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Exhibit 10.19    
    

 
 

EXECUTIVE EMPLOYMENT AGREEMENT    
    

        THIS EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made and
entered into this 4th day of October, 2007 (the "Effective Date") by and between GENOPTIX, INC.,
a Delaware corporation ("Company"), and DOUGLAS A. SCHULING
("Executive"). 

 
 

RECITALS:    
    

        Executive is currently employed by the Company as its Senior Vice President and Chief Financial Officer. 

        The
Company and Executive desire to formally state the terms and conditions of Executive's employment by the Company and to provide Executive with certain benefits upon a qualifying
termination of such employment. 

        The
Company desires to employ Executive in the executive capacity hereinafter stated, and the Executive desires to enter into the employ of the Company in such capacity for the period
and with the terms and conditions set forth herein. 

 
 

AGREEMENT:    
    

        NOW, THEREFORE, in consideration of the promises and the covenants set forth in this Agreement and for other
valuable consideration, the parties hereby agree as follows: 

        1.     Employment.    The Company hereby employs Executive as Senior Vice President and Chief Financial Officer,
assigned with responsibilities to do and perform all services, acts, or things necessary or advisable to manage and conduct the business of the Company, subject at all times to the policies set by the
Board of Directors of the Company (the "Board"), and to the consent of the Board when required by the terms of this contract. Executive hereby accepts
such employment and agrees to devote such time and energies as appropriate to fulfill all responsibilities to the Company. Executive shall be employed at will. 

        2.     Compensation.    In consideration for all services rendered by Executive under this Agreement, Executive shall
receive the compensation described in this Section 2. All such compensation shall be paid subject to appropriate tax withholding and similar deductions. 

        (a)   Salary.    Executive shall be paid an initial annual salary of $269,537, payable in accordance with the
Company's normal practices in the payment of salary and wages practices, in equal installments, but not less than 26 increments annually. 

        (b)   Executive Benefit and Incentive Compensation Plans.    During employment hereunder, Executive shall be entitled
to receive those benefits which are routinely made available to executive officers of the Company, including participation in any executive stock ownership plan, profit sharing plan, incentive
compensation or bonus plan, retirement plan, Company-provided life insurance, or similar executive benefit plans maintained or sponsored by the Company. The Company shall not take any action that
would substantially diminish the aggregate value of Executive's fringe benefits as they exist as of the Effective Date of this Agreement or as the same may be increased from time to time. 

        (c)   Expense Reimbursement.    The Company shall promptly reimburse Executive for all reasonable expenses
necessarily incurred during conduct of Company business, and for which adequate documentation is presented, but in no event later than December 31 of the year following the year in which the
expense was incurred. 

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        (d)   Personal Time Off.    Executive shall be entitled to paid time off in accordance with the Company's policies
applicable to executives. 

        3.     Termination.    Executive's employment may be terminated as follows, with the following effects: 

        (a)   Death.    Executive's employment shall terminate immediately upon the Executive's death, in which event the
Company's only obligations hereunder shall be to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by the Executive prior to the
date of his death. 

        (b)   Disability.    In the event the Executive is disabled from performing his assigned duties under this agreement
due to illness or injury for a period in excess of forty-five (45) consecutive days or a period or periods of more than one hundred and twenty (120) days in the aggregate in
any twelve month period, the Board, in its sole discretion, may terminate Executive's employment immediately upon written notice to Executive, in which event the Company's only obligations hereunder
shall be to pay all compensation and expense reimbursements owing for services rendered and reasonable business expenses incurred by the Executive prior to the effective date of termination. 

        (c)   For Cause.    The Company may terminate Executive's employment for Cause immediately upon written notice from
the Board to Executive. For purposes of this Agreement, "Cause" means the occurrence of any one or more of the following: (i) Executive's
conviction of or plea of nolo contendere to any felony crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) Executive's attempted
commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) Executive's intentional, material violation of any contract or agreement between the Participant and
the Company or of any statutory duty owed to the Company; (iv) Executive's unauthorized use or disclosure of the Company's confidential information or trade secrets; or (v) Executive's
gross misconduct. In the event Executive's employment is terminated for Cause, the Company shall have no further obligations to Executive other than to pay all compensation and expense reimbursements
owing for services rendered and reasonable business expenses incurred by Executive prior to the effective date of such termination. 

        (d)   Without Cause.    The Company in its sole discretion may terminate Executive's employment without cause or
prior warning immediately upon written notice from the Board to Executive, in which event the Company shall pay to Executive all compensation and expense reimbursements owing for services rendered and
reasonable business expenses incurred by Executive prior to the effective date of termination, and, contingent upon Executive's delivery to the Company of an effective Release and Waiver as provided
in Section 3(e) below, provide the following benefits to Executive: (i) severance consisting of continued payment of Executive's base salary at the rate in effect as of the effective
date of termination, less standard deductions and withholdings, for a period of twelve (12) months following the effective date of termination, subject to acceleration of such payments into a
single lump-sum cash severance payment in the event a Change in Control (as defined below) of the Company has occurred prior to the date of termination or a Change in Control occurs within
ninety (90) days after the date of termination of Executive's employment; (ii) upon timely election by Executive complying with COBRA, payment of all premiums required to continue
Executive's medical, dental and vision insurance coverage pursuant to COBRA for a period of twelve (12) months following the date of termination; and (iii) immediately accelerate the
vesting of all options to purchase the common stock of the Company granted to Executive prior to the effective date of such termination (the "Options")
such that Executive shall be deemed vested as to the same number of shares as if Executive had continued to be employed by the Company for a period of twelve (12) months following the 

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effective
date of such termination (subject to the additional accelerated vesting provided in Section 4(b) in the event Executive is terminated by the Company without Cause within
90 days prior to or within 13 months following the effective date of a Change in Control). As a condition to receiving the continuing benefits specified in this Section 3(d),
during the twelve (12) month period following the Executive's termination date, Executive shall not engage in any employment or business activity that is directly competitive with the Company's
business activities as of such termination date and Executive shall not induce any employee of the Company to leave the employ of the Company. 

        (e)   Release and Waiver.    As a condition to receiving the benefits specified in Sections 3(d) and 4(b) of this
Agreement, Executive must deliver to the Company a fully effective waiver and release of claims in the form attached hereto as Exhibit A (the
"Release and Waiver") within the time frame set forth therein, but in no event later than forty-five (45) days following the
Executive's termination date. 

        (f)    Voluntary Termination by Executive.    Executive may terminate his employment hereunder at any time, whether
with or without cause, effective sixty (60) days after delivery of written notice of such termination to the Company, except for Executive's Emergency Need. "Emergency
Need", as used in this Section, is defined to be the advent of illness or related health issues in Executive or his immediate family which a medical doctor would conclude poses
a mortal health risk to that person. The Company shall have the option, in its sole discretion, to specify an earlier termination date than that provided by Executive in the written notice. Upon
voluntary termination pursuant to this Section, the Company shall have no further obligations to Executive other than to pay all compensation and expense reimbursements owing for services rendered and
reasonable business expenses incurred by Executive prior to effective date of termination as determined by the Company. 

        (g)   Returning Company Documents.    In the event of any termination of Executive's employment hereunder, Executive
shall, prior to or on such termination deliver to the Company (and will not maintain possession of or deliver to anyone else) any and all devices, records, data, data bases software, software
documentation, laboratory notebooks, notes, reports, proposals, lists, customer lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or
property, or reproductions of any of the above aforementioned items belonging to the Company, its successors or assigns. 

        4.     Change in Control.

        (a)   Option Acceleration Upon A Change in Control.    Effective immediately upon the closing of a Change in Control
of the Company, the vesting of fifty percent (50%) of the then unvested shares of Common Stock subject to the Options shall be accelerated in full and shall be fully vested and immediately exercisable
(and, if any Options have been early exercised by Executive, the reacquisition or repurchase rights held by the Company with respect to the shares of Common Stock subject to such acceleration shall
lapse in full, as appropriate). Thereafter, the balance of the Options' unvested shares of Common Stock subject to such Options shall vest in six (6) equal monthly installments over the
six-month period immediately following the closing of the Change in Control, except as provided in Section 4(b) below. 

        (b)   Benefits Upon Termination.    In the event that Executive's employment by the Company is terminated without
Cause (as defined above) or Executive terminates his employment for Good Reason (as defined below) within ninety (90) days prior to or within thirteen (13) months following the effective
date of a Change in Control (as defined below) of the Company, contingent upon Executive's delivery to the Company of a fully effective Release and Waiver as provided in Section 3(e), the
Executive shall be entitled to the benefits and payments specified in Sections 3(d)(i) and 3(d)(ii) above, and the vesting of the unvested shares of Common Stock subject to the 

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Options
shall immediately accelerate in full such that all of the shares of Common Stock subject to such Options shall be fully vested and immediately exercisable (and, if any Options have been early
exercised by Executive, the reacquisition or repurchase rights held by the Company with respect to the shares of Common Stock subject to such acceleration shall lapse in full, as appropriate). 

        (c)   Change in Control.    "Change in Control" means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following events: 

        (i)    any Exchange Act Person (as defined below) becomes the beneficial owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities other than by virtue of a merger, consolidation or similar
transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof
or any other Exchange Act Person from the Company in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity
securities or (B) solely because the level of beneficial ownership held by any Exchange Act Person (the "Subject
Person") exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting
securities by the Company, and after such share acquisition, the Subject Person becomes the beneficial owner of any additional voting securities that, assuming the repurchase or other acquisition had
not occurred, increases the percentage of the then outstanding voting securities beneficially owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be
deemed to occur (for purposes of this Section 4(c), "Exchange Act Person" means any natural person, entity or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act")), except that "Exchange Act Person" shall not include
(A) the Company or any subsidiary of the Company, (B) any employee benefit plan of the Company or any subsidiary of the Company or any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any subsidiary of the Company, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) an entity
beneficially owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their beneficial ownership of stock of the Company; or (E) any natural
person, entity or "group" (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the date of this Agreement, is the beneficial owner, directly or indirectly, of
securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities); 

        (ii)   there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and,
immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not beneficially own, directly or indirectly,
either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar
transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions relative to each other as their beneficial ownership of the outstanding voting securities of the Company immediately prior to such transaction; 

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        (iii) the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the
Company, or a complete dissolution or liquidation of the Company shall otherwise occur, except for a liquidation into a parent corporation; 

        (iv)  there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the
consolidated assets of the Company and its subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its
subsidiaries to
an entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are beneficially owned by stockholders of the Company in substantially the same proportions
relative to each other as their beneficial ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or 

        (v)   individuals who, on the date of this Agreement, are members of the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the members of the Board; (provided, however, that if the
appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member
shall, for purposes of the Plan, be considered as a member of the Incumbent Board). 

        (d)   Good Reason.    "Good Reason" for the Executive to terminate the Executive's employment hereunder shall mean
the occurrence of any of the following events without the Executive's consent: 

        (i)    a material adverse change in the nature of the Executive's authority, duties or responsibilities, as they exist on the
Effective Date of this Agreement; 

        (ii)   a material adverse change in the Executive's reporting level requiring that the Executive report to a corporate officer
or executive other than the Company's Chief Executive Officer; 

        (iii) the relocation of the Company's executive offices or principal business location to a point more than sixty
(60) miles from their location as of the Effective Date of this Agreement; or 

        (iv)  a material reduction by the Company of the Executive's base salary as initially set forth herein or as the same may be
increased from time to time. 

Provided however that, such termination by the Executive shall only be deemed for Good Reason pursuant to the foregoing definition if: (i) the
Executive gives the Company written notice of the intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that the Executive believes
constitutes Good Reason, which notice shall describe such condition(s); (ii) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice
(the "Cure Period"); and (iii) the Executive terminates employment within thirty (30) days following the end of the Cure Period. 

        5.     Application of Internal Revenue Code Section 409A.    Benefits payable under the Agreement, to the extent
of payments made from the date of termination of the Executive through March 15th of the calendar year following such termination, are intended to constitute separate payments for purposes of
Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the "short-term deferral" rule set forth in Section 1.409A-1(b)(4) of
the Treasury Regulations; to the extent such payments are made following said March 15th, they are subject to the distribution requirements of Section 409A(a)(2)(A) of the Internal
Revenue Code of 1986, as amended (the "Code"), including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that
payment to the Executive be delayed until 6 months after separation from service if the Executive is a "specified 

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Executive"
within the meaning of the aforesaid section of the Code at the time of such separation from service. 

        6.     Code Section 280G.    If any payment or benefit Executive would receive pursuant to a Corporate
Transaction 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 the Company shall cause to be determined, before any amounts of the Payment are paid
to Executive, which of the following two amounts would maximize Executive's after-tax proceeds: (i) payment in full of the entire amount of the Payment (a  "Full Payment"), or (ii) payment of only a part of the Payment so that Executive receives the
largest payment possible without the imposition of the Excise Tax (a "Reduced Payment"), whichever
amount results in Executive's receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.
For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes
and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes).
If a Reduced Payment is made, (i) the Payment shall be paid only to the extent permitted under the Reduced Payment alternative, and Executive shall have no rights to any additional payments
and/or benefits constituting the Payment, and (ii) reduction in payments and/or benefits shall occur in the following order unless Executive elects in writing a different order
(provided, however, that such election shall be subject to Company approval if made on or after the date on which the event that triggers the Payment
occurs): reduction of cash payments, cancellation of accelerated vesting of stock awards, and reduction of other benefits. In the event that acceleration of compensation from Executive's equity awards
is to be reduced, such acceleration of vesting shall be canceled in the reverse order of the date of grant unless Executive elects in writing a different order for cancellation. 

        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 Corporate Transaction shall make all
determinations required to be made under this Section 6. 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 the Corporate Transaction, the Company shall appoint a different nationally recognized independent registered 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 at such other time as requested by the Company. If the independent registered public
accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Company and Executive with an
opinion reasonably acceptable to Executive that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall be final, binding
and conclusive upon the Company and Executive. 

        7.     Conflict Of Interest.    During the Employment Period, Executive shall devote such time and energies as
appropriate to fulfill all responsibilities to the Company in the capacity set forth in Section 1. Executive shall be free to pursue business activities which do not interfere with the
performance of his duties and responsibilities under this Agreement, however, Executive shall not engage in any outside business activity which involves actual or potential competition with the
business of the Company, except with the written consent of the Board. 

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        8.     Executive Benefit Plans.    All of the Executive benefit plans referred to or contemplated by this Agreement
shall be governed solely by the terms of the underlying plan documents and applicable law. Nothing in this Agreement shall impair the Company's right to amend, modify, replace, and terminate any and
all such plans in its sole discretion as provided by law. This Agreement is for the sole benefit of Executive and the Company, and is not intended to create an Executive benefit plan or to modify
existing terms of existing plans. 

        9.     Assignment.    This Agreement may not be assigned by Executive. This Agreement shall bind and inure to the
benefit of the Company's successors and assigns, as well as Executive's heirs, executors, administrators, and legal representatives. The Company shall obtain from any successor, before the succession
takes place, an agreement to assume the obligations and perform all of the terms and conditions of this Agreement. 

        10.   Notices.    All notices required by this Agreement may be delivered by first class mail at the following
addresses: 

	To Company:	 	Genoptix, Inc.

Attn: Board of Directors

2110 Rutherford Road

Carlsbad, CA 92008
	

To Executive:	
 	

Douglas A. Schuling

2110 Rutherford Road

Carlsbad, CA 92008

        11.   Amendment.    This Agreement may be modified only by written agreement signed by both the Company and
Executive. 

        12.   Choice Of Law.    This Agreement shall be governed by the laws of the State of California, without regard to
choice of law principles. 

        13.   Partial Invalidity.    In the event any provision of this Agreement is void or unenforceable, the remaining
provisions shall continue in full force and effect. 

        14.   Waiver.    No waiver of any breach of this Agreement shall constitute a waiver of any subsequent breach. 

        15.   Complete Agreement.    As of the Effective Date, this Agreement, together with the stock option agreements and
equity incentive plans governing the Options, constitutes the entire agreement between the parties in connection with the subject matter hereof and supersedes any and all prior or contemporaneous oral
and written agreements or understandings between the parties. 

        16.   Headings.    Headings in this Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose. 

        17.   Miscellaneous.    Executive acknowledges full understanding of the matters set forth herein and the obligations
undertaken upon the execution hereof. 

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        IN WITNESS WHEREOF, the parties have executed this EXECUTIVE EMPLOYMENT
AGREEMENT as of the date first written above. 

	GENOPTIX, INC.	 	 
	

By:	

/s/  TINA S. NOVA      	
 	

 
	 	
	 	 

	

Name:	

Tina S. Nova, Ph.D.	
 	

 
	 	
	 	 

	

Title:	

President and Chief Executive Officer	
 	

 
	 	
	 	 

	

Dated:	

October 4, 2007	
 	

 
	 	
	 	 
	
EXECUTIVE:	
 	

 
	

/s/  DOUGLAS A. SCHULING      
DOUGLAS A. SCHULING	
 	

 
	

Dated:	

October 4, 2007	
 	

 
	 	
	 	 

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Exhibit A
  
    RELEASE AND WAIVER OF CLAIMS    
    

        In consideration of the payments and other benefits set forth in the Employment Agreement dated October 4, 2007 (the "Employment
Agreement"), to which this form is attached, I, DOUGLAS A. SCHULING, hereby furnish  GENOPTIX, INC. (the "Company"), with the following release and waiver
("Release and Waiver"). 

        In
exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its
directors, officers, Executives, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, Affiliates, and assigns from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Release and Waiver. This
general release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all
claims related to my compensation or benefits from the Company, including, but not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits,
stock, stock options, or any other ownership interests in
the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including, but not
limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including, but not limited to,
claims for discrimination, harassment, retaliation, attorneys' fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990, the federal Age Discrimination in Employment Act of 1967 (as amended) ("ADEA"), and the California Fair Employment and Housing Act (as amended). 

        I
also acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: "A general release does not extend to
claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement
with the debtor." I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any
claims I may have against the Company. 

        I
acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration
given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company. I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed;
(b) I should consult with an attorney prior to executing this Release and Waiver; (c) I have twenty-one (21) days from the date of termination of my employment with
the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution
of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired
unexercised and no benefits will be paid unless and until this Release and Waiver has become effective. In the event that this Release and Waiver is requested in connection with an exit incentive or
other employment termination program offered to a group or class of employees, I have forty-five (45) days to consider this Release and Waiver and I shall be provided with the
information required by 29 U.S.C. Section 626 (f)(1)(H). 

        This
Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not
relying on 

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any
promise or representation by the Company that is not expressly stated herein. This Release and Waiver may only be modified by a writing signed by both me and the a duly authorized member of the
Board of Directors of the Company. 

	

Date:	

 	
 	

 
	 	
	 	

	 	 	 	DOUGLAS A. SCHULING

10

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Exhibit 10.19

EXECUTIVE EMPLOYMENT AGREEMENT

RECITALS

AGREEMENT

Exhibit A RELEASE AND WAIVER OF CLAIMSQuickLinks
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Exhibit 10.7  

March 10,
2005 

Karl
Reinhard Beutner, MD, PhD 

Re:    Offer of Employment by Anacor Pharmaceuticals, Inc.

Dear
Karl: 

        I
am very pleased to confirm to you our offer of employment with Anacor Pharmaceuticals, Inc. (the "Company" or "Anacor") as our Chief Medical Officer, a full-time,
exempt level position reporting directly to me and working in our Bay Area location. Subject to fulfillment of all conditions imposed by this offer letter, we would like your start date to be
April 11, 2005, as mutually agreed to by you and the Company. In this key position and as part of the senior management team, you will provide strategic scientific leadership with primary
responsibility for planning, organizing, and managing the Company's drug development and regulatory programs. Specific responsibilities include but are not limited to providing the leadership and
ongoing clinical and regulatory perspective to the research and development strategy as well as pre-clinical, operating, manufacturing and business decisions for the Company, overseeing
and executing the clinical strategy design for Anacor's lead drug candidates, design and execute the Anacor's worldwide regulatory strategy, represent the Company externally and with strategic
partners and work with business development to identify and evaluate appropriate product candidates. You will also participate in related tasks as assigned by the Company. The terms of our offer and
the benefits currently provided by the Company are as follows: 

        1.     Your
starting base salary as a full-time employee will be $11,250 per semi-monthly pay period, which is equivalent to $270,000 annually, and will
be paid per the Company's standard payroll process and less all applicable taxes and withholdings. In addition, the Company will provide you with a one-time sing-on bonus in
the amount of $10,000 ("Sign-on Bonus"). The Sign-on Bonus will be paid to you in your first regular paycheck following your effective date of hire and will be subject to all
applicable payroll taxes and withholdings. If your employment with the Company terminates by reason of voluntary resignation or for Cause (as defined below), within one year of your effective start
date, you agree to repay the Company, the prorated portion of the total Sign-on Bonus corresponding to the remaining period in the one year. Such repayment will be due to the Company upon
termination of employment. For purposes of this agreement "Cause" is defined as failure or refusal to comply in any material respect with the reasonable policies, standards or regulations of the
Company; causing material loss or damage to the Company; a good faith determination by the Company's Chief Executive Officer of substandard performance or failure to perform duties determined by the
Company; unethical or fraudulent conduct; material breach of a term of this offer agreement or of the Confidential Information and Invention Assignment Agreement, including, without limitation, theft
of the Company's proprietary information; or an unlawful or criminal act which would reflect badly on the Company in the Company's reasonable judgment. 

        2.     In
addition, you will be eligible for a performance bonus of up to twenty percent (20%) of your base salary ("Performance Bonus"). Fifty percent (50%) of the Performance
Bonus is contingent on your achievement of individual performance objectives as mutually established by you and the Company ("Individual Component"). The remaining fifty percent (50%) of the
Performance Bonus is contingent on the Company's achievement of its corporate objectives ("Company Component"). The Individual Component of the Performance Bonus will be assessed on, and if earned,
paid on a quarterly basis and prorated for your length of service. The Company Component of the Performance Bonus will be assessed on, and if earned, paid on an annual basis, and prorated for your
length of service. The Company will determine in its sole discretion, the level of achievement of each Performance Bonus component. The Performance Bonus, if earned, will be paid less all applicable
taxes and withholdings. 

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        3.     As
a full-time employee you will be eligible to participate in health insurance, and other employee benefit plans established by the Company, subject to any
eligibility requirements imposed by such plans. You will also be eligible for paid time off ("PTO") equal to four (4) weeks or twenty (20) working days accrued per year of service, which
will accrue on a prorated basis each pay period during which you are an active employee. 

        4.     The
Company recognizes that you have established a successful, independent dermatology practice and agrees that you may continue such practice provided you
(1) limit your time spent on your practice to 10% and devote the remaining 90% of your time to the business of the Company, and (2) that this and any other outside activities do not
breach your obligations as set forth in the Company's Confidential Information and Invention Assignment Agreement. In order to accommodate continuation of your dermatology practice, the Company will
allow you to work from home 1 day per week. 

        5.     In
order to assure a smooth transition from your current employer, Dow Pharmaceutical Sciences ("Dow"), we would like to set forth the following transition schedule
(Transition Period): for the first 4 weeks from your date of hire, you agree to spend 60% of time (3 days per week), working for Anacor; and for the following 4 weeks you agree to spend 80% of
time (4 days per week), working for Anacor until you reach 90% time (4.5 days per week) working solely for Anacor on June 6, 2005. During the Transition Period, you will receive a
prorated portion of your salary commensurate with the amount of time you spend working for Anacor. For salary and benefits purposes, working 90% time for Anacor will be considered
full-time. 

        6.     In
an effort to facilitate you working on-site at Company headquarters for at least 4 days per week, upon commencing employment with the Company, the
Company will assist you in securing temporary housing arrangements. The specifics of these arrangements will be determined by the Company once the employment offer has been accepted. 

        7.     Notwithstanding
the transition schedule outlined in Paragraph 5 above, as a full-time employee of the Company, you agree that you will devote at least
90% of your business time and attention to the business of the Company, and that the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and
advice. You further agree that during the course of your employment with the Company, you will not render commercial or professional services of any nature to any person or organization, other than
those explicitly set forth in this offer of employment, whether or not for compensation, without the prior written consent of the Company's Chief Executive Officer, and you will not directly or
indirectly engage or participate in any business that is competitive in any manner with the business of the Company, as determined by the Company. 

        8.     As
an employee of the Company, you will have access to certain confidential information of the Company and you may, during the course of your employment, develop certain
information or inventions, which will be the property of the Company. To protect the interests of the Company, you will be required to sign the Company's standard "Confidential Information and
Invention Assignment Agreement" as a condition of your employment. We wish to impress upon you that we do not want you to bring with you any confidential or proprietary material of any former employer
or to violate any other obligations you may have to any former employer. 

        9.     We
will recommend to the Board of Directors of the Company (the "Board") that you be granted the opportunity to purchase 225,000 options of Common Stock of the Company
("Options"), under its 2001 Equity Incentive Plan (the "Plan") at the fair market value of the Company's Common Stock, as determined by the Board upon their approval of such grant.
Twenty-five percent (25%) of the Options will vest on the one year anniversary date of your employment, and the remaining Options will vest monthly in equal portions over the following
three years for a total vesting term of four years. The Options will be governed by the terms and conditions of the Plan and corresponding option agreement. Further details on the Plan and any
specific option granted to you will be provided upon approval of 

2

 

such
grant by the Company's Board. At the completion of Anacor's ongoing Series C financing, it is expected that all employees will receive additional stock option grants that will adjust their
holdings for the dilution that was created by the financing. You will be eligible for such an increase and will be treated in a manner similar to other employees. 

        10.   Contingent
upon the Board's further approval, you will be eligible for certain acceleration benefits for the vesting of restricted stock and/or stock options held by you
in the event of a "Change of Control" of the Company, per the enclosed Change of Control Provisions (Exhibit A), which is a summary of the key provisions of this acceleration benefit. 

        11.   While
we look forward to a mutually satisfying relationship, should you decide to accept our offer, your employment is for no specific period of time and you will be an
at-will employee of the Company, which means the employment relationship can be terminated by either you or the Company at any time, with or without cause of advance notice. Any statements
or representations to the contrary (and, indeed, any statements contradicting any provision in this letter) should be regarded by you as ineffective. This at-will provision may only be
amended in a writing signed by both you and the Company's Chief Executive Officer. Further, your participation in any stock option or benefit programs is not to be regarded as assuring you of
continuing employment for any particular period of time. As always, the Company reserves the right to modify, delete, or otherwise amend its benefits, compensation and incentive programs, and work
assignments from time to time as it deems necessary in its sole discretion. 

        12.   For
purposes of federal immigration law, and as a requirement of employment with the Company, within three (3) business days of starting your new position you
will need to present documentation demonstrating your identity and eligibility to work in the United States. If you have questions about this requirement, which applies to U.S. citizens and
non-U.S. citizens alike, you may contact Human Resources. 

        13.   This
offer supersedes and replaces any prior representations or agreements, written, verbal or otherwise, between you and the Company regarding the terms described in
this letter. This offer, if not accepted, will expire on March 11, 2005. Please sign this letter below and return one original, along with executed originals of the referenced and enclosed
documents as applicable, to Anacor Pharmaceuticals, Inc., Attention: Human Resources. Your signature will acknowledge that you have read and understood and agreed to the terms and conditions of
this offer letter as well as the referenced and enclosed documents. A duplicate letter is enclosed for your files. Should you have anything else that you wish to discuss, please do not hesitate to
call us. 

We
look forward to the opportunity to welcome you to the Company. 

Very
truly yours,

   

/s/ DAVID PERRY

    

David
Perry

Chief Executive Officer 

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I
have read and understood this offer letter and hereby acknowledge, accept and agree to the terms set forth above. No further commitments were made to me as a condition of employment.

   

   

    

	/s/  KARL R. BEUTNER      
 Karl Reinhard Beutner, MD, PhD	 	Date Signed:	3/11/05

	

 	
 	

Effective Start Date:	

4/11/05

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Exhibit A    
    

 
  Anacor Pharmaceuticals, Inc.    
    
    Change of Control Provisions    
    

        The effectiveness of the Change of Control Provisions is contingent upon approval by the Board of Directors of Anacor Pharmaceuticals, Inc. (the
"Company"). 

Terms: 

        In
the event your employment with the Company is terminated without Cause or you are subject to an Effective Termination in connection with or at any time within twelve
(12) months following a Change of Control, and contingent on you executing a Release Agreement at that time, all restricted stock and stock options granted to you and held by you (the "Shares")
shall immediately vest if the Change of Control is a Liquidity Event, or (ii) 50% of the remaining unvested Shares shall become vested if the Change of Control is not a Liquidity Event. In
addition, the Company's Board of Directors (the "Board") may, in its sole discretion, accelerate the vesting of some or all of the Shares in connection with a Change of Control. 

Definitions: 

        Change of Control. "Change of Control" shall mean a sale of all or substantially all of the Company's assets, or any merger or
consolidation of the Company with or into another corporation other than a merger or consolidation in which the holders of more than 50% of the shares of capital stock of the Company outstanding
immediately prior to such transaction continue to hold (either by voting securities remaining outstanding or by their being converted into voting securities of the surviving entity) more than 50% of
the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction. For purposes of clarification, an equity financing
will not be a Change of Control, even if equity securities representing greater than 50% of the total voting power of the Company are sold. 

        Cause. "Cause", for the purposes of the Change of Control Provisions, means (A) gross negligence or willful misconduct in the
performance of duties to the Company where such gross negligence or willful misconduct has resulted or is likely to result in substantial and material damage to the Company or its subsidiaries;
(B) deliberate violation of a Company policy; (C) repeated unexplained or unjustified absence from the Company; (D) a material and willful violation of any federal or state law;
(E) commission of any act of fraud with respect to the Company; (F) conviction of a felony or a crime involving moral turpitude causing material harm to the standing and reputation of
the Company; (G) unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of non-disclosure as
a result of your relationship with the Company; or (H) your death or Permanent Disability, in each case as determined in good faith by the Board. 

        Effective Termination. "Effective Termination" means your voluntary termination of your employment with the Company within thirty
(30) days following the occurrence of any of the following without your consent: (A) a material reduction or change in job duties, responsibilities and requirements inconsistent with
your position with the Company and your prior duties, responsibilities and requirements prior to the Change of Control, provided that neither a mere change in title along nor reassignment following a
Change of Control to a position that is substantially similar to the position held prior to the Change of Control in terms of job duties, responsibilities or requirements shall constitute a material
reduction in job responsibilities; (B) any material reduction of your then current base salary (other than in connection with a general decrease in base salaries for most employees or other
senior executives of the successor corporation); or (C) your refusal to relocate to 

1

 

the
principal place for performance of Company duties to a location more than fifty (50) miles from the Company's then current location at the time of the Change of Control. 

        Liquidity Event. "Liquidity Event" means a Change of Control which results in the holders of the Company's Series B Preferred Stock
receiving at least three (3) times the original purchase price for such shares if after the Series B financing. For purposes of this section, the consideration received by the holders of
Series B Preferred Stock shall be valued in the manner set forth in the Company's Certificate of Incorporation, as it may be amended from time to time. 

        Permanent Disability. "Permanent Disability" shall mean your inability to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than six
(6) months. 

        Release Agreement. If any events occur which entitle you to any benefits under the Change of Control Provisions, as a condition to your
receiving such benefits, you shall execute the Company's standard form of "Release Agreement" releasing the Company from any claims relating to your employment or termination of your employment. 

Other Terms:  

        You shall be entitled to receive the acceleration benefit to the extent of the maximum after-tax benefit to you, after taking into account any excise
tax that may be imposed upon the benefit that is characterized as an "excess parachute payment" under applicable law. You are advised to consult with your own tax or financial advisor to understand
the possible financial and tax implications as a result of receiving any such benefits. 

        The
terms of this agreement amend and supercede any prior change of control agreements. 

	AGREED AND ACCEPTED:	 	 
	

/s/ Karl Reinhard Beutner
 Karl Reinhard Beutner, MD, PhD	
 	

10/31/06
 Date

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QuickLinks

Exhibit A

Anacor Pharmaceuticals, Inc. Change of Control Provisions

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