Document:

tcon-ex106_550.htm

Exhibit 10.6

 

TRACON PHARMACEUTICALS, INC.

BONUS PLAN

 

 

The TRACON Pharmaceuticals, Inc. (“TRACON” or the “Company”) Bonus Plan (the “Plan”) is designed to reward eligible employees for the achievement of corporate objectives, as well as measured individual objectives that are consistent with and support the overall corporate objectives.

 

ELIGIBILITY

 

All regular employees are eligible to participate in the Plan.  In order to be eligible, a participant must have been in an eligible position for at least three (3) full months prior to the end of the Plan year, and the participant must remain continuously employed through the end of the Plan year and until awards are paid.  The Plan year is January 1 through December 31.  If the participant is not continuously employed through the date awards are paid, the participant will not have earned any bonus.  If the participant has been subject to any performance improvement plan or other disciplinary procedure during the Plan year, any award to such individual will be at the discretion of the President/CEO or the Compensation Committee of the Board of Directors (the “Compensation Committee”), and may be reduced or withheld regardless of corporate performance as outlined below. 

 

Change in Status During the Plan Period:

 

	
a.
	
Participants hired during the Plan year:

	
•
	
Participants hired during the Plan year are eligible for a prorated award based on the number of calendar days employed in an eligible position.

	
•
	
Participants hired during the months of October through December are not eligible to participate for the Plan year. 

	
•
	
If an employee has worked in a temporary or consulting capacity for TRACON, this time will NOT impact the eligibility start date which is the date of hire.  Only as an exception and with approval by the Compensation Committee or the Board of Directors will time worked as a consultant be considered when determining the bonus award proration for an employee.

	
b.
	
Promotion/change in level: 

	
•
	
Participants promoted during the Plan year with a change to bonus target and/or bonus corporate and individual performance factor percentages are eligible for an award that will be prorated based on the number of calendar days employed in each eligible position.

	
c.
	
Termination of employment: 

	
•
	
If a participant’s employment is terminated voluntarily prior to the date awards are paid, the participant will not be eligible to receive an award. 

	
•
	
If a participant’s employment is terminated involuntarily prior to the date awards are paid, it will be at the absolute discretion of the Company whether or not an award payment is made to such terminated participant.

	
d.
	
Leave of absence:  

	
•
	
Bonus award will be prorated to reflect the calendar days on a leave of absence that exceed 60 calendar days in the Plan year.

 

AWARD CALCULATION

 

Awards will be determined by applying a “bonus percentage” to the participant’s base salary that is in effect at the end of the Plan year, regardless if the salary has changed at any point during the calendar year. 

 

The President/CEO will present to the Compensation Committee/Board of Directors a list of the overall corporate objectives for the applicable Plan year, which are subject to approval by the Compensation Committee/Board of 

 

 

Directors.  All participants in the Plan whose performance is measured in part based on individual performance factors will then develop a list of key individual objectives, which must be approved by the responsible Vice President, Senior Vice President, Chief Officer, or President/CEO.

 

The relative weight between “corporate and individual performance factors” varies based on the individual’s assigned level within the organization.  The bonus percentage and/or the weighting may be reviewed periodically and may be adjusted for any Plan year by the Compensation Committee.  The Compensation Committee will use the weighting between the corporate and individual performance factors in effect at the end of the Plan year in making its bonus determination. The bonus percentages and weighting for the performance factors will initially be as follows:

 

						
	
Level/Position
	
 
	
 

	
 
	
 
	
 
	
Individual Factors

	
 
	
Bonus Percentage 
	
Corporate Factor
	
Core Competency
	
Individual Goal Achievement

	
President and CEO
	
50%
	
100%
	
 
	
 

	
Chief Officer
	
40%
	
100%
	
 
	
 

	
Executive Vice President
	
40%
	
100%
	
 
	
 

	
Senior Vice President
	
35%
	
100%
	
 
	
 

	
Vice President
	
30%
	
60%
	
16%
	
24%

	
Executive/Senior Director
	
25%
	
50%
	
20%
	
30%

	
Director
	
20%
	
40%
	
24%
	
36%

	
Associate Director
	
20%
	
40%
	
24%
	
36%

	
Senior Manager II, I
	
20%
	
25%
	
30%
	
45%

	
Manager II, I
	
20%
	
25%
	
30%
	
45%

	
Individual Contributor II, I
	
20%
	
25%
	
30%
	
45%

	
Support
	
20%
	
25%
	
30%
	
45%

 

Performance Award Multiplier

 

Separate award multipliers will be established for both the corporate and the individual components of each award.  The award multiplier for the corporate component will be determined by the Compensation Committee/Board of Directors each Plan year, in its sole discretion, based on the achievement of the approved corporate objectives for the Plan year.  The same award multiplier for the corporate component of the award shall be used for all such Plan participants.  

 

The award multiplier for the individual component shall be approved by the responsible Chief Officer or President/CEO and consists of the Core Competency Assessment and the achievement of Individual goals, each weighted 40% and 60%, respectively.

 

2

 

The ratings used for the Annual Performance Core Competency Assessment is as follows: 

 

5 = Exceptional; Far exceeds all goals and objectives on a consistent basis

4 = Exceeds; Consistently exceeds goals and objectives

3 = Meets; Consistently meets goals and objectives

2 = Marginal; Met some goals and objectives but requires improvement

          1 = Unsatisfactory

 

		
	
Numerical Rating Scale
	
Multiplier for Core Competency Individual Performance

	
5
	
120.00%

	
4.9
	
118.37%

	
4.8
	
116.70%

	
4.7
	
115.03%

	
4.6
	
113.36%

	
4.5
	
111.69%

	
4.4
	
110.02%

	
4.3
	
108.35%

	
4.2
	
106.68%

	
4.1
	
105.01%

	
4
	
103.34%

	
3.9
	
101.67%

	
3.8
	
100.00%

	
3.7
	
97.50%

	
3.6
	
95.00%

	
3.5
	
92.50%

	
3.4
	
90.00%

	
3.3
	
87.50%

	
3.2
	
85.00%

	
3.1
	
82.50%

	
3
	
80.00%

	
2.9
	
72.00%

	
2.8
	
64.00%

	
2.7
	
56.00%

	
2.6
	
48.00%

	
2.5
	
40.00%

	
2.4
	
32.00%

	
2.3
	
24.00%

	
2.2
	
16.00%

	
2.1
	
8.00%

	
2
	
0.00%

3

 

 

 

 

For Executives (Vice President level and above):  The actual performance bonus awarded in any year, if any, may be more or less than the applicable target, depending primarily on the Compensation Committee’s determination of the award multiplier for the corporate component and the executive’s individual performance with respect to the corporate objectives. Whether or not a performance bonus is paid for any year is within the discretion of the Compensation Committee/Board of Directors based on such achievement.  

 

Example:

 

Step # 1:    Potential bonus award calculation

Position:Manager

Base salary at end of calendar year:              $100,000

Target bonus percentage:       20%

Potential base bonus:             $ 20,000

 

Step # 2:    Split award target amount based on weighting of performance factors

Potential corporate performance bonus (25%):$ 5,000

Target individual performance bonus (75%):

       Core Competency (40% of 75%, or 30%)                $6,000

       Personal Goal Achievement (60% of 75%, or 45%)   $9,000

           $ 20,000

Step # 2:   Actual bonus award calculation

Payment multipliers are determined and approved based on assessment of corporate and individual

performance, for example:

 

Corporate multiplier                        75.0%   

Core Competency Assessment multiplier         116.7% - performance assessed at 4.8

Personal Goal Objective Performance                85.0%   

 

Corporate component                         $    3,750   ($5,000 x 75.0%)

Individual component:

        Core Competency Assessment                     $    7,002   ($6,000 x 116.7%)

                               Individual Goals Achieved                         $    7,650   ($9,000 x 85.0%)

Total Award                                       $  18,402

 

AWARD PAYMENTS

 

Bonus award payments may be made in cash, through the issuance of stock, stock options or another form of equity award, or by a combination of cash, stock, stock options and/or another form of equity award, at the discretion of the Compensation Committee.  All bonus award payments are subject to applicable tax withholdings.  In the event that the Compensation Committee and/or the Board of Directors elect to pay bonus awards in stock or stock options, the Compensation Committee, in its sole discretion, will make a determination as to the number of shares of stock or stock options to be issued to each Plan participant based, in part, upon the overall corporate performance and each participant’s individual performance, as described.  The issuance of stock and stock options may also be subject to the approval of the Company’s stockholders, and any stock options issued will be subject to the terms and conditions of the Company’s equity incentive award plan, as amended from time to time by the Company.

 

Payment of bonus awards will be made as soon as practicable after the Company’s year-end, but not later than December 31 of the year following the Plan year.   Payments will not be impacted by any benefits, with the exception of elected 401(k) contributions which will be applied. 

 

4

 

PLAN PROVISIONS

 

Governance

 

The Plan will be governed by the Compensation Committee.  The President and/or CEO of TRACON will be responsible for the administration of the Plan.  The Compensation Committee will be responsible for recommending to the Board of Directors a bonus amount for the President and/or CEO.  Additionally, the Compensation Committee will be responsible for approving any compensation or incentive awards to other executive officers of the Company and all other officers who are subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended.  All determinations of the Compensation Committee, under the Plan, shall be final and binding on all Plan participants.

 

Compensation Committee’s Absolute Right to Alter or Abolish the Plan

 

The Compensation Committee reserves the right in its absolute discretion to terminate the Plan, or any portion of the Plan, at any time or to alter the terms and conditions under which a bonus will be paid. In the event of the Plan’s termination prior to the payment of a bonus, such bonus will not be payable under this Plan. Such discretion may be exercised any time before, during, and after the Plan year is completed. No participant shall have any vested right to receive any compensation hereunder until actual delivery of such compensation.  Participation in the Plan at any given time does not guarantee ongoing participation.

 

Employment Duration/Employment Relationship

 

This Plan does not, and TRACON’s policies and practices in administering this Plan do not, constitute an express or implied contract or other agreement concerning the duration of any participant’s employment with the Company.  The employment relationship of each participant is “at will” and may be terminated at any time by TRACON or by the participant, with or without cause.

 

 

 

 

 

 

5tcon-ex108_552.htm

Exhibit 10.8

TRACON PHARMACEUTICALS, INC.

EMPLOYMENT AGREEMENT

For

MARK WIGGINS

This Employment Agreement (the “Agreement”) is made and entered into effective as of January 27, 2021 (the “Effective Date”), by and between TRACON Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Mark Wiggins (the “Executive”).  The Company and Executive are hereinafter collectively referred to as the “Parties”, and individually referred to as a “Party”.  From and following the Effective Date, this Agreement shall replace and supersede that certain Amended and Restated Employment Agreement between Executive and Company entered into as of May 28, 2018 (the “Prior Agreement”). Certain capitalized terms used in this Agreement are defined in Section 11.

Recitals

Whereas, the Company desires to employ Executive to provide personal services to the Company in that capacity, and wishes to provide Executive with certain compensation and benefits in return for such services, and Executive wishes to be so employed and to receive such benefits; and 

Whereas, the Company and Executive wish to enter into this Agreement to define their mutual rights and duties with respect to Executive’s compensation and benefits; 

Now, Therefore, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the Parties, intending to be legally bound, agree as follows: 

Agreement

1.Employment by the Company.

1.1Position.  Executive shall serve as the Company’s Chief Business Officer.  During the term of Executive’s employment with the Company, Executive will devote Executive’s best efforts and substantially all of Executive’s business time and attention to the business of the Company, except as permitted in Section 10 below, and except for approved vacation periods and reasonable periods of illness or other incapacities permitted by the Company’s general employment policies.  

1.2Duties and Location.  Executive shall report to the Company’s Chief Executive Officer (the “CEO”), and shall have such duties and responsibilities as are customary for the position of Chief Business Officer.  Executive’s primary office location shall be the Company’s San Diego, California office.  The Company reserves the right to reasonably require Executive to perform Executive’s duties at places other than Executive’s primary office location from time to time, and to require reasonable business travel.

1.

 

1.3Policies and Procedures.  The employment relationship between the Parties shall be governed by the general employment policies and practices of the Company, except that when the terms of this Agreement differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control.

2.Compensation.

2.1Salary.  Executive shall receive a base salary at the rate of $375,733 per year, subject to standard payroll deductions and withholdings and payable in accordance with the Company’s regular payroll schedule.  

2.2Bonus.  Executive will be eligible for an annual discretionary bonus of up to forty-percent (40%) of Executive’s base salary in effect during the bonus year (the “Annual Bonus”).  Whether Executive receives an Annual Bonus for any given year, and the amount of any such Annual Bonus, will be determined by the Company’s Board of Directors (the “Board”) (or the Compensation Committee thereof) in its sole discretion, based upon the Company’s and Executive’s achievement of objectives and milestones to be determined on an annual basis by the Board (or the Compensation Committee thereof).  No Annual Bonus amount is guaranteed and, in addition to the other conditions for earning such Annual Bonus, Executive must remain an employee in good standing of the Company on the scheduled Annual Bonus payment date in order to earn any Annual Bonus.   

3.Standard Company Benefits.  Executive shall be entitled to participate in all employee benefit programs for which Executive is eligible under the terms and conditions of the benefit plans that may be in effect from time to time and provided by the Company to its employees.  The Company reserves the right to cancel or change the benefit plans or programs it offers to its employees at any time. Executive will be included as an insured under the Company’s D&O insurance policy to the same extent as other executive officers of the Company.

4.Vacation.  Executive shall be entitled to accrue vacation at the rate of four (4) weeks per year (maximum vacation accrual caps will be in accordance with the Company’s vacation policy).

5.Expenses.  The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in furtherance or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time. 

6.Equity.  

6.1Prior Awards.  Any stock, stock options, or other equity awards that Executive has already been granted by the Company shall continue to be governed in all respects by the terms of the applicable grant agreements, grant notices, and plan documents, except as otherwise provided in this agreement.  

6.2Additional Awards.  The Board (or the Compensation Committee thereof) may grant additional stock, stock options, or other equity awards to Executive in its sole discretion.

2.

 

7.Termination of Employment.

7.1At-Will Employment.  Executive’s employment relationship is at-will.  Either Executive or the Company may terminate the employment relationship at any time, with or without cause or advance notice.  

7.2Termination Benefits.  In the event that Executive’s employment terminates for any reason, including due to Executive’s death or disability, no further payments shall be due under this Agreement, except that Executive shall be entitled to any amounts earned, accrued or owing but not yet paid under Section 2 above, any benefits accrued or earned under the Company’s benefit plans and programs or to which Executive is otherwise entitled under applicable law, and any outstanding equity awards vested as of the termination date, which awards must be exercised within 90 days of the termination date or the earlier expiration of such equity award, whichever occurs first.  Executive may also be eligible for other post-employment payments and benefits pursuant to the terms and conditions of that certain June 2, 2014 TRACON Pharmaceuticals, Inc. Severance Plan (the “Severance Plan”), and the Severance Agreement entered into by and between Executive and the Company concurrently with this Agreement (the “Severance Agreement”).  

8.Section 409A.  It is intended that all of the benefits and other payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A.    

9.Proprietary Information Obligations.

9.1Confidential Information Agreement.  As a condition of employment, and in consideration for the benefits provided for in this Agreement and the Severance Agreement, Executive shall sign and comply with the Company’s Employee Proprietary Information and Inventions Agreement (the “Confidential Information Agreement”).

9.2Third-Party Agreements and Information.  Executive represents and warrants that Executive’s employment by the Company does not conflict with any prior employment or consulting agreement or other agreement with any third party, and that Executive will perform Executive’s duties to the Company without violating any such agreement.  Executive represents and warrants that Executive does not possess confidential information arising out of prior employment, consulting, or other third party relationships, that would be used in connection with Executive’s employment by the Company, except as expressly authorized by that third party.  During Executive’s employment by the Company, Executive will use in the performance of Executive’s duties only information which is generally known and used by persons with training and experience comparable to Executive’s own, common knowledge in the industry, otherwise legally in the public domain, or obtained or developed by the Company or by Executive in the course of Executive’s work for the Company.  

10.Outside Activities During Employment; Non-Competition.

3.

 

10.1Outside Activities.  During Executive’s employment with the Company, Executive may engage in civic and not-for-profit activities so long as such activities do not interfere with the performance of Executive’s duties hereunder or present a conflict of interest with the Company.  Subject to the restrictions set forth herein and in the Confidential Information Agreement, and only with prior written disclosure to and consent of the Board, Executive may engage in other types of business or public activities.  The Board may rescind such consent if the Board determines, in its reasonable discretion, that such activities compromise or threaten to compromise the Company’s business interests or conflict with Executive’s duties to the Company.  Notwithstanding the foregoing, and so long as such activities (individually or in the aggregate) do not present a time commitment which conflicts with Executive’s duties to the Company, (i) Executive shall be permitted to continue his current Board of Director roles with Zogenix, Inc. and SelectION, Inc.; (ii) Executive may continue activities with a maximum of two clients at any one time through his pre-existing consulting business (BioPharma Business Development, LLC) at times other than usual business hours, and (iii) Executive may manage his personal investments. 

10.2Non-Competition During Employment.  During Executive’s employment with the Company, Executive will not, without the prior written consent of the Board, directly or indirectly serve as an officer, director, stockholder, employee, partner, proprietor, investor, joint venturer, associate, representative or consultant of any person or entity engaged in, or planning or preparing to engage in, business activity competitive with any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that Executive may purchase or otherwise acquire up to (but not more than) one percent (1%) of any class of securities of any enterprise (without participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange

11.Dispute Resolution.  To ensure the rapid and economical resolution of disputes that may arise in connection with Executive’s employment and services for the Company, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, Executive’s employment with and services for the Company, or the termination of Executive’s employment with and services for the Company, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §§1-16, and to the fullest extent permitted by law, by final, binding and confidential arbitration conducted in San Diego, California (or such other location as mutually agreed by the parties) by JAMS, Inc. (“JAMS”) or its successors by a single arbitrator.  Both Executive and the Company acknowledge that by agreeing to this arbitration procedure, they each waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding.  Any such arbitration proceeding will be governed by JAMS’ then applicable rules and procedures for employment disputes, which can be found at http://www.jamsadr.com/rules-clauses/ and which will be provided to Executive upon request.  In any such proceeding, the arbitrator shall (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award.  Executive and the Company each shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law.  Nothing in this Agreement is intended to prevent either the Company or Executive from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration pursuant to applicable law.  The Company shall pay all filing fees in excess of 

4.

 

those that would be required if the dispute were decided in a court of law, and shall pay the arbitrator’s fees and any other fees or costs unique to arbitration.  Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

12.General Provisions.

12.1Notices.  Any notices provided must be in writing and will be deemed effective upon the earlier of personal delivery (including personal delivery by fax) or the next day after sending by overnight carrier, to the Company at its primary office location and to Executive at the address as listed on the Company payroll.

12.2Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keeping with the intent of the parties.

12.3Waiver.  Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

12.4Complete Agreement.  This Agreement, together with the Severance Plan, the Severance Agreement, and the Confidential Information Agreement, constitutes the entire agreement between Executive and the Company with regard to this subject matter and is the complete, final, and exclusive embodiment of the Parties’ agreement with regard to this subject matter.  This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations.  It cannot be modified or amended except in a writing signed by a duly authorized officer of the Company and Executive.

12.5Counterparts.  This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.

12.6Headings.  The headings of the paragraphs hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

12.7Successors and Assigns.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executive’s duties hereunder and Executive may not assign any of Executive’s rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.

12.8Tax Withholding.All payments and awards contemplated or made pursuant to this Agreement will be subject to withholdings of applicable taxes in compliance with 

5.

 

all relevant laws and regulations of all appropriate government authorities.  Executive acknowledges and agrees that the Company has neither made any assurances nor any guarantees concerning the tax treatment of any payments or awards contemplated by or made pursuant to this Agreement.  Executive has had the opportunity to retain a tax and financial advisor and fully understands the tax and economic consequences of all payments and awards made pursuant to the Agreement.

12.9Choice of Law.  All questions concerning the construction, validity and interpretation of this Agreement will be governed by the laws of the State of California.  

In Witness Whereof, the Parties have executed this Agreement on the day and year first written above.

TRACON Pharmaceuticals, Inc.

By: /s/ Charles P. Theuer, M.D., Ph.D.

		
	
Charles P. Theuer, M.D., Ph.D.

	
 
	
Chief Executive Officer

 

 

Executive

/s/ Mark Wiggins

Mark Wiggins 

6.

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