EXHIBIT
10.34


 


AFFYMAX
INC.


 


EXECUTIVE
EMPLOYMENT AGREEMENT


for


John A.
Orwin


 


This Employment Agreement (“Agreement”)
is entered into by and between John A. Orwin (“Executive”)
and Affymax Inc., (the “Company”),
effective as of February 19, 2010 (the “Effective
Date”).


 


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 his 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:


 


1.             EMPLOYMENT BY THE COMPANY.


 


1.1          Position. 
Subject to terms set forth herein, the Company agrees to employ
Executive in the position of President and Chief Operating Officer and
Executive hereby accepts such employment as of April 12, 2010 (the “Employment Date”).  During the term of his employment with the
Company, Executive will devote his best efforts and substantially all of his
business time and attention to the business of the Company, except for vacation
periods as set forth herein and reasonable periods of illness or other
incapacities permitted by the Company’s general employment policies.


 


1.2          Duties and Location. 
Executive shall serve in an executive capacity and shall perform such
duties as are customarily associated with his then current title, consistent
with the Bylaws of the Company and as required by the Company’s Board of
Directors (the “Board”).  Executive will report to the Chief Executive
Officer.  Executive’s primary office
location shall be the Company’s corporate headquarters, currently located in
Palo Alto, California.  The Company
reserves the right to reasonably require Executive to perform his duties at
places other than its corporate headquarters from time to time, and to require reasonable
business travel.


 


1.3          Policies and Procedures. 
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


 


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in conflict with the
Company’s general employment policies or practices, this Agreement shall
control.


 


2.             COMPENSATION.


 


2.1          Salary.  As of the Employment Date, Executive shall
receive for services to be rendered hereunder an annualized base salary of
$420,000, payable on a semi-monthly
basis, subject to payroll withholding and deductions and payable in accordance
with the Company’s regular payroll schedule. 
Such salary shall be reviewed annually and may be increased as approved
by the Board.


 


2.2          Bonus.  As of the Employment Date, Executive will be
eligible to earn an annual bonus of up to fifty percent (50%) of base salary as
determined by the Board of Directors upon the recommendations of its
Compensation Committee and Chief Executive Officer and provided that Executive
remains employed by the Company as of the date the bonus is calculated.  Eighty percent (80%) of the bonus amount will
be based on the Company’s performance in meeting its planned operating
objectives and twenty percent (20%) of the bonus amount will be based on the
Executive’s performance against expectations of his position, as determined by
the Company in its sole discretion.


 


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


 


2.4          Equity Awards.  Subject to the approval of the
Board, Executive shall be granted an option to purchase 220,000 shares of
Company Common Stock (the “Option”),
at fair market value as determined by the Board as of the date of grant,
pursuant to the Company’s 2006 Equity Incentive Plan (the “Plan”).  The Option shares will vest as follows:  twenty-five percent (25%) of the shares
covered by the Option shall vest on the first year anniversary of the vesting
commencement date and the remaining seventy-five percent (75%) of the shares
covered by the Option shall vest in thirty-six (36) equal monthly installments
thereafter, in accordance with the Company’s standard vesting and exercisability
policy, as long as Executive remains in continuous service with the
Company.  The Option shall be governed by
the terms and conditions set forth in the Plan, and in the applicable stock
option agreement and grant document.


 


3.             PROPRIETARY INFORMATION
OBLIGATIONS.


 


3.1          Agreement.  As a condition of employment, Executive
agrees to execute and abide by the Proprietary Information and Inventions
Agreement attached hereto as Exhibit A.


 


3.2          Remedies.  Executive’s duties under the Employee
Proprietary Information and Inventions Agreement shall survive termination of
his employment with the Company. 
Executive acknowledges that a remedy at law for any breach or threatened
breach by him of the provisions of the Proprietary Information and Inventions
Agreement


 


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would be inadequate, and
he therefore agrees that the Company shall be entitled to injunctive relief in
case of any such breach or threatened breach.


 


3.3          Third Party Agreements and
Information.  Executive represents and warrants that
Executive’s employment by the Company will not conflict with any prior
employment or consulting agreement or other agreement with any third party, and
that Executive will perform his duties to the Company without violating any
such agreement.  Executive represents and
warrants that Executive does not possess confidential information arising out
of prior employment, consulting, or other third party relationships, which
would be used in connection with Executive’s employment by the Company, except
as expressly authorized by that third party. 
During Executive’s employment by the Company, Executive will use in the
performance of Executive’s duties only information which is generally known and
used by persons with training and experience comparable to Executive’s own,
common knowledge in the industry, otherwise legally in the public domain, or
obtained or developed by the Company or by Executive in the course of Executive’s
work for the Company.


 


4.             OUTSIDE ACTIVITIES DURING
EMPLOYMENT.


 


4.1          Non-Company Business.  Except with the prior written consent of
the Company’s Board of Directors, Executive will not during the term of this
Agreement undertake or engage in any other employment, occupation or business
enterprise, other than ones in which Executive is a passive investor, provided that Executive agrees not to
become engaged in any other business activity which, in the reasonable judgment
of the Board, is likely to interfere with Executive’s ability to discharge his
duties and responsibilities to the Company. 
Executive may engage in civic and not-for-profit activities so long as
such activities do not materially interfere with the performance of his duties
hereunder.


 


4.2          No Adverse Interests. 
Except as permitted by Section 4.3, Executive agrees not to acquire, assume or participate in,
directly or indirectly, any position, investment or interest known by him to be
adverse or antagonistic to the Company, its business or prospects, financial or
otherwise.


 


4.3          Noncompetition. 
During the term of his employment by the Company, except on behalf of
the Company, Executive will not directly or indirectly, whether as an officer,
director, stockholder, partner, proprietor, associate, representative,
consultant, 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 him 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, he may own, as a passive investor, securities of
any competitor corporation, so long as his direct holdings in any one such
corporation shall not in the aggregate constitute more than one percent (1%) of
the voting stock of such corporation.


 


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5.             TERMINATION OF EMPLOYMENT.


 


5.1          At-Will Relationship. 
Executive’s employment relationship is at-will.  Either Executive or the Company may terminate
the employment relationship at any time, with or without cause or advance
notice.


 


5.2          Termination Without Cause.


 


(a)           The Company may terminate Executive’s employment with
the Company at any time without Cause, upon notice to Executive.


 


(b)           In the event Executive’s employment is terminated
without Cause and such termination results in a “separation from service” with
the Company within the meaning of Treasury Regulations Section 1.409A-1(h) (without
regard to any permissible alternative definition thereunder), the Company shall
provide Executive the following severance benefits (the “Severance
Benefits”):  (i) a
lump sum cash severance payment equal to nine (9) months of Executive’s
then current annual base salary, less applicable withholdings and deductions; (ii) if
Executive timely elects continued Company-provided group health insurance
coverage pursuant to federal COBRA law, the Company will pay Executive’s COBRA
premiums sufficient to maintain his group health insurance coverage in effect
as of the date of the termination for twelve (12) months following the
termination, provided that the Company’s obligation to continue to pay
Executive’s COBRA premiums hereunder will cease immediately upon Executive’s
eligibility for equivalent group health insurance coverage through a new
employer; (iii) Executive will have the ability to exercise any vested
stock options (including the Option) granted to Executive by the Company until
one (1) year following the date of the termination or the expiration of
the term of any such options, whichever occurs earlier.  As a condition precedent to Executive’s
receipt of the Severance Benefits, Executive must properly execute, and not
revoke or attempt to revoke, the Release described in Section 6 within
sixty (60) days following the date of his termination of employment.


 


5.3          Termination for Cause.


 


(a)           The Company may terminate Executive’s employment with
the Company at any time for Cause, upon notice to Executive.


 


(b)           “Cause” for termination shall mean: indictment or
conviction of any felony or of any crime involving dishonesty; participation in
any fraud against the Company; breach of Executive’s duties to the Company,
including persistent unsatisfactory performance of job duties; intentional
damage to any property of the Company; conduct by Executive which in the good
faith and reasonable determination of the Board demonstrates gross unfitness to
serve; incapacity to perform the essential functions of Executive’s job for a
period of ninety (90) consecutive days; or death.


 


(c)           In the event Executive’s employment is terminated at
any time with Cause, he shall be entitled to receive his base salary, and his
accrued but unused paid time off earned through the date of termination;
Executive will not be entitled to severance pay, pay in lieu of notice or any
other such compensation, except as may be 


 


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provided in the Company’s severance benefit plan, if
any, in effect on the termination date, or except as required by law.


 


5.4          Termination for Good
Reason.


 


(a)           Executive may voluntarily terminate his employment for
“Good Reason” by notifying the Company in writing that Executive believes that
an event described in this Section 5.4(a) has occurred (the “Constructive Termination Notice”),
within ten (10) days after the initial occurrence of one of the following
events; provided, however, that Executive shall
not have “Good Reason” to terminate employment unless the Company does not cure
the event described in this Section 5.4(a) within thirty (30) days
following receipt by the Company of the Constructive Termination Notice:


 


(i)            the assignment to Executive of any duties or
responsibilities which result in the material diminution of Executive’s
position; provided, however, that
the acquisition of the Company and subsequent conversion of the Company to a
division or unit of the acquiring corporation will not by itself result in a
diminution of Executive’s position;


 


(ii)           a reduction by the Company in Executive’s annual base
salary by greater than fifteen percent (15%), except to the extent the base
salaries of other executive officers of the Company are accordingly reduced; or


 


(iii)         a relocation of Executive, or the Company’s principal
executive offices by more than forty (40) miles, except for required travel by
Executive on the Company’s business.


 


(b)           In the event Executive terminates his employment for
Good Reason, and such termination results in a “separation from service” with
the Company within the meaning of Treasury Regulation Section 1.409A-1(h) (without
regard to any permissible alternative definition thereunder), the Company shall
provide Executive the Severance Benefits described above in Section 5.2(b).


 


5.5          Voluntary or Mutual Termination.


 


(a)           Executive may voluntarily terminate his employment
with the Company at any time, after which no further compensation will be paid
to Executive.


 


(b)           In the event Executive voluntarily terminates his employment
other than for “Good Reason,” he
will not be entitled to severance pay, pay in lieu of notice or any other such
compensation.


 


5.6          Involuntary Termination
Following a Change in Control.


 


(a)           Definition. 
For the purposes of this Agreement, a “Change in Control” shall mean a merger
or consolidation of the Company with, or any sale of all or substantially all
of the assets of the Company, to any other person, corporation or entity,
unless as a result of such merger, consolidation or sale of assets the holders
of the 


 


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Company’s voting
securities prior thereto hold at least fifty percent (50%) of the total voting
power represented by the voting securities of the surviving or successor
corporation after such transaction.


 


(b)           Severance Benefits. 
In the event of the termination of Executive’s employment without Cause
or Executive’s resignation for Good Reason, and in each case such termination
results in a “separation from service” with the Company within the meaning of
Treasury Regulations Section 1.409A-1(h) (without regard to any
permissible alternative definition thereunder) (an “Involuntary
Termination”) within twelve (12) months immediately following
the effective date of a Change in Control, in lieu of the Severance Benefits provided
in Sections 5.2 and 5.4 herein, Executive will receive the following benefits
(the “Change in Control Benefits”):
(i) a lump sum cash severance payment equal to fifteen (15) months of
Executive’s then current annual base salary, less applicable withholdings and
deductions; (ii) a lump sum cash severance payment equal to one and
one-quarter (1.25) times Executive’s annual target bonus potential, less
applicable withholdings and deductions; (iii) if Executive timely elects
continued Company-provided group health insurance coverage pursuant to federal
COBRA law, the Company will pay Executive’s COBRA premiums sufficient to
maintain his group health insurance coverage in effect as of the date of the
Involuntary Termination for twelve (12) months following the Involuntary
Termination, provided that the Company’s obligation to continue to pay
Executive’s COBRA premiums hereunder will cease immediately upon Executive’s
eligibility for equivalent group health insurance coverage through a new
employer; (iv) Executive will have the ability to exercise any vested
stock options (including the Option) granted to Executive by the Company until
one (1) year following the date of the Involuntary Termination or the
expiration of the term of any such option, whichever occurs earlier; and (v) the
vesting of all of Executive’s outstanding equity awards (including the Option)
shall be accelerated so that they vest in full and the Company’s right to
repurchase any earlier exercised shares, if applicable, shall lapse.  As a condition precedent to Executive’s
receipt of the Change in Control Benefits, Executive must properly execute, and
not revoke or attempt to revoke, the Release described in Section 6  within sixty (60) days following the date of
his termination of employment.


 


6.             RELEASE. 
As a condition of receipt of any benefits under Section 5 of this Agreement, Executive shall
provide the Company with an executed and effective general release
substantially in the form attached hereto as EXHIBIT B
(the “Release”).


 


7.             NONINTERFERENCE.


 


While employed by the Company, and for two (2) years immediately
following the Termination Date, Executive agrees not to interfere with the
business of the Company by:


 


(a)           soliciting, attempting to solicit, inducing, or
otherwise causing any employee of the Company to terminate employment in order
to become an employee, consultant or independent contractor to or for any other
person or entity of the Company; or


 


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(b)           directly or indirectly soliciting the business of any
customer of the Company which at the time of termination or one year
immediately prior thereto was listed on the Company’s customer list.


 


8.             COOPERATION
WITH COMPANY.


 


8.1          Cooperation Obligation.  During and after the term of Executive’s
employment, Executive will cooperate with the Company in responding to the
reasonable requests of the Company’s Chairman of the Board, CEO or General
Counsel, in connection with any and all existing or future litigation,
arbitrations, mediations or investigations brought by or against the Company,
or its or their respective affiliates, agents, officers, directors or
employees, whether administrative, civil or criminal in nature, in which the
Company reasonably deems Executive’s cooperation necessary or desirable.  In such matters, Executive agrees to provide
the Company with reasonable advice, assistance and information, including
offering and explaining evidence, providing sworn statements, and participating
in discovery and trial preparation and testimony.  Executive also agrees to promptly send the
Company copies of all correspondence (for example, but not limited to,
subpoenas) received by Executive in connection with any such legal proceedings,
unless Executive is expressly prohibited by law from so doing. The failure by
Executive to cooperate fully with the Company in accordance with this Section 8
will be a material breach of the terms of this Agreement which will result in
all commitments of the Company to make additional payments or provide
additional benefits to Executive under Section 5 becoming null and void.


 


8.2          Expenses and Fees.  The Company will reimburse
Executive for reasonable out-of-pocket expenses incurred by Executive as a
result of his cooperation with the obligations described in Section 8.1, within thirty (30) days of the
presentation of appropriate documentation thereof, in accordance with the
Company’s standard reimbursement policies and procedures. After termination of
Executive’s employment, the Company will also pay Executive a reasonable fee in
the amount of $200 per hour for
the time Executive devotes to matters as requested by the Company under Section 8.1 (the “Fees”).  The Company will not deduct or withhold any
amount from the Fees for taxes, social security, or other payroll deductions,
but will instead issue an IRS Form 1099 with respect to the Fees.  Executive acknowledges that in
cooperating in the manner described in Section 8.1, he will be serving as an independent contractor, not a
Company employee, and he will be entirely responsible for the payment of all
income taxes and any other taxes due and owing as a result of the payment of
Fees.  Executive hereby indemnifies the
Company and its officers, directors, agents, attorneys, employees,
shareholders, subsidiaries, and affiliates and holds them harmless from any
liability for any taxes, penalties, and interest that may be assessed by any
taxing authority with respect to the Fees, with the exception of the employer’s
share of employment taxes subsequently determined to be applicable, if any.


 


9.             DISPUTE
RESOLUTION.  To ensure rapid and economical resolution of
any disputes which may arise under this Agreement, Executive and the Company
agree that any and all disputes, claims, or demands in any way arising out of
or relating to this Agreement, Executive’s employment with the Company, or the
termination of Executive’s employment with the Company, shall be resolved by
confidential, final and binding 


 


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arbitration conducted
before a single arbitrator with Judicial Arbitration and Mediation Services, Inc.
(“JAMS”) in San Francisco, California,
under the then-applicable JAMS rules.  The parties  acknowledge that by
agreeing to this arbitration procedure, they waive the right to resolve any
such dispute through a trial by jury, judge or administrative proceeding.  The Company shall bear JAMS’ arbitration fees
and administrative costs.  The arbitrator
shall:  (a) have the authority to
compel adequate discovery for the resolution of the dispute and to award such
relief as would otherwise be permitted by law; and (b) issue a written
arbitration decision including the arbitrator’s essential findings and
conclusions and a statement of the award. 
The arbitrator, and not a court, shall also be authorized to determine
whether the provisions of this paragraph apply to a dispute, controversy, or
claim sought to be resolved in accordance with these arbitration
procedures.  Notwithstanding the
foregoing, Executive and the Company shall each have the right to resolve any
dispute or cause of action involving Company trade secrets, proprietary
information, or intellectual property (including, without limitation,
inventions assignment rights under California Labor Code Section 2870, and
rights under patent, trademark, or copyright law) by court action instead of
arbitration.  Nothing in this Agreement is intended to prevent
either Executive or the Company from obtaining injunctive relief in court to
prevent irreparable harm pending the conclusion of any such arbitration.


 


10.          TAX PROVISIONS.


 


10.1        Best After-Tax.


 


(a)           If any payment or benefit Executive would receive
pursuant to a Change in Control from the Company or otherwise (“Payment”) would (i) constitute
a “parachute payment” within the meaning of Section 280G of 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 equal 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 of the greatest economic benefit 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 a manner necessary
to provide Executive with the greatest economic benefit.  If more than one manner of reduction of
payments or benefits necessary to arrive at the Reduced Amount yields the
greatest economic benefit, the payments and benefits shall be reduced pro rata.


 


(b)           The independent registered public accounting firm
engaged by the Company for general audit purposes as of the day prior to the
effective date of the event described in Section 280G(b)(2)(A)(i) of
the Code shall perform the foregoing calculations.  If the independent registered public
accounting firm so engaged by the Company is serving as accountant or auditor
for the individual, entity or group effecting such event, the Company shall
appoint a nationally recognized independent registered 


 


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public accounting firm to
make the determinations required hereunder. 
The Company shall bear all expenses with respect to the determinations
by such independent registered public accounting firm required to be made
hereunder.  The independent registered
public 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.  Any good faith determinations
of the independent registered public accounting firm made hereunder shall be
final, binding and conclusive upon the Company and Executive.


 


10.2        Compliance with Section 409A.  It is intended that all payments of Severance
Benefits and Change in Control Benefits provided under this Agreement
constitute separate payments for purposes of Treasury Regulations Section 1.409A-2(b)(2) and
that such payments satisfy, to the greatest extent possible, the exemptions
from the application of Section 409A of the Code provided by Treasury
Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9).


 


11.          GENERAL PROVISIONS.


 


11.1        Notices.  Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of personal delivery
(including personal delivery by fax) or the next day after sending by overnight
carrier, to the Company at its primary office location and to Executive at his
address as listed on the Company payroll.


 


11.2        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 to the extent possible in keeping with the intent of the
parties.


 


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


 


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


 


11.5        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.


 


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11.6        Headings.  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.


 


11.7        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 his duties hereunder
and he may not assign any of his rights hereunder without the written consent
of the Company, which shall not be withheld unreasonably.


 


11.8        Attorneys’ Fees.  If either party hereto brings
any action to enforce his or its rights hereunder, the prevailing party in any
such action shall be entitled to recover his or its reasonable attorneys’ fees
and costs incurred in connection with such action.


 


11.9        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.


 


	
   

  	
  Affymax Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Arlene M. Morris

  
	
   

  	
   

  	
  Arlene M. Morris

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  February 19, 2010

  



 


 


	
  Accepted and agreed this

  	
   

  
	
  22nd day of February, 2010.

  	
   

  
	
   

  	
   

  
	
  John A.
  Orwin, an Individual

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ John A.
  Orwin

  	
   

  



 


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EXHIBIT A


 


EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS
AGREEMENT


 

















 


EXHIBIT B


 


RELEASE AGREEMENT