Document:

Exhibit 10.2

 

SEATTLE GENETICS, INC.

 

 

2002 COMMON STOCK

 

PURCHASE AGREEMENT

 

 

Dated as of April 19, 2002

 

 

SEATTLE GENETICS, INC.

 

2002 COMMON STOCK PURCHASE AGREEMENT

 

This

2002 Common Stock Purchase Agreement (this “Agreement”) is made as of

April 19, 2002 between Seattle Genetics, Inc., a Delaware corporation with an

office at 21823 30th Drive S.E., Bothell, WA 98021(the “Company”),

and Genentech, Inc., a Delaware corporation with an office at 1 DNA Way, South

San Francisco, CA 94080 (the “Purchaser”).

 

RECITALS

 

WHEREAS, it is a

condition of the Collaboration Agreement of even date herewith (the “Collaboration

Agreement”) by and between the Company and Purchaser that the Purchaser

purchase from the Company shares of Common Stock, $0.001 par value per share (“Common

Stock”), of the Company in a private placement; and

 

WHEREAS, the

Company and the Purchaser wish to set forth the terms and conditions upon which

the Company will issue and sell such shares to the Purchaser;

 

NOW, THEREFORE, in

consideration of the premises and mutual covenants and conditions contained

herein, the Company and the Purchaser hereby agree as follows:

 

ARTICLE I

 

PURCHASE AND SALE

OF SHARES

 

1.01         Purchase Price and Closings.

 

(a)           First Closing.  The Company will issue and sell to the

Purchaser and, subject to the terms and conditions of this Agreement, the

Purchaser will purchase from the Company that number of unregistered shares of

the Company’s Common Stock (the “Shares”) equal to two percent (2%) of

the capital stock of the Company (on a fully diluted basis including all shares

of Common Stock reserved for issuance pursuant to the Company’s stock option

and employee stock purchase plans), up to a maximum dollar amount of

$3,500,000.00 at a closing to be held on the date, at the location and at the

time of execution of this Agreement by both the Company and Purchaser (the “First

Closing”).  The purchase price per

share for the Shares to be issued and sold at the First Closing shall be the

average closing price (based on a trading day from 9:30 a.m. to 4:00 p.m. (New

York time)) of the Company’s Common Stock as reported on the Nasdaq National

Market for the thirty (30) trading days ending one (1) day prior to the First

Closing.

 

(b)           Second Closing.  Beginning upon the date that [***] (the

“[***]”) and for a period of [***] thereafter, the Company shall have the right

to sell to the Purchaser, at the Company’s option, Shares equal to [***], at a

closing to be held on a date [***] of the [***] and at the time and location

designated by the Company (the “Second Closing”).  The purchase price per share for the Shares

to be issued and sold at the Second Closing shall be the average closing price

(based on a trading day from 9:30 a.m. to 4:00 p.m. (New York time)) of the

Company’s Common Stock as reported on the Nasdaq National Market for the [***]

ending on the later to occur of: (a) the [***]; or (b) the date that is [***]

after the [***].

 

 

(c)           General.  Both the First Closing and the Second

Closing (each referred to herein as a “Closing”) shall be subject to the

satisfaction of all of the conditions to Closing specified in Article II

herein.  At each Closing, the Company

will issue and deliver a certificate evidencing the Shares sold to the Purchaser

against payment of the full purchase price therefor by wire transfer of

immediately available funds to an account designated by the Company.

 

1.02         Representations and Warranties by

the Purchaser.  The Purchaser

represents and warrants to the Company that: (a) it is an “accredited investor”

as defined in Rule 501(a) under the Securities Act of 1933, as amended (the “Securities

Act”); (b) it will acquire the Shares for its own account, for the purpose

of investment and not with a view to distribution or resale thereof;

(c) the execution of this Agreement and the consummation of the

transactions contemplated hereby have been duly authorized by all necessary

action on the part of the Purchaser, and this Agreement has been duly executed

and delivered, and constitutes a valid, legal, binding and enforceable

agreement of the Purchaser, except (i) as limited by applicable bankruptcy,

insolvency, reorganization, moratorium and other laws of general application

affecting enforcement of creditors’ rights generally and (ii) as limited by

laws relating to the availability of specific performance, injunctive relief or

other equitable remedies; (d) it has taken no action which would give rise

to any claim by any other person for any brokerage commissions, finders’ fees

or the like relating to this Agreement or the transactions contemplated hereby;

(e) it has had the opportunity to ask questions of and receive answers

from representatives of the Company concerning the terms of the offering of the

Shares and to obtain additional information concerning the Company and its

business, and has all of the information necessary for it to evaluate the

merits and risks of an investment in the Shares and can bear the economic risks

of such investment.  The acquisition by

the Purchaser of the Shares shall constitute a confirmation of these

representations and warranties made by the Purchaser as of the date of such

acquisition.  The Purchaser further

represents that it understands and agrees that, until registered under the

Securities Act or transferred pursuant to the provisions of Rule 144 as

promulgated by the Securities and Exchange Commission, all certificates

evidencing any of the Shares, whether upon initial issuance or upon any

transfer thereof, shall bear a legend, prominently stamped or printed thereon,

reading substantially as follows:

 

“THE SECURITIES

REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES

ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THESE SECURITIES MAY NOT BE SOLD, MORTGAGED,

PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE

REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF AN

EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF 1933, AS

AMENDED, AND APPLICABLE STATE SECURITIES LAWS.”

 

ARTICLE II

 

CONDITIONS TO

CLOSING

 

2.01         Conditions of the Purchaser’s

Obligation.  The obligation of the

Purchaser to purchase and pay for the Shares at each Closing is subject to the

satisfaction of the following conditions, any one or more of which may be

waived by the Purchaser:

 

(a)           Documentation at Closing.  The Purchaser shall have received prior to

or at each Closing all of the following documents or instruments, or evidence

of completion thereof, each in form and substance satisfactory to the

Purchaser:

 

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(i)            A copy of the Certificate of

Incorporation of the Company, certified by the Secretary of State of the State

of Delaware, a copy of the resolutions of the Board of Directors of the Company

evidencing the approval of this Agreement, the issuance of the Shares and the

other matters contemplated hereby, and a copy of the Bylaws of the Company, all

of which shall have been certified by the Secretary of the Company to be true,

complete and correct in every particular, and certified copies of all documents

evidencing other necessary corporate or other action and governmental

approvals, if any, with respect to this Agreement and the Shares.

 

(ii)           A certificate of the Secretary of the

Company which shall certify the names of the officers of the Company authorized

to sign this Agreement, the certificate for the Shares and the other documents,

instruments or certificates to be delivered pursuant to this Agreement by the

Company or any of its officers, together with the true signatures of such

officers.  The Purchaser may

conclusively rely on such certificate until it shall receive a further

certificate of the Secretary or an Assistant Secretary of the Company canceling

or amending the prior certificate and submitting the signatures of the officers

named in such further certificate.

 

(iii)          A certificate of the President or

Chief Executive Officer of the Company stating that all covenants and conditions

required to be performed prior to or at the Closing have been performed as of

the Closing and that all the representations and warranties contained in

Section 3 herein are true and correct as of the Closing.

 

(iv)          Certificates of Good Standing and Valid

Existence for the Company from the Secretaries of State of the States of

Delaware and Washington, as the case may be.

 

(b)           Performance.  The Company shall have performed and

complied with all agreements, obligations and conditions contained in this

Agreement that are required to be performed or complied with by it on or before

the Closing.

 

(c)           Consents, Waivers, Etc.  The Company shall have obtained all consents

or waivers, if any, necessary to execute and deliver this Agreement, issue the

Shares and to carry out the transactions contemplated hereby and thereby.  All corporate and other action and

governmental filings necessary to effectuate the terms of this Agreement, the

Shares and other agreements and instruments executed and delivered by the

Company in connection herewith shall have been made or taken, except for any

post-sale filing that may be required under federal or state securities

laws.  In addition to the documents set

forth above, the Company shall have provided to the Purchaser any other information

or copies of documents that it may reasonably request.

 

(d)           Collaboration Agreement.  The Purchaser and the Company shall have

entered into the Collaboration Agreement.

 

(e)           Amendment of Investors’ Rights

Agreement.  The Company’s Amended

and Restated Investors’ Rights Agreement dated as of December 22, 1999, as

amended (the “Rights Agreement”), shall have been amended to include the

Purchaser as a party such that the Purchaser is entitled to registration with

respect to the Shares as though the Purchaser were a “Holder” (as defined in

the Rights Agreement) and the Shares were “Registrable Securities” (as defined

in the Rights Agreement) for the purposes of registration pursuant to the

Rights Agreement.

 

2.02         Conditions of the Company’s

Obligation.  The obligation of the

Company to sell the Shares at each Closing is subject to the satisfaction of

the following conditions:

 

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(a)           Consents, Waivers, Etc.  The Company shall have obtained all consents

or waivers, if any, necessary to execute and deliver this Agreement, issue the

Shares and to carry out the transactions contemplated hereby and thereby.  All corporate and other action and

governmental filings necessary to effectuate the terms of this Agreement, the

Shares and other agreements and instruments executed and delivered by the

Company in connection herewith shall have been made or taken, except for any

post-sale filing that may be required under federal or state securities laws.

 

(b)           Collaboration Agreement.  The Purchaser and the Company shall have

entered into the Collaboration Agreement.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The

Company hereby represents and warrants to the Purchaser as follows:

 

3.01         Corporate Action.  The Company has all necessary corporate

power and has taken all corporate action required to enter into and perform

this Agreement.  This Agreement is a

valid and legally binding obligations of the Company, enforceable in accordance

with its terms.  The issuance, sale and

delivery of the Shares in accordance with this Agreement, have been duly

authorized by all necessary corporate action on the part of the Company.  The issuance of the Shares is not subject to

preemptive rights or other preferential rights in any present stockholders of

the Company that have not been waived and will not conflict with any provision

of any agreement or instrument to which the Company is a party or by which it

or its property is bound and to which the Company has not obtained appropriate

waivers.

 

3.02         No Conflict.  The execution and delivery of this Agreement

by the Company does not, and the consummation of the transactions contemplated

hereby will not, conflict with, or result in any material violation of, or

default under (with or without notice or lapse of time, or both), or give rise

to a right of termination, cancellation, modification or acceleration of any

obligation under (i) any provision of the Certificate of Incorporation of

the Company or Bylaws of the Company, (ii) any mortgage, indenture, lease,

contract or other agreement or instrument, permit, concession or license to

which the Company or any of its properties or assets is subject or

(iii) any judgment, order, decree, applicable to the Company or its

properties or assets.

 

3.03         Status of Shares.  Subject to the accuracy of the Purchaser’s

representations and warranties in this Agreement, the offer, sale and issuance

of the Shares in conformity with the terms of this Agreement constitute

transactions exempt from the registration or qualification requirements of the

laws of any applicable state or U.S. jurisdiction.  The Shares have been duly authorized for issuance to the

Purchaser and, when issued and delivered in accordance with the terms hereof

and after payment of the purchase price therefor, will be duly authorized,

validly issued, fully-paid and non-assessable, issued in compliance with

applicable state and federal securities laws and free of restrictions on

transfer other than restrictions on transfer under applicable state and federal

securities laws.  The issuance of the

Shares is not subject to preemptive or other similar rights.  No further approval or authority of the

stockholders or the Board of Directors of the Company will be required for the

issuance and sale of the Shares.

 

3.04         Organization, Good Standing and

Qualification.  The Company is a

corporation duly organized and validly existing under the laws of the

jurisdiction of its incorporation and has all requisite corporate power and

authority to carry on its business.  The

Company is duly qualified to transact business and is in good standing in each

jurisdiction in which the failure so to qualify would have a

 

5

 

material adverse effect

on the general affairs, business, prospects, management, financial position,

stockholders’ equity or results of operations of the Company (a “Material

Adverse Effect”).

 

3.05         Capitalization.  The authorized capital stock of the Company

consists of 100,000,000 shares of Common Stock and 5,000,000 shares of

Preferred Stock.  As of March 15, 2002,

the issued and outstanding capital stock of the Company consisted of 29,917,812

shares of Common Stock and no shares of Preferred Stock.  The shares of issued and outstanding capital

stock of the Company have been duly authorized and validly issued, are fully

paid and non-assessable and have not been issued in violation of or are not

otherwise subject to any preemptive or other similar rights.  The Company has reserved a total of 5,972,910

shares of Common Stock for issuance upon the exercise of stock options granted

or available for future grant under the Company’s 1998 Stock Option Plan and

2000 Directors’ Stock Option Plan, and has reserved 593,227 shares of Common

Stock for issuance under the Company’s 2000 Employee Stock Purchase Plan.

 

3.06         SEC Documents.

 

(a)           The

Company has timely filed all reports, schedules, registration statements and

other documents required to be filed by the Company with the Securities and

Exchange Commission on or after the date of filing with the Securities and

Exchange Commission of the Company’s Final Prospectus for its initial public

offering on March 7, 2001 through the date hereof (such documents as

supplemented and amended from time to time, collectively, the “Company SEC

Documents”).  As of their respective

filing dates, or in the case of registration statements, their respective

effective dates, none of the Company SEC Documents (including all exhibits and

schedules thereto and documents incorporated by reference therein) contained

any untrue statement of a material fact or omitted to state a material fact

required to be stated therein or necessary in order to make the statements

therein, in light of the circumstances under which they were made, not misleading,

and the Company SEC Documents complied when filed, or in the case of

registration statements, as of their respective effective dates, in all

material respects with the then applicable requirements of the Securities Act

or the Securities Exchange Act of 1934, as the case may be, and the rules and

regulations promulgated by the Securities and Exchange Commission thereunder.

 

(b)           The

financial statements (including the notes thereto) of the Company included in

the Form 10-K for the year ended December 31, 2001, complied in all material

respects with the then applicable accounting requirements and the published

rules and regulations of the Securities and Exchange Commission with respect

thereto, were prepared in accordance with generally accepted accounting

principles during the periods involved (except as may have been indicated in

the notes thereto) and accurately and fairly present the financial condition of

the Company as at the dates thereof and the results of their operations,

stockholders’ equity and cash flows for periods then ended.

 

3.07         Governmental Permits.  Except as described in the Company SEC

Documents, the Company owns, possesses or has obtained all licenses, permits,

certificates, consents, orders, approvals and other authorizations from, and

has made all declarations and filings with, all federal, state, local and other

governmental authorities (including foreign regulatory agencies), all

self-regulatory organizations and all courts and other tribunals, domestic or

foreign, necessary to own or lease, as the case may be, and to operate its

properties and to carry on its business as conducted as of the date hereof,

except where the failure to own, possess, obtain or make would not,

individually or in the aggregate, have a Material Adverse Effect, and the

Company has not received any actual notice of any proceeding relating to

revocation or modification of any such license, permit, certificate, consent,

order, approval or other authorization, except as described in the Company SEC

Documents.  To the best of its

knowledge, the

 

6

 

Company is in compliance

with all laws and regulations relating to the conduct of its business as

conducted as of the date hereof, and all of the descriptions in the Company SEC

Documents of the legal and governmental procedures and requirements of the

United States Food and Drug Administration or any foreign, state or local

governmental body exercising comparable authority are accurate in all material

respects.

 

3.08         Prior Offerings.  All offers of capital stock of the Company

before the date of this Agreement were at all relevant times duly registered or

exempt from the registration requirements of the Securities Act and were duly

registered or subject to an available exemption from the registration

requirements of the applicable state securities laws.

 

3.09         No Defaults; No Litigation.  The Company is not in violation of its

Certificate of Incorporation, or Bylaws or in material default in the

performance of observance of any obligation, agreement, covenant or condition

contained in any material contract, indenture, mortgage, loan agreement, deed,

trust, note, lease, sublease, voting agreement, voting trust, or other

instrument or material agreement to which the Company is a party which, singly

or in the aggregate, could reasonably be expected to result in any material

adverse change in the condition, financial or otherwise, or in the business

affairs or business prospects of the Company. 

There is no action, suit or proceeding before or by any court or

governmental agency or body, domestic or foreign, now pending, or, to the

knowledge of the Company, threatened against or affecting the Company which,

singly or in the aggregate, could reasonably be expected to result in any

material adverse change in the condition, financial or otherwise, or in the

business affairs or business prospects of the Company.

 

3.10         Taxes.  The Company has filed all material tax returns required to be

filed, which returns are true and correct in all material respects, and the

Company is not in default in the payment of any taxes, including penalties and

interest, assessments, fees and other charges shown thereon due or otherwise

assessed other than those being contested in good faith and for which adequate

reserves have been provided or those currently payable without which were

payable pursuant to said returns or any assessments with respect thereto.

 

3.11         Insurance.  The Company maintains insurance of the type

and in the amount that the Company reasonably believes is adequate for the

business, including, but not limited to, liability insurance for clinical

testing and insurance covering all real and personal property owned or leased

by the Company against theft, damage, destruction, acts of vandalism and all

other risks customarily insured against by similarly situated companies, all of

which insurance is in full force and effect.

 

3.12         Intellectual Property.  The Company, to the best of its knowledge in

the course of diligent inquiry, owns or is licensed to use all patents, patent

applications, inventions, trademarks, trade names, applications for

registration of trademarks, service marks, service mark applications,

copyrights, know-how, manufacturing processes, formulae, trade secrets,

licenses and rights in any thereof and any other intangible property and assets

that are material to the business of the Company as now conducted and as

proposed to be conducted (in this Agreement called the “Proprietary Rights”),

or is seeking, or will seek, to obtain rights to use such Proprietary Rights

that are material to the business of the Company as proposed to be

conducted.  The Company does not have

any knowledge of, and the Company has not given or received any notice of, any

pending conflicts with or infringement of the rights of others with respect to

any Proprietary Rights or with respect to any license of Proprietary Rights

that are material to the business of the Company.  No action, suit, arbitration, or legal, administrative or other

proceeding, or investigation is pending, or, to the best of the Company’s

knowledge, threatened, which involves any Proprietary Rights, nor, to the best

of the Company’s knowledge, is there any reasonable basis therefor.

 

7

 

3.13         No Integrated Offerings.  Neither the Company, nor any person acting

on its behalf, has directly or indirectly made any offers or sales of any

security or solicited any offers to buy any security under circumstances that

would require registration under the Securities Act of the issuance of the

Shares to the Purchaser.  The issuance

of the Shares to the Purchaser will not be integrated with any other issuance

of the Company’s securities (past, current or future) for purposes of the

Securities Act or any applicable rules of Nasdaq (or of any national securities

exchange on which the Company’s Common Stock is then traded).  The Company will not make any offers or

sales of any security (other than the Shares) that would cause the offering of

the Shares to be integrated with any other offering of securities by the

Company for purposes of any registration requirement under the Securities Act

or any applicable rules of Nasdaq (or of any national securities exchange on

which the Company’s Common Stock is then traded).

 

3.14         Environmental Laws.  To the best of its knowledge, the Company

(a) is in compliance with any and all applicable foreign, federal, state

and local laws and regulations relating to the protection of human health and

safety, the environment or hazardous or toxic substances or wastes, pollutants

or contaminants (collectively, “Environmental Laws”), (b) has

received all permits, licenses or other approvals required of it under

applicable Environmental Laws to conduct its businesses and (c) is in compliance

with all terms and conditions of any such permit, license or approval, except

where such noncompliance with Environmental Laws, failure to receive required

permits, licenses or other approvals or failure to comply with the terms and

conditions of such permits, licenses or approvals would not, individually or in

the aggregate, reasonably be expected to have a Material Adverse Effect.

 

3.15         Property.

The Company has good and marketable title in fee simple to all items of real

property and good and marketable title to all personal property owned by it, in

each case free and clear of all liens, encumbrances and defects except such as

are described or referred to in the Company SEC Documents or such as do not

materially affect the value of such property and do not interfere with the use

made or proposed to be made of such property by the Company; and any real

property and buildings held under lease by the Company are held under valid,

existing and enforceable leases with such exceptions as are not material and do

not interfere with the use made or proposed to be made of such property and

buildings by the Company.

 

3.16         Registration Rights.  Except as provided in that certain Investor

Rights Agreement dated as of December 22, 1999, as amended, the Company is

presently not under any obligation, and has not granted any rights, to register

under the Securities Act any of its presently outstanding securities or any of

its securities that may be subsequently issued.

 

3.17         Disclosure.  The Company has provided to Purchaser all of

the information reasonably available to it that Purchaser has requested for

deciding whether to purchase the Common Stock. 

To the best of the Company’s knowledge, neither this Agreement nor any

certificates made or delivered in connection herewith contains any untrue

statement of a material fact or omits to state a material fact necessary to

make the statements herein or therein not misleading.

 

8

 

ARTICLE IV

 

OTHER AGREEMENTS

 

4.01         Publicity and Nondisclosure.  Any proposed announcement, press release or

other public disclosure concerning this Agreement and/or any of the

transactions or relationships contemplated hereby shall be subject to the terms

of Section 9 of the Collaboration Agreement .

 

4.02         Rule 144 Information.  Until the earlier of (i) the date on which

the Shares may be resold by the Purchaser without registration and without

regard to any volume limitations by reason of Rule 144(k) under the Securities

Act or any other rule of similar effect or (ii) all of the Shares have been

sold, the Company shall file all reports required to be filed by it under the

Securities Act and the Securities Exchange Act of 1934, as amended, and shall

take such further action to the extent reasonably required to enable the

Purchaser to sell the Shares pursuant to Rule 144 under the Securities Act (as

such rule may be amended from time to time).

 

4.03         Listing of Shares.  If required by the rules and regulations of

any national securities exchange or automated quotation system, the Company

agrees to promptly secure the listing of the shares upon each national

securities exchange or automated quotation system upon which shares of its

Common Stock are listed and, so long as Purchaser owns any of the shares, shall

maintain such listing of all shares.

 

ARTICLE V

 

MISCELLANEOUS

 

5.01         Survival.  Notwithstanding any investigation made by

any party to this Agreement, all covenants, agreements, representations and

warranties made by the Company and the Purchaser in this Agreement and in the

certificates for the Shares delivered pursuant to this Agreement shall survive

for a period of one (1) year after the execution of this Agreement.

 

5.02         No Waiver.  No failure or delay on the part of any party

to this Agreement in exercising any right, power or remedy hereunder shall

operate as a waiver thereof; nor shall any single or partial exercise of any

such right, power or remedy preclude any other or further exercise thereof or

the exercise of any other right, power or remedy hereunder.

 

5.03         Amendments, Waivers and Consents.  Any provision in this Agreement to the

contrary notwithstanding, and except as hereinafter provided, changes in or

additions to this Agreement may be made, and compliance with any covenant or

provision set forth herein may be omitted or waived, if the party requesting

such change, addition, omission or waiver shall obtain consent thereto in

writing from the other party.  Any

waiver or consent may be given subject to satisfaction of conditions stated therein

and any waiver or consent shall be effective only in the specific instance and

for the specific purpose for which given.

 

5.04         Addresses for Notices.  All notices, requests, demands and other

communications provided for hereunder shall be in writing and mailed or

delivered to each applicable party at the address set forth below or at such

other address as to which such party may inform the other parties in writing in

compliance with the terms of this Section.

 

If to the Purchaser: 

Genentech, Inc., 1 DNA Way, South San Francisco, CA 94080-4990;

Attention: Treasurer, with a copy to: Corporate Secretary; or at such other

address as shall be

 

9

 

designated by the Purchaser in a written notice to the

Company complying as to delivery with the terms hereof.

 

If to the Company: 

Seattle Genetics, Inc, 21823 30th Drive S.E., Bothell, WA

98021, Attention:  Chief Financial

Officer, with a copy to:  Venture Law

Group, 4750 Carillon Point, Kirkland, WA 98033, Attention:  Sonya F. Erickson; or at such other address

as shall be designated by the Company in a written notice to the Purchaser

complying as to delivery with the terms hereof.

 

All such notices,

requests, demands and other communications shall, when mailed (which mailing

must be accomplished by certified mail, postage prepaid; express overnight

courier service; or registered mail, return receipt requested) be effective

upon receipt.

 

5.05         Binding Effect; Assignment.  This Agreement shall be binding upon and inure

to the benefit of the Company and the Purchaser and their respective heirs,

successors and assigns, except that neither party shall have the right to

assign its rights hereunder or any interest herein without the prior written

consent of the other party.

 

5.06         Entire Agreement.  This Agreement and the documents referred to

herein constitute the entire agreement between the parties and supersedes any

prior understandings or agreements concerning the subject matter hereof.

 

5.07         Severability.  The provisions of this Agreement are

severable and, in the event that any court of competent jurisdiction shall

determine that any one or more of the provisions or part of a provision

contained in this Agreement shall, for any reason, be held to be invalid,

illegal or unenforceable in any respect, such invalidity, illegality or

unenforceability shall not affect any other provision or part of a provision of

this Agreement.

 

5.08         Governing Law.  This Agreement shall be governed by and

construed in accordance with the internal laws of the State of Washington

without regard to its conflicts of laws principles to the contrary.

 

5.09         Headings.  Article, Section and subsection 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.

 

5.10         Counterparts.  This Agreement may be executed in

counterparts, each of which shall be enforceable against the party actually

executing the counterpart, and all of which together shall constitute one

instrument.

 

[REMAINDER OF PAGE INTENTIONALLY

LEFT BLANK]

 

10

 

IN WITNESS

WHEREOF, the parties hereto have caused this Agreement to be executed as of the

date first above written.

 

	

   

  	

  SEATTLE GENETICS, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Clay B. Siegall

  	

   

  
	

   

  	

  Name: Clay B. Siegall

  
	

   

  	

  Title: President and

  CSO

  
	

   

  	

   

  
	

   

  	

  GENENTECH, INC.

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Thomas T. Thomas

  	

   

  
	

   

  	

  Name: Thomas T. Thomas

  
	

   

  	

  Title: Treasurer

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Joseph S. McCracken

  	

   

  
	

   

  	

  Name: Joe McCracken

  
	

   

  	

  Title: Vice President,

  Business Development

  

 

11Exhibit 10.10

 

EMPLOYMENT AGREEMENT

 

DATE:                   January 1, 2002

 

 

PARTIES:            CAPITAL  CORP. OF THE WEST,  a  California

corporation,  hereinafter  referred

toas “Employer”; and

 

THOMAS T. HAWKER, herein after referred to as “Employee”.

 

RECITALS:

 

1.                                       Employee is currently employed as the Chief

Executive Officer of Employer under a written Employment Agreement dated

September 12, 2000, which will expire at the close of business on December 31,

2001.

 

2.                                       The Parties desire to enter into a new

Employment Agreement for an additional three (3) year term.

 

AGREEMENT:

 

Employer hereby agrees to extend  the

employment of Employee, and Employee hereby accepts said extension of

employmentwith Employer, upon the terms and conditions hereinafter set forth.

 

1.             Duties.

 

Employee is hereby employed as the President  and Chief Executive Officer

of Employer.  Employee shall perform the

customary duties of a Chief Executive Officer of a California bank holding

company, including but not limited to, the  supervision of Employer’s

business and all subsidiary corporations and businesses owned or related to

Employer and such  kindred

duties as may from time to time be reasonably requested of Employee by the

Board of Directors of Employer. As used herein the term “business of Employer”

shall include the business of any of Employer’s subsidiaries and related

entities.

 

 

2.             Appointment to

Board of Directors.

 

Employer hereby agrees that Employee shall remain a member of the Board

of Directors of Employer for so long as Employee is elected to a position on

the board by the shareholders of  Employer,

or until this Agreement has been terminated. During the period of Employee’s

election to the Board of Directors, Employee shall serve as a member of any or

all committees to which he is appointed, except the audit committee. Employee

also hereby agrees to accept appointment to other boards of directors and

committees of subsidiary and related organizations of Employer. Employee shall

fulfill all of Employee’s duties as a board and committee member without

additional compensation. Upon the termination of this Agreement by either

Employee or Employer, Employee agrees to immediately resign from the Board of

Directors, from all committees and from all corporate offices of Employer and

from all of Employer’s subsidiaries and related companies; further, all fringe

benefits, such as insurance, shall be terminated on the last day of service of

Employee, unless other­wise mandated by the terms of this Agreement, Employer’s

personnel policy, or any other benefit policies in effect at the time of such

termination.

 

3.             Term.

 

Provided Employee is still employed by Employer through December 31,

2001, this Agreement shall be effective for a period of thirty-six (36) months

thereafter, and employment under this agreement shall commence on January 1,

2002 and unless sooner terminated as provided herein, shall end on December 31,

2004 (“Term”).

 

4.             Extent of

Service.

 

Employee shall donate his full time, attention, and energies to the

business of Employer, and shall not during the Term of this Agreement be

engaged in any other business activities, except per­sonal investments, without

the prior written consent of Employer.

 

2

 

5.             Regular Compensation.

 

In consideration for the services which Employee is to render under

this Agreement, Employer shall pay to Employee a base salary (“Base Salary”) of

Two Hundred Sixty Thousand Dollars ($260,000).   The Base Salary shall be payable to Employee in equal

semi-monthly installments on the fifteenth and last working day of each month

during the period of employment.  Cost

of living adjustments will be made effective January 1 of the second and third

years in amounts indicated by the Consumer Price Index for the Western Urban

Area published by the U.S. Department of Labor Statistics for the preceding

twelve (12) months.

 

6.             Discretionary

Incentive Compensation.

 

Employee shall be entitled to participate in any incentive programs

which may be adopted from time to time by Employer for Employee. Amounts

awarded to Employee under any said incentive program shall be determined at the

sole discretion of Employer, including the vesting of any incentive

awards.  If either the Employer or

Employee choose not to negotiate a subsequent Agreement, for reasons other than

those included in paragraph 19, on the conclusion of this Agreement, the

incentive award earned for the 2004 year will be paid in full as if Employee

were still employed.

 

7.             Business

Expenses.

 

Employee shall be reimbursed for all ordinary and necessary, documented

expenses reasonably incurred by Employee in connection with his employment

associated with managing the business of Employer and other expenses which may

be authorized from time to time by the Board of Directors of Employer,

including expenses for club membership, entertainment, travel and similar

items. Travel and other expenses for attendance at conventions and banking

education programs that are approved by the Board of Directors shall also be

reimbursed. Employer will pay for or will reimburse Employee for such expenses

upon presentation by Employee from time to time of

 

3

 

receipts evidencing such

expenditures.

 

8.             Automobile.

 

Employer shall provide an automobile for the use of Employee. Employer

shall pay all fuel, operating, maintenance and insurance costs associated with

such automobile. Employee shall be entitled to limited use of the automobile

for personal use, but shall primarily use it for business purposes associated

with his employment.  As the Chief

Executive Officer of Employer, Employee has been provided an automobile for the

convenience of Employer.  Employer

expects the Employee will frequently visit Employer’s various business

locations, customers, business partners, vendors, regulatory agencies, ratings

and market making agencies and travel for various trade associations in which

Employer is actively engaged.  For the

security of the automobile, the convenience of the Employer, and the

conservation of the time of Employee dedicated to the business of Employer,

Employee agrees to garage the automobile at his personal residence.  Employee is authorized to commence his work

travel as set forth above from such personal residence.

 

9.             Vacation.

 

During the term of employment Employee shall be entitled to vacation

leave at full salary at the discretion of Employee as time allows, so long as

it is reasonable and does not jeopardize his responsibilities, of twenty (20)

business days; provided that Employee shall take as a portion of his vacation

leave at least ten (10) consecutive business days.

 

10.           Disability.

 

If Employee becomes permanently disabled during the Term because of

sickness, physical or mental disability, so that he is unable to perform his

full duties hereunder, Employer agrees to continue the salary (i) ninety (90)

days from

 

4

 

commencement of the disability,

(ii) until Employee is able to return to work, or (iii) when any payments

commence to Employee under the separate Salary Continuation Agreement executed

between the parties, whichever is less.

 

11.           Insurance.

 

Employer shall provide to Employee, his wife and

qualifying children, during the Term at Employer’s expense the same medical

insurance, dental insurance, life insurance, and disability insurance coverage,

if any, which may be offered to Employer’s other full-time employees under any

benefit plans as may be in effect from time to time.

 

The parties acknowledge that Employee’s Base Salary has been set high

enough under this contract so that Employee may pay for life insurance.

However, Employee shall have the right to determine whether to maintain life

insurance and use part of his Base Salary to cover the premiums thereon, or to

use the Base Salary for other purposes. Employer shall have no duty under this

agreement to give Employee any additional compensation to cover life insurance

premiums or to maintain any life insurance on Employee’s life.

 

12.           Stock Options.

 

As part of the consideration for entering this agreement, the Board of

Directors has agreed to grant 7,000 incentive stock options each year on

January 1 of 2002, 2003, and 2004 at the then market value provided employee is

still actively employed by employer on each of said dates.  Each stock option grant will vest 25% on

grant and 25% each year thereafter.

 

13.           Retirement Plan.

 

Employer shall be entitled to participate in any retirement plans

offered to other employees of Employer such as Employee’s participation in

Employer’s 401K plan.

 

5

 

14.           Printed Material.

 

All written, printed,

visual or audio materials used by Employee in performing duties for Employer,

other than Employee’s personal notes and diaries, are and shall remain the property

of Employer. Upon termination of employment on any basis, Employee shall return

all such materials to Employer.

 

15.           Disclosure of Information.

 

In the course of employment, Employee may

have access to confidential information and trade secrets relating to

Employer’s business. Except as required in the course of employment by

Employer, Employee shall not, without Employer’s prior written consent,

directly or indirectly disclose to anyone any confidential information relating

to Employer or any financial information, trade secrets or “know-how” which is

germane to Employer’s business and operations. Employee recognizes and

acknowledges that any financial information concerning any of Employer’s

customers, as it may exist from to time, is strictly confidential and is a

valuable, special and unique asset of Employer’s business. Employee shall not,

either before or after termination of this Agreement, disclose to anyone said

financial information, or any part thereof, for any reason or purposes

whatsoever.

 

16.           Prohibited

Activities and Investments.

 

During the Term of this

Agreement, Employee shall not, directly or indirectly, either as an employee,

employer, consultant, agent, principal, partner, principal stockholder (i.e.,

ten percent or more) or corporate officer, directly, or in any other individual

or representative capacity, engage or participate in any business competitive

with that of Employer.

 

6

 

17.           Surety

Bond.

 

Employee agrees to furnish all information and take any other steps

necessary to enable Employer to obtain and maintain a fidelity bond conditional

on the rendering of a true account by Employee of all moneys, goods, or other

property which may come into the custody, charge, or possession of Employee

during the Term of Employee’s employment. The surety company issuing such bond

and the amount of the bond must be acceptable to Employer. All premiums on the

bond are to be paid by Employer. If Employee cannot personally qualify for a

surety bond at any time during the Term of this Agreement, Employer shall have

the option to terminate this Agreement immediately and said termination shall

be deemed to be a termination for cause.

 

18.           Moral

Conduct.

 

Employee agrees to conduct himself

at all times with due regard to public conventions and morals and to abide by

and reflect in his personal actions all of the “core values” adopted by

Employer and its subsidiaries from time to time. Employee further agrees not to

do or commit any act that will reasonably tend to degrade him or to bring him

into public  hatred, contempt or

ridicule, or that will reasonably tend to shock or offend any community in

which Employer engages in business, or to prejudice Employer or the banking

industry in general.

 

19.           Termination

of Agreement.

 

(a)           Termination

for Cause.

 

Employer reserves the

right to terminate this Agreement “for cause”. Termination for cause shall

include termination because of Employee’s (i) personal dishonesty, (ii)

incompetence, (iii) willful misconduct, (iv) breach of fiduciary duty involving

personal profit, (v) material breach of any of the terms of this Agreement, (vi) substantial failure to perform assigned

duties, (vii) willful violation of any law, rule or regulation (other than

traffic violations or similar offenses) or final cease-and-desist order, or

(viii) the willful or permanent breach by Employee of any obligations owed to

Employer pursuant to this Agreement. In addition, Employer reserves the right

to terminate this Agreement “for

 

7

 

cause” in the event that

actions are effected by any regulatory agency having jurisdiction to remove or

suspend Employee from office, or upon the directive of any such regulatory

agency that Employer must remove Employee as its Chief Executive Officer,

regardless of whether such directive is given orally or in writing.

 

(b)           Statutory

Grounds for Termination.

 

Employee’s employment under this Agreement

shall terminate immediately upon the occurrence of any of the following events,

which events are described in sections 2920 and 2921 of the California Labor

Code:

 

(1)           The

occurrence of circumstances that make it impossible or impractical for  the business of Employer to

be continued.

 

(2)           The

death of Employee.

 

(3)           The

loss of Employee’s legal capacity. This does not affect Employee’s rights under

Section 10 of this Agreement.

 

(4)           The

loss by Employer of legal capacity to contract.

 

(5)           Subject to Section 10 of this Agreement, the continued incapacity on the

part of Employee under this Agreement,

unless waived by Employer.

 

(c)           Termination

for Bankruptcy.

 

This Agreement may be terminated immediately by either party at the

option of either party and without prejudice to any other remedy to which

either party may be entitled at law, in equity or under this Agreement if

either party:

 

(1)           Files

a petition in bankruptcy court or is adjudicated a bankrupt;

 

8

 

(2)           Institutes

or suffers to be instituted against it or him any procedure in bankruptcy court

for reorganization or rearrangement of his financial affairs;

 

(3)           Has

a receiver of his assets or property appointed because of insolvency; or

 

(4)           Makes a general

assignment for the benefit of creditors.

 

(d)           Automatic Termination

in the Event of Acquisition of Employer.

 

This Agreement shall automatically terminate upon the consummation of

any event by which substantially all of the stock and/or assets of Employer are

acquired by a person, a group of persons, a financial institution or other

entity, and if the acquiring entity within a one (1) year period from date of

acquisition no longer desires that the Executive remain or if the acquiring

entity substantially changes the title, 

salary or position of the Executive.

 

In the event that termination should occur, Employee shall receive an

acquisition payment (“Acquisition Payment”) in the amount equal to eighteen (18) months Base Salary at the then

current rate of compensation.

 

If termination occurs, the Employer will provide Executive benefit

continuation to include health, life and disability benefits during the

eighteen (18) month severance period.

 

In the event of any such acquisition of Employer and the consequent

automatic termination of this Agreement, no provision contained in this

Agreement should be construed to prevent Employee from negotiating a new

employment agreement with either Employer or the acquiror of Employer, should

the parties desire to do so.

 

9

 

It is mutually agreed by the parties that the

above-referenced Acquisition Payment shall be received by Employee in lieu of

any and all claims and/or damages which may be sustained by Employee due to the

acquisition of Employer and the termination of Employee’s employment and will

be accepted by Employee in full satisfaction of all such claims and damages.

 

20.           Severance Pay.

 

Upon early termination of this Agreement (i)

pursuant to Section 19(d) of this Agreement, (ii) by Employee for any reason,

(iii) by Employer “for cause” (pursuant to Section 19(a) of this Agreement), or

(iv) because of the death, incapacity or disability of Employee, Employee shall

not receive any Severance Payment of any sort or any bonus for the calendar

year in which termination is effected.

 

The parties acknowledge that it would be difficult to determine the

damages which Employee would suffer if his employment is terminated by Employer

without cause or on statutory grounds. Therefore it is agreed that if this

agreement is terminated early by Employer on any basis other than those listed

in the first paragraph of this Section 20, then Employee shall be entitled to

receive a cash payment (“Severance Payment”) in the amount equal to one year’s

Base Salary at the then current rate of compensation and benefit continuation

to include health, life and disability coverage for a period of one (1)

year.  It is mutually agreed by the

parties that the payment of the cash Severance Payment set forth above shall be

received by Employee in lieu of any and all claims and/or damages which may be

sustained by Employee by reason of his early termination and will be accepted

by Employee in full satisfaction of all such claims and damages and as payment

in full for all benefits received from Employee’s services. The parties

understand and agree under no circumstances would Employee be entitled to

receive both the Acquisition Payment described in Subsection (2) of Section 19

and the Severance Payment described in this Section 20.

 

10

 

21.           Notices.

 

Any notice to Employer required or permitted under this Agreement shall

be given in writing to Employer, either by personal service or by certified

mail, postage prepaid, addressed to the chairman of the Board of Directors of

Employer at its then principal place of business.  Any such notice to Employee shall be given in like manner and, if

mailed, shall be addressed to Employee at Employee’s home address then shown on

Employer’s files. For the purpose of determining compliance with any time limit

in this Agreement, a notice shall be deemed to have been duly given (a) on the

date of service, if personally served on the party to whom notice is to be

given, or (b) the fifth business day after mailing, if mailed to the party to whom

notice is to be given in the manner provided in this Section.

 

22.           Nonassignability.

 

Neither this Agreement nor any right or interest hereunder shall be

assignable by Employee, his beneficiaries or legal representatives without

Employer’s prior written consent; provided, however, that nothing in this

Section 22 shall preclude (i) Employee from designating a beneficiary to

receive any benefit payable hereunder upon his death, or (ii) the executors,

administrators, or other legal representatives of Employee or his estate from

assigning any rights hereunder to the person or persons entitled thereto.

 

23.           No Attachment.

 

Except as required

bylaw, no right to receive payments under this Agreement shall be subject to

anticipation, commutation, alienation, sale, assignment, encumbrance, charge,

pledge or hypo­thecation or to execution, attachment, levy or similar process

or assignment by operation of law, and any attempt, voluntary or involuntary,

to effect any such action shall be null, void and of no effect.

 

11

 

24.           Binding Effect.

 

This Agreement shall be binding upon, and inure to the benefit of,

Employee and Employer and their respective permitted successors and assigns.

 

25.           Modification and

Waiver.

 

(a)           Amendment of

Agreement.

 

This Agreement may not be modified or amended except by an instrument

in writing signed by the parties hereto.

 

(b)           Waiver.

 

No term or condition of this Agreement shall be deemed to have been

waived nor shall there be any estoppel against the enforcement of any provision

of this Agreement, except by written instrument of the party charged with such

waiver or estoppel. No such written waiver shall be deemed a continuing waiver

unless specifically stated therein, and each such waiver shall operate only as

to the specific term or condition for the future or as to any act other than

that specifically waived. No delay in exercising any rights shall be construed

as a waiver, nor shall a waiver on one occasion operate as a waiver of such right

on any future occasion.

 

26.           Entire Agreement.

 

This Agreement

supersedes any and all other agreements, either oral or in writing, between the

parties hereto with respect to the employment of Employee by Employer. This

Agreement contains all of the covenants and agreements between the parties with

respect to such employment in any manner whatsoever.  Each party to this Agreement acknowledges that no

representations, inducements, promises or agreements, orally or otherwise, have

been made by any party, or anyone acting on behalf of any party, which are not

embodied herein, and that no other agreement, statement or promise not

contained in this Agreement shall be valid and binding.

 

12

 

27.           Partial Invalidity.

 

If any provision in this Agreement is held by a court of competent jurisdiction to be

invalid, void or unenforceable, the remaining provisions shall nevertheless

continue in full force without being impaired or invalidated in any way.

 

28.           Governing Law.

 

This Agreement shall be governed by, and construed in accordance with,

the laws of the State of California.

 

29.           Injunctive Relief.

 

Employer and Employee acknowledge and agree that the services to be

performed under this Agreement are of a special, unique, unusual, extraordinary

and intellectual character which give them a peculiar value, the loss of which

cannot be reasonably or adequately compensated in damages in an action at law.

Employer and Employee therefore expressly agree that Employer and Employee, in

addition to any other rights or remedies which Employer and Employee may

possess, shall be entitled to injunctive and other equitable relief  to prevent a breach of  this

Agreement by Employee and Employer.

 

30.           Bank Regulatory

Agencies.

 

The obligations and rights of the parties hereunder are expressly

conditioned upon the approval or non-disapproval of (i) this Agreement and/or

(ii) Employee, in the event such approvals are required, by those banking

regulatory agencies which have jurisdiction over Employer or any of its

subsidiaries.

 

13

 

31.           Duplicate

Originals.

 

This Agreement may be executed simultaneously in one or more

counterparts, each of which shall be deemed an original, but all of which together

constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this

Agreement on the day and year first above written.

 

 

	

   

  	

  EMPLOYER:

  	

   

  	

  CAPITAL CORP OF THE WEST

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

  /s/

  	

  James W. Tolladay

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  James W. Tolladay

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  Chairperson of the Board

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  EMPLOYEE:

  	

   

  	

   

  	

  /s/

  	

  Thomas T. Hawker

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  Thomas T. Hawker

  	

   

  

 

14

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