of termination to the Employee.


 


(c)           Termination Due to Disability.  In the event of the Employee’s Disability,
the Company shall be entitled to terminate his employment.  In the case that the Company terminates the
Employee’s employment due to Disability, the Employee shall be entitled to his
Salary up to and including the date of termination as well as any unpaid
expense reimbursements.  As used in this Section 4(c),
the term “Disability” shall mean the Company’s
determination that due to physical or mental illness or incapacity, whether
total or partial, the Employee is substantially unable to perform his duties
hereunder for a period of 90 consecutive days or shorter periods aggregating 90
days during any period of 180 consecutive days.


 


(d)           Death.  Except as provided in this Section 4(d),
no Salary or benefits shall be payable under this Agreement following the date
of the Employee’s death.  In the event of
the Employee’s death, any Salary earned by the Employee up to the date of
death, as well as any unreimbursed expenses, shall be paid to the Employee’s
estate or Employee’s named beneficiary within a reasonable period following his
death.


 


5.                                      PROTECTION OF THE COMPANY’S
INTEREST


 


(a)           Employee Confidential Information
and Invention Agreement.  The
Employee hereby acknowledges that he has previously executed and delivered to
the Company 


 


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the Company’s Employee Confidential
Information and Invention Agreement (the “Confidentiality Agreement”),
which is attached hereto as Annex A.  The
Employee hereby acknowledges and understands that the provisions of the
Confidentiality Agreement are incorporated into this Agreement.


 


(b)                                 Protection of Trade Secrets;
Non-Solicitation.


 


(i)            The Employee acknowledges that in
the course of his employment with the Company, he has and will in the course of
his continued employment with the Company become familiar with the trade
secrets of the Company and its affiliates and with other Confidential
Information (as defined in the Confidentiality Agreement) concerning the
business of the Company and its affiliates and that his services have been and
will be of special, and unique and extraordinary value to the Company and its
affiliates.  Because of the foregoing and
in further consideration of the compensation and other benefits to be provided
to the Employee hereunder, the Employee hereby agrees that, during the Term,
and at any time thereafter, he shall not, directly or indirectly, use trade
secrets (as such term is defined in Section 3426(1)(d) of the Uniform
Trade Secrets Act) of the Company or its affiliates or Confidential Information
or otherwise engage in unfair competition against the Company or any of its
affiliates.


 


(ii)           During the Term, and continuing
through the first anniversary of the termination date of the Employee’s
employment for any reason (the “Restricted Period”),
the Employee shall not directly or indirectly through another person or entity
induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of the Company or any such affiliate that
is within any geographical area in which the Company or its affiliates engage
or plan to engage in such businesses to cease doing business with the Company
or such affiliate or in any way interfere with the relationship between any
such customer, supplier, licensee or business relation and the Company or any
such affiliate.


 


(c)           Extension of Time of Restrictions.  The Restricted Period shall be extended by
the length of any period during which the Employee is in breach of the
restrictions set forth in Section 5(b).


 


(d)           Non-Disparagement.  The Employee agrees that at any time during
his employment with the Company or at any time thereafter, the Employee shall
not make, or cause or assist any other person to make, any statement or other
communication which impugns or attacks, or is otherwise critical of, the
reputation, business or character of the Company, any subsidiary or any of
their respective officers, directors, employees, products or services.


 


(e)           Enforcement.  The Employee hereby acknowledges that he has
carefully reviewed the provisions of this Agreement and agrees that the provisions
are fair and equitable, and that they are necessary and reasonable in order to
protect the Company and its affiliates in the conduct of their business.  However, in light of the possibility of
differing interpretations of law and change in circumstances, the parties
hereto agree that if any one or more of the provisions of this Section 5
(including any provision contained in the Confidentiality Agreement) is
determined by a court or other tribunal of competent jurisdiction to be
invalid, void or unenforceable under circumstances then existing, the parties
hereto agree that the maximum 


 


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period, scope or
geographical area reasonable or enforceable under such circumstances shall be
substituted for the stated period, scope or area.


 


(f)            Remedies.  The Employee acknowledges that the Company
has a compelling business interest in preventing unfair competition stemming
from the intentional or inadvertent use or disclosure of the Company’s
confidential and proprietary information, including trade secrets of the
Company.  The Employee further
acknowledges and agrees that damages for a breach or threatened breach of any
of the covenants set forth in this Section 5 (including any provision
contained in the Confidentiality Agreement) will be difficult to determine and
will not afford a full and adequate remedy, and therefore agrees that the
Company, in addition to seeking actual damages in connection therewith and the
termination of the Company’s obligations in Section 4(b), may seek
specific enforcement of any such covenant in any court of competent
jurisdiction, including, without limitation, by the issuance of a temporary or
permanent injunction without the necessity of showing any actual damages or
posting any bond or furnishing any other security, and that the specific
enforcement of the provisions of this Agreement will not diminish the Employee’s
ability to earn a livelihood or create or impose upon the Employee any undue
hardship. The Employee also agrees that any request for such relief by the
Company shall be in addition to, and without prejudice to, any claim for
monetary damages that the Company may elect to assert.


 


6.                                      GENERAL PROVISIONS


 


(a)           No Other Severance Benefits.  Except as specifically set forth in this
Agreement, the Employee covenants and agrees that he shall not be entitled to
any other form of severance benefits from the Company, including, without
limitation, benefits otherwise payable under the Company’s regular severance
policies, if any, in the event his employment hereunder ends for any reason
and, except with respect to obligations of the Company expressly provided for
herein, the Employee unconditionally releases the Company and its subsidiaries
and affiliates, and their respective directors, officers, employees and
stockholders, or any of them, from any and all claims, liabilities or
obligations under any severance arrangements of the Company or any of its
subsidiaries or affiliates.


 


(b)           Tax Withholding.  All amounts paid to Employee hereunder shall
be subject to all applicable federal, state and local wage withholding.


 


(c)           Notices.  Any notice hereunder by either party to the
other shall be given in writing by personal delivery, or certified mail, return
receipt requested, or (if to the Company) by facsimile, in any case delivered
to the applicable address set forth below:


 


	
   

  	
  (i)

  	
   

  	
  To the Company:

  	
   

  	
  Lipid
  Sciences, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  7068 Koll Center
  Parkway, Suite 401

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Pleasanton, CA
  94566-3111

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Facsimile No.:
  (925) 249-4040

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attn: Chairman
  of the Board of Directors

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  With a copy to:

  	
   

  	
  Allen Matkins Leck Gamble Mallory & 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Natsis LLP

  



 


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  Three Embarcadero Center, Suite 1200

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  San Francisco, CA 94111

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Fax: (415) 837-1516

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attn: Roger S. Mertz, Esq.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
   

  	
  To the Employee:

  	
   

  	
  S. Lewis Meyer, Ph.D.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Last known
  residential address

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  and fax number
  on file with the Company

  



 


or to such other persons
or other addresses as either party may specify to the other in writing.


 


(d)           Representation by the Employee.  The Employee represents and warrants that his
entering into this Agreement does not, and that his performance under this
Agreement and consummation of the transactions contemplated hereby will not,
violate the provisions of any agreement or instrument to which the Employee is
a party or any decree, judgment or order to which the Employee is subject, and
that this Agreement constitutes a valid and binding obligation of the Employee
in accordance with its terms.  Breach of
this representation will render all of the Company’s obligations under this
Agreement void ab initio.


 


(e)           Assignment; Assumption of
Agreement.  No right, benefit or
interest hereunder shall be subject to assignment, encumbrance, charge, pledge,
hypothecation or setoff by the Employee in respect of any claim, debt,
obligation or similar process.  The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company to assume expressly and to agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.


 


(f)            Amendment.  No provision of this Agreement may be
amended, modified, waived or discharged unless such amendment, modification,
waiver or discharge is agreed to in writing and signed by the parties.  No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time.


 


(g)           Severability.  If any term or provision hereof is determined
to be invalid or unenforceable in a final court or arbitration proceeding, (i) the
remaining terms and provisions hereof shall be unimpaired and (ii) the
invalid or unenforceable term or provision shall be deemed replaced by a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.


 


(h)           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California (determined
without regard to the choice of law provisions thereof).


 


(i)            Entire Agreement.  This Agreement and the Confidentiality
Agreement contain the entire agreement of the Employee, the Company and any predecessors
or affiliates thereof with respect to the subject matter hereof and all prior
agreements and negotiations are superceded hereby.


 


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(j)            Counterparts.  This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed an original, but both
such counterparts shall together constitute one and the same document.


 


(k)           Survival.  The provisions of Sections 4 and 5
(including the provisions of the Confidentiality Agreement) shall survive the
termination of this Agreement.


 


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


 


	
   

  	
  LIPID
  SCIENCES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sandra Gardiner

  
	
   

  	
   

  	
  Name: Sandra Gardiner

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S. Lewis Meyer, Ph.D.

  
	
   

  	
   

  	
  S. LEWIS MEYER, Ph.D.

  



 


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