exv10w1







Exhibit 10.1




OMEROS CORPORATION

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT




     This Amended and Restated Employment Agreement (the “Agreement”) is dated as of April
7, 2010 (the “Effective Date”) by and between Dr. Gregory A. Demopulos (“Employee”)
and Omeros Corporation, a Washington corporation (the “Company”).



     1. Term of Agreement. Subject to the provisions of Section 3, this Agreement shall
commence on the date hereof and shall continue until terminated by either party. The period of the
Employee’s employment hereunder is hereinafter referred to as the “Employment Period.” The
Company’s obligations under Sections 4(c), 5, 10 and 12(i) shall survive the termination of this
Agreement, as will the Employee’s obligations under Section 9.



     2. Duties.



     (a) Position. Employee shall be employed as President, Chief Executive Officer and
(unless he shall no longer be serving on the Company’s Board of Directors (the “Board”))
Chairman of the Company. Employee shall continue to be nominated for reelection to the Board
throughout the Employment Period. Employee will report to the Board and all other employees of the
Company will report, directly or indirectly, to Employee.



     (b) Obligations to the Company. Employee agrees that to the best of his ability and
experience he will at all times loyally and conscientiously perform all of the duties and
obligations required of him. During the Employment Period, Employee will devote all of his business
time and attention to the business of the Company, will not render commercial or professional
services of any nature to any person or organization, whether or not for compensation, without the
prior written consent of the Board, and will not directly or indirectly engage or participate in
any business that is competitive in any manner with the business of the Company; provided, that,
notwithstanding the foregoing and Section 1 of Exhibit A, Employee may:




     (i) devote such time to clinical practice and related activities as he reasonably deems
necessary to maintain his status as a board-eligible orthopedic and hand and microvascular
surgeon, and Employee will be entitled to all of the benefits and profits arising therefrom
or incident thereto; and




     (ii) serve on the boards or other governing bodies of, or otherwise participate in the
activities of, charitable and other not-for-profit or community organizations, and in
connection therewith accept and retain honoraria, speaking fees and the like; and




     (iii) invest (whether or not passively) and otherwise be involved in (through the
provision of services or otherwise) one or more ventures, however organized or owned, that
have as a business objective the development and/or commercial exploitation of an electronic
system of reporting medical test results, so long as such involvement does not require his
participation in the daily operations of such venture or ventures or materially interfere
with the performance of his duties to the Company; and




     (iv) with the consent of the Board (which consent shall not be unreasonably withheld),
serve on the boards or other governing bodies of businesses or organizations not described
in (ii) or (iii) above.


The ownership by Employee of not more than 1% of the outstanding equity securities of a corporation
whose stock is listed on a national stock exchange or the Nasdaq National Market shall in no event
be treated as directly or indirectly engaging or participating in a competitive business. (For the
avoidance of doubt, the immediately preceding sentence shall not be construed as limiting in any
way Employee’s investment or involvement as described in clause (iii) above.) To the extent
consistent with the foregoing, Employee will also comply with and be bound by the Company’s
operating policies, procedures and practices from time to time in effect during the Employment
Period.




     3. At-Will Employment. The Company and Employee acknowledge that Employee’s employment
is and shall continue to be at-will, as defined under applicable law, and that Employee’s
employment with the Company may be terminated by either party at any time for any or no reason. If
Employee’s employment terminates for any reason, Employee shall not be entitled to any benefits
other than as provided in this Agreement or applicable law.



 









 





     4. Compensation. For the duties and services to be performed by Employee hereunder,
the Company shall pay Employee, and Employee agrees to accept, the following:



     (a) Salary and Bonus.




     (i) Base Salary. Effective as of March 1, 2010, Employee shall receive base
salary at an annual rate of $600,000 or such higher annual rate as the Board or its
Compensation Committee may approve (“Base Salary”), payable in accordance with the
Company’s payroll practices for executive employees but not less frequently than
semi-monthly. The Compensation Committee shall review Employee’s Base Salary not less
frequently than annually, beginning the earlier of March 1, 2011 or the period for annual
reviews for all employees of the Company, and may increase it but may not decrease it,
without the consent of Employee.




     (ii) Bonuses. During the Employment Period Employee shall be entitled to
participate in all bonus and incentive plans or programs, if any, of the Company, in each
case at a level and on terms commensurate with his position and responsibilities.



     (b) Additional Benefits. Employee will be eligible to participate in the Company’s
employee benefit and fringe benefit plans and programs of general application and in any other
employee benefit and fringe benefit plans and programs of the Company that are made available to
other executive employees of the Company, including without limitation those plans covering
medical/dental, disability and life insurance, in accordance with the rules established for
individual participation in any such plan or program and under applicable law and, in each case, on
terms that are not less favorable to Employee than the terms applicable to other executive
employees of the Company. Without limiting the generality of the foregoing, Employee will
participate in awards under the Company’s equity compensation and/or equity incentive plans as from
time to time in effect at a level and on terms commensurate with his position and responsibilities
and no less favorable than those applicable to the chief executive officers of peer companies as
reasonably determined by the Compensation Committee of the Board, taking into account the
recommendation of independent compensation consultants. Employee will be eligible for not less
than four weeks of vacation per year and for sick leave in accordance with the Company’s policies
in effect during the Employment Term, and will receive such other benefits as the Company generally
provides to its other employees of comparable position and experience. In addition to and not in
lieu of the foregoing, the Company shall bear the costs incurred by Employee in maintaining his
status as a board-eligible orthopedic and hand and microvascular surgeon, including, without
limitation, payment of Employee’s malpractice insurance and professional fees.



     (c) Reimbursement of Expenses; Insurance. Subject to substantiation in accordance with
Company policies, Employee shall be promptly reimbursed by the Company for all reasonable expenses
that he incurs in the course of his employment hereunder. During the Employment Period and
thereafter, Employee shall be indemnified by the Company to the fullest extent permitted by law
against all liability with respect to acts or omissions by Employee during the course of his
employment with the Company (including for this purpose any service on the Board), and the Company
shall maintain in force adequate insurance covering such acts or omissions. Any reimbursements or
direct payment by the Company of otherwise reimbursable expenses (including amounts described in
the last sentence of Section 4(b) above) shall be subject to such Company procedures, not
inconsistent with the express provisions of this Agreement, as shall from time to time be in
effect.



     5. Termination of Employment and Severance Benefits.



     (a) Termination of Employment. Employee’s employment, and with it the Employment
Period, shall terminate upon the first to occur of the following:




     (i) The Company’s termination of Employee’s employment for Cause (as defined in Section
7(a) below) (“Termination for Cause”);




     (ii) The Company’s termination of Employee’s employment for Disability (as defined in
Section 7(d) below) (“Disability Termination”);



 









 






     (iii) The Company’s termination of Employee’s employment other than a Termination for
Cause or a Disability Termination (“Termination Without Cause”).




     (iv) The termination by Employee of his employment for Good Reason (as defined in
Section 7(b) below) or any other termination by Employee that is treated as a Constructive
Termination under Section 7(b) below (“Constructive Termination”).




     (v) The termination by Employee of his employment other than for Good Reason
(“Voluntary Termination”).




     (vi) Termination of Employee’s employment by reason of death.


The effective date of Employee’s termination (the “Date of Termination”) shall be (A) in
the case of a termination under clause (vi) above, the date of death, and (B) in every other case,
the date on which the Company (in the case of termination described in clauses (i), (ii) or (iii)
above) or Employee (in the case of clauses (iv) and (v) above) gives the other party notice of
termination or, if a later date is specified in such notice, such later date.




     (b) Severance Benefits. Employee shall be entitled to receive severance benefits upon
termination of employment only as set forth in this Section 5(b):




     (i) Voluntary Termination. If Employee’s employment terminates by Voluntary
Termination, then Employee shall not be entitled to receive payment of any severance
benefits. Employee will be entitled to payment promptly and in all events within thirty (30)
days of the Date of Termination of all Base Salary, bonuses (including, without limitation,
the full amount of any milestone or incentive payments earned by Employee at or prior to the
Date of Termination) and vacation earned but not yet paid as of the Date of Termination, and
Employee’s benefits will be continued under the Company’s then existing benefit plans and
programs in accordance with such plans and programs in effect on the Date of Termination and
in accordance with applicable law.




     (ii) Involuntary Termination. If Employee’s employment is terminated by the
Company in a Termination Without Cause or by Employee in a Constructive Termination,
Employee will be entitled to receive all amounts he would have received in the event of a
Voluntary Termination, such amounts to be paid in accordance with the timing rules of
Section 5(b)(i) above, plus the following severance benefits (“Severance Benefits”):




     (x) until the earlier of (I) the last day of the two year period beginning on
the Date of Termination and (II) Employee’s start date with a new employer that pays
Employee base salary equal to or in excess of his Base Salary in effect immediately
prior to the Date of Termination (or, in the event of any purported decrease in Base
Salary prior to the Date of Termination, which purported decrease was a stated cause
for Constructive Termination by Employee, base salary equal to or in excess of his
Base Salary in effect immediately prior to such purported decrease) (the
“Severance Period”), salary continuation at an annual rate equal to the sum
of (a) the rate of Base Salary in effect immediately prior to the Date of
Termination (or, in the event of any purported decrease in Base Salary prior to the
Date of Termination, which purported decrease was a stated cause for Constructive
Termination by Employee, at the rate in effect immediately prior to such purported
decrease), plus (b) the greater of (i) if any portion of Employee’s remuneration
during the two-year period preceding the calendar year in which the Date of
Termination falls was paid or payable as a bonus, the annual average of the
aggregate of such bonus amounts, or (ii) for the calendar year in which the Date of
Termination falls, any bonus to which Employee would have been entitled for such
year if his employment had not been terminated, as determined by the Board in good
faith. Such salary continuation payments shall be paid on the same periodic basis as
payments of base salary are paid to executive employees of the Company, but not less
frequently than semi-monthly. The severance payments described in this clause (x)
shall not be subject to offset for other earnings.



 









 






     (y) during the Severance Period, continued participation by Employee and his
eligible dependents in all medical, dental, optical and mental health benefit plans
or programs of the Company, in each case as in effect immediately prior to the Date
of Termination (or, in the event of any purported decrease in coverage occurring
prior to the Date of Termination, as in effect immediately prior to such purported
decrease) and in each case on terms not less favorable to Employee and his eligible
dependents than the terms applicable to active executive employees of the Company
and their eligible dependents, unless comparable coverage is provided by Employee’s
new employer.




     (z) full and immediate vesting and accelerated exercisability of all stock
options held by Employee immediately prior to the Date of Termination and full and
immediate vesting of all then unvested shares of stock of the Company, if any,
previously acquired by Employee or purchasable under any such stock option;
provided, that Employee shall have until the maximum term of the option (determined,
for the avoidance of doubt, assuming continued employment) to exercise any stock
option that had not been exercised prior to the Date of Termination.




     (iii) Termination for Cause. If Employee’s employment is terminated by the
Company in a Termination for Cause, then Employee shall not be entitled to receive payment
of any severance benefits. Employee will be entitled to payment promptly (and in all events
within thirty (30) days of the Date of Termination) of all Base Salary, bonuses and vacation
earned but not yet paid as of the Date of Termination, and Employee’s benefits will be
continued under the Company’s then existing benefit plans and programs in accordance with
such plans and programs in effect on the Date of Termination and in accordance with
applicable law.




     (iv) Termination by Reason of Death or Disability. In the event that Employee’s
employment with the Company terminates as a result of Employee’s death or a Disability
Termination, Employee (or Employee’s estate or personal representative) will be entitled to
payment promptly (and in all events within thirty (30) days of such death or Disability
Termination) of all Base Salary, bonuses and vacation earned but not yet paid as of the Date
of Termination and any other benefits payable under the Company’s then existing benefit
plans and policies in accordance with such plans and policies in effect on the date of death
or Disability and in accordance with applicable law.



     6. Section 409A.



     (a) Notwithstanding anything to the contrary in this Agreement, if Employee is a “specified
employee” within the meaning of Section 409A of the Code and the final regulations and any other
guidance promulgated thereunder (“Section 409A”) at the time of his termination, only that portion
of the Deferred Compensation Separation Benefits which do not exceed the Section 409A Limit (as
defined below) will be made within the first six (6) months following Employee’s termination of
employment in accordance with the payment schedule applicable to each such payment or benefit. For
these purposes, each severance payment and benefit is hereby designated as a separate payment and
will not collectively be treated as a single payment. Any portion of the Deferred Compensation
Separation Benefits in excess of the Section 409A Limit shall accrue and, to the extent such
portion of the Deferred Compensation Separation Benefits would otherwise have been payable within
the first six (6) months following Employee’s termination of employment, will become payable on the
first payroll date that occurs on or after the date six (6) months and one (1) day following the
date of Employee’s termination of employment. All subsequent Deferred Compensation Separation
Benefits, if any, will be payable in accordance with the payment schedule applicable to each
payment or benefit.



     (b) This Agreement is intended to comply with the requirements of, or the requirements for
exemption from, Section 409A so that none of the Severance Benefits or other amounts 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. Without limiting the generality of the foregoing,
references herein to “termination of employment” and similar or correlative terms shall be
construed to mean and require a “separation from service” as defined in Section 409A. The Company
and Employee agree to work together in good faith to consider amendments to this Agreement 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 Employee under Section 409A.



 









 





     7. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:



     (a) Cause. For purposes of this Agreement, “Cause” for Employee’s termination will
exist at any time after the happening of one or more of the following events:




     (i) Employee’s willful misconduct or gross negligence in performance of his duties
hereunder, including Employee’s refusal to comply in any material respect with the legal
directives of the Board so long as such directives are not inconsistent with Employee’s
position and duties, and such refusal to comply is not remedied within 10 working days after
written notice from the Board, which written notice shall state that failure to remedy such
conduct may result in Termination for Cause;




     (ii) Dishonest or fraudulent conduct that materially discredits the Company, a
deliberate attempt to do an injury to the Company, or conduct that materially discredits the
Company or is materially detrimental to the reputation of the Company, including conviction
of a felony; or




     (iii) Employee’s material breach, if incurable, of any element of the Company’s
Confidential Information and Invention Assignment Agreement, including without limitation,
Employee’s theft or other misappropriation of the Company’s proprietary information.



     (b) Constructive Termination. For purposes of this Agreement, “Constructive
Termination” means Employee’s termination of his employment within 120 days following the
occurrence of Good Reason. For purposes of this Agreement, “Good Reason” means any of the
following: (i) any material diminution in Employee’s authority, duties or responsibilities; (ii)
any material diminution in Base Salary; (iii) any material change in the geographic location at
which Employee must perform services (in other words, the relocation of Employee to a principal
work location that is more than 50 miles from the Company’s location on the Effective Date); and
(iv) any other action or inaction that constitutes a material breach by the Company of this
Agreement; provided, however, that before Employee may terminate his employment in a Constructive
Termination, (A) Employee must provide the Company with written notice within 90 days of the event
that Employee believes constitutes “Good Reason” specifically identifying the acts or omissions
constituting the grounds for Good Reason and (B) the Company must have an opportunity within 30
days following delivery of such notice to cure the Good Reason condition.



     (c) Deferred Compensation Separation Benefits. For purposes of this Agreement,
“Deferred Compensation Separation Benefits” shall mean the Severance Benefits payable to
Employee, if any, pursuant to this Agreement, together with any other severance payments or
separation benefits which may be considered deferred compensation under Section 409A.



     (d) Disability. For purposes of this Agreement, “Disability” shall mean that
Employee has been unable to perform his duties hereunder as the result of his incapacity due to
physical or mental illness, and such inability, which continues for at least 120 consecutive
calendar days or 150 calendar days during any consecutive twelve-month period, if shorter, after
its commencement, is determined to be total and permanent by a physician selected by the Company
and its insurers and acceptable to Employee or to Employee’s legal representative (with such
agreement on acceptability not to be unreasonably withheld).



     (e) Section 409A Limit. For purposes of this Agreement, “Section 409A Limit”
shall mean two (2) times the lesser of: (i) Employee’s annualized compensation based upon the
annual rate of pay paid to Employee during the Company’s taxable year preceding the Company’s
taxable year of Employee’s termination of employment as determined under Treasury Regulation
1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or
(ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section
401(a)(17) of the Code for the year in which Employee’s employment is terminated.



 









 





     8. Confidentiality Agreement. Employee has signed a Confidential Information and
Invention Assignment Agreement (the “Confidentiality Agreement”) substantially in the form
attached hereto as Exhibit A. Employee hereby represents and warrants to the Company that
he has complied with all obligations under the Confidentiality Agreement and agrees to continue to
abide by the terms of the Confidentiality Agreement and further agrees that the provisions of the
Confidentiality Agreement shall survive any termination of this Agreement or of Employee’s
employment relationship with the Company.



     9. Noncompetition Covenant. Employee hereby agrees that he shall not, during the
Employment Period and until the later of (i) the end of the Severance Period, if any, and (ii) one
year after the Date of Termination, do any of the following without the prior written consent of
the Board:



     (a) Compete. Carry on any business or activity (whether directly or indirectly, as a
partner, stockholder, principal, agent, director, affiliate, employee or consultant) which is
directly competitive with the business conducted by the Company (as conducted now or during the
term of Employee’s employment), nor engage in any other activities that conflict with Employee’s
obligations to the Company. The parties acknowledge and agree that Employee shall not be deemed to
have breached his undertakings under this Section 9 by reason of engaging, whether during the
Employment Period or thereafter, in any or any combination of the activities described as permitted
activities under Section 2(b), including, for the avoidance of doubt but without limitation,
Section 2(b)(iii).



     (b) Solicit Business. Solicit or influence or attempt to influence any client or
customer, either directly or indirectly, to direct his or its purchase of the Company’s products
and/or services to any person, firm, corporation, institution or other entity in competition with
the business of the Company.



     (c) Solicit Personnel. During the term of this Agreement and until the later of (i)
the end of the Severance Period and (ii) one year after the Date of Termination, solicit or
influence or attempt to influence any person employed by the Company to terminate or otherwise
cease his employment with the Company or become an employee of any competitor of the Company. This
Section 9(c) is to be read in conjunction with Section 6 of the Confidential Information and
Invention Assignment Agreement executed by Employee.



     10. Successors. This Agreement shall be binding on the Company and its successors and
assigns. Without limiting the foregoing, the Company shall require any successor (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets to assume the Company’s obligations under
this Agreement and to agree expressly to perform the Company’s obligations under this Agreement in
the same manner and to the same extent as the Company would be required to perform such obligations
in the absence of a succession. The terms of this Agreement and all of Employee’s rights hereunder
shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees.



     11. Code Section 280G Best Results.



     (a) Payments and benefits under this Agreement, including the vesting of equity-based
compensation, shall be made and provided without regard to whether the deductibility of such
payments or benefits (or any other payments or benefits to or for the benefit of Employee) would be
limited or precluded by Section 280G of the Code and the regulations thereunder (“Section 280G”)
and without regard to whether such payments or benefits (or any other payments or benefits) would
subject Employee to the federal excise tax levied on certain “excess parachute payments” under
Section 4999 of the Code; provided, that if any such payment or benefit, or portion thereof, would,
but for this Section 11, constitute an “excess parachute payment” as that term is defined in
Section 280G and if the total of all payments and benefits to or for the benefit of Employee, after
reduction for all taxes (including the tax described in Section 4999 of the Code, if applicable)
with respect to such payments (“Employee’s total after-tax payments”), would be increased by the
limitation or elimination of any payment or benefit under this Agreement, amounts and benefits
payable or to be provided under this Agreement shall be reduced to the extent, and only to the
extent, necessary to maximize Employee’s total after-tax payments. If a reduction in payments or
benefits constituting “parachute payments” (as defined in Section 280G) is required under the
immediately preceding



 









 




sentence, it shall be accomplished in the following order: (A) cash payments shall be reduced
first and in reverse chronological order such that the cash payment owed on the latest date
following the occurrence of the event triggering such excise tax will be the first cash payment to
be reduced; (B) vesting of stock awards shall be cancelled/reduced next and in the reverse order of
the date of grant for such stock awards (i.e., the vesting of the most recently granted stock
awards will be reduced first), with full-value awards reversed before any stock option or stock
appreciation rights are reduced; and (C) employee benefits shall be reduced last and in reverse
chronological order such that the benefit owed on the latest date following the occurrence of the
event triggering such excise tax will be the first benefit to be reduced.




     (b) The Company shall appoint a nationally recognized accounting firm, reasonably acceptable
to Employee, to make the determinations required hereunder and perform the foregoing calculations.
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
Employee within fifteen (15) calendar days after the date on which right to a Payment is triggered
(if requested at that time by the Company or Employee) or such other time as requested by the
Company or Employee. 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 Employee with an opinion reasonably acceptable to Employee 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 Employee.



     12. Miscellaneous Provisions.



     (a) No Duty to Mitigate. Employee shall not be required to mitigate the amount of any
payment contemplated by this Agreement (whether by seeking new employment or in any other manner).



     (b) Amendments and Waivers. Any term of this Agreement may be amended or waived only
with the written consent of the parties.



     (c) Sole Agreement. This Agreement, including Exhibit A hereto, constitutes the sole
agreement of the parties and supersedes all oral negotiations and prior writings with respect to
the subject matter hereof. In particular, this Agreement shall supersede any terms contained in
stock option agreements provided to Employee or in any exhibits to this Agreement, in each case
that are contrary to the terms hereof; provided, for the avoidance of doubt, that subject to the
last sentence of Section 4(b), nothing in this Agreement shall be construed as adversely affecting
Employee’s rights under any stock option granted to him prior to the Effective Date.



     (d) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon receipt, when delivered personally or by a
nationally-recognized delivery service (such as Federal Express or UPS), or 48 hours after being
deposited in the U.S. mail as certified or registered mail with postage prepaid, if such notice is
addressed to the party to be notified at such party’s address as set forth in the signature blocks
below or as subsequently modified by written notice.



     (e) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Washington, without giving effect to the
principles of conflict of laws.



     (f) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.
In the event that the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of
the Agreement shall be enforceable in accordance with its terms.



     (g) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.



     (h) Arbitration. Any dispute or claim arising out of or in connection with this
Agreement will be finally settled by binding arbitration in Seattle, Washington in accordance with
the rules of the American Arbitration



 









 




Association by one arbitrator appointed in accordance with said rules. The arbitrator shall apply
Washington law, without reference to rules of conflicts of law or rules of statutory arbitration,
to the resolution of any dispute. Judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to
any court of competent jurisdiction for preliminary or interim equitable relief, or to compel
arbitration in accordance with this paragraph, without breach of this arbitration provision. This
Section 12(h) shall not apply to the Confidentiality Agreement.




     (i) Legal Fees. The Company shall reimburse Employee for his legal fees incurred in
negotiating this Agreement. In addition, the Company shall pay all legal and other reasonable fees
and expenses that Employee may incur in connection with any action by Employee to obtain any
severance, coverage, reimbursement, remuneration or other payment or benefit asserted by Employee
in good faith to be owing to him under the Agreement, if Employee substantially prevails with
respect to any material claim brought in the arbitration.



     (j) Advice of Counsel. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN EXECUTING
THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL,
AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL
NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.


The parties have executed this Agreement the date first written above.




	 	 	 	 	 
	 	OMEROS CORPORATION

 	 
	 	By:  	/s/ Marcia S. Kelbon
 	 
	 	  	Title:  VP, Patent & General Counsel 	 



	 	 	 	 	 
	 	Address:  	1420 Fifth Avenue, Suite 2600
Seattle, WA 98101
 	 



	 	 	 	 	 
	 	GREGORY A. DEMOPULOS

 	 
	 	Signature:  	/s/ Gregory A. Demopulos
 	 
	 	 	 	 
	 	 	 	 
	 



	 	 	 	 	 



 









 







EXHIBIT A




CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT



OMEROS MEDICAL SYSTEMS, INC.

EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT




     In consideration for my becoming employed, or my employment being continued, by Omeros Medical
Systems, Inc. or its subsidiaries, affiliates, or successors (collectively, the “Company”),
and for any cash, equity or other compensation for my services, I hereby agree as follows:




	1.	 	Overall Duties. During my term of employment with the Company, I will perform
for the Company such duties as may be designated by the Company from time to
time. I will devote my best efforts to the interests of the Company and will
not engage in other employment or in any activities detrimental to the best
interests of the Company without the prior written consent of the Company.
	 
	2.	 	Company Intellectual Property.
	 
	2.1	 	Definitions. As used in this Agreement, the term
“Intellectual Property” means
discoveries, developments, concepts, designs, ideas, know-how, improvements,
inventions, trade secrets and/or original works of authorship, and trademarks,
whether or not patentable, copyrightable or otherwise legally protectable. This
includes, but is not limited to, any new product, apparatus, article of
manufacture, biological material, method, procedure, process, technique,
system, compound, formulation, composition of matter, design or configuration
of any kind, or any improvement thereon. As used in this Agreement, the term
“Company Intellectual Property” means all Intellectual Property that I may
solely or jointly create, conceive, develop or reduce to practice during the
term of my employment with the Company which (i) pertains to any current or
planned line of business activity of the Company, (ii) was aided by the use of
time, material or facilities of the Company, whether or not during working
hours or (iii) relates to any of my work carried out for the Company, whether
or not during normal working hours. Company Intellectual Property shall not be
interpreted to include, and any assignment of inventions required by this
Agreement does not apply to, any invention or other proprietary right of mine
which I have disclosed to the Board of Directors of Omeros and which has been
disclaimed thereby as being unrelated to and not in conflict with the present
future business or research of Omeros.
	 
	2.2	 	Duty to Disclose and Company Ownership. I agree to promptly disclose all
Company Intellectual Property to the Company, for no additional compensation.
All Company Intellectual Property shall be the sole property of the Company and
its assigns to the maximum extent permitted by law (and to the fullest extent
permitted by law shall be deemed “works made for hire”), and the Company and
its successors and assigns shall be the sole owner of all patents, copyrights,
trademarks, trade secrets and other rights in connection therewith.
	 
	2.3	 	Assignment. I hereby assign and transfer to the Company, for no additional
compensation, any right and title to and interest in Company Intellectual
Property that I may have or acquire, including any copyrights and Registrations
and renewals therefore, any inventions, any United States, International and
foreign patent applications filed on such inventions, the right to apply for
all such patent applications in my name or in the name of the Company, such
Company Intellectual Property to be held and enjoyed by the Company as entirely
as the same would have been held and enjoyed by me had this assignment and
transfer not been made.
	 
	2.4	 	Assistance. I agree to provide all required or requested assistance to the
Company to permit the Company, at its expense but at no additional compensation
to me, in obtaining and enforcing the full benefits, enjoyment, rights and
title throughout the world in Company Intellectual Property, including but not
limited to the review and execution of assignments confirming ownership by the
Company, declarations, powers of attorney, and other documents, and assistance
or cooperation in legal proceedings. I hereby irrevocably designate the Company
and its duly authorized officers and agents as my agent and attorney-in fact,
to execute and file on my behalf any such applications and to do all other
lawful acts to further the prosecution and issuance of patents, copyright and
mask work registrations related to such Inventions. This power of attorney
shall not be affected by my subsequent incapacity.




 









 






	2.5	 	Notice Required by Revised Code of Washington 49.44.140. Any assignment of
inventions required by this Agreement does not apply to an invention for which
no equipment, supplies, facility or trade secret information of the Company was
used and which was developed entirely on the employee’s own time, unless (a)
the invention relates (i) directly to the business of the Company or (ii) to
the Company’s actual or demonstrably anticipated research or development or (b)
the invention results from any work performed by the employee for the Company.
	 
	2.6	 	I attach hereto as Exhibit A a complete list of all inventions or other
Intellectual Property, if any, made by me prior to my employment with the
Company that are relevant to any aspect of the Company’s current and planned
business, and I represent and warrant that such list is complete. If no such
list is attached to this Agreement, I represent that I have no such inventions
or other Intellectual Property at the time of signing this Agreement. If in the
course of my employment with the Company, I use or incorporate into a product
or process offered or under development by the Company an invention or other
Intellectual Property not included in the Company Intellectual Property in
which I have an interest, the Company is hereby granted a nonexclusive, fully
paid-up, royalty-free, perpetual worldwide license of my interest to use and
sublicense such invention or other Intellectual Property without restriction of
any kind.
	 
	3.	 	Confidentiality Obligation.
	 
	3.1	 	Definition. As used in this Agreement, the term “Proprietary Information” means
information or material not generally known or available outside the Company,
or information or material entrusted to the Company by third parties, that I
may obtain or create before or during the term of my employment, or obtain
through the Company’s resources or personnel after my employment. This
includes, but is not limited to, Company Intellectual Property, other
inventions, confidential knowledge, copyrights, product ideas, techniques,
processes, formulas, object codes, biological materials, mask works and/or any
other information of any type relating to documentation, laboratory notebooks,
data, schematics, algorithms, flow charts, mechanisms, research, manufacture,
improvements, assembly, installation, marketing, forecasts, sales, pricing,
customers, customer lists, customer data, investor names and lists, the duties,
qualifications, performance levels and compensation of other employees, and/or
cost or other financial data concerning any of the foregoing or the Company and
its operations. Proprietary Information may be contained in material such as
drawings, samples, procedures, specifications, reports, studies, customer or
supplier lists, budgets, cost or price lists, compilations or computer
programs, or may be in the nature of unwritten knowledge or know-how.
	 
	3.2	 	Duty to Protect Proprietary Information. I understand and agree that all
Proprietary Information is the sole property of the Company and its assigns. I
hereby assign to the Company any rights I may acquire in such Proprietary
Information. During and after my employment, I will hold in confidence and not
directly or indirectly disclose or use any Proprietary Information, except as
authorized by the Company as necessary for carrying out my duties for the
Company. I agree not to make copies of such Proprietary Information except as
authorized by the Company. Upon termination of my employment, or upon earlier
request of the Company, I will return or deliver to the Company all tangible or
electronic forms or copies of such Proprietary Information in my possession or
control. These obligations with respect to Proprietary Information shall not
apply to information that I can conclusively establish with written
documentation: (i) was widely known to the public at the time I obtained the
Proprietary Information or later becomes widely known to the public through no
direct or indirect action on my part; (ii) was known to me prior to my
employment or pre-employment relationship or association with Company; or (iii)
that I later receive from a third party having the lawful right to disclose the
same.
	 
	4.	 	Ownership of Physical Property. All documents, apparatus, equipment and other
physical property in any form, whether or not pertaining to Proprietary
Information, furnished to me by the Company or produced by me or others in
connection with my employment shall be and remain the sole property of the
Company, and will be returned to the Company upon request or upon termination
of my employment, even if not requested.
	 
	5.	 	Non-solicitation of Employees, Consultants and Other Parties. During the term
of my employment with the Company, and for a period of one (1) year following
the termination of my employment with the Company for




 









 






	 	 	any reason, I shall not
directly or indirectly solicit, induce, recruit or encourage any of the
Company’s employees or consultants to terminate their relationship with the
Company, or attempt any of the foregoing, either for myself or any other person
or entity. For a period of one (1) year following termination of my employment
with the Company for any reason, I shall not solicit any licensor, customer, or
licensee of the Company, that are known to me, with respect to any business,
products or services that are competitive to the products or services offered
by the Company or under development as of the date of termination of my
relationship with the Company.






	6.	 	Noncompetition. During the term of my employment with the Company and for one
(1) year following the termination of my employment or relationship with the
Company for any reason, I will not, without the Company’s prior written
consent, directly or indirectly work on any products or services that are
competitive with products or services (a) being commercially developed or
exploited by the Company during my employment or (b) on which I worked or about
which I learned Proprietary Information during my employment with the Company.
	 
	7.	 	No Conflicts. I represent that my performance of all the terms of this
Agreement as an employee of the Company does not and will not breach any
agreement to keep in confidence proprietary information, knowledge or data
acquired by me in confidence or in trust prior to my becoming an employee of
the Company, and I will not disclose to the Company, or induce the Company to
use, any confidential or proprietary information or material belonging to any
previous employer or others. I am not a party to and agree not to enter into
any written or oral agreement that conflicts or interferes with the provisions
of this Agreement. I will not bring to my employment with the Company any
materials or documents obtained from or belonging to a former employer except
those documents listed in Exhibit A, which I have the unrestricted right to use
and disclose without breach of any agreement or other obligation.
	 
	8.	 	At-Will Relationship. I understand and acknowledge that my employment with the
Company is and shall continue to be at-will, as defined under applicable law,
meaning that either I or the Company may terminate the relationship at any time
for any reason or no reason, without further obligation or liability on the
part of the Company.
	 
	9.	 	Miscellaneous. This Agreement inures to the benefit of successors and assigns
of the Company and is binding upon my heirs and legal representatives. My
obligations under Sections 2 and 3 of this Agreement shall endure and subsist
beyond the term of my employment, and my obligations under Sections 5 and 6 of this Agreement shall continue beyond the term of this Agreement for the
periods noted in those sections.
	 
	 	 	I acknowledge that violation of this Agreement by me may cause irreparable injury to the
Company, and I agree that the Company will be entitled to seek extraordinary relief in
court, including, but not limited to, temporary restraining orders, preliminary injunctions
and permanent injunctions without the necessity of posting a bond or other security and
without prejudice to any other rights and remedies that the Company may have for a breach
of this Agreement.
	 
	 	 	This Agreement supersedes any oral, written or other communications or agreements
concerning the subject matter of this Agreement, and may be amended or waived only by a
written instrument that I and a duly authorized officer of the Company have signed. This
Agreement shall be governed by the laws of the State of Washington applicable to contracts
entered into and performed entirely within the State of Washington, without giving effect
to principles of conflict of laws. If any provision of this Agreement is held to be
unenforceable under applicable law, then such provision shall be excluded from this
Agreement only to the extent unenforceable, and the remainder of such provision and of this
Agreement shall be enforceable in accordance with its terms.




 









 






	10.	 	Acknowledgment. I certify and acknowledge that I have carefully read all of the provisions
of this Agreement and that I understand and will fully and faithfully comply with such
provisions. I acknowledge that the Company’s counsel represents the interest of the
Company, and have received a recommendation to obtain independent legal counsel to review
this Agreement in advance and counsel me of my rights and obligations thereunder.





	 	 	 	 	 	 	 

	OMEROS MEDICAL SYSTEMS, INC.	 	Gregory A. Demopulos, M.D.	 	 
	 
	By:

	 /s/ Marcia S. Kelbon
	 	/s/ Gregory A. Demopulos, M.D.	 	 
	 

	 
	 	 	 	 
		Title:

	  VP, Patent & General Counsel
	 	Dated: 12/11/01	 	 
		Dated:

	  12/11/01