Exhibit 10.2
October 2, 2023
John F. Fowler
Address
Re: Separation and Consulting Agreement
Dear John:
This separation and consulting agreement (the “Agreement”) summarizes the terms of your separation from Kezar Life Sciences, Inc. (the “Company”) and sets forth the severance benefits offered to you to help in this transition.
(a) Separation Date. You hereby resign your employment from the Company, and the Company accepts your resignation. Your last day of work with the Company and your employment termination date will be November 7, 2023 (the “Separation Date”). Effective on the Separation Date, you will no longer provide services to the Company as its Chief Executive Officer and you resign from any and all positions you may hold with the Company or any of its affiliates, except that you will remain a director on the Company’s Board of Directors (the “Board”) following the Separation Date.
(b) Accrued Salary. On the Separation Date, the Company will pay you all accrued salary and paid time off earned through the Separation Date, subject to standard payroll deductions and withholdings. You are entitled to this payment regardless of whether or not you sign this Agreement.
(c) Expense Reimbursements. You agree that, within seven (7) days after 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.
(a) Consulting Services and Fees. Pursuant to this consulting arrangement, you will consult with and advise the Company from time to time, as reasonably requested by the Company (the “Consulting Services”). You will conduct the Consulting Services at a location of your choosing. You will exercise the highest degree of professionalism and utilize your expertise and creative talents in performing the Consulting Services. You shall abide by the Company’s applicable policies and procedures during the Consulting Period. In exchange for the Consulting Services, the Company will pay you consulting fees equal to $5,000 per month.
(b) Equity Awards. Since your service as an employee and a consultant will be continuous, your termination of employment will not constitute a termination of service for purposes of the Company’s applicable stock or equity plan (the “Plan”). Thus, vesting of your outstanding stock options and other equity awards (the “Equity Awards”) will not cease as of the Separation Date and will continue for the duration of the Consulting Period. Your Equity Awards shall continue to be governed by the Plan and all applicable grant notices and agreements.
(c) Independent Contractor Status. You agree that during the Consulting Period: (i) you will be an independent contractor to the Company and not an employee of the Company, and nothing in this Agreement is intended to, or should be construed to, create a partnership, agency, joint venture or employment relationship after the Separation Date; and (ii) the Company will not make payments for state or federal income tax, FICA (social security and Medicare), make unemployment insurance or disability insurance contributions, or obtain workers’ compensation insurance on your behalf, and you acknowledge and agree that your relationship with the Company during the Advisory Period will not be subject to the Fair Labor Standards Act or other laws or regulations governing employment relationships.
(d) Taxes and Withholding. As an independent contractor, the Company will not withhold any amount for taxes, social security or other payroll deductions. The Company will issue you a Form 1099 with respect to any fees paid to you, if any. You acknowledge that you will be entirely responsible for payment of any such taxes, and you hereby indemnify, defend and save harmless the Company, and its officers and directors in their individual capacity, from any liability for any taxes, penalties or interest that may be assessed by any taxing authority with respect to all compensation you receive under this Agreement, with the exception of the employer’s share of social security, if any.
(e) Limitations on Authority. During the Consulting Period, you will have no responsibilities or authority as a consultant to the Company other than as provided above. You will have no authority to bind the Company to any contractual obligations, whether written, oral or implied, except with the prior written authorization of an officer of the Company. You agree not to represent or purport to represent the Company in any manner whatsoever to any third party unless authorized in advance by the Company, in writing, to do so.
(f) Confidential Information and Inventions. You agree that, during the Consulting Period and thereafter, you will not use or disclose, in any manner that is not authorized by the Company or essential to your performance of specifically requested Consulting Services, any confidential or proprietary information or materials of the Company that you obtain or develop in the course of performing the Consulting Services. Any and all work product you create in the course of performing the Consulting Services will be the sole and exclusive property of the Company. As set forth in your Confidential Information and Inventions Assignment Agreement (“Confidentiality Agreement”) with the Company, and subject to the limitations set forth therein, you hereby assign to the Company all right, title, and interest in all inventions, techniques, processes, materials, and other intellectual property developed in the course of performing the Consulting Services. You further acknowledge and reaffirm your continuing obligations, both during the Consulting Period and thereafter (as applicable), under the Confidentiality Agreement entered into between you and the Company, a copy of which is attached hereto as Exhibit A and incorporated herein by reference.
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(g) Other Work Activities. Throughout the Consulting Period, you shall have the right to engage in employment, consulting, or other work relationships in addition to your work for the Company. The Company will make arrangements to enable you to perform your work for the Company at such times and in such a manner so that it will not unreasonably interfere with other activities in which you may engage. In order to protect the trade secrets and confidential and proprietary information of the Company, you agree that, during the Consulting Period, you will notify the Company in writing, and obtain the Company’s written consent, before you obtain employment with, or perform competitive work for, any business entity that is competitive with the Company, or engage in any other work activity, or preparation for work activity, competitive with the Company. For purposes of this Agreement, the term “competitive” shall mean other companies or institutions that are with autoimmune focused development programs unless approved in advance by the Board.
(h) Termination of Consulting Period. The Consulting Period shall end on the earliest to occur of the following:
(i) November 7, 2024; or
(ii) Five (5) days after you or the Company provides written notice that you or the Company are terminating the Consulting Period for any reason; or
(iii) Immediately upon the Company’s written notice to you that you have breached any of your obligations hereunder or have breached any of your obligations under your Confidentiality Agreement.
(i) Waiver of Director Compensation. Following the Separation Date, you would be considered an “Eligible Director,” as such term is defined under the Company’s Non-Employee Director Compensation Policy, as amended (the “Director Compensation Policy”). As consideration for the consulting fees under this Agreement during the Consulting Period, you expressly decline all cash and equity compensation that you would otherwise be entitled to receive under the Director Compensation Policy during the Consulting Period. For clarity, however, this Section 2(i) shall immediately expire upon the termination or expiration of the Consulting Period.
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“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”
You hereby expressly waive and relinquish all rights and benefits under that section and any law of any other jurisdiction of similar effect with respect to your release of any unknown or unsuspected claims herein.
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[Signature page follows]
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If this Agreement is acceptable to you, please sign and date the Agreement below, and return the fully-executed Agreement to me within twenty-one (21) calendar days of the date you receive it. The Company’s severance offer will automatically lapse and expire if we do not receive the fully-executed Agreement back from you within that timeframe.
We wish you the best in your future endeavors.
Sincerely,
Kezar Life Sciences, Inc.
By: /s/ Graham Cooper
Graham Cooper
Chairman of the Board of Directors
Exhibit A – Confidential Agreement
I have read, understand and agree fully to the foregoing Agreement:
/s/ John Fowler October 2, 2023
John Fowler Date
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