Exhibit 10.36

officeArt object [idra20171231ex1036dfc97001.jpg]

 

 

February 2, 2017

Jonathan Yingling

74 High Ridge Rd.

Skillman NJ 08558-2374

Dear Jonathan

On behalf of Idera Pharmaceuticals, Inc. (the “Company”), I am pleased to
confirm the following terms of your employment with the Company.

1.         Employment.  You will be employed to serve on a full time basis as
the Company’s Senior Vice President, Early Development, effective as of February
6, 2017 (the “Commencement Date”).  You will be responsible for performing such
duties as are consistent with your position, plus such other duties as may from
time to time be assigned to you by the Chief Executive Officer.  Your regular
place of work shall be the Company’s Exton, Pennsylvania location and you shall
report solely to the Chief Executive Officer.  You agree to devote your full
business time, best efforts, skill, knowledge, attention and energies to the
advancement of the Company’s business and interests and to the performance of
your duties and responsibilities as an employee of the Company.  Notwithstanding
the foregoing, Idera acknowledges and agrees that you currently serve as a
consultant to Clavius Pharmaceuticals, LLC providing general management services
and that in the future you may become a member of the Clavius board of directors
while serving as an employee of Idera.

2.         Base Salary and Bonus.

(a)        Your annual base salary shall be $385,000 per year and shall be
payable to you at periodic intervals in accordance with the Company’s payroll
practices for salaried employees.  Such base salary may be increased from time
to time in accordance with normal business practices and in the sole discretion
of the Company.

(b)        You shall be eligible to receive, for each fiscal year of the Company
ending during your employment with the Company, an annual bonus of up to 40% of
your annual base salary, whether pursuant to a formal bonus or incentive plan or
program of the Company or otherwise.  Such bonus, if any, will be prorated based
on your hire date for the first calendar year.  Such bonus, if any, will be
approved by the Board of Directors or the Compensation Committee of the Board of
Directors (together, the “Board”) in its sole discretion and will be based on
both individual and Company performance objectives as developed and determined
by the Company in its sole discretion.  Any bonus earned by you and

 

--------------------------------------------------------------------------------

 

Jonathan Yingling
February 2, 2017
Page 2

 

 

approved by the Board under this Section 2(b) shall be paid in accordance with
the Company’s Annual Incentive Plan Plan Document.

(c)        All salary, bonus and other compensation payable to you pursuant to
this Agreement shall be subject to applicable withholding taxes.

3.         Benefit Programs.  You may participate in any and all benefit
programs that the Company may establish and make available to its employees from
time to time, provided you are eligible under (and subject to all provisions of)
the plan documents governing those programs. Such benefits may include medical,
dental and retirement plans.  Any benefits made available by the Company, and
the rules, terms and conditions for participation in such benefit plans, may be
changed by the Company at any time and from time to time without advance notice.

4.         Reimbursement of Expenses.  The Company shall reimburse you, in
accordance with the Company’s expense reimbursement policy, for all reasonable
travel, entertainment and other expenses incurred or paid by you in connection
with, or related to, the performance of your duties, responsibilities or
services under this Agreement, specifically including expenses for travel
between offices of the Company, upon presentation by you of appropriate
documentation, expense statements, vouchers and/or such other supporting
information as the Company may request and in accordance with Section 12(e)
below.

5.         Equity.  Upon the commencement of your employment with the Company,
you will be granted an option to purchase 600,000 shares of the Company’s common
stock, 275,000 options of which will be considered a non-statutory inducement
grant outside the Company’s 2013 Stock Incentive Plan. The exercise price will
be equal to the fair market value of the Company’s common stock on the
Commencement Date (the “Option(s)The Option(s) shall vest over four years with
the first installment vesting on the first anniversary of the Commencement Date
and the balance of the shares vesting in equal quarterly installments over the
remaining three years. The Option shall be evidenced by an option agreement that
is consistent with the form of option agreement generally used by the Company
and the terms of this letter.

6.         Relocation Assistance.  The Company will provide you with Education
Insight Services in order to help you with your assessment of a potential
relocation to within approximately 30 miles of a Company work location.  Should
you decide to relocate to within one year of your start date, the Company will
also provide you with relocation assistance, components of which are outlined in
Exhibit B.  Such relocation assistance will be subject to a Repayment Agreement,
a sample of which is contained in Exhibit C.

7.         Termination of Employment Period.  Your employment by the Company
pursuant to this Agreement shall terminate upon the occurrence of any of the
following:

 

--------------------------------------------------------------------------------

 

Jonathan Yingling
February 2, 2017
Page 3

 

 

(a)        At the election of the Company, for Cause (as defined on Exhibit A),
immediately upon written notice by the Company to you, which notice shall
identify the Cause upon which the termination is based.

(b)        At the election of either party, upon not less than thirty days’
prior written notice of termination.

8.         Effect of Termination.

(a)        In the event your employment is terminated pursuant to Section 7(a)
or 7(b), the Company shall pay to you the compensation and benefits otherwise
payable you under Section 2 through the last day of your actual employment by
the Company.

(b)        In the event that the Company terminates your employment with the
Company at any time without Cause pursuant to Section 7(b), then, subject to
Section 8(e) the Company shall also (i) continue to pay you your then current
base salary for a period of twelve (12) months, payable in accordance with and
at the times contemplated by the Company’s then current payroll practices and
(ii) pay you any bonus earned by you and approved by the Board prior to such
termination that is then unpaid.

(c)        Notwithstanding Section 8(b) above, and in lieu of any payment owed
under Section 8(b), if any, in the event that the Company terminates you without
Cause or you resign from employment with the Company for Good Reason upon a
Change in Control (as such terms are defined below) or within the twelve (12)
month period following the Change in Control, then, subject to Section 8(e), (i)
the Company shall continue to pay you your then current base salary for a period
of twelve (12) months, payable in accordance with and at the times contemplated
by the Company’s then current payroll practices, (ii) the Company shall pay you
any bonus earned by you and approved by the Board prior to such termination or
resignation that is then unpaid and (iii) the Options shall vest in full and
become immediately exercisable.

(d)        Following a termination of your employment entitling you to severance
payments under Section 7(b) or Section 7(c), and subject to Section 7(e), if you
are eligible for and elect to continue receiving group medical and/or dental
insurance under the continuation coverage rules known as COBRA, the Company will
pay the share of the premium for such coverage that it pays for active and
similarly-situated employees who receive the same type of coverage (single,
family, or other) until the earlier of (i) the end of the period for which the
Company is paying you your then current base salary pursuant to Section 8(b) or
Section 8(c) above (as applicable, the “Severance Period”) or (ii) the date your
COBRA continuation coverage expires.

 

--------------------------------------------------------------------------------

 

Jonathan Yingling
February 2, 2017
Page 4

 

 

(e)        Notwithstanding anything in this Section 7 to the contrary, the
Company’s obligations to make severance payments and provide benefits to you
pursuant to this Section 8 shall be contingent upon your execution of a
separation and release agreement (the “Release Agreement”) in a form reasonably
acceptable to the Company which Release Agreement must become irrevocable within
60 days (or such earlier date as the Release Agreement provides) following the
date of your termination of employment.  Such payments and benefits shall begin
to be paid or provided in the first regular payroll period beginning after the
Release Agreement becomes binding on you; provided, however, that if the 60th
day after termination occurs in the calendar year following the year of your
date of termination, the severance payments and benefits shall be paid or
provided no earlier than January 1 of such subsequent calendar year (whether or
not the Release Agreement is executed prior to such date).  You must continue to
comply with the Invention, Non-Disclosure and Non-Competition Agreement
referenced in Section 9 to continue to receive severance payments and benefits. 
The severance payments and benefits shall constitute your sole remedy in
connection with the termination of your employment in the event of a termination
of your employment by the Company without Cause or by you for Good Reason.

9.         Invention, Non-Disclosure and Non-Competition Agreement.  As a
condition to your employment, you will be required to execute an Invention,
Non-Disclosure and Non-Competition Agreement with the Company.

10.       Background Check.  Your employment is fully contingent upon a
satisfactory background check.

11.       Company Policies and Procedures.  As an employee of the Company, you
will be required to comply with all Company policies and procedures.  Violations
of the Company’s policies may lead to immediate termination of your
employment.  Further, the Company’s premises, including all workspaces,
furniture, documents and other tangible materials, and all information
technology resources of the Company (including computers, data and other
electronic files, and all internet and e-mail) are subject to oversight and
inspection by the Company at any time.  Company employees should have no
expectation of privacy with regard to any Company premises, materials, resources
or information.

12.       Other Agreements and Governing Law.  You represent that you are not
bound by any employment contract, restrictive covenant or other restriction
preventing you from continuing in employment with or carrying out your
responsibilities for the Company, or which is in any way inconsistent with the
terms of this Agreement.  Please note that this Agreement supersedes any and all
prior or contemporaneous agreements, discussions and/or understandings, whether
written or oral, relating to the subject matter of this

 

--------------------------------------------------------------------------------

 

Jonathan Yingling
February 2, 2017
Page 5

 

 

Agreement or your employment with the Company.  The resolution of any disputes
under this Agreement will be governed by Massachusetts law.

13.       Compliance with Section 409A.  Subject to the provisions in this
Section 13, any severance payments or benefits under this Agreement (including
under Section 8 hereof) shall begin only upon the date of your “separation from
service” (determined as set forth below) which occurs on or after the date of
termination of your employment.  The following rules shall apply with respect to
distribution of the payments and benefits, if any, to be provided to you under
this Agreement:

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

(b)        If, as of the date of your “separation from service” from the
Company, you are not a “specified employee” (within the meaning of Section
409A), then each installment of the severance payments and benefits shall be
made on the dates and terms set forth in this Agreement.

(c)        If, as of the date of your “separation from service” from the
Company, you are a “specified employee” (within the meaning of Section 409A),
then:

(i)         Each installment of the severance payments and benefits due under
this Agreement that, in accordance with the dates and terms set forth herein,
will in all circumstances, regardless of when the separation from service
occurs, be paid within the Short-Term Deferral Period (as hereinafter defined)
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.  For purposes of this Agreement, the “Short-Term Deferral Period”
means the period ending on the later of the fifteenth day of the third month
following the end of your tax year in which the separation from service occurs
and the fifteenth day of the third month following the end of the Company’s tax
year in which the separation from service occurs; and

(ii)        Each installment of the severance payments and benefits due under
this Agreement that is not described in Section 13 (c)(i) above and that would,
absent this subsection, be paid within the six-month period following your
“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,
your death), with any such installments that are required to be delayed being
accumulated during the six-month period

 

--------------------------------------------------------------------------------

 

Jonathan Yingling
February 2, 2017
Page 6

 

 

and paid in a lump sum on the date that is six months and one day following your
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
severance payments and benefits if and to the maximum extent 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 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 your second taxable year following your taxable year in which the
separation from service occurs.

(d)        The determination of whether and when your separation from service
from the Company has occurred shall be made 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 Section 13(d), “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.

(e)        All reimbursements and in-kind benefits provided under this Agreement
shall be made or provided in accordance with the requirements of Section 409A to
the extent that such reimbursements or in-kind benefits are subject to Section
409A, including, where applicable, the requirements that (i) any reimbursement
is for expenses incurred during your lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the calendar year following
the year in which the expense is incurred and (iv) the right to reimbursement is
not subject to set off or liquidation or exchange for any other benefit.

(f)         Notwithstanding anything herein to the contrary, the Company shall
have no liability to you or to any other person if the payments and benefits
provided hereunder that are intended to be exempt from or compliant with Section
409A are not so exempt or compliant.

14.       Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business; provided,  however, that
your obligations to the Company are personal and shall not be assigned by you.

 

--------------------------------------------------------------------------------

 

Jonathan Yingling
February 2, 2017
Page 7

 

 

15.       Acknowledgment.  You state and represent that you have had an
opportunity to fully discuss and review the terms of this Agreement with an
attorney.  You further state and represent that you have carefully read this
Agreement, understand the contents herein, freely and voluntarily assent to all
of the terms and conditions hereof, and sign your name of your own free act.

16.       Miscellaneous.

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

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

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

If this Agreement correctly sets forth the initial terms under which you will be
employed by the Company, please sign the enclosed duplicate of this Agreement in
the space provided below, along with the enclosed Invention, Non-Disclosure and
Non-Competition Agreement, and return them to me.

 

 

 

Very truly yours,

 

 

 

/S/ VINCENT J. MILANO

 

Vincent J. Milano

 

Chief Executive Officer

 

The foregoing correctly sets forth the terms of my employment with Idera
Pharmaceuticals, Inc.  I am not relying on any representations other than as set
forth above.

 

 

 

 

 

/S/ JONATHAN YINGLING

    

Date:

 

February 3, 2017

Jonathan Yingling

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

EXHIBIT A

Definitions

The following terms shall have the following definitions for purposes of this
Agreement:

(a)        Cause shall mean (i) a material breach of any material term of this
Agreement, (ii) a plea of guilty or nolo contendere to, or conviction of, a
felony offense, (iii) repeated unexplained or unjustified absence, or refusals
to carry out the lawful directions of the Board or (iv) material breach of a
fiduciary duty owed to the Company under this Agreement, provided that any
action or inaction described by (i), (iii) or (iv), above, shall not be the
basis of a termination of your employment with the Company for "Cause" unless
the Company provided you with at least 20 days advance written notice specifying
in reasonable detail the conduct in need of being cured and such conduct was not
cured within the notice period or prior to termination.

(b)        Change in Control shall mean the occurrence of any of the following
events: (i) a change in the composition of the Board over a period of thirty-six
consecutive months or less such that a majority of the members of the Board
ceases to be comprised of individuals who are Continuing Members; for such
purpose, a "Continuing Member" shall mean an individual who is a member of the
Board on the date of this Agreement and any successor of a Continuing Member who
is elected to the Board or nominated for election by action of a majority of
Continuing Members then serving on the Board; (ii) any merger or consolidation
that results in the voting securities of the Company outstanding immediately
prior thereto representing (either by remaining outstanding or by being
converted into voting securities of the surviving or acquiring entity) less than
60% of the combined voting power of the voting securities of the Company or such
surviving or acquiring entity outstanding immediately after such merger or
consolidation; (iii) any sale of all or substantially all of the assets of the
Company; (iv) the complete liquidation or dissolution of the Company; or (v) the
acquisition of "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities (other than
through a merger or consolidation or an acquisition of securities directly from
the Company) by any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportion as their ownership of stock of the Company;
provided however that, where applied to compensation subject to Section 409A of
the Internal Revenue Code and the guidance issued thereunder (“Section

1

--------------------------------------------------------------------------------

 

 

409A”), any acceleration of or change in payment shall only apply (if required
by Section 409A) if the Change in Control is also a change in control event
described in Treasury Regulation 1.409A-3(i)(5).

(c)        Good Reason shall mean any action on the part of the Company not
consented to by you in writing having the following effect or effects: (i) a
material reduction in your base salary; (ii) a material diminution in your
duties, responsibilities or authority as set forth in Section 1 of this
Agreement, (iii) the Company requires you to permanently relocate and work
full-time from  another location that is more than 50 miles from the location
you are then performing your ongoing and regular services) or (iv) the Company
relocates your current place of work to a location that makes it unreasonable
for you to commute to the Company’s offices four or more business days per
week.  You must (A) give notice to the Company of your intention to resign for
Good Reason within 90 days after the occurrence of the event (or series of
events) that you assert entitle you to resign for Good Reason, (B) state in that
notice the condition that you consider to provide you with Good Reason to
resign, (C) provide the Company with at least 30 days after you deliver your
notice to cure the condition and (D) if the condition is not cured, resign for
Good Reason on or prior to the 60th day after you deliver your notice.

2

--------------------------------------------------------------------------------

 

 

EXHIBIT B

Relocation Assistance Offering Summary

 

 

 

 

Benefit

    

Description

Eligibility

 

▪     Full time, regular employee, relocating at Idera Pharmaceuticals Inc.’s
request

▪     New hire, Executive level

Website

 

▪     Customized web access for relocation assistance

▪     Login Credentials provided by Aires

Miscellaneous Allowance

 

▪     One month’s new base salary, capped at $10,000

▪     Paid upon effective date of transfer

▪     Taxable, grossed-up

Lump Sum Allowance

 

▪     Home Finding Trip; including meals, lodging and travel

▪     Temporary Living; including lodging and return trips home

▪     Final Move

▪     Taxable, grossed-up

Home Sale Assistance

 

▪     Marketing Assistance through Aires

▪     Buyer Value Option

▪     Not subject to repayment agreement

School Search Assistance

 

▪     Assistance with school search in the destination location

▪     Taxable, grossed-up

Home Purchase Closing Costs Assistance

 

▪     For current homeowners who purchase within one-year reimbursement of
actual, reasonable, and customary buyer’s closing costs, up to 2% of the net
purchase price

▪     Taxable, grossed-up

New Home Mortgage

 

▪     Aires - Mortgage Solutions Powered by Quicken Loans

▪     Optional Program

Household Goods Move

 

▪     Packing, shipping, delivery, and one debris pick-up

▪     Partial unpack

▪     Valuation protection at $7.50/lb up to $125,000

▪     Storage in-transit for up to 30 days

Tax Gross Up

 

▪     Assistance for federal (supplemental rate), state, local, and FICA
determined using Idera Pharmaceuticals Inc.’s derived income

Repayment Terms

 

▪     Pro-rated reimbursement to Idera of all expenses if employment is
terminated for other than Good Reason or Cause within 24 months of the effective
date of relocation.

 

3

--------------------------------------------------------------------------------

 

 

EXHIBIT C

Sample Relocation Expense Repayment Agreement

Employee Name: 

    

Work Location:

Job Title: 

 

Anticipated Effective Date of Relocation:

 

As of the effective date of this Relocation Expense Repayment Agreement (this
“Agreement”), Idera Pharmaceuticals (the “Company”)  has agreed to incur
expenses or reimburse the undersigned employee (the “Employee”) for certain
expenses for the purpose of relocating Employee and Employee’s eligible
household members to a Company Work Location.  The relocation benefits being
offered are described in the Company’s Homeowner Relocation Policy, a copy of
which is attached hereto for reference.

Employee confirms that neither he/she nor any other household member is
receiving relocation benefits from any other company or source.  Employee
acknowledges that relocation benefits paid by the Company are subject to
reduction in an amount equal to any relocation benefits paid by another source.

If, within twenty-four (24) months after the effective date of relocation
(defined as the first day that Employee reports to work following a the
household move contemplated herein),

(a)   Employee voluntarily terminates employment with the Company for any reason
other than Good Reason, or

(b)   the Company terminates Employee's employment for other than Cause,

Employee agrees to repay the Company within 30 days of terminating employment
any and all relocation expenses or payments incurred or reimbursed by the
Company, on a prorated basis.

If termination occurs after more than twenty-four (24) months after the
effective date of relocation, the Employee will not be required to repay
relocation expenses.

Any repayment required under this Agreement will be due and payable to the
Company within 30 days of terminating employment.  The Company reserves the
right to deduct any sums due and owing to the Company from Employee’s final pay
check(s), including, without limitation, salary, commissions, bonuses, vacation
or other paid leave, severance or separation pay, and expense reimbursements, up
to the full amount of the Employee Sale/Company Purchase expense owed to the
Company.  If such deduction does not fully satisfy the amount of reimbursement
due, Employee agrees to immediately repay the remaining unpaid balance to the
Company.

Employee's employment is at will and may be terminated for any reason at any
time by either the Company or Employee.  Nothing in this Agreement constitutes a
contract or guarantee of employment for any specific term or limits either
party's right to terminate the employment relationship.

Employee:

 

    

Date:

 

 

 

 

 

 

Company:

 

 

Date:

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

4

--------------------------------------------------------------------------------