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EXHIBIT 10.26
[ALANEX CORPORATION LOGO]
May 1, 1996
Ms. Michelle A. Youngers, CPA
5220 Soledad Road
San Diego, CA 92109
Dear Michelle:
Alanex Corporation (the "Company") is pleased to offer you the position of
Director of Finance and Administration on the following terms.
You will be expected to manage the financial, accounting and administrative
departments of the Company, and will report to the Chief Executive Officer of
the Company. Of course, Alanex may change your position, duties and work
location from time to time as it deems necessary.
You will receive a salary of one hundred eight thousand dollars ($108,000) per
year, payable in regular periodic payments in accordance with Company policy.
Such salary shall be prorated for any partial year of employment on the basis
of a three hundred sixty-five day (365) fiscal year. Your compensation shall be
subject to customary withholding taxes and any other employment taxes which are
commonly required to be collected or withheld by the Company. You will also be
eligible for a bonus of twenty-two thousand five hundred dollars ($22,500.00)
subject to the following conditions: (1) eleven thousand two hundred fifty
dollars ($11,250.00) shall be payable within thirty (30) days following the
successful completion of an initial public offering of securities of the
Company; and (2) eleven thousand two hundred fifty dollars ($11,250.00) shall
be paid upon the completion of one year of service with the Company, subject to
your satisfactory performance in that year.
The Company also agrees to grant you a stock option to purchase fifty thousand
(50,000) shares of Common Stock at an exercise price equal to ten cents ($0.10)
(the fair market value of the company's Common Stock) (the "Option") under the
standard terms of the company's 1993 Stock Option Plan or any successor stock
option plan. The Option shall vest in equal monthly installments over a
four-year period. The Option shall have a term of ten years.
You will also be eligible for standard Company employee benefits as described
in the Employee Handbook that you will receive upon acceptance of this offer.
However, with respect to your entitlement to vacation time, you will receive
fifteen vacation days
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Michelle A. Youngers -2- May 1, 1996
annually. The company may modify its compensation and benefits from time to
time as it deems necessary.
As an Alanex employee, you will be expected to abide by company rules and
regulations, acknowledge in writing that you have read the company Employee
Handbook, and sign and comply with a Proprietary Information and Inventions
Agreement which prohibits unauthorized use or disclosure of company proprietary
information. For your review, a copy of the Proprietary Information and
Inventions Agreement is attached hereto.
You may terminate your employment with Alanex at any time and for any reason
whatsoever simply by notifying the Company. Likewise, the Company may terminate
your employment at any time and for any reason whatsoever, with or without
cause or advance notice. This at-will employment relationship cannot be changed
except in writing signed by a company officer.
Notwithstanding your status as an at-will employee, the Company agrees that if
you are terminated without cause at any time within the first two years of your
employment with the Company, the vesting of your Option shall accelerate by a
period of two years from the date of your termination. If you are terminated
without cause at any time after the first two years of employment with the
Company, the vesting of your Option shall accelerate by a period of one year
from the date of your termination. All shares subject to the Option that do not
vest pursuant to this paragraph shall cease vesting and the Option with respect
to such shares will be canceled.
If your employment under this letter agreement is terminated by the Company for
cause, you shall be entitled to receive only your accrued base salary and other
accrued benefits required by law, prorated to the date of termination. For
purposes of this Agreement, "for cause" termination shall be limited to the
following: (1) engaging or in any way participating in any activity which is
competitive with or intentionally injurious to the Company or which violates
any provisions of the Proprietary Information and Inventions Agreement; (2) the
commission of any fraud against the Company or use or appropriation for your
personal use or benefit any funds or properties of the Company not so
authorized by the Board of Directors; (3) the conviction of a crime involving
dishonesty or moral turpitude; or (4) conduct which in good faith and
reasonable determination of the Board of Directors demonstrates gross unfitness
to serve in your position.
The employment terms in this letter supersede any other agreements or promises
made to you by anyone, whether oral or written. As required by law, this offer
is subject to your satisfactory proof of your right to work in the United
States.
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Michelle A. Youngers -3- May 1, 1996
Please sign and date this letter, and return one copy to me by May 24, 1996, if
you wish to accept employment at Alanex under the terms described above. If you
accept our offer, we would like you to start on June 1, 1996.
We look forward to your favorable reply and to a productive and enjoyable work
relationship.
Very truly yours,
ALANEX CORPORATION
By: /s/ Marvin R. Brown
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Marvin R. Brown, M.D.
President & Chief Executive Officer
APPROVED AND ACCEPTED:
/s/ Michelle A. Youngers 5/24/96
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Michelle A. Youngers Date