Attached files
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| EX-99.1 - RESPONSE GENETICS INC | v183489_ex99-1.htm |
| 8-K - RESPONSE GENETICS INC | v183489_8k.htm |
Exhibit
10.1
April 30,
2010
David D.
O’Toole
Dear
David:
I am very pleased to provide you with
the terms of your anticipated employment with Response Genetics, Inc. (“Response
Genetics” or the “Company”). The details of the Company’s offer (the
“Offer”) are set forth below. Please contact me if you have any
questions about the terms in this Offer. We look forward to working
with you.
1. Position. Your position will be
Vice President and Chief Financial Officer (“CFO”) reporting to the Company’s
Chief Executive Officer or her successor, or such other senior executive officer
as she may designate from time to time (your “Supervisor”). You will
work in the greater Los Angeles area, although you acknowledge that you may be
required to travel from time to time in connection with your employment with the
Company. As a Response Genetics employee, we expect that you will
perform any and all duties and responsibilities associated with your position in
a satisfactory manner and to the best of your abilities at all times, and you
will be expected to devote all of your working time to the performance of your
duties at Response Genetics throughout your employment.
2. Responsibilities. Your
principle responsibilities will include the following: (1) overall management of
financial operations of the Company; (2) ensuring the Company meets or exceeds
all regulatory, GAAP and other requirements related to financial functions and
reporting; (3) coordinate the development and distribution of a coordinated
strategic development plan; (4) attend and participate as a representative of
the Company in regional and national healthcare industry conferences and trade
shows as necessary; (5) write proposals, create and present client and investor
presentations as necessary, and (6) performing responsibilities that are
normally associated with your position and as otherwise may be assigned to you
from time to time by your Supervisor or upon the authority of the Board of
Directors of the Company (the “Board”).
3. Starting
Date/Term. If you accept this offer, your employment with
Response Genetics will begin on May 3, 2010 or such other date as we mutually
agree no later than 30 days from the date of signing this Offer (“Commencement
Date”), and extend for a term of one (1) year, with automatic one (1) year
renewal terms thereafter (collectively, the “Term”) unless
Employer or Employee gives written notice to the other of at least ninety (90)
days prior to the expiration of any Term of such party’s election not to further
extend this Offer, subject to any earlier termination of your employment as
described below. Any termination of your employment will be governed
by the terms set forth in this Offer.
4. Compensation and
Benefits.
(a) Base
Salary. Your base pay shall be at an annual rate of $255,000
which is payable bi-weekly, minus customary deductions for federal and state
taxes and the like.
(b) Annual
Bonus. You will be eligible to receive an annual bonus, in the
Company’s discretion and based upon the Company’s Bonus Plan applicable to
officers and key employees, in respect of each fiscal year during your
employment with the Company of up to 35% of your base salary. The
bonus will be based upon the Company meeting certain targets, as determined by
the Board, and you meeting certain personal objectives, as determined by your
Supervisor and approved by the Board. The bonus amount will be
calculated and awarded within 45 days of the end of the Company’s fiscal year to
which such annual bonus relates.
(c) Equity
Grant. Subject to the approval of the Compensation Committee
of the Board and the Board of Directors, the Company shall grant to you a
nonqualified stock option to purchase 100,000 shares of common stock of the
Company (the “Option”), subject to
the terms and conditions of the Company’s 2006 Stock Plan and Standard Form of
Option Offer. The exercise price of the Option shall be equal to the
fair market value, which is the closing price of the Common Stock on the
composite tape for the trading day, of the Company’s common stock on your
Commencement Date, and shall vest in equal annual amounts over a four (4) year
period commencing on the first anniversary of the Commencement Date and each
anniversary thereafter until fully vested, provided you remain employed during
such period. Notwithstanding the foregoing, in the event of a Change
in Control as defined herein, 100% of the Option shall at that time fully
accelerate and become exercisable. For purposes hereof, “Change of Control”
means the occurrence of any of the following events:
(i) Ownership. Any
“Person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing more than 50% of the total voting power represented by the
Company’s then outstanding voting securities (excluding for this purpose any
such voting securities held by the Company or its Affiliates or by any employee
benefit plan of the Company) pursuant to a transaction or a series of related
transactions which the Board does not approve; or
(ii) Merger/Sale
of Assets. (A) A merger or consolidation of the Company
whether or not approved by the Board, 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 the parent of
such corporation) at least 50% of the total voting power represented by the
voting securities of the Company or such surviving entity or parent of such
corporation, as the case may be, outstanding immediately after such merger or
consolidation; or (B) the stockholders of the Company approve an agreement for
the sale or disposition by the Company of all or substantially all of the
Company’s assets; or
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(iii) Change
in Board Composition. A change in the composition of the
Board, as a result of which fewer than a majority of the directors are Incumbent
Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the Commencement Date, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company).
(iv) For
purposes of this Agreement, “Change in Control” shall be interpreted in a
manner, and limited to the extent necessary, so that it will not cause adverse
tax consequences for either party with respect to Section 409A of the Internal
Revenue Code of 1986, as amended (“Code Section 409A), and any successor
statute, regulation and guidance thereto.
(d) Payment Upon Change of
Control. In the event a Change of Control occurs during your
employment, you shall be entitled to the following payments:
(i) Should
a Change of Control occur during the first year of your employment, you shall be
entitled to a cash payment that is equivalent to six (6) months salary at your
then current annual rate of pay to be paid bi-weekly, minus customary deductions
for federal and state taxes and the like, for six (6) months following the date
of the Change of Control; or
(ii) Should
a Change of Control occur during the second or third years of your employment,
you shall be entitled to a cash payment that is equivalent to nine (9) months
salary at your then current annual rate of pay to be paid bi-weekly, minus
customary deductions for federal and state taxes and the like, for nine (9)
months following the date of the Change of Control.
(iii) Notwithstanding
the foregoing, if any payment or benefit you would receive under this Offer,
when combined with any other payment or benefit you receive pursuant to a Change
of Control (“Payment”) would (i)
constitute a "parachute payment" within the meaning of Section 280G of the Code,
and (ii) but for this sentence, be subject to the excise tax imposed by Section
4999 of the Code (the “Excise Tax”), then such Payment shall be either (x) the
full amount of such Payment or (y) such lesser amount (with cash payments being
reduced before stock option compensation) as would result in no portion of the
Payment being subject to the Excise Tax, whichever of the foregoing amounts,
taking into account the applicable federal state and local employments taxes,
income taxes, and the Excise Tax results in your receipt, on an after-tax basis,
of the greater amount of the Payment notwithstanding that all or some portion of
the Payment may be subject to the Excise Tax.
(e) Benefits. In
addition to your compensation, you may take advantage of various benefits
currently offered by the Company generally to its employees. Any such
benefits may be modified or changed from time to time at the sole discretion of
the Company. Where a particular benefit is subject to a formal plan
(for example, medical insurance), eligibility to participate in and receive any
particular benefit is governed solely by the applicable formal plan
document.
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(f) Time
Off. You will be granted twenty (20) paid time off days
(“PTO days”)
for your use for vacation, personal or sick leave. Vacation should be scheduled
upon consultation with your Supervisor and with advance notice. A
total of thirty (30) accrued but unused PTO days will be paid to you should you
leave the Company’s employment. The Company will also observe 10 holidays per
year, for which you will be paid.
5. Termination of
Employment.
(a)
General. Your
employment with the Company shall terminate prior to the expiration of the Term
upon the earliest to occur of: (i) your death, (ii) a termination by the Company
by reason of your permanent disability (subject to any applicable laws), (iii) a
termination by the Company with or without Cause (as defined below), subject to
expiration of applicable notice periods, or (iv) your resignation with or
without Good Reason, with at least subject to expiration of applicable notice
periods.
(b)
Required
Notice. Except in the case of a termination by the Company for
Cause or by reason of your permanent disability, where such termination shall be
effective upon your receipt of written notice from the Company (or any later
date set forth in such written notice), either you or the Company, as
applicable, shall provide the other with written notice of your termination of,
or resignation from, as applicable, employment, which termination shall be
effective upon the expiration of the Required Notice Period. The
“Required Notice
Period” shall mean sixty (60) days, in the case of a termination of your
employment occurring on or prior to the first anniversary of the Commencement
Date; provided, however, that in the case of
your resignation from employment without Good Reason, the Company may elect at
any point during the Required Notice Period to waive the remaining portion of
such period, and have your employment with the terminate upon such election
(which election, and termination as a result thereof, shall not be considered a
termination by the Company hereunder). Except as described in
the preceding proviso, both your and the Company’s obligations under this Offer
shall continue during the Required Notice Period; provided, however, at any time during
such Required Notice Period, the Company may elect to limit, or otherwise not
require you to perform, any or all of your duties and responsibilities pursuant
this Offer, which election shall in no event otherwise change the obligations of
the Company or Employee during the remainder of the Required Notice
Period.
(c) Definitions. For
purposes of this Offer:
(i) “Cause” shall mean:
(A) engaging in dishonesty or misconduct that is injurious to the Company; (B)
your conviction of, pleas of guilty to, or entry of nolo contendere to, any
felony or crime involving moral turpitude, material fraud or embezzlement of the
Company’s property or a charge or indictment of any other felony; or (C) your
breach of any of the material terms of this Offer, including the confidentiality
obligations set forth herein.
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(ii) “Good Reason” shall
mean your resignation following: (A)a material breach by the Company of its
obligations hereunder, provided you have first given notice to the Company of
such alleged breach and the Company has failed to cure same within ten (10) days
of receipt of such notice; (B) your compensation and benefits are materially
reduced; or (C) the imposition of a requirement by the Company that you relocate
your principal office to a location outside of the State of California that
necessitates a change in your home residence.
(iii) For
the purposes of this Agreement, “Good Reason” shall be interpreted in a manner,
and limited to the extent necessary, so that it will not cause adverse tax
consequences for either party with respond to Section 409A of the Internal
Revenue Code of 1986, as amended (“Code Section 409A”), and any successor
statute, regulation and guidance thereto.
6. Section
409A.
(a) Notwithstanding
anything herein to the contrary, any payment of nonqualified deferred
compensation under Section 409A of the Code that is otherwise required to be
made under the Employment Agreement to the Employee upon Employee’s separation
from service shall be delayed for such period of time as may be necessary to
meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the “Delay
Period”). On the first business day following the expiration
of the Delay Period, Employee shall be paid, in a single cash lump sum, an
amount equal to the aggregate amount of all payments delayed pursuant to the
preceding sentence and any remaining payments not so delayed shall continue to
be paid pursuant to the payment schedule set forth herein.
(b) The
Company does not guarantee the tax treatment or tax consequences associated with
any payment or benefit set forth in this Offer, including but not limited to
consequences related to Code Section 409A. You and the Company agree
to both negotiate in good faith and jointly execute an amendment to modify this
Offer to the extent necessary to comply with the requirements of Code Section
409A; provided
that no such amendment shall increase the total financial obligation of the
Company under this Offer. In the event that the Company determines in
good faith that it is required to withhold taxes from any payment or benefit
already provided to you, you agree to pay on demand the amount the Company has
determined to the Company.
7. Indemnity. The
Company shall indemnify you and hold you harmless from any and all claims
arising from or relating to your performance of your duties hereunder to the
fullest extent permitted by law and/or the Company’s Directors and Officers
Liability Insurance.
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8. Your
Certifications To Response Genetics. As a condition of your
employment:
(a) You
hereby certify to Response Genetics that you are free to enter into and fully
perform the duties of your position and that you are not subject to any
employment, confidentiality, non-competition or other agreement that would
restrict your employment by Response Genetics. You further hereby
certify that your signing this letter of employment with Response Genetics does
not violate any order, judgment or injunction applicable to you, or conflict
with or breach any agreement to which you are a party or by which you are
bound.
(b) You
hereby certify that all facts you have presented or will present to Response
Genetics are accurate and true. This includes, but is not limited to,
all oral and written statements you have made (including those pertaining to
your education, training, qualifications, licensing and prior work experience)
on any job application, resume or c.v., or in any interview or
discussion with Response Genetics.
9. Restrictions on
Conduct.
(a) Confidential
Information. You acknowledge that, during the course of your
continued employment, you will have access to information about the Company and
its subsidiaries (collectively, the “Company Group”) and
that your employment with the Company will bring you into close contact with
confidential and proprietary information of the Company Group. In
recognition of the foregoing, you expressly agree, at all times during the term
of your employment and thereafter, to hold in confidence, and not to use, except
for the benefit of the Company Group, or to disclose to any person, firm,
corporation or other entity without written authorization of the Company, any
Confidential Information of the Company Group. You further agree not
to make copies of such Confidential Information except as authorized by the
Company. For purposes hereof, “Confidential
Information” means confidential or proprietary trade secrets, client
lists, client identities and information, information regarding service
providers, investment methodologies, marketing data or plans, sales plans,
management organization information, operating policies or manuals, business
plans or operations or techniques, financial records or data, or other
financial, commercial, business or technical information (i) relating to the
Company or any other member of the Company Group, or (ii) that the Company or
any other member of the Company Group may receive belonging to suppliers,
customers or others who do business with the Company or any other member of the
Company Group. Notwithstanding the foregoing, Confidential
Information shall not include (i) any of the foregoing items which are or have
become publicly known through no wrongful act of yours or of others who were
under confidentiality obligations as to the item or items involved; or (ii) any
information that you are required to disclose to, or by, any governmental or
judicial authority; provided, however, that in such
event you agree to give the Company prompt written notice thereof so that the
Company or other member of the Company Group may seek an appropriate protective
order and/or waive in writing compliance with the confidentiality provisions of
this agreement.
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(b) Noncompetition. You
covenant and agree that during your employment with the Company, you shall not,
directly or indirectly, individually or jointly, own any interest in, operate,
join, control, participate as a partner, director, principal, officer, or agent
of, enter into the employment of, act as a consultant to, or perform any
services for, any person or entity (other than the Company or any other member
of the Company Group), that engages in any business activity that is competitive
with the business of the Company.
(c) Noninterference. You
covenant and agree that during the your employment with the Company and for the
twelve (12) month period immediately thereafter, you shall not, directly or
indirectly, for your own account or for the account of any other individual or
entity, engage in Interfering Activities. “Interfering Activities”
shall mean (i) encouraging, soliciting, or inducing, or in any manner attempting
to encourage, solicit, or induce, any individual employed by, or individual or
entity providing consulting services to, the Company or any other member of the
Company Group to terminate such employment or consulting services; provided,
that the foregoing shall not be violated by general advertising not targeted at
employees or consultants of the Company.
(d) Injunctive
Relief. You expressly acknowledge that any breach or
threatened breach of any of the terms and/or conditions set forth in this
Section 9 may result in substantial, continuing and irreparable injury to the
Company Group. Therefore, you hereby agree that, in addition to any
other remedy that may be available to the Company, the Company shall be entitled
to seek injunctive relief, specific performance or other equitable relief by a
court of appropriate jurisdiction in the event of any breach or threatened
breach of the terms of this agreement without the necessity of proving
irreparable harm or injury as a result of such breach or threatened
breach.
(e) Severability. Each
of the rights enumerated in this Section 9 shall be independent of the others
and shall be in addition to and not in lieu of any other rights and remedies
available to the Company Group at law or in equity. If any of the
provisions of this Section 9 or any part of any of them is hereafter construed
or adjudicated to be invalid or unenforceable, the same shall not affect the
remainder of this agreement, which shall be given full effect without regard to
the invalid portions. If any of the covenants contained herein are
held to be invalid or unenforceable because of the duration of such provisions
or the area or scope covered thereby, both you and the Company agree that the
court making such determination shall have the power to reduce the duration,
scope and/or area of such provision to the maximum and/or broadest duration,
scope and/or area permissible by law and in its reduced form said provision
shall then be enforceable.
10. Inventions and Intellectual
Property Rights.
(a) Assignment of
Inventions. You agree that you will, without additional
compensation, 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 your right, title and interest throughout the
world in and to any and all developments, original works of authorship,
concepts, know-how, improvements or trade secrets, whether or not patentable or
registrable under copyright or similar laws, which you may solely or jointly
conceive or develop or reduce to practice, or cause to be conceived or developed
or reduced to practice, during the Transition Period, whether or not during
regular working hours, provided they: (i) relate or related at the time of
conception or development to the actual or demonstrably proposed business or
research and development activities of the Company Group; (ii) result or
resulted from, or relate or related to, any work performed for the Company
Group; or (iii) are or were developed through the use of Confidential
Information and/or Company Group resources or in consultation with Company Group
personnel (collectively referred to as “Developments”). You
further acknowledge that all Developments which are made by you (solely or
jointly with others) within the scope of your employment and during the
Transition Period are “works made for hire” (to the greatest extent permitted by
applicable law) for which you are, in part, compensated by your base salary,
unless regulated otherwise by law. In the event any such Development
is deemed not to be a work made for hire, you hereby assign all rights in such
Development to the Company.
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11. Employment
Terms. All Company employees are required, as a condition to
your employment with the Company, to (i) sign and return a satisfactory I-9
Immigration form providing sufficient documentation establishing your employment
eligibility in the United States; (ii) satisfactory proof of your identity as
required by United States law; and (iii) abide by the Company’s Personnel
Policies and Procedures as created by the Company and amended from time to
time.
12. Assignment. This Offer is not
assignable by you but may be assigned by the Company without your prior
consent.
13. Miscellaneous. This letter constitutes
the Company’s entire offer regarding the terms and conditions of your
prospective employment with Response Genetics. It supersedes any
prior agreements, or other promises or statements (whether oral or written)
regarding the terms of employment. The terms of your employment shall
be governed by the law of the State of California.
You may
accept this offer of employment by signing the enclosed additional copy of this
letter. Your signature on the copy of this letter and your submission
of the signed copy to me will evidence your agreement with the terms and
conditions set forth herein. This offer will expire on May 10, 2010
unless accepted by you prior to such date by directing the signed offer letter
to the attention of Kathleen Danenberg.
We are
pleased to offer you the opportunity to join Response Genetics, and we look
forward to having you aboard. We are confident that you will make an
important contribution to our unique and exciting enterprise.
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| Sincerely, | |
| /s/ Kathleen Danenberg | |
| Kathleen Danenberg |
Agreed
to and Acknowledged:
/s/ David D.
O’Toole________________________
Signature
May 3,
2010________________________
Date
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