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Exhibit 10.31 FORM OF ARCHEMIX CORP.
CHANGE IN CONTROL AGREEMENT
THIS CHANGE IN CONTROL AGREEMENT
(this " Agreement "), by and between Archemix Corp.,
a Delaware corporation (the " Company "), and
(the " Executive "), is made as of September 30,
2008 (the " Effective Date ").
WHEREAS, the Company recognizes that
the possibility of a Change in Control (as defined in
Section 1.1) of the Company exists and that such possibility,
and the uncertainty and questions which it may raise among key
personnel, may result in the departure or distraction of key
personnel to the detriment of the Company and its stockholders, and
WHEREAS, the Board of Directors of
the Company (the " Board ") has determined that
appropriate steps should be taken to reinforce and encourage the
continued employment and dedication of the Company’s key
personnel without distraction from the possibility of a Change in
Control of the Company and related events and circumstances.
NOW, THEREFORE, as an inducement for
and in consideration of the Executive remaining in its employ, the
Company agrees that the Executive shall receive the benefits set
forth in this Agreement in the event the Executive’s
employment with the Company is terminated under the circumstances
described below in connection with a Change in Control.
1. Key
Definitions. As used herein,
the following terms shall have the following respective meanings:
1.1 " Anticipatory
Termination" means a termination of the employment of
Executive by the Company under the following circumstances:
(a) a Change in Control occurs, (b) the Executive’s
employment with the Company is terminated prior to the date on
which the Change in Control occurs, and (c) it is reasonably
demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps
reasonably calculated to effect a Change in Control or
(ii) otherwise arose in connection with or in anticipation of
a Change in Control. 1.2 "
Change in Control " means an event or occurrence set
forth in any one or more of the following in any one transaction or
series of transactions occurring within a 12-month period:
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(a)
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the acquisition by an individual, entity or group (within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the " Exchange Act ")) (a "
Person ") of beneficial ownership of any capital
stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) more than 50% of the combined
voting power of the
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then-outstanding securities of the Company entitled to vote
generally in the election of directors (the " Outstanding
Company Voting Securities "); provided , however,
that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from the Company (excluding an acquisition
pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock
or voting securities of the Company, unless the Person exercising,
converting or exchanging such security acquired such security
directly from the Company), (ii) any acquisition by the
Company, or (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
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(b)
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the consummation of a merger, consolidation, reorganization,
recapitalization or share exchange involving the Company, or a sale
or other disposition of assets of the Company having a total gross
fair market value equal to or more than 40% of the total gross fair
market value of the assets of the Company immediately before such
sale or disposition (a " Business Combination "),
unless, immediately following such Business Combination, the
individuals and entities who were the beneficial owners of the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the combined voting power of the then-outstanding
securities of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company
or substantially all of the Company’s assets either directly
or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the " Acquiring
Corporation ").
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In
no event shall any of the forgoing events or occurrences constitute
a Change in Control under this Agreement if it results from the
acquisition by any one person, or more than one person acting as a
group, owning more than 50% of the total fair market value or total
voting power of the Company’s stock, of additional stock of
the Company. In all cases, the determination of whether a Change of
Control has occurred shall be interpreted in a manner consistent
with the definition of a change in control under Section 409A
of the Internal Revenue Code of 1986, as amended ("
Section 409A ").
1.3 " Change in Control
Date " means the first date during the Term (as defined in
Section 2, including any extension thereof) on which a Change
in Control occurs. 1.4 "
Cause " means any of the following:
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(a)
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a continuing failure by the Executive to render services to the
Company in accordance with the Executive’s assigned duties
(other than such a failure as a result of Disability);
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(a)
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any act or omission by the Executive involving willful
misconduct or gross negligence which results in material harm to
the Company;
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(a)
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the Executive’s commission of any felony or any fraud,
financial wrongdoing, willful disloyalty, deliberate dishonesty or
breach of fiduciary duty in connection with the performance of the
Executive’s obligations to the Company AND which materially
and adversely affects the business activities, reputation, or
goodwill of the Company;
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(a)
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the Executive’s deliberate disregard of a Company rule or
policy which materially and adversely affects the business
activities, reputation, or goodwill of the Company; or
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(vi)
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the Executive’s material breach of this Agreement.
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In the event of a termination for Cause, the Termination Notice
given to the Executive by the Company shall state that the
termination of employment is "for Cause." Such written notice shall
specify the particular act or acts, or failure to act, which is or
are the basis for the decision to so terminate the
Executive’s employment for Cause. The Executive shall be
given the opportunity within thirty (30) calendar days of the
receipt of such notice to meet with the Board to defend such act or
acts, or failure to act, and the Executive shall be given fifteen
(15) days after such meeting to cure such act (or failure to
act) to the Board’s reasonable satisfaction. Upon failure of
the Executive, within such latter fifteen (15) day period, to
so cure such act or failure to act, the Executive’s
employment by the Company shall be deemed terminated for Cause. All
other terminations initiated by the Company (other than due to
Disability) shall be referred to as termination without Cause.
1.5 " Disability "
means the Executive’s failure due to illness, accident or any
other physical or mental incapacity to perform the essential
functions of the Executive’s positions for ninety
(90) consecutive days or an aggregate of one hundred and
twenty (120) days within any period of three hundred and
sixty-five (365) consecutive days during the term hereof. In
the event Disability triggers payment of benefits under
Section 4 that are subject to Section 409A of the
Internal Revenue Code of 1986, as amended ("Section 409A"),
Disability shall mean that, by reason of any medically determinable
physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not
less than twelve (12) months, the Executive is unable to
engage in any substantial gainful activity or is receiving income
replacement benefits for a period of not less than three months
under an accident and health plan covering employees of the
Company. 1.6 " Good
Reason " means the occurrence, without the
Executive’s written consent, of any of the events or
circumstances set forth in clauses (a) through
(e) below.
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(a)
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any material diminution in the Executive’s duties,
authority or responsibilities as in effect immediately prior to the
earliest to occur of (i) the Change in Control Date, (ii) the
date of the execution by the Company of the initial written
agreement or instrument providing for the Change in Control or
(iii) the date of the adoption by the Board of Directors of
a
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resolution providing for the Change in Control (with the
earliest to occur of such dates referred to herein as the "
Measurement Date "); provided that a change in title
or role reflecting the difference in size or structure of an
Acquiring Corporation shall not be Good Reason if the
Executive’s duties, authority or responsibilities within the
portion of the business of the Acquiring Corporation represented by
the business of the Company are not materially diminished;
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(b)
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any material diminution in the Executive’s duties,
authority or responsibilities prior to the date set forth in clause
(a) that the Executive can reasonably demonstrate (i) was
at the request of a third party who has taken steps reasonably
calculated to effect a Change in Control or (ii) otherwise arose in
connection with or in anticipation of a Change in Control;
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(c)
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a material reduction in the Executive’s compensation as in
effect on the Measurement Date, except such a reduction
(i) with the Executive’s consent, or (ii) in
connection with a reduction in compensation of other Company
executives at the level of senior management (a "Broad Executive
Reduction") other than a Broad Executive Reduction that Executive
can reasonably demonstrate (x) was at the request of a third
party who has taken steps reasonably calculated to effect a Change
in Control or (y) otherwise arose in connection with or in
anticipation of a Change in Control;
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(d)
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a material breach of this Agreement by the Company or any
successor to the Company;
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(e)
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any material reduction in the aggregate in the Executive’s
pension, retirement or benefit plans or programs (including without
limitation any 401(k), life insurance, medical, health and accident
or disability plan and any vacation program or policy) (a "
Benefit Plan ") in which the Executive participates
or which is applicable to the Executive immediately prior to the
Measurement Date, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan or program; except for any across the board reduction
imposed on substantially all other members of the Company’s
senior management (a "Broad Executive Benefit Reduction") other
than a Broad Executive Benefit Reduction that Executive can
reasonably demonstrate (i) was at the request of a third party
who has taken steps reasonably calculated to effect a Change in
Control or (ii) otherwise arose in connection with or in
anticipation of a Change in Control; or
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(f)
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any relocation of the Executive’s principal office
location to a location more than 35 miles from the Boston,
Massachusetts metropolitan area.
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The Executive’s right to
terminate his or her employment for Good Reason shall not be
affected by his or her incapacity due to physical or mental
illness. 1.7 " Reverse
Merger " means the consummation of a merger or share
exchange involving the Company as the result of which the equity of
the Company (including outstanding warrants and stock options) is
converted into the ownership of (or the right to receive upon
exercise) at least 50% of the equity of the resulting or acquiring
corporation. 1.8 " Reverse
Merger Date " means the first date during the Term (as
defined in Section 2) on which a Reverse Merger occurs.
Anything in this Agreement to the contrary notwithstanding, if
(a) a Reverse Merger occurs, (b) the Executive’s
employment with the Company is terminated prior to the date on
which the Reverse Merger occurs, and (c) it is reasonably
demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps
reasonably calculated to effect a Reverse Merger or
(ii) otherwise arose in connection with or in anticipation of
a Reverse Merger, then for all purposes of this Agreement the
"Reverse Merger Date" shall mean the date immediately prior to the
date of such termination of employment.
1.9 " Severance Term "
shall mean nine (9) months.
2. Term of Agreement . This Agreement, and all
rights and obligations of the parties hereunder, shall take effect
upon the Effective Date and shall expire upon the first to occur of
(a) the expiration of the Term (as defined below) if a Change
in Control has not occurred during the Term, (b) the
fulfillment by the Company of all of its obligations under this
Agreement following the 12-month anniversary of the Change in
Control Date, if the Executive is still employed by the Company as
of such date, (c) the fulfillment by the Company of all of its
obligations under this Agreement if the Executive’s
employment with the Company terminates on or within 12 months
following the Change in Control Date, (d) immediately prior to
effectiveness of the Company’s initial public offering
registered under the Securities Act of 1933, or (e) three (3)
months after the consummation of a Reverse Merger with a
corporation subject to reporting obligations under the Securities
Exchange Act of 1934. " Term " shall mean the period
commencing as of the Effective Date and continuing in effect
through December 31, 2010; provided , however, that on
January 1, 2011 and each January 1 thereafter, the Term shall
be automatically extended for one additional year beyond its then
Term (as previously extended) unless, not later than 90 days
prior to any such January 1, the Company shall have given the
Executive written notice that the Term will not be extended;
provided , further , however, in the event that a
definitive agreement relating to any transaction that would result
in a Change in Control is entered into during the Term but not
consummated prior to the scheduled expiration of the Term (or any
extension thereof), the Term shall be automatically extended until
the earlier to occur of (i) the termination such definitive
agreement or (ii) the consummation of the Change in Control
contemplated thereby. 3.
Employment Status; Termination Following a Change of Control
. 3.1 Not an Employment
Contract . The Executive acknowledges that this Agreement does
not constitute a contract of employment or impose on the Company
any obligation to retain the Executive as an employee and that this
Agreement does not prevent the Executive from terminating
employment at any time. Except in the case of an Anticipatory
Termination, if the
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Executive’s employment with the Company terminates for any
reason and subsequently a Change in Control shall occur, the
Executive shall not be entitled to any benefits hereunder. This
Agreement deals only with termination of employment under the
specific circumstances set forth herein and does not deal with
termination of employment under any other circumstances. Nothing in
this Agreement shall be deemed to amend or modify the terms of any
separate employment agreement to which the Executive and the
Company are party. 3.2 Termination
of Employment .
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(a)
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If a Change of Control Date occurs during the Term (or any
extension thereof), any termination of the Executive’s
employment by the Company or by the Executive on or within twelve
(12) months following the Change of Control Date (other than
due to the death of the Executive) shall be communicated by a
written notice to the other party hereto (the " Notice of
Termination "), given in accordance with Section 7.
Any Notice of Termination shall: (i) indicate the specific
termination provision (if any) of this Agreement relied upon by the
party giving such notice, (ii) to the extent applicable, set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment
under the provision so indicated and (iii) specify the Date of
Termination (as defined below). The effective date of an employment
termination (the "Date of Termination ") shall be the
close of business on the date specified in the Notice of
Termination (which date may not be less than fifteen (15) days
or more than thirty (30) days after the date of delivery of
such Notice of Termination) in the case of a termination other than
termination due to the Executive’s death, a termination by
the Company for Cause or a termination by the Executive for Good
Reason. In the case of the Executive’s death, the Date of
Termination shall be the date of the Executive’s death. In
the event the Company fails to satisfy the requirements of
Section 3.2(a) regarding a Notice of Termination, the
purported termination of the Executive’s employment pursuant
to such Notice of Termination shall not be effective for purposes
of this Agreement.
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(b)
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The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the
Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting any such
fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.
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(c)
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Any Notice of Termination for Cause given by the Company must be
given within 90 days of the occurrence (or if later, the
discovery) of the event(s) or circumstance(s) which constitute(s)
Cause. Such Notice of Termination for Cause shall provide the
Executive with thirty (30) days to remedy such events or
circumstances (the " Cause Cure Period "), if such
events or circumstances may be subject to being remedied. Any event
or
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circumstance that is remedied by the Executive within the Cause
Cure Period shall not be deemed to constitute Cause.
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(d)
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Any Notice of Termination for Good Reason given by the Executive
must be given within ninety (90) days of the occurrence of the
event(s) or circumstance(s) which constitute(s) Good Reason. Such
Notice of Termination for Good Reason shall provide the Company
with thirty (30) days to remedy such events or circumstances
(the " Good Reason Cure Period "), if such action may
be subject to being remedied. Any event or circumstance that is
remedied by the Company within the Good Reason Cure Period shall
not be deemed to constitute Good Reason.
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4. Benefits to
Executive . 4.1 Benefits
in Connection with a Change in Control . If a Change in Control
Date occurs during the Term (or any extension thereof) and there is
an Anticipatory Termination or the Executive’s employment
with the Company terminates on or within 12 months following
the consummation of the Change in Control associated with such
Change in Control Date, the Executive shall be entitled to the
following benefits:
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(a)
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Termination Without Cause or for Good Reason . If
(w) there is an Anticipatory Termination, (x) the
Executive is not offered continued employment by the Acquiring
Corporation or (y) the Executive’s employment with the
Company is terminated by the Company (other than for Cause,
Disability or Death) or by the Executive for Good Reason on or
within 12 months following the consummation of the Change in
Control, then the Executive shall be entitled to the following
benefits:
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(i)
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the Company shall pay to the Executive the following
amounts:
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(1)
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in a lump sum, in cash, within 30 days after the Date of
Termination, the sum of (A) any unpaid portion of the
Executive’s base salary through the Date of Termination,
(B) a pro rata current year bonus amount (calculated by
dividing the number of full and partial months of the current
fiscal year in which the Executive is employed through the Date of
Termination by 12, and multiplying this fraction by the amount of
the current annual bonus target, or if not yet set, the amount of
the annual bonus payment paid to the Executive in the preceding
year), and (C) the amount of any accrued vacation pay, in each
case to the extent not previously paid (the sum of the amounts
described in clauses (A), (B), and (C) shall be hereinafter
referred to as the " Accrued Obligations "); and
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(2)
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in a lump sum, in cash, within 30 days after the Date of
Termination, the sum of (A) the Executive’s current base
salary for the Severance Term; and (B) (i) the amount of the
current annual bonus target, or if not yet set, the amount of the
annual bonus payment paid to the Executive in the preceding year
multiplied by (ii) the quotient of the number of months in the
Severance Term divided by twelve (12); and
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(ii)
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for the Severance Term after the Date of Termination or such
longer period as may be provided by the terms of the app
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