Exhibit 10.1

 

Ultragenyx Pharmaceutical Inc.

 

 

 

60 Leveroni Court

Novato, CA 94949

Tel: 415-483-8800

 

 

 

June 17, 2014

 

 

 

Sunil Agarwal, M.D. FAAP

 

 

 

Re: Offer of Employment

 

 

Dear Sunil,

 

 

On behalf of Ultragenyx Pharmaceutical Inc. (the "Company"), I am pleased to
present to you an offer of full-time employment as Chief Medical Officer and
Senior Vice President. The Company's Board of Directors (the "Board") and I are
excited about the important contributions you can make by joining the Ultragenyx
management team and are confident that you will play a key role in our company's
growth and success.

 

This letter will supersede the letter dated June 9, 2014.

 

In your role as Chief Medical Officer, you will report directly to me and be a
member of the Senior Management Team. In this role, you will have primary
responsibility for the successful conduct of clinical development in all of our
programs from inception through post-marketing. Your responsibilities include
providing medical and operational leadership company-wide and directing all
clinical activities for the company's clinical programs. This will include
designing clinical development plans for our products including writing or
reviewing clinical protocols, statistical analysis plans and study reports. You
will provide management and medical oversight of investigational drug safety
data and safety monitoring, and related activities (e.g. adverse event reporting
and product safety reviews for preparation of technical and regulatory
documents). You will provide leadership and direction to Clinical Development,
Clinical Operations, Clinical Affairs, Clinical Sciences, Data
Management/Biometrics, Regulatory Affairs, Non-Clinical Research and Drug
Safety. As for all functions at Ultragenyx, the clinical group is expected to
work in an integrated fashion with program development, technical operations,
regulatory affairs, business development and commercial operations to drive the
growth and success of the company. This includes establishing, maintaining and
evolving the critical and unique strategies for development at Ultragenyx which
depend on unique collaborations between departments, and novel approaches to
traditional clinical development challenges.

 

Compensation

 

 

In the regular exempt position of Chief Medical Officer, the Company shall pay
you as compensation for your services an initial base salary at a gross annual
rate of $450,000 (the "Base Salary"). Such Base Salary shall be payable in
accordance with the Company's standard payroll procedures and subject to
standard payroll deductions and withholdings. The Board or the Compensation
Committee of the Board shall review your Base Salary at least annually. The
Company will also provide you with a one-time sign-on bonus in the amount of
$100,000, payable within 30 days of your start date, and subject to standard tax
withholdings.

 

In addition to your Base Salary, pursuant to the Company's corporate bonus plan
(or such other incentive plan maintained by the Company) you will be eligible to
earn an annual bonus of up to 35% of your Base Salary based upon your
performance during the previous year as evaluated by the CEO in consultation
with the Board (or Compensation Committee of the Board) against pre-determined
individual and/or corporate performance goals. For the 2014 performance year,
you will be eligible to receive the full bonus amount based on the achievement
of the Company's objectives as approved by the Board. The Company will also
provide you with a retention bonus in the amount of $100,000 to be paid in two
installments, with the first installment to be paid on the 1st anniversary of
your start date and the second installment to be paid on the 2nd

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anniversary of your start date. In order to receive any bonus payment, you must
be continuously employed through, and still employed by the Company on the date
any such bonus is paid. Any annual bonus shall be payable no later than March
15th following the end of such applicable fiscal period in which such bonus is
earned.

 

Equity Grants

 

 

Subject to the approval of the Board, you will also receive an option to
purchase an aggregate of 150,000 shares of the Company's Common Stock (the
"Option") pursuant to the Company's stock incentive plan (the "Plan"). The
exercise price of the Option will be equal to the closing price per share of
Common Stock on the date of grant.

 

The Option will vest and become exercisable as follows: 1/4th of the shares
initially subject to the Option shall vest and become exercisable on the first
(1st) anniversary of the first day of your employment with the Company, and
thereafter 1/48th of the shares initially subject to the Option shall vest and
become exercisable each month until the Option is fully vested, in each case
subject to your continued employment by the Company (or its subsidiaries). The
Option shall be governed by the Company's standard form of stock option
agreement and the Plan.

 

Subject to the approval of the Board, you will also receive a grant of 25,000
restricted stock units (the "RSUs") pursuant to the Plan. The RSUs will vest as
follows: 1/2 of the RSUs initially subject to vesting shall vest and become
exercisable on the first (1st) anniversary of the first day of your employment
with the Company, and thereafter 1/24th of the RSUs initially subject to the
vesting shall vest and become exercisable each month until the RSUs are fully
vested, in each case subject to your continued employment by the Company (or its
subsidiaries). The RSUs shall be governed by the Company's standard form of
restricted stock unit agreement and the Plan.

 

Notwithstanding the foregoing, (a) in the event that (i) the Company consummates
a Covered Transaction (as defined in the Plan), (ii) on the date such Covered
Transaction is consummated you are employed by the Company (or its subsidiaries)
and (iii) within 12 months after the date such Covered Transaction is
consummated your employment by the Company (or its successor or subsidiaries) is
terminated without Cause (as defined below) or you resign such employment due to
a Constructive Termination (as defined below), then provided such termination
constitutes a "separation from service" (as defined under Treasury Regulation
Section 1.409A-1(h), without regard to any alternative definition thereunder, a
"Separation from Service"), in addition to the severance benefits set forth
below, the vesting of any equity­ based compensation awards granted to you in
connection with your employment shall accelerate with respect to 100% of the
then-unvested shares then subject to such awards; and (b) in the event that your
employment with the Company is terminated without Cause, and provided that such
termination constitutes a Separation from Service, then in addition to the
severance benefits set forth below, the vesting of the RSUs shall accelerate
with respect to 100% of the then-unvested portion of such award.

 

 

Benefits

 

 

You shall be eligible to participate in all of the employee benefits and benefit
plans that the Company generally makes available to its full-time regular
employees, subject to the terms and conditions of such benefits and benefit
plans. At this time, these include medical, dental vision life/accidental death
and dismemberment insurance coverage, flexible spending plan, and 401k
retirement plan. Coverage for these benefits begins on the 1st day of the month
following your date of hire. The Company covers 90% of the insurance premiums
for the employee and 75% of the premiums for eligible dependents. Detailed
information about the benefits presently available will be provided to you on
your first day of employment.

 

You will be entitled to accrue and use Paid Time Off (PTO) at the rate of 160
hours per year, up to an accrual cap of 240 hours, in accordance with the terms
of the Company's PTO policy.

 

"At Will" Employment

 

 

Employment with the Company is "at-will". This means that it is not for any
specified period of time and can be terminated by you or by the Company at any
time, with or without advance notice, and for any or no particular reason or
Cause. It also means that your job duties, title, ·responsibilities, reporting
level, compensation and benefits, as well as the Company's personnel policies
and procedures, may be changed at

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any time, with or without notice in the sole discretion of the Company. This
"at-will" nature of your employment shall remain unchanged during your tenure as
an employee, and can only be changed by an express written agreement that is
signed by you and by the Company's CEO.

 

Severance

 

 

If, at any time, your employment with the Company or its successor is terminated
without Cause, or you resign your employment due to a Constructive Termination,
then provided such termination constitutes a Separation from Service, the
Company shall: (i) extend the exercise period applicable to the Option (and to
any other options to purchase the Company's Common Stock you then hold) such
that you will have until the date that is twelve (12) months after the date of
your Separation from Service to exercise any of the vested shares (determined as
of the date ,of your Separation from Service) subject to the Option (but in no
event will the exercise period be extended until later than the date of
expiration of the term of the Option as set forth in the agreement evidencing
such Option); and (ii) the Company shall pay you, as severance the equivalent of
one (1) year of your Base Salary in effect as of the date of your Separation
from Service, subject to standard payroll deductions and withholdings (the
"Severance Amount"). The Severance Amount will be paid in installments in the
form of continuation of your Base Salary payments, paid on the Company's regular
payroll dates, commencing on the Company's first regular payroll date that
follows the 60th day after such Separation from Service, and shall be for all
accrued Base Salary for the 60-day period plus the period from the 60th day
until the regular payroll date and the remainder of the Base Salary continuation
payments shall thereafter be made on the Company's regular payroll dates.

 

Notwithstanding anything herein to the contrary, the receipt of any of the
severance or acceleration benefits described in this letter will be subject to
and conditioned upon: (i) your signing a separation agreement and release of
claims in a form reasonably satisfactory to the Company (the "Separation
Agreement") and such Separation Agreement becoming effective and irrevocable as
specified therein no later than sixty (60) days following your Separation from
Service; and (ii) your continued compliance with the terms of this letter, the
Separation Agreement, the enclosed Confidential Information and Invention
Assignment Agreement (including without limitation, your not using or disclosing
any confidential or proprietary information of the Company), and any other
agreement entered into between you and the Company. No severance benefits of any
kind will be paid or provided, and no acceleration of vesting shall be
effective, until the Separation Agreement becomes effective. You shall also
resign from all positions and terminate any relationships as an employee,
advisor, officer or director with the Company and any of its affiliates, each
effective on the date of termination.

 

Additionally, and for the avoidance of doubt, in the event that the Company
terminates your employment for Cause, or you resign your employment for any
reason other than due to a Constructive Termination, or your employment
terminates upon your death or disability, you will no longer vest in the Option
or the RSUs (or any other equity) and you will not be entitled to any severance
benefits described herein.

 

For purposes of this offer letter, "Cause" means any of the following: (i) your
gross negligence in carrying out, or material failure to carry out, your duties
for the Company (including without limitation, your failure to cooperate in any
Company investigation), after notice from the Board and a reasonable opportunity
to cure (if deemed curable); (ii) any breach of your fiduciary duties to the
Company, after notice from the Board and a reasonable opportunity to cure (if
deemed curable); (iii) conviction of, or plea of guilty or no contest to, any
felony; (iv) any act of fraud or embezzlement by you with respect to your
obligations or otherwise relating to the business of the Company; (v) your
material violation of any Company policy; (vi) your material breach of any
agreement entered into between you and the Company; or (vii) your unauthorized
use or disclosure of confidential information or trade secrets of the Company or
its affiliates.

 

For the purposes of this letter, "Constructive Termination" means the occurrence
of any of the following events without your written consent: (i) a material
reduction or change in your job duties, responsibilities and requirements from
your job duties, responsibilities and requirements immediately prior to such
reduction or change, taking into account the differences in job title and duties
that are normally occasioned by reason of an acquisition of one company by
another; (ii) a material reduction of your Base Salary (other than an equal,
across-the-board reduction in the compensation of all similarly-situated
employees of the Company or the surviving entity that is approved by the Board);
or (iii) a requirement that you relocate to a principal office that increases
your one-way commute by more than 50 miles relative to your immediately
preceding principal office. Notwithstanding the foregoing, none of the foregoing
events or conditions will constitute Constructive Termination unless: (x) you
provide the Company with written objection (or notice) to the event or condition

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within 30 days following the occurrence thereof, (y) the Company does not
reverse or otherwise cure the event or condition within 30 days of receiving
that written objection, and (z) you resign your employment within 30 days
following the expiration of that cure period.

 

In the event that the severance and other benefits to you provided for herein:
(i) constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"); and (ii) but for this
paragraph, would be subject to the excise tax imposed by Section 4999 of the
Code, then your severance benefits provided for herein shall be payable as to
such lesser amount which would result in no portion of such severance benefits
being subject to excise tax under Section 4999 of the Code, whichever of the
foregoing amounts, taking into account the applicable federal, state and local
income taxes and the excise tax imposed by Section 4999, results in the receipt
by you on an after-tax basis, of the greatest amount of severance benefits
hereunder, notwithstanding that all or some portion of such severance benefits
may be taxable under Section 4999 of the Code. Any determination required under
this paragraph shall be made in writing by independent public accountants
selected by the Company (the "Accountants"), whose determination shall be
conclusive and binding upon you and the Company for all purposes. For purposes
of making the calculations required by this paragraph, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Section 280G and 4999 of the Code. The Company and you shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this paragraph. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this paragraph. Any reduction in severance benefits
required by this paragraph shall occur in a manner necessary to provide you with
the greatest economic benefit. If more than one manner of reduction of severance
benefits necessary to arrive at the reduced amount yields the greatest economic
benefit to you, the payments and benefits shall be reduced pro rata.

 

Compliance with Section 409A

 

 

It is intended that all of the severance benefits and other payments payable
under this letter satisfy, to the greatest extent possible, the exemptions from
the application of Code Section 409A provided under Treasury Regulations
1.409A-l(b)(4), 1.409A-l(b)(S) and 1.409A-l(b)(9), and this letter agreement
will be construed to the greatest extent possible as consistent with those
provisions, and to the extent not so exempt, this letter (and any definitions
hereunder) will be construed in a manner that complies with Section 409A. Any
payment by the Company under this letter agreement that is subject to Section
409A and that is contingent on a termination of employment is contingent on a
"separation from service" within the meaning of Section 409A. Each such payment
shall be considered to be a separate payment for purposes of Section 409A.
Notwithstanding any provision to the contrary in this letter, if you are deemed
by the Company at the time of your Separation from Service to be a "specified
employee" for purposes of Code Section 409A(a)(2)(B)(i), and if any of the
payments upon Separation from Service set forth herein and/or under any other
agreement with the Company are deemed to be "deferred compensation", then to the
extent delayed commencement of any portion of such payments is required in order
to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i) and the
related adverse taxation under Section 409A, such payments shall not be provided
to you prior to the earliest of (i) the expiration of the six­ month period
measured from the date of your Separation from Service with the Company, (ii)
the date of your death, or (iii) such earlier date as permitted under Section
409A without the imposition of adverse taxation. Upon the first business day
following the expiration of such applicable Code Section 409A(a)(2)(B)(i)
period, all payments deferred pursuant to this paragraph shall be paid in a lump
sum to you, and any remaining payments due shall be paid as otherwise provided
herein or in the applicable agreement. No interest shall be due on any amounts
so deferred.

 

Compliance with Company Policies

 

 

As an employee of the Company, you will be expected to comply with the Company's
personnel and other policies, including but not limited to, the Company's
policies prohibiting discrimination and unlawful harassment, conflicts of
interest and violation of applicable laws in the course of performing services
to the Company. During your orientation, you will be provided with the Company's
policy and procedures.

 

Full-time Services to the Company

 

 

The Company requires that, as a full-time employee, you devote your full
business time, attention, skills and efforts to the tasks and duties of your
position as assigned by the Company. However, the Company will not preclude you
from providing services to others, so long as such services would not be to the
benefit of a competitor of the Company and will not otherwise interfere with
your ability to satisfactorily fulfill your job responsibilities to the Company.
If you wish to perform services (for any or no form of compensation) to any
other person or business entity while employed by the Company, please contact
the CEO and discuss your

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plans in advance of providing such services so that no problem later arises that
could have been avoided from the outset. Any other such services must be
approved by the CEO and Board.

 

Conditions

 

 

This offer, and any employment pursuant to this offer, is conditioned upon the
following:

 

 

•

Your ability to provide satisfactory documentary proof of your identity and
right to work in the United States of America on your first day of employment.
Enclosed is the INS Form 1-9, Employment Eligibility Verification, the second
page of which includes a description of acceptable documentary proof.

 

•

Your signed agreement to, and ongoing compliance with, the terms of the enclosed
Confidential Information and Invention Assignment Agreement without
modification.

 

•

Your consent (by your signature below) to, and results satisfactory to the
Company of, reference and background checks. Until you have been informed in
writing by the Company that such checks have been completed and the results
satisfactory to the Company, you should defer reliance on this offer.

 

•

Your return to me of the enclosed copy of this letter, after being signed by you
without modification.

 

No Conflicting Obligations

 

 

By signing and accepting this offer, you represent and warrant that: (i) you are
not subject to any pre-existing contractual or other legal obligation with any
person, company or business enterprise which may be an impediment to or is
inconsistent with your employment with, or your providing services to, the
Company; {ii) you have not and shall not bring onto Company premises, or use or
disclose in the course of your employment with the Company, any confidential or
proprietary information or trade secrets of another person, company or business
enterprise; (iii) you have returned all property and confidential information
belonging to any prior employer; and (iv) you are not relying on any
representations, promises or agreements not expressly contained in this letter.

 

 

Choice of Law and Severability

 

This letter shall be interpreted in accordance with the laws of the State of
California without giving effect to provisions governing the choice of law. If
any provision of this letter becomes or is deemed invalid, illegal or
unenforceable in any applicable jurisdiction by reason of the scope, extent or
duration of its coverage, then such provision shall be deemed amended to the
minimum extent necessary to conform to applicable law so as to be valid and
enforceable or, if such provision cannot be so amended without materially
altering the intention of the parties, then such provision shall be stricken and
the remainder of this letter shall continue in full force and effect. If any
provision of this letter is rendered illegal by any present or future statute,
law, ordinance or regulation (collectively, the "Law") then that provision shall
be curtailed or limited only to the minimum extent necessary to bring the
provision into compliance with the Law. All the other terms and provisions of
this letter shall continue in full force and effect without impairment or
limitation.

 

Entire Agreement

 

 

If you accept this offer, and the conditions of this offer are satisfied, this
letter and the written agreements referenced in this letter shall constitute the
complete agreement between you and the Company with respect to the initial terms
and conditions of your employment. Any representations, promises or agreements,
whether written or oral, not contained in this letter or contrary to those
contained in this letter, that may have been made to you are expressly cancelled
and replaced by this offer letter. Except as otherwise specified in this letter
or in the written agreements referenced in this letter, the terms and conditions
of your employment pursuant to this letter may not be changed, except by a
writing issued by the CEO with approval by the Board.

 

We look forward to you accepting this offer and a mutually rewarding
relationship. As with all important decisions, you should make a decision
concerning this offer based on your own investigation and judgment concerning
the Company and its prospects, independent of the opinions and perspectives that
may have been shared with you by any Company employee.

 

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If you accept this offer, please date and sign below, on the enclosed copy of
this letter and return it to me no later than June 20, 2014. Please retain the
original of this letter for your records. You should bring your INS Form 1-9
required identification and proof of authorization to work with you on your
first day of employment.

 

We look forward to working with you on developing treatment for many rare
genetic diseases and hope you find your employment at Ultragenyx Pharmaceutical
a rewarding experience. If you have any questions regarding this offer letter,
please feel free to contact me at (415) 483-8899.

 

 

 

Warm Regards,

 

 

/s/ Emil Kakkis

 

 

Emil D. Kakkis, M.D., Ph.D.

Chief Executive Officer

 

I accept the above offer:

 

Signature: /s/ Sunil Agarwal

Dated: June 19, 2014

Print Name: Sunil Agarwal

 

 

 

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