Exhibit
10.2
AMENDMENT TO EMPLOYMENT
AGREEMENT
This Amendment (the
“Amendment”), effective as of October 31, 2006
(the “Effective Date”), to the employment agreement
executed on September 20, 2001 (the “Employment
Agreement”) by and between Curis, Inc., a Delaware
corporation (the “Company”), and Daniel R. Passeri (the
“Executive”).
WHEREAS , the Company and the Executive desire to amend
the Employment Agreement to reflect changes which the parties
hereby agree to in connection with the Company’s continued
employment of the Executive;
WHEREAS , it is essential to the Company to retain and
attract as directors and executive officers the most capable
persons available; and
WHEREAS , the substantial increase in corporate
litigation subjects directors and officers to expensive litigation
risks at the same time that the availability of directors’
and officers’ liability insurance has been severely limited;
and
WHEREAS , it is now and has always been the express
policy of the Company to indemnify its directors and officers;
and
WHEREAS , the Executive does not regard the protection
available under the Company’s Certificate of Incorporation
and insurance as adequate in the present circumstances, and may not
be willing to continue to serve as a director and executive officer
of the Company without adequate protection; and
WHEREAS , the Company desires the Executive to continue
to serve as a director and executive officer of the
Company.
NOW , THEREFORE , in consideration of the
mutual covenants and agreements set forth herein and for good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as
follows:
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1.
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Amendments - The Employment Agreement shall be amended to
include the following provisions.
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1.1
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Term .
This Employment Agreement will remain in force and effect
throughout the term of the Executive’s employment with the
Company, as set forth in Section 1 of the Employment
Agreement. The Executive’s employment with the Company may be
terminated by either the Company or the Executive at any time
subject only to the severance provisions contained in
Section 1.2 hereof.
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1.2
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Termination
and Severance . The
benefits provided for the Executive under this Amendment shall be
reduced by the salary continuation payments provided under the
Employment Agreement. It is not intended that the Employment
Agreement provide any benefits in addition to or duplicative of any
benefits which the Executive is eligible to receive under this
Amendment. This Amendment shall supersede any and all other prior
agreements or arrangements for post-termination benefits and
indemnification.
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(a)
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In the event
the Executive’s employment terminates as a result of the
expiration of the Employment Period (as that term is defined in the
Employment Agreement), by the Company for Cause, by the Executive
without Good Reason or due to the death or Disability (as defined
in the Employment Agreement) of the Executive, the Company shall
pay to the Executive only his base salary accrued through the last
day of his employment with the Company.
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(b)
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In the event
the Executive’s employment terminates as a result of a
voluntary termination by the Executive for Good Reason, or a
termination by the Company without Cause, upon execution of an
general release of all claims against the Company, its employees,
officers, directors and agents, in a form drafted by the Company,
the Executive shall receive: (i) his base salary accrued
through the last day of his employment with the Company,
(ii) twelve (12) monthly payments each equal in amount to
one-twelfth (1/12th) of the Executive’s then base
salary, reduced by all applicable taxes and withholdings, in
accordance with the Company’s then current payroll policies
and practices and (iii) the medical and other benefits
provided to him pursuant to the first sentence of Section 3.3
of the Employment Agreement as an Executive of the Company will
cease upon termination and the Executive will immediately become
eligible for continuation of medical/dental coverage pursuant to
COBRA. Company will pay any difference between the COBRA premium
and the amount the Executive would otherwise be responsible for
with respect to the medical and dental coverage elected for a
period of twelve (12) months from the date of such termination
or as long as the Executive is eligible for COBRA, whichever period
is shorter. At the end of this period, the Executive is eligible to
continue coverage for the balance of the statutory period under
COBRA, provided that the Executive pays the COBRA
premium.
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(c)
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For purposes of
this Amendment, the definitions of “Good Reason” and
“Cause” shall be those set forth in Section 4(e)
of the Employment Agreement.
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(d)
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In the event
the Executive’s employment terminates as a result of
termination of the Executive by the Company or its successor
without Cause, or by the Executive for Good Reason, within twelve
(12) months following a Change in Control Event, upon
execution by the Executive of a general release of all claims
against the Company, its employees, officers, directors and agents,
in a form drafted by the Company, the Executive shall receive
(i) his base salary accrued through the last day of his
employment with the Company; (ii) twelve (12) monthly
payments each equal in amount to one-twelfth (1/12th) of the
Executive’s then base salary, reduced by all applicable taxes
and withholdings, in accordance
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with the
Company’s then current payroll policies and practices
(iii) the medical and other benefits provided to him pursuant
to the first sentence of Section 3.3 of the Employment
Agreement as an Executive of the Company will cease upon
termination and the Executive will immediately become eligible for
continuation of medical/dental coverage pursuant to COBRA. Company
will pay any difference between the COBRA premium and the amount
the Executive would otherwise be responsible for with respect to
the medical and dental coverage elected for a period of twelve
(12) months from the date of such termination or as long as
the Executive is eligible for COBRA, whichever period is shorter.
At the end of this period, the Executive is eligible to continue
coverage for the balance of the statutory period under COBRA,
provided that Executive pays the COBRA premium. For purposes of
this paragraph, Executive’s “Base Salary” shall
be the greater of the amount in effect either immediately prior to
the Change in Control Event or the termination date of
Executive’s employment. The benefits provided under this
Section 1.2(e) shall be in lieu of any benefits the Executive
would have otherwise been entitled to pursuant to
Section 1.2(b) of this Amendment.
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(e)
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For purposes of
this Amendment, a “Change in Control Event” shall
mean:
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(i)
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The acquisition
by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of 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) 50% or more of either (x) the then-outstanding
shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (y) the combined voting power
of the 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 (i), the following
acquisitions shall not constitute a Change in Control Event:
(A) 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 or an underwriter or agent of
the Company), (B) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (C) any acquisition
by any corporation pursuant to a Business Combination (as defined
below) which complies with clauses (x) and (y) of
subsection (iii) of this definition; or
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(ii)
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Such time as
the Continuing Directors (as defined below) do not constitute a
majority of the Board (or, if applicable, the Board of Directors of
a successor corporation to the Company), where the term
“Continuing Director” means at any date a member of the
Board (x) who was a member of the Board on the date of the
initial adoption of this Amendment by the Board or (y) who was
nominated or elected subsequent to such date by at least a majority
of the directors who were Continuing Directors at the time of such
nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who
were Continuing Directors at the time of such nomination or
election; or
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(iii)
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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 all or substantially all of the assets of
the Company (a “Business Combination”), unless,
immediately following such Business Combination, each of the
following two conditions is satisfied: (x) all or
substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of
the resulting or acquiring corporation or other form of entity 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 or entity is referred to herein as the
“Acquiring Corporation”) in substantially the same
proportions as their ownership of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, respectively,
immediately prior to such Business Combination and (y) no
Person (excluding the Acquiring Corporation or any employee benefit
plan (or related trust) maintained or sponsored by the Company or
by the Acquiring Corporation) beneficially owns, directly or
indirectly, 50% or more of the then-outstanding shares of common
stock of the Acquiring Corporation, or of the combined voting power
of the then-outstanding securities of such corporation entitled to
vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business
Combination).
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(f)
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Notwithstanding
any provision of this Amendment to the contrary, if, at the time
the Executive’s employment is terminated, the Executive is
a
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“specified employee” within the
meaning of Section 409A(a)(2)(B)(ii) of the Internal Revenue
Code and the regulations thereunder, then any payments to be paid
or provided to the Executive under this Amendment that constitute
“nonqualified deferred compensation” within the meaning
of Section 409A of the Code shall be delayed by a period of
six (6) months and (i) all payments that would have been
made to the Executive during such six (6) month period shall
be made in a lump sum in the seventh (7th) month following the
date of termination and (ii) all remaining payments shall
commence in the seventh (7th) month following the date of
termination.
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1.3
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No Duty to
Seek Employment . The
Executive and the Company acknowledge and agree that nothing
contained in this Amendment shall be construed as requiring the
Executive to seek or accept alternative or replacement employment
in the event of his termination of employment by the Company for
any reason, and no payment or benefit payable hereunder shall be
conditioned on the Executive’s seeking or accepting such
alternative or replacement employment.
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1.4
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Indemnification . Upon the later of (1) six years after the
date that the Executive shall have ceased to serve as an executive
officer of the Company or, at the request of the Company, as a
director, officer, partner, trustee, member, employee or agent of
another corporation, partnership, joint venture, trust, limited
liability company or other enterprise or (2) the final
termination of all Proceedings (as defined below) pending on the
date set forth in clause (1) in respect of which the Executive
is granted rights of indemnification or advancement of Expenses (as
defined below) hereunder and of any proceeding commenced by the
Executive pursuant to Section 1.4(h) of this Amendment
relating thereto, the Company shall provide indemnification to the
Executive as follows:
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(a)
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Indemnification in Third-Party
Proceedings . The Company
shall indemnify the Executive in accordance with the provisions of
this Section 1.4(a) if the Executive was or is a party to or
threatened to be made a party to or otherwise involved in any
Proceeding (other than a Proceeding by or in the right of the
Company to procure a judgment in its favor) by reason of the
Executive’s Corporate Status or by reason of any action
alleged to have been taken or omitted in connection therewith,
against all Expenses, judgments, fines, penalties and amounts paid
in settlement actually and reasonably incurred by or on behalf of
the Executive in connection with such Proceeding, if the Executive
acted in good faith and in a manner which the Executive reasonably
believed to be in, or not opposed to, the best i
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