EXHIBIT 10.11
HOLLIS-EDEN PHARMACEUTICALS, INC.
September 15, l999
Dear Eric:
On behalf of Hollis-Eden Pharmaceuticals, Inc., we are pleased to offer you the
position of Vice President and Corporate General Counsel reporting directly to
me. This letter will serve to set forth the terms of your employment. Listed
below are the general responsibilities you will assume and other aspects related
to your employment with the organization. As used herein, the term "Hollis-Eden"
refers to Hollis-Eden Pharmaceuticals, Inc.
1. Position Title: Your initial position with Hollis-Eden will be Vice
President and Corporate General Counsel.
2. Duties and Responsibilities: You will be reporting directly to the
Chairman/Chief Executive Officer. You will have overall responsibility for
all areas of corporate law including advising the corporation of its legal
rights, obligations and privileges. This will include the interpretation of
laws, rulings and regulations for the corporation, researching the
corporation concerning transactions of business involving internal affairs,
stockholders, directors, officers and corporate relations with the general
public. Additionally, you will assist in representing the corporation in
litigation and other legal proceedings. Finally, as an integral member of
the senior leadership team, you will participate in strategic planning and
development of our resources to assure the achievement of our goals and
objectives.
3. Compensation:
a) Salary: Your semi-monthly base salary will be $7,291.67, which is
equivalent to $175,000 annually.
b) Stock Options: It will be recommended to the Board of Directors that you
be granted stock options for 65,000 shares at an exercise price equal to
the fair market value at the date of the grant, which date shall be
deemed to be the date this offer is accepted, and, under the standard
terms of the Company's 1997 Incentive Stock Option Plan. As an
additional incentive, we will provide immediate vesting for 10,000
shares of this option grant.
c) Bonus: Upon the recommendation of the CEO to the Board of Directors, you
may be eligible for a discretionary performance bonus based upon merit
and achievement of strategic milestone(s).
d) Benefits: You will be entitled to participate in Hollis-Eden's benefits
plans including medical, dental and vision insurance and other such
benefits the company offers its employees.
4. Start Date of Employment: The specific date of employment will commence
immediately upon acceptance of this offer.
5. Termination: Hollis-Eden shall have the right to terminate your employment
at any time, with or without cause, by written notice to you. In the event
that your employment is terminated by Hollis-Eden without cause within the
first 12 months of your employment, you will receive the remainder of the
12 months salary and stock options will continue to vest through the
severance period, plus severance compensation for a maximum of three (3)
months. Medical and other benefit plans shall also remain in place
throughout the severance period. Should your employment be terminated for
cause or by you, all compensation, benefits, and rights you may have under
this agreement will terminate on the date of termination of employment,
including your right to receive the severance payment described above. For
purposes of this agreement "cause" shall mean your death, disability (the
inability to perform services for a period of 120 days in any consecutive
twelve month period), a breach of this agreement or your duty of loyalty to
Hollis-Eden, willful misconduct or negligence in the performance of the
duties contemplated hereby. Your conviction of a felony, or conduct by you
which brings you or Hollis-Eden into public disrepute, or which could have
a substantial adverse effect on Hollis-Eden or its business.
Additionally, in the event a Person or Group shall acquire 50% or more of
the voting stock of Hollis-Eden Pharmaceuticals, Inc., or acquire
substantially all of the assets of Hollis-Eden or in the event of a Change
of Control (as now or in the future defined in the Company's Employee Stock
Option Plan), all of your then unvested stock options shall automatically
immediately become 100% vested and fully exercisable.
6. Arbitration: Any controversy or dispute arising out of or relating to this
agreement, or the interpretation thereof, shall be settled exclusively by
arbitration conducted in San Diego, California before one or more
arbitrators in accordance with the commercial arbitration rules of American
Arbitration Association then in effect and with discovery permitted by both
parties in accordance with Section 1283.05 of the Code of Civil Procedure
of the State of California or any other successor thereto, subject to such
modification as may be directed by the arbitrator. The award of
arbitrator(s) shall be final and binding, and judgement may be entered on
the arbitrator's award in any court having jurisdiction. In the event of
any such arbitration (or if legal action shall be brought in connection
therewith), the party prevailing in such proceeding shall be entitled to
recover from the other party the reasonable costs thereof, including
reasonable attorney and accounting fees.
Most importantly Eric, we are looking forward to welcoming you to the
Hollis-Eden team and look forward to the experience and knowledge you will bring
to help the Corporation maximize shareholder value. I personally look forward to
working with you and collaborating with the team in the many challenges ahead.
Warm Regards, Agreed and Accepted:
/s/ Richard B. Hollis September 15, 1999 /s/ Eric J. Loumeau September 15, 1999
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Richard B. Hollis Date Eric Loumeau Date
Chief Executive Officer
Hollis-Eden Pharmaceuticals, Inc.
cc: Candice Byrne
Vice President, Human Resources