Exhibit 10.1

FIRST AMENDMENT

TO AMENDED AND RESTATED SEVERANCE AGREEMENT

This FIRST AMENDMENT TO AMENDED AND RESTATED SEVERANCE AGREEMENT (“First
Amendment”) is entered into on April 27, 2007, by and between METABASIS
THERAPEUTICS, INC., a Delaware corporation (the “Company”), and PAUL K. LAIKIND
(the “Employee”). Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to such terms in the Severance Agreement (as defined
below).

WHEREAS, the Company and Employee have entered into an Amended and Restated
Severance Agreement dated July 19, 2006 (the “Severance Agreement”); and

WHEREAS, the Company and Employee desire to amend the Severance Agreement as set
forth in this First Amendment;

NOW, THEREFORE, in consideration of the premises set forth herein and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Company and Employee hereby amend the Severance Agreement as follows:

1.  The following paragraph shall be added to the end of Section 6 of the
Severance Agreement:

“ 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 an effective Release and Waiver of Claims in the form
attached hereto as Exhibit A.”

2.  A new Section 11(i) is hereby added to the Severance Agreement as follows:

“(i)          Application of Internal Revenue Code Section 409A.  If the Company
determines that any severance benefit or payment under this Agreement fails to
satisfy the distribution requirement of Section 409A(a)(2)(A) of the Internal
Revenue Code as a result of Section 409A(a)(2)(B)(i) of the Internal Revenue
Code, the payment of such benefit shall be accelerated to the minimum extent
necessary so that the benefit is not subject to the provisions of Section
409A(a)(1) of the Internal Revenue Code.  (It is the intention of the preceding
sentence to apply the short-term deferral provisions of Section 409A of the
Internal Revenue Code, and the regulations and other guidance thereunder, to any
such payments, and the payment schedule as revised after the application of the
preceding sentence shall be referred to as the “Revised Payment Schedule”.) 
However, if there is no Revised Payment Schedule that would avoid the
application of Section 409A(a)(1) of the Internal Revenue Code, the payment of
such benefits shall not be paid pursuant to a Revised Payment Schedule and
instead shall be delayed to the minimum extent necessary so that such benefits
are not subject to the provisions of Section 409A(a)(1) of the Internal Revenue
Code.  The Company may attach conditions to or adjust the amounts paid under
this Agreement to preserve, as closely as possible, the economic consequences
that would have applied in the absence of this Section 11(i); provided, however,
that no such condition or adjustment shall result in the payments being subject
to Section 409A(a)(1) of the Internal Revenue Code.”

3.  A new Section 11(j) is hereby added to the Severance Agreement  as follows:

“(j)      At-Will Employment; No Employment Rights.  Employee acknowledges and
agrees that Employee’s employment with the Company is “at will,” and subject to
the provisions of this Agreement, may be terminated at any time and for any
reason whatsoever by Employee or the Company, with or without Cause and with or
without advance notice.  This “at-will” employment relationship cannot be
changed except in a writing signed by the Company’s Chairman of the Board.”

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4.  A new Exhibit A is hereby added to the Severance Agreement as follows:

“ EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

(TO BE SIGNED FOLLOWING TERMINATION OF EMPLOYMENT)

In consideration of the payments and other benefits set forth in the Severance
Agreement dated July 19, 2006 (the “Agreement”) to which this form is attached,
I, Paul K. Laikind hereby furnish METABASIS THERAPEUTICS, INC. and any and all
affiliated, subsidiary, related, or successor corporations (collectively, the
“Company”), with the following release and waiver (“Release and Waiver”).

In exchange for the consideration provided to me by the Agreement that I am not
otherwise entitled to receive, I hereby generally and completely release and
forever discharge the Company and its directors, officers, employees,
shareholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, and assigns from any and all claims,
liabilities, demands, causes of action, costs, expenses, attorneys’ fees,
damages, indemnities and obligations of every kind and nature, in law, equity or
otherwise, both known and unknown, suspected and unsuspected, disclosed and
undisclosed, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring prior to my signing this Release and Waiver. 
This general release includes, but is not limited to: (1) all claims arising out
of or in any way related to my employment with the Company or the termination of
that employment; (2) all claims related to my compensation or benefits from the
Company, including, but not limited to, salary, bonuses, commissions, vacation
pay, expense reimbursements, severance pay, fringe benefits, stock, stock
options, or any other ownership interests in the Company, other than as provided
in the Agreement (and provided further that nothing in this general release
shall affect (a) my right to receive a payout of my accrued but unused vacation
and/or paid time off as of my termination date or (b) my rights under any stock
options or other stock awards granted, or under any written commitments
regarding future grants of stock options or other stock awards approved, by the
Company’s Board of Directors or the Compensation Committee thereof prior to my
termination date); (3) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including, but not limited to, claims for fraud, emotional distress, and
discharge in violation of public policy, related to my employment with the
Company or the termination of that employment; and (5) all federal, state, and
local statutory claims related to my employment with the Company or the
termination of that employment, including, but not limited to, claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment
and Housing Act (as amended).

I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows:  “A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” I hereby expressly waive
and relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against the
Company.

I acknowledge and agree that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this Release and Waiver is knowing and
voluntary, and that the consideration given for this Release and Waiver is in
addition to anything of value to which I was already entitled as an executive of
the Company.  If I am 40 years of age or older upon execution of this Release
and Waiver, I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that:  (a) the release and waiver granted
herein does not relate to claims under the ADEA which may arise after this
Release and Waiver is executed; (b) I should consult with an attorney prior to
executing this Release and Waiver; (c) I have twenty-one (21) days in which to
consider this Release and Waiver (although I may choose voluntarily to execute
this Release and Waiver earlier); (d) I have seven (7) days following the
execution of this Release and Waiver to revoke my consent to this Release and
Waiver; and (e) this Release and Waiver shall not be effective until the eighth
day after I execute this Release and Waiver and the revocation period has
expired.

I acknowledge my continuing obligations under my Employee Proprietary
Information and Inventions Agreement with the Company (the “PIIA”) .

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This Release and Waiver, along with the PIIA, constitutes the complete, final
and exclusive embodiment of the entire agreement between the Company and me with
regard to the subject matter hereof.  I am not relying on any promise or
representation by the Company that is not expressly stated herein.  This Release
and Waiver may only be modified by a writing signed by both me and the Chief
Executive Officer of the Company.

Date:

 

 

By:

 

 

 

 

 

 

 

Print Name:

“

 

 

5.  Continuing Effect of Agreement.  Except as expressly set forth in this First
Amendment, all terms and conditions of the Severance Agreement are hereby
ratified and shall continue in full force and effect.

6.  Counterparts.  This First Amendment may be executed in several counterparts,
each of which shall constitute an original and all of which, when taken
together, shall constitute one agreement.

7.  Choice of Law.  This First Amendment shall be construed and enforced in
accordance with and be governed by the laws of the State of California.

IN WITNESS WHEREOF, the parties hereto have duly executed this First Amendment
as of the date first set forth above.

EMPLOYEE:

 

 

 

COMPANY:

 

 

 

 

 

 

 

 

 

 

 

 

 

PAUL K. LAIKIND

 

 

 

METABASIS THERAPEUTICS, INC.

 

 

 

 

 

 

 

 

 

 

 

By:

 

  /s/ Paul K. Laikind

 

By:

 

  /s/ David F. Hale

 

 

 

 

Title:

 

Chairman of the Board

 

 

 

 

 

 

 

 

 

 

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