Exhibit 10.1
METABASIS THERAPEUTICS,
INC.
AMENDED AND RESTATED SEVERANCE
AGREEMENT
T HIS A MENDED AND R ESTATED S EVERANCE A GREEMENT (this “Agreement” ) is
entered into effective as of April 22, 2009 (the
“Effective Date” ), by and between
B ARRY
G UMBINER (the “Employee” ) and
M ETABASIS T HERAPEUTICS , I NC . , a
Delaware corporation (the “Company” ).
This Agreement shall replace and supersede in its entirety that
certain Severance Agreement between the Employee and Company
entered into effective June 18, 2007 (the “Prior
Agreement” ).
R ECITALS
A. W HEREAS , the
Company and Employee previously entered into the Prior Agreement
and desire to amend and restate the Prior Agreement in its entirety
as set forth herein, effective as of the Effective Date, to, among
other things, provide for additional severance benefits that may be
provided to Employee and clarify the application of
Section 409A of the Internal Revenue Code (the “
Code ”) to the severance benefits that may be
provided to Employee;
B. W HEREAS , the
Company desires to continue to retain the Employee’s
experience, skills, abilities, background and knowledge and is
willing to engage the Employee’s services on the terms and
conditions set forth in this Agreement; and
C. W HEREAS , the
Employee desires to continue to be in the employ of the Company and
is willing to accept such employment on the terms and conditions
set forth in this Agreement.
A GREEMENT
N OW , THEREFORE , in
consideration of the foregoing Recitals and the mutual promises and
covenants herein contained, and for other good and valuable
consideration the receipt and sufficiency of which is acknowledged,
it is agreed between the parties as follows:
1. Term of
Agreement.
This Agreement shall remain in
effect from the Effective Date until the earlier of:
(a) The date when the Employee’s employment
with the Company terminates for any reason not described in
Section 6; or
(b) The date when the Company has met all of its
obligations under this Agreement following a termination of the
Employee’s employment with the Company for a reason described
in Section 6.
1.
2. Definition of Change in
Control.
For all purposes under this
Agreement, “Change in Control” shall mean
the occurrence of any of the following events after the Effective
Date:
(a) The Company is merged, consolidated, or
reorganized into or with another legal entity, and as a result of
such merger, consolidation or reorganization more than 50% of the
voting securities of such entity or its parent outstanding
immediately after such transaction are held by persons other than
the holders of voting securities of the Company immediately prior
to such transaction;
(b) The Company sells all or substantially all of
its assets to another legal entity and thereafter, more than 50% of
the voting securities of such entity or its parent outstanding
immediately after such transaction are held by persons other than
the holders of voting securities of the Company immediately prior
to such transaction;
(c) A change in the composition of the
Company’s Board of Directors (the
“Board” ) during any period of two
consecutive years such that individuals who at the beginning of
such period were members of the Board cease for any reason to
constitute at least a majority thereof, unless the election, or the
nomination for election by the Company’s stockholders, of
each new director was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the
beginning of the period; or
(d) Any person (as the term person is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act
of 1934, as amended (the “Exchange Act”
)) has become the beneficial owner (as the term “beneficial
owner” is defined under Rule 13d-3, or any successor rule or
regulation promulgated under the Exchange Act) of more than 50% of
the then outstanding voting securities of the Company;
provided that changes in beneficial ownership resulting from
issuances of securities by the Company in transactions the primary
purpose of which is to raise capital through the sale of Company
equity to one or more financial investors shall be disregarded in
determining whether a Change in Control has occurred.
3. Definition of Good
Reason.
For all purposes under this
Agreement, “Good Reason” for the Employee
to terminate the Employee’s employment hereunder shall mean
the occurrence of any of the following events without the
Employee’s consent; provided however, that any
resignation by the Employee due to any of the following conditions
shall only be deemed for Good Reason if: (i) the Employee
gives the Company written notice of the intent to terminate for
Good Reason within ninety (90) days following the first
occurrence of the condition(s) that the Employee believes
constitutes Good Reason, which notice shall describe such
condition(s); (ii) the Company fails to remedy, if remediable,
such condition(s) within thirty (30) days following receipt of
the written notice (the “Cure Period” )
of such condition(s) from the Employee; and (iii) Employee
actually resigns his employment within the first fifteen
(15) days after expiration of the Cure Period:
(a) a material reduction in Employee’s
authority or responsibility as an employee of the Company,
including (without limitation) a reduction or elimination of
authority to approve expenditures or to hire, promote, demote or
terminate subordinates;
2.
(b) a material reduction in his annual base salary
or target bonus opportunity as an employee of the Company, other
than pursuant to a Company-wide reduction of annual base salary or
target bonus opportunities for employees of the Company generally;
or
(c) the relocation of the Company’s executive
offices by a distance of fifty (50) miles or more, which
relocation requires an increase in the Employee’s one-way
driving distance by more than thirty-five
(35) miles.
4. Definition of
Cause.
For all purposes under this
Agreement, “Cause” shall mean:
(a) a material and continuing failure to perform the
duties of Employee’s employment which is injurious to the
Company, other than a failure resulting from complete or partial
incapacity due to physical or mental illness or impairment, which
failure is not corrected within 15 business days after written
notice thereof to the Employee;
(b) Employee’s gross misconduct or fraud;
or
(c) Employee’s conviction of, or plea of
“guilty” or “no contest” to, a
felony.
5. Definition of Continuation
Period.
For all purposes under this
Agreement, “Continuation Period” shall
mean the period commencing on the date when the termination of the
Employee’s employment under Section 6 is effective and
ending on the earlier of:
(a) the date twelve (12) months after the date
when the employment termination was effective; or
(b) the date of the Employee’s
death.
6. Entitlement to Severance Pay
and Benefits.
(a) The Employee shall be entitled to receive the
severance pay described in Section 7 (the
“Severance Pay” ) and the benefits
described in Section 8(a)(i), 8(b) and 8(c) from the Company
if on or before the occurrence of a Change in Control, the Company
terminates the Employee’s employment for any reason other
than Cause.
(b) The Employee shall be entitled to receive the
Severance Pay described in Section 7 and the benefits
described in Section 8(a)(ii), 8(b) and 8(c) from the Company
if one of the following events occurs:
(i) Within the first 12-month period after the
occurrence of a Change in Control, the Employee voluntarily resigns
his employment for Good Reason;
3.
(ii) Within the first 12-month period after the
occurrence of a Change in Control, the Company terminates the
Employee’s employment for any reason other than Cause;
or
(iii) Within the first 12-month period after the
occurrence of a Change in Control, the Company terminates the
Employee’s employment because his position has been
eliminated in connection with a restructuring or a reduction in
force, as determined by the Company.
(c) The Employee’s receipt of any Severance
Pay or any other benefits pursuant to this Agreement shall be
subject to, and contingent upon, the Employee’s furnishing to
the Company a Release and Waiver of Claims in the form attached
hereto as Exhibit A (the “Release”
) within the applicable time period set forth therein, but in no
event later than forty-five days following termination of
employment, and permitting such Release to become effective in
accordance with its terms (such date, the “Release
Effective Date” ).
7. Amount of Severance
Pay.
During the Continuation Period, the
Company shall pay the Employee Severance Pay at an annual rate
equal to the sum of:
(a) The Employee’s base compensation at the
annual rate in effect on the date 30 days prior to the date when
the termination of his employment with the Company is effective;
plus
(b) The arithmetic mean of the Employee’s
annual bonuses for the last three calendar years completed prior to
the date when the termination of his employment with the Company is
effective. In the event that the Employee received no bonus from
the Company for one or more of such calendar years, the years in
which no bonus was paid shall be disregarded and the arithmetic
mean of the Employee’s bonuses for the remaining years (if
any) shall be used.
Such amount, as determined in
accordance with Sections 7(a) and 7(b), shall be paid at periodic
intervals in accordance with the Company’s standard payroll
procedures.
8. Other Benefits.
(a) Stock Options and Restricted
Stock.
(i) Immediately upon the occurrence of the event
described in Section 6(a), there shall vest immediately such
number of unvested stock options and shares of restricted stock
granted to Employee by the Company that would have vested in
accordance with the applicable vesting schedule as if
Employee’s had been employed for an additional 12 months as
of the date of termination.
(ii) All unvested stock options and shares of
restricted stock granted to Employee by the Company shall vest
immediately upon the occurrence of one of the events described in
Section 6(b).
4.
In the case of the foregoing clause
(ii) only, the post-termination exercise grace period under
the Employee’s stock options shall commence at the end of the
Continuation Period. The Employee represents that he has consulted
or will consult a tax adviser regarding the impact of this
Subsection (a) on the tax treatment of Employee’s stock
options and shares of restricted stock.
(b) Group Insurance.
At the commencement of the
Continuation Period, the Employee (and, where applicable, his
dependents) shall be entitled to convert his key employee long-term
disability policy and group life insurance policy into individual
policies pursuant to the terms of such policies. Should the
Employee elect to convert either or both of such policies, the
Company will pay the premiums for such policy or policies during
the Continuation Period directly to the insurer in accordance with
its standard billing practices. At the commencement of the
Continuation Period, the Employee shall be eligible to continue his
group health continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1986, and the Company will pay the
premiums for such coverage during the Continuation Period. The
foregoing notwithstanding, in the event that the Employee becomes
eligible for comparable group insurance coverage in connection with
new employment, the premium payments by the Company under this
Subsection (b) shall terminate immediately.
(c) Outplacement
Services. If one of the
events described in Section 6 has occurred, the Employee shall
be entitled to reasonable outplacement services at the
Company’s expense. Such services shall be provided by a firm
selected by the Employee from a list compiled by the Company and
shall be limited to a period of six consecutive months.
9. Limitation on
Payments.
(a) Reductions.
If any payment or benefit Employee
would receive in connection with a Change in Control from the
Company or otherwise (a “ Payment ”)
would (i
