Exhibit 10.9

Execution Copy

 

 

 

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), made effective
as of May 14, 2013, is entered into by Intercept Pharmaceuticals, Inc. (the
“Company”) and Daniel Regan (“Executive”).

 

WHEREAS, the Executive and the Company are parties to an Employment Agreement
dated March 1, 2013, which was amended by an Amendment to Employment agreement
dated April 12, 2013 (as amended, the “Prior Agreement”);

 

WHEREAS, the Executive commenced employment with the Company on March 4, 2013
(the “Commencement Date”);

 

WHEREAS, the Company and the Executive desire to amend and restate the Prior
Agreement on the terms and conditions hereinafter set forth, which shall
supersede the Prior Agreement.

 

NOW THEREFORE, in consideration of the mutual covenants and promises contained
in this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties to this Agreement,
the parties agree as follows:

 

1. Term of Employment. The Company hereby agrees to continue to employ
Executive, and Executive hereby accepts employment with the Company, upon the
terms set forth in this Agreement, until March 4, 2014, unless sooner terminated
in accordance with the provisions of Section 4 (such period, the “Initial
Term”); provided, however, that on each anniversary of the Commencement Date,
the term of employment under this Agreement shall be automatically extended for
an additional one-year period (each such period, a “Subsequent Period”) unless
terminated sooner pursuant to Section 4 or if, at least thirty (30) days prior
to the applicable anniversary date, either Executive or the Company provides
written notice to the other party electing not to extend. The Initial Term
together with each Subsequent Term, if any, are referred to hereinafter as the
“Agreement Term.”

 

2. Title; Capacity. During the Agreement Term, the Company will employ Executive
as its Chief Commercial Officer to perform the duties and responsibilities
inherent in such position (which shall initially include, without limitation,
those set forth in Schedule 1 to this Agreement) and such other duties and
responsibilities as the Chief Executive Officer of the Company (the “CEO”) shall
from time to time reasonably assign to Executive. On an annual basis, the
Company’s Board of Directors (the “Board”), in consultation with Executive and
the CEO, will set reasonably attainable, specific goals pursuant to the
objectives of the Company as in effect from time to time. Executive shall report
directly to the CEO and shall be subject to the supervision of, and shall have
such authority as is delegated to Executive by, the CEO, which authority shall
be sufficient to perform his duties hereunder. Executive will be based at the
Company’s headquarters in New York, New York. Subject to Section 4.3 below, the
location of Executive’s employment is subject to change during the course of the
Agreement Term as determined by the Board in consultation with the Executive.
Executive hereby accepts such employment and agrees to undertake the duties and
responsibilities set out in Schedule 1. Executive shall devote his full business
time, energies and attention in the performance of the foregoing services.
Notwithstanding the foregoing, nothing herein shall preclude Executive from (i)
performing services for such other companies as the Company may designate or
permit, (ii) serving, with the prior written consent of the Board, which consent
shall not be unreasonably withheld, as an officer or member of the boards of
directors or advisory boards (or their equivalents in the case of a
non-corporate entity) of non-competing businesses, (iii) serving as an officer
or a member of charitable, educational or civic organizations, (iv) engaging in
charitable activities and community affairs, and (v) managing Executive's
personal investments and affairs; provided, however, that the activities set out
in clauses (i) – (v) shall be limited by Executive so as not to materially
interfere, individually or in the aggregate, with the performance of Executive's
duties and responsibilities hereunder.

 

 

 

3. Compensation and Benefits.

 

3.1 Salary. The Company shall pay Executive an initial annualized base salary of
$350,000, payable in accordance with the Company’s regular payroll practices.
Such base salary shall be subject to annual review and increase (but not
decrease) as may be determined and approved by the Board or the Company’s
Compensation Committee in its sole discretion.

 

3.2 Bonuses. At the end of a given fiscal year, Executive will be eligible to
receive a bonus equal to up to 40% of his base salary in effect at the end of
such fiscal year. The amount of any such bonus shall be based on factors
including, but not limited to, Executive’s achievement, as determined by the
Board or the Compensation Committee in its sole discretion, of reasonable goals
and milestones established in advance by the Board or the Compensation Committee
in consultation with the CEO and Executive. The period for calculation of the
bonus shall be consistent with the Company’s fiscal year. Such bonus, if any,
will be paid to Executive on or after January 1 and in any case no later than
March 15 of the immediately succeeding fiscal year. The bonus shall be paid in
cash; provided that, if requested by Executive and if approved by the Board or
the Compensation Committee in its sole discretion, some or all of the bonus for
which Executive may be eligible in that future year may be paid in equity under
the Company’s stockholder approved stock plan then in effect (valued at the fair
market value thereof), or any combination of the foregoing. For the period
beginning on the Commencement Date and ending on the last day of the 2013 fiscal
year, Executive shall be eligible to receive a prorated bonus (calculated as the
annual bonus that would have been paid for the entire 2013 fiscal year
multiplied by a fraction the numerator of which is equal to the number of days
Executive worked in the applicable fiscal year and the denominator of which is
equal to the total number of days in such year). To the extent that the Company
is required pursuant to Section 954 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act to develop and implement a policy (the “Policy”)
providing for the recovery from the Executive of any payment of incentive-based
compensation paid to the Executive that was based upon erroneous data contained
in an accounting statement, this Agreement shall be deemed amended and the
Policy incorporated herein by reference as of the date that the Company takes
all necessary corporate action to adopt the Policy, without requiring any
further action of the Company or the Executive, provided that any such Policy
shall only be binding on the Executive if the same Policy applies to the
Company's other executive officers.

 

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3.3 Equity Awards. At the sole discretion of the Board or the Company’s
Compensation Committee, stock options or other equity-based awards may be
granted to Executive from time to time.

 

3.4 Fringe Benefits. Executive shall be entitled to participate in all bonus and
benefit programs that the Company establishes and makes available to its
executives and/or employees from time to time, including, but not limited to,
health care plans, dental care plans, supplemental retirement plans, life
insurance plans, disability insurance plans and incentive compensation plans, to
the extent that Executive is eligible under, and subject to the terms and
conditions of, the applicable plan documents governing such programs. The
Company shall pay 100% of the premium cost for health insurance coverage for
Executive, his spouse and children, provided that his spouse and dependents are
not covered by an equivalent health insurance plan provided by his spouse’s
employer. Executive shall be eligible to accrue up to four (4) weeks of paid
vacation each calendar year (to be taken at such times and in such number of
days as Executive shall determine in consultation with the CEO and in a manner
so as not to impair or otherwise interfere with Executive’s ability to perform
his duties and responsibilities hereunder). The vacation days for which
Executive is eligible shall accrue at the rate of 1.67 days per month that
Executive is employed during such calendar year. Vacation accrual will be capped
at 1.75 times Executive’s annual vacation accrual. When Executive’s accrued
vacation reaches the cap, Executive will not accrue additional vacation time
until some of the previously accrued vacation is used and the accrued amount
falls below the cap, unless the Company is acquired by another business venture,
in which case none of the previous year’s accrued vacation will be subject to a
cap. Executive shall also be eligible for paid holidays and up to five (5) paid
sick days annually, in accordance with the Company’s policies for its senior
executives as in effect from time to time. At the end of each calendar year, all
unused sick days shall be forfeited.

 

3.5 Relocation. The Company shall provide reimbursement to Executive for
reasonable and documented expenses, less all applicable withholdings and
deductions required by law, relating to (a) Executive’s relocation from Boston,
Massachusetts to a residence within a reasonable daily commute from New York
City and (b) Executive commuting from his home in Massachusetts to New York
prior to the date he relocates to the New York City area (collectively,
“Relocation Assistance”). The Relocation Assistance is conditioned on
Executive’s relocation to the New York City area in 2013. The Company will
reimburse Executive for authorized and documented eligible relocation expenses
as soon as commercially practicable following the date on which Executive
provides documentation of the expense which is reasonably acceptable to the
Company, but in any event no later than 60 days following the date on which
Executive submits all necessary documentation relating to such expense.

 

3.6 Reimbursement of Expenses. The Company shall reimburse Executive for
reasonable travel, entertainment and other expenses incurred or paid by
Executive in connection with, or related to the performance of his duties,
responsibilities or services under this Agreement, upon presentation by
Executive of documentation, expense statements, vouchers and/or such other
supporting information as the Company may request. Executive must submit proper
documentation for each such expense within sixty (60) days after the later of
(i) his incurrence of such expense or (ii) his receipt of the invoice for such
expense. The Company will reimburse Executive for that expense within thirty
(30) days after receipt of the documentation.

 

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3.7 Withholdings. Payments made under this Section 3 shall be subject to
applicable federal, state and local taxes and withholdings, if any.

 

4. Termination of Employment Period. The Agreement Term shall terminate upon the
occurrence of any of the following:

 

4.1 Expiration of the Agreement Term. This Agreement shall expire at the end of
the Agreement Term; provided, that notice is given in accordance with Section 1
of this Agreement.

 

4.2 Termination by the Company for Cause. At the election of the Company, for
Cause (as defined below), immediately following written notice by the Company to
Executive, which notice shall identify in reasonable detail the Cause upon which
termination is based. For the purposes of this Agreement, “Cause” for
termination shall be deemed to exist upon:

 

(a) a good faith finding by the Company that (i) Executive has engaged in
material dishonesty, willful misconduct, or gross negligence; (ii) Executive has
breached or has threatened to breach his Invention, Non-Disclosure, and
Non-Solicitation Agreement; or (iii) Executive has materially breached this
Agreement, and Executive has failed to cure such conduct or breach within thirty
(30) days after his receipt of written notice from the Company of such breach;
or

 

(b) Executive’s conviction, guilty plea, or entry of nolo contendere to any
crime involving moral turpitude, fraud or embezzlement, or any felony.

 

4.3 Termination By Executive for Good Reason. Executive may terminate the
Agreement Term for Good Reason. For purposes of this Agreement, “Good Reason”
means the occurrence, without Executive’s written consent, of any of the events
or circumstances set forth in clauses (a) through (c) below. In addition,
notwithstanding the occurrence of any of the events enumerated in clauses (a)
through (c), such occurrence shall not be deemed to constitute Good Reason if,
within thirty (30) days after the Company’s receipt of written notice from
Executive of the occurrence or existence of an event or circumstance enumerated
in clauses (a) through (c), such event or circumstance has been remedied by the
Company. Executive shall not be deemed to have terminated his employment for
Good Reason unless he first delivers a written notice of termination to the
Company identifying in reasonable detail the acts or omissions constituting Good
Reason within ninety (90) days after their occurrence and the provision of this
Agreement relied upon, such acts or omissions are not cured by the Company
within thirty (30) days of the receipt of such notice, and Executive actually
ends his employment within one-hundred and twenty (120) days after the Company’s
failure to cure.

 

(a) any other action or omission by the Company which results in a material
diminution in Executive’s position, status, offices, titles, authority,
responsibilities, or reporting requirements;

 

(b) a change by the Company in the location at which Executive performs his
principal duties for the Company to a different location that is (i) outside a
radius of fifty (50) miles from Executive’s principal residence immediately
prior to the date on which such change occurs, or (ii) more than fifty (50)
miles from the location at which Executive performed his principal duties for
the Company immediately prior to the date on which such change occurs. The
Executive’s residence for purposes of this Section 4.3(b) shall be the residence
he establishes in the New York City area prior to the end of 2013 pursuant to
Section 3.5 ; or

 

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(c) any material breach by the Company of this Agreement.

 

4.4 Death or Disability. This Agreement shall terminate upon Executive’s death
or disability. As used in this Agreement, the determination of “disability”
shall occur when Executive, due to a physical or mental disability, for a period
of 60 consecutive days, or 120 days in the aggregate whether or not consecutive,
during any 360-day period, is unable to perform the services contemplated under
this Agreement. A determination of disability shall be made by a physician
satisfactory to both Executive and the Company; provided, that, if Executive and
the Company do not agree on a physician, Executive and the Company shall each
select a physician and these two together shall select a third physician, whose
determination as to disability shall be binding on all parties.

 

4.5 Termination by Executive Without Good Reason or Termination by the Company
Without Cause. At the election of Executive without Good Reason or by the
Company without Cause, upon not less than thirty (30) days’ prior written notice
to the other party.

 

5. Effect of Termination.

 

5.1 Payments Upon Termination for Any Reason. In the event Executive’s
employment is terminated pursuant to Section 4, the Company shall pay to
Executive (or his estate or legal representative, if applicable), on the date of
his termination of employment with the Company, the compensation and benefits
under Sections 3.1, 3.4, 3.5 and 3.6 that are accrued and unpaid through such
termination date (including, without limitation, an amount equal to all accrued
but unused vacation pay and unreimbursed expenses). In the event of termination
of Executive’s employment by Executive by reason of non-renewal of the Agreement
Term pursuant to Sections 1 and 4.1, the Company for Cause pursuant to Section
4.2, by reason of Executive’s death or disability pursuant to Section 4.4, or by
Executive without Good Reason pursuant to Section 4.5, Executive shall not
receive any compensation or benefits other than as expressly stated in this
Section 5.1 and as otherwise required by law.

 

5.2 Termination by the Company Without Cause, by the Company by Reason of
Non-Renewal of Agreement Term, or by Executive for Good Reason. Subject to
Section 5.3 below, in addition to the payments and provisions under Section 5.1,
in the event of termination of Executive’s employment by the Company by reason
of non-renewal of the Agreement Term pursuant to Sections 1 and 4.1, by
Executive for Good Reason pursuant to Section 4.3, or by the Company without
Cause pursuant to Section 4.5, provided that Executive executes a release of
claims substantially in the form attached hereto as Exhibit A (the “Release”),
which Release must be effective and irrevocable prior to the sixty (60th) day
following the termination of the Executive's employment (the “Review Period”),
the Company shall provide Executive with the following:

 

(a) twelve (12) months of Executive’s base salary in effect at the time of
termination of employment, payable according to the Company’s payroll commencing
on the first payroll date following the date the Release is effective and
irrevocable (the “Payment Date”); and

 

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(b) the Company will, for a period of twelve (12) months following Executive’s
termination from employment, continue Executive’s participation in the Company’s
group health plan and dental plan and shall pay that portion of the premiums
that the Company paid on behalf of Executive and his dependents during
Executive’s employment, provided, however, that if the Company’s health
insurance plan and/or dental plan does not permit such continued participation
in such plan after Executive’s termination of employment, then the Company shall
pay that portion of the premiums associated with COBRA continuation coverage
that the Company paid on behalf of Executive and his dependents during
Executive’s employment, including any administrative fee, on Executive’s behalf
for such twelve-month period; and provided, further, that if Executive becomes
employed with another employer during the period in which continued health
insurance and/or dental insurance is being provided pursuant to this Section,
the Company shall not be required to continue such health and dental benefits,
or if applicable, to pay the costs of COBRA, if Executive becomes covered under
a health insurance plan of the new employer. (For purposes of this Section
5.2(b), the term “Executive” shall include, to the extent applicable,
Executive’s spouse and any of his dependents covered under the Company’s group
health plan and/or dental plan prior to his termination of employment).

 

5.3 Termination in the Event of a Change in Control.

 

(a) In addition to the payments and provisions under Section 5.1 but in lieu of,
and not in addition to, the payments required pursuant to Section 5.2 above and
5.5 below, in the event Executive’s employment with the Company is terminated by
the Company by reason of non-renewal of the Agreement Term pursuant to Sections
1 and 4.1, by Executive for Good Reason pursuant to Section 4.3, or by the
Company without Cause pursuant to Section 4.5, in any such case, in anticipation
of and/or within twelve (12) months following a Change in Control (as defined
below), provided that Executive (or his legal representative, if applicable)
executes a Release and the Release becomes effective and irrevocable prior to
the end of the Review Period, Executive shall be entitled to the following:

 

(i) a lump sum cash amount equal to twelve (12) months of Executive’s base
salary in effect at the time of Executive’s termination, such payment to be made
on the Payment Date;

 

(ii) for up to twelve (12) months after Executive’s date of termination, the
Company shall continue Executive’s participation in the Company’s group health
and dental plan and shall pay that portion of the premiums that the Company paid
on behalf of Executive and his dependents during Executive’s employment;
provided, however, that if the Company’s health insurance plan and/or dental
insurance plan does not permit Executive’s continued participation in such plan
after his termination of employment, then the Company shall pay that portion of
the premiums associated with COBRA continuation coverage that the Company paid
on behalf of Executive and his dependents during Executive’s employment,
including administrative fees, on Executive’s behalf for so long as COBRA
continuation coverage is available, up to twelve (12) months; and provided,
further, that if Executive becomes employed with another employer during the
period in which continued health insurance and/or dental insurance is being
provided pursuant to this Section, the Company shall not be required to continue
the relevant benefits, or if applicable, to pay the relevant costs of COBRA, if
Executive becomes covered under a health insurance plan and/or dental plan of
the new employer. (For purposes of this Section 5.3(a)(ii), the term “Executive”
shall include, to the extent applicable, Executive’s spouse and any of his
dependents covered under the Company’s group health plan and/or dental plan
prior to his termination of employment.)

 

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(b) As used herein, “Change in Control” shall occur or be deemed to occur if any
of the following events occur:

 

(i) any sale, lease, exchange or other transfer (in one transaction or a series
of transactions) of all or substantially all of the assets of the Company; or

 

(ii) any consolidation or merger of the Company (including, without limitation,
a triangular merger) where the shareholders of the Company immediately prior to
the consolidation or merger, would not, immediately after the consolidation or
merger, beneficially own, directly or indirectly, shares representing in the
aggregate more than fifty percent (50%) of the combined voting power of all the
outstanding securities of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any); or

 

(iii) a third person, including a “person” as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (but other than
(x) the Company, (y) any employee benefit plan of the Company, or (z) investors
purchasing equity securities of the Company pursuant to a financing or a series
of financings approved by the Board of Directors of the Company) becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly, of Controlling Securities (as defined below). “Controlling
Securities” shall mean securities representing 25% or more of the total number
of votes that may be cast for the election of the directors of the Company.

 

5.4 Effect of Termination on Stock Options and Other Equity Compensation.

 

(a) In the event of Executive’s termination by Executive by reason of
non-renewal of the Agreement Term pursuant to Sections 1 and 4.1, by the Company
for Cause pursuant to Section 4.2, or by Executive without Good Reason pursuant
to Section 4.5, all unvested stock options and other equity-based awards granted
to Executive before and after the date of this Agreement shall be immediately
forfeited upon the effective date of such termination of employment or as
otherwise provided in the award agreement; provided, that, Executive shall have
until the earlier of expiration date of the option or ninety (90) days from the
date of termination of Executive to exercise all vested options unless the stock
plan pursuant to which the option is granted requires earlier termination in
connection with a liquidation or sale of the Company.

 

(b) In the event of Executive’s termination by the Company by reason of
non-renewal of the Agreement Term pursuant to Sections 1 and 4.1, by Executive
for Good Reason pursuant to Section 4.3, or by the Company without Cause
pursuant to Section 4.5, and provided that Executive (or his legal
representative, if applicable) executes a Release and the Release becomes
effective and irrevocable prior to the end of the Review Period, that number of
Executive’s unvested stock options and other equity-based awards that would
otherwise have vested from the effective date of Executive’s termination to the
first anniversary of such date shall vest as of the date the Release is
effective and irrevocable and Executive (or his estate or legal representative,
if applicable) shall have until the earlier of the expiration date of the option
or one (1) year from the date of termination of Executive’s employment to
exercise all vested options unless the stock plan pursuant to which the option
is granted requires earlier termination in connection with a liquidation or sale
of the Company.

 

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(c) In the event Executive’s employment with the Company is terminated by the
Company by reason of non-renewal of the Agreement Term pursuant to Sections 1
and 4.1, by Executive for Good Reason pursuant to Section 4.3, or by the Company
without Cause pursuant to Section 4.5, in any such case, in anticipation of, on
or within twelve (12) months following a Change in Control, in lieu of the
acceleration provided for pursuant to Section 5.4(b) above, provided that
Executive (or his legal representative, if applicable) executes a Release and
the Release becomes effective and irrevocable prior to the end of the Review
Period, all of Executive’s unvested stock options and other equity-based awards
then in effect shall vest as of the date the Release is effective and
irrevocable and Executive (or his estate or legal representative, if applicable)
shall have until the earlier of the expiration date of the option or one (1)
year from the date of termination of Executive’s employment to exercise all
vested options unless the stock plan pursuant to which the option is granted
requires earlier termination in connection with a liquidation or sale of the
Company.

 

(d) In the event Executive’s employment with the Company is terminated by reason
of disability pursuant to Section 4.4, all unvested stock and stock options
granted to Executive before and after the date of this Agreement shall be
immediately forfeited upon the effective date of such termination of employment
or as otherwise provided in the option agreement; provided, that, Executive
shall have until the earlier of the expiration date of the option or one (1)
year from the date of termination of Executive’s employment to exercise all
vested options unless the stock plan pursuant to which the option is granted
requires earlier termination in connection with a liquidation or sale of the
Company.

 

5.5 Review Period. In the event that the Review Period begins in one taxable
year of the Executive and ends in a later taxable year, any payments contingent
upon Executive’s execution without revocation of the Release prior to the end of
the Review Period will be made or commence to be paid on the first payroll date
in the later taxable year. In no event will any payments be made or commence to
be paid later than the ninetieth (90) day following the Executive’s date of
termination.

 

5.6 Limitation on Benefits. The Company will make the payments under this
Agreement without regard to whether the deductibility of such payments (or any
other payments or benefits) would be limited or precluded by Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”) and without regard to
whether such payments would subject Executive to the federal excise tax levied
on certain “excess parachute payments” under Code Section 4999 of the Code;
provided, however, that if the Total After-Tax Payments (as defined below) would
be increased by the reduction or elimination of any payment and/or other benefit
(including the vesting of the options) under this Agreement, then the amounts
payable under this Agreement will be reduced or eliminated as follows, if
possible: (i) first, by reducing or eliminating any cash payments or other
benefits (other than the vesting of the options) and (ii) second, by reducing or
eliminating the vesting of that options that occurs as a result of such Change
in Control (as provided above), to the extent necessary to maximize the Total
After-Tax Payments. The Company’s independent, certified public accounting firm
will determine whether and to what extent payments or vesting under this
agreement are required to be reduced in accordance with the preceding sentence.
For purposes of this Agreement, “Total After-Tax Payments” means the total of
all “parachute payments” (as that term is defined in Section 280G(b)(2) of the
Code) made to or for the benefit of Executive (whether made under the Agreement
or otherwise), after reduction for all applicable federal taxes (including,
without limitation, the tax described in Section 4999 of the Code). The Company
agrees to pay for all costs associated with the determination of the payments or
vesting required to be reduced and for the avoidance of doubt, shall not be
required to pay any taxes, penalties, interest or other expenses to which
Executive may be subject.

 

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5.7 Withholdings. Payments made under this Section 5 shall be subject to
applicable federal, state and local taxes and withholdings.  If the payment of
any COBRA or health insurance premiums would otherwise violate the
nondiscrimination rules or cause the reimbursement of claims to be taxable under
the Patient Protection and Affordable Care Act of 2010, together with the Health
Care and Education Reconciliation Act of 2010 (collectively, the “Act”) or
Section 105(h) of the Code, the Company paid premiums shall be treated as
taxable payments and be subject to imputed income tax treatment to the extent
necessary to eliminate any discriminatory treatment or taxation under the Act or
Section 105(h) of the Code. 

 

6. Notices. All notices, requests, consents and other communications hereunder
will be in writing, will be addressed, if to the Company, at its principal
corporate offices to the attention of the Legal Department, and if to Executive,
at his address set forth on the signature page hereto, or in either case, such
other address as a party may designate by notice hereunder, and will be either
(i) delivered by hand, (ii) sent by overnight courier, or (iii) sent by
registered or certified mail, return receipt requested, postage prepaid. All
notices, requests, consents and other communications hereunder will be deemed to
have been given either (i) if by hand, at the time of the delivery thereof to
the receiving party at the address of such party set forth above, (ii) if sent
by overnight courier, on the next business day following the day such notice is
delivered to the courier service, or (iii) if sent by registered or certified
mail, on the fifth business day following the day such mailing is made.

 

7. Absence of Restrictions. Executive represents and warrants that he is not
bound by any employment contracts, restrictive covenants or other restrictions
that prevent Executive from entering into employment with, or carrying out his
responsibilities for, the Company, or which are in any way inconsistent with any
of the terms of this Agreement.

 

8. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whether written
or oral relating to the subject matter of this Agreement, with the exception of
the Invention, Non-Disclosure, and Non-Solicitation Agreement, dated as March 1,
2013, by and between the Company and Executive. Notwithstanding the foregoing,
the parties to this Agreement acknowledge that stock options and other equity
awards may be granted by the Company to Executive under and pursuant to the
Intercept Pharmaceuticals, Inc. 2012 Equity Incentive Plan and any amendments
thereto, as well as any additional plans, and the award agreements related to
such plans.

 

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9. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and Executive.

 

10. Governing Law; Consent to Jurisdiction. This Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of New York
without regard to conflict of law principles. Any action, suit or other legal
proceeding arising under or relating to any provision of this Agreement shall be
commenced only in a court of the State of New York (or, if appropriate, a
federal court located within the State of New York), and the Company and
Executive each consents to the jurisdiction of such a court. The Company and
Executive each hereby irrevocably waive any right to a trial by jury in any
action, suit or other legal proceeding arising under or relating to any
provision of this Agreement.

 

11. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of both parties and their respective successors and assigns,
including any corporation with which, or into which, the Company may be merged
or which may succeed to the Company’s assets or business, provided, however,
that the obligations of Executive are personal and shall not be assigned by him.
Notwithstanding the foregoing, if Executive dies the compensation and benefits
stated in this Agreement will be paid to his beneficiary or to his estate if no
beneficiary.

 

12. Miscellaneous.

 

12.1 No Waiver. No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.

 

12.2 Captions. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.

 

12.3 Severability. In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.

 

12.4 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. This Agreement may be delivered by
facsimile, and facsimile signatures shall be treated as original signatures for
all applicable purposes.

 

12.5 Blue Penciling. To the extent that any provision herein or in any plan of
nonqualified deferred compensation that this document is a part of contravenes
the requirements of Code Section 409A or the regulations thereunder), such
provision shall be appropriately modified in accordance with available IRS
guidance (including without limitation IRS Notice 2010-6 and related guidance)
so that Executive is not subject to the adverse effects of Code Section 409A but
will nevertheless retain, to the extent possible, the economic benefit of the
provision.

 

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12.6 Section 409A.

 

(a) The payments under this Agreement are intended either to be exempt from
Section 409A of the Code under the short-term deferral, separation pay, or other
applicable exception, or to otherwise comply with Section 409A. The parties
agree that this Agreement shall be administered in a manner consistent with such
intent. For purposes of Section 409A, all payments under this Agreement shall be
considered separate payments. If any amount or benefit payable to the Executive
under this Agreement upon a “termination of employment” is determined by the
Company to constitute a “deferral of compensation” for purposes of Section 409A
(after taking into account any applicable exceptions), such amount or benefit
shall not be paid or provided until the Executive has also experienced a
“separation from service” from the Company within the meaning of Section 409A.
Notwithstanding any provision to the contrary, to the extent Executive is
considered a specified employee under Section 409A and would be entitled during
the six-month period beginning on Executive’s separation from service to a
payment that is not otherwise excluded under Section 409A, such payment will not
be made until the earlier of the six-month anniversary of Employee’s separation
from service or death; provided that the first payment made after the delay
shall include all amounts that would have been paid earlier but for such six (6)
month delay. At the request of the Executive, the Company shall set aside those
payments that would otherwise be made in such six-month period in a trust that
is in compliance with Rev. Proc. 92-64.

 

(b) If an expense reimbursement or provision of in-kind benefit provided to the
Executive under this Agreement is not exempt from Section 409A of the Code, the
following rules apply: (i) in no event shall any reimbursement be paid after the
last day of the taxable year following the taxable year in which the expense was
incurred; (ii) the amount of reimbursable expenses incurred or provision of
in-kind benefits in one tax year shall not affect the expenses eligible for
reimbursement or the provision of in-kind benefits in any other tax year; and
(iii) the right to reimbursement for expenses or provision of in-kind benefits
is not subject to liquidation or exchange for any other benefit.

 

(c) The parties agree to negotiate in good-faith the amendment of this
Agreement, as necessary, to avoid any violations of Section 409A in a manner
that preserves the original intent of the parties to the extent reasonably
possible. Notwithstanding the foregoing, the Company makes no representations
that the payments and benefits provided under this Agreement comply with Section
409A and in no event shall the Company be liable for all or any portion of any
taxes, penalties, interest or other expenses that may be incurred by Executive
on account of non-compliance with Section 409A.

 

 

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first set forth above. 

 

  THE COMPANY:       INTERCEPT PHARMACEUTICALS, INC.               By:  /s/ Mark
Pruzanski     Name:  Mark Pruzanski, MD
Title:    President and Chief Executive Officer

 

 

  EXECUTIVE:               By:  /s/ Daniel Regan     Name:   Daniel Regan  
Address for Notice Purposes:   __________________________________
__________________________________
__________________________________     __________________________________      
           

 

 

[Employment Agreement – Daniel Regan]

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Exhibit A

 

RELEASE OF CLAIMS

 

FOR AND IN CONSIDERATION OF the payments and benefits (the “Separation
Benefits”) to be provided to me in connection with the separation of my
employment, in accordance with the Amended and Restated Employment between
Intercept Pharmaceuticals, Inc. (the “Company”) and me dated as May 14, 2013
(the “Agreement”), which Separation Benefits are conditioned on my signing this
Release of Claims (“Release”) and which I will forfeit unless I execute and do
not revoke this Release of Claims, I, on my own behalf and on behalf of my heirs
and estate, voluntarily, knowingly and willingly release and forever discharge
the Company, its subsidiaries, affiliates, parents, and stockholders, together
with each of those entities’ respective officers, directors, stockholders,
employees, agents, fiduciaries and administrators (collectively, the
“Releasees”) from any and all claims and rights of any nature whatsoever which I
now have or in the future may have against them up to the date I execute this
Release, whether known or unknown, suspected or unsuspected. This Release
includes, but is not limited to, any rights or claims relating in any way to my
employment relationship with the Company or any of the other Releasees or the
termination thereof, any contract claims (express or implied, written or oral),
including, but not limited to, the Agreement, or any rights or claims under any
statute, including, without limitation, the Americans with Disabilities Act, the
Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act,
the Rehabilitation Act of 1973 (including Section 504 thereof), Title VII of the
1964 Civil Rights Act, the Civil Rights Act of 1866 (42 U.S.C. § 1981), the
Civil Rights Act of 1991, the Equal Pay Act, the National Labor Relations Act,
the Worker Adjustment and Retraining Notification Act, the Family Medical Leave
Act, the Lilly Ledbetter Fair Pay Act, the Genetic Information
Non-Discrimination Act, the New York State Human Rights Law, the New York City
Human Rights Law, and the Employee Retirement Income Security Act of 1974, all
as amended, and any other federal, state or local law. This Release specifically
includes, but is not limited to, any claims based upon the right to the payment
of wages, incentive and performance compensation, bonuses, equity grants,
vacation, pension benefits, 401(k) Plan benefits, stock benefits or any other
employee benefits, or any other rights arising under federal, state or local
laws prohibiting discrimination and/or harassment on the basis of race, color,
age, religion, sexual orientation, religious creed, sex, national origin,
ancestry, alienage, citizenship, nationality, mental or physical disability,
denial of family and medical care leave, medical condition (including cancer and
genetic characteristics), marital status, military status, gender identity,
harassment or any other basis prohibited by law.

 

As a condition of the Company entering into this Release, I further represent
that I have not filed against the Company or any of the other Releasees, any
complaints, claims or lawsuits with any arbitral tribunal, administrative
agency, or court prior to the date hereof, and that I have not transferred to
any other person any such complaints, claims or lawsuits. I understand that by
signing this Release , I waive my right to any monetary recovery in connection
with a local, state or federal governmental agency proceeding and I waive my
right to file a claim seeking monetary damages in any arbitral tribunal,
administrative agency, or court. This Release does not: (i) prohibit or restrict
me from communicating, providing relevant information to or otherwise
cooperating with the U.S. Equal Employment Opportunity Commission or any other
governmental authority with responsibility for the administration of fair
employment practices laws regarding a possible violation of such laws or
responding to any inquiry from such authority, including an inquiry about the
existence of this Release or its underlying facts, or (ii) require me to notify
the Company of such communications or inquiry. Furthermore, notwithstanding the
foregoing, this Release does not include and will not preclude: (a) rights or
claims to vested benefits under any applicable retirement and/or pension plans;
(b) rights under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”); (c) claims for unemployment compensation; (d) rights to defense and
indemnification, if any, from the Company for actions or inactions taken by me
in the course and scope of my employment with the Company and its parents,
subsidiaries and/or affiliates; (e) any rights I may have to obtain contribution
as permitted by law in the event of entry of judgment against the Company as a
result of any act or failure to act for which I and the Company are held jointly
liable; (f) the right to any equity awards that vested prior to or because of
the termination of my employment and/or (g) any actions to enforce the
Agreement.

 

13

 

I acknowledge that, in signing this Release, I have not relied on any promises
or representations, express or implied, other than those that are set forth
expressly herein or in the Agreement and that are intended to survive separation
from employment, in accordance with the terms of the Agreement.

 

I further acknowledge that:

 

(1)I first received this Release on the date of the Agreement to which it is
attached as Exhibit A;

 

(2)I understand that, in order for this Release to be effective, I may not sign
it prior to the date of my separation of employment with the Company but that if
I wish to receive the Separation Benefits, I must sign and return this Release
prior to the sixtieth (60th) day following my separation of employment;

 

(3)I have carefully read and understand this Release;

 

(4)The Company advised me to consult with an attorney and/or any other advisors
of my choice before signing this Release;

 

(5)I understand that this Release is legally binding and by signing it I give up
certain rights;

 

(6)I have voluntarily chosen to enter into this Release and have not been forced
or pressured in any way to sign it;

 

(7)I acknowledge and agree that the Separation Benefits are contingent on
execution of this Release, which releases all of my claims against the Company
and the Releasees, and I knowingly and voluntarily agree to release the Company
and the Releasees from any and all claims I may have, known or unknown, in
exchange for the benefits I have obtained by signing, and that these benefits
are in addition to any benefit I would have otherwise received if I did not sign
this Release;

 

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(8)I have seven (7) days after I sign this Release to revoke it by notifying the
Company in writing. The Release will not become effective or enforceable until
the seven (7) day revocation period has expired;

 

(9)This Release includes a waiver of all rights and claims I may have under the
Age Discrimination in Employment Act of 1967 (29 U.S.C. §621 et seq.); and

 

(10)This Release does not waive any rights or claims that may arise after this
Release becomes effective, which is seven (7) days after I sign it, provided
that I do not exercise my right to revoke this Agreement.

 

Intending to be legally bound, I have signed this Release as of the date written
below.

 

 

 

Signature:_____________________ ______________________________ Daniel Regan
   Date signed

 

 

 

 

 

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