Document:

Exhibit 10.6

 

EMPLOYMENT AGREEMENT

 

This Agreement
is entered into as of April 9, 1998 (the “Effective Date”), by and between
MOSAIC PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and JAMES
A. WELLS (the “Employee”).

 

1.             At-Will Employment.  Employee has left his prior employment and is
not otherwise employed as an employee or consultant. The Employee’s employment
with the Company is for an unspecified duration and constitutes “at-will”
employment. The Employee acknowledges that the employment relationship may be
terminated at any time, with or without good cause or for any or no cause, at
the option either of the Company or the Employee, with or without notice.
Employee will devote his full business time and attention to his employment with
the Company.

 

2.             Salary.  For all services to be rendered by the
Employee to the Company, the Company agrees to pay the Employee an annual
salary of $190,000 in accordance with the Company’s standard payroll policies.

 

3.             Benefits.  During the Employee’s employment with the
Company, the Employee shall be entitled to participate in employee benefit
plans or programs of the Company (“Benefit Plans”), if any, to the extent that
the Employee’s position, tenure, salary, age, health and other qualifications
make the Employee eligible to participate, subject to the rules and regulations
applicable thereto.

 

4.             Signing Bonus.  The Company will pay a $10,000 signing bonus
promptly following the execution of this Agreement.

 

5.             Termination of Employment

 

(a)           Voluntary Resignation/Termination
For Cause.  If the Employee
voluntarily resigns or is terminated by the Company for Cause (as defined
below), then:

 

(i)            no salary will be
paid for the periods following the date of termination;

 

(ii)           no benefits will be paid or provided
for the periods following the date of termination; and

 

(iii)          the number of shares exercisable under
the Employee’s outstanding options and warrants, if any, and the Company’s
right to repurchase the Employee’s outstanding Common Stock shall be measured
as of the date of termination.

 

(b)           Termination Without Cause or
Involuntarily Terminated. If the Employee is (i) terminated by the Company
without Cause (as defined below) or (ii) Involuntarily Terminated (as defined
below) on or before April 9, 1999, then:

 

1

 

(i)            the Employee’s annual salary will
continue to be paid in accordance with the Company’s standard payroll policies
until the earlier of (A) twelve months following the date of termination, or (B)
Employee’s acceptance of other full-time employment;

 

(ii)           the Employee will continue to receive
benefits pursuant to the Company’s Benefit Plans, provided that such Benefit
Plans permit continuation post-termination by payment of COBRA premiums, at the
Company’s expense until the earlier of (A) twelve months following the date of
termination, or (B) Employee’s acceptance of other full-time employment;

 

(iii)          (A) if termination pursuant to this
Section 5(b) is on or before April 1, 1999, the number of shares exercisable
under the Employee’s outstanding options and warrants, and the Company’s right
to repurchase the Employee’s outstanding Common Stock shall be measured as if
the termination occurred twenty-four (24) months from the actual date of
termination, and (B) if termination pursuant to this Section 5(b) occurs at any
time after April 1, 1999, and only if such termination is “without Cause” (the
parties agreeing that Involuntary Termination does not apply after April 1,
1999), the number of shares exercisable under the Employees outstanding options
and warrants, and the Company’s right to repurchase the Employee’s outstanding
Common Stock shall be measured as if the termination occurred twelve (12)
months from the actual date of termination.

 

(c)           As used in this
Agreement, “Cause” shall mean:

 

(i)            the Employee’s failure to
substantially perform the duties associated with the Employee’s position;

 

(ii)           the Employee’s personally engaging in
conduct that the Employee reasonably should know or that the Employee intends
to be seriously injurious to the Company, its affiliates or employees;

 

(iii)          a material and willful violation of a
federal or state law or regulation applicable to the business of the Company;

 

(iv)          the Employee’s being convicted of a
felony under the laws of the United States or any State, or the
misappropriation of material property belonging to, the Company or its
affiliates; or

 

(v)           the Employee knowingly and
intentionally breaching in any material respect the terms of the Employee’s
Proprietary Information Agreement.

 

(d)           As used in this
Agreement, “Involuntary Terminated” shall mean:

 

(i)            without the Employee’s consent, a
substantial reduction of the Employee’s responsibilities regarding the Company’s
research programs. The parties acknowledge that Employee is currently solely
responsible for the Company’s research programs and that the Company intends to
do significant additional hiring in this area. Accordingly, the parties agree
that any reduction shall be compared against this proposed hiring plan.

 

2

 

6.             Arbitration.  Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Palo Alto, California, in accordance
with the rules of the American Arbitration Association then in effect by an
arbitrator selected by both parties within 20 days after either party has
notified the other in writing that it desires a dispute between them to be
settled by arbitration. In the event the parties cannot agree on such
arbitrator within such 20-day period, each party shall select an arbitrator and
inform the other party in writing of such arbitrator’s name and address within
5 days after the end of such 20-day period and the two arbitrators so selected
shall select a third arbitrator within 15 days thereafter; provided,
however, that in the event of a failure by either party to select an
arbitrator and notify the other party of such selection within the time period
provided above, the arbitrator selected by the other party shall be the sole
arbitrator of the dispute. Each party shall pay its own expenses associated
with such arbitration, including the expense of any arbitrator selected by such
party and the Company will pay the expenses of the jointly selected arbitrator.
The decision of the arbitrator or a majority of the panel of arbitrators shall
be binding upon the parties and judgment in accordance with that decision may
be entered in any court having jurisdiction thereover. Punitive damages shall
not be awarded.

 

7.             Notices.  For purposes of this Agreement, notices and
other communications provided for in this Agreement shall be in writing and
shall be delivered personally or sent by United States certified mail, return
receipt requested, postage prepaid, to the address set forth on the signature
pages to this Agreement.

 

8.             Applicable Law.  This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
California without reference to choice or conflicts of law.

 

9.             Counterparts.  This Agreement may be executed in one or more
counterparts, none of which need contain the signature of more than one party
hereto, and each of which shall be deemed to be an original, and all of which
together shall constitute a single agreement.

 

3

 

IN WITNESS
WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year first above
written.

 

 

	
  “COMPANY”

  	
  “EMPLOYEE”

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  James A.
  Wells

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
  Address:

  	
  341 Columbus
  Avenue

  
	
   

  	
   

  	
  Burlingame,
  CA 94010

  
									

 

4Exhibit 10.7

 

Modified Employment Agreement

 

April 15, 2003

 

Daryl Winter

 

Dear Daryl:

 

In connection with the desire of Sunesis
Pharmaceuticals Incorporated (the “Company”) to realign certain reporting and
staffing relationships within the Company, and in recognition that changes in
your reporting relationships might trigger certain rights under your employment
agreement entered into with the Company on or about March 23, 2000, we have
discussed appropriate modifications to your employment agreement and have
agreed on the following modified agreement:

 

1.                                       Position.

 

a.                                       You
will continue to be employed as Senior Vice President & General Counsel of
the Company, working out of the Company’s offices in South San Francisco,
California. Instead of reporting directly to Chief Executive Officer Jim Young,
you will report directly to Chief Operating Officer Dan Swisher, effective as
of the date first written above. As General Counsel, you will continue to have
overall responsibility for the Company’s corporate legal functions, including
but not limited to, serving as Secretary of the Company’s Board of Directors
and Corporate Secretary. The Company agrees that the change in reporting does
not imply any change in your authority or in your independence, and that you
will continue to select and supervise outside and in-house counsel representing
the Company, as you have done since your hire.

 

b.                                      You
agree to the best of your ability and experience that you will at all times
loyally and conscientiously perform all of the duties and obligations required
of and from you pursuant to the express and implicit terms hereof. During the
term of your employment, you further agree that you will devote all of your
business time and attention to the business of the Company, the Company will be
entitled to all of the benefits and profits arising from or incident to all
such work services and advice, you will not render commercial or professional
services of any nature to any person or organization, whether or not for
compensation, without the prior written consent of the Company’s Board of
Directors, 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.
Nothing in this letter agreement will prevent you from accepting speaking or
presentation engagements in exchange for honoraria or from serving on boards of
charitable organizations or otherwise participating in civic, charitable or
fraternal organizations, or from owning no more than one percent (1%) of the
outstanding equity securities of a corporation whose stock is listed on a
national stock exchange. It is contemplated that you may serve on

 

 

boards of
directors of other, non-competitive companies, and the Sunesis Board of
Directors will not unreasonably withhold its consent from such participation.
Such participation shall not exceed the greater of six (6) days per year or
such number of days as is required for you to serve on the board of directors
of one such company.

 

c.                                       In
the event that any of the following events occur, your reporting responsibility
will change so that you report directly to the Company’s Chief Executive
Officer:

 

(i)                                     Any
of the following individuals cease holding their present positions, as listed
in this subparagraph: Jim Young, Chief Executive Officer; Dan Swisher, Chief
Operating Officer.

 

(ii)                                  The
Company reasonably anticipates entering into any form of agreement, including
but not limited to a binding or non-binding letter of intent, to engage in a
transaction that will, if completed, result in a Change of Control as defined
below.

 

(iii)                               You
notify the CEO that you have concluded that reporting to any position other
than the CEO is undermining your authority as General Counsel and the CEO
believes it to be in the best interests of the Company that you report directly
to the CEO.

 

2.                                       Compensation.

 

a.                                       Base
Salary. You will be paid an annual salary that combines salary and the
guaranteed bonus set forth in your original employment agreement, of not less
than $251,000 (“base salary”) payable in two equal payments per month pursuant
to the Company’s regular payroll policy (or in the same manner as other
officers of the Company). Your base salary will be reviewed annually for
adjustment based on cost of living and merit, at the discretion of the Board of
Directors, but will not be reduced.

 

b.                                      Bonus. You will be eligible to earn
incentive bonuses based on achievement of objectives and in accordance with the
Company’s executive bonus programs.

 

5.                                      Stock
options.

 

a.                                       Initial
Option Grant. In connection with the commencement of your employment
the Company granted you an option to purchase 300,000 shares of the Company’s
Common Stock (“Shares”). You and the Company agree that the grant and any
previous exercise of options by you are governed by the option agreement,
option grant, any purchase agreement and other documentation relating to such
grant, exercise and/or purchase, and that all such documents remain in full
force and effect according to their terms.

 

b.                                      Subsequent Option Grants. You have
received an additional stock option grant of 120,000 shares, and such grant
will continue to governed by its documentation. You will be eligible to
participate in any stock option or other incentive programs available to
officers or employees of the Company.

 

2

 

6.                                       Benefits.

 

a.                                       Insurance Benefits. The Company will provide you with
standard medical and dental insurance benefits. In addition, the Company
currently indemnifies all officers and directors to the maximum extent
permitted by law, and you will be requested to enter into the Company’s
standard form of Indemnification Agreement giving you such protection. Pursuant
to the Indemnification Agreement, the Company will agree to advance any
expenses for which indemnification is available to the extent allowed by
applicable law.

 

b.                                      Vacation. You will be entitled to
three weeks paid vacation per year, pro-rated for the remainder of this
calendar year.

 

c.                                       Housing Expense. The Company has
provided you a loan in the amount of $100,000 that is governed by its own
documentation. You and the Company agree that the terms of the loan
documentation continue in full force and effect.

 

d.                                      Professional Requirements. The
Company will pay the costs of your State Bar dues, your required Continuing
Legal Education courses and those professional education programs reasonably
necessary for the performance of you duties as the Company’s chief legal
officer. Your participation in such programs will be considered work time and
the travel expenses associated with attendance at such conferences will be paid
according to the Company’s expense reimbursement policies.

 

e.                                       Reimbursement of Legal Expenses.
The Company will reimburse you the reasonable attorney’s fees and expenses you
incur in obtaining legal advice and in the negotiating and drafting of this
Modified Agreement, in an amount not to exceed three thousand dollars ($3,000.)

 

7.                                       Confidential Information And Invention Assignment
Agreement.  You
acknowledge that you have previously executed and delivered to an officer of
the company, the company’s confidential information and invention assignment
agreement, (the “confidentiality agreement”),and that the confidentiality
agreement remains in full force and effect.

 

8.                                       Confidentiality of Terms. You agree
to follow the company’s strict policy that employees must not disclose, either
directly or indirectly, any information, including any of the terms of this
agreement, regarding salary, bonuses, or stock purchase or option allocations
to any person, including other employees of the company; provided, however,
that you may discuss such terms with members of your immediate family and any
legal, tax or accounting specialists who provide you with individual legal, tax
or accounting advice, and you may discuss it with other employees of the
company on a need to know basis if required to carry out your duties as the
company’s chief legal officer or at the request of the board of directors or
any superior officer of the company.

 

9.                                       At-Will Employment. Your employment
with the Company will be on an “at-will” basis, meaning that either you or the
Company may terminate your employment at any time for any reason or no reason,
without further obligation or liability. In addition, if you are terminated by
the Company without “cause,” as defined below, then:

 

3

 

(i)                                     your
annual base salary will continue to be paid in accordance with the Company’s
standard payroll policies until the earlier of (A) twelve (12) months following
the date of termination (nine (9) months following the date of termination if
termination is more than six (6) months following the date first written
above), or (B) your acceptance of other full-time employment at an equal or
greater base salary. If you obtain full time employment at an annualized base
salary less than the annualized base salary you were entitled to at the
Company, then the Company will pay you the difference in monthly base salary on
a monthly basis until the end of the Company’s severance pay obligation. You
shall have no obligation to obtain other employment during the severance
payment period;

 

(ii)                                  you
will continue to receive benefits pursuant to the Company’s Benefit Plans,
provided that such Benefit Plans permit continuation post-termination by
payment of State or Federal COBRA premiums, at the Company’s expense until the
earlier of (A) twelve (12)months following the date of termination (nine (9)
months following the date of termination if termination is more than six (6)
months following the date first written above), or (B) you are no longer
eligible for State or Federal COBRA;

 

(iii)                               the
number of shares exercisable under your outstanding options shall be measured
as if the termination occurred twelve (12) months after the actual date of
termination; and

 

(iv)                              you
shall be entitled to the benefits described in subparagraphs (i), (ii) and (iii)
above if you terminate employment on or before the expiration of 12 months from
your start date, or within the first six (6) months after the date first
written above, because of Effective Termination. Effective Termination shall
mean: (A) without your express written consent, a significant reduction of your
duties, position or responsibilities; or (B) without your express written
consent, a substantial reduction of the facilities and perquisites (including
office space and location); or (C) a material reduction by the Company of your
base salary; or (D) a reduction by the Company in the kind or level of your
benefits to which you are entitled with the result that your overall benefits
package is significantly reduced; or (E) without your express written consent,
the relocation of you to a facility or location more than one-hundred (100)
miles from the Company’s current facility; or (F) if you are required by the
rules of professional responsibility of your profession to resign as the
Company’s attorney because of acts or omissions of the Company, its
affiliate(s) or any of their employees, agents or Boards of Directors; or (G) failure
by the Company to comply with paragraph 1(c) of this Modified Agreement or any
of its subparts; or (H) any other material breach by the Company of this
Modified Agreement or any other written agreement between the Company and you.

 

(v)                                 if,
upon a change of control (as defined below) of the Company or at anytime within
twelve (12) months following such change of control, you are terminated by the
Company without cause or are Effectively Terminated, then upon such
termination, vesting of the unvested portion of any stock option held by you or
the Company’s right to repurchase stock under your stock purchase agreement(s)
shall automatically be accelerated (or in the case of the right of repurchase,
shall lapse) so that such options or shares, as applicable, shall become
completely vested. In addition, if you are still providing services to the
Company on the one-year anniversary following the change of control, the
unvested portion of any stock option held by you or the Company’s right to
repurchase stock under your stock purchase agreement(s) shall

 

4

 

automatically
be accelerated (or in the case of the right of repurchase, shall lapse) so that
such options shall become completely vested. For the purposes of this Section 9(v),
“Change of Control” shall mean a merger or reorganization of the Company with
or into any other corporation or corporations, or a sale of all or
substantially all of the assets of the corporation, or a sale of securities of
the Company, in which transaction the Company’s stockholders immediately prior
to such transaction own immediately after such transaction less than 50% of the
equity securities of the surviving corporation or its parent. Notwithstanding
the foregoing, if it is determined by the Company’s independent public
accountants that such accelerated vesting would preclude accounting for the
change of control as a pooling of interests for financial accounting purposes,
and it is a condition to the closing of the change of control that the
transaction be accounted for as a pooling of interests, then the accelerated
vesting shall not occur pursuant to this section (v) but shall be accelerated
at the earliest time which will not preclude accounting as a pooling of
interests.

 

10.                                 Definition of “Cause.”

 

“Cause” to terminate your employment is
defined as follows:

 

(A)                              your
deliberate refusal to substantially perform the duties associated with your
position;

 

(B)                                your
personally engaging in conduct that you intend to be seriously injurious to the
Company, its affiliates or employees;

 

(C)                                your
knowing violation of a federal or state law or regulation applicable to the
business of the Company

 

(D)                               your
being convicted of a felony under the laws of the United States or any State,
or the misappropriation of material property belong to, the Company or its
affiliates; or

 

(E)                                 your
knowingly and intentionally breaching in any material respect the terms of your
Proprietary Information Agreement.

 

11.                                 Definition of “Disability.”

 

“Disability” means a mental or physical
impairment, which in the good faith judgment of the Board of Directors of the
Company, prevents you from performing the responsibilities and duties of your
position to their satisfaction for a period of forty-five (45) consecutive days
or ninety (90) days during any twelve-month period.

 

Your stock option agreements and/or stock
purchase agreements will reflect the vesting acceleration and change of control
provisions recited in this Agreement, but if they do not so state, then the
teens of this agreement will prevail.

 

To indicate your acceptance of this modified
agreement, please sign and date this letter in the space provided below and
return it to me. This letter, together with the Confidentiality Agreement, your
stock option agreements and grants, stock purchase agreement, and loan

 

5

 

agreement, set
forth the terms of your employment with the Company and supersede any prior
representations or agreements, whether written or oral. This letter may not be
modified or amended except by a written agreement, signed by the Company and by
you.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  SUNESIS
  PHARMACEUTICALS INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AGREED AND
  ACCEPTED:

  
	
   

  	
   

  
	
   

  	
  DARYL WINTER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date

  
					

 

6

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