Document:

Employment Offer Letter Agreement with Christopher L. Burnley

 EXHIBIT 10.7 
 

 
 TERMS OF EMPLOYMENT 
 1. Employer: Phenomix Corporation (“Phenomix”). 
 2. Employee: Christopher L.
Burnley (“Employee”). 
 3. Title: Chief Business Officer. 
 4. Commencement Date: May 12, 2003 (“Start Date”). 
 5. Level of Commitment: Full-time basis. 
 6. Reports to: Laura K. Shawver, Ph.D. 

7. Salary: $225,000 per year, to be earned and paid in semi-monthly installments, payable in arrears, less applicable withholding tax and
payroll deductions. 
 8. Transition Benefits: Phenomix will pay reasonable and customary moving and transitional accommodation
expenses of Employee, provided that such moving and transitional accommodation expenses combined shall not exceed $50,000.00 and provided further that written documentation of such expenses is provided to Phenomix within 90 days of hire date. In
addition, Phenomix will provide you with an additional $50,000 to assist you with you incidental relocation expenses, which amount shall be non-accountable and paid to you upon purchase of your home in San Diego or your first day of employment,
whichever is later. If you should voluntarily terminate your employment with Phenomix within two years, $50,000 will be immediately due and payable. 
 9. Mortgage Assistance: Loan. To assist with your purchase of a residence in San Diego, Phenomix will make you a loan of up to $200,00.00, secured by a second deed of trust on the residence (the
“Loan”). We expect that the Loan will be interest free, provided that you (after consulting with your tax attorney) agree that the Loan meets the required conditions for an employee relocation loan under the Internal Revenue Code;
otherwise the Loan will bear interest at the lowest rate that would advice imputed interest for federal income tax purposes (which is currently 3.15%). The principal and any interest shall be paid within five years. For so long as you continue to
serve as an employee of Phenomix, Phenomix will pay you bonuses over a period of five years equal to the principal amount of the Loan (including any accrued interest). The bonus amount will be paid coincident with your required repayments of the
Loan, as follows: 12.5% of the Loan on each of the first and second anniversaries of the Loan date, 18.75% of the Loan on the third anniversary of the Loan date, 25% on the fourth anniversary of the Loan date and 31.25% of the Loan on the fifth
anniversary of the Loan date (which bonuses 

 
will constitute taxable income for which withholding tax will be payable). Upon voluntary termination, the Loan will be due and payable within 30 days of
such termination. 
 Notwithstanding the foregoing, you understand that, pursuant to the Sarbanes-Oxley Act of 2002, you may be required to
prepay the Loan at such time as the Company’s securities become publicly traded. In such event, the Company will pay you a bonus coincident with the required prepayment in the amount of such prepayment, provided that the bonus can be paid under
the Sarbanes-Oxley Act or other applicable law. 
 10. Stock Option: Phenomix will recommend that its Board of Directors grant to
Employee a stock option to acquire 362,000 shares of common stock of Phenomix at an exercise price equal to the fair market value of the Company’s common stock on the date of grant. Such stock option grant will be on customary terms, provided
that the stock options will become vested and exercisable over a period of four years, with 25% of options becoming vested and exercisable on the first anniversary of the Start Date, and the remaining 75% becoming vested and exercisable monthly over
months 13 through 48 following the Start Date. 
 11. Performance-Based Bonus: 
 (a) Bonus Amount: You will he eligible to receive an annual, performance-based monetary bonus of up to 20% of your annual salary.

 (b) Performance Criteria: Performance criteria will be subject to approval by the Board of Directors. 
 12. Benefits: Employee shall be entitled to customary employee benefits, such as group health insurance coverage, participation in a 401(k) plan
and other fringe benefits offered by Phenomix to other employees at a similar level of responsibility. 
 13. Phenomix’s
Policies: Employee will be required to comply with customary Phenomix policies, including without limitation, maintaining the confidentiality of Phenomix’s confidential information, assigning to Phenomix inventions made by Employee during
the term of employment, and not pursuing competitive activities during the term of employment. Employee will be required to sign Phenomix’s standard employee confidential information and inventions agreement, a copy of which is attached hereto.

 14. Duration: Employee’s employment with Phenomix will be “at will,” which means that Employee has the right to
terminate employment with Phenomix at any time and that Phenomix reserves for itself an equal right to terminate the relationship. Nothing in this Agreement is intended to modify this at will employment relationship. 
 15. Severance: In the event: (1) there has been a “Change of Control” of the Company, (2) you are a full-time employee at the
time of the Change of Control, and (3) within three hundred sixty five (365) calendar days from and including the date of the Change of Control, your employment is involuntarily terminated for any reason (other than for “Cause”
or your death or disability), you shall receive a severance payment in an amount equal to six months’ base salary, the transition benefit described under paragraph 8 will be forgiven and you will have one year from your termination date to
repay the Loan made under paragraph 9. 

 As used herein, “Change of Control” means the occurrence of any of the following events:
(a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Securities Exchange Act of 1934), directly or
indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; (b) the consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets; (c) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent 50% of the total voting power represented by
the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation; or (d) a change in the composition of the Board of Directors, as a result of which fewer than a majority of
the directors are Incumbent Directors. “Incumbent Directors” means directors who either (1) are directors of the Company as of the date hereof, or (2) are elected, or nominated for election, to the Board of Directors with the
affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transaction described in clauses (a), (b) or (c) or in connection with an actual or threatened proxy contest relating
to the election of directors of the Company. As used herein “Cause,” shall mean (a) fraud or illegal acts; (b) material violation with consequential damages to the Company of Company agreements, including the
Company’s confidential information and inventions agreement; (c) material failure to perform your job function to a reasonable standard after notice of such failure has been given to you by the Board of Directors and you have had a 15
business-day period to cure such failure or (d) any other reason deemed cause under applicable California law. 
 REVIEWED AND APPROVED: 
  

					
	April 24, 2003	 		 	PHENOMIX CORPORATION
			
	 	 		 	/s/ Laura K. Shawver
		 		 	Laura K. Shawver, Ph.D.
		 		 	President & Chief Executive Officer

  

					
			
	April 24, 2003	 		 	/s/ Christopher L. Burnley
		 		 	Christopher L. BurnleyEmployment Offer Letter Agreement with John E. Crawford

 EXHIBIT 10.8 
 

 
  

			
	October 5, 2007	  	Laura K. Shawver, Ph.D.
		  	Chief Executive Officer Tel: 858.731.5207
 Fax: 858.731.5226
 laura.shawver@phenomix.com

 John Crawford 
 [Address] 
 Dear John: 
 On behalf of Phenomix
Corporation (“Phenomix”), I am pleased to offer employment to you as Phenomix’s Chief Financial Officer, reporting to me. If you accept this offer, we agree that you will commence employment on October 8, 2007 (the “Start
Date”). 
 The terms of your employment are as follows: 
 1. Salary. Phenomix will pay you a salary at a semi-monthly rate of $10,000, (equivalent to $240,000 per year) (the “Salary”), subject to periodic review and adjustments at the discretion of Phenomix, Phenomix’s Board
of Directors (the “Board”) or the Compensation Committee of the Board (the “Compensation Committee”). 
 2. Performance Bonus.
During your employment, you may be considered annually for a performance bonus. Currently, your anticipated performance bonus target will be 20% of your Salary. Performance bonus compensation in any year, if any, will be determined at the sole
discretion of the Board based on your performance and that of Phenomix, relative to milestones to be agreed upon between you and me, and otherwise in accordance with the general employee bonus program agreed upon by the Compensation Committee.

 3. Common Stock Options. At the next meeting of the Board, it is anticipated that the Board will agree to grant you an incentive stock option to
acquire 425,000 shares of common stock of Phenomix under Phenomix’ 2001 Stock Option Plan. The grant date of the stock option will be the date of the Board action or the Start Date, whichever is later. The stock option will be immediately
exercisable on the grant date, but Phenomix will retain a right to repurchase the shares if you cease to be an employee, consultant or director of Phenomix for any reason (subject to paragraph 7 below). The number of shares subject to Phenomix’
right of repurchase will be reduced over the period of your employment by 106,250 shares on the first anniversary of your start date, and thereafter by 8854 shares at the end of each month so that Phenomix’ right to repurchase shall have
expired with respect to all of the option shares on the fourth anniversary of your start date. The exercise price of the stock options will be the fair market value of Phenomix’ common stock on the grant date as determined by the Board.

 Phenomix Corporation . 5871 Oberlin Drive, Suite 200 Ÿ San Diego, CA 92121 Ÿ 858-731-5200 telephone Ÿ 858-731-5226 facsimile 

 4. Other Benefits. In addition to the benefits specifically described in this letter, you will be entitled to
participate in Phenomix’ standard executive benefits, which will include health insurance coverage and vacation which Phenomix may from time to time have in effect for all or most of its senior executives. You will be entitled to earn vacation
in accordance with Phenomix’s policies from time to time in effect, subject to a minimum entitlement of 120 hours vacation per year. Such participation will be subject to the terms of the applicable plan documents, generally applicable policies
of Phenomix, applicable law and the discretion of the Board, Compensation Committee or any administrative or other committee provided for in or completed by any such plan. Nothing contained in this Agreement shall be construed to create any
obligation on the part of the Phenomix to maintain the effectiveness of any such plan which may be in effect from time to time. 
 5. Phenomix’
Policies: This offer is contingent upon your successful completion of a pre-employment background investigation and drug test. Satisfactory drug test results must be received by Phenomix prior to the expiration of this offer. You will be
required to comply with Phenomix policies, including without limitation, maintaining the confidentiality of Phenomix’ confidential information, assigning to Phenomix inventions made by you during the term of employment, and not pursuing
competitive activities during the term of employment. You will be required to sign Phenomix’ Innovations and Proprietary Rights Assignment Agreement (the “Proprietary Rights Assignment Agreement”), a copy of which is attached hereto.

 6. Duration: Your employment with Phenomix will be “at will,” which means that you or Phenomix may terminate your employment at any time.
Your employment with Phenomix will remain at-will throughout the duration of your relationship with Phenomix and can only be changed by a written agreement signed by you and Phenomix’s Chief Executive Officer (the “CEO”). 

7. Change in Control. You shall be entitled to full accelerated vesting of your options (i.e., Phenomix’ right to repurchase your option shares will
terminate) and six months severance based on you then current Salary in the event that you are terminated by Phenomix without “Cause” or your termination is “Constructive” within 90 before or 365 days after a “Change of
Control” or “Fundamental Transaction” (as such terms are defined in the 2001 Stock Option Plan, the “Plan”). “Cause” shall mean (a) any act of fraud or illegal acts by you; (b) breach by you of any
obligations under this agreement or breach by you of any obligations under the Proprietary Rights Assignment Agreement; (c) your material failure to perform your job function to a reasonable standard after notice of such failure has been given
to you by the CEO or the Board and you have had a 15 business day period to cure such failure, (d) your willful failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after
being instructed by Phenomix to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the willful inducement of others to fail to cooperate or to produce documents or
other materials or (e) any other reason deemed cause under applicable California law. “Constructive termination” shall mean without your consent and after written notice to the Board at least 15 business days prior to termination such
that the Board has an opportunity to cure: (i) the assignment to you of any duties or a reduction in your duties, either of which results in a significant diminution in your responsibilities with Phenomix below those responsibilities normally
assigned to an executive officer of a company, (ii) a material reduction in your base salary or bonus as in effect immediately before such reduction, (iii) a material reduction in the kind or level of employee benefits to which you are
entitled immediately prior to such reduction, with the result that your overall benefits package is substantially reduced, except 

  

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for across-the-board reduction similarly affecting all or substantially all management employees or (iv) the relocation of you employment to a facility
or location more than 50 miles from the location where you are principally employed by Phenomix, which relocation is not approved by you. 
 8.
Arbitration. In the event of any dispute arising out of or relating to your employment relationship or its termination (including without limitation claims for breach of contract, wrongful termination, or age, race, sex, disability or other
discrimination) that is not fully resolved by good faith negotiations between the parties, you and Phenomix agree fully, finally and exclusively to arbitrate the dispute in binding arbitration before a neutral arbitrator under the Employment Dispute
Resolution Rules of the American Arbitration Association in San Diego County, California, rather than litigate the dispute in court; provided that this arbitration provision will not apply to any dispute relating to or arising out of the alleged
misuse or misappropriation of Phenomix’ trade secrets or proprietary information. In the event of arbitration, the parties shall be permitted to engage in adequate discovery, the arbitrator shall issue a written decision, and the arbitrator
shall be allowed to assess costs and impose any statutorily available remedies. Phenomix will bear any administrative costs associated with the arbitration. 
 9. Authorization to Work. As with all employees, Phenomix’ offer to you is contingent on your submission of satisfactory proof of your identity and your legal authorization to work in the United States. 
 10. Entire Agreement. This letter agreement and Phenomix’ standard employee innovations and proprietary rights assignment agreement contain the entire
agreement with respect to your employment with Phenomix and supersede any prior or contemporaneous representations or agreements. The terms of this offer may only be changed by written agreement, although Phenomix may from time to time, in its sole
discretion, adjust the compensation and benefits paid to you and its other employees, as well as job titles and responsibilities. In case any provision of the letter agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby. You agree that you are not relying on any promises or representations made by Phenomix or any of its representations other than those set forth in this
letter. 
 Should you have any questions regarding any of the items indicated above, please call me. 
 Please confirm your acceptance of this offer (by signing and returning a copy to me) by no later than October 8, 2007. 
 I am enthusiastic about your joining Phenomix and all of us are looking forward to working with you. 
  

	
	Sincerely,
	
	/s/ Laura K. Shawver
	Laura K. Shawver, Ph.D.

  

	
	Agreed and accepted by:
	
	/s/ John Crawford
	John Crawford

  

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