Document:

ex10_1.htm

Exhibit 10.1

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (“Agreement”), effective as of August 31, 2011 (the “Effective Date”), is between XOMA (US) LLC (hereinafter referred to as “XOMA”), a Delaware limited liability company having an address of 2910 Seventh Street, Berkeley, California 94710, and Steven B. Engle (hereinafter referred to as “Mr. Engle”), an individual having an address of 1100 Arbor Road, Menlo Park, California 94025, both of whom may be jointly referred to sometimes hereinafter as the “Parties.”  In consideration of the mutual promises, covenants, and conditions contained herein, the Parties hereby agree as follows:

 

1.   Consulting Services:  Mr. Engle agrees to perform the consulting services described in Exhibit A to this Agreement (“Services”).  Mr. Engle warrants that he has the skills, ability and training necessary to and that he shall render the Services in a timely and professional manner consistent with industry standards in accordance with the terms of this Agreement including Exhibit A, and otherwise meeting the professional and/or services standards of XOMA.  Subject to the foregoing, the manner and means by which Mr. Engle chooses to complete the Services are in Mr. Engle’s sole discretion and control.

 

2.   Compensation:  In consideration of the Services to be rendered hereunder, XOMA agrees to pay Mr. Engle the compensation set forth in Exhibit A to this Agreement.

 

3.   Expenses:  XOMA will reimburse Mr. Engle for all reasonable travel, lodging and other expenses documented to the reasonable satisfaction of XOMA, including without limitation those relating to currently scheduled trips to a meeting of the Biotechnology Industry Organization in Washington, DC in September of 2011 and The Biotech Meeting in Laguna Beach, California in October of 2011.

 

4.   Other Services and Conflicts of Interest:  During the term of this Agreement, Mr. Engle may perform services for, or be employed by other persons, companies, or employers, so long as doing so does not create a conflict of interest or otherwise cause Mr. Engle to breach his obligations under this Agreement.

 

5.   Term:  The term of this Agreement will begin on the Effective Date hereof and continue until the earlier of December 31, 2014, or termination by either Party in accordance with this Section 5.

 

     (a)           Either XOMA or Mr. Engle may terminate this Agreement immediately upon a material breach by the other Party by giving written notice to the breaching Party.

 

     (b)           This Agreement shall terminate automatically upon the death of Mr. Engle.

 

6.   Confidential Information:

   

     (a)    Mr. Engle acknowledges that his association with XOMA under this Agreement creates a relationship of confidence and trust between Mr. Engle and XOMA with respect to information disclosed to Mr. Engle or known to Mr. Engle as a result of his relationship with XOMA, not generally known to the trade or industry in which XOMA is engaged, about XOMA’s products, processes, programs, methods, formulas, techniques, concepts, applications, calculations and services, including research, development, manufacturing, purchasing, finance, engineering, marketing, merchandising, and selling; and corresponding information about the products, processes, programs, methods, formulas, techniques, concepts, applications, calculations and services of XOMA’s affiliates acquired by Mr. Engle or developed or made known to XOMA by Mr. Engle in the scope of Mr. Engle’s relationship with XOMA (hereinafter referred to as “Confidential Information”).

 

  

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            (b)    At all times during the term of this Agreement and thereafter, Mr. Engle will not disclose, use, disseminate, lecture upon or publish Confidential Information unless Mr. Engle first secures XOMA’s written consent.

 

            (c)    Mr. Engle will not disclose to XOMA or induce XOMA to use any secret or confidential information or material which Mr. Engle has reason to believe is owned by others.

 

    (d)           Upon termination of this Agreement, Mr. Engle will turn over to a designated individual employed by XOMA all property then in Mr. Engle’s possession or custody and belonging to XOMA, except as approved by XOMA.  Mr. Engle will not retain any copies or reproductions of correspondence, memoranda, reports, specifications, computations, notebooks, drawings, photographs or other documents relating in any way to the Services performed hereunder which are entrusted to Mr. Engle at any time during the term of this Agreement.

 

7.   Representations and Warranties:  Mr. Engle represents and warrants that performance of this Agreement will not breach any agreement or other contractual commitment or obligation by which Mr. Engle is bound.

 

8.   Employment Taxes, Payments and Records:  Mr. Engle agrees (a) to pay and/or withhold any and all fees, charges, payments and taxes required to be paid or withheld pursuant to any and all applicable federal, state and local laws, statutes, rules and regulations (collectively, the “Laws”), including, without limitation, any and all federal and state income tax, social security, unemployment and disability insurance laws, statutes, rules and regulations, in connection with this Agreement; and (b) to maintain any and all records and documents required by the Laws in connection with this Agreement and to file such records and documents as required by the Laws.

 

9.   Independent Contractor Status:  In performing the Services, Mr. Engle will be deemed to be for all purposes an independent contractor (and not an employee or agent of XOMA) under any and all laws, whether existing or future, including without limitation Social Security laws, unemployment insurance laws, and withholding and other employment taxation laws.  Mr. Engle will not be entitled to participate in any employee benefits accruing to employees of XOMA (except as expressly provided in the Employment Agreement (as defined below)).  Mr. Engle will not be authorized to make any representation, contract or commitment on behalf of XOMA unless Mr. Engle is specifically requested or authorized to do so in writing by an authorized representative of XOMA.

 

  

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10.   Performance of Services:  In performing the Services, Mr. Engle agrees to provide his own equipment, tools and other materials at his own expense.  Notwithstanding the preceding sentence, XOMA shall make its facilities and equipment available to Mr. Engle as reasonably necessary in connection with the Services.  For any work performed on XOMA’s premises, Mr. Engle shall comply with all security, confidentiality, safety and health policies of XOMA.  Mr. Engle shall take all necessary precautions to prevent, and shall be responsible for, any injury to any persons (including, without limitation, employees of XOMA) or damage to property (including, without limitation, XOMA’s property) arising from or relating to Mr. Engle’s performance of the Services or the use by Mr. Engle of any XOMA equipment, tools, facility or other property, whether or not such claim is based upon its condition or on the alleged negligence of XOMA in permitting its use.

 

11.   Injunctive Relief:  XOMA and Mr. Engle reaffirm, recognize and agree that the Services to be performed by Mr. Engle hereunder are of a special, unique, extraordinary and intellectual character; that those Services are of particular value to XOMA and that the breach of any or all obligations undertaken by Mr. Engle hereunder, including, without limiting the generality of the foregoing, Mr. Engle’s obligation of non-competition, could not be reasonably or adequately compensated by damages in an action at law, and that an appropriate remedy for XOMA for any such breach or threat to commit a breach will be, without limitation, an injunction restraining Mr. Engle from committing such breach and granting specific performance hereunder.

 

12.   Legal Fees:  If any action or proceeding in arbitration or law is commenced to enforce any of the provisions or rights under this Agreement, the unsuccessful party to such action or proceeding, as determined by arbitration or by the court in a final judgment or decree, will pay the successful party all costs, expenses, and reasonable attorney’s fees incurred therein by such party (including, without limitation, such costs, expenses and fees on any appeal), and if such successful party will recover judgment in any such action or proceedings, such costs, expenses and attorneys’ fees will be included as part of such judgment.

 

13.   Amendments to Employment Agreement:  Section 6(b) of the Amended and Restated Employment Agreement effective as of December 30, 2008 between XOMA and Mr. Engle (“Employment Agreement”) is hereby amended to provide that the payment referred to in clause (i)(B)(2) thereof shall be made within two (2) business days of the Effective Date, and Section 7(a) of the Employment Agreement is hereby amended by deleting the last sentence thereof in its entirety.  The remaining provisions of the Employment Agreement that survive the termination of Mr. Engle’s employment with XOMA shall remain in full force and effect.

 

14.   Severability:  If any provision of this Agreement is held to be inoperative, unenforceable or otherwise invalid, the remaining provisions hereof will be carried into effect without regard to such inoperative, unenforceable or otherwise invalid provision.

 

15. Governing Law:  This Agreement will be construed in accordance with, and governed by, the laws of the State of California.

 

  

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16. Assignment:  Since this Agreement requires the performance of personal services by Mr. Engle, Mr. Engle may not assign any right or delegate any duty described in this Agreement without XOMA’s prior written approval.

 

17. Entire Agreement:  This instrument constitutes the entire Agreement between the Parties hereto and supersedes any and all prior agreements concerning the engagement of Mr. Engle by XOMA as a consultant, whether written or oral.  This Agreement will not be amended, altered or changed except by written agreement signed by both Parties hereto.

 

  

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.

 

XOMA (US) LLC                                                                                       Steven B. Engle

___________________________________                 ___________________________________

Christopher J. Margolin                                                                                    Steven B. Engle

Vice President, General Counsel and Secretary

  

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EXHIBIT A

Statement of Work

	
I.  

	
DESCRIPTION OF THE SERVICES TO BE PERFORMED:

Mr. Engle will provide consulting services to XOMA in order to assist in implementing an orderly transition of management responsibilities and otherwise as mutually agreed to.  The timing of such services and the amount of time required will be mutually agreed upon.

	
II.  

	
COMPENSATION:

XOMA will pay Mr. Engle for consulting services rendered by him during the term of this Agreement:

 

    (a)           for each of the first six months following the Effective Date, a retainer of Fifteen Thousand Three Hundred Dollars ($15,300) per month, and

    (b)           thereafter as may be agreed between Mr. Engle and XOMA.

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Exhibit 10.2

 

XOMA (US) LLC

EMPLOYMENT AGREEMENT

 

NAME:  John Varian

 

TITLE:  Interim Chief Executive Officer

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 31st day of August, 2011, by and between XOMA (US) LLC (the “Company”) and the person executing this Agreement as employee (“Employee”).

 

1.  Employment.  On the terms and conditions set forth herein, Company hereby employs Employee, and Employee hereby accepts such employment.  While employed hereunder, Employee shall devote all of the Employee’s best efforts and attention to the business and affairs of the Company.

 

2.  Position.  Employee is employed by the Company to render services to the Company in the position of Interim Chief Executive Officer.  Employee shall perform such duties and responsibilities as are normally related to such position in accordance with the standards of the industry and any additional duties now or hereafter assigned to Employee by the Company.  Employee shall abide by the rules, regulations, and practices as adopted or modified from time to time in the Company’s sole discretion.

 

3.  Compensation.  In consideration of the service to be rendered under this Agreement, the Company shall pay Employee a salary at the rate of $400,000 per year (“Base Salary”).  The Base Salary will be paid to Employee in equal, semi-monthly installments on the fifteenth and the last day of the month in accordance with the Company’s regularly established payroll practice.

 

4.  Benefits.  Employee shall be eligible to participate in the benefits made generally available by the Company to similarly-situated employees, in accordance with the benefits plans established by the Company, as may be amended from time to time in the Company’s sole discretion, excluding the Company’s CEO Incentive Compensation Plan and Management Incentive Compensation Plan.

 

5.  Expenses.  The Company shall reimburse Employee for reasonable business expenses incurred in the performance of Employee’s duties hereunder in accordance with the Company’s expense reimbursement guidelines.

 

  

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6.  At-Will Employment.  The employment relationship between the Company and the Employee shall be “at-will” at all times.  Either the Company or the Employee may terminate Employee’s employment with the Company at any time, without any advance notice, for any reason or no reason at all, notwithstanding anything to the contrary contained in or arising under any statements, policies, or practices of the Company relating to the employment, discipline or termination of its employees.  Upon and after such termination, all obligations of the Company under this Agreement shall cease, except as provided in Paragraphs 7 and 10.

 

7.  Severance Payments.  Upon termination of Employee’s employment for any reason other than for Cause (as defined below) or upon Employee’s resignation for Good Reason (as defined below), Employee will be entitled to his then current salary pursuant to this Agreement for, if such termination or resignation occurs prior to December 31, 2011, a period of two (2) months or, if such termination or resignation occurs thereafter, a period of three (3) months, in each case following such termination or resignation.  “Cause” shall mean:

 

          (i)  willful material fraud or material dishonesty in connection with Employee’s performance hereunder;

 

         (ii)  failure by Employee to substantially perform the material duties of his job as Interim Chief Executive Officer;

   

         (iii)  material breach of this Agreement or the Company’s policies set forth on the Company’s Intranet Portal under “Policy Manual”;

 

         (iv)  misappropriation of a material business opportunity of the Company;

 

         (v)  misappropriation of any Company funds or property;  or

 

         (vi)  conviction of, or the entering of, a plea of guilty, or no contest, with respect to a felony or the equivalent thereof.

 

“Good Reason” shall mean, unless remedied by the Company within sixty (60) days after the receipt of written notice from the Employee as provided below or consented to in writing by the Employee, (i) the material diminution of any material duties or responsibilities of the Employee; or (ii) a material reduction in the Employee's base salary; provided, however, that the Employee must have given written notice to the Company of the existence of any such condition within ninety (90) days after the initial existence thereof (and the failure to provide such timely notice will constitute a waiver of the Employee’s ability to terminate employment for Good Reason as a result of such condition), and the Company will have a period of sixty (60) days from receipt of such written notice during which it may remedy the condition; provided further, however, that any termination of employment by the Employee for Good Reason must occur not later than one hundred eighty (180) days following the initial existence of the condition giving rise to such Good Reason in order to qualify for the severance pay set forth in this Paragraph 7.

 

  

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8.  Proprietary Rights.  Employee agrees to sign and be bound by the terms of the Proprietary Information Agreement, which is attached hereto as Exhibit A.

 

9.  Agreement Not to Compete.  Notwithstanding any provisions of the Proprietary Information Agreement referred to in Paragraph 8 hereof, while employed hereunder by the Company, Employee will not (i) directly or indirectly, engage in any other occupation, employment, consultation, or other activity in competition with the business, developments, products, work, or activities of the Company; or (ii) engage, directly or indirectly, in any other business activity (whether or not for pecuniary advantage) that might interfere with Employee’s duties and responsibilities hereunder or create a conflict of interest with the Company.

 

10.    Arbitration.  All claims or controversies between Employee and the Company relating in any manner whatsoever to Employee’s employment with the Company or the termination of that employment shall be resolved by arbitration before one arbitrator in accordance with the then applicable JAMS Employment Arbitration Rules and Procedures, which can be found at www.jamsadr.com. Claims subject to arbitration shall include contract claims, tort claims, claims relating to compensation and stock options, as well as claims based on any federal, state, or local law, statute, or regulation, including but not limited to any claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the California Fair Employment and Housing Act (“Arbitrable Claims”).  However, claims for unemployment insurance, claims under applicable workers’ compensation laws, and claims under the National Labor Relations Act shall not be subject to arbitration.  The Arbitrator shall apply the same substantive law, with the same statutes of limitations and same remedies, that would apply if the claims were brought in a court of law.  The arbitrator shall have the authority to consider and decide pre-hearing motions, including dispositive motions.

 

Either party may bring an action in court to compel arbitration under this Agreement and to enforce an arbitration award.  Otherwise, neither party shall initiate or prosecute any lawsuit in any way related to any Arbitrable Claim, including without limitation any claim as to the making, existence, validity, or enforceability of the agreement to arbitrate.  All arbitration hearings under this Agreement shall be conducted in or near Berkeley, California.  Arbitration shall be final and binding upon the parties and shall be the exclusive remedy for all Arbitrable Claims, except that either party may, at its option, seek injunctive relief under Cal. Code Civ. Proc. § 1281.8 in a court of competent jurisdiction for any claim or controversy arising out of or related to the unauthorized use, disclosure, or misappropriation of the confidential and/or proprietary information of either party. 

 

Each party shall pay for its own costs and attorney’s fees, if any.  However, if any party prevails on a statutory claim which affords the prevailing party attorney’s fees, then the arbitrator may award reasonable attorney’s fees and costs to the prevailing party as provided by law.  The costs and fees of the arbitrator shall be paid by the Company.

 

THE PARTIES UNDERSTAND AND AGREE THAT THIS AGREEMENT TO ARBITRATE CONSTITUTES A WAIVER OF THEIR RIGHT TO A TRIAL BY JURY OF ANY CLAIMS OR CONTROVERSIES SUBJECT TO ARBITRATION UNDER THIS AGREEMENT.

 

  

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11.  Severability.  In any provision of this Agreement shall be held by a court or arbitrators to be invalid, unenforceable, or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of the Agreement shall remain in full force and effect.  In the event that the time period or scope of any provision is declared by a court or arbitrators of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrators deem enforceable, then such court or arbitrators shall reduce the time period or scope to the maximum time period or scope permitted by law.

 

12.  Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California.

 

13.  Successors and Assigns.  Except as otherwise expressly provided in this Agreement, the provisions hereof shall inure to the benefit of the successors and assigns of the Company.  Employee agrees that Employee shall have no right to assign and shall not assign or purport to assign any rights or obligations under this Agreement.  The Company may transfer its rights hereunder to any other person or entity.

 

14.  Amendments; Waivers.  This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Employee and by a duly authorized representative of the Company other than Employee.  By an instrument in writing similarly executed, either party may waive compliance by the other party with any provision of this Agreement that such other party was or is obligated to comply with or perform, provided, however, that such a waiver shall not operate as a waiver of, or estoppel with respect to, any other subsequent failure.  No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall operate as a waiver thereof, no shall any single or partial exercise of any right, remedy, or power hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, or power provided herein or by law or in equity.

 

15.  Entire Agreement.  The terms of this Agreement are intended by the parties to be the final expression of their agreement with respect to terms of Employee’s employment by the Company and may not be contradicted by evidence of any prior or contemporaneous statements or agreements, except for agreements specifically referenced herein (including the Proprietary Information Agreement attached as Exhibit A, and the Company’s Share Option Plans and Agreements).

 

  

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    IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.

XOMA (US) LLC.

 

 

By:  _____________________________________                       _____________________________________

	
        Charles C. Wells

        Vice President,

        Human Resources

        and Information Technology

	  	
   John Varian

   Interim Chief Executive Officer

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