Exhibit 10.38

VERSARTIS, INC.

 

SEVERANCE BENEFIT PLAN

 

 

 

 

1.

INTRODUCTION .

 

The Versartis, Inc. Severance Benefit Plan (the "Plan") was established by
Versartis, Inc. (the "Company") effective October 6, 2017 (the "Effective
Date"). The purpose of the Plan is to provide for the payment of severance
benefits to certain eligible employees of the Company who meet the eligibility
criteria set forth in Section 3 below and satisfy the other eligibility
requirements set forth in the Plan. This Plan supersedes any severance benefit
plan, policy or practice, whether formal or informal, written or unwritten,
previously announced or maintained by the Company with respect to the Eligible
Employees, except for the Company's Change in Control Severance Benefit Plan
(the "Change in Control Plan ") which remains in full force and effect. This
Plan document also is the Summary Plan Description for the Plan.

 

2.

DEFINITIONS. For purposes of the Plan, the following terms are defined as
follows:

 

(a)"Base Salary" means the Eligible Employee's base salary or regular wage rate
in effect immediately prior to the Eligible Employee's termination date. Base
Salary does not include variable forms of compensation such as but not limited
to overtime, lead premiums, shift differentials, bonuses, incentive
compensation, commissions, expenses or expense allowances.

 

 

(b)

"Board”, means the Board of Directors of the Company.

 

(c)"Cause", as determined by the Board in its sole discretion, means: (i) a
Participant's conviction (including a guilty plea or a no contest plea) of a
felony, or of any other crime involving fraud, dishonesty or moral turpitude;
(ii) a Participant's attempted commission of or participation in a fraud or act
of material dishonesty against the Company; (iii) a Participant's material
breach of any written agreement between a Participant and the Company (including
but not limited to a Participant's Proprietary Information and Invention
Agreement or any other restrictive covenant agreements) or material breach or
material neglect of any statutory or fiduciary duty a Participant owes to the
Company as reasonably determined by the Chief Executive Officer of the Company
(the "CEO") (except when a Participant is the CEO) and the Board, in each case,
after having provided the Participant with not less than thirty (30) days
written notice of same and with the opportunity to cure of the same duration to
the extent curable; or (iv) a Participant's conduct that constitutes gross
insubordination, incompetence or habitual neglect of a Participant's duties as
reasonably determined by the CEO (except when the Participant is the CEO) and
the Board, in each case, after having provided the Participant with not less
than thirty (30) days written notice of same and with the opportunity to cure of
the same duration to the extent curable.

 

(d)"Change in Control”, means a "Change in Control" as defined in the Company's
2014 Equity Incentive Plan, as it may be amended from time to time.

 

 

 

 

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(e)"Participant" means each individual who is employed by the Company and has
received a written notification that he or she is eligible to participate in the
Plan.

 

(f)"Plan Administrator " means the Board or any committee of the Board duly
authorized to administer the Plan. The Plan Administrator may, but is not
required to be, the Compensation Committee of the Board. The Board may at any
time administer the Plan, in whole or in part, notwithstanding that the Board
has previously appointed a committee to act as the Plan Administrator.

 

(g)"Retention Bonus" means the retention bonus equal to 50% of the Participant's
Base Salary with respect to which the Participant was provided notification of
his or her eligibility to receive on October 6, 2017.

 

(h)"Qualifying Termination" means an involuntary termination by the Company of
the Eligible Employee's employment which is implemented without Cause and
effective before October 5, 2018.

 

 

3.

ELIGIBILITY FOR BENEFITS.

 

(a)General Rules. Subject to the requirements set forth in the Plan, the Company
will grant severance benefits under the Plan to Eligible Employees.

 

(1)Definition of "Eligible Employee." For purposes of this Plan, an Eligible
Employee is a Participant who is terminated in a Qualifying Termination. The
determination of whether an employee is an Eligible Employee will be made by the
Company, in its sole discretion, and such determination will be binding and
conclusive on all persons.

 

(2)In order to be eligible to receive any benefits under the Plan, an Eligible
Employee must remain on the job and satisfactorily provide services to the
Company until the applicable employment termination date selected by the Company
("Employment Termination Date ").

 

(3)In order to be eligible to receive any benefits under the Plan, an Eligible
Employee also must execute a general waiver and release in substantially the
form attached hereto as Exhibit A or Exhibit B, as applicable, within the time
frame set forth therein, but not earlier than the first date following the
Employment Termination Date, and such release must become effective in
accordance with its terms. The Company, in its discretion, may modify the form
of the required release to comply with applicable law and will determine the
form of the required release, which may be incorporated into any other agreement
entered into with the Eligible Employee.

 

(b)Exceptions to Benefit Entitlement. An employee, including an employee who
otherwise is an Eligible Employee, will not receive benefits under the Plan (or
will receive reduced benefits under the Plan) in any of the following
circumstances, as determined by the Company in its sole discretion:

 

(1)The employee has executed an individually negotiated employment contract or
agreement with the Company or an affiliate of the Company relating to severance

 

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benefits that is in effect on his or her termination date, in which case such
employee's severance benefit, if any, shall be governed by the terms of such
individually negotiated employment contract or agreement and shall be governed
by this Plan only to the extent that the reduction pursuant to Section 4(c)
below does not entirely eliminate benefits under this Plan.

 

(2)The employee's termination of employment qualifies the employee to receive
severance benefits under the Change in Control Plan, in which case such
employee's severance benefit, if any, shall be governed by the terms of the
Change in Control Plan and shall be governed by this Plan only to the extent
that the reduction pursuant to Section 4(c) below does not entirely eliminate
benefits under this Plan.

 

 

(3)

The Company terminates the employee's employment for Cause.

 

(4)The employee voluntarily terminates employment with the Company. Voluntary
terminations include, but are not limited to, resignation, retirement or failure
to return from a leave of absence on the scheduled date.

 

 

 

disability.

 

(5)

 

The employee's employment is terminated as a result of his or her death or

 

(6)The employee's employment is terminated on or after the earlier of (i)
October 5, 2018, or (ii) a Change in Control.

 

 

(7)

The employee has been or will be paid the Retention Bonus.

 

(8)The employee is rehired by the Company or an affiliate of the Company prior
to the date benefits under the Plan are scheduled to be paid.

 

(9)The employee has not signed the Company's standard form of confidential
information and inventions assignment agreement ("Proprietary Agreement")
covering the employee's period of employment with the Company (and with any
predecessor) and/or does not confirm in writing that he or she is and will
remain subject to the terms of that agreement.

 

(10) The employee has failed to cooperate fully with the Company in connection
with its actual or contemplated defense, prosecution, or investigation of any
existing or future litigation, arbitrations, mediations, claims, demands,
audits, government or regulatory inquiries, or other matters arising from
events, acts, or failures to act that occurred during the time period in which
the individual was employed by the Company (including any period of employment
with an entity acquired by the Company). Such cooperation includes, without
limitation, being available upon reasonable notice, without subpoena, to provide
accurate and complete advice, assistance and information to the Company,
including offering and explaining evidence, providing truthful and accurate
sworn statements, and participating in discovery and trial preparation and
testimony. As a condition of receiving benefits under the Plan, the employee
must also promptly send the Company copies of all correspondence (for example,
but not limited to, subpoenas) received by the employee in connection with any
such legal proceedings, unless the employee is expressly prohibited by law from
so doing. The Company will reimburse the employee for reasonable out-of-pocket
expenses incurred in connection with any such cooperation (excluding foregone
wages, salary, or other compensation) within thirty

 

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(30) days after the employee's timely presentation of appropriate documentation
thereof, in accordance with the Company's standard reimbursement policies and
procedures, and will make reasonable efforts to accommodate the employee's
scheduling needs.

 

(c)Termination of Benefits. A Participant's right to receive benefits under the
Plan will terminate immediately if, at any time prior to or during the period
for which the Participant is receiving benefits under the Plan, the Participant,
without the prior written approval of the Plan Administrator:

 

(1)willfully breaches a material provision of the Participant's Confidentiality
Agreement and/or any obligations of confidentiality, non-solicitation,
non-disparagement, no conflicts or non-competition provision set forth in any
other agreement between the Company or any subsidiary and a Participant
(including, without limitation, the Participant's employment agreement or offer
letter) or under applicable law;

 

(2)encourages or solicits any of the Company's then current employees to leave
the Company's employ for any reason or interferes in any other manner with
employment relationships at the time existing between the Company and its then
current employees; or

 

(3)induces any of the Company's then current clients, customers, suppliers,
vendors, distributors, licensors, licensees, or other third party to terminate
their existing business relationship with the Company or interferes in any other
manner with any existing  business relationship between the Company and any then
current client, customer, supplier, vendor, distributor, licensor, licensee, or
other third party.

 

 

4.

AMOUNT OF BENEFIT.

 

(a)Severance Benefits. Subject to the exceptions set forth in Section 3(c),
severance benefits under the Plan, if any, will be provided to Eligible
Employees described in Section 3 in the amount provided in Appendix A.

 

(b) Additional Benefits.   Notwithstanding the foregoing, the Company may, in
its sole discretion, (i) authorize benefits in addition to those benefits set
forth in Section 4(a) to Eligible Employees; (ii) waive or modify, in respect to
one or more employees or classes of employees, the eligibility requirements for
receipt of benefits under this Plan and/or (iii) modify the method of
calculating the amount of benefits to be received under the Plan. The provision
of any such benefits to an Eligible Employee will in no way obligate the Company
to provide such benefits to any other Eligible Employee or to any other
employee, even if similarly situated. An employee for whom any eligibility
requirement has been waived or modified, or who is offered benefits under this
Plan that are different than, or in addition to, those set forth in Section 4(a)
will receive specific written notice that the Plan Administrator is exercising
discretion in that regard. Receipt of benefits under this Plan pursuant to such
exceptions may be subject to a covenant of confidentiality and non-disclosure.

 

 

(c)

Certain Reductions.

 

(1)Mandatory Reductions. Severance benefits provided under the Plan will be
reduced, in whole or in part, by other similar benefits payable to the Eligible
Employee by the

 

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Company or an affiliate of the Company that become payable in connection with
the Eligible Employee's termination pursuant to the Change in Control Plan or
any other severance, separation pay or similar plan or any written
employment  or severance agreement between the Eligible Employee and the Company
or any affiliate of the Company.

 

(2)Discretionary Reductions. The Company, in its sole discretion, shall have the
authority to reduce an Eligible Employee's severance benefits, in whole or in
part, by any other severance benefits, pay and benefits provided during a period
following written notice of a plant closing or mass layoff, pay and benefits in
lieu of such notice, or other similar benefits payable to the Eligible Employee
by the Company or an Employer that become payable in connection with the
Eligible Employee's  termination of employment pursuant to (i) any applicable
legal requirement, including, without limitation, the Worker Adjustment and
Retraining Notification Act, the California Plant Closing Act, or any other
similar state law, or

(ii) any Company policy or practice providing for the Eligible Employee to
remain on the payroll for a limited period of time after being given notice of
the termination of the Eligible Employee's employment, and the Plan
Administrator shall so construe and implement the terms of the Plan. Any such
reductions that the Company determines to make pursuant to this Section 4(c)
shall be made such that any benefit under the Plan shall be reduced solely by
any similar type of benefit under such legal requirement, policy or practice (
i.e., any cash severance benefits under the Plan shall be reduced solely by any
cash payments or severance benefits under such legal requirement, policy or
practice). The Company's decision to apply such reductions to the severance
benefits of one Eligible Employee and the amount of such reductions shall in no
way obligate the Company to apply the same reductions in the same amounts to the
severance benefits of any other Eligible Employee, even if similarly situated.
In the Company's sole discretion, such reductions may be applied on a
retroactive basis, with severance benefits previously paid being
re-characterized as payments pursuant to the Company's statutory obligation.

 

(3)Indebtedness of Participants. To the extent permitted under applicable law,
if a Participant is indebted to the Company on the effective date of a
Participant's Qualifying Termination, the Company reserves the right to offset
the payment of any benefits under the Plan by the amount of such indebtedness;
provided, however, that any such offsets comply with Section 409A of the Code
and are otherwise made in accordance with all applicable laws.

 

 

5.

TRANSITION MATTERS.

 

(a)Return of Company Property. An Eligible Employee will not be entitled to any
benefits under the Plan unless and until the Eligible Employee timely returns
all Company Property no later than ten (10) business days following the
Employment Termination Date. For this purpose, "Company Property" means all
paper and electronic Company documents (and all copies thereof) created and/or
received by the Eligible Employee during his or her period of employment with
the Company and other Company property which the Eligible Employee had in his or
her possession or control at any time, including, but not limited to, Company
files, notes, lab notebooks, drawings, records, plans, forecasts, reports,
studies, analyses, proposals, agreements, financial information, research and
development information, sales and marketing information, operational and
personnel information, specifications, code, software, databases,

 

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computer-recorded information, tangible property and equipment (including, but
not limited to, leased vehicles, computers, computer equipment, software
programs, facsimile machines, mobile telephones, servers), credit and calling
cards, entry cards, identification badges and keys; and any materials of any
kind which contain or embody any proprietary or confidential information of the
Company (and all reproductions thereof in whole or in part). As a condition to
receiving benefits under the Plan, Eligible Employees must not make or retain
copies, reproductions or summaries of any such Company property. However, an
Eligible Employee is not required to return his or her personal copies of
documents evidencing the Eligible Employee's hire, termination, compensation,
benefits and stock options, stock units, other equity award documentation and
any documentation received as a shareholder of the Company.

 

(b)Transition of Work. An Eligible Employee will not be entitled to any
severance benefit under the Plan unless the Eligible Employee (i) has
satisfactorily transitioned his or her work and information concerning his or
her work to the Company to the extent requested by the Company (including but
not limited to completion of exit checklists)  and (ii) has provided the Company
with all logins, passwords, passcodes and similar information created by the
Eligible Employee for documents, email and electronic files that the Eligible
Employee created or used on Company systems.

 

 

6.

TIME OF PAYMENT AND FORM OF BENEFIT.

 

All severance benefits under the Plan will be paid as provided in Appendix A
following the Eligible Employee's satisfaction of all of the requirements set
forth in this Plan. All payments under the Plan will be subject to applicable
withholding for federal,  state and local taxes. If an Eligible Employee is
indebted to the Company at his or her Employment Termination Date, the Company
reserves the right to offset any severance payments under the Plan by the amount
of such indebtedness. Additionally, if an Eligible Employee is subject to
withholding for taxes related to any non-Plan benefits, including but not
limited to any imputed income related to perquisites, the Company may offset any
severance payments under the Plan by the amount of such withholding taxes.
However, payments under the Plan will not be subject to any other deductions
such as, but not limited to, 401(k) plan contributions and/or loan repayments or
other employee benefit and benefit plan contributions.

Notwithstanding anything to the contrary set forth herein, any payments and
benefits provided under the Plan that constitute "deferred compensation" within
the meaning of Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code") and the regulations and other guidance thereunder and any state law
of similar effect (collectively "Section 409A' will not commence in connection
with an Eligible Employee's termination of employment unless and until the
Eligible Employee has also incurred a "separation from service" (as such term is
defined in Treasury Regulations Section 1.409A-l(h) ("Separation From Service'),
unless the Company reasonably determines that such amounts may be provided to
the Eligible Employee without causing the Eligible Employee to incur the adverse
personal tax consequences under Section 409A.

It is intended that all Plan Payments provided on Appendix A satisfy, to the
greatest extent possible, the exemptions from the application of Section 409A
provided under of Treasury Regulation l.409A-l(b)(4) and 1.409A-l(b)(9)(iii).
However, if the Company (or, if applicable, the successor entity thereto)
determines that the payments and benefits provided under the Plan

 

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(the "Plan Payments ") constitute "deferred compensation" under Section 409A of
the Internal Revenue Code of 1986, as amended (the "Code") (Section 409A,
together, with any state law of similar effect, "Section 409A") and an Eligible
Employee is, at the time of "separation from service" (as defined under Section
409A), a "specified employee" of the Company or any successor entity thereto, as
such term is defined in Section 409A(a)(2)(B)(i) (a "Specified Employee "),
then, solely to the extent necessary to avoid the incurrence of the adverse
personal tax consequences under  Section 409A, the timing of the Plan Payments
will be delayed as follows: on the earlier to occur of (i) the date that is six
months and one day after the individual's separation from service and (ii) the
date of the Eligible Employee's death (such earlier date, the "Delayed Initial
Payment Date "), the Company (or the successor entity thereto, as applicable)
will pay to the Eligible Employee a lump sum amount equal to the sum of the Plan
Payments that the Eligible Employee would otherwise have received through the
Delayed Initial Payment Date if payment of the Plan Payments had not been
delayed pursuant to this Section 6.

 

7.

REEMPLOYMENT.

 

In the event of an Eligible Employee's reemployment by the Company or any other
affiliate of the Company during the period of time in respect of which severance
benefits pursuant to the Plan have been paid, the Company, in its sole and
absolute discretion, may require such Eligible Employee to repay to the Company
all or a portion of such severance benefits as a condition of reemployment.

 

8.

CLAWBACK; RECOVERY.

 

All payments and severance benefits provided under the Plan will be subject to
recoupment in accordance with any clawback policy that the Company is required
to adopt pursuant to the listing standards of any national securities exchange
or association on which the Company's securities are listed or as is otherwise
required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or
other applicable law. No recovery of compensation under such a clawback policy
will be an event giving rise to a right to resign for "good reason,"
constructive termination, or any similar term under any plan of or agreement
with the Company.

 

9.

RIGHT TO INTERPRET PLAN; AMENDMENT AND TERMINATION.

 

(a)Exclusive Discretion. The Plan Administrator is the named fiduciary charged
with the responsibility for administering the Plan. The Plan Administrator will
have the exclusive discretion and authority to establish rules, forms, and
procedures for the administration of the Plan and to construe and interpret the
Plan and to decide any and all questions of fact, interpretation, definition,
computation or administration arising in connection with the operation of the
Plan, including, but not limited to, the eligibility to participate in the Plan
and amount of benefits paid under the Plan. The Plan Administrator may delegate
any or all of its administrative duties to an officer of the Company and any
such delegation will convey with it the full discretionary authority of the Plan
Administrator to carry out the delegated duties. The Company or the Plan
Administrator will indemnify and hold harmless any person to whom it delegated
its responsibilities; provided, however, such person does not act with gross
negligence or willful misconduct. The rules, interpretations, computations and
other actions of the Plan Administrator or its delegate will be binding and
conclusive on all persons.

 

 

(b)

Amendment or Termination.

 

7.

 

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The Plan will automatically terminate upon the earlier of: (i) October 5, 2018,
or (ii) a Change in Control. The Company reserves the right to earlier amend or
terminate the Plan; provided, however, that no such amendment will apply to any
Participant who would be adversely affected by such amendment or termination
unless such Participant consents in writing to such amendment or termination.
Any action amending or terminating the Plan will be in writing and executed by a
duly authorized officer of the Company.

10.No IMPLIED EMPLOYMENT CONTRACT.

 

The Plan will not be deemed (i) to give any employee or other person any right
to be retained in the employ of the Company or (ii) to interfere with the right
of the Company to discharge any employee or other person at any time, with or
without cause, which right is hereby reserved.

 

11.

LEGAL CONSTRUCTION.

 

This Plan is intended to be governed by and will be construed in accordance with
the Employee Retirement Income Security Act of 1974 ("ERISA") and, to the extent
not preempted by ERISA, the laws of the State of California (without regard to
principles of conflict of laws).

 

12.

CLAIMS, INQUIRIES AND APPEALS.

 

(a)Applications for Benefits and Inquiries. Any application for benefits,
inquiries about the Plan or inquiries about present or future rights under the
Plan must be submitted to the Plan Administrator in writing by an applicant (or
his or her authorized representative). The Plan Administrator is:

 

Versartis, Inc.

Attn: Chief Operating Officer 1020 Marsh Road

Menlo Park, CA 94025

 

(b)Denial of Claims. In the event that any application for benefits is denied in
whole or in part, the Plan Administrator must provide the applicant with written
or electronic notice of the denial of the application, and of the applicant's
right to review the denial. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. The notice of denial will be set
forth in a manner designed to be understood by the applicant and will include
the following:

 

 

(1)

the specific reason or reasons for the denial;

 

(2)references to the specific Plan provisions upon which the denial is based;

 

(3)a description of any additional information or material that the Plan
Administrator needs to complete the review and an explanation of why such
information or material is necessary; and

 

(4)an explanation of the Plan's review procedures and the time limits applicable
to such procedures, including a statement of the applicant's right to bring a
civil

 

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action under Section 502(a) of ERISA following a denial on review of the claim,
as described in Section 13(d) below.

 

This notice of denial will be given to the applicant within ninety (90) days
after the Plan Administrator receives the application, unless special
circumstances require an extension of time, in which case, the Plan
Administrator has up to an additional ninety (90) days for processing the
application. If an extension of time for processing is required, written notice
of the extension will be furnished to the applicant before the end of the
initial ninety (90) day period.

This notice of extension will describe the special circumstances necessitating
the additional time and the date by which the Plan Administrator is to render
its decision on the application.

(c)Request for a Review. Any person (or that person's authorized representative)
for whom an application for benefits is denied, in whole or in part, may appeal
the denial by submitting a request for a review to the Plan Administrator within
sixty (60) days after the application is denied. A request for a review will be
in writing and will be addressed to:

 

Versartis, Inc.

Attn: Chief Operating Officer 1020 Marsh Road

Menlo Park, CA 94025

 

A request for review must set forth all of the grounds on which it is based, all
facts in support of the request and any other matters that the applicant feels
are pertinent. The applicant (or his or her representative) will have the
opportunity to submit (or the Plan Administrator may require the applicant to
submit) written comments, documents, records, and other information relating to
his or her claim. The applicant (or his or her representative) will be provided,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant to his or her claim. The
review will take into account all comments, documents, records and other
information submitted by the applicant (or his or her representative) relating
to the claim, without regard to whether such information was submitted or
considered in the initial benefit determination.

(d)Decision on Review. The Plan Administrator will act on each request for
review within sixty (60) days after receipt of the request, unless special
circumstances require an extension of time (not to exceed an additional sixty
(60) days), for processing the request for a review. If an extension for review
is required, written notice of the extension will be furnished to the applicant
within the initial sixty (60) day period.  This notice of extension will
describe the special circumstances necessitating the additional time and the
date by which the Plan Administrator is to render its decision on the review.
The Plan Administrator will give prompt, written or electronic notice of its
decision to the applicant. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. In the event that the Plan
Administrator confirms the denial of the application for benefits in whole or in
part, the notice will set forth, in a manner calculated to be understood by the
applicant, the following:

 

 

(1)

the specific reason or reasons for the denial;

 

(2)references to the specific Plan provisions upon which the denial is based;

 

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(3)     a statement that the applicant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant to his or her claim; and

 

 

(4) 502(a) of ERISA.

a statement of the applicant's right to bring a civil action under Section

 

 

(e) Rules and Procedures. The Plan Administrator will establish rules and
procedures, consistent with the Plan and with ERISA, as necessary and
appropriate in carrying out its responsibilities in reviewing benefit claims.
The Plan Administrator may require an applicant who wishes to submit additional
information in connection with an appeal from the denial of benefits to do so at
the applicant's own expense.

 

(f) Exhaustion of Remedies. No legal action for benefits under the Plan may be
brought until the applicant (i) has submitted a written application for benefits
in accordance with the procedures described by Section 12(a) above, (ii) has
been notified by the Plan Administrator that the application is denied, (iii)
has filed a written request for a review of the application in accordance with
the appeal procedure described in Section 12(c) above, and (iv) has been
notified that the Plan Administrator has denied the appeal. Notwithstanding the
foregoing, if the Plan Administrator does not respond to an applicant's claim or
appeal within the relevant time limits specified in this Section 12, the
applicant may bring legal action for benefits under the Plan pursuant to Section
502(a) of ERISA.

 

 

13.

BASIS OF PAYMENTS TO AND FROM PLAN.

 

The Plan will be unfunded, and all benefits under the Plan will be paid only
from the general assets  of the  Company. An Eligible Employee's right to
receive payments under the Plan is no greater than that of the Company's
unsecured general creditors.  Therefore, if the Company were to become
insolvent, the Eligible Employee might not receive benefits under the Plan.

 

14.

OTHER PLAN INFORMATION.

 

(a)Employer and Plan Identification Numbers. The Employer Identification Number
assigned to the Company (which is the "Plan Sponsor" as that term is used in
ERISA) by the Internal Revenue Service is 26-4106690. The Plan Number assigned
to the Plan by the Plan Sponsor pursuant to the instructions of the Internal
Revenue Service is 511.

 

(b)Ending Date for Plan's Fiscal Year and Type of Plan. The date of the end of
the fiscal year for the purpose of maintaining the Plan's records is December
31. The Plan is a welfare benefit plan.

 

(c)Agent for the Service of Legal Process. The agent for the service of  legal
process with respect to the Plan is:

 

10.

 

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Versartis, Inc.

Attn: Chief Operating Officer 1020 Marsh Road

Menlo Park, CA 94025

 

(d)Plan Sponsor and Administrator. The Plan Sponsor and the "Plan Administrator
" of the Plan is:

 

Versartis, Inc.

Attn: Chief Operating Officer 1020 Marsh Road

Menlo Park, CA 94025

 

The Plan Sponsor's and Plan Administrator's telephone number is (650) 963-8580.

 

15.

STATEMENT OF ERISA RIGHTS.

 

Participants in this Plan are entitled to certain rights and protections under
ERISA. If you are an Eligible Employee, you are considered a participant in the
Plan and, under ERISA, you are entitled to:

(a)Receive Information About Your Plan and Benefits

 

(1)Examine, without charge, at the Plan Administrator's office and at other
specified locations, such as worksites, all documents governing the Plan and a
copy of the latest annual report (Form 5500 Series), if applicable, filed by the
Plan with the U.S. Department of Labor and available at the Public Disclosure
Room of the Employee Benefits Security Administration;

 

(2)Obtain, upon written request to the Plan Administrator, copies of documents
governing the operation of the Plan and copies of the latest annual report (Form
5500 Series), if  applicable, and an updated (as necessary) Summary Plan
Description. The Administrator may make a reasonable charge for the copies; and

 

(3)Receive a summary of the Plan's annual financial report, if applicable. The
Plan Administrator is required by law to furnish each participant with a copy of
this summary annual report.

 

(b)Prudent Actions by Plan Fiduciaries. In addition to creating rights for Plan
participants, ERISA imposes duties upon the people who are responsible for the
operation of the employee benefit plan. The people who operate the Plan, called
"fiduciaries" of the Plan, have a duty to do so prudently and in the interest of
you and other Plan participants and beneficiaries. No one, including
your  employer, your union or any other person,  may fire you or otherwise
discriminate against you in any way to prevent you from obtaining a Plan benefit
or exercising your rights under ERISA.

 

(c)Enforce Your Rights. If your claim for a Plan benefit is denied or ignored,
in whole or in part, you have a right to know why this was done, to obtain
copies of documents

 

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relating to the decision without charge, and to appeal any denial, all within
certain time schedules as set forth in detail in Section 12 herein.

 

Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of Plan documents or the latest annual report
from the Plan, if applicable, and do not receive them within thirty (30) days,
you may file suit in a Federal court and you are not required to follow the
claims procedure set forth in Section 12 herein. In such a case, the court may
require the Plan Administrator to provide the materials and pay you up to $110 a
day until you receive the materials, unless the materials were not sent because
of reasons beyond the control of the Plan Administrator.

If you have completed the claims and appeals procedure described in Section 12
and have a claim for benefits which is denied or ignored, in whole or in part,
you may file suit in a state or Federal court.

If you are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or you may file suit in a Federal
court. The court will decide who should pay court costs and legal fees. If you
are successful, the court may order the person you have sued to pay these costs
and fees. Ifyou lose, the court may order you to pay these costs and fees, for
example, if it finds your claim is frivolous.

(d)Assistance with Your Questions. If you have any questions about the Plan, you
should contact the Plan Administrator. If you have any questions about this
statement or about your rights under ERISA,  or if you need assistance in
obtaining documents from the Plan Administrator, you should contact the nearest
office of the Employee Benefits Security Administration, U.S. Department of
Labor, listed in your telephone directory or the Division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You
may also obtain certain publications about your rights and responsibilities
under ERISA by calling the publications hotline of the Employee Benefits
Security Administration or accessing its website at http://www.dol.gov/ebsa/.

 

16.GENERAL PROVISIONS.

 

(a)Notices. Any notice, demand or request required or permitted to be given by
either the Company or an Eligible Employee pursuant to the terms of this Plan
will be in writing and will be deemed given when delivered personally or
deposited in the U.S. mail, with postage prepaid, and addressed to the parties,
in the case of the Company, at the address set forth in Section 14(d) and, in
the case of an Eligible Employee, at the address as set forth in the Company's
employment file maintained for the Eligible Employee as previously furnished by
the Eligible Employee or such other address as a party may request by notifying
the other in writing.

 

17.Mitigation. Except as otherwise specifically provided in the Plan, an
Eligible Employee will not be required to mitigate damages or the amount of any
payment provided under the Plan by seeking other employment or otherwise, nor
will the amount of any payment provided for under the Plan be reduced by any
compensation earned by an Eligible Employee as a result of employment by another
employer or any retirement benefits received by such

 

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Participant after the date of the Participant's termination of employment with
the Company (except as provided for in Section 4(c)).

 

(a) Transfer and Assignment. The rights and obligations of an Eligible Employee
under this Plan may not be transferred or assigned without the prior written
consent of the Company. This Plan will be binding upon any person who is a
successor by merger, acquisition, consolidation or otherwise to the business
formerly carried on by the Company without regard to whether or not such person
or entity actively assumes the obligations hereunder.

 

(b)Waiver. Any party's failure to enforce any provision or provisions of this
Plan will not in any way be construed as a waiver of any such provision or
provisions, nor prevent any party from thereafter enforcing each and every other
provision of this Plan. The rights granted the parties herein are cumulative and
will not constitute a waiver of any party's right to assert all other legal
remedies available to it under the circumstances.

 

(c)Severability. Should any provision of this Plan be declared or determined to
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions will not in any way be affected or impaired.

 

(d) Section Headings. Section headings in this Plan are included for convenience
of reference only and will not be considered part of this Plan for any other
purpose.

 

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For Employees Age 40 or Older

 

 

EXHIBIT A

 

RELEASE AGREEMENT

I understand and agree completely to the terms set forth in the Versartis, Inc.
Severance Benefit Plan (the "Plan").

I understand that this Release, together with the Plan, constitutes the
complete, final  and exclusive embodiment of the entire agreement between the
Company, affiliates of 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 therein. Certain capitalized terms used in this Release are
defined in the Plan.

I hereby confirm my obligations under my Proprietary Agreement with the Company.

In consideration of the severance benefits and other consideration provided to
me under the Plan that I am not otherwise entitled to receive, and except as
otherwise set forth in this Release, I hereby generally and completely release
the Company and its current and former directors, officers, employees,
stockholders, shareholders, partners, agents, attorneys, predecessors,
successors, parent and subsidiary entities, insurers, affiliates, and assigns
and the Company's co­ employer TriNet Group, Inc. and its affiliates
(collectively, the "Released Parties") from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way related
to events, acts, conduct, or omissions occurring prior to my signing this
Release (collectively, the "Released Claims").

The Released Claims include, but are not limited to: (1) all claims arising out
of or in any way related to my employment with the Company or its affiliates, or
the termination of that employment; (2) all claims related to my compensation or
benefits, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company or its affiliates; (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 claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(5) all federal, state, and local statutory claims, including 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"), the federal Employee Retirement
Income Security Act of 1974 (as amended), and the California Fair Employment and
Housing Act (as amended).

I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA. I also acknowledge that the consideration
given for the Released Claims is in addition to anything of value to which I was
already entitled. I further acknowledge that I have been advised by this
writing, as required by the ADEA, that: (a) the Released Claims do not apply to
any rights or claims that arise after the date I sign this Release; (b) I should
consult with an attorney prior to signing this Release (although I may choose
voluntarily not to do so); (c) I have forty-five (45) days to consider this
Release (although I may choose to voluntarily sign it sooner); (d) I have seven
(7) days following the date I sign this Release to revoke the Release by
providing written notice to an officer of the Company; and (e) the Release will
not be effective until the date upon which the revocation period has expired
unexercised, which will be the eighth day after I sign this Release ("Effective
Date").

 

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For Employees Age 40 or Older

 

I have received with this Release all of the information required by the ADEA,
including without limitation a detailed list of the job titles and ages of all
employees who were terminated in this group termination and the ages of all
employees of the Company in the same job classification or organizational unit
who were not terminated, along with information on the eligibility factors used
to select employees for the group termination and any time limits applicable to
this group termination program.

I 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 or her favor at the
time of executing the release, which if known by him or her must have materially
affected his or her 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 my release of any claims I may
have against the Company.

Notwithstanding the foregoing, the following are not included in the Released
Claims (the "Excluded Claims"): (1) any rights or claims for indemnification I
may have pursuant to any written indemnification agreement with the Company to
which I am a party, the charter, bylaws, or operating agreements of the Company,
or under applicable law; or (2) any rights which are not waivable as a matter of
law. In addition, nothing in this Release prevents me from filing, cooperating
with, or participating in any proceeding before the Equal Employment Opportunity
Commission, the Department of Labor, the California Department of Fair
Employment and Housing, or any other federal, state, or local agency. While this
Agreement does not limit my right to receive an award for information provided
to the Securities and Exchange Commission, I understand and agree that, to the
maximum extent permitted by law, I am otherwise waiving any and all rights I may
have to individual relief based on any claims that I have released and any
rights I have waived by signing this Agreement. I hereby represent and warrant
that, other than the Excluded Claims, I am not aware of any claims I have or
might have against any of the Released Parties that are not included in the
Released Claims.

I hereby represent that I have been paid all compensation owed and for all hours
worked, I have received all the leave and leave benefits and protections for
which I am eligible, and I have not suffered any on-the-job injury for which I
have not already filed a workers' compensation claim.

I hereby agree not to disparage the Company, or its officers, directors,
employees, shareholders or agents, in any manner likely to be harmful to its or
their business, business reputation, or personal reputation; provided, however,
that I will respond accurately and fully to any question, inquiry or request for
information when required by legal process or in connection with a government
investigation. In addition, nothing in this provision or this Agreement is
intended to prohibit or restrain me in any manner from making disclosures that
are protected under the whistleblower provisions of federal law or regulation or
under other applicable law or regulation.

I acknowledge that to become effective, I must (1) sign and return this Release
to the Company within the 45 day period commencing immediately following my last
day of employment; and

(2) I must not revoke it thereafter.

EMPLOYEE

 

 

 

 

 

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Printed Name:___ Date:----------------

 

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For Employees Under Age 40

 

 

EXHIBIT B

 

RELEASE AGREEMENT

 

 

I understand and agree completely to the terms set forth in the Versartis, Inc.
Severance Benefit Plan (the "Plan").

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of 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 therein. Certain capitalized terms used in this Release are
defined in the Plan.

I hereby confirm my obligations under my Proprietary Agreement with the Company.

In consideration of the severance benefits and other consideration provided to
me under the Plan that I am not otherwise entitled to receive, and except as
otherwise set forth in this Release, I hereby generally and completely release
the Company and its current and former directors, officers, employees,
stockholders, shareholders, partners, agents, attorneys, predecessors,
successors, parent and subsidiary entities, insurers, affiliates, and assigns
and the Company's co­ employer TriNet Group, Inc. and its affiliates
(collectively, the "Released Parties ") from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way related
to events, acts, conduct,  or omissions occurring prior to my signing this
Release (collectively, the "Released Claims").

The Released Claims include, but are not limited to: (1) all claims arising out
of or in any way related to my employment with the Company or its affiliates, or
the termination of that employment; (2) all claims related  to my compensation
or benefits, including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company or its affiliates; (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 claims for fraud,
defamation, emotional distress, and discharge in violation of public policy; and
(5) all federal, state, and local statutory claims, including 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, and the California Fair Employment and
Housing Act (as amended).

I 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 or her favor at the
time of executing the release, which if known by him or her must have materially
affected his or her 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 my release of any claims I may
have against the Company.

Notwithstanding the foregoing, the following are not included in the Released
Claims (the "Excluded Claims"): (I) any rights or claims for indemnification I
may have pursuant to any written indemnification agreement with the Company to
which I am a party, the charter, bylaws, or operating agreements of the Company,
or under applicable law; or (2) any rights which are not

 

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For Employees Under Age 40

 

waivable as a matter of law. In addition, nothing in this Release prevents me
from filing, cooperating with, or participating in any proceeding before the
Equal Employment Opportunity Commission, the Department of Labor, the California
Department of Fair Employment and Housing, or any other federal, state, or local
agency. While this Agreement does not limit my right to receive an award for
information provided to the Securities and Exchange Commission, I understand and
agree that, to the maximum extent permitted by law, I am otherwise waiving any
and all rights I may have to individual relief based on any claims that I have
released and any rights I have waived by signing this Agreement. I hereby
represent and warrant that, other than the Excluded Claims, I am not aware of
any claims I have or might have against any of the Released Parties that are not
included in the Released Claims.

I hereby represent that I have been paid all compensation owed and for all hours
worked, I have received all the leave and leave benefits and protections for
which I am eligible, and I have not suffered any on-the-job injury for which I
have not already filed a workers' compensation claim.

I hereby agree not to disparage the Company, or its officers, directors,
employees, shareholders or agents, in any manner likely to be harmful to its or
their business, business reputation, or personal reputation; provided, however,
that I will respond accurately and fully to any question, inquiry or request for
information when required by legal process or in connection with a government
investigation. In addition, nothing in this provision or this Agreement is
intended to prohibit or restrain me in any manner from making disclosures that
are protected under the whistleblower provisions of federal law or regulation or
under other applicable law or regulation.

I acknowledge that to become effective, I must sign and return this Release to
the Company within the 14 day period that commences immediately following my
last day of employment.

EMPLOYEE

 

 

 

 

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APPENDIX A

 

VERSARTIS,  INC. SEVERANCE BENEFIT PLAN

 

Certain capitalized terms used in this Appendix A are defined in Section 3
below. Other capitalized terms used in this Appendix A have the meanings set
forth in the Plan.

 

General Eligibility Requirements. Eligible Employee who meets all the
requirements to receive benefits as set forth in the Plan, including, without
limitation, executing a general waiver and release in substantially  the form
attached to the Plan as Exhibit A  or Exhibit B, as applicable (the "Release"),
within the applicable time period set forth therein and provided that the
Release becomes effective in accordance with its terms, will receive severance
benefits as set forth in this Appendix A. The Company, in its sole discretion,
may modify the form of the required Release to comply with applicable law, and
may incorporate such Release into a termination agreement or other agreement
with the Eligible Employee.

 

1.Base Salary Severance Benefit. The Company will pay as a lump sum  cash
payment an amount equal to the monthly Base Salary multiplied by the applicable
number of months in the "Severance Benefit Period" as indicated in the table
below with respect to the Eligible Employee's Position:   (the "Base Salary
Severance Benefit" ):

 

Position

Severance Benefit Period

Chief Executive Officer

18 months

C-Suite Executives and Senior Vice Presidents

12 months

Vice Presidents and Directors

9 months

Managers

6 months

Other Employees

3 months*

 

Any such Base Salary Severance Benefit that such Eligible Employee receives
shall be subject to all required tax withholding and shall be paid in a single
lump sum as soon as administratively feasible following the Release Effective
Date, but in no event later than 75 days following the Employment Termination
Date.

2.         Welfare Severance Benefit. The Company will pay as a lump sum cash
payment an amount equal to 140% of the cost of the Eligible Employee's monthly
insurance premium as in effect in September 2017 for the Eligible Employee's
cost of coverage under the Company's group health and welfare benefit plans (the
"Monthly Welfare Premium"), including the cost of coverage for the Eligible
Employee's eligible dependents,  multiplied  by the applicable number

 

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of months in the "Benefit Period" as indicated in the table below with respect
to the Eligible Employee's Position (the "Welfare Severance Benefit "):

 

Position

Benefit Period

Chief Executive Officer

18 months

C-Suite Executives and Senior Vice Presidents

12 months

Vice Presidents and Directors

9 months

Managers

6 months

Other Employees

3 months*

 

For purposes of the Plan, references to Monthly Welfare Premium shall not
include any amounts payable by the Eligible Employee under an Internal Revenue
Code Section 125 health care reimbursement plan. Any such payment that such
Eligible Employee receives shall be subject to all required tax withholding and
shall be paid in a single lump sum as soon as administratively feasible
following the Release Effective Date, but in no event later than 75 days
following the Employment Termination Date.

 

 

*Notwithstanding anything to the contrary set forth herein, if payment of the
Eligible Employee's Retention Bonus would result in a greater payment to the
Eligible Employee than the sum of the Base Salary Severance Benefit and the
Welfare Severance Benefit, then the Eligible Employee will receive payment of a
lump sum cash amount equal to the Retention Bonus in lieu of and not additional
to the Base Salary Severance Benefit and the Welfare Severance Benefit, subject
to the Eligible Employee's satisfaction of conditions to receive benefit under
the Plan. Any such payment that such Eligible Employee receives shall be subject
to all required tax withholding and shall be paid in a single lump sum as soon
as administratively feasible following the Release Effective Date, but in no
event later than 75 days following the Employment Termination Date.

 

 

3.Definitions. The following capitalized terms as used in this Appendix A have
the following meanings

 

 

a.

"Position" means the position held by the Eligible Employee immediately prior to
the Employment Termination Date.

 

 

b.

"Release Effective Date" means the date that the Release becomes effective and
irrevocable.

 

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