Document:

ex_126002.htm

Exhibit 10.2

 

 

CONFIDENTIAL SEPARATION AND SETTLEMENT AGREEMENT AND RELEASE

 

This Confidential Separation Agreement and Release (“Agreement”) is entered into as of this day 2 of October, 2018, by and between (i) William P. Kauper (“you”) and Patricia R. Kauper, your spouse, and Bank 34 (the “Bank’) and Bancorp 34, Inc. (the “Company”). Unless the context otherwise requires, the term “Company” shall also include, the Bank, and any subsidiaries, affiliates, officers, directors, employees or agents of each of said entities (each shall be an “Affiliate” of the Bank and the Company.)

 

1.     Amounts Owed Upon Separation from Service. You agree to terminate your employment and employment agreement and resign from the Bank and Company, effective October 2, 2018 (the “Separation Date”). In connection with your separation from service, you will receive only the following:

 

One year and three months (15 months) of your base salary paid in a lump sum within five (5) days of the Effective Date of this Agreement and six thousand five hundred (6,500) restricted shares in Bancorp 34, Inc. to vest on the Effective Date of this Agreement. For purposes of this Agreement, the “Effective Date” shall be eight (8) calendar days after this Agreement is executed by both parties.

 

2.     Tax Liability. You understand that the Company shall issue an IRS Form W-2, as appropriate for the payments and benefits specified in Section 1 of this Agreement, which will be subject to applicable tax withholding.

 

3.     Release of Claims. 

 

(a) In exchange for the benefits described in Section 1 above, you, William P. Kauper, your spouse Patricia R. Kauper, your heirs and assigns, hereby irrevocably release, waive, and forever discharge the Company and the Bank, any of their subsidiaries, and the current and past officers, directors, employees, agents and Affiliates of each of said entities, from and against any and all claims of any kind whatsoever, whether known or unknown, arising out of or connected with the Employment Agreement, Change in Control Agreement, Stock Option Agreements, or any other agreement, whether written or oral, with the Bank or the Company arising out of or connected in any way with your employment or service with the Bank or the Company, whether as an officer, employee, or as a shareholder, or arising out of or connected in any way with the termination of your employment or service with the Bank or the Company, including, but not limited to, all matters in law, in equity, in contract (whether oral, written, express or implied) or in tort, or arising under any benefit plan, or pursuant to any applicable statute, rule or regulation, including but not limited to any claim of discrimination under any federal, state, or local law, rule, regulation, executive order or guideline from the beginning of time through the date of this Agreement. The items released include all matters relating to or arising out of his employment or separation from employment. This release specifically includes substantive claims for age discrimination under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act (the “ADEA”). Other examples of items released under this Agreement are claims under federal, state, or local laws, such as title VII of the Civil Rights Act of 1964, as amended; the Employee Retirement Income Security Act of 1974, as amended; the Americans with Disabilities Act, as amended; the Family and Medical Leave Act, as amended; the New Mexico Human Rights Act (or any other similar statute of New Mexico or any other jurisdiction that may be applicable in this case and which is designed to protect employees from prohibited discrimination); any common law, tort, or contract claims; and any claims for attorneys’ fees and costs. It is the intention of the parties that you and your spouse are waiving and releasing any and all claims that you have, have had or may ever have against the Bank or the Company, any of their subsidiaries, or the current and past officers, directors, employers, agents or Affiliates of each said entities, and it is the further intention of the parties that these release provisions are to be interpreted in the broadest possible way so as to effect the intent of the parties, which is that this shall be a general and a complete release forever resolving all of releasing party’s claims.

 

 

 

 

This Agreement supersedes and replaces any and all other benefits, plans or rights of payment William P. Kauper had from Company and Bank, except that this Agreement shall not supersede or in any way impair any vested rights or benefits, including but not limited to your benefits pursuant to the Company and/or Bank’s Employee Stock Ownership Plan. Company and Bank further agree that you have accrued but unused PTO hours that—pursuant to policy—will be paid in cash at your hourly rate as of the date of separation and will be paid within five (5) days of the Effective Date of this Agreement.

 

You acknowledge that you have been advised by the Bank to consult with an attorney of your choice before signing this Agreement. You acknowledge that you have been given a period of at least 21 days to decide whether to sign this Agreement, and you acknowledge that you have had an opportunity to consult with an attorney about this Agreement, should you elect to do so prior to signing this Agreement.

 

WAIVER OF AGE DISCRIMINATION CLAIM

 

William P. Kauper acknowledges and agrees that the release set forth above releases all claims under the Age Discrimination in Employment Act (“ADEA”). William P. Kauper further acknowledges and agrees that: (i) his release and waiver of any claim under the ADEA is knowing and voluntary; (ii) he has been informed by this writing to consult with his attorney prior to executing this Agreement; (iii) the consideration furnished under this Agreement is in addition to anything of value to which he is already entitled; and (iv) he has had at least 21 days within which to consider this Agreement or he knowingly and voluntarily waives his right to consider this Agreement for 21 days.

 

William P. Kauper may revoke this Agreement. You may do so during the seven calendar days after the date you sign it. The Agreement will not become effective until the eighth calendar day after William P. Kauper signs it. If you wish to revoke the Agreement, you must do so in writing and your written notice of revocation must be either hand delivered or sent by certified mail to Jill Gutierrez, CEO, Bank 34, 500 E. 10th Street, Alamogordo, NM 88310. To be effective, Gutierrez must receive the revocation of the Agreement during the seven calendar days after the day William P. Kauper signs it.

 

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PERIOD TO CONSIDER AND REVOKE THE AGREEMENT

 

William P. Kauper agrees that he has been given a reasonable period of time within which to consider the Agreement and knowingly and voluntarily waives the 21 day period within which he had to consider this Agreement. William P. Kauper has been advised and understands that he may revoke this Agreement at any time within 7 calendar days after signing the Agreement by giving notice in writing either by hand delivery or by certified mail to the address set forth above.

 

4.     Affirmations.

 

(a)     You understand that you do not have any right or claim to any continued or future employment or service, or compensation in any form or fashion, either as an employee, director, officer, consultant or independent contractor, from the Company or the Bank or any Affiliate other than as noted in Paragraph 1, above. You further agree that you shall not seek or accept further employment or service with the Bank or the Company as an employee, director, independent contractor or consultant at any time after the date of this Agreement.

 

(b)     You represent and warrant that there are no pending claims, lawsuits, charges, grievances, or causes of action of any kind that you have brought against the Company and that, to the best of your knowledge, you possess no such claims or, to the extent that you have any claims or disputes, you agree that they are released as part of this Agreement.

 

(c)     You further represent, warrant and affirm that you are not aware of any facts or circumstances indicating that you are due any amount whatsoever other than the payments provided for in or contemplated by this Agreement and that you are specifically waiving any rights and releasing the Bank and the Company, any subsidiaries of said entities, and the current and past officers, directors, employers, Affiliates and agents of each of said entities, as to any facts or circumstances that may arise or that you are currently aware of that would support a claim to amounts due to you arising out of you relationship with the Bank or the Company as an employee, officer, consultant or independent contractor.

 

5.     Return of Materials. You will promptly (and in any event within five (5) business days) return to the Company all property, including but not limited to credit cards, keys, cell phones, equipment, documents and other materials in your possession that are the property of the Company, whether created by you or by others, and including the originals and all copies thereof, whether in electronic, paper or any other form.

 

6.     Confidentiality. You acknowledge that you have had access to trade secrets and other confidential information regarding the Bank and the Company, and their businesses that are unique and irreplaceable, and that the use of such trade secrets and other confidential information by a competitor or other persons who are not affiliated with such entities would cause irreparable harm to the Bank or the Company. Accordingly, you will not disclose or use to the detriment of the Bank or the Company any such trade secrets or other confidential information. Confidential information includes any information, whether or not reduced to written or other tangible form, which (i) is not generally known to the public or within the industry; (ii) has been treated by the Bank or, the Company as confidential or proprietary, such as any financial or other information relating to a customer.

 

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Neither William P. Kauper, Patricia R. Kauper, nor their heirs, agent, or affiliates, nor the Company or Bank shall disclose the terms or conditions of this Agreement except to the extent required to regulators, accountants, lawyers or agents, and except to the extent required to do so in response to a Subpoena or other lawful Order or pursuant to Federal securities laws or regulations, or to third parties who have agreed to maintain the confidentiality of this Agreement or similar information.

 

7.     Non-Competition.     The obligation of the Bank to make or continue payments under this Agreement shall be subject to the condition that for a period of two years after your separation from service you shall not compete with the Bank or the Company in any city, town or county in New Mexico or Arizona that is within fifty (50) miles of any office of the Bank or in which the Bank or the Company has filed a regulatory application to establish an office, determined as of the date of your Separation from Service with the Bank or the Company. You agree that within said cities, towns and counties in New Mexico or Arizona, you shall not work for or advise, consult or otherwise serve with, directly or indirectly, including as a director, any entity whose business materially competes with the depository, lending or other business activities of the Bank, including but not limited to, any bank, savings institution, credit union, mortgage bank, or loan company. You further agree that following your separation from service with the Bank or the Company, you shall not directly or indirectly, solicit, hire, or entice any of the following to cease, terminate, or reduce any relationship with the Bank or the Company or to divert any business from the Bank or the Company: (i) any person who is an employee or officer of the Bank or the Company; or (ii) any customer or client of the Bank or the Company. The parties hereto agree, recognizing that irreparable injury will result to the Company and the Bank, their business and properties in the event of your breach of this provision, that in the event of any such breach, the Company and/or the Bank will be entitled, in addition to any other remedies and damages available to them, including a return of the amounts paid to you under this Agreement, to an injunction to restrain the violation hereof by you, your partners, agents, servants and employees and all persons acting for or under your direction. Nothing herein will be construed as prohibiting the Company and/or its Affiliates from pursuing any other remedies available to them in law or equity for such breach or threatened breach, including the recovery of damages from you.

 

8.      Non-Disparagement. You covenant and agree that, except to the extent required by law, you will not make to any person or entity any statement, whether written or oral, that directly or indirectly impugns the integrity of, or reflects negatively on the Company or any Affiliate, or that does or may denigrate, disparage or have a detrimental effect on the Company. The Company and the Bank covenant and agree that, except to the extent required by law, they will not make, through any employee, officer or director, to any person or entity any statement, whether written or oral, that directly or indirectly impugns the integrity of, or reflects negatively on you, or that does or may denigrate, disparage or have a detrimental effect on you. This section does not prohibit any truthful statement made by any party hereto to any government agency in the context of an official investigation or examination.

 

9.     Acceptance of Agreement. You acknowledge that, before signing this Agreement, you were advised by the Company to consult with an attorney. You agree that you had an adequate opportunity to review this Agreement with persons of your choice, including your attorney, that you fully understand the terms of this Agreement, and that you have signed it knowingly and voluntarily.

 

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10.     No Admission of Liability. This Agreement is not an admission by the Company of any liability to you.

 

11.     Governing Law and Jurisdiction. This Agreement shall be governed in accordance with the laws of the State of New Mexico in which you primarily performed services for the Company as of the Separation Date without regard to its conflict of laws provision.

 

12.     Savings Clause. If any provision of this Agreement is determined to be void or unenforceable, the remaining provisions of this Agreement will remain in full force and effect.

 

13.     Entire Agreement. This Agreement represents the entire understanding of both you, your spouse and the Company with respect to the subject matter hereof and supersedes all prior understandings, written, or oral.

 

14.     Counterparts. This Agreement may be signed in counterparts, and all of the counterpart copies shall be treated as a single agreement.

 

15.     Assignment; Modification of Agreement. This Agreement will inure to the benefit of the Company, its Affiliates and any successors and assigns. You may not assign your rights, duties or obligations under this Agreement; provided, however, this provision does not, in the event of your death, prohibit your beneficiaries from being entitled to receive the benefits specified in Section 1. None of the terms of this Agreement may be changed or modified except in a writing signed by both you and the Company. 

 

16.     Required Provisions. Notwithstanding anything herein contained to the contrary, any payments to you by the Company, the Bank, or any Affiliate whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of FDIA, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.

 

17.     Successors and Assigns. The Company shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company, expressly and unconditionally to assume and agree to perform Bank’s obligations under this Agreement, in the same manner and to the same extent that Bank would be required to perform if no such succession or assignment had taken place.

 

 

 

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have signed this Agreement, effective as of the date set forth above, and you hereby acknowledge that the terms of this Agreement have been completely read, are fully understood, and are voluntarily accepted after full consideration of all facts and legal claims.

 

 

 

WILLIAM P. KAUPER     

 

 

	          10-02-2018 	 	/s/ William P. Kauper	 
	Date	 	William P. Kauper	 

                              

 

PATRICIA R. KAUPER

 

 

	          10-02-2018 	 	/s/ Patricia R. Kauper	 
	Date	 	Patricia R. Kauper	 

                    

 

 

 

 BANCORP 34, INC.

 

 

 

	          10-2-2018 	 	By: 	/s/ Jill Gutierrez	 
	Date	 	Jill Gutierrez, Chief Executive Officer	 

          

 

BANK 34

 

 

	          10-2-2018 	By: 	/s/ Jill Gutierrez 	 
	Date	 	Jill Gutierrez, Chief Executive Officer	 

 

6EX-10.1

 Exhibit 10.1 
  

 
  
 Principia Biopharma Inc. 

400 East Jamie Court 
 Suite 302 

South San Francisco, CA 94080 
 August 23, 2018 

Dolca Thomas, M.D. 
 Re: Offer of Employment 

Dear Dolca: 
 Principia Biopharma Inc., a
Delaware corporation (the “Company”), is pleased to offer you the position of Chief Medical Officer, on the following terms. 
 Employment and
Duties 
 This is a full time position starting September 17, 2018, reporting to Martin Babler, Chief Executive Officer. The Company
is aware of the fact that you are under a notice period requirement arising out of your employment with Roche, which may delay your start date by up to six months. The Company has agreed that in the event Roche enforces its notice period
requirement, the Company will defer your start date until after the expiration of the notice period. As used below, “Start Date” means the day, between September 17, 2018 and March 17, 2019, on which you begin regular, full-time
employment with the Company. 
 In your position as Chief Medical Officer, you will be responsible for all clinical development aspects of
the Company’s programs. This includes but is not limited to the following duties: (a) leading and running the Company’s Clinical department; (b) designing and implementing the development plans for the Company’s programs;
(c) developing and maintaining relationships with scientists, physicians and other key opinion leaders related to the Company’s clinical programs; and (d) contributing to the Company as a senior leader of the business. You will also
be asked to perform other duties determined by or in collaboration with the Chief Executive Officer. Subject to your right to receive severance upon a resignation for Good Reason (as defined below), the Company may change your position, duties, work
location or reporting structure from time to time in its discretion. In this role you will work principally from our facility located in South San Francisco. 

 

 
  
  

 Base Salary, Sign-on Bonus and Annual Bonus 

You will be paid a base salary at the annual rate of Four Hundred Twenty Thousand Dollars ($420,000.00), less standard payroll deductions and
all required withholdings (“Base Salary”). Any increase of such salary shall become the new Base Salary for purposes of this Agreement. Your Base Salary will be paid twice per month and otherwise in accordance with the Company’s
standard payroll policies. You will also receive, with your first payroll with the Company, a sign-on bonus of Fifty Thousand Dollars ($50,000.00), less standard payroll deductions and all required
withholdings (the “Sign-On Bonus”). The Sign-On Bonus is repayable if you leave the Company within 12 months of the Start Date under certain conditions, as
further provided below. 
 In addition to your Base Salary, each year you will be eligible to earn a discretionary annual cash bonus of
thirty percent (30%) of your Base Salary (the “Annual Bonus”). If and when the Company makes an offering of its shares on a publicly-traded market, thereafter the target percentage for your annual bonus will increase to 35%. In order to
compensate you for the 2018 bonus you may forfeit at Roche (and only to the extent you do forfeit such bonus), for calendar year 2018 the Company agrees to pay you an Annual Bonus of $130,000.00, less standard payroll deductions and all required
withholdings, no later than March 15, 2019. Thereafter, whether you receive an Annual Bonus for any given year, and the amount of any such Annual Bonus, if any, shall be determined by the Company’s Board of Directors (the
“Board”) in its sole discretion based upon the Company’s performance and your individual attainment of agreed upon performance objectives during the applicable year, as well as such other criteria that the Board deems relevant.
Performance objectives will be set no later than ninety (90) days after the start of the relevant year. For 2018, these objectives will be set within thirty (30) days of your Start Date. Any Annual Bonus awarded by the Board shall be paid
no later than March 15th of the year following the applicable bonus year. You are only eligible to earn an Annual Bonus if you are employed by the Company on the day such Annual Bonus is paid; provided, however, that if in any calendar year the
Company terminates your employment without Cause or you terminate your employment with Good Reason on or before the day any Annual Bonus is paid for that year, you will be entitled to a prorated share of the Annual Bonus that corresponds to the
number of days you worked in that year. Except as described above, in the event you leave the Company’s employment for any reason prior to the date any Annual Bonus is paid, you will not have earned, and will not receive, any such Annual Bonus
(including a prorated amount). Applicable payroll deductions and all required withholdings will be deducted from any bonus payments. 
 Stock Options

 As an additional incentive to join the Company, subject to approval by the Board of Directors and subject to the adjustments described
below, you will be granted an unvested option to purchase 1,799,130 shares of common stock of the Company (which amount the Company acknowledges and agrees constitutes approximately 1.0% of the Company’s fully diluted equity as of the date of
this offer letter) pursuant to the Company’s 

 

 
  
  

 
2008 Equity Incentive Plan, at a per share exercise price equal to the fair market value of the Company’s common stock on the date of grant (the “Option”). The Company agrees to
submit your option grant to the Board for consideration at the first Board of Directors meeting occurring after the Start Date. In the event the Company makes an offering of its shares on a publicly-traded market between the date of this letter and
the date the Option is granted, the Option will be granted under the then-effective option plan and will consist of the number of shares that represents approximately 0.958% of the Company’s fully diluted equity as of the date of the grant.

 The Option will be an incentive stock option (ISO) to the extent permitted by applicable tax law. Except as otherwise set forth below,
the Option shall vest and become exercisable as to twenty-five percent (25%) of the shares subject to the Option on the first anniversary of the Start Date, and as to 1 /48th of the shares subject to the Option in equal monthly installments
thereafter on each monthly anniversary of the Start Date, with such vesting subject to your continuous employment by the Company through the applicable vesting date. The Option shall be subject to the terms and conditions of the applicable equity
plan and the Company’s standard form of stock option agreement. Subject to management discretion and Board approval, you will also be eligible to receive future unvested options to purchase shares of common stock of the Company. 

Change in Control Double Trigger Option Acceleration 

If, on or within twelve (12) months after a Change in Control (as defined below), your employment is terminated by the Company (or its
successor) other than for Cause (as defined below) or is terminated by you due to a resignation for Good Reason, and such termination or resignation is not due to your death or disability, then all outstanding shares subject to any stock options or
other equity awards then held by you (including, but not limited to, the Option) shall vest in full effective as of immediately prior to your termination (the “Full Acceleration”). Notwithstanding the foregoing, as a precondition of the
Full Acceleration, you must deliver to the Company, and not revoke, a Release (as defined below) within 30 days following your termination date or such longer time as may be required by law. 

Relocation Benefits 
 Subject to your
relocation to the San Francisco Bay Area no later than December 31, 2018, the Company will provide you with the following relocation benefits (the “Relocation Benefits”): 

 

	 	1.	 Reimbursement of your documented, reasonable moving expenses, including
one-way business class airfare for you and your family members, in relocating from Basel, Switzerland to the San Francisco Bay Area. 

 

	 	2.	 A lump-sum payment of $30,000.00, grossed up and included in your first
payroll with the Company, to assist with temporary housing costs in the San Francisco Bay Area. The Company agrees to consider a supplemental payment given temporary housing costs in the Bay Area in the event that

 

 
  
  

	 	
you cannot find reasonable permanent accommodations by December 31, 2018 despite diligent efforts. 

  

	 	3.	 Reimbursement of all documented, reasonable closing costs (including loan origination fees, appraisal fees,
title searches and related costs, but excluding points, insurance and prepaid property taxes), in connection with your purchase of a home in the San Francisco Bay Area within the first two years of the Start Date. 

 

	 	4.	 The services of an outside relocation company to assist you with moving your household items, finding temporary
housing in the Bay Area, etc. 

 Upon proof of relocation of your family to the San Francisco Bay Area, the Company will
make some or all of the elements of the Relocation Benefits available to you, regardless of whether such relocation occurs prior to the Start Date. The foregoing Relocation Benefits may be taxable to you, and if so the value of such benefits will be
included in your gross pay and subject to applicable withholdings (except that the amount provided in #2 above will be grossed up for tax purposes). If your employment with the Company is terminated for Cause or if you resign without Good Reason
within 12 months of the Start Date, on your last day of employment, you will repay the Company (a) the full dollar amount expended by the Company in providing you the Relocation Benefits; plus (b) the
Sign-On Bonus. For purposes of any such repayment, you authorize and consent to the Company’s deduction of up to the full amount of (a) and (b) from the net amount of your final paycheck and any
other amounts otherwise owed to you by the Company. 
 Employee Benefits 

During the period of your full-time employment by the Company, you shall be eligible for the Company’s basic employment benefits to the
extent they are generally available to all Company employees, such as medical, dental and vision insurance, sick leave, vacations and holidays. You shall also be eligible to participate in all incentive, savings and retirement plans, practices,
policies and programs maintained or sponsored by the Company from time to time for the benefit of its employees. Details about applicable benefits are provided in an Employee Handbook and in Summary Plan Descriptions, which have been prepared by the
Company and made available for your review. The Company may modify or cancel benefits from time to time as it deems appropriate in its sole discretion. 

In addition, you will be entitled with respect to your acts or failures to act during your employment to liability insurance coverage on the
same basis as other managers and officers of the Company. 
 Compliance with Confidential Information Agreement and Company Policies 

As a condition of employment, you will be required to: (i) sign and comply with a Proprietary Information and Invention Assignment
Agreement, a copy of which is attached hereto as Exhibit A, which, among other things, prohibits unauthorized use or disclosure of Company proprietary information, (ii) subject to the Company’s compliance with its

 

 
  
  

 
obligations to sponsor you for an appropriate work visa (and following receipt of such visa), sign and return a satisfactory I-9 Immigration form providing
sufficient documentation establishing your employment eligibility in the United States, and (iii) provide satisfactory proof of your identity as required by United States law. By signing below, you represent that your performance of services to
the Company will not violate any duty which you may have to any other person or entity (such as a present or former employer), including obligations concerning providing services (whether or not competitive) to others, confidentiality of proprietary
information and assignment of inventions, ideas, patents or copyrights, and you agree that you will not do anything in the performance of services hereunder that would violate any such duty. You will be expected to abide by the Company rules and
regulations and acknowledge in writing that you have read the Company’s Employee Handbook. 
 Severance Benefits 

If, at any time, (a) the Company (or its successor) terminates your employment without Cause or you resign for Good Reason and
(b) such termination or resignation is not due to your death or disability, then, upon your “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)) (a
“Separation from Service”), you shall be entitled to receive the following as your sole severance benefits (the “Severance Benefits”): 

(1)    Severance Pay 

You shall be entitled to severance pay in the form of continuation of your Base Salary in effect on the effective date of termination for the
first (a) twelve (12) months after the date of such termination, if occurring within twelve (12) months of a Change in Control; or (b) nine (9) months after the date of such termination, if not following a Change in Control (as
applicable, the “Severance Pay Period”), less applicable payroll deductions and all required withholdings. The severance shall be paid in substantially equal installments on the Company’s regular payroll schedule, subject to standard
deductions and withholdings over the Severance Pay Period following termination; provided, however, that no payments will be made prior to the thirtieth (30th) day following your termination (or on such later date that the Release becomes
effective). On the thirtieth (30th) day following your termination date, or on such later date that the Release becomes effective, the Company will pay you the salary continuation payments that you would have received on or prior to such date in a
lump sum under the original schedule but for the thirty (30) day delay while waiting for the effectiveness of the Release, with the balance of the cash severance being paid as originally scheduled. In the event the waiting period for the
effectiveness of the Release spans two calendar years, no cash severance will be paid until the later year. 

 

 
  
  

 (2)    Benefits 

If you make a valid election to receive COBRA benefits, the Company will reimburse you during the Severance Pay Period for your portion of any
COBRA premiums necessary to maintain the medical and healthcare benefits enjoyed by you and your family during the course of your employment with the Company. Reimbursement will be discontinued on the earlier of (a) your eligibility for health
care coverage through another employer’s plan; (b) your ineligibility to receive COBRA benefits for any reason; or (c) the end of the Severance Pay Period. 

(3)     Stock Option Vesting Absent Change in Control 

Any unvested stock options and other equity awards (if any) outstanding as of the termination date (including the Option, to the extent not
fully vested) will be subject to accelerated vesting, effective as of the termination date, with respect to an additional number of options that would have vested over the nine (9) months following the termination date (for example 9/48th of
the total options for option grants with a four year vesting schedule). 
 The Severance Benefits are conditional upon: (a) your
continuing to comply with your continuing obligations under your Proprietary Information and Inventions Agreement; and b) your delivering to the Company, and not revoking, a Release within thirty (30) days following your termination date or
such longer time as may be required by law. 
 It is intended that all of the Severance Benefits and other payments payable under this
agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) provided under Treasury Regulations
1.409A-1 (b)(4),1.409A-1 (b)(5) and 1.409A- 1(b)(9), and this agreement shall be construed to the greatest extent possible as consistent with those provisions, and to
the extent not so exempt, this agreement (and any definitions hereunder) shall be construed in a manner that complies with Section 409A. For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), your right to receive any installment payments under this agreement (whether severance payments, reimbursements or otherwise) shall be treated as a right to receive a series of
separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. Notwithstanding anything to the contrary in this agreement, no compensation or benefits, including without
limitation any Severance Benefits, shall be paid to you during the 6-month period following your Separation from Service to the extent that (i) you are a specified employee (within the meaning of Code
Section 409A and (ii) the Company makes a good faith determination that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Code Section 409A(a)(2)(B)(i). If the payment of any
such amounts is delayed as a result of the previous sentence, then the Company will pay you the cumulative amount that would have otherwise been payable to you during such 6-month period in a lump sum on the
first business day after such six-month period (or such earlier date upon which 

 

 
  
  

 
such amount can be paid under Code Section 409A without resulting in a prohibited distribution). 

Definitions 
 As used in this agreement,
the following terms have the following definitions: 
 “Cause” for the Company (or any successor thereto) to terminate your employment shall exist
if any of the following occurs: A) your conviction (including a guilty plea of nolo contendere) of any felony, or of any other crime involving fraud, dishonesty or moral turpitude; (B) your commission or attempted commission of or participation
in a fraudulent act or act of dishonesty against the Company; (C) your material violation of any agreement between you and the Company, including, without limitation, material breach of this agreement, or your Proprietary Information and
Inventions Agreement, or of any Company policy, or of any statutory duty you owe to the Company; or (D) your conduct that constitutes gross insubordination or habitual neglect of duties, provided, however, that the action or conduct described
in clause (C) above and this clause (D) will constitute “Cause” only if such action or conduct causes (or is reasonably expected to cause) harm to the Company and continues after the Board has provided you with written notice
thereof and thirty (30) days opportunity to cure the same (provided that the Board is not obligated to provide such written notice and opportunity to cure if the action or conduct is not reasonably susceptible to cure). The determination that a
termination is for Cause shall be made by the Board in good faith. 
 “Change in Control” has the same definition as Sections 2(a)(i) and
2(a)(iii) of the Company’s 2008 Equity Incentive Plan (which constitute portions of the definition of “Acquisition” under that plan), or comparable sections from a future effective equity plan. 

You shall have “Good Reason” for your resignation from your employment with the Company or its successors for up to ninety (90) days following
the initial occurrence of one of the following events without your written consent and after having provided thirty (30) days prior written notice and an opportunity to cure to the Company, and the Company failing to cure the event within such thirty-day cure period: (A) material breach of this agreement; (B) material reduction in your duties or change in your reporting line (including responsibilities and/or authorities), provided, however,
that a change in job position (including a change in title) shall not be deemed a “material reduction” in and of itself unless your new duties are substantially reduced from prior duties (including the assignment of duties and
responsibilities inconsistent with the position of Chief Medical Officer or removal of those duties and responsibilities from you as set forth in this offer letter); (C) relocation of your principal place of employment to a place that increases your
one-way commute by more than forty (40) miles as compared to your then current place of employment immediately prior to such relocation; (D) any directive in conflict with your professional medical
obligations or otherwise in violation of law or regulation; or (E) a material reduction (at least 10% or more) of your gross Base Salary (unless pursuant to a salary reduction program applicable to the Company’s executive employees. 

 

 
  
  

 “Release” means a signed and dated effective, general release of all known and unknown claims in
the form provided to you by the Company. 
 Penalty for Failure to Employ 

In the event that you accept this offer and are able and willing to begin full-time, regular employment with the Company as its CMO at any time
between September 17, 2018 and March 17, 2019, but the Company or its successor in interest fails to employ you in such position for any reason or for no reason, the Company will pay you an amount equal to nine (9) months of the Base
Salary described above ($315,000), as well as the Sign-On Bonus and Relocation Benefits, less any applicable or required withholdings, in exchange for your Release. 

At-will Employment Relationship and Dispute Resolution 

Notwithstanding any of the above, your employment with the Company is “at will”. This means you may terminate your employment with
the Company at any time and for any reason whatsoever simply by notifying the Company. Likewise, the Company may terminate your employment or change the circumstances of your employment (job duties, work location, position, title, compensation,
reporting structure, etc.) at any time and for any reason whatsoever, with or without cause or advance notice (but subject, if applicable, to the severance provisions contained herein). This at-will employment
relationship cannot be changed except in a writing signed by a Company officer or by a duly authorized member of the Board. To ensure the rapid and economical resolution of disputes that may arise in connection with your employment, you and the
Company agree that any and all disputes, claims, or causes of action, in law or equity, arising from or relating to the enforcement, breach, performance, execution, or interpretation of this agreement, your employment, or the termination of your
employment, shall be resolved, to the fullest extent permitted by law, by final, binding and confidential arbitration in San Francisco, California conducted before a single arbitrator by Judicial Arbitration and Mediation Services, Inc.
(“JAMS”) or its successor, under the then applicable JAMS rules. By agreeing to this arbitration procedure, both you and the Company waive the right to resolve any such dispute through a trial by jury or judge or by administrative
proceeding. The arbitrator shall: (a) have the authority to determine arbitrability of claims under this agreement; (b) 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 (c) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. The Company shall pay all JAMS’ arbitration fees. Nothing in this
letter agreement shall prevent either you or the Company from obtaining injunctive relief in court if necessary to prevent irreparable harm pending the conclusion of any arbitration. 

If you accept this offer, this agreement (together with its Exhibits), the option agreement memorializing the Option and the Proprietary
Information and Invention Assignment Agreement shall constitute the complete agreement between you and Company with respect to the terms and conditions of your employment. Any prior or 

 

 
  
  

 
contemporaneous representations (whether oral or written) not contained in this letter or the Proprietary Information and Invention Assignment Agreement or contrary to those contained in this
letter or the Proprietary Information and Invention Assignment Agreement, that may have been made to you are expressly cancelled and superseded by this offer. If any provision of this agreement is found by a court of competent jurisdiction to be
unenforceable, that provision shall be severed and the remainder of this agreement shall continue in full force and effect. As required by law, this offer is subject to satisfactory proof of your right to work in the United States. 

If you wish to accept employment with the Company on the terms described herein, please sign and date this letter, and return it to me by
5:00pm PST on Friday, August 23rd 2018, at which time the offer will expire if not accepted. 
 We look forward to your favorable reply and
to a productive and enjoyable work relationship. 
  

			
	Sincerely,
	
	PRINCIPIA BIOPHARMA INC.
		
	By:	 	 /s/ Martin Babler

	Name: Martin Babler
	Title:    CEO

 Accepted by: 
  

			
	 /s/ Dolca Thomas

	Dolca Thomas, M.D.

  

			
		
	Date:	 	
    
8-23-2018

 

 
  
  

 Exhibit A 

Proprietary Information and Inventions Assignment Agreement

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