Exhibit 10.1

EXECUTION VERSION

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), effective as of July 29, 2019 (the
“Effective Date”), is by and between Verastem, Inc. (the “Company”), a Delaware
corporation with its principal place of business at 117 Kendrick Street, Suite
500, Needham, MA 02494, and Brian Stuglik (the “Executive”).

 

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

WHEREAS, the Company 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. Term, Position and Duties. 

(a) Unless earlier terminated in accordance with Section 4 of this Agreement,
the initial term of employment (the “Initial Term”) under this Agreement shall
be for a three-year period commencing on the Effective Date.  The term of
employment shall be automatically extended for an additional consecutive
12-month period (the “Extended Term”) beginning on the third anniversary of the
Effective Date and on each applicable anniversary of the Effective Date
thereafter, unless and until the Company or Executive provides written notice to
the other party not less than ninety (90) days before the applicable anniversary
date that such party is electing not to extend the term of employment under this
Agreement, in which case the term of this Agreement shall end as of the end of
such Initial Term or Extended Term, as the case may be, unless sooner terminated
in accordance with Section 4 of this Agreement. 

(b) Upon the terms and subject to the conditions set forth in this Agreement,
the Company hereby offers and the Executive hereby accepts employment with the
Company to serve as its Chief Executive Officer, reporting to the Company’s
Board of Directors.  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.  Except with respect to the noncompetitive
endeavors disclosed in writing to the Board in connection with the execution of
this Agreement (and provided such endeavors do not, individually or in the
aggregate, interfere with the Executive’s duties and responsibilities hereunder
or breach any of the provisions of this Agreement (other than the provisions of
this paragraph) or the Employee Non-Solicitation, Non-Competition, Confidential
Information and Inventions Assignment Agreement referenced below), 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.  
Subject to prior approval of the Board of Directors, the Executive may join the
board of directors or advisory committee of up to two companies (inclusive of
any such board or committee approved pursuant to the immediately

 

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preceeding sentence), provided such service does not interfere with the
Executive’s duties hereunder, pose a conflict of interest or breach any
provisions of this Agreement or the Employee Non-Solicitation, Non-Competition,
Confidential Information and Inventions Assignment Agreement referenced below. 

2. Compensation and Benefits.  During the Executive’s employment, as
compensation for all services performed by the Executive for the Company and
subject to his performance of his duties and responsibilities for the Company,
pursuant to this Agreement or otherwise, the Company will provide the Executive
the following pay and benefits:

(a) Base Salary; Annual Bonus.  The Company will pay the Executive a base salary
at the rate of Six Hundred and Thousand Dollars ($600,000) 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 of Directors of the Company (the
“Board”) in its discretion.  The Executive shall have the opportunity to earn an
annual target bonus measured against performance criteria to be determined by
the Board (or a committee thereof) of sixty-five percent (65%) of the
Executive’s then current annual base salary (the “Target Bonus”), with the
actual amount of the bonus, if any, to be determined by the Board (or a
committee thereof).  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. Subject to Sections 5(a)(iv) and 5(c)(iv) below (relating to the
payment of a pro rata target bonus as part of severance), the Executive must
remain employed through the last day of the year for which the bonus is earned
in order to be eligible to receive any bonus.

(b) Stock Options.  Subject to Board approval, the Company will grant the
Executive, promptly following the Effective Date:

 

i. a non-statutory stock option to purchase 500,000 shares (the “Time-based
Award”) of the Company’s Common Stock, $0.0001 par value per share (the “Common
Stock”), to be granted on the effective date of his hiring (the “Grant Date”),
to vest as to 331/3% of the shares subject to the option on the first
anniversary of the Grant Date and as to an additional 8.33% of the shares at the
end of each successive three-month period following the first anniversary of the
Grant Date until the third anniversary of the Grant Date (with the number of
shares vesting on each vesting date rounded down to the nearest whole share,
except with respect to the final vesting date on which all remaining unvested
shares shall vest), provided that the Executive continues to serve as an
employee of or other service provider to the Company on each such vesting date,
and to have a purchase price per share equal to the fair market value of a share
of the Common Stock on the Grant Date (determined to be the closing price of a
share of Common Stock on the Grant Date); and

 

ii. a non-statutory stock option to purchase 200,000 shares (the
“Performance-based Award” ) of the Common Stock, to be granted on the Grant Date
and with 50% to vest upon the achievement of $20 million in “net product
revenues” of duvelisib and the remaining 50% to vest upon the achievement of $75
million in “net product revenues” of duvelisib, such achievement as determined
in good faith by the Board or a committee thereof and provided that the
Executive continues to serve as an employee of or other service provider to the
Company on each such vesting date, and to have a purchase price per share equal
to the fair

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market value of a share of the Common Stock on the Grant Date (determined to be
the closing price of a share of Common Stock on the Grant Date). For purposes of
the Performance-based Award, “net product revenues” means the cumulative net
product revenues as reported in the Company’s publicly filed quarterly reports
since launch.  Each stock option shall be subject to the terms of the Company’s
equity plan, the applicable option award, and any applicable shareholder and/or
option holder agreements and other restrictions and limitations generally
applicable to common stock of the Company or equity awards held by Company
executives or otherwise imposed by law to the extent not inconsistent with
anything in this Agreement.

 

(a) Restricted Stock Units.  Subject to Board approval, the Company will grant
the Executive, promptly following the Effective Date, a grant of restricted
stock units with respect to 270,000 shares of Common Stock (the “RSU Award”), to
vest as to 331/3% of the shares on the first anniversary of the Grant Date, and
as to an additional 8.33% of the shares at the end of each successive
three-month period following the first anniversary of the Grant Date until the
third anniversary of the Grant Date (with the number of shares vesting on each
vesting date rounded down to the nearest whole share, except with respect to the
final vesting date on which all remaining unvested shares shall vest), provided
that the Executive continues to serve as an employee of or other service
provider to the Company on each such vesting date,  provided that the Executive
has served continuously as an employee or other service provider to the Company
on such vesting date.  The RSU Award shall be subject to the terms of the
Company’s equity plan, the applicable restricted stock unit award, and any
applicable shareholder and/or restricted stock unit holder agreements and other
restrictions and limitations generally applicable to common stock of the Company
or equity awards held by Company executives or otherwise imposed by law to the
extent not inconsistent with the provisions of this Agreement.

 

(b) Participation in Employee Benefit Plans.  The Executive will be eligible 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) 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 payment or reimbursement that would constitute
nonqualified deferred compensation subject to Section 409A of the Internal
Revenue Code (including the regulations promulgated thereunder, “Section 409A”)
shall be subject to the following additional rules: (i) no payment or
reimbursement of any such expense shall affect the Executive’s right to payment
or reimbursement of any other such expense in any other taxable year; (ii)
payment or 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;

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and (iii) the right to payment or reimbursement shall not be subject to
liquidation or exchange for any other benefit.

(d) Perquisite Allowance. During the Initial Term and any Extended Term, the
Company shall pay the Executive a perquisite allowance at a rate of two thousand
five hundred dollars ($2,500) per month.

3. Confidential Information, Non-Competition and Proprietary Information.  The
Executive has executed or will execute within ten (10) business days following
the date hereof the Company’s standard Employee Non-Solicitation,
Non-Competition, Confidential Information and Inventions Assignment Agreement. 
It is understood and agreed that a material 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 or until expiration
of the Initial Term or Extended Term, as applicable, without renewal.

(a) The Company may terminate the Executive’s employment for “Cause” upon
written notice to the Executive received setting forth in reasonable detail the
nature of the Cause.  The following shall constitute Cause for termination: (i)
the Executive’s willful failure to perform, or gross negligence in the
performance of, the Executive’s material duties and responsibilities to the
Company or its Affiliates which is not remedied within ten (10) days of written
notice thereof; (ii) material breach by the Executive of any material provision
of this Agreement or any other material agreement with the Company or any of its
Affiliates which is not remedied within ten (10) days of written notice thereof;
(iii) fraud, embezzlement or other dishonesty with respect to the Company or any
of its Affiliates; or (iv) the Executive’s commission of a felony or other crime
involving moral turpitude.

(b) The Company may terminate the Executive’s employment at any time other than
for Cause upon 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 the Company’s
failure to continue the Executive’s appointment or election as a director or
officer of any of its Affiliates shall not constitute “Good Reason”; (ii) a
material reduction in the Executive’s base salary; (iii) a material breach by
the Company of any material provision of this Agreement or any other material
agreement with Executive; or (iv) relocation of the Executive’s principal place
of business more than forty (40) miles from the then current location of the
Executive’s principal place of business.

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(d) The Executive may terminate his employment with the Company other than for
Good Reason at any time upon sixty (60) days’ 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 twenty (120) 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 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.

5. Severance Payments and Other Matters Related to Termination.

(a) Termination pursuant to Section 4(b) or 4(c).  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(b) of this Agreement or
by the Executive for Good Reason pursuant to Section 4(c) of this Agreement, or
as a result of the Company’s delivery of a notice of non-renewal in accordance
with Section 1(a) of this Agreement:

i. 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.   

iii. 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 the Executive a
monthly cash amount equal to the full premium cost of that participation (the
“Benefits Payment”) 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.

 

iii. The Company shall pay the Executive a pro-rata portion of his Target Bonus
for the year in which the date of termination occurs, calculated based on the
number of days the Executive has been employed by the Company in such year and
payable on the Payment Commencement Date.

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iii. All of the Executive’s then remaining unvested stock 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
and would have vested during the twelve (12) month period following the date of
termination if such termination had not occurred shall (notwithstanding anything
to the contrary in the applicable award agreement) remain outstanding and
eligible to vest until the Payment Commencement Date and, subject to Section
5(a)(vii), automatically become fully vested as of the Payment Commencement
Date.

iii. The Company will also pay the Executive on the date of termination any base
salary earned but not paid through the, date of termination (collectively, the
“Accrued Amounts”).  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 on the later of such date
when bonuses are paid to executives of the Company generally in accordance with
the timing rules of Section 2(a) and the Payment Commencement Date. 

iii. Any obligation of the Company to provide the Executive severance payments
or other benefits under this Section 5(a) (other than the Accrued Amounts) is
conditioned on the Executive’s signing, returning and not revoking an effective
release of claims in the form provided by the Company (the “Employee Release”)
within the deadline specified therein (and in all events within 60 days
following the termination of the Executive’s employment), which release shall
not 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 coverage and 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.  Any severance
payments to be made in the form of salary continuation pursuant to the terms of
this Agreement shall be payable in accordance with the normal payroll practices
of the Company, and will begin on the Payment Commencement Date but shall be
retroactive to the date of termination.  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.  The Executive
further agrees to repay any overpayment of health benefit premiums made by the
Company hereunder.

(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 the Accrued Amounts.  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 the Executive’s employment, 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 payment
obligations to the Executive under this Agreement.

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(c) Upon a Change of Control. If, within ninety (90) days prior to a Change of
Control or within eighteen (18) months 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 pursuant to Section 4(b) of this
Agreement, the Executive’s employment terminates as a result of the Company’s
delivery of a notice of non-renewal in accordance with Section 1(a) of this
Agreement, or the Executive terminates his employment for Good Reason pursuant
to Section 4(c) of this Agreement, then, in lieu of any payments to the
Executive or on the Executive’s behalf under Section 5(a) hereof:

i. All of the Executive’s then remaining unvested stock 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 anything to the contrary in the applicable award
agreement) remain outstanding and eligible to vest until the Payment
Commencement Date and, subject to Section 5(c)(v), automatically become fully
vested as of the Payment Commencement Date.

ii. The Company shall pay, on the Payment Commencement Date, a lump sum payment
equal to eighteen (18) months of the Executive’s then-current annual base
salary; 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)(ii) payable in a lump sum on the closing date of
the Change of Control (or, if later, the Payment Commencement Date).

iii. 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 the Executive the
Benefits Payment for eighteen (18) 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, 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. 

iv. The Company shall pay the Executive a pro-rata portion of his Target Bonus
for the year in which the date of termination occurs, calculated based on the
number of days the Executive has been employed by the Company in such year and
payable on the Payment Commencement Date.

v. The Company will also pay the Executive the Accrued Amounts.  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 on the later of such date when bonuses are paid to
executives of the Company generally in accordance with the timing rules of
Section 2(a) and the Payment Commencement Date. 

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vi. Any obligation of the Company to provide the Executive severance payments or
other benefits under this Section 5(c) (other than the Accrued Amounts) is
conditioned on the Executive’s signing, returning and not revoking the Employee
Release by the deadline specified therein (and in all events within 60 days
following the termination of the Executive’s employment), which release shall
not 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 coverage and 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. 

(d) 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.  Notwithstanding anything herein to the
contrary, if the payment by the Company of the Benefits Payments will subject or
expose the  Company to taxes or penalties, the Executive and the Company agree
to renegotiate the provisions of Section 5(a)(ii) or 5(c)(iii), as
applicable, in good faith and enter into a substitute arrangement pursuant to
which the Company will not be subjected or exposed to taxes or penalties and the
Executive will be provided with payments or benefits with an economic value that
is no less than the economic value of the Benefits Payments.

(e) Upon a Change of Control, the Performance-based Award shall (notwithstanding
anything to the contrary in the applicable award agreement), to the extent not
assumed or continued by the acquirer in such Change of Control on substantially
identical terms, become vested as of the consummation of the Change of Control.

(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 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.  The
obligation of the Company to make payments to the Executive or on the
Executive’s behalf under Section 5 of this Agreement is expressly conditioned
upon the Executive’s continued full performance of the Executive’s obligations
under Section 3 hereof, under the Employee Non-Solicitation, Non-Competition,
Confidential Information and Inventions Assignment Agreement to be executed
herewith, 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.

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

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

“Payment Commencement Date” shall mean the Company’s next regular payday for
executives that follows the expiration of sixty (60) calendar days from the date
the Executive’s employment terminates.

“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 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

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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 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.

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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

/s/ BRIAN STUGLIK

Brian Stuglik

THE COMPANY

/s/ MICHAEL KAUFFMAN

Michael Kauffman, Chair,

Verastem Board of Directors

 

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77178035_7

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” (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” (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 that qualify
for the exception under

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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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