Document:

Employment Offer Letter

 Exhibit 10.20 
 KALOBIOS, INC. 
 3427
HILLVIEW AVENUE 
 PALO ALTO, CA 94304 

January 8, 2004 
 Geoffrey
Yarranton 
 c/o KaloBios Inc. 
  

 
 Dear Geoff: 

KaloBios, Inc. (the “Company”) is pleased to offer you employment on the following terms: 

1. Position. Your initial title will be C.E.O. and you will initially report to the Chairman of the Board of Directors. This is a
full-time position. By signing this letter agreement, you confirm to the Company that you have no contractual commitments or other legal obligations that would prohibit you from performing your duties for the Company. 

2. Cash Compensation. The Company will pay you a starting salary at the rate of $240,000 per year, payable in accordance with the
Company’s standard payroll schedule. This salary will be subject to adjustment pursuant to the Company’s employee compensation policies in effect from time to time. 
 3. Employee Benefits. As a regular employee of the Company, you will be eligible to participate in a number of Company-sponsored benefits. In addition, you will be entitled to paid vacation in
accordance with the Company’s vacation policy, as in effect from time to time. 
 4. [Intentionally omitted]

 5. Proprietary Information and Inventions Agreement. Like all Company employees, you will be required, as a condition
of your employment with the Company, to sign the Company’s standard Proprietary Information and Inventions Agreement, a copy of which is attached hereto as Exhibit A. 

6. Employment Relationship. Employment with the Company is for no specific period of time. Your employment with the Company will
be “at will,” meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause. Any contrary representations that may have been made to you are superseded by this letter agreement.
This is the full and complete agreement between you and the Company on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at
will” nature of your employment may only be changed in an express written agreement signed by you and a duly authorized officer of the Company (other than you). 

 [Name] 
 [Date] 
 Page 5 

 

 7. Outside Activities. While you render services to the Company, you agree that
you will not engage in any other employment, consulting or other business activity without the prior written consent of the Company. While you render services to the Company, you also will not assist any person or entity in competing with the
Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company. 
 8. Withholding
Taxes. All forms of compensation referred to in this letter agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law. 

9. Entire Agreement. This letter agreement supersedes and replaces any prior agreements, representations or understandings,
whether written, oral or implied, between you and the Company. 
 10. Arbitration. You and the Company agree to waive any
rights to a trial before a judge or jury and agree to arbitrate before a neutral arbitrator any and all claims or disputes arising out of this letter agreement and any and all claims arising from or relating to your employment with the Company,
including (but not limited to) claims against any current or former employee, director or agent of the Company, claims of wrongful termination, retaliation, discrimination, harassment, breach of contract, breach of the covenant of good faith and
fair dealing, defamation, invasion of privacy, fraud, misrepresentation, constructive discharge or failure to provide a leave of absence, or claims regarding commissions, stock options or bonuses, infliction of emotional distress or unfair business
practices. 
 The arbitrator’s decision must be written and must include the findings of fact and law that support the
decision. The arbitrator’s decision will be final and binding on both parties, except to the extent applicable law allows for judicial review of arbitration awards. The arbitrator may award any remedies that would otherwise be available to the
parties if they were to bring the dispute in court. The arbitration will be conducted in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association; provided, however that the arbitrator must
allow the discovery authorized by the California Arbitration Act or the discovery that the arbitrator deems necessary for the parties to vindicate their respective claims or defenses. The arbitration will take place in Santa Clara County or, at your
option, the county in which you primarily worked with the Company at the time when the arbitrable dispute or claim first arose. 

You and the Company will share the costs of arbitration equally, except that the Company will bear the cost of the arbitrator’s fee
and any other type of expense or cost that you would not be required to bear if you were to bring the dispute or claim in court. Both the Company and you will be responsible for their own attorneys’ fees, and the arbitrator may not award
attorneys’ fees unless a statute or contract at issue specifically authorizes such an award. 

 [Name] 
 [Date] 
 Page 6 

 

 The foregoing notwithstanding, this arbitration provision does not apply to
(a) workers’ compensation or unemployment insurance claims or (b) claims concerning the ownership, validity, infringement, misappropriation, disclosure, misuse or enforceability of any confidential information, patent right,
copyright, mask work, trademark or any other trade secret or intellectual property held or sought by either you or the Company (whether or not arising under the Proprietary Information and Inventions Agreement between you and the Company).

 If an arbitrator or court of competent jurisdiction (the “Neutral”) determines that any provision of this
arbitration provision is illegal or unenforceable, then the Neutral shall modify or replace the language of this arbitration provision with a valid and enforceable provision, but only to the minimum extent necessary to render this arbitration
provision legal and enforceable. 
 * * * * * 

We hope that you will accept our offer to join the Company. You may indicate your agreement with these terms and
accept this offer by signing and dating both the enclosed duplicate original of this letter agreement and the enclosed Proprietary Information and Inventions Agreement and returning them to me. This offer, if not accepted, will expire at the close
of business on 9th January, 2004. As required by law,
your employment with the Company is contingent upon your providing legal proof of your identity and authorization to work in the United States. Your employment is also contingent upon your starting work with the Company on or before 9th January. 

 [Name] 
 [Date] 
 Page 7 

 

 If you have any questions, please call me at. 

 

			
	Very truly yours,
	
	KALOBIOS, INC.
		
	By:	 	 /s/ Mark Alfenito

	Title:	 	 President

 I have read and accept this employment offer: 

 

			
	 /s/ Geoffrey T. Yarranton

	Signature of [Name]
		
	Dated:	 	January 8, 2004

 Attachment 
 Exhibit A: Proprietary Information and Inventions Agreement 

 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT 

The following confirms and memorializes an agreement that KaloBios, Inc., a Delaware corporation (the “Company”), and I
(G.T. Yarranton) have had since the commencement of my employment with the Company in any capacity and that is and has been a material part of the consideration for my employment by Company: 

1. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement or my
employment with Company. I will not violate any agreement with or rights of any third party or, except as expressly authorized by Company in writing hereafter, use or disclose my own or any third party’s confidential information or intellectual
property when acting within the scope of my employment or otherwise on behalf of Company. Further, I have not retained anything containing any confidential information of a prior employer or other third party, whether or not created by me.

 2. Company shall own all right, title and interest (including patent rights, copyrights, trade secret rights, mask work
rights, sui generis database rights and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designs,
know-how, ideas and information made or conceived or reduced to practice, in whole or in part, by me during the term of my employment with Company to and only to the fullest extent allowed by California Labor Code Section 2870 (which is
attached as Appendix A) (collectively “Inventions”). I will promptly disclose all such Inventions to Company. I hereby make all assignments necessary to accomplish the foregoing. I shall further assist Company, at Company’s
expense, to further evidence, record and perfect such assignments, and to perfect, obtain, maintain, enforce, and defend any rights specified to be so owned or assigned. I hereby irrevocably designate and appoint Company as my agent and
attorney-in-fact, coupled with an interest and with full power of substitution, to act for and in my behalf to execute and file any document and to do all other lawfully permitted acts to further the purposes of the foregoing with the same legal
force and effect as if executed by me. If anything created by me prior to my employment relates in any way to Company’s actual or proposed business, I have listed it on Appendix B in a manner that does not violate any third party rights.
Without limiting Section 1 or Company’s other rights and remedies, if, when acting within the scope of my employment or otherwise on behalf of Company, I use or (except pursuant to this Section 2) disclose my own or any third
party’s confidential information or intellectual property (or if any Invention cannot be fully made, used, reproduced, distributed and otherwise exploited without using or violating the foregoing), Company will have and I hereby grant Company a
perpetual, irrevocable, worldwide royalty-free, non-exclusive, sublicensable right and license to exploit and exercise all such confidential information and intellectual property rights. 

3. To the extent allowed by law, paragraph 2 includes all rights of paternity, integrity, disclosure and withdrawal and any other rights
that may be known as or referred to as “moral rights,” “artist’s rights,” “droit moral,” or the like (collectively “Moral Rights”). To the extent I retain any such Moral Rights under applicable law, I
hereby ratify and consent to any action that may be taken with respect to such Moral Rights by or authorized by Company and agree not to assert any Moral Rights with respect thereto. I will confirm any such ratifications, consents and agreements
from time to time as requested by Company. 

 4. I agree that all Inventions and all other business, technical and financial information
(including, without limitation, the identity of and information relating to customers or employees) I develop, learn or obtain during the term of my employment that relate to Company or the business or demonstrably anticipated business of Company or
that are received by or for Company in confidence, constitute “Proprietary Information.” I will hold in confidence and not disclose or, except within the scope of my employment, use any Proprietary Information. However, I shall not be
obligated under this paragraph with respect to information I can document is or becomes readily publicly available without restriction through no fault of mine. Upon termination of my employment, I will promptly return to Company all items
containing or embodying Proprietary Information (including all copies), except that I may keep my personal copies of (i) my compensation records, (ii) materials distributed to shareholders generally and (iii) this Agreement. I also
recognize and agree that I have no expectation of privacy with respect to Company’s telecommunications, networking or information processing systems (including, without limitation, stored computer files, email messages and voice messages) and
that my activity and any files or messages on or using any of those systems may be monitored at any time without notice. 
 5.
Until one year after the term of my employment, I will not encourage or solicit any employee or consultant of Company to leave Company for any reason (except for the bona fide firing of Company personnel within the scope of my employment).

 6. I agree that during the term of my employment with Company (whether or not during business hours), I will not engage in
any activity that is in any way competitive with the business or demonstrably anticipated business of Company, and I will not assist any other person or organization in competing or in preparing to compete with any business or demonstrably
anticipated business of Company. 
 7. I agree that this Agreement is not an employment contract for any particular term and
that I have the right to resign and Company has the right to terminate my employment at will, at any time, for any or no reason, with or without cause. In addition, this Agreement does not purport to set forth all of the terms and conditions of my
employment, and, as an employee of Company, I have obligations to Company which are not set forth in this Agreement. However, the terms of this Agreement govern over any inconsistent terms and can only be changed by a subsequent written agreement
signed by the President of Company. 
 8. I agree that my obligations under paragraphs 2, 3, 4 and 5 of this Agreement shall
continue in effect after termination of my employment, regardless of the reason or reasons for termination, and whether such termination is voluntary or involuntary on my part, and that Company is entitled to communicate my obligations under this
Agreement to any future employer or potential employer of mine. My obligations under paragraphs 2, 3 and 4 also shall be binding upon my heirs, executors, assigns, and administrators and shall inure to the benefit of Company, it subsidiaries,
successors and assigns. 

 9. Any dispute in the meaning, effect or validity of this Agreement shall be resolved in
accordance with the laws of the State of California without regard to the conflict of laws provisions thereof. I further agree that if one or more provisions of this Agreement are held to be illegal or unenforceable under applicable California law,
such illegal or unenforceable portion(s) shall be limited or excluded from this Agreement to the minimum extent required so that this Agreement shall otherwise remain in full force and effect and enforceable in accordance with its terms. I also
understand that any breach of this Agreement will cause irreparable harm to Company for which damages would not be a adequate remedy, and, therefore, Company will be entitled to injunctive relief with respect thereto in addition to any other
remedies and without any requirement to post bond. 
 I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE
OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR REPRESENTATIONS HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT. I SIGN THIS AGREEMENT VOLUNTARILY AND FREELY, IN DUPLICATE, WITH THE UNDERSTANDING THAT THE COMPANY
WILL RETAIN ONE COUNTERPART AND THE OTHER COUNTERPART WILL BE RETAINED BY ME. 
  

					
	    7th Jan    , 2004	 		 	Employee
			
		 		 	 /s/    G.T.
Yarranton        

		 		 	Signature
			
		 		 	 G.T. Yarranton        

		 		 	Name (Printed)

  

			
	 Accepted and Agreed to:
 KaloBios, Inc.

		
	By:	 	 

 APPENDIX A 
 California Labor Code Section 2870. Application of provision providing that employee shall assign or offer to assign rights in invention to employer. 

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights
in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those
inventions that either: 
 (i) Relate at the time of conception or reduction to practice of the invention to the employer’s
business, or actual or demonstrably anticipated research or development of the employer; or 
 (ii) Result from any work
performed by the employee for his employer. 
 (b) To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable. 

 APPENDIX B 
 PRIOR MATTERLetter Agreement

 Exhibit 10.21 
 KALOBIOS PHARMACEUTICALS, INC. 
 3427 HILLVIEW AVENUE 
 PALO
ALTO, CA 94304 
 December 18, 2008 
 David Pritchard 
  
  

Dear David: 
 You and KaloBios
Pharmaceuticals, Inc. (the “Company”) signed an offer letter dated August 15, 2006 (the “Offer Letter”). To avoid potential adverse tax consequences imposed by Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), the Offer Letter is hereby amended as follows: 
 Section 5 of the Offer Letter is
hereby amended and restated in its entirety as follows: 
 5. Severance Benefits upon Change in Control. If the
Company is subject to a Change in Control (as defined in the Plan) before your service with the Company terminates, and if you are subject to an Involuntary Termination within 12 months after that Change in Control and a Separation occurs, then you
will be entitled to the following benefits: 
 (a) The Company will continue to pay your base salary for a period
of 12 months following the termination of your employment. Your base salary will be paid at the rate in effect at the time of the termination of your employment and in accordance with the Company’s standard payroll procedures. The amount of the
salary continuation payments under this Subsection (a) will be reduced by the amount of any severance pay or pay in lieu of notice that you receive from the Company under a federal or state statute (including, without limitation, the WARN Act).

 (b) If a target bonus has been established for you under Section 2 for the fiscal year in which your
employment terminates, you will receive a pro rata portion of that target bonus, based on the number of days for which you were employed during that fiscal year. This amount will be paid in installments over the same period as your base
salary, pursuant to Subsection (a) above. 
 (c) If you elect to continue your health insurance coverage
under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) 

 David Pritchard 
 December 18, 2008 
  Page
 2
 
  

 
following the termination of your employment, then the Company will pay the same portion of your monthly premium under COBRA as it pays for active employees until the earliest of (i) the
close of the 12-month period following the termination of your employment, (ii) the expiration of your continuation coverage under COBRA or (iii) the date when you become eligible for substantially equivalent health insurance coverage in
connection with new employment or self-employment. 
 (d) Separation from Service. For all purposes under
the Offer Letter, “Separation” means a “separation from service,” as defined in the regulations under Section 409A of the Code. 
 (e) Commencement of Severance Payments. Payment of the periodic severance pay provided for under Section 5(a) and 5(b) will commence on the first regularly scheduled payroll date that occurs
on or after 60 days after your Separation, but only if you have complied with the release and other preconditions set forth in the last paragraph of Section 5. For purposes of Section 409A of the Code, each periodic payment under
Section 5(a) and 5(b) is hereby designated as a separate payment. 
 (f) Mandatory Deferral of
Payments. If the Company determines that you are a “specified employee” under Section 409A(a)(2)(B)(i) of the Internal Revenue Code at the time of your Separation, then (i) the periodic severance payments under
Section 5(a) and 5(b), to the extent that they are subject to Section 409A of the Code, will commence during the seventh month after your Separation and (ii) the installments that otherwise would have been paid during the first six
months after your Separation will be paid in a lump sum when the periodic payments commence. If applicable, this paragraph supersedes any contrary provision of the Offer Letter. 

However, this Section 5 will not apply unless you (i) resign as a member of the Boards of Directors of the Company and all of
its subsidiaries, to the extent applicable, (ii) sign a general release of claims (in a form prescribed by the Company) of all known and unknown claims that you may then have against the Company or persons affiliated with the Company and
(iii) have returned all Company property. The Company will deliver the release to you within 15 days after your Separation. You must execute and return the release within the period of time set forth in the form of release. 

The definition of “Involuntary Termination” in Section 12 of the Offer Letter is hereby amended and restated in its
entirety as follows: 
 “Involuntary Termination” means either (a) involuntary discharge by the
Company for reasons other than Cause or (b) voluntary resignation following (i) a change in your position with the Company that materially reduces your level of authority or responsibility, (ii) a reduction in your base salary by more
than 10% or (iii) receipt of notice that your principal workplace will be relocated more than 30 miles. A condition will not be considered reason for voluntary resignation under subclause (b) unless you give the Company written notice of
the 

 David Pritchard 
 December 18, 2008 
  Page
 3
 
  

 
condition within 90 days after the condition comes into existence and the Company fails to remedy the condition within 30 days after receiving your written notice. In addition, your resignation
must occur within 12 months after the condition comes into existence. 
 Except as expressly set forth above, the Offer Letter
will remain in effect without change. 
 You may indicate your agreement with this amendment of the Offer Letter by signing and
dating the enclosed duplicate original of this letter agreement and returning it to me. This letter agreement may be executed in two counterparts, each of which will be deemed an original, but both of which together will constitute one and the same
instrument. 
  

			
	Very truly yours,
	
	KALOBIOS PHARMACEUTICALS, INC..
		
	By:    	 	/s/ Geoffrey T. Yarranton
	Title: Director

 I have read and accept this amendment: 

 

			
	 /s/ David Pritchard

	David Pritchard
		
	Dated:	 	December 23, 2008

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