Document:

Employment Agreement - Hideki Garren

 Exhibit 10.9* 
 EMPLOYMENT AGREEMENT 
 This Employment Agreement is made and entered into by and between Tolerion,
Inc. (the “Company”) and Hideki Garren (the “Employee”), as of April 16, 2002. 
 1. Position and Duties.
Employee will be employed by the Company as its Director of Molecular Biology, reporting to the Chief Executive Officer or Vice President of Research. Employee accepts employment with the Company on the terms and conditions set forth in this
Agreement, and Employee agrees to devote Employee’s full business time, energy and skill to Employee’s duties at the Company. These duties will include, but not be limited to, those duties normally performed by a Director of Molecular
Biology, as well as any other reasonable duties that may be assigned to Employee from time to time by the Chief Executive Officer or Vice President of Research. 
 2. Term of Employment. Employee’s employment with the Company will start on April 24, 2002, will be for no specified term, and may be terminated by Employee or the Company at any time, with or without
cause, subject to the provisions of Paragraphs 4 and 5 below. 
 3. Compensation. Employee will be compensated by the Company for
Employee’s services as follows: 
 (a) Salary: Employee will be paid a monthly salary of $ 13,333 ($160,000 on an annualized
basis), less applicable withholding, in accordance with the Company’s normal payroll procedures. Employee’s salary will be reviewed by the Company’s Board of Directors (the “Board”) from time to time (but no more frequently
than annually), and may be subject to adjustment based upon various factors including, but not limited to, Employee’s performance and the Company’s profitability. Any adjustment to Employee’s salary shall be in the sole discretion of
the Board. 
 (b) Bonus. The Company does not currently have a bonus plan, and there are no plans to adopt one in the foreseeable
future. However, in the event a performance-based management bonus plan is adopted by the Company for key management and personnel, Employee will be eligible to participate in such a plan. 
 (c) Benefits: Employee will have the right, on the same basis as other employees of the Company, to participate in and to receive benefits under
any Company medical, disability or other group insurance plans, any 401(k) plan, as well as under the Company’s business expense reimbursement and other policies. Employee will accrue paid vacation in accordance with the Company’s
vacation policy applicable to all employees. Such vacation plan shall be established in the near future. 
 (d) Stock Options: Subject
to the Board’s approval, Employee will be granted an option to purchase 100,000 shares of the Company’s common stock under the Company’s stock option plan at an exercise price equal to the fair market value of that stock on the grant
date. Provided Employee remains employed by the Company, this option will vest over a five-year period, with 20% of the shares vesting on the first anniversary of the commencement of Employee’s 
  

	*	The Registrant is re-filing Exhibit 10.9 to the Registrant’s Form S-1/A originally filed on February 21, 2008 to include all exhibits, schedules and appendices to this
agreement. The Registrant has made no other changes to the previously filed agreement. 

  

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employment and l/60th of the shares vesting on the first day of each full month thereafter. Employee’s option will be governed by and subject to the
terms and conditions of the Company’s standard form of stock option agreement (which Employee will be required to sign in connection with the issuance of Employee’s option). 
 4. Voluntary Termination. In the event that Employee voluntarily resigns from Employee’s employment with the Company, or in the event that
Employee’s employment terminates as a result of Employee’s death or disability (meaning that Employee is unable to perform Employee’s duties for any 90 days in any one-year period as a result of a physical and/or mental impairment),
Employee will be entitled to no compensation or benefits from the Company other than those earned under Paragraph 3 through the date of Employee’s termination. Employee agrees that if Employee voluntarily terminates Employee’s employment
with the Company for any reason, Employee will provide the Company with 30 days’ written notice of Employee’s resignation. The Company may, in its sole discretion, elect to waive all or any part of such notice period and accept
Employee’s resignation at an earlier date. 
 5. Other Termination. Employee’s employment may be terminated under the
circumstances set forth below. 
 (a) Termination for Cause: If Employee’s employment is terminated by the Company for
“Cause” as defined below, Employee shall be entitled to no compensation or benefits from the Company other than those earned under Paragraph 3 through the date of Employee’s termination for Cause. 
 For purposes of this Agreement, a termination for “Cause” occurs if Employee is terminated for any of the following reasons: (i) theft,
dishonesty, or intentional falsification of any employment or Company records; (ii) failure or inability to perform any assigned duties reasonably expected of an employee in the Employee’s position after written notice from the Company to
the Employee of, and a reasonable opportunity to cure, such failure or inability; (iii) the Employee’s conviction (including any plea of guilty or nolo contendre) for any criminal act which impairs his ability to perform his duties as an
employee of the Company or for any felony; or (iv) theft or other misappropriation of the Company’s proprietary information. 
 (b)
Termination Without Cause: If Employee’s employment is terminated by the Company without Cause (and not as a result of Employee’s death or disability), and if Employee signs a general release of known and unknown claims in form
satisfactory to the Company, Employee will receive severance payments at Employee’s final base salary rate, less applicable withholding, until the earlier of (i) three months after the date of Employee’s termination without Cause, or
(ii) the date on which Employee first commences other employment. Severance payments will be made in accordance with the Company’s normal payroll procedures. During the period in which Employee is receiving severance payments, the Company
will pay the premiums to continue Employee’s group health insurance coverage under COBRA. 
 6. Other Employment. During his
employment, Employee shall diligently and conscientiously devote all of his working time and attention to discharging his duties to the Company and shall not, without the express prior written consent of the Company, render to any 

  

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other person, corporation, partnership, firm, company, joint venture or other entity any services of any kind for compensation or engage in any other
activity that would in any manner interfere with the performance of the Employee’s duties on behalf of the Company. The foregoing notwithstanding, the Company hereby consents to Employee’s current moonlighting activities on the weekends
only, including taking call for a local physician or performing disability physical examinations, so long as such activities do not interfere with Employee’s duties and responsibilities for the Company. 
 7. Confidential and Proprietary Information. As a condition of Employee’s employment, Employee agrees to sign the Company’s standard
form of employee confidentiality and assignment of inventions agreement attached as Appendix A. 
 8. Dispute Resolution. In the event
of any dispute or claim relating to or arising out of Employee’s employment relationship with the Company, this agreement, or the termination of Employee’s employment with the Company for any reason (including, but not limited to, any
claims of breach of contract, wrongful termination or age, sex, race, sexual orientation, disability or other discrimination or harassment), Employee and the Company agree that all such disputes shall be fully, finally and exclusively resolved by
binding arbitration conducted by the American Arbitration Association in Santa Clara County, California. Employee and the Company hereby knowingly and willingly waive Employee’s respective rights to have any such disputes or claims tried to a
judge or jury. Provided, however, that this arbitration provision shall not apply to any claims for injunctive relief. 
 9.
Severability. If any provision of this Agreement is deemed invalid, illegal or unenforceable, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected 
 10. Assignment. In view of the personal nature of the services to be
performed under this Agreement by Employee, Employee cannot assign or transfer any of Employee’s obligations under this Agreement. 
 11. Entire Agreement. This Agreement, the Founder Stock Purchase Agreement, and the agreements referred to above constitute the entire agreement between Employee and the Company regarding the terms and conditions of Employee’s
employment, and they supersede all prior negotiations, representations or agreements between Employee and the Company regarding Employee’s employment, whether written or oral. 
 12. Modification. This Agreement may only be modified or amended by a supplemental written agreement signed by Employee and an authorized
representative of the Company. 
 13. Vesting of Founders Shares. The parties hereto acknowledge and agree that the shares of common
stock of the Company purchased by Employee pursuant to that certain Founder Stock Purchase Agreement, by and between Employee and the Company, dated as of February 20, 2002 (the “Founder Agreement”), are subject to the Unvested Share
Repurchase 

  

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Option (as defined in the Founder Agreement) set forth in the Founder Agreement and that the Unvested Share Repurchase Option contemplates a vesting of such
shares of common stock during the course of Employee’s providing continuous services to the Company as an employee, consultant or director. Furthermore, the parties hereto acknowledge and agree that Employee’s providing continuous services
pursuant to this Agreement shall constitute providing continuous services for purposes of the Unvested Share Repurchase Option and that the services to be provided hereunder are not intended to be the exclusive type of services which may constitute
continuous services to the Company for purposes of the Unvested Share Repurchase Option. 
 IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date and year written below. 
  

							
		 		 	Tolerion, Inc.
				
	Date:	 	  
	 	By:	 	 /s/ James Koshland

		 		 	Its:	 	  

			
		 		 	EMPLOYEE
			
	Date:	 	April 16, 2002	 	 /s/ Hideki Garren

		 		 	Hideki Garren

  

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 APPENDIX A 
 EMPLOYEE NONDISCLOSURE AND ASSIGNMENT AGREEMENT 
 This Agreement formalizes in writing certain
understandings and procedures which have been in effect since the time I was initially employed by Tolerion, Inc. (“Company”). 
 1. Duties. In return for the compensation now and hereafter paid to me, I will perform such duties for Company as may be designated by Company from time to time. During my employment with Company, I will devote my best efforts to the
interests of Company and will not engage in other employment or in any activities determined by Company to be detrimental to the best interests of Company. Furthermore, I will not (a) reveal, disclose or otherwise make available to any person any
Company password or key, whether or not the password or key is assigned to me or (b) obtain, possess or use in any manner a Company password or key that is not assigned to me. I will use my best efforts to prevent the unauthorized use of any laptop
or personal computer, peripheral device, software or related technical documentation issued to me by Company, and I will not input, load or otherwise attempt any unauthorized use of software in any Company computer, whether or not such computer is
assigned to me. 
 2 . “Proprietary Information” Definition. In this Agreement, “Proprietary Information” includes
(a) any information that is confidential or proprietary, technical or non-technical information of Company, including for example and without limitation, information related to Innovations (as defined in Section 4 below), concepts,
techniques, processes, methods, systems, designs, computer programs, source documentation, trade secrets, formulas, development or experimental work, work in progress, forecasts, proposed and future products, marketing plans, business plans,
customers and suppliers and any other nonpublic information that has commercial value or (b) any information Company has received from others that Company is obligated to treat as confidential or proprietary, which may be made known to me by
Company, a third party or otherwise learned by me during my employment with Company. 
 3. Ownership and Nondisclosure of Proprietary
Information. All Proprietary Information is the sole property of Company, Company’s assigns, Company’s customers and Company’s suppliers, as applicable. Company, Company’s assigns, Company’s customers and Company’s
suppliers, as applicable, are the sole and exclusive owners of all patents, copyrights, mask works, trade secrets and other rights in and to the Proprietary Information. I will not disclose any Proprietary Information to anyone outside Company, and
I will use and disclose Proprietary Information to those inside Company only as may be necessary in the ordinary course of performing my duties as an employee of Company. If I have any questions as to whether information constitutes Proprietary
Information, or to whom, if anyone, inside Company, any Proprietary Information may be disclosed, I will consult with my manager at Company. 
 4. “Innovations” Definition. In this Agreement, “Innovations” means all discoveries, designs, developments, improvements, inventions (whether or not 

  

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protectable under patent laws), works of authorship, information fixed in any tangible medium of expression (whether or not protectable under copyright
laws), trade secrets, know-how, ideas (whether or not protectable under trade secret laws), mask works, trademarks, service marks, trade names and trade dress. 
 5. Disclosure and License of Prior Innovations. I have listed on Exhibit A (“Prior Innovations”) attached hereto all Innovations relating in any way to Company’s business or demonstrably
anticipated research and development or business, which were conceived, reduced to practice, created, derived, developed, or made by me prior to my employment with Company (collectively, the “Prior Innovations”). I represent that I have no
rights in any such Company-related Innovations other than those Innovations listed in Exhibit A (“Prior Innovations”). If nothing is listed on Exhibit A (“Prior Innovations”), I represent that there are no Prior
Innovations at the time of signing this Agreement. I hereby grant to Company and Company’s designees a royalty-free, irrevocable, worldwide, fully paid-up license (with rights to sublicense through multiple tiers of sublicensees) to practice
all patent, copyright, moral right, mask work, trade secret and other intellectual property rights relating to any Prior Innovations that I incorporate, or permit to be incorporated, in any Innovations that I, solely or jointly with others,
conceive, develop or reduce to practice during my employment with Company (the “Company Innovations”). Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, any Prior Innovations in any Company
Innovations without Company’s prior written consent. 
 6. Disclosure and Assignment of Company Innovations. I hereby agree to
promptly disclose and describe to Company all Company Innovations. I hereby do and will assign to Company or Company’s designee all my right, title, and interest in and to any and all Company Innovations. To the extent any of the rights, title
and interest in and to Company Innovations cannot be assigned by me to Company, I hereby grant to Company an exclusive, royalty-free, transferable, irrevocable, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to
practice such non-assignable rights, title and interest. To the extent any of the rights, title and interest in and to Company Innovations can neither be assigned nor licensed by me to Company, I hereby irrevocably waive and agree never to assert
such non-assignable and non-licensable rights, title and interest against Company or any of Company’s successors in. This Section 6 shall not apply to any Innovations that (a) do not relate, at the time of conception, reduction to
practice, creation, derivation, development or making of such Innovation to Company’s business or actual or demonstrably anticipated research, development or business; and (b) was developed entirely on my own time; and (c) was
developed without use of any of Company’s equipment, supplies, facilities or trade secret information; and (d) did not result from any work I performed for Company. 
 7. Future Innovations. I agree to disclose promptly in writing to Company all Innovations conceived, reduced to practice, created, derived,
developed, or made by me during the term of my employment and for three (3) months thereafter, whether or not I believe such Innovations are subject to this Agreement, to permit a determination by Company as to whether or not the Innovations
should be considered Company Innovations. Company will receive any such information in confidence. 
  

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 8. Notice of Nonassignable Innovations to Employees in California. This Agreement does not apply
to an Innovation that qualifies fully as a nonassignable invention under the provisions of Section 2870 of the California Labor Code. I acknowledge that a condition for an Innovation to qualify fully as a non-assignable invention under the
provisions of Section 2870 of the California Labor Code is that the invention must be protected under patent laws. I have reviewed the notification in Exhibit B (“Limited Exclusion Notification”) and agree that my signature
acknowledges receipt of the notification. 
 9. Cooperation in Perfecting Rights to Innovations. I agree to perform, during and after
my employment, all acts deemed necessary or desirable by Company to permit and assist Company, at Company’s expense, in obtaining and enforcing the full benefits, enjoyment, rights and title throughout the world in the Innovations as provided
to Company under this Agreement. If Company is unable for any reason to secure my signature to any document required to file, prosecute, register or memorialize the assignment of any rights or application or to enforce any right under any
Innovations as provided under this Agreement, I hereby irrevocably designate and appoint Company and Company’s duly authorized officers and agents as my agents and attorneys-in-fact to act for and on my behalf and instead of me to take all
lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance, and enforcement of rights under such Innovations, all with the same legal force and effect as if executed by me. The foregoing is
deemed a power coupled with an interest and is irrevocable. 
 10. Return of Materials. At any time upon Company’s request, and
when my employment with Company is over, I will return all materials (including, without limitation, documents, drawings, papers, diskettes and tapes) containing or disclosing any Proprietary Information, as well as any keys, pass cards,
identification cards, computers, printers, pagers, personal digital assistants or similar items or devices that the Company has provided to me. I will provide Company with a written certification of my compliance with my obligations under this
Section. 
 11. No Violation of Rights of Third Parties. During my employment with Company, I will not (a) breach any agreement
to keep in confidence any confidential or proprietary information, knowledge or data acquired by me prior to my employment with Company or (b) disclose to Company, or use or induce Company to use, any confidential or proprietary information or
material belonging to any previous employer or any other third party. I am not currently a party, and will not become a party, to any other agreement that is in conflict, or will prevent me from complying, with this Agreement. 
 12. Survival. This Agreement (a) shall survive my employment by Company; (b) does not in any way restrict my right to resign or the
right of Company to terminate my employment at any time, for any reason or for no reason; (c) inures to the benefit of successors and assigns of Company; and (d) is binding upon my heirs and legal representatives. 
 13. No Solicitation. During my employment with Company and for a period of one (1) year thereafter, I will not solicit, encourage, or cause
others to solicit or encourage any employees of Company to terminate their employment with Company. 
 14. No Disparagement. During my
employment with Company and after the 

  

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termination thereof, I will not disparage Company, its products, services, agents or employees. 
 15. Injunctive Relief. I agree that any violation of this Agreement by me will cause irreparable and continuing damage to Company for which money
damages are insufficient, and Company shall be entitled to injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including money damages if appropriate). 
 16. Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows, with notice deemed given as
indicated: (a) by personal delivery, when delivered personally; (b) by overnight courier, upon written verification of receipt; (c) by facsimile transmission, upon acknowledgment of receipt of electronic transmission; or (d) by
certified or registered mail, return receipt requested, upon verification of receipt. Notices to me shall be sent to any address in Company’s records or such other address as I may provide in writing. Notices to Company shall be sent to
Company’s Human Resources Department or to such other address as Company may specify in writing. 
 17. Governing Law: Forum.
This Agreement shall be governed by the laws of the United States of America and by the laws of the State of California, as such laws are applied to agreements entered into and to be performed entirely within California between California residents.
Each of the parties irrevocably consents to the exclusive personal jurisdiction of the federal and state courts located in California, as applicable, for any matter arising out of or relating to this Agreement, except that in actions seeking to
enforce any order or any judgment of such federal or state courts located in California, such personal jurisdiction shall be nonexclusive. 
 18. Severability. If any provision of this Agreement is held by a court of law to be illegal, invalid or unenforceable, (a) that provision shall be deemed amended to provide Company the maximum protection permitted by applicable law
and (b) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected. 
 19. Waiver:
Modification. The waiver by Company of any term, provision or breach by me of this Agreement shall not be effective unless such waiver is in writing and signed by Company. No waiver by Company of a breach of this Agreement by me shall constitute
a waiver of any other or subsequent breach by me. This Agreement may be modified only with the written consent of both Company and me. 
  

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 20. Entire Agreement. This Agreement represents my entire understanding with Company with respect
to the subject matter of this Agreement and supersedes all previous understandings, written or oral. 
 I certify and acknowledge that I have
carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions. 
  

									
	“COMPANY”	 		 	EMPLOYEE:
			
	Tolerion, Inc.	 		 	
					
	By:	 	 /s/ James M. Koshland
	 		 	By:	 	 /s/ Hideki Garren

		 	James M. Koshland	 		 		 	Hideki Garren
					
	Title	 	  
	 		 	Title	 	  

					
	Dated:	 	  
	 		 	Dated:	 	April 16, 2002

  

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 Exhibit A 
 PRIOR INNOVATIONS 
 Check one of the following: 
  

	x	NO SUCH PRIOR INNOVATIONS EXIST. 

 OR 
  

	 ̈	YES, SUCH PRIOR INNOVATIONS EXIST AS DESCRIBED BELOW (include basic description of each Prior Innovation): 

 Exhibit B 
 LIMITED EXCLUSION NOTIFICATION TO EMPLOYEES IN CALIFORNIA 
 THIS IS TO NOTIFY you in accordance with
Section 2872 of the California Labor Code that the foregoing Agreement between you and Company does not require you to assign or offer to assign to Company any invention that you developed entirely on your own time without using Company’s
equipment, supplies, facilities or trade secret information except for those inventions that either: 
 (1) Relate at the time of conception
or reduction to practice of the invention to Company’s business, or actual or demonstrably anticipated research or development of Company; or 
 (2) Result from any work performed by you for Company. 
 To the extent a provision in the foregoing Agreement purports to require
you to assign an invention otherwise excluded from the preceding Section, the provision is against the public policy of California and is unenforceable. 
 This limited exclusion does not apply to any patent or invention covered by a contract between Company and the United States or any of its agencies requiring full title to such patent or invention to be in the United
States. 
 I ACKNOWLEDGE RECEIPT of a copy of this notification. 
  

									
	Tolerion, Inc.	 		 		 	
					
	By:	 	 /s/ James M. Koshland
	 		 	By:	 	 /s/ Hideki Garren

		 	James M. Koshland	 		 		 	Hideki Garren
					
	Title:	 	 s
	 		 		 	
					
	Date:	 	  
	 		 	Date:	 	April 16, 2002Employment Offer Letter - Frank H. Valone

 Exhibit 10.10* 
  

							
	

	  		  		  	 3430 W. BAYSHORE ROAD
 SUITE 201
 PALO ALTO, CA 94303
 TELEPHONE: (50) 846-7800
 FACSIMILE: (650) 846-7825
 www.bayhilltherapeutics.com

  

			
	 Frank Valone
	  	 October 10, 2003

	 [Address]
	  	
		  	

  

			
	 Re:
	  	Employment Offer

 Dear Frank: 
 On behalf of Bayhill Therapeutics, Inc. (“Bayhill Therapeutics” or the Company”), I am pleased to offer you the position of Vice President of Medical Affairs. In this position you will report to the Chief Executive Officer.

 The terms of yow employment are as follows: 
 1. At-Will Employment. You understand and acknowledge that your employment with the Company is for an unspecified duration and constitutes at-will” employment. You acknowledge that this 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 yourself. 
 2. Compensation. 
 (a) Base Salary: Your base salary shall be $270,000.00 annually, payable in accordance with
customary Company payroll procedures (including compliance with applicable withholding and other laws) as may from time to time be established in the future. Your position is classified as “exempt” and you will not be eligible for overtime
pay. 
 (b) Incentive Stock Options: Company management will recommend to the Board of Directors that you be granted a stock option
(the “Stock Option”) entitling you to purchase up to 250,000 shares of the Company’ Common Stock. The Stock Option shall vest over five (5) years with 20% of the shares subject to the Stock Option vesting at the end of the first
year and the remaining shares subject to the Stock Option vesting monthly over a four-year period thereafter. The Stock Option shall be exercisable at a price per share equal to the fair market value of the Company’s Common Stock on the dare of
grant as then determined by the Company’s Board of Directors, which price may or may not be the same as the Board’s most recent determination of fair market value and which is likely to be 10% of the price of the Series A Preferred. The
Stock Option will be an incentive stock option to the extent permitted by applicable law. Other terms of the Stock Option shall be set forth in a stock option agreement to be entered into between you and the Company and shall also be subject to the
terms of the Company’s 2002 Equity Incentive Plan, both of which you will be required to sign as a condition of receiving the Smock Option. The grant of the Stock Option and its terms are subject in all respects to the approval of the Board of
Directors. 
 3. Benefits. You shall be entitled to the Company’s basic employment benefits available to all Company employees as
the same currently exists or may exist in the future. You acknowledge that participation in Company benefit programs may require payroll deductions and/or direct contributions by you. 
  

	*	The Registrant is re-filing Exhibit 10.10 to the Registrant’s Form S-1/A originally filed on February 21, 2008 to include all exhibits, schedules and appendices to this
agreement. The Registrant has made no other changes to the previously filed agreement. 

							
	

	 		 		  	3430 W. BAYSHORE ROAD
		 		 		  	SUITE 201
		 		 		  	PALO ALTO, CA 94303
		 		 		  	TELEPHONE: (50) 846-7800
		 		 		  	FACSMILE: (650) 846-7825
		 		 		  	www.bayhilltherapeutics.com

 4. Employment Terms. This offer, and your employment by the Company, are contingent upon
your signing and returning to the Company on or before your employment start date, the attached “Confidential Information and Invention Assignment Agreement.” Please note that this offer letter, the attached agreement, and any stock
option agreements set forth the entire agreement and understanding between you and the Company regarding your employment relationship and supersede any other written or oral representation or promise. The provisions of this offer letter regarding
“at will” employment may only be modified by a document signed by you and the Company’s CEO or President. 
 5. Start
Date. Your start date will be mid November, 2003, the specific date to be agreed upon. Please indicate your acceptance of this offer letter by signing and returning a copy to me in the next few days. 
 Frank, we are very excited at the prospect of your joining us at Bayhill Therapeutics and participating in the creation of what I believe can be a highly
successful biopharmaceutical company that can make a major contribution to alleviating the debilitating effects of various autoimmune and other diseases. We look forward to your enthusiastic participation. 
  

	
	Very truly yours,
	
	 /s/ Genie Criscione

	 Genie Criscione

	 for

	 John P. Walker

	 Chairman & Chief Executive Officer

  

	
	 Agreed and Accepted:

	
	I accept this offer of employment on the terms stated above.
	
	 /s/ Frank H. Valone

	 Frank Valone

	
	 Date: October 13, 2003

 BAYHILL THERAPEUTICS, INC. 
 EMPLOYMENT, CONFIDENTIAL INFORMATION AND 
 INVENTION ASSIGNMENT AGREEMENT 

 As a condition of my employment with Bayhill Therapeutics, Inc., its subsidiaries, affiliates, successors or assigns (together the
“Company”), and in consideration of my employment with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I, Frank Valone, agree to the following: 
 1. At-Will Employment. I understand and acknowledge that my employment with the Company is for an unspecified duration and constitutes
“at-will” employment. I acknowledge that this 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 myself. 
 2. Confidential Information. 
 (a) Company Information. I agree at all times during the term of my employment and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm or
corporation without written authorization of the Board of Directors of the Company, any Confidential Information of the Company. I understand that “Confidential Information” means any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans, products, services, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the term
of my employment), markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, finances or other business information disclosed to me by the Company
either directly or indirectly in writing, orally or by drawings or observation of parts or equipment. I further understand that Confidential Information does not include any of the foregoing items which have become publicly known and made generally
available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved. 
 (b)
Former Employer Information. I agree that I will not, during my employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former or concurrent employer or other person or entity and
that I will not bring onto the premises of the Company any unpublished document or proprietary information belonging to any such employer, person or entity unless consented to in writing by such employer, person or entity. 
 (c) Third Party Information. I recognize that the Company has received and in the future will receive from third parties their confidential
or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the
strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party. 

 3. Inventions. 
 (a) Inventions Retained and Licensed. I have attached hereto, as Exhibit A, a list describing all inventions, original works of
authorship, developments, improvements and trade secrets which were made by me prior to my employment with the Company (collectively referred to as “Prior Inventions”), which belong to me, which relate to the Company’s proposed
business, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions. If in the course of my employment with the Company, I
incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have
made, modify, use and sell such Prior Invention as part of or in connection with such product, process or machine. 
 (b) Assignment of
Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company and hereby assign to the Company, or its designee, all my right, title and interest in and
to any and all inventions, original works of authorship, developments, concepts, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, that I may solely or jointly conceive or develop or reduce to
practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company (collectively referred to as “Inventions”). I further acknowledge that all original works of authorship
that are made by me (solely or jointly with others) within the scope of and during the period of my employment with the Company and which are protectible by copyright are “works made for hire,” as that term is defined in the United States
Copyright Act. 
 (c) Inventions Assigned to the United States. I agree to assign to the United States government all my right,
title and interest in and to any and all Inventions whenever such full title is required to be in the United States by a contract between the Company and the United States or any of its agencies. 
 (d) Maintenance of Records. I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or
jointly with others) during the term of my employment with the Company. The records will be in the form of notes, sketches, drawings and any other format that may be specified by the Company. The records will be available to and remain the sole
property of the Company at all times. 
 (e) Patent and Copyright Registrations. I agree to assist the Company, or its
designee, at the Company’s expense, in every proper way to secure the Company’s rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Company shall deem necessary in order to
apply for and obtain such rights and in order to assign and convey to the Company, its successors, 

 
assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement. If the
Company is unable because of my mental or physical incapacity or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or
original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute
and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by me. 
 (f) Exception to Assignments. I understand that the provisions of this Agreement requiring assignment of Inventions to the Company do not
apply to any invention which qualifies fully under the provisions of the California Labor Code Section 2870 (attached hereto as Exhibit D). I will advise the Company promptly in writing of any inventions that I believe meet the criteria
in California Labor Code Section 2870 and not otherwise disclosed on Exhibit A. 
 4. No Conflicting Employment. I
agree that, during the term of my employment with the Company, I will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which the Company is now involved or becomes involved
during the term of my employment, nor will I engage in any other activities that conflict with my obligations to the Company. 
 5.
Returning Company Documents. I agree that, at the time of leaving the employ of the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data,
notes, reports, proposals, lists, correspondence, specifications, drawings blueprints, sketches, materials, equipment, other documents or property or reproductions of any aforementioned items developed by me pursuant to my employment with the
Company or otherwise belonging to the Company, its successors or assigns. In the event of the termination of my employment, I agree to sign and deliver the Termination Certification attached hereto as Exhibit B. 
 6. Notification to New Employer. In the event that I leave the employ of the Company, I hereby grant consent to notification by the Company
to my new employer about my rights and obligations under this Agreement. 
 7. Solicitation of Employees. I agree that for a
period of twelve (12) months immediately following the termination of my relationship with the Company for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the
Company’s employees to leave their employment, take away such employees or attempt to solicit, induce, recruit, encourage or take away employees of the Company, either for myself or for any other person or entity. 

 8. Conflict of Interest Guidelines. I agree to diligently adhere to the Conflict of
Interest Guidelines attached as Exhibit C hereto. 
 9. Representations. I agree to execute any proper oath or verify
any proper document required to carry out the terms of this Agreement. I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in
trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict herewith. 
 10. Arbitration and Equitable Relief. 
 (a) Arbitration. Except as provided in
Section 10(b) below, I agree that any dispute or controversy arising out of or relating to any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Santa Clara County, California,
in accordance with the rules then in effect of the American Arbitration Association. The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The Company and I shall each pay one-half of the costs and expenses of such arbitration, and each of us shall separately pay our
counsel fees and expenses. 
 (b) Equitable Remedies. I agree that it would be impossible or inadequate to measure and
calculate the Company’s damages from any breach of the covenants set forth in Sections 2, 3, and 5 herein. Accordingly, I agree that if I breach any of such Sections, the Company will have available, in addition to any other right or remedy
available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or threatened breach and to specific performance of any such provision of this Agreement. I further agree that no bond or other security
shall be required in obtaining such equitable relief and I hereby consent to the issuance of such injunction and to the ordering of specific performance. 
 11. General Provisions. 
 (a) Governing Law; Consent to Personal Jurisdiction.
This Agreement will be governed by the laws of the State of Delaware, without regard to its conflict of laws principles. I hereby expressly consent to the personal jurisdiction of the state and federal courts located in Santa Clara County,
California for any lawsuit filed there against me by the Company arising from or relating to this Agreement. 
 (b) Entire
Agreement. This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us. No modification of or amendment to this Agreement, nor
any waiver of any rights under this agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

 (c) Severability. If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions
will continue in full force and effect. 

 (d) Successors and Assigns. This Agreement will be binding upon my heirs, executors,
administrators and other legal representatives and will be for the benefit of the Company, its successors and its assigns. 
 IN WITNESS
WHEREOF, I execute this Agreement as of the date written below. 
  

					
	Dated: Nov. 3, 2003	 		 	
			
		 		 	 /s/ Frank Valone

		 		 	Frank Valone
			
	  
	 		 	
	Witness	 		 	

 EXHIBIT A 
 LIST OF PRIOR INVENTIONS 
 AND ORIGINAL WORKS OF AUTHORSHIP 
  

					
	 Title
	 	 Date
	 	 Identifying Number
 or Brief Description

    X   No inventions or improvements 
          Additional Sheets Attached 
  

					
	Signature of Employee:	 	 /s/ Frank Valone
	 	
		 	Frank Valone	 	
			
	Date:11/03/03	 		 	

 EXHIBIT B 
 BAYHILL THERAPEUTICS, INC. 
 TERMINATION CERTIFICATION 
 This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials, equipment, other documents or property, or reproductions of any aforementioned items belonging to Bayhill Therapeutics, Inc., a Delaware corporation, its subsidiaries,
affiliates, successors or assigns (together, the “Company”). 
 I further certify that I have complied with all the terms of the
Company’s Employment, Confidential Information and Invention Assignment Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with
others) covered by that agreement. 
 I further agree that, in compliance with the Employment, Confidential Information and Invention
Assignment Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer
programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees. 

I further agree that for twelve (12) months from this date, I will not solicit, induce, recruit or encourage any of the Company’s employees
to leave their employment. 
  

							
	Date:	 	  
	 		 	  

		 		 		 	Frank Valone

 EXHIBIT C 
 BAYHILL THERAPEUTICS, INC. 
 CONFLICT OF INTEREST GUIDELINES 
 It is the policy of Bayhill Therapeutics, Inc., a Delaware corporation (the “Company”), to conduct its affairs in strict compliance with the
letter and spirit of the law and to adhere to the highest principles of business ethics. Accordingly, all officers, employees and independent contractors must avoid activities which are in conflict, or give the appearance of being in conflict, with
these principles and with the interests of the Company. The following are potentially compromising situations which must be avoided. Any exceptions must be reported to the Company’s President and written approval for continuation must be
obtained. 
 1. Revealing confidential information to outsiders or misusing confidential information. Unauthorized divulging of information
is a violation of this policy whether or not for personal gain and whether or not harm to the Company is intended. (The Employment, Confidential Information and Invention Assignment Agreement elaborates on this principle and is a binding agreement.)

 2. Accepting or offering substantial gifts, excessive entertainment, favors or payments which may be deemed to constitute undue influence
or otherwise be improper or embarrassing to the Company. 
 3. Participating in civic or professional organizations that might involve
divulging confidential information of the Company. 
 4. Initiating or approving personnel actions affecting reward or punishment of
employees or applicants where there is a family relationship or is or appears to be a personal or social involvement (other than as officers of the Company appointed by the Board of Directors). 
 5. Initiating or approving any form of personal or social harassment of employees. 
 6. Investing or holding outside directorship in suppliers, customers or competing companies, including financial speculations, where such investment or
directorship might influence in any manner a decision or course of action of the Company. 
 7. Borrowing from or lending to employees,
customers or suppliers. 
 8. Acquiring real estate of interest to the Company. 
 9. Improperly using or disclosing to the Company any proprietary information or trade secrets of any former or concurrent employer or other person or
entity with whom obligations of confidentiality exist. 

 10. Unlawfully discussing prices, costs, customers, sales or markets with competing companies or their
employees. 
 11. Making any unlawful agreement with distributors with respect to prices. 
 12. Improperly using or authorizing the use of any inventions which are the subject of patent claims of any other person or entity. 
 13. Engaging in any conduct which is not in the best interest of the Company. 
 Each officer, employee and independent contractor must take every necessary action to ensure compliance with these guidelines and to bring problem areas
to the attention of higher management for review. Violations of this conflict of interest policy may result in discharge without warning. 

 EXHIBIT D 
 CALIFORNIA LABOR CODE SECTION 2870 
 EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS 
 “(b) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions
that either: 
 (1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or
demonstrably anticipated research or development of the employer. 
 (2) Result from any work performed by the employee for the employer.

 (c) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.”

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