Exhibit 10.11

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), is entered
into on October 10, 2018 (the “Effective Date“), by and between Assembly
Biosciences, Inc., a Delaware corporation with principal executive offices at
11711 N. Meridian Street, Suite 310, Carmel, IN 46032 (the “Company”), and
Jackie Papkoff, Ph.D. (the “Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Company and the Executive entered into an employment offer letter
dated March 11, 2018 (the “Prior Agreement”).

 

WHEREAS, the Company desires to continue to employ the Executive in the role of
Senior Vice President, Chief Scientific Officer Microbiome as of the Effective
Date, and the Executive desires to continue employment with the Company as of
the Effective Date; and

 

WHEREAS, the parties desire to enter into this Agreement, setting forth the
terms and conditions of the Executive’s continued employment with the Company.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby agree as follows:

 

1. Employment.

 

(a) Services. As of the Effective Date, the Executive will be employed by the
Company initially as its Senior Vice President, Chief Scientific Officer
Microbiome, reporting initially to the Company’s Chief Executive Officer, and
shall perform such duties as are consistent with a position of Senior Vice
President, Chief Scientific Officer Microbiome, and other duties assigned by the
Chief Executive Officer from time to time, including overseeing the research,
discovery and development activities of the Microbiome business (the
“Services”). The Executive agrees to perform such Services faithfully, to devote
substantially all of her working time, attention and energies to the business of
the Company and, while she remains employed and subject to the terms of this
Agreement, not to engage in any other business activity that is in conflict with
her duties and obligations to the Company. For avoidance of doubt, with the
written consent of the Chief Executive Officer, the Executive may engage in
consulting and board activities for businesses that are not competitive with the
Company so long as such activities do not interfere with her duties and
obligations to the Company and otherwise comply with the Company’s Code of
Conduct and Employee Handbook.

 

(b) Acceptance. Executive hereby accepts such employment and agrees to render
the Services.

 

 

 

 

2. Term. The Executive's employment under this Agreement shall commence as of
the Effective Date and shall continue on an “at-will” basis until terminated
pursuant to Section 8 of this Agreement (the “Term”).

 

3. Best Efforts. The Executive shall devote substantially all of her business
time, attention and energies (recognizing the exception described in 1(a) above
for consulting and board work that is approved by the Chief Executive Officer)
to the business and affairs of the Company and shall use her best efforts to
advance the best interests of the Company and during the Term shall not be
actively engaged in any other business activity, whether or not such business
activity is pursued for gain, profit or other pecuniary advantage, that will
interfere with the performance by the Executive of her duties hereunder or the
Executive’s availability to perform such duties or that will adversely affect,
or negatively reflect upon, the Company.

 

4. Compensation. During the Term, as full compensation for the performance by
the Executive of her duties under this Agreement, the Company shall pay the
Executive as follows:

 

(a) Base Salary. The Company shall pay Executive an annualized base salary (the
“Base Salary”) initially equal to three hundred sixty thousand dollars
($360,000). Payment shall be made in accordance with the Company’s normal
payroll practices, as they may be changed from time to time. The Base Salary
will be reviewed by the Chief Executive Officer and the Board of Directors (the
“Board”), or a committee thereof, no less frequently than annually.

 

(b) Annual Performance Bonus. At the sole discretion of the Board (or a
committee thereof), the Executive shall be eligible to receive an annual
performance-based bonus during the Term (the “Annual Performance Bonus”)
targeted at thirty-five percent (35%) of Executive’s then current Base Salary
based on the attainment by the Company and the Executive of certain financial,
clinical development and business objectives as established annually by the
Chief Executive Officer (or a committee of the Board). The Annual Performance
Bonus shall be payable as a lump-sum payment as determined by the Board (or a
committee thereof) in its sole discretion. Except as otherwise provided in this
Agreement, to earn any particular Annual Performance Bonus, the Executive must,
in addition to satisfying the performance objectives, remain employed on the
date the Annual Performance Bonus is paid; provided, further, that the Annual
Performance Bonus will be paid no later than seventy-five (75) days after the
end of the period to which the Annual Performance Bonus pertains.

 

(c) Withholding. The Company shall withhold all applicable federal, state and
local taxes, social security and such other amounts as may be required by law
from all amounts payable to the Executive under this Agreement, including
Section 4 and Section 9.

 

(d) Equity. From time to time, subject to and upon the approval by the Board (or
a committee thereof), the Company may grant to the Executive equity awards to
purchase or receive shares of common stock of the Company (the “Equity Awards”).
The Equity Awards will contain such terms and conditions as may be approved by
the Board (or a committee thereof).

 

2 

 

 

(e) Expenses. The Company shall provide the Executive with a corporate credit
card for business use, and shall reimburse the Executive for all normal, usual
and necessary expenses incurred by the Executive in furtherance of the business
and affairs of the Company, including reasonable travel and entertainment, upon
timely receipt by the Company of appropriate vouchers or other proof of the
Executive’s expenditures and otherwise in accordance with any travel or expense
reimbursement policy as may from time to time be adopted by the Company.

 

(f) Other Benefits. The Executive shall be entitled to all rights and benefits
for which Executive shall be eligible under any benefit or other plans
(including, without limitation, dental, medical, medical reimbursement and
hospital plans, pension plans, employee stock purchase plans, profit sharing
plans, bonus plans and other so-called “Fringe Benefits”) as the Company shall
make available to its senior executives from time to time, subject to the terms
of such plans. In addition, if applicable, the Company shall reimburse the
Executive for Executive’s reasonable licensing fees, continuing professional
education, and other professional dues upon timely receipt by the Company of
appropriate vouchers or other proof of the Executive’s expenditures and
otherwise in accordance with any expense reimbursement policy as may from time
to time be adopted by the Company. The Company shall also name the Executive as
a covered person under its Directors & Officers insurance policies.

 

(g) Vacation. The Executive will be entitled to paid vacation in accordance with
the Company’s vacation policy, as in effect from time to time.

 

5. Confidential Information and Inventions.

 

(a) The Executive recognizes and acknowledges that in the course of Executive’s
duties Executive is likely to receive confidential or proprietary information
owned by the Company or third parties with whom the Company has an obligation of
confidentiality, relating to and used in the Company’s business (collectively,
“Confidential and Proprietary Information”). Confidential and Proprietary
Information shall include, but shall not be limited to, confidential or
proprietary scientific or technical information, data, study results, study
design, formulas and related concepts, business plans (both current and under
development), client lists, promotion and marketing programs, trade secrets, or
any other confidential or proprietary business information relating to
development programs, costs, revenues, marketing, investments, sales activities,
promotions, credit and financial data, manufacturing processes, financing
methods, plans or the business and affairs of the Company or of any affiliate,
client or service provider of the Company, and any and all information relating
to the operation of the Company’s business which the Company may from time to
time designate as confidential or proprietary or that the Executive reasonably
knows should be, or has been, treated by the Company as confidential or
proprietary. The Executive expressly acknowledges that the Confidential and
Proprietary Information constitutes a protectable business interest of the
Company. The Executive further agrees that if any information that the Company
deems to be a trade secret is found by a court of competent jurisdiction not to
be a trade secret, such information will, nevertheless, be considered
Confidential and Proprietary Information for purposes of this Agreement.
Confidential and Proprietary Information does not include any information that:
(i) at the time of disclosure is generally known to, or readily ascertainable
by, the public; (ii) becomes known to the public through no fault of the
Executive or other violation of this Agreement; or (iii) is disclosed to the
Executive by a third party under no obligation to maintain the confidentiality
of the information. The Executive agrees, during and after the Term, except as
reasonably necessary for the fulfillment of Executive’s duties under this
Agreement: (i) not to use any such Confidential and Proprietary Information for
herself or others; and (ii) to keep confidential and not disclose or make
accessible to any other person or entity any Confidential and Proprietary
Information. The Executive agrees to return immediately all Confidential and
Proprietary Information and Company material and reproductions (including but
not limited, to writings, correspondence, notes, drafts, records, invoices,
technical and business policies, computer programs or disks) thereof in
Executive’s possession to the Company upon termination of employment, or at any
time upon the Company’s request.

 

3 

 

 

(b) Except with prior written authorization by the Company, the Executive agrees
not to disclose or publish any of the Confidential and Proprietary Information,
or any confidential, scientific, technical or business information of any other
party to whom the Company owes an obligation of confidence, at any time during
or after Executive’s employment with the Company. The restrictions in this
Section 5(b) and in Section 5(a) above will not apply to any information that
the Executive is required to disclose by law, provided that the Executive (i)
notifies the Company of the existence and terms of such obligation, (ii) gives
the Company a reasonable opportunity to seek a protective or similar order to
prevent or limit such disclosure, and (iii) only discloses that information
actually required to be disclosed.

 

(c) The Executive agrees that any and all inventions (whether or not
patentable), discoveries, improvements, know-how, ideas, information and
patentable or copyrightable works (“Inventions”) initiated, conceived or made by
Executive, either alone or in conjunction with others, during the course of
Executive’s employment by the Company or that result from work performed by the
Executive for the Company, shall be the sole property of the Company to the
maximum extent permitted by applicable law and, to the extent permitted by law,
shall be “works made for hire” as that term is defined in the United States
Copyright Act (17 U.S.C.A., Section 101). The Company shall be the sole owner of
all patents, copyrights, trade secret rights, and other intellectual property or
other rights in connection therewith. The Executive hereby assigns to the
Company all right, title and interest Executive may have or acquire in all such
Inventions. The Executive further agrees to assist the Company in every proper
way (but at the Company’s expense) to obtain and from time to time enforce
patents, copyrights or other rights on such Inventions in any and all countries,
and to that end the Executive will execute all documents necessary:

 

4 

 

 

(i) to apply for, obtain and vest in the name of the Company alone (unless the
Company otherwise directs) letters patent, copyrights or other analogous
protection in any country throughout the world and when so obtained or vested to
renew and restore the same; and

 

(ii) to defend any opposition proceedings in respect of such applications and
any opposition proceedings or petitions or applications for revocation of such
letters patent, copyright or other analogous protection.

 

To the extent this Agreement is required to be construed in accordance with the
laws of any state which precludes a requirement to assign certain classes of
inventions made by an employee, this Section 5 will be interpreted not to apply
to any invention which a court rules and/or the Company agrees falls within such
classes. As required pursuant to Section 2872 of the California Labor Code, the
Executive acknowledges that the Company has notified the Executive that the
provisions of this Section 5 do not apply to an invention that qualified fully
under the provisions of Section 2870 of the California Labor Code (attached
hereto as Exhibit A).

 

(d) The Executive acknowledges that, while performing the services under this
Agreement the Executive may locate, identify and/or evaluate patented or
patentable inventions having commercial potential in the fields of pharmacy,
pharmaceutical, biotechnology, healthcare, technology and other fields that may
be of potential interest to the Company (the “Third-Party Inventions”). The
Executive understands, acknowledges and agrees that all rights to, interests in
or opportunities regarding, all Third-Party Inventions identified by the Company
or its affiliates or either of the foregoing Persons’ officers, directors,
employees (including the Executive), agents or consultants during the Term shall
be and remain the sole and exclusive property of the Company or such affiliate
and the Executive shall have no rights whatsoever to such Third-Party Inventions
and will not pursue for herself or for others any transaction relating to the
Third-Party Inventions which is not on behalf of the Company.

 

(e) Executive’s covenants set forth in this Section 5 are in addition and
supplement Executive’s additional covenants set forth in her Proprietary
Information and Inventions Agreement dated March 11, 2018 (the “PIIA”).

 

(f) The provisions of this Section 5 shall survive any termination or expiration
of this Agreement.

 

6. Non-Solicitation. The Executive understands and recognizes that Executive’s
services to the Company are special and unique and that in the course of
performing such services the Executive will have access to and knowledge of
Confidential and Proprietary Information (as defined in Section 5) and will
become knowledgeable of and familiar with the Company’s research and discovery
program, drug product candidates, clinical programs, service providers as well
as the Company’s business. The Executive acknowledges that, due to the unique
nature of the Company’s business, the loss of any of its clinical sites, service
providers or business flow or the improper use of its Confidential and
Proprietary Information could create significant instability and cause
substantial damage to the Company and therefore the Company has a strong
legitimate business interest in protecting the continuity of its business
interests and the restrictions herein agreed to by the Executive narrowly and
fairly serve such an important and critical business interest of the Company.
Therefore, the Executive covenants and agrees as follows:

 

5 

 

 

(a) Definitions. As used in this Agreement, the following terms have the
meanings given to such terms below:

 

(i) “Company Employee” means (A) any person who is an employee of the Company at
the time of the date of the Executive’s termination of employment, and (B) any
person who was an employee of the Company at any point during the six (6) month
period prior to, the termination of the Executive’s employment.

 

(ii) “Person” means any person, firm, partnership, joint venture, corporation or
other business entity.

 

(iii) “Restricted Period” means the period commencing on the date of the
Executive’s termination of employment and ending twelve (12) months thereafter;
provided, however, that this period will be tolled and will not run during any
time Executive is in violation of this Section 6, it being the intent of the
parties that the Restricted Period will be extended for any period of time in
which the Executive is in violation of this Section 6.

 

(b) Non-Solicitation. During Executive’s employment with the Company and during
the Restricted Period (other than for the benefit of the Company), the Executive
will not, directly or indirectly, on the Executive’s own behalf or on behalf of
any other Person, solicit, induce, or attempt to solicit or induce any Company
Employee or any independent contractor (who is then engaged by the Company or
was engaged by the Company in the prior six (6) months) to terminate his or her
employment or engagement with the Company or to accept employment or engagement
with any Person.

 

(c) Enforcement. In the event that the Executive breaches or threatens to breach
any provisions of Section 5 or this Section 6, then the Company will suffer
irreparable harm and monetary damages would be inadequate to compensate the
Company. Accordingly, in addition to any other rights which the Company may
have, the Company shall (i) be entitled, without the posting of bond or other
security, to seek injunctive relief to enforce the restrictions contained in
such Sections and (ii) have the right to require the Executive to account for
and pay over to the Company all compensation, profits, monies, accruals,
increments and other benefits derived or received by the Executive as a result
of any transaction constituting a breach of any of the provisions of Sections 5
or 6, to the maximum extent permitted by law.

 

(d) Reasonableness and Severability. Each of the rights and remedies enumerated
in Section 6(c) shall be independent of the others and shall be in addition to
and not in lieu of any other rights and remedies available to the Company at law
or in equity. The Executive hereby acknowledges and agrees that the covenants
provided for pursuant to Section 6 are essential elements of Executive’s
employment by the Company and are reasonable with respect to their duration,
geographic area and scope and in all other respects. If, at the time of
enforcement of this Section 6, a court of competent jurisdiction holds that the
restrictions stated herein are unreasonable under the circumstances then
existing, the parties hereto agree that the maximum duration, scope or
geographic area legally permissible under such circumstances will be substituted
for the duration, scope or area stated herein. If any of the covenants contained
in this Section 6, or any part of any of them, is hereafter construed or
adjudicated to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants or rights or remedies which shall be
given full effect without regard to the invalid portions. No such holding of
invalidity or unenforceability in one jurisdiction shall bar or in any way
affect the Company’s right to the relief provided in this Section 6 or otherwise
in the courts of any other state or jurisdiction within the geographical scope
of such covenants as to breaches of such covenants in such other respective
states or jurisdictions, such covenants being, for this purpose, severable into
diverse and independent covenants.

 

6 

 

 

(e) Defend Trade Secrets Act of 2016. The Executive understands that pursuant to
the federal Defend Trade Secrets Act of 2016, the Executive shall not be held
criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that (i) is made (x) in confidence to a federal,
state, or local government official, either directly or indirectly, or to an
attorney; and (y) solely for the purpose of reporting or investigating a
suspected violation of law; or (ii) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal.

 

(f) Protected Disclosures. The Executive understands that nothing contained in
this Agreement or Executive’s PIIA limits the Executive’s ability to communicate
with any federal, state or local governmental agency or commission, including to
provide documents or other information, without notice to the Company. The
Executive also understands that nothing in this Agreement limits the Executive’s
ability to share compensation information concerning the Executive or others,
except that this does not permit the Executive to disclose compensation
information concerning others that the Executive obtain because the Executive’s
job responsibilities require or allow access to such information.

 

(g) Remedies. In the event that an actual proceeding is brought in equity to
enforce the provisions of Section 5 or this Section 6, the Executive shall not
urge as a defense that there is an adequate remedy at law nor shall the Company
be prevented from seeking any other remedies which may be available. The
Executive agrees that she shall not raise in any proceeding brought to enforce
the provisions of Section 5 or this Section 6 that the covenants contained in
such Sections limit Executive’s ability to earn a living.

 

(h) Survival. The provisions of Section 6 shall survive any termination of this
Agreement.

 

7. Representations and Warranties.

 

(a) The Executive hereby represents and warrants to the Company as follows:

 

(i) Neither the execution or delivery of this Agreement nor the performance by
the Executive of her duties and other obligations hereunder violate or will
violate any statute, law, determination or award, or conflict with or constitute
a default or breach of any covenant or, to Executive’s knowledge, obligation
under (whether immediately, upon the giving of notice or lapse of time or both)
any prior employment agreement, contract, or other instrument to which the
Executive is a party or by which she is bound.

 

7 

 

 

(ii) The Executive believes that Executive has the full right, power and legal
capacity to enter and deliver this Agreement and to perform Executive’s duties
and other obligations hereunder. This Agreement constitutes the legal, valid and
binding obligation of the Executive enforceable against Executive in accordance
with its terms. No approvals or consents of any persons or entities are required
for the Executive to execute and deliver this Agreement or perform her duties
and other obligations hereunder.

 

(b) The Company hereby represents and warrants to the Executive that this
Agreement and the employment of the Executive hereunder have been duly
authorized by and on behalf of the Company, including, without limitation, by
all required action by the Board (or committee thereof).

 

8. Termination. The Executive’s employment hereunder shall be terminated
immediately upon the Executive’s death and may be otherwise terminated as
follows:

 

(a) The Executive’s employment hereunder may be terminated by the Company for
Cause as determined by the Chief Executive Officer. Any of the following actions
by the Executive shall constitute “Cause”:

 

(i) The willful failure or continuing refusal by the Executive to perform
Executive’s duties hereunder;

 

(ii) Any act of willful or intentional misconduct, or a grossly negligent act by
the Executive having the effect of injuring, in a material way (as determined in
good-faith by the Company), the business or reputation of the Company, including
but not limited to, any officer, director, or executive of the Company;

 

(iii) Willful misconduct by the Executive in carrying out Executive’s duties or
obligations under this Agreement, including, without limitation, insubordination
with respect to lawful directions received by the Executive from the Chief
Executive Officer or from the Board;

 

(iv) The Executive’s indictment of any felony or a misdemeanor involving moral
turpitude (including entry of a nolo contendere plea);

 

(v) The determination by the Company, based upon clear and convincing evidence,
after a reasonable and good-faith investigation by the Company following a
written allegation by another employee of the Company, that the Executive
engaged in some form of harassment prohibited by law (including, without
limitation, age, sex or race discrimination);

 

8 

 

 

(vi) Any intentional misappropriation of the property of the Company, or
embezzlement of its funds or assets (whether or not a misdemeanor or felony);

 

(vii) Breach by the Executive of any of the provisions of Sections 5, 6, or 7 of
this Agreement or the provisions of you PIIA; and

 

(viii) Breach by the Executive of any provision of this Agreement other than
those contained in Sections 5, 6, or 7 which is not cured by the Executive
within thirty (30) business days after notice thereof is given to the Executive
by the Company.

 

Except for a failure, misconduct, breach, or refusal which, by its nature,
cannot reasonably be expected to be cured, the Executive shall have ten business
days from the delivery of written notice by the Company within which to cure any
acts constituting Cause, unless a longer cure period is provided in the act
constituting Cause described above; provided however, that, if the Company
reasonably expects irreparable injury from a delay of ten business days, the
Company may give the Executive notice of such shorter period within which to
cure as is reasonable under the circumstances, which may include the termination
of the Executive's employment for Cause without notice and with immediate
effect.

 

(b) The Executive’s employment hereunder may be terminated by the Chief
Executive Officer due to the Executive’s Disability. For purposes of this
Agreement, a termination for “Disability” shall occur (i) when the Chief
Executive Officer has provided a written termination notice to the Executive
supported by a written statement from a reputable independent physician mutually
selected by the Company and the Executive, or the Executive’s legal
representatives in the event Executive is unable to make such selection due to
mental incapacity, to the effect that the Executive shall have become so
physically or mentally incapacitated as to be unable to resume, even with
reasonable accommodation as may be required under the Americans With
Disabilities Act, within the ensuing twelve (12) months, Executive’s employment
hereunder by reason of physical or mental illness or injury, or (ii) upon
rendering of a written termination notice by the Company after the Executive has
been unable to substantially perform Executive’s duties hereunder, even with
reasonable accommodation as may be required under the Americans With
Disabilities Act, for one hundred twenty (120) or more consecutive days, or more
than one hundred eighty (180) days in any consecutive twelve (12) month period,
by reason of any physical or mental illness or injury. For purposes of this
Section 8(b), the Executive agrees to make herself available and to cooperate in
any reasonable examination by a reputable independent physician mutually
selected by the Company and the Executive, and paid for by the Company.
Notwithstanding the foregoing, nothing herein shall give the Company the right
to terminate the Executive prior to discharging its obligations to the
Executive, if any, under the Family and Medical Leave Act, the Americans With
Disabilities Act, or any other applicable law. The Company shall reimburse the
Executive for Executive’s actual cost of maintaining a supplementary long-term
disability insurance policy during the Term up to a maximum reimbursement of
$10,000 per year.

 

9 

 

 

(c) The Executive’s employment hereunder may be terminated by the Company (or
its successor) by written notice to the Executive upon the occurrence of a
Change of Control. For purposes of this Agreement, “Change of Control” means (i)
the acquisition, directly or indirectly, following the Effective Date by any
person (as such term is defined in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended), in one transaction or a series of related
transactions, of securities of the Company representing in excess of fifty
percent (50%) of the combined voting power of the Company’s then outstanding
securities if such person or his or its affiliate(s) do not own in excess of
fifty percent (50%) of such voting power on the Effective Date of this
Agreement, (ii) the future disposition by the Company (whether direct or
indirect, by sale of assets or stock, merger, consolidation or otherwise) of all
or substantially all of its business and/or assets in one transaction or series
of related transactions other than a merger effected exclusively for the purpose
of changing the domicile of the Company, or (iii) a “corporate transaction” as
defined in the Company equity incentive plans under which the Executive has been
granted Equity Awards. Notwithstanding the foregoing, if the Change of Control
does not constitute a change in the ownership or effective control of the
Company, or in the ownership of a substantial portion of the assets of the
Company, within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), the amount of cash severance payable pursuant to
Section 9(b), if any, shall be paid in equal installments in accordance with the
Company’s then payroll practice over a 12-month period. Solely for purposes of
Section 409A of the Code, each installment payment is considered a separate
payment.

 

(d) The Executive’s employment hereunder may be voluntarily terminated by the
Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean any of the following which occurs without Executive’s consent: (i) any
material reduction by the Company of the Executive’s duties, or responsibilities
or authority that, taken as a whole, results in a material diminution of
position; provided, however that a change in the Executive’s title or reporting
relationship shall not by itself constitute a termination by Executive for Good
Reason under this clause (i); (ii) any material reduction (meaning 10% or more)
by the Company of the Executive’s Base Salary and/or target Annual Performance
Bonus payable hereunder (it being understood that an across-the-board reduction
applicable to all similarly situated employees of the Company, including the
Executive, shall not be deemed a reduction for purposes of this definition);
(iii) the Executive no longer reports to the Chief Executive Officer or
President of the Company or its successor; (iv) any requirement by the Company,
without the Executive’s prior written consent, that the Executive locate the
Executive’s residence or primary place of employment to a location outside a
50-mile radius of such location mutually agreed upon between the Company and the
Executive as of the Effective Date, or such other location that the Company and
the Executive may mutually agree upon and designate from time to time during the
Term; or (v) a material breach by the Company of Section 7(b) of this Agreement
which is not cured by the Company within thirty (30) days after written notice
thereof is given to the Company by the Executive. However, notwithstanding the
above, Good Reason shall not exist unless: (x) the Executive notifies the Board
or the Chief Executive Officer in writing within thirty (30) days of the initial
existence of one of the adverse events described above, and (y) the Company
fails to correct the adverse event within thirty (30) days of such notice, and
(z) the Executive’s voluntary termination because of the existence of one or
more of the adverse events described above occurs within ninety (90) days of the
initial existence of the event.

 

10 

 

 

(e) The Executive’s employment may be terminated by the Company without Cause by
delivery of written notice to the Executive effective the date of delivery of
such notice. For the avoidance of doubt, termination of the Executive’s
employment due to his death or Disability does not constitute a termination for
Cause.

 

(f) The Executive’s employment may be terminated by the Executive in the absence
of Good Reason by delivery of written notice to the Company effective fifteen
(15) days after the date of delivery of such notice.

 

9. Compensation upon Termination.

 

(a) Accrued Benefits. Upon termination of the Executive’s employment by either
party regardless of the cause or reason, the Executive shall be entitled to the
following, referred to herein as the “Accrued Benefits”: (i) payment for any
accrued, unpaid Base Salary through the termination date; (ii) if provided for
under the Company’s vacation plan or policy or required by applicable law,
payment for any accrued, unused vacation days through the termination date; and
(iii) reimbursement for any approved business expenses that the Executive has
timely submitted for reimbursement in accordance with the Company’s business
expense reimbursement policy or practice. Except as otherwise expressly provided
by this Agreement, the Company shall have no further payment obligations to the
Executive and all Equity Awards that have not vested as of the termination date
shall be forfeited to the Company as of such date. Subject to this Section 9,
the vested portion of any stock options held by the Executive as of the
Executive’s termination date shall remain exercisable for ninety (90) days
following such termination.

 

(b) Change of Control Separation Benefits. If the Executive’s employment is
terminated by the Company due to Disability pursuant to Section 8(b), by the
Company without Cause pursuant to Section 8(e), or by the Executive for Good
Reason pursuant to Section 8(d) and such termination occurs during the period
beginning on the Change of Control and ending twelve (12) months immediately
following such Change of Control (the “COC Period”), provided that the Executive
signs and does not revoke a general release of claims against the Company within
the time period specified therein (which time period shall not exceed sixty (60)
days), in form and substance satisfactory to the Company (the “Release”), then
the Company shall provide the following benefits to the Executive, referred to
herein as the “Change of Control Separation Benefits”: (i) a lump sum payment
equal to twelve (12) months of the Executive’s then-current Base Salary; (ii)
the full Annual Performance Bonus for the year in which such termination occurs,
less any installments paid in advance (items (i) and (ii) being the “Change of
Control Separation Pay”); (iii) immediate vesting in full of all Equity Awards
subject to time based vesting; (iv) extension of the exercise period for all
vested stock options held by the Executive as of the termination date until the
end of their term; and (v) if the Executive properly and timely elects to
continue his health insurance benefits under COBRA or applicable state
continuation coverage after the termination date, reimbursement for the portion
of Executive’s health continuation coverage premiums that the Company would have
paid had the Executive remained employed by the Company until the earlier of (A)
the twelve (12) month period following the month in which the Executive’s
termination date occurs, or (B) the maximum period permitted by applicable law,
provided that the Company’s obligation to pay a portion of the Executive’s
health continuation coverage premiums will terminate if she becomes eligible for
health insurance benefits from another employer during the reimbursement period.
Subject to the Release being effective, the Change of Control Separation Pay
will be paid within sixty (60) days after the termination date; provided,
however, that if the 60-day period begins in one calendar year and ends in a
second calendar year, such payments, to the extent they qualify as
“non-qualified deferred compensation” within the meaning of Section 409A of the
Code, shall be paid no earlier than the first Company payroll date in the second
calendar year and, in any case, by the last day of such 60-day period.

 

11 

 

 

(c) Base Separation Benefits. If the Executive’s employment is terminated during
the Term and outside of the COC Period as a result of the Executive’s Disability
pursuant to Section 8(b), by the Company without Cause pursuant to Section 8(e),
or by the Executive for Good Reason pursuant to Section 8(d)(ii) –(v), provided
that the Executive signs and does not revoke the Release within the time period
specified therein (which time period shall not exceed sixty (60) days), then the
Company shall provide the following benefits to the Executive, referred to
herein as the “Base Separation Benefits”: (i) the continued payment in
installments of the Executive’s then-current Base Salary for a period of twelve
(12) months following the termination date (the “Base Separation Pay”); and (ii)
if the Executive properly and timely elects to continue the Executive’s health
insurance benefits under COBRA or applicable state continuation coverage after
the termination date, reimbursement for the portion of Executive’s health
continuation coverage premiums that the Company would have paid had the
Executive remained employed by the Company until the earlier of (A) the twelve
(12) month period following the month in which the Executive’s termination date
occurs, or (B) the maximum period permitted by applicable law, provided that the
Company’s obligation to pay a portion of the Executive’s health continuation
coverage premiums will terminate if she becomes eligible for health insurance
benefits from another employer during the reimbursement period. The first
installment of the Base Separation Pay will be paid on the Company’s first
regular payday occurring following the effective date of the Release in an
amount equal to the sum of payments of Base Salary that would have been paid if
Executive had remained in employment for the period from the termination date
through the payment date. The remaining installments will be paid until the end
of the 12-month period at the same rate as the Base Salary in accordance with
the Company’s normal payroll practices for its employees. Notwithstanding the
foregoing, if the 60-day period for the execution and non-revocation of the
Release begins in one calendar year and ends in a second calendar year, the Base
Separation Pay, to the extent it qualifies as “non-qualified deferred
compensation” within the meaning of Section 409A of the Code, shall begin to be
paid no earlier than the first Company payroll date in the second calendar year
and, in any case, by the last day of such 60-day period; provided, however, that
the initial payment shall include a catch-up payment to cover amounts
retroactive to the day immediately following the termination date. The Executive
understands that if Executive is eligible to receive the Base Separation
Benefits, such Base Separation Benefits shall be in lieu of and not in addition
to the Change of Control Separation Benefits described in Section 9(b) of this
Agreement. Notwithstanding the foregoing, if the Executive is entitled to
receive the Base Separation Benefits but violates any provisions of this
Agreement or any other agreement entered into by the Executive and the Company
after termination of employment, the Company will be entitled to immediately
stop paying any further installments of the Base Separation Benefits. If the
Executive’s employment is terminated during the Term as a result of the
Executive’s death, then the Company shall provide to the Executive’s estate the
continued payment of Executive’s then-current Base Salary for a period of twelve
(12) months following the termination date, beginning on the Company’s first
regular payday following the such termination date.

 

(d) This Section 9 sets forth the only obligations of the Company with respect
to the termination of the Executive’s employment with the Company, except as
otherwise required by law, and the Executive acknowledges that, upon the
termination of Executive’s employment, Executive shall not be entitled to any
payments or benefits which are not explicitly provided in Section 9.

 

(e) Upon termination of the Executive’s employment hereunder for any reason, the
Executive shall be deemed to have resigned as director and/or officer of the
Company and each subsidiary, to the extent applicable, effective as of the date
of such termination, unless otherwise requested by the Board.

 

(f) The provisions of this Section 9 shall survive any termination of this
Agreement.

 

10. Section 409A. The intent of the parties to this Agreement is that the
payments, compensation and benefits under this Agreement be exempt from or
comply with Section 409A of the Code and the regulations and guidance
promulgated thereunder (collectively, “Section 409A”) and, in this connection,
the following shall be applicable:

 

(a) To the greatest extent possible, this Agreement shall be interpreted to be
exempt from or in compliance with Section 409A.

 

12 

 

 

(b) If any severance, compensation, or benefit required by this Agreement is to
be paid in a series of installment payments, each individual payment in the
series shall be considered a separate payment for purposes of Section 409A.

 

(c) If any severance, compensation, or benefit required by this Agreement that
constitutes “nonqualified deferred compensation” within the meaning of Section
409A is considered to be paid on account of “separation from service” within the
meaning of Section 409A, and the Executive is a “specified employee” within the
meaning of Section 409A, no payments of any of such severance, compensation, or
benefit shall be made until the earlier of six (6) months plus one (1) day after
such separation from service or the Executive’s death (the “New Payment Date”).
The aggregate amount of any such payments that would have otherwise been paid
during the period between the date of separation from service and the New
Payment Date shall be paid to the Executive or her estate in a lump sum payment
on the New Payment Date. Thereafter, any severance, compensation, or benefit
required by this Agreement that remains outstanding as of the day immediately
following the New Payment Date shall be paid without delay over the time period
originally scheduled, in accordance with the terms of this Agreement.

 

(d) The provisions of this Section 10 shall survive any termination of this
Agreement.

 

11. Section 280G.

 

(a) Notwithstanding any other provision of this Agreement or any other plan,
arrangement or agreement to the contrary, if any of the payments or benefits
provided or to be provided by the Company or its affiliates to the Executive or
for the Executive’s benefit pursuant to the terms of this Agreement or otherwise
(“Covered Payments”) constitute parachute payments (“Parachute Payments”) within
the meaning of Section 280G of the Code and would, but for this Section 11 be
subject to the excise tax imposed under Section 4999 of the Code (or any
successor provision thereto) or any similar tax imposed by state or local law or
any interest or penalties with respect to such taxes (collectively, the “Excise
Tax”), then prior to making the Covered Payments, a calculation shall be made
comparing (i) the Net Benefit (as defined below) to the Executive of the Covered
Payments after payment of the Excise Tax to (ii) the Net Benefit to the
Executive if the Covered Payments are limited to the extent necessary to avoid
being subject to the Excise Tax. Only if the amount calculated under (i) above
is less than the amount under (ii) above will the Covered Payments be reduced to
the minimum extent necessary to ensure that no portion of the Covered Payments
is subject to the Excise Tax (that amount, the “Reduced Amount”). “Net Benefit”
shall mean the present value of the Covered Payments net of all federal, state,
local, foreign income, employment and excise taxes.

 

(b) Any such reduction shall be made in accordance with Section 409A of the Code
and the following: (i) the Covered Payments which do not constitute nonqualified
deferred compensation subject to Section 409A of the Code shall be reduced
first; and (ii) all other Covered Payments shall then be reduced as follows: (A)
cash payments shall be reduced before non-cash payments; and (B) payments to be
made on a later payment date shall be reduced before payments to be made on an
earlier payment date.

 

(c) Any determination required under this Section 11 shall be made in writing in
good faith by the accounting firm that was the Company’s independent auditor
immediately before the Change of Control (the “Accounting Firm”). The Accounting
Firm shall provide detailed supporting calculations to the Company and the
Executive as requested by the Company or the Executive. The Company and the
Executive shall provide the Accounting Firm with such information and documents
as the Accounting Firm may reasonably request in order to make a determination
under this Section 11. For purposes of making the calculations and
determinations required by this Section 11, the Accounting Firm may rely on
reasonable, good faith assumptions and approximations concerning the application
of Section 280G and Section 4999 of the Code. The Accounting Firm’s
determinations shall be final and binding on the Company and the Executive. The
Company shall be responsible for all fees and expenses incurred by the
Accounting Firm in connection with the calculations required by this Section 11.

 

(d) It is possible that after the determinations and selections made pursuant to
this Section 11 the Executive will receive Covered Payments that are in the
aggregate more than the amount provided under this Section 11 (“Overpayment”) or
less than the amount provided under this Section 11 (“Underpayment”).

 

(i) In the event that: (A) the Accounting Firm determines, based upon the
assertion of a deficiency by the Internal Revenue Service against either the
Company or the Executive which the Accounting Firm believes has a high
probability of success, that an Overpayment has been made or (B) it is
established pursuant to a final determination of a court or an Internal Revenue
Service proceeding that has been finally and conclusively resolved that an
Overpayment has been made, then the Executive shall pay any such Overpayment to
the Company.

 

(ii) In the event that: (A) the Accounting Firm, based upon controlling
precedent or substantial authority, determine that an Underpayment has occurred
or (B) a court of competent jurisdiction determines that an Underpayment has
occurred, any such Underpayment will be paid promptly by the Company to or for
the benefit of the Executive.

 

13 

 

 

12. Miscellaneous.

 

(a) This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of California, without giving effect to
its principles of conflicts of laws.

 

(b) In the event of any dispute arising out of, or relating to, this Agreement
or the breach thereof (other than Sections 5 or 6 hereof), or regarding the
interpretation thereof, the parties agree to submit any differences to
nonbinding mediation prior to pursuing resolution through the courts. The
parties hereby submit to the exclusive jurisdiction of the state and federal
courts situated in San Francisco County, California, and agree that service of
process in such court proceedings shall be satisfactorily made upon each other
if sent by registered mail addressed to the recipient at the address referred to
in Section 12(g) below.

 

(c) This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, legal representatives, successors and
permitted assigns.

 

(d) This Agreement, and the Executive’s rights and obligations hereunder, may
not be assigned by the Executive. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company, including any successors or assigns in
connection with any sale, transfer or other disposition of all or substantially
all of its business or assets.

 

(e) This Agreement cannot be amended orally, or by any course of conduct or
dealing, but only by a written agreement signed by the parties hereto.

 

(f) The failure of either party to insist upon the strict performance of any of
the terms, conditions and provisions of this Agreement shall not be construed as
a waiver or relinquishment of future compliance therewith, and such terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.

 

(g) All notices, requests, consents and other communications, required or
permitted to be given hereunder, shall be in writing and shall be delivered
personally or by an overnight courier service or sent by registered or certified
mail, postage prepaid, return receipt requested, to the parties at the addresses
set forth on the first page of this Agreement, and shall be deemed given when so
delivered personally or by overnight courier, or, if mailed, five days after the
date of deposit in the United States mail. Either party may designate another
address, for receipt of notices hereunder by giving notice to the other party in
accordance with this Section 12(g).

 

(h) This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof, including, without limitation that the Prior Agreement.
For avoidance of doubt, the execution and delivery of this Agreement shall not
constitute “Good Reason” under the Prior Agreement. No representation, promise
or inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.

 

14 

 

 

(i) As used in this Agreement, “affiliate” of a specified person or entity shall
mean and include any person or entity controlling, controlled by or under common
control with the specified person or entity.

 

(j) The section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.

 

(k) This Agreement may be executed in any number of counterparts, each of which
shall constitute an original, but all of which together shall constitute one and
the same instrument.

 

[Remainder of Page Intentionally Left Blank – Signature Page Follows]

 

15 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement and intend
it to be effective as of the Effective Date by proper person thereunto duly
authorized.

 

  ASSEMBLY BIOSCIENCES, INC.         By: /s/ Derek Small   Name: Derek Small  
Title: Chief Executive Officer and President         EXECUTIVE         /s/
Jackie Papkoff, Ph.D.   Name: Jackie Papkoff, Ph.D.

 

[Signature Page to Jackie Papkoff, Ph.D. Amended and Restated Employment
Agreement] 

 

 

 

 

EXHIBIT A

 

California Labor Code Section 2870. Application of provision providing that
employee shall assign or offer to assign rights in invention to employer.

 

(a) Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either:

 

(1) Relate at the time of conception or reduction to practice of the invention
to the employer’s business, or actual or demonstrably anticipated research or
development of the employer; or

 

(2) Result from any work performed by the employee for his employer.

 

(b) To the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.