September 6, 2006 Fabio Benedetti, M.D. Onyx Pharmaceuticals, Inc. 2100 Powell Street Emeryville, CA 94608 Dear Fabio:
Exhibit 10.37
September 6, 2006
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D.
Onyx Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Onyx Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Fabio:
This letter sets forth the terms of our agreement with respect to the termination of your
employment with Onyx Pharmaceuticals, Inc. (“Onyx” or the “Company”).
1. Separation. Your last day of employment with the Company will be September 15,
2006 (the “Separation Date”).
2. Accrued Salary and Vacation. On the Separation Date, the Company will pay you
all accrued salary, and all accrued and unused vacation earned through the Separation Date, subject
to standard payroll deductions and withholdings. You are entitled to these payments whether or not
you sign this Agreement.
3. Severance Benefits. Although the Company is not otherwise required to do so, if
you sign and date this Agreement, return it to the Company, and allow the release contained herein
to become effective, the Company will provide you with the following severance benefits (the
“Severance Benefits”):
(a) Severance Payments. The Company will make severance payments to you in the form
of continuation of your base salary in effect on the Separation Date for a period of six (6) months
after the Separation Date (the “Severance Period”). These Severance Payments will be made on the
Company’s ordinary payroll dates, beginning with the first payroll date after the Effective Date
(as defined in Section 13) and will be subject to standard payroll deductions and withholdings.
(b) Stock Option. Your outstanding stock options will continue to vest during the
Severance Period, provided that you remain in compliance with all of the terms of this Agreement
and the Consulting Period described herein continues for the entire Severance Period. Such equity
awards will continue to be subject to the applicable equity award agreements, grant notices and
plan documents. You will have ninety (90) days to exercise any vested shares following the end of
the Severance Period or any earlier termination of vesting of the Options. The Options that vest
during the Severance Period will cease being incentive stock options under Section 422 of the
Internal Revenue Code due to the extension of your vesting period beyond your employment
termination.
(c) Health Insurance. As provided by the federal COBRA law, state insurance laws,
and by the Company’s current group health insurance policies, you will be eligible to continue your
current health insurance benefits at your own expense for a period of time following the Separation
Date and, later, to convert to an individual policy if you wish. You will be provided with a
separate notice of your COBRA rights. If you timely elect continued coverage under COBRA, as part
of this Agreement, the Company will pay the COBRA premiums necessary to continue your current
health insurance coverage at your current level of coverage for a period of six (6) months from the
Separation Date (the “COBRA Premiums”). Notwithstanding the foregoing, the Company’s obligation to
pay COBRA Premiums will cease immediately if you become eligible for other health insurance
benefits at the expense of a new employer. You agree to notify the Company immediately, in
writing, upon your acceptance of employment with another employer that provides you with
eligibility for health insurance benefits within six (6) months after the Separation Date.
(d) Outplacement Assistance. The Company will reimburse you for reasonable
outplacement assistance expenses incurred by you during the six (6) months after the Separation
Date, up to a maximum reimbursement amount of $15,000.00.
4. Consulting Agreement. If you sign and date this Agreement, return it to the
Company, and allow the release contained herein to become effective, the Company will enter into
the following consulting agreement with you:
(a) Consulting Period. The Company will engage you as a consultant for the period
(the “Consulting Period”) commencing on the day immediately following the Separation Date and
continuing until the earliest of: (i) the date that is six (6) months after the Separation Date;
(ii) the date the Company provides written notice of termination to you due to your material breach
of this Agreement or your material breach of your Proprietary Information, Inventions and
Nonsolicitation Agreement (discussed in Section 8); or (iii) the date that you and the Company
mutually agree to terminate the consulting relationship.
(b) Consulting Services. You agree to provide consulting services to the Company in
any area of your expertise upon request by the Chief Executive Officer (“CEO”) of the Company.
During the Consulting Period, you will report directly to the CEO or as otherwise specified by the
CEO. You agree to exercise the highest degree of professionalism and utilize your expertise and
creative talents in performing these services. You agree to make yourself available to perform
such consulting services throughout the Consulting Period for up to a maximum of twenty (20) hours
per month at a time and place that is mutually agreeable to you and the Company.
(c) Consulting Fees and Benefits.
(i) Consulting Fees. During the Consulting Period, you will receive as consulting
fees $250.00 per hour for each hour or portion thereof that you actually provide services to the
Company (“Consulting Fees”).
(ii) Independent Contractor Relationship. During the Consulting Period, your
relationship with the Company will be that of an independent contractor, and nothing in this
Agreement is intended to, or should be construed to, create a partnership, agency, joint venture or
employment relationship. Except as set forth above in Section 3 of this Agreement, you will not be
entitled to any of the benefits which the Company may make available to its employees during the
Consulting Period, including, but not limited to, group health or life insurance, profit-sharing or
retirement benefits.
(iii) Taxes and Withholding. You are solely responsible for, and will file, on a
timely basis, all tax returns and payments required to be filed with, or made to, any federal,
state or local tax authority with respect to the performance of consulting services and receipt of
Consulting Fees under this Agreement. You are solely responsible for, and must maintain adequate
records of, expenses incurred in the course of performing services under this Agreement. The
Company will not withhold from the Consulting Fees any amount for taxes, social security or other
payroll deductions. The Company will regularly report amounts paid to you by filing Form 1099-MISC
with the Internal Revenue Service as required by law. You acknowledge that you
will be entirely responsible for payment of any such taxes, and you hereby indemnify and hold
harmless the Company from any liability for any taxes, penalties or interest that may be assessed
by any taxing authority with respect to all Consulting Fees you receive under this Agreement, with
the exception of the employer’s share of Social Security, if any.
(d) Limitations on Authority. You will have no responsibilities or authority as a
consultant to the Company other than as provided above. You agree not to represent or purport to
represent the Company in any manner whatsoever to any third party unless authorized by the Company,
in writing, to do so, except that you have a consulting relationship with the company.
(e) Proprietary Information and Inventions. You agree that the Proprietary
Information, Inventions and Non-Solicitation Agreement between you and the Company that you signed
on December 21, 2004 (the “Proprietary Information, Inventions and Nonsolicitation Agreement”, a
copy of which is attached hereto as Exhibit A) shall govern any Company information to which you
have access or which you develop, or inventions made by you, while performing services during the
Consulting Period (with the exception of the provisions relating to “works made for hire” under the
United States Copyright Act, which shall not apply during the Consulting Period).
(f) Other Work Activities. Throughout the Consulting Period, you retain the right
to engage in employment, consulting, or other work relationships in addition to your work for the
Company. The Company will make reasonable arrangements to enable you to perform your work for the
Company at such times and in such a manner so that it will not interfere with other activities in
which you may engage.
5. Other Compensation or Benefits. You acknowledge that, except as expressly
provided in this Agreement, you will not receive from the Company any additional compensation,
including but not limited to salary or bonuses, severance or employee benefits after the Separation
Date, with the exception of any vested right you may have under the express terms of a written
ERISA-qualified benefit plan (e.g., 401(k) account) or any vested Options. You further acknowledge
and agree that you are not currently entitled to receive any Change in Control severance benefits
nor shall you be entitled to receive any Change in Control severance benefits in the future
(including without limitation any accelerated vesting of your stock options provided for in your
stock option agreements or the Company’s stock option plan). Any such provisions in your stock
option agreements or the stock option plan providing for accelerated vesting of stock options in
the event of a change in control are hereby superseded and shall have no further force or effect.
6. Expense Reimbursements. You agree that on or before the Separation Date, you
will submit your final documented expense reimbursement statement reflecting all business expenses
you incurred through the Separation Date, if any, for which you seek reimbursement. The Company
will reimburse you for these expenses pursuant to its regular business practice. In addition,
pursuant to its regular business practice, the Company will reimburse you for documented business
expenses incurred during the Consulting Period.
7. Return of Company Property. On the Separation Date, you agree to return to the
Company all Company documents (and all copies thereof) and other Company property that you have had
in your possession or control at any time, including, but not limited to, Company files, notes,
drawings, records, business plans and forecasts, financial information, specifications, training
materials, computer-recorded information, tangible property including, but not limited to,
computers, credit cards, entry cards, identification badges and keys; and any materials of any kind
that contain or embody any proprietary or confidential information of the Company (and all
reproductions thereof). You agree to undertake a diligent search to locate any such documents,
property and information on or before the Separation Date. You may retain such documents,
property, and materials during the Consulting Period only to the extent approved in writing by the
Company and you shall return them immediately upon written request from the Company.
8. Proprietary Information Obligations. You acknowledge and reaffirm your
continuing obligations under your Proprietary Information, Inventions and Nonsolicitation Agreement
both during and after the Consulting Period. Such obligations include, but are not limited to, no
use or disclose of any confidential or
proprietary information of the Company without prior written authorization from a duly
authorized representative of the Company, and your obligations not to solicit the Company’s
employees pursuant to Section 9 of the Proprietary Information, Inventions and Nonsolicitation
Agreement.
9. Disclosure. You hereby acknowledge and agree that this Agreement and a
description of the terms set forth herein may be filed by the Company with the Securities and
Exchange Commission pursuant to its obligations as a reporting company under the Securities
Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder, and
consequently shall be publicly available.
10. Nondisparagement. You agree not to disparage the Company or the Company’s
officers, directors, employees, shareholders, parents, subsidiaries, affiliates, and agents, in any
manner likely to be harmful to them or their business, business reputation or personal reputation;
similarly, the Company’s officers and directors agree not to disparage you in any manner likely to
be harmful to you or your business or personal reputation. Notwithstanding the foregoing, both you
and the Company (including its officers and directors) may respond accurately and fully to any
question, inquiry or request for information when required by legal process.
11. Dispute Resolution. Unless otherwise prohibited by law or specified below, all
disputes, claims and causes of action in law or equity arising from or relating to this Agreement
or its enforcement, performance, breach or interpretation shall be resolved solely and exclusively
by final and binding confidential arbitration through the Judicial Arbitration and Mediation
Service (“JAMS”) to be held in San Francisco, California under the then-existing JAMS arbitration
rules for employment matters.
12. General Release. In exchange for the consideration provided to you by this
Agreement that you are not otherwise entitled to receive, including but not limited to the
Severance Benefits, you hereby generally and completely release the Company and its current and
former 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 your signing this Agreement.
This general release includes, but is not limited to: (a) all claims arising out of or in any way
related to your employment with the Company or the termination of that employment; (b) all claims
related to your 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; (c) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort
claims, including claims for fraud, defamation, emotional distress, and discharge in violation of
public policy; and (e) 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). Notwithstanding the foregoing, nothing in this Agreement
shall prevent you from filing, cooperating with, or participating in any proceeding before the
Equal Employment Opportunity Commission or the California Department of Fair Employment and
Housing, except that you acknowledge and agree that you shall not recover any monetary benefits in
connection with any such claim, charge or proceeding with regard to any claim released herein.
13. ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving and
releasing any rights you may have under the ADEA (“ADEA Waiver”). You also acknowledge that the
consideration given for the ADEA Waiver is in addition to anything of value to which you were
already entitled. You further acknowledge that you have been advised by this writing, as required
by the ADEA, that: (a) your ADEA Waiver does not apply to any rights or claims that arise after
the date you sign this Agreement; (b) you should consult with an attorney prior to signing this
Agreement (although you may choose voluntarily not to do so); (c) you have twenty-one (21) days to
consider this Agreement (although you may choose voluntarily to sign it sooner); (d) you have
seven (7) days following the date you sign this Agreement to revoke the ADEA Waiver by providing
written notice of your revocation to me; and (e) the ADEA Waiver will not be effective until the
date upon which the revocation period has expired unexercised, which will be the eighth day after
you sign this Agreement (“Effective Date”). Nevertheless, your general release of claims, except
for the ADEA Waiver, is effective immediately, and not revocable.
14. Waiver. In giving the release herein, which includes claims which may be
unknown to you at present, you acknowledge that you 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. (California Civil Code section 1542)
You hereby expressly waive and relinquish all rights and benefits under that section and any
law or legal principle of similar effect in any jurisdiction with respect to the release of unknown
and unsuspected claims granted in this Agreement.
15. Representations. You hereby represent that you have been paid all compensation
owed and for all hours worked, have received all the leave and leave benefits and protections for
which you are eligible pursuant to the federal Family and Medical Leave Act or any applicable state
law, and have not suffered any on-the-job injury for which you have not already filed a claim.
16. Entire Agreement. This Agreement, including Exhibit A, constitutes the
complete, final and exclusive embodiment of the entire agreement between you and the Company with
regard to the subject matter hereof. It supersedes any and all other agreements entered into by
and between you and the Company. It is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained herein. It may not be
modified except in a writing signed by you and a duly authorized officer of the Company. Each
party has carefully read this Agreement, has been afforded the opportunity to be advised of its
meaning and consequences by his or its respective attorneys, and signed the same of his or its own
free will.
17. Section 409A. If the Company determines that any cash severance benefit, health
continuation coverage or additional benefits provided under this Agreement shall fail to satisfy
the distribution requirement of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as
amended (the “Code”) as a result of Section 409A(a)(2)(B)(i) of the Code, the payment of such
benefit shall be accelerated to the minimum extent necessary so that the benefits is 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 such 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 Company may attach
conditions to or adjust the amounts paid pursuant to this paragraph to preserve, as closely as
possible, the economic consequences that would have applied in the absence of this paragraph;
provided, however, that no such condition or adjustment shall result in the payments being subject
to Section 409A(a)(1) of the Code.
18. Attorneys’ Fees. If either you or the Company brings any action to enforce
rights under this Agreement, the prevailing party in any such dispute shall be entitled to recover
reasonable attorneys’ fees and costs incurred by that party in connection with such action.
19. Successors and Assigns. This Agreement will bind the heirs, personal
representatives, successors, assigns, executors and administrators of each party, and will inure to
the benefit of each party, its heirs, successors and assigns.
20. Applicable Law. This Agreement will be deemed to have been entered into and
will be construed and enforced in accordance with the laws of the State of California as applied to
contracts made and to be performed entirely within California.
21. Severability. If a court or an arbitrator of competent jurisdiction determines
that any term or provision of this Agreement is invalid or unenforceable, in whole or in part, then
the remaining terms and provisions
hereof will be unimpaired. The court or the arbitrator will then have the authority to modify
or replace the invalid or unenforceable term or provision with a valid and enforceable term or
provision that most accurately represents the parties’ intention with respect to the invalid or
unenforceable term or provision.
22. Counterparts. This Agreement may be executed in two counterparts, each of which
will be deemed an original, all of which together constitutes one and the same instrument.
Facsimile signatures are as effective as original signatures.
If this Agreement is acceptable to you, please sign below and return the original to me.
I wish you the best of luck in your future endeavors.
Sincerely,
| Onyx Pharmaceuticals, Inc. |
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| By: | /s/ Hollings C. Renton | |||
| Hollings C. Renton | ||||
| Chairman and Chief Executive Officer | ||||
Exhibit A — Proprietary Information, Inventions and Non-Solicitation Agreement
| Understood and Agreed: |
||||
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ | ||||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D. | ||||
Date: September 7, 2006