R. Kent Snyder-

EMPLOYMENT AGREEMENT
CHANGE IN CONTROL AGREEMENT

Amendment to Employment Agreement

 

Exhibit 10.7

June 2, 2003

R. Kent Snyder
P.O. Box 67599
Rancho Santa Fe CA 92067

Dear Kent:

        We are pleased to extend to you an offer to join Senomyx, Inc. ("Company") as our President and Chief Executive Officer. The following terms apply and will constitute your employment agreement with the Company (the "Agreement").

        1.    EMPLOYMENT.    

        1.1    Term.    The term of this Agreement shall begin on your first day of work for the Company and shall continue until terminated in accordance with Section 4 herein.

        1.2    Title.    You shall have the title of President and Chief Executive Officer of the Company and shall report to the Board of Directors of the Company (the "Board"). You shall serve in such other capacity or capacities as the Board may from time to time prescribe. During the term of this Agreement, unless otherwise agreed, you shall also serve as a member of the Board. Upon termination of this Agreement for any reason, you shall immediately resign as a member of the Board.

        1.3    Duties.    You shall do and perform all services, acts or things necessary or advisable to manage and conduct the business of the Company and which are normally associated with the position of President and Chief Executive Officer, consistent with the bylaws of the Company and as required by the Board.

        1.4    Location.    Unless otherwise agreed in writing, you shall perform services pursuant to this Agreement at the Company's offices located in San Diego, California, or at any other place at which the Company maintains an office; provided, however, that the Company may from time to time require you to travel temporarily to other locations in connection with the Company's business.

        2.    LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.    

        2.1    Loyalty.    During your employment by the Company you shall devote your full business energies, interest, abilities and productive time to the proper and efficient performance of your duties under this Agreement.

        2.2    Covenant not to Compete.    Except with the prior written consent of the Company's Board of Directors, you will not, while employed by the Company, or during any period during which you are receiving compensation or any other consideration from the Company, including, but not limited to, severance pay pursuant to Section 4.1.3 herein, engage in competition with the Company and/or any of its affiliates, subsidiaries, or joint ventures currently existing or which shall be established during your employment by the Company (collectively, "Affiliates") either directly or indirectly, in any manner or capacity, as adviser, principal, agent, affiliate, promoter, partner, officer, director, employee, stockholder, owner, co-owner, consultant, or member of any association or otherwise, in any phase of the business of developing, manufacturing and marketing of products or services which are in the same field of use or which otherwise compete with the products or services or proposed products or services of the Company and/or any of its Affiliates.

        2.3    Agreement not to Participate in Company's Competitors.    During your employment by the Company, you agree not to acquire, assume or participate in, directly or indirectly, any

1


 

position, investment or interest known by you to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise or in any company, person or entity that is, directly or indirectly, in competition with the business of the Company or any of its Affiliates. Ownership by you, as a passive investment, of less than two percent (2%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded on the Nasdaq Stock Market or in the over-the-counter market shall not constitute a breach of this paragraph.

        3.    COMPENSATION.    

        3.1    Base Salary.    The Company shall pay you a base salary of Three Hundred-Fifty Thousand Dollars ($350,000.00) per year, less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with Company policy. Such base salary shall be prorated for any partial year of employment on the basis of a 365-day fiscal year.

        3.2    Discretionary Bonus.    In addition to your base salary, you will be eligible to receive an annual discretionary bonus of up to thirty percent (30%) of your then current base salary based upon your performance against specific milestones to be defined by the Board.

        3.3    Stock Options.    Upon commencement of your employment hereunder, you shall be granted pursuant to the terms of the Company's 1999 Equity Incentive Plan, as amended (the "Plan"), an option to purchase shares of the common stock of the Company constituting 4% of the Company's outstanding shares on a fully diluted basis as of the date of grant assuming conversion of all outstanding preferred stock to common stock and including all shares reserved for issuance pursuant to the Plan (the "Option"). The Option shall be an incentive stock option to the extent permitted by applicable Federal income tax law. The exercise price of the Option will be equal to the fair market value of the common stock on the date of the grant, which is expected to be $0.30 per share. Subject to the provisions of Section 4.1.3 below, the Option will vest monthly over four (4) years so long as you provide service to the Company in accordance with the Plan, with 1/48th of the shares subject to the Option vesting at the end of each one-month anniversary of the date of commencement of your employment hereunder. The Option will be governed by a separate Stock Option Agreement and the Plan.

        3.4    Option Rights Upon Change of Control.    If your employment is involuntarily terminated within thirty-six (36) months following a change in control of the Company as provided under the Plan, such option shall immediately become 100% vested and exercisable in full.

        3.5    Changes to Compensation and Position with the Company.    Subject to Section 4.1 below, your Base Salary will not be reduced, your position, title and duties with the Company will not be changed and the Company will not relocate its principal place of business to more than fifty (50) miles from its current location without your prior consent.

        3.6    Employment Taxes.    All of your compensation shall be subject to customary withholding taxes and any other employment taxes as are commonly required to be collected or withheld by the Company.

        3.7    Vacation; Benefits.    You will be entitled to up to twenty (20) days of Paid Time Off ("PTO") per year. In addition, you shall, in accordance with Company policy and the terms of the applicable plan documents, be eligible to participate in benefits under any executive benefit plan or arrangement which may be in effect from time to time and made available to the Company's executive or key management employees.

2


 

        4.    TERMINATION.    

        4.1    Termination By the Company.    Your employment with the Company may be terminated under the following conditions:

        4.1.1    Termination for Death or Disability.    Your employment with the Company shall terminate effective upon the date of your death or Complete Disability. "Complete Disability" shall mean the inability of you to perform your duties under this Agreement because you have become permanently disabled within the meaning of any policy of disability income insurance covering employees of the Company then in force. In the event the Company has no policy of disability income insurance covering employees of the Company in force when you become disabled, the term Complete Disability shall mean the inability of the you to perform your duties under this Agreement by reason of any incapacity, physical or mental, which the Board, based upon medical advice or an opinion provided by a licensed physician acceptable to the Board, determines to have incapacitated you from satisfactorily performing all of your usual services for the Company for a period of at least ninety (90) days during any twelve (12) month period (whether or not consecutive). Based upon such medical advice or opinion, the determination of the Board shall be final and binding and the date such determination is made shall be the date of such Complete Disability for purposes of this Agreement. If your employment shall be terminated by death or Complete Disability, the Company shall pay to you, and/or your heirs, your base salary and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings, and the Company shall thereafter have no further obligations to you and/or your heirs under this Agreement.

        4.1.2    Termination by the Company For Cause.    The Company may terminate your employment under this Agreement for Cause. "Cause" for the Company to terminate your employment shall mean the occurrence of any of the following events:

        (i)    your substantial and repeated failure to satisfactorily perform your job duties which in the reasonable good faith, determination of the Board demonstrates gross unfitness to serve the Company, such as continued flagrant absences from the Company and demonstrable and substantial lapses of duty;

        (ii)   your refusal or failure to follow lawful directions of the Board of Directors of the Company;

        (iii)  your conviction of a felony or a crime involving moral turpitude;

        (iv)  your engaging or in any manner participating in any activity which is directly competitive with or injurious to the Company or any of its Affiliates or which violates any material provisions of Section 5 hereof or your Proprietary Information and Inventions Agreement with the Company; or

        (v)   your commission of any fraud against the Company, its Affiliates, employees, agents, collaborators or customers or use or intentional appropriation for your personal use or benefit of any funds or properties of the Company.

If your employment shall be terminated by the Company for Cause, the Company shall pay the your base salary and accrued and unused vacation benefits earned through the date of termination at the rate in effect at the time of termination, less standard deductions and withholdings, and the Company shall thereafter have no further obligations to you under this Agreement.

        4.1.3    Termination by the Company Without Cause.    You shall be an at-will employee. The Company may terminate your employment under this Agreement at any time and for any reason. However, if the Company terminates your employment without Cause (i) the Company shall pay you your base salary and accrued and unused vacation earned through the date of termination at

3


the rate then in effect, less standard deductions and withholdings, (ii) the Company shall continue to pay to you as severance your base salary then in effect for a period of twelve (12) months following the date of termination, less standard deductions and withholdings and (iii) in the event such termination by the Company without Cause occurs within one (1) year of the date of commencement of your employment hereunder, then the vesting of your Option shall be accelerated and your Option shall be exercisable pursuant to its terms to the same extent as if you had been continuously employed by the Company for a period of one year following the date of commencement of your employment hereunder; provided that in order to be eligible for said severance payments and acceleration pursuant to the foregoing clauses (ii) and (iii) you shall be required to execute a release of claims substantially in the form of Exhibit A and shall not be eligible to receive any such severance payment or acceleration until said release shall become effective.

        4.2    Termination By You.    You may terminate your employment with the Company as follows:

        4.2.1    Resignation.    You may resign your employment upon thirty (30) days written notice to the Company, delivered to the Chairman of the Board. Upon such resignation, the Company shall pay you your base salary and accrued and unused vacation earned through the date upon which the Company, in its sole discretion, accepts such resignation, and you shall not be entitled to any other benefit or compensation and the Company shall have no further obligations to you under this Agreement.

        4.3    Termination by Mutual Agreement of the Parties.    Your employment pursuant to this Agreement may be terminated at any time upon mutual agreement, in writing. Any such termination of employment shall have the consequences specified in such writing.

        4.4    Survival of Certain Provisions.    Sections 2.2 and 5 shall survive the termination of this Agreement.

        5.    CONFIDENTIAL AND PROPRIETARY INFORMATION; NONSOLICITATION.    

        5.1   As a condition of employment you agree to execute and abide by the Company's standard Proprietary Information and Inventions Agreement, attached hereto as Exhibit B.

        5.2   While employed by the Company and for one (1) year thereafter, you agree that in order to protect the Company's trade secrets and confidential and proprietary information from unauthorized use, you will not, either directly or through others, solicit or attempt to solicit any employee, consultant or independent contractor of the Company to terminate his or her relationship with the Company in order to become an employee, consultant or independent contractor to or for any other person or business entity.

        6.    ASSIGNMENT AND BINDING EFFECT.    

        This Agreement shall be binding upon and inure to the benefit of you and your heirs, executors, personal representatives, assigns, administrators and legal representatives. Because of the unique and personal nature of your duties under this Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be assignable by you. This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives.

        7.    CHOICE OF LAW.    

        This Agreement shall be construed and interpreted in accordance with the internal laws of the State of California.

4


 

        8.    INTEGRATION.    

        This Agreement, including Exhibits A and B, contains the complete, final and exclusive agreement of the Parties relating to the terms and conditions of your employment and the termination of your employment, and supersedes all prior and contemporaneous oral and written employment agreements or arrangements between the Parties. To the extent this Agreement conflicts with the Proprietary Information and Inventions Agreement attached as Exhibit B hereto, the Proprietary Information and Inventions Agreement controls.

        9.    AMENDMENT.    

        This Agreement cannot be amended or modified except by a written agreement signed by you and the Chairman of the Board of the Company.

        10.    WAIVER.    

        No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the Party against whom the wavier is claimed, and any waiver or any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach.

        11.    SEVERABILITY.    

        The finding by a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal. Such court shall have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision which most accurately represents the Parties' intention with respect to the invalid or unenforceable term or provision.

        12.    INTERPRETATION; CONSTRUCTION.    

        The headings set forth in this Agreement are for convenience of reference only and shall not be used in interpreting this Agreement. This Agreement has been drafted by legal counsel representing the Company, but you have been encouraged to consult with, and have consulted with, your own independent counsel and tax advisors with respect to the terms of this Agreement. The Parties acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

        13.    REPRESENTATIONS AND WARRANTIES.    

        You represent and warrant that you are not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that your execution and performance of this Agreement will not violate or breach any other agreements between you and any other person or entity.

        14.    COUNTERPARTS.    

        This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall contribute one and the same instrument.

        15.    LITIGATION COSTS.    

        Should any claim be commenced between the Parties or their personal representatives concerning any provision of this Agreement or the rights and duties of any person in relation to this Agreement, the Party prevailing in such action shall be entitled, in addition to such other relief as may be granted to a reasonable sum as and for that Party's attorney's fees in such action.

5


 

        16.    ELIGIBILITY.    

        As required by law, this offer and Agreement is subject to satisfactory proof of your right to work in the United States.

        If you accept employment on the terms described above, please sign and date this letter in the space provided below and return it to me no later than June 6, 2003. After such date this offer shall lapse.

        We look forward to your favorable reply and to a productive and enjoyable working relationship.

Sincerely,

 

 


Senomyx, Inc.


 


 


/s/  MARK LESCHLY      


Mark Leschly, Chairman of the Board of Directors


 


 


Agreed and Accepted:


 


 


/s/  R. KENT SNYDER      


R. KENT SNYDER


 


 


Dated:


 


6/2/03


 


 


 

6



EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

        In consideration of the payments and other benefits set forth in Section 4.1.3 of the Offer of Employment letter dated May 30, 2003 (the "Offer Letter"), to which this form is attached, I, R. Kent Snyder hereby furnish Senomyx, Inc. (the "Company"), with the following release and waiver ("Release and Waiver").

        In exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, Affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Release and Waiver. This general release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys' fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) ("ADEA"), and the California Fair Employment and Housing Act (as amended).

        I also acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any claims I may have against the Company.

        I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company. I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I have the right to consult with an attorney prior to executing this Release and Waiver (although I may choose voluntarily not to do so); and (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired.

        I acknowledge that I have the right to consult with an attorney prior to executing this Release and Waiver (although I may choose voluntarily not to do so); and (c) I have five (5) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release, and Waiver earlier).

        I acknowledge my continuing obligations under my Proprietary Information and Inventions Agreement, a copy of which is attached to the Offer Letter as Exhibit B. Pursuant to the Proprietary

1


 

Information and Inventions Agreement I understand that among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control. I understand and agree that my right to the severance pay I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my Proprietary Information & Inventions Agreement.

        This Release and Waiver, including Exhibit B to the Offer Letter, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated herein. This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.

Date:

 

 

 

 

 

By:

 

 

 

 


 

 

 

 

 

 


R. KENT SNYDER

2


 

 

 

 

EXHIBIT 10.1

CHANGE IN CONTROL AGREEMENT

This Change in Control Agreement (the “Agreement”) is made as of October 10, 2006 between Senomyx, Inc., a Delaware corporation (the “Company”), and R. Kent Snyder (“Employee”).

Whereas, in order to provide an incentive for Employee to participate actively in the affairs and maximize the value of the Company, the Company is willing to provide Employee with certain benefits on the terms and conditions set forth below.

Now Therefore, for good and valuable consideration, the sufficiency of which is hereby acknowledged, Employee and the Company (each, a “Party,” and collectively, the “Parties”) agree as follows:

1.             Accelerated Vesting of Options in the Event of a Change in Control.  If (i) a Change in Control (defined below) occurs and (ii) during the period beginning one (1) month prior to the effective date of such Change in Control and ending thirty-six (36) months after the effective date of such Change in Control, Employee’s employment with the Company is terminated either (A) by the Company without Cause (defined below) (not including death or Disability (as defined below)) or (B) by Employee for Good Reason (defined below) (not including death or Disability), then, without further action by Employee, the vesting applicable to all options to purchase shares of the Company’s capital stock (“Options”) and all shares of the Company’s capital stock which are subject to the Company’s right to repurchase such shares (“Restricted Stock”) held by Employee as of the effective date of such termination shall be accelerated in full such that Employee shall have the right to exercise in accordance with the terms thereof all or any portion of such Options (notwithstanding any vesting schedule set forth in such Options) and any such Company repurchase rights with respect to such Restricted Stock shall lapse in full.

2.             Severance Benefits in the Event of a Change in Control.  In addition to the benefits set forth in Section 1, if (i) a Change in Control occurs and (ii) during the period beginning one (1) month prior to the effective date of such Change in Control and ending eighteen (18) months after the effective date of such Change in Control, Employee’s employment with the Company is terminated either (A) by the Company without Cause (not including death or Disability) or (B) by Employee for Good Reason (not including death or Disability), then, without further action by Employee or the Company, Employee shall be entitled to the benefits set forth below:

(a)           Employee shall be entitled to receive a lump sum cash payment in an amount equal to one hundred fifty percent (150%) of Employee’s Annual Pay (as defined below), payable on the Effective Date specified in the Release (as defined below) delivered by Employee to the Company following such Change in Control.  The foregoing payments shall be subject to standard deductions and withholdings.

1

 


(b)           Assuming the Employee timely and accurately elects to continue his health insurance benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall reimburse the Employee for the COBRA expenses he pays on behalf of himself and his family until the earliest of (i) the end of the 12 month period following Employee’s termination, (ii) the expiration of the Employee’s continuation coverage under COBRA and any applicable state COBRA-like statute that provides mandated continuation coverage or (iii) the date the Employee becomes eligible for health insurance benefits of a subsequent employer.

3.             Release.  Notwithstanding the foregoing, the Employee shall not receive any of the severance payments or benefits set forth under Sections 1 and/or 2, unless upon Employee’s termination of employment, the Employee furnishes the Company with an effective waiver and release of claims (the “Release”) in a form acceptable to the Company and substantially as attached hereto as Exhibit A.  If a majority of the Board of Directors of the Company (the “Board”) determines in good faith that the Employee has breached any provision of his Proprietary Information and Inventions Agreement with the Company or any provision of this Agreement, the Employment Agreement (as defined below) or the Release, the Company shall be excused from the obligation to provide any severance payment under Sections 1 and/or 2 and the Company shall be entitled to full recovery of any severance payment already provided to the Employee under Sections 1 and/or 2.

4.             Definitions.  For purposes of this Agreement, capitalized terms used herein shall have the following meanings:

(a)           “Annual Pay” shall mean the sum of the Employee’s (i) base salary in effect on the date of termination and (ii) the last annual bonus paid to the Employee by the Company prior to the date of termination.

(b)           “Cause” means the occurrence of any of the following:  (i) the Employee’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) the Employee’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) the Employee’s intentional and material violation of any contract or agreement between the Employee and the Company or any statutory duty owed to the Company; (iv) the Employee’s unauthorized use or disclosure of the Company’s confidential information or trade secrets or (v) the Employee’s gross misconduct.  The determination that a termination is for Cause shall be made by the Company in its discretion.  Any determination by the Company that the employment of the Employee was terminated by reason of dismissal without Cause for the purposes of determining benefits under this Agreement shall have no impact upon any determination of the rights or obligations of the Company or such Employee for any other purpose.

(c)           “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i)            any Exchange Act Person (as defined in the Company’s Amended and Restated 2004 Equity Incentive Plan (the “Plan”)) becomes the owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting

2

 


power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction.  Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person from the Company in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (B) solely because the level of Ownership (as defined in the Plan) held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;

(ii)           there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity (as defined in the Plan) in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

(iii)         the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company shall otherwise occur;

(iv)          there is consummated a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries (as defined in the Plan), other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or

(v)            individuals who, on the date of this Agreement, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Agreement, be considered as a member of the Incumbent Board.

3

 


(d)           “Disability” shall mean Employee’s failure or inability, for reasons of health, to perform Employee’s usual and customary duties on behalf of the Company in the usual and customary manner for a total of more than ninety (90) consecutive business days (excluding Saturdays, Sundays and holidays (days during which the Company is closed due to a recognized holiday)).

(e)           “Good Reason” shall mean the occurrence of any of the following events or conditions:  (i) (A) a change in the Employee’s status, title, position or responsibilities (including reporting responsibilities) which represents an adverse change from the Employee’s status, title, position or responsibilities as in effect at any time within ninety (90) days preceding the date of a Change in Control or at any time thereafter; (B) the assignment to the Employee of any duties or responsibilities which are inconsistent with the Employee’s status, title, position or responsibilities as in effect at any time within ninety (90) days preceding the date of a Change in Control or at any time thereafter; or (C) any removal of the Employee from or failure to reappoint or reelect the Employee to any of such offices or positions (unless such removal or failure to reappoint or reelect is (1) in connection with the termination of the Employee’s employment for Cause, (2) as a result of the Employee’s Disability or death, or (3) by the Employee other than as a result of termination for Good Reason); (ii) a reduction in the Employee’s annual base compensation; or (iii) the Company’s requiring the Employee to relocate to any place outside a fifty (50) mile radius of the Employee’s current work site, excluding in any event reasonably required travel on the business of the Company or its affiliates. Notwithstanding the foregoing, in no event shall Good Reason be satisfied solely because the Employee retains the same position held prior to the Change in Control but in a distinct legal entity or business unit of a larger entity following the Change in Control.

5.             Golden Parachute Taxes.  If any payment or benefit Employee would receive pursuant to a Change in Control from the Company or otherwise (“Payments”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (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 Payments shall be equal to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Employee’s 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. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless Employee elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date on which the event that triggers the Payment occurs):  reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits.  In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Employee’s stock awards unless Employee elects in writing a different order for cancellation.

4

 


The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Employee within fifteen (15) calendar days after the date on which Employee’s right to a Payment is triggered (if requested at that time by the Company or Employee) or such other time as requested by the Company or Employee.  If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Company and Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to such Payment.  Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Employee.

6.             Application of Code Section 409A.  If the Company determines that any of the Payments fail to satisfy the distribution requirement of Section 409A(a)(2)(A) of the Code as a result of Section 409A(a)(2)(B)(i) of the Code, the Payments shall be accelerated to the minimum extent necessary so that such Payments are not subject to the provisions of Section 409A(a)(1) of the Code (It is the intention of the preceding sentence to apply the short-term deferral provisions of Section 409A of the Code, and the regulations and other guidance thereunder, to the Payments, and the payment schedule as revised after the application of the preceding sentence shall be referred to as the “Revised Payment Schedule”).  However, if there is no Revised Payment Schedule that would avoid the application of Section 409A(a)(1) of the Code, the payment of such benefits shall not be paid pursuant to a Revised Payment Schedule and instead shall be delayed to the minimum extent necessary so that such benefits are not subject to the provisions of Section 409A(a)(1) of the Code.  The Board may attach conditions to or adjust the amounts paid pursuant to this Section 6 to preserve, as closely as possible, the economic consequences that would have applied in the absence of this Section 6; provided, however, that no such condition or adjustment shall result in the payments being subject to Section 409A(a)(1) of the Code.

7.             General Provisions.

(a)           This Agreement shall be governed by the laws of the State of California (without regard to principles of conflict of laws).

(b)           Any notice, demand or request required or permitted to be given by either the Company or Employee pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally or deposited in the U.S. mail, First Class with postage prepaid, and addressed to the parties at such addresses as have been previously furnished by the Parties or such other address as a Party may request by notifying the other in writing.

5

 


(c)           The rights and obligations of Employee under this Agreement may not be transferred or assigned without the prior written consent of the Company.

(d)           This Agreement is meant to supplement the terms of stock option agreement(s) or other agreement(s) pursuant to which Employee acquired the Options, as well as any written employment agreement between the Company and Employee, including Employee’s employment agreement with the Company dated June 2, 2003 (the “Employment Agreement”).  To the extent that the terms and conditions of this Agreement regarding payment of severance benefits are inconsistent with those found in the Employment Agreement, the terms and conditions of this Agreement shall be controlling.  Notwithstanding the foregoing, the parties acknowledge and agree that if Employee is terminated without “cause” and the termination is not during the period beginning one (1) month prior to the effective date of a Change in Control and ending eighteen (18) months after the effective date of a Change in Control, the terms of the Employment Agreement (including the definition of cause set forth therein) shall govern the payment of any severance benefits to Employee in connection with such termination.

(e)           Any Party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent any Party from thereafter enforcing each and every other provision of this Agreement.  The rights granted the Parties herein are cumulative and shall not constitute a waiver of any Party’s right to assert all other legal remedies available to it under the circumstances.

(f)            Employee agrees upon request to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.

(g)           In case any provision of this 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.

(h)           This Agreement, in whole or in part, may be modified, waived or amended upon the written consent of the Company and Employee.

(i)            This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

6

 


In Witness Whereof, the undersigned have set their hand as of the date first above written.

 

EMPLOYEE

 

SENOMYX, INC.

 

 

 

 

 

 

/s/ R. Kent Snyder

 

By:

/s/ Harry J. Leonhardt

 

 

 

R. Kent Snyder

 

Name:

 Harry J. Leonhardt

 

 

 

 

 

Title:

 Senior Vice President, General

 

 

 

Counsel and Corporate Secretary

 

 

 

 

 

 

 

[SIGNATURE PAGE TO CHANGE IN CONTROL AGREEMENT]

 


EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

In consideration of the payments and other benefits set forth in the Change in Control Agreement dated October 10, 2006, between Senomyx, Inc. (the “Company”) and R. Kent Snyder (“Employee”), to which this form is attached, Employee hereby furnishes the Company with the following release and waiver.

Employee hereby releases, and forever discharges the Company, its officers, directors, agents, employees, stockholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys’ fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising at any time prior to and including Employee’s employment termination date with respect to any claims relating to Employee’s employment and the termination of Employee’s employment, including but not limited to, claims pursuant to any federal, state or local law relating to employment, including, but not limited to, discrimination claims, claims under the California Fair Employment and Housing Act, and the Federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”), the Federal Americans with Disabilities Act or claims for wrongful termination, breach of the covenant of good faith, contract claims, tort claims, and wage or benefit claims, including but not limited to, claims for salary, bonuses, commissions, stock, stock options, vacation pay, fringe benefits, severance pay or any form of compensation.  Notwithstanding the above, this Release and Waiver does not release any claims Employee may have (i) for indemnification pursuant to and in accordance with the applicable statutes and the applicable terms of the charters, articles of incorporation or bylaws of the Company or under any indemnification agreements or insurance coverage, (ii) in vested pension and retirement benefits under the terms of qualified employee pension benefit plans, (iii) for accrued benefits under the terms of applicable employment agreements or employee benefit plans, and (iv) for any claims under any state Workers’ Compensation laws and any state unemployment benefits laws.

Employee also acknowledges that Employee has read and understood Section 1542 of the California Civil Code which reads as follows:  “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.”  Employee hereby expressly waives and relinquishes all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any claims Employee may have against the Company.

Employee acknowledges that, among other rights, Employee is waiving and releasing any rights Employee may have under ADEA, that this waiver and release is knowing and voluntary, and that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled as an employee of the Company.  Employee further acknowledges that Employee has been advised, as required by the Older Workers Benefit Protection Act, that:  (a) the waiver and release granted herein does not relate to claims which may arise after this release and waiver is executed; (b) Employee has the right to consult with an attorney prior to executing this release and waiver (although Employee may choose voluntarily not to do so); and (c) if on the date of execution of this release and waiver Employee is age 40 or

 


older, then (I) Employee has twenty-one (21) days from the date Employee receives this release and waiver, in which to consider this release and waiver (although Employee may choose voluntarily to execute this release and waiver earlier); and (II) Employee has seven (7) days following the execution of this release and waiver to revoke Employee’s consent to this release and waiver.  This release and waiver shall be effective as of the date of execution hereof; provided that if on the date of execution of this release and waiver Employee is age 40 or older, then this release and waiver shall not be effective until the foregoing seven (7) day revocation period has expired.  The date as of which this release and waiver is effective as aforesaid shall be deemed the “Effective Date” hereof.

Date:

 

 

By:

 

 

 

R. Kent Snyder

 

 


 



Exhibit 10.2

 

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

 

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”) is entered into effective as of December 31, 2008 (the “Effective Date”), by and between R. KENT SNYDER (the “Employee”) and SENOMYX, INC. (the “Company”).

 

RECITALS

 

A.            The Company and the Employee previously executed that certain Employment Agreement dated as of June 2, 2003 (the “Original Agreement”).

 

B.            In consideration of the premises, and other good and valuable consideration, receipt of which is hereby acknowledged by the parties, the Company and the Employee desire to amend the Original Agreement to clarify the application of Section 409A of the Internal Revenue Code to Employee’s benefits provided under the Original Agreement, effective as of the Effective Date.

 

AGREEMENT

 

The Company and the Employee, intending to be legally bound, agree as follows effective as of the Effective Date:

 

1.             AMENDMENT OF ORIGINAL AGREEMENT.

 

(a)           Amendment of Section 4.1.3.  The last sentence of Section 4.1.3 of the Original Agreement is hereby amended to add the following to the end of such sentence:

 

; provided further that such release (the “Release”) shall be executed by you and delivered to the Company within the applicable time period set forth therein, but in no event later than forty-five (45) days following termination of your employment, and you shall permit the Release to become effective in accordance with its terms (such date, the “Release Effective Date”).”

 

(b)           Addition of New Section 4.1.4.  A new Section 4.1.4 is hereby added to the Original Agreement as follows:

 

4.1.4               Application of Internal Revenue Code Section 409A.  Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement (the “Termination Benefits”) that constitute “deferred compensation” within the meaning of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with your termination of employment unless and until you have also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to you without causing you to incur the additional 20% tax under Section 409A.  Such determination by the

 


 

Company shall be made no later than ten (10) days following your termination of employment.

 

For the avoidance of doubt, it is intended that payments of the Termination Benefits set forth in this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-1(b)(9).  However, if the Company (or, if applicable, the successor entity thereto) determines that any Termination Benefits constitute “deferred compensation” under Section 409A and you are, on the termination of your service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of such Termination Benefit payment shall be delayed until the earlier to occur of: (i) the date that is six months and one day after your Separation From Service”) or (ii) the date of your death (such applicable date, the “Specified Employee Initial Payment Date”), the Company (or the successor entity thereto, as applicable) shall pay to you a lump sum amount equal to such Termination Benefit payment that you would otherwise have received through the Specified Employee Initial Payment Date if the payment of such Termination Benefits had not been so delayed pursuant to this Section.

 

Notwithstanding any other payment schedule set forth in this Agreement, none of the Severance Benefits will be paid or otherwise delivered prior to the Release Effective Date.  Except to the extent that payments may be delayed until the Specified Employee Initial Payment Date pursuant to the preceding paragraph, on the first regular payroll pay day following the Release Effective Date, the Company will pay you the Severance Benefits you would otherwise have received under the Agreement on or prior to such date but for the delay in payment related to the effectiveness of the Release, with the balance of the Severance Benefits being paid as originally scheduled.”

 

2.                                      MISCELLANEOUS PROVISIONS.

 

(a)           Original Agreement.  The Original Agreement, as amended by this Amendment, shall continue in full force and effect after the date hereof.

 

(b)           Whole Agreement.  No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in the Original Agreement, as amended by this Amendment, have been made or entered into by either party with respect to the subject matter of this Amendment.

 


 

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

 

 

Company”

 

 

 

SENOMYX, INC.

 

 

 

By:

 

 

 

 

 

 

Employee”

 

 

 

 

 

R. KENT SNYDER