Exhibit 10.32

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), dated
November, 22, 2013, by and between Verastem, Inc. (the “Company”), a Delaware
corporation with its principal place of business at 215 First Street, Suite 440,
Cambridge, MA 02199, and Robert Forrester (the “Executive”) of 346 Gay Street,
Westwood, MA 02142 amends and restates in its entirety the Amended and Restated
Employment Agreement, dated as of January 13, 2012 between the Company and the
Executive.

 

WHEREAS, the Executive is possessed of certain experience and expertise that
qualify him to provide management direction and leadership for the Company.

 

WHEREAS, the Company has employed the Executive to serve as its Chief Operating
Officer and now wishes to employ the Executive to serve as its Chief Executive
Officer.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company offers and the Executive accepts
employment upon the following terms and conditions:

 

1.                                      Position and Duties. Upon the terms and
subject to the conditions set forth in this Agreement, the Company hereby offers
and the Executive hereby accepts continued employment with the Company to serve
as its Chief Executive Officer. The Executive agrees to perform the duties of
the Executive’s position and such other duties as reasonably may be assigned to
the Executive from time to time. The Executive also agrees that while employed
by the Company, the Executive will devote one hundred percent (100%) of the
Executive’s business time and the Executive’s reasonable commercial efforts,
business judgment, skill and knowledge exclusively to the advancement of the
business and interests of the Company and to the discharge of the Executive’s
duties and responsibilities for it. The Executive may, however, hold one
(1) outside directorship with a publicly traded company and one (1) outside
directorship with a privately held or not for profit company, in each case with
the prior approval of the Nominating Committee of the Board of Directors of the
Company (the “Board”), with such approval not to be unreasonably withheld.

 

2.                                      Compensation and Benefits. During the
Executive’s employment, as compensation for all services performed by the
Executive for the Company, the Company will provide the Executive the following
pay.

 

(a)                                 Base Salary; Annual Bonus. Retroactive to
July 1, 2013, the Company will pay the Executive a base salary at the rate of
Four Hundred Ninety Thousand Dollars ($490,000) per year. Such amount shall be
payable in accordance with the regular payroll practices of the Company for its
executives, as in effect from time to time, and subject to increase from time to
time by the Board in its discretion.  For avoidance of doubt, the parties agree
that Executive’s base salary shall not decrease without his consent.  The
Executive shall have the opportunity to earn an annual target bonus measured
against performance criteria to be determined reasonably and in good faith by
the Board (or a committee thereof) in consultation with the Executive, and set
at 60% of the Executive’s then current annual base salary (the

 

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“Target Bonus”). Any bonus amount payable by the Company, if any, shall be paid
no later than March 15 of the year following the year in which such bonus is
earned.

 

(b)                                 Participation in Employee Benefit Plans. The
Executive will be entitled to participate in all Employee Benefit Plans from
time to time in effect for employees of the Company generally, except to the
extent such plans are duplicative of benefits otherwise provided the Executive
under this Agreement (e.g., severance pay) or under any other agreement. The
Executive’s participation will be subject to the terms of the applicable plan
documents and generally applicable Company policies. The Company may alter,
modify, add to or delete its Employee Benefit Plans at any time as it, in its
sole judgment, determines to be appropriate, without recourse by the Executive.
For purposes of this Agreement, “Employee Benefit Plan” shall have the meaning
ascribed to such term in Section 3(3) of ERISA, as amended from time to time.

 

(c)                                  Vacation. The Executive will accrue three
weeks paid vacation per year (or such greater amount as is generally made
available to the Company’s executive officers) in accordance with the Company’s
policies from time to time in effect and receive paid holidays in accordance
with the Company holiday schedule. Vacation may be taken at such times and
intervals as the Executive shall determine, subject to the business needs of the
Company, and otherwise shall be subject to the policies of the Company, as in
effect from time to time.

 

(d)                                 Business Expenses. The Company will pay or
reimburse the Executive for all reasonable business expenses incurred or paid by
the Executive in the performance of his duties and responsibilities for the
Company, subject to any maximum annual limit and other restrictions on such
expenses set by the Company and to such reasonable substantiation and
documentation as it may specify from time to time. Any such reimbursement that
would constitute nonqualified deferred compensation subject to Section 409A
shall be subject to the following additional rules: (i) no reimbursement of any
such expense shall affect the Executive’s right to reimbursement of any other
such expense in any other taxable year; (ii) reimbursement of the expense shall
be made, if at all, not later than the end of the calendar year following the
calendar year in which the expense was incurred; and (iii) the right to
reimbursement shall not be subject to liquidation or exchange for any other
benefit.

 

3.                                      Confidential Information,
Non-Competition and Proprietary Information. The Executive acknowledges that he
has executed, and will continue to comply with, the Company’s standard Employee
Non-Solicitation, Non-Competition, Confidential Information and Inventions
Assignment Agreement. It is understood and agreed that breach by the Executive
of the Employee Non-Solicitation, Non-Competition, Confidential Information and
Inventions Assignment Agreement shall constitute a material breach of this
Agreement.

 

4.                                      Termination of Employment. The
Executive’s employment under this Agreement shall continue until terminated
pursuant to this Section 4.

 

(a)                                 The Company may terminate the Executive’s
employment for “Cause” upon written notice to the Executive setting forth in
reasonable detail the nature of the Cause. The following, as determined by the
Board in good faith and using its reasonable judgment, shall constitute Cause
for termination: (i) the Executive’s willful failure to perform, or gross

 

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negligence in the performance of, the Executive’s material duties and
responsibilities to the Company and its Affiliates which is not remedied within
thirty (30) days of written notice thereof; (ii) material breach by the
Executive of any material provision of this Agreement or any other agreement
with the Company or any of its Affiliates which is not remedied within thirty
(30) days of written notice thereof; (iii) fraud, embezzlement or other
dishonesty with respect to the Company and any of its Affiliates, taken as a
whole, which, in the case of such other dishonesty, causes or could reasonably
be expected to cause material harm to the Company and any of its Affiliates,
taken as a whole; or (iv) the Executive’s conviction of a felony.

 

(b)                                 The Company may terminate the Executive’s
employment at any time other than for Cause upon one month’s written notice to
the Executive.

 

(c)                                  The Executive may terminate his employment
hereunder for Good Reason by providing notice to the Company of the condition
giving rise to the Good Reason no later than thirty (30) days following the
occurrence of the condition, by giving the Company thirty (30) days to remedy
the condition and by terminating employment for Good Reason within thirty (30)
days thereafter if the Company fails to remedy the condition. For purposes of
this Agreement, “Good Reason” shall mean, without the Executive’s consent, the
occurrence of any one or more of the following events: (i) material diminution
in the nature or scope of the Executive’s responsibilities, duties or authority,
provided that, in the absence of a Change of Control, neither (x) the Company’s
failure to continue the Executive’s appointment or election as a director or
officer of any of its Affiliates nor (y) any diminution in the nature or scope
of the Executive’s responsibilities, duties or authority that is reasonably
related to a substantial diminution of the business of the Company as a whole
that is reasonably projected to be sustained shall constitute “Good Reason;”
(ii) a material reduction in the Executive’s base salary other than one
temporary reduction of not more than 120 days and not in excess of 20% of the
Executive’s base salary in connection with and in proportion to a general
reduction of the base salaries of the Company’s executive officers;
(iii) failure of the Company to provide the Executive the salary or benefits in
accordance with Section 2 hereof after thirty (30) days’ notice during which the
Company does not cure such failure; or (iv) relocation of the Executive’s office
more than forty (40) miles from the location of the Company’s principal offices
as of immediately prior to such relocation.

 

(d)                                 The Executive may terminate his employment
with the Company other than for Good Reason at any time upon one month’s notice
to the Company.  In the event of termination of the Executive’s employment in
accordance with this Section 4(d), the Board may elect to waive the period of
notice, or any portion thereof, and, if the Board so elects, the Company will
pay the Executive his then current base salary for the period so waived.

 

(e)                                  This Agreement shall automatically
terminate in the event of the Executive’s death during employment. The Company
may terminate the Executive’s employment, upon notice to the Executive, in the
event the Executive becomes disabled during employment and, as a result, is
unable to continue to perform substantially all of his material duties and
responsibilities under this Agreement for one-hundred and fifty (150) days
during any period of three hundred and sixty-five (365) consecutive calendar
days. If any question shall arise as to whether the Executive is disabled to the
extent that the Executive is unable to perform substantially all of his material
duties and responsibilities for the Company and its Affiliates, the Executive
shall, at the Company’s request and expense, submit to a medical examination by
a

 

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physician selected by the Company to whom the Executive or the Executive’s
guardian, if any, has no reasonable objection to determine whether the Executive
is so disabled and such determination shall for the purposes of this Agreement
be conclusive of the issue. If such a question arises and the Executive fails to
submit to the requested medical examination, the Company’s determination of the
issue shall be binding on the Executive.  For avoidance of all doubt, this
provision is not intended to and does not affect the Executive’s rights under
the Company’s long term and short term disability plans, nor his legal rights
under state or federal law.

 

5.                                      Severance Payments and Other Matters
Related to Termination.

 

(a)                                 Termination pursuant to Section 4(b) or
4(c).

 

(i)                                     Except as provided in
Section 5(c) below, in the event of termination of the Executive’s employment
either by the Company other than for Cause pursuant to Section 4(a) of this
Agreement or by the Executive for Good Reason pursuant to Section 4(c) of this
Agreement, (a) all unvested options, restricted stock, and restricted stock
units granted prior to the date this Agreement is fully executed which, by their
terms, vest only based on the passage of time (disregarding any acceleration of
the vesting of such options, restricted stock or restricted stock units based on
individual or Company performance) that are outstanding immediately prior to the
date of termination and, but for the termination of the Executive’s employment,
would have vested during the twelve (12) month period immediately following the
date of termination, shall, notwithstanding the terms of the stock or equity
compensation plans and any applicable award agreements, remain outstanding and
eligible to vest until the Payment Commencement Date and, subject to
Section 5(a)(iii), automatically become fully vested as of the Payment
Commencement Date with respect to such portion of each such award that would
have vested during such twelve (12) month period and (b) the Company shall pay
the Executive’s then-current annual base salary for a period of twelve (12)
months in accordance with the Company’s payroll practice then in effect,
beginning on the Payment Commencement Date.

 

(ii)                                  Except as provided in Section 5(c) below,
in the event of termination of the Executive’s employment either by the Company
other than for Cause pursuant to Section 4(a) of this Agreement or by the
Executive for Good Reason pursuant to Section 4(c) of this Agreement, if the
Executive is participating in the Company’s group health plan and/or dental plan
at the time the Executive’s employment terminates, and the Executive exercises
his right to continue participation in those plans under the federal law known
as COBRA, or any successor law, the Company will pay or, at its option,
reimburse the Executive, for the full premium cost of that participation for
twelve (12) months following the date on which the Executive’s employment with
the Company terminates or, if earlier, until the date the Executive becomes
eligible to enroll in the health (or, if applicable, dental) plan of a new
employer, payable in accordance with regular payroll practices for benefits
beginning on the Payment Commencement Date.  In the event that the Company
elects to reimburse the

 

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Executive for the full premium cost of that participation, it shall gross up
such payment’s tax consequences, if any, to the Executive. Notwithstanding the
foregoing, if the payment or reimbursement by the Company of the premium costs,
including payment of any gross up for any tax consequences, described in the
preceding sentence will subject or expose the Company to taxes or penalties, the
Executive and the Company agree to make good faith efforts to renegotiate the
provisions of this Section 5(a)(ii) and to enter into a substitute arrangement
pursuant to which the Company may not be subjected or exposed to taxes or
penalties but which will not adversely affect the full economic value to the
Executive of the benefits promised by this provision. For avoidance of any
doubt, nothing in this provision will require the Executive to accept any
renegotiated agreement that would disadvantage him economically or require that
he accept a lesser quality of health care coverage for himself and his family.
The Company will also pay the Executive on the date of termination any base
salary earned but not paid through the date of termination and pay for any
vacation time accrued but not used to that date. In addition, the Company will
pay the Executive any bonus which has been awarded to the Executive, but not yet
paid on the date of termination of his employment, payable in a lump sum at such
time when bonuses are paid to executives of the Company generally in accordance
with the timing rules of Section 2(a).

 

(iii)                               Any obligation of the Company to provide the
Executive severance payments or other benefits under this Section 5(a) or
Section 5(c) is conditioned on the Executive’s signing an effective and
reasonable release of claims (the “Employee Separation Release”) and the
termination of any period in which the Executive may revoke such Employee
Release (without the Executive revoking) within 60 days following the
termination of the Executive’s employment (“Release Effective Date”).  Such
Employee Separation Release shall not (A) apply to (i) claims for
indemnification in the Executive’s capacity as an officer or director of the
Company under the Company’s Certificate of Incorporation, By-laws or agreement,
if any, providing for director or officer indemnification, (ii) rights to
receive insurance payments under any policy maintained by the Company and (iii)
rights to receive retirement benefits that are accrued and fully vested at the
time of the Executive’s termination and rights under such plans protected by
ERISA, nor shall such Employee Separation Release (B) prevent the Executive from
defending himself against a released party in the event that any such released
party initiates legal action against him pertaining to events or circumstances
arising prior to the effective date of the Employee Release other than a legal
action that solely alleges claims involving or arising out of a violation of law
that would constitute a felony or other crime involving moral turpitude by the
Executive that amounts to criminal misconduct on the Executive’s part.  In such
a circumstance described in (B), the Employee Separation Release shall be null
and void as against that party alone, and the Executive may bring any
counter-claim he may have against the party that initiated the litigation.

 

(iv)                              The severance payments shall commence on the
first payroll period following the Release Effective Date, but the amount of the
first

 

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installment shall reflect the period retroactive to the date of termination (the
“Payment Commencement Date”), and each subsequent installment payment shall be a
series of separate, substantially equal payments.

 

(v)                                 Notwithstanding the foregoing, if the 60th
day following the date of termination occurs in the calendar year following the
calendar year of the termination, then the Payment Commencement Date shall be no
earlier than January 1 of such subsequent calendar year.  The Executive agrees
to provide the Company prompt notice of the Executive’s eligibility to
participate in the health plan and, if applicable, dental plan of any employer.

 

(b)                                 Termination other than pursuant to
Section 4(b) or 4(c). In the event of any termination of the Executive’s
employment, other than a termination by the Company pursuant to Section 4(b) of
this Agreement or a termination by the Executive for Good Reason pursuant to
Section 4(c) of this Agreement, the Company will pay the Executive any base
salary earned but not paid through the date of termination and pay for any
vacation time accrued but not used to that date. In addition, the Company will
pay the Executive any bonus which has been awarded to the Executive, but not yet
paid, at such time when bonuses are paid to executives of the Company generally
in accordance with the timing rules of Section 2(a). The Company shall have no
other obligation to the Executive under this Agreement.

 

(c)                                  Upon a Change of Control.

 

(i)                                     Subject to the provisions of
Section 5(a)(iii), if, within ninety (90) days prior to a Change of Control or
within one year following a Change of Control (as defined in Section 6 hereof),
the Company or any successor thereto terminates the Executive’s employment other
than for Cause, or the Executive terminates his employment for Good Reason,
then, in lieu of any payments to the Executive or on the Executive’s behalf
under Section 5(a) hereof, (a) all of the Executive’s then remaining unvested
options, restricted stock, and restricted stock units which, by their terms,
vest only based on the passage of time (disregarding any acceleration of the
vesting of such options, restricted stock or restricted stock units based on
individual or Company performance) that are outstanding immediately prior to the
date of termination shall, notwithstanding the terms of the stock or equity
compensation plans and any applicable award agreements, remain outstanding and
eligible to vest until the Payment Commencement Date and, subject to
Section 5(a)(iii), automatically become fully vested as of the Payment
Commencement Date; and (b) the Company shall pay, on the Payment Commencement
Date, a lump sum equal to two (2) times (x) the Executive’s then-current annual
base salary plus (y) the Executive’s Target Bonus; provided, however, that if
such termination occurs prior to a Change of Control, such severance payments
shall be made at the time and in the manner set forth in Section 5(a)(i) during
the period beginning on the date of termination through the date of the Change
of Control with any severance remaining to be paid under this Section 5(c)(i)
payable in a lump sum on the closing date of the Change of Control (or, if
later, the Payment Commencement Date); and,

 

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(ii)                                  If the Executive is participating in the
Company’s group health plan and/or dental plan at the time the Executive’s
employment terminates (and such termination is as described in 5(c)(i) above),
and the Executive exercises his right to continue participation in those plans
under the federal law known as COBRA, or any successor law, then, in lieu of any
payments to the Executive or on the Executive’s behalf under
Section 5(a) hereof,  the Company will pay or, at its option, reimburse the
Executive, for the full premium cost of that participation for twenty-four (24)
months (or such shorter period during which COBRA participation is permitted by
law) following the date on which the Executive’s employment with the Company
terminates or, if earlier, until the date the Executive becomes eligible to
enroll in the health (or, if applicable, dental) plan of a new employer, with
such amount payable on a pro-rata basis in accordance with the Company’s regular
payroll practices for benefits beginning on the Payment Commencement Date.  In
the event that the Company elects to reimburse the Executive for the full
premium cost of that participation, it shall gross up such payment’s tax
consequences, if any, to the Executive.  Notwithstanding the foregoing, if the
payment or reimbursement by the Company of the premium costs, including payment
of any gross up for any tax consequences, described in the preceding sentence
will subject or expose the Company to taxes or penalties, the Executive and the
Company agree to make good faith efforts to renegotiate the provisions of this
Section 5(a)(ii) and to enter into a substitute arrangement pursuant to which
the Company may not be subjected or exposed to taxes or penalties but which will
not adversely affect the full economic value to the Executive of the benefits
promised by this provision. For avoidance of any doubt, nothing in this
provision will require the Executive to accept any renegotiated agreement that
would disadvantage him economically or require that he accept a lesser quality
of health care coverage for himself and his family. The Company will also pay
the Executive on the date of termination any base salary earned but not paid
through the date of termination and pay for any vacation time accrued but not
used to that date. In addition, the Company will pay the Executive any bonus
which has been awarded to the Executive, but not yet paid on the date of
termination of his employment, payable in a lump sum at such time when bonuses
are paid to executives of the Company generally in accordance with the timing
rules of Section 2(a).

 

(d)                                 Golden Parachute Tax Provisions.

 

(i)                                     The Company and the Executive agree that
in the event the payment or provision of any or all amounts or benefits under
this Agreement (such amounts and benefits, the “Benefits”), together with any
other payments or benefits payable or provided to or for the benefit of the
Executive in connection with a Change of Control (together with the Benefits,
the “Total Benefits”) would, without giving effect to this Section 5(d), be
subject to the excise tax imposed under Section 4999 of the Code , then, subject
to Section 5(d)(ii) below, Company shall pay to the Executive a Gross-Up
Payment.  Gross-Up Payment means an amount (A) such that the net amount retained
by Executive, after payment of the excise tax and any federal, state, and local
income or employment tax and any

 

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interest or penalties imposed, in each case, with respect to such excise tax, is
equal to the Total Benefits (such amount (A), the “Total GU Amount”), multipied
by a fraction (B) the numerator of which is the Total GU Amount arising from
payments or benefits payable or provided to or for the benefit of Executive in
connection with a Change in Control to the extent such payments or benefits are
payable or provided in connection with options and other equity and
equity-related awards first granted to the Executive prior to the execution of
this Agreement, and the denominator of which is the Total GU Amount arising from
payments or benefits payable or provided to or for the benefit of Executive in
connection with a Change in Control to the extent such payments or benefits are
payable or provided in connection with all options and other equity and
equity-related awards granted to the Executive.  Any such Gross-Up Payment shall
be paid to the Executive within 60 days following the date that the Excise Tax
is due.

 

(ii)                                  If reduction of the unpaid Benefits would
result in greater Net After-Tax Receipts than would payment of the unpaid
Benefits, the unpaid Benefits shall be reduced to the amount (the “Optimal
Benefit”) that produces the greatest amount of Net After-Tax Receipts.  If the
greatest amount of Net After-Tax Receipts may result from two or more different
Optimal Benefit amounts, the unpaid Benefits shall be reduced to the lesser of
such Optimal Benefit amounts.  “Net After-Tax Receipts” means the amount of the
Total Benefits plus the amount of the Gross-Up Payment, if any, net of all
federal, state and local income and excise taxes imposed on the Total Benefits
and the Gross-Up Payment.  Any such reduction shall be made in the manner that
results in the greatest economic benefit for the Executive.  If more than one
method of reduction will result in the same economic benefit, the method of
reduction shall be determined by the Company.

 

(iii)                               All calculations necessary to make any
determinations under this Section 5(d) shall be performed by the accounting firm
engaged (as of the day prior to the effective date of the Change in Control) by
the Company for general tax compliance purposes, unless otherwise agreed by the
Company and the Executive.  The Company shall bear all expenses incurred in
connection with such calculations.

 

(iv)                              The intent of this Section 5(d) is for the
Executive to receive either the full amount of the unpaid Benefits plus the
Gross-Up Payment described in Section 5(d)(i) or a reduction in the unpaid
Benefits as described in Section 5(d)(ii), whichever results in the greater
economic benefit for the Executive.

 

(e)                                  Except for any right the Executive may have
under applicable law to continue participation in the Company’s group health and
dental plans under COBRA, or any successor law, benefits shall terminate in
accordance with the terms of the applicable benefit plans based on the date of
termination of the Executive’s employment, without regard to any continuation of
base salary or other payment to the Executive following termination.

 

(f)                                   Provisions of this Agreement shall survive
any termination if so provided in this Agreement or if necessary or desirable to
accomplish the purposes of other surviving

 

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provisions, including without limitation the Executive’s obligations under
Section 3 of this Agreement and under the Employee Non-Solicitation,
Non-Competition, Confidential Information and Inventions Assignment Agreement. 
In the event that the Company’s Board of Directors determines in good faith that
the Executive has not continued to perform in all material respects under
Section 3 hereof, under the Employee Non-Solicitation, Non-Competition,
Confidential Information and Inventions Assignment Agreement and under any
subsequent agreement between the Executive and the Company or any of its
Affiliates relating to confidentiality, non-competition, proprietary information
or the like, unless (1) such failure is determined to amount to willful
misconduct or gross negligence or (2) such failure is not capable of being
cured, the Company will provide the Executive reasonable notice of its
determination and provide Executive with a 30 day period to cure any perceived
deficits in his performance.  If the Board determines in good faith at the end
of such 30-day period, if applicable, or immediately upon any such initial
determination in the case of a determination described in clause (1) or (2) of
the preceding sentence, that the Executive is not performing under any of such
agreements in all material respects, the Company may cease making payments under
Section 5 of this Agreement.  Nothing in this provision limits the Executive’s
ability to challenge that determination or to assert that it is in breach of the
obligations undertaken by the Company in Section 5. In the event that the
Company ceases to make payments to the Executive or on the Executive’s behalf
under Section 5 of this Agreement pursuant to this provision and the Executive
challenges such action on the part of the Company before a court of competent
jurisdiction, the Company will pay the Executive’s reasonable attorney’s fees in
the event that the Executive prevails in a decision that has become
unappealable.

 

(g)                                  In the event of any conflict between the
vesting provisions applicable to equity-based awards set forth in this Section 5
and the terms of the stock or equity compensation plans and any applicable award
agreements, the provisions of this Section 5 shall govern except as may be
expressly provided in an award agreement making specific reference to this
Section 5(g).

 

6.                                      Definitions.  For purposes of this
agreement; the following definitions apply:

 

“Affiliates” means all persons and entities directly or indirectly controlling,
controlled by or under common control with the Company, where control may be by
management authority, equity interest or otherwise.

 

“Change of Control” shall mean (i) the acquisition of beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) directly or indirectly by any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act),
of securities of the Company representing a majority or more of the combined
voting power of the Company’s then outstanding securities, other than an
acquisition of securities for investment purposes pursuant to a bona fide
financing of the Company; (ii) a merger or consolidation of the Company with any
other corporation in which the holders of the voting securities of the Company
prior to the merger or consolidation do not own more than 50% of the total
voting securities of the surviving corporation; or (iii) the sale or disposition
by the Company of all or substantially all of the Company’s assets other than a
sale or disposition of assets to an Affiliate of the Company or a holder of
securities of the Company; notwithstanding the foregoing, no transaction or
series of transactions shall constitute a Change of Control unless such
transaction or series of transactions

 

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constitutes a “change in control event” within the meaning of Treasury
Regulation Section 1.409A-3(i)(5)(i).

 

“Person” means an individual, a corporation, an association, a partnership, an
estate, a trust and any other entity or organization, other than the Company or
any of its Affiliates.

 

7.                                      Conflicting Agreements. The Executive
hereby represents and warrants that his signing of this Agreement and the
performance of his obligations under it will not breach or be in conflict with
any other agreement to which the Executive is a party or is bound with any third
party, and that the Executive is not now subject to any covenants against
competition or similar covenants or any court order that could affect the
performance of the Executive’s obligations under this Agreement. The Executive
agrees that he will not disclose to or use on behalf of the Company any
proprietary information of a third party without that party’s consent.

 

8.                                      Withholding; Other Tax Matters. Anything
to the contrary notwithstanding, (a) all payments required to be made by the
Company hereunder to Executive shall be subject to the withholding of such
amounts, if any, relating to tax and other payroll deductions as the Company may
reasonably determine it should withhold pursuant to any applicable law or
regulation, and (b) all severance payments and benefits payable pursuant to
Sections 5(a) and 5(c) hereof shall be subject to the terms and conditions set
forth on Exhibit A attached hereto

 

9.                                      Assignment. Neither the Executive nor
the Company may make any assignment of this Agreement or any interest in it, by
operation of law or otherwise, without the prior written consent of the other;
provided, however, that the Company may assign its rights and obligations under
this Agreement without the Executive’s consent to one of its Affiliates or to
any Person with whom the Company shall hereafter affect a reorganization,
consolidate with, or merge into or to whom it transfers all or substantially all
of its properties or assets. This Agreement shall inure to the benefit of and be
binding upon the Executive and the Company, and each of our respective
successors, executors, administrators, heirs and permitted assigns.

 

10.                               Severability. If any portion or provision of
this Agreement shall to any extent be declared illegal or unenforceable by a
court of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.

 

11.                               Miscellaneous. This Agreement, together with
the Employee Non-Solicitation, Non-Competition, Confidential Information and
Inventions Assignment Agreement, sets forth the entire agreement between the
Executive and the Company and replaces all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive’s employment. This Agreement may not be modified or amended, and no
breach shall be deemed to be waived, unless agreed to in writing by the
Executive and an expressly authorized representative of the Board. The headings
and captions in this Agreement are for convenience only and in no way define or
describe the scope or content of any provision of this Agreement. This Agreement
may be executed in two or more counterparts, each of which

 

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shall be an original and all of which together shall constitute one and the same
instrument. This is a Massachusetts contract and shall be governed and construed
in accordance with the laws of the Commonwealth of Massachusetts, without regard
to the conflict-of-laws principles thereof.

 

12.                               Notices. Any notices provided for in this
Agreement shall be in writing and shall be effective when delivered in person,
consigned to a reputable national courier service for overnight delivery or
deposited in the United States mail, postage prepaid, and addressed to the
Executive at the Executive’s last known address on the books of the Company or,
in the case of the Company, to it by notice to the Chairman of the Board of
Directors, c/o Verastem, Inc. at its principal place of business, or to such
other addressees) as either party may specify by notice to the other actually
received.

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
the Company, by its duly authorized representative, and by the Executive, as of
the date first stated above.

 

 

THE EXECUTIVE

THE COMPANY

 

 

 

 

/s/ Robert Forrester

 

/s/ Stephen Sherwin

Robert Forrester

Stephen Sherwin

 

Chairman of the Compensation Committee

 

 

 

 

 

/s/ Christoph Westphal

 

Christoph Westphal

 

Executive Chairman

 

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Exhibit A

 

Payments Subject to Section 409A

 

1.                                      Subject to this Exhibit A, any severance
payments that may be due under the Agreement shall begin only upon the date of
the Executive’s “separation from service” (determined as set forth below) which
occurs on or after the termination of Executive’s employment. The following
rules shall apply with respect to distribution of the severance payments, if
any, to be provided to Executive under the Agreement, as applicable:

 

(a)                                 It is intended that each installment of the
severance payments under the Agreement provided under shall be treated as a
separate “payment” for purposes of Section 409A. Neither the Company nor
Executive shall have the right to accelerate or defer the delivery of any such
payments except to the extent specifically permitted or required by
Section 409A.

 

(b)                                 If, as of the date of Executive’s
“separation from service” from the Company, Executive is not a “specified
employee” (as determined by the Board within the meaning of Section 409A), then
each installment of the severance payments shall be made on the dates and terms
set forth in the Agreement.

 

(c)                                  If, as of the date of Executive’s
“separation from service” from the Company, Executive is a “specified employee”
(as determined by the Board within the meaning of Section 409A), then:

 

(i)                                     Each installment of the severance
payments due under the Agreement that, in accordance with the dates and terms
set forth herein, will in all circumstances, regardless of when Executive’s
separation from service occurs, be paid within the short-term deferral period
(as defined under Section 409A) shall be treated as a short-term deferral within
the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent
permissible under Section 409A and shall be paid on the dates and terms set
forth in the Agreement; and

 

(ii)                                  Each installment of the severance payments
due under the Agreement that is not described in this Exhibit A,
Section 1(c)(i) and that would, absent this subsection, be paid within the
six-month period following Executive’s “separation from service” from the
Company shall not be paid until the date that is six months and one day after
such separation from service (or, if earlier, Executive’s death), with any such
installments that are required to be delayed being accumulated during the
six-month period and paid in a lump sum on the date that is six months and one
day following Executive’s separation from service and any subsequent
installments, if any, being paid in accordance with the dates and terms set
forth herein; provided, however, that the preceding provisions of this sentence
shall not apply to any installment of payments if and to the maximum extent that
that such installment is deemed to be paid under a separation pay plan that does
not provide for a deferral of compensation by reason of the application of
Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an
involuntary separation from service). Any installments

 

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that qualify for the exception under Treasury Regulation
Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of
Executive’s second taxable year following the taxable year in which the
separation from service occurs.

 

2.                                      The determination of whether and when
Executive’s separation from service from the Company has occurred shall be made
and in a manner consistent with, and based on the presumptions set forth in,
Treasury Regulation Section 1.409A-1(h). Solely for purposes of this Exhibit A,
Section 2, “Company” shall include all persons with whom the Company would be
considered a single employer under Section 414(b) and 414(c) of the Code.

 

3.                                      The Company makes no representation or
warranty and shall have no liability to Executive or to any other person if any
of the provisions of the Agreement (including this Exhibit) are determined to
constitute deferred compensation subject to Section 409A but that do not satisfy
an exemption from, or the conditions of, that section.

 

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