Exhibit 10.1

 

CUBIST PHARMACEUTICALS, INC.
2014 SEVERANCE PLAN
AND SUMMARY PLAN DESCRIPTION

 

Effective December 8, 2014

 

1.                                      Establishment of This Plan. Cubist
Pharmaceuticals, Inc. (“Cubist” and together with its subsidiaries, the
“Company”), hereby establishes the Cubist Pharmaceuticals, Inc. 2014 Severance
Plan, (the “Plan”), as an unfunded severance pay plan, which is intended to be a
welfare benefit plan within the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974 and its regulations, as amended
(“ERISA”).  This Plan is effective December 8, 2014 (the “Effective Date”).

 

2.                                      Purpose.  This Plan is for the purpose
of assisting each Eligible Employee (as defined below) who is involuntarily
terminated for reasons other than for “Cause,” as defined herein.  The
compensation and benefits described in this Plan are intended to assist Eligible
Employees in making a transition to new employment and are not intended to be a
reward for prior service.

 

3.                                      Plan Administrator.  The general
administration of this Plan and the responsibility for carrying out its
provisions shall be vested in the administrator of the Plan (the “Plan
Administrator”), which shall be the Senior Vice President of Human Resources of
Cubist or his or her designee.  The Plan Administrator shall be the Plan’s
“administrator” within the meaning of Section 3(16) of ERISA.

 

4.                                      Eligibility.  Eligibility to participate
in this Plan is limited to any “Eligible Employee,” defined as an individual
who:

 

a.                                      on or after the Effective Date, is a
regular full-time or part-time employee of the Company or ;

 

b.                                      has not voluntarily terminated his or
her employment with the Company;

 

c.                                       has been involuntarily terminated
without Cause from his or her position with the Company;

 

d.                                      has not been offered “Comparable
Employment” (as defined herein) with the Company or a successor employer
following a Change in Control (as defined herein);

 

e.                                       has not been terminated in connection
with the failure to return from or expiration of a leave of absence, including
by reason of a disability;

 

f.                                        has not entered into an individual
agreement with the Company providing for benefits upon involuntary termination;

 

g.                                       is not listed on Schedule A by employee
identification number; and

 

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h.                                      has signed and returned a separation
agreement and general release and waiver of claims in a form acceptable to the
Company (the “Release”), by the deadline specified in such form, without
revocation.

 

Notwithstanding the foregoing, an individual who has entered into an individual
agreement with the Company providing for benefits upon involuntary termination
but who would otherwise qualify as an Eligible Employee shall be an Eligible
Employee solely for purposes of receiving outplacement services described in
Section 5(d) and on Schedule B, unless such individual agreement with the
Company provides for an outplacement services benefit different from the
outplacement services benefit for which the individual would be eligible under
Schedule B.

 

For the purpose of this Plan, termination shall be considered for “Cause” if the
Company terminates an employee’s employment as a result of (i) any act or
omission by such employee which has a material adverse effect on the business of
the Company, including without limitation the commission of any crime;
(ii) material misconduct; (iii) refusal or substantial failure to perform
material job responsibilities to the satisfaction of the Company; (iv) excessive
unauthorized absenteeism; or (v) material breach of a written Company policy or
a written agreement with the Company including confidentiality, non-solicitation
or intellectual property protections.  In all cases, termination for Cause shall
be determined in the sole discretion of the Plan Administrator.

 

For purposes of this Plan, “Comparable Employment” shall mean a position with
(i) substantially similar responsibilities to the position held by the employee
at the time of the Change in Control; (ii) a compensation level equal to at
least 100% of employee’s total target cash compensation (base salary plus target
incentive cash compensation at 100% performance) with the Company at the time of
the Change in Control; (iii) no material change in the geographic location of
employment at the time of the Change in Control, except with the employee’s
consent; and (iv) similar number of total regular work hours as the position
held by the employee at the time of the Change in Control.  For clarity, an
individual who leaves employment by reason of being offered or assigned only
employment that is not Comparable Employment shall not be excluded from
eligibility under Section 4(b) or Section 4(d) above by reason of such offer or
assignment and shall be regarded as having been involuntarily terminated under
Section 4(c).

 

For the purpose of this Plan, only an Eligible Employee shall be deemed to be a
“participant” as defined in Section 3(7) of ERISA.

 

5.                                      Severance Benefits.  Each Eligible
Employee shall receive severance benefits (“Severance Benefits”) as described in
this Section 5 based on his or her job title immediately prior to his or her
termination date.  Severance Benefits shall be provided only after the Eligible
Employee has executed and returned the Release, and after the revocation has
period expired.

 

a.                                      Base Pay Component.  Each Eligible
Employee shall receive a lump sum payment equal to the weekly base pay he or she
would have received during the period of time set forth on Schedule A attached
hereto.  Such period of time for each Eligible Employee shall be the Eligible
Employee’s “Severance Period.”

 

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(i)                                     For a salaried Eligible Employee, weekly
base pay for purposes of this Section 5(a) shall be limited to the Eligible
Employee’s base weekly salary determined as of the date of termination of
employment, and shall not include any other compensation.  For clarity, in the
event an employee leaves employment by reason of being offered or assigned only
employment that is not Comparable Employment, base pay will be determined by
reference to the position held before such offer or assignment.

 

(ii)                                  For an hourly Eligible Employee, weekly
base pay for purposes of this Section 5(a) shall be limited to the Eligible
Employee’s base hourly rate as of the date of employment termination multiplied
by the number of hours actually worked each week on average during the twelve
(12) weeks preceding termination, which number shall not exceed forty (40)
hours, and shall not include any other compensation. If an Eligible Employee is
on an approved leave of absence for any portion of the twelve (12) week period
preceding termination of employment, the Plan Administrator may make appropriate
adjustments to the method of calculation described above.

 

(iii)                               “Years of service” as referenced in Schedule
A shall be calculated as of the Eligible Employee’s termination date and shall
be the full complete years of service the Eligible Employee has worked
continuously for the Company, provided, however that any period of time of at
least six months that is not included in a full complete year described above
shall be recognized as a completed year of service for purposes of this
definition.

 

b.                                      Bonus Component.  Each Eligible Employee
shall receive a pro rata portion of his or her target bonus for the year in
which termination occurs.  Such portion shall be calculated by multiplying the
Eligible Employee’s target bonus for the year in which termination occurs, as
determined by the Plan Administrator in his or her sole discretion, by the
quotient equal to (i) the number of days between January 1 and the earlier of
the last day of the Severance Period and December 31, divided by (ii) 365 or 366
in the case of a leap year.  In the event that the a bonus plan does not have a
pre-established target or the Company has not approved a bonus plan or a target
bonus applicable to the Eligible Employee for the year in which termination
occurs, the calculation will be made using, in the case of a bonus plan with no
pre-established target, the Eligible Employee’s actual bonus for the year
immediately preceding the year of termination and, in all other cases, the
Eligible Employee’s target bonus for the year immediately preceding the year of
termination.

 

This bonus component shall be added to the base pay component described in
Section 5(a) and paid in one lump sum payment.

 

c.                                       Benefit Continuation.

 

(i)                                     U.S. Employees.  With respect to an
Eligible Employee who is employed in the U.S., the Eligible Employee’s
eligibility for employee benefits

 

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under the Federal Consolidated Omnibus Budget Reconciliation Act statute
(“COBRA”) shall commence the first day of the month beginning immediately after
the termination of employment date.  To the extent the Eligible Employee elects
COBRA continuation coverage and pays a portion of the required premium
corresponding to the employee contribution rate most recently in effect for
similarly situated active employees, he or she will be eligible to continue to
receive medical and dental insurance coverage during the Severance Period at the
same level of coverage as on the date of the Eligible Employee’s termination of
employment, to the extent available under the plans with respect to which the
Eligible Employee’s COBRA election applies; provided, however, that no coverage
shall be provided following the Eligible Employee’s death or the effective date
of the Eligible Employee’s coverage by a group health plan of a subsequent
employer. Each Eligible Employee shall be required to notify the Company
immediately if the Eligible Employee becomes covered by a group health plan of a
subsequent employer. No Eligible Employee shall be entitled to receive cash or
other consideration in lieu of coverage.  At the end of the Severance Period,
the Eligible Employee shall no longer have a right to receive contributions
towards continued health plan coverage, which shall be continued only to the
extent required by COBRA and only to the extent that Eligible Employee continues
to timely pay the full COBRA amount required for continuation of health plan
coverage.

 

(ii)                                  Non-U.S. Employees.  With respect to an
Eligible Employee who is employed outside of the United States, such Eligible
Employee will be eligible to continue to receive medical and dental insurance
coverage during the Severance Period at the same level of coverage as on the
date of the Eligible Employee’s termination of employment, to the extent
available under the plans and consistent with applicable law.  Each Eligible
Employee shall be required to notify the Company immediately if the Eligible
Employee becomes covered by a group health plan of a subsequent employer.  No
Eligible Employee shall be entitled to receive cash or other consideration in
lieu of coverage.  At the end of the Severance Period, the Eligible Employee
shall no longer have a right to receive contributions towards continued health
plan coverage, which shall be continued only to the extent required by
applicable law and only to the extent that Eligible Employee continues to timely
pay the full amount required for continuation of health plan coverage.

 

d.                                      Outplacement Counseling Services.  Each
Eligible Employee shall be entitled to outplacement counseling services at a
frequency and cost as determined by the Plan Administrator in his or her sole
discretion for a period of time as set forth on Schedule A.  An Eligible
Employee may begin utilizing outplacement counseling services upon termination
of employment, and in no event may begin utilizing such services more than four
(4) weeks after the termination date.  If an Eligible Employee does not use all
or any portion of the outplacement counseling services made available, the
Eligible Employee shall not be entitled to receive cash or other consideration
in lieu of such services.

 

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e.                                       Form of Benefit.  All cash Severance
Benefits shall be paid to an Eligible Employee not more than 60 days after the
date on which the Eligible Employee separates from service.  To the extent the
Plan provides a Severance Benefit that constitutes a deferral of compensation as
determined in accordance with Section 409A of the Internal Revenue Code (the
“Code”) and regulations thereunder (collectively, “Code Section 409A”), the Plan
shall be interpreted and administered to comply with the requirements of Code
Section 409A.  For purposes of Code Section 409A, references to termination of
employment shall be interpreted consistent with the definition of “separation
from service” in Code Section 409A, and each installment in a series of payments
shall be treated as a separate “payment.”  Notwithstanding anything to the
contrary in this Plan, if at the time of an Eligible Employee’s termination of
employment, the Eligible Employee is a “specified employee,” as defined below,
any and all amounts payable under this Plan on account of such separation from
service that are covered in (i) below would (but for this provision) be payable
within six (6) months following the date of termination, shall instead be paid
on the next business day following the expiration of such six (6) month period
or, if earlier, upon the Eligible Employee’s death; except (i) to the extent of
amounts that do not constitute a deferral of compensation within the meaning of
Treasury regulation Section 1.409A-1(b) (including without limitation by reason
of the safe harbor set forth in Section 1.409A-1(b)(9)(iii), as determined by
the Plan Administrator in his or her reasonable good faith discretion);
(ii) benefits that qualify as excepted welfare benefits pursuant to Treasury
regulation Section 1.409A-1(a)(5); or (iii) other amounts or benefits that are
not subject to the requirements of Code Section 409A.

 

In the event of an Eligible Employee’s death before he or she receives Severance
Benefits to which he or she otherwise would be entitled under the Plan, payment
of his or her cash Severance Benefits shall be in a lump sum paid to his or her
estate.

 

f.                                        Repayment of Severance Benefits.  Any
Eligible Employee who accepts Severance Benefits under the Plan shall reimburse
the Company, as applicable, for the full amount of any Severance Benefits he or
she received under the Plan if the Eligible Employee (i) acts contrary to the
terms of the Release, as determined by the Plan Administrator, including
disclosing any trade secrets of the Company or (ii) violates any other written
covenants between the Eligible Employee and the Company that survive the
termination of employment.  In addition, any Eligible Employee described in the
preceding sentence shall forfeit any right to Severance Benefits under the Plan
which have not yet been provided.

 

6.                                      Funding.  All payments under this Plan
shall be funded solely from the Company’s general assets, and there shall be no
trust to fund this Plan.

 

7.                                      Duration of Plan.  This Plan is
effective as of the Effective Date.  The provisions of this Plan relating to the
provision of benefits to Eligible Employees who are entitled under the Plan to
receive Severance Benefits after the termination of the Plan shall survive until
such Severance Benefits have been provided in full.

 

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8.                                      Termination, Amendment and Assumption of
Plan.

 

a.                                      This Plan may be amended, modified or
terminated at any time, by action of Cubist; provided, in no event shall such
amendment, modification or termination materially reduce or diminish an Eligible
Employee’s right to receive any benefit accrued hereunder prior to the date of
such amendment, modification or termination without the consent of the Eligible
Employee.  Accrued for this purpose means the Eligible Employee has satisfied
all conditions for receiving Severance Benefits.

 

b.                                      Notwithstanding Section 8(a) above, in
the event of the consummation of a Change in Control, the Plan may not be
adversely amended or terminated, in either case, for a period of 12 months
following such Change in Control.

 

c.                                       In the event of a Change in Control,
Cubist may require the purchaser/successor employer to expressly assume and
agree to perform this Plan in the same manner and to the same extent that the
Company would be required to perform it if no such Change in Control had taken
place.  If the purchaser/successor employer adopts the Plan it shall execute a
Company approved adoption form.

 

d.                                      For purposes of the Plan, “Change in
Control” means the first to occur of any of the following events:

 

(i)                                     any acquisition of Cubist by a person
not a Company affiliate, by means of merger or other form of corporate
reorganization, in which the outstanding ownership interests of Cubist are
exchanged for securities or other consideration issued, or caused to be issued,
by the acquiring person and in which the holders of Cubist’s ownership interests
immediately before such acquisition hold less than 50 % of the ownership
interests of the acquiring or surviving person (other than a mere
reincorporation transaction),

 

(ii)                                  the closing of the transfer from existing
Cubist stockholders, in one transaction or a series of related transactions, to
a person or group (as used in Rule 13d of the Securities Exchange Act of 1934,
as amended) of affiliated persons, of Cubist’s securities if, after such
closing, such person or group of affiliated persons would hold more than 50% of
the outstanding voting securities of Cubist, or

 

(iii)                               a sale of all or substantially all of the
assets of Cubist to a Person not a Company affiliate.

 

9.                                      Plan Administration.  Severance Benefits
under the Plan will be provided only if the Plan Administrator (or its delegate)
decides in his or her discretion that the individual applying for benefits is
entitled to them.  Any decision made by the Plan Administrator in good faith is
final and binding on all persons.  The Plan Administrator has full discretionary
authority to interpret the Plan and control and manage the operation and
administration of the Plan in all its details, to decide all questions
concerning the Plan and determine all matters relating to eligibility, coverage
or benefits under the Plan.  Any determination by the Plan Administrator

 

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shall be final and binding, in the absence of clear and convincing evidence that
the Plan Administrator acted arbitrarily and capriciously.

 

The Plan Administrator shall have such powers as are necessary to discharge his
or her duties, including, but not limited to, interpretation and construction of
this Plan, the determination of all questions of eligibility, participation and
benefits, and all other related or incidental matters.  The Plan Administrator
shall decide all such questions in accordance with the terms of the controlling
legal documents and applicable law, and his or her decision will be binding on
the Company or successor employer, as applicable, the Eligible Employee, the
Eligible Employee’s spouse or other dependent or beneficiary and all other
interested parties.

 

The Plan Administrator may make rulings; make regulations and prescribe
procedures; gather needed information; prescribe documents for Eligible
Employees to sign; exercise all of the power and authority contemplated by ERISA
with respect to the Plan; employ or appoint persons to help or advise in any
administrative functions; appoint service providers; recoup overpayments; and
generally do anything needed to operate, manage and administer the Plan.

 

The Plan Administrator may require each Eligible Employee to submit, in such
form as he or she shall deem reasonable and acceptable, proof of any information
which the Plan Administrator finds necessary or desirable for the administration
of this Plan.  The Plan Administrator may also require, as a condition to the
receipt of any benefit hereunder, that the Eligible Employee release the Company
or successor employer, as applicable, their directors, officers and employees,
and the Plan Administrator from any and all claims, liabilities and causes of
action arising with respect to this Plan, as legally permissible.

 

The Plan Administrator shall maintain such records as are necessary to carry out
the provisions of this Plan and to comply with ERISA.  The Plan Administrator
shall also make all disclosures and file all reports which are required by
ERISA.

 

10.                               Claims Procedure.

 

a.                                      Claim for Benefits:  Routine
applications relating to benefit payments and inquiries relating to the
operation of the Plan are not claims to be resolved under the procedures set
forth in this Section 10.  However, an individual who wishes to dispute a
determination resulting from such routine processing may file a claim as
described.

 

(i)                                     Any person claiming benefits under this
Plan (“Claimant”) may be file a claim in writing, together with such other
documents and information as the Claimant considers appropriate or as the Plan
Administrator may require (a “Claim”).

 

(ii)                                  Within ninety (90) days following receipt
of the Claim, the Plan Administrator’s authorized delegate reviewing the claim
will furnish the Claimant with written notice of the decision rendered with
respect to the Claim.

 

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(iii)                               Should special circumstances require an
extension of time for processing the claim, written notice of the extension will
be furnished to the Claimant prior to the expiration of the initial ninety (90)
day period.

 

(1)                                 The notice will indicate the special
circumstances requiring an extension of time and the date by which a final
decision is expected to be rendered.

 

(2)                                 In no event will the period of the extension
exceed ninety (90) days from the end of the initial ninety (90) day period.

 

b.                                      Content of Denial:  In the case of a
denial of a Claim, the written notice will set forth:

 

(i)                                     The specific reasons for the denial;

 

(ii)                                  References to this Plan provisions upon
which the denial is based;

 

(iii)                               A description of any additional information
or material necessary for perfection of the Claim (together with an explanation
of why the material or information is necessary); and

 

(iv)                              An explanation of this Plan’s claim review
procedure, including a statement of the Claimant’s right to bring a civil action
under Section 502(a) of ERISA following an adverse determination on review.

 

c.                                       Appeals:

 

(i)                                     In order to appeal the decision rendered
with respect to his or her Claim or with respect to the amount of his or her
benefit, the Claimant must follow the procedures set forth in this Section 10.

 

(ii)                                  The appeal must be made, in writing,
within 90 days or within 180 days if an extension was requested.

 

(iii)                               Upon appeal, the Claim must be given full
and fair review by the Plan Administrator.  The Claimant may review all
pertinent documents and submit issues and comments in writing in connection with
the appeal.

 

(iv)                              The decision of the Plan Administrator will be
made promptly, and not later than sixty (60) days after the Plan Administrator’s
receipt of a request for review, unless special circumstances require an
extension of time for processing.  In such a case, a decision will be rendered
as soon as possible, but not later than one hundred and twenty (120) days after
receipt of the request for review.

 

(v)                                 The decision on review will be in writing
and will include specific reasons for the decision, written in a manner designed
to be understood by the

 

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Claimant, with specific references to the pertinent Plan provisions upon which
the decision is based, and a statement of the Claimant’s right to bring a civil
action under Section 502(a) of ERISA.

 

Severance Benefits will be provided under the Plan only if the Plan
Administrator determines in his or her discretion that the Claimant is entitled
to them. No action at law or in equity shall be brought to recover under this
Plan until the mandatory appeal procedures herein provided have been exhausted
and the Severance Benefits requested in such appeal have been denied in whole or
in part.  No lawsuit shall be brought against the Plan, the Company, or the Plan
Administrator after 90 days from receipt of the final decision on a claim
appeal.

 

11.                               Tax and Other Withholdings; Code Section 280G.

 

a.                                      The Company or successor employer may
withhold from any payment under this Plan any non-U.S., federal, state,
provincial, or local income or employment taxes required by law to be withheld
with respect to such payment and such sum as the Company (or successor employer)
may reasonably estimate is necessary to cover any taxes for which the Company
(or successor employer) may be liable and which may be assessed with regard to
such payment.

 

b.                                      Notwithstanding any provision of this
Plan to the contrary:

 

(i)                                     If at any time is determined that
payment of the Severance Benefits, together with any other payments and benefits
payable to an Eligible Employee or for an Eligible Employee’s benefit (together
with the Severance Benefits, the “Total Benefits”), would subject an Eligible
Employee to an excise tax under Section 4999 of the Code and the regulations
thereunder (“Code Section 4999”), and that a reduction in the amount of the
unpaid Severance Benefits would result in the amount of the Total Benefits, net
of all federal, state and local income taxes on the Total Benefits and any taxes
on the Total Benefits under Code Section 4999 (such amount, the “Net After-Tax
Receipts”), being equal to or greater than the Net After-Tax Receipt that would
result from payment of the unpaid Severance Benefits without reduction, then the
aggregate amount of any unpaid Severance Benefits shall be reduced to the
smallest amount that results in the Net After-Tax Receipts being equal to or
greater than the Net After-Tax Receipt that would result if the unpaid Severance
Benefits were reduced to any other amount.

 

(ii)                                  In the event that an Eligible Employee
receives payments or benefits that should not have been paid under this
Section 11, the Eligible Employee must repay or reimburse the Company promptly
upon receiving notice that an overpayment has been made.

 

(iii)                               Nothing in this Section 11 shall cause the
Company to be responsible for, or to have any liability or obligation with
respect to, any excise tax liability under Code Section 4999.

 

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12.                               Agent for Service of Legal Process.  Legal
process with respect to claims under this Plan may be served on the Plan
Administrator.

 

13.                               Expenses.  All costs and expenses incurred in
administering this Plan, including the expenses of the Plan Administrator, shall
be borne by the Company or successor employer, as applicable.

 

14.                               Plan Not an Employment Contract.  This Plan is
not a contract between the Company or any successor employer and any employee,
nor is it a condition of employment of any employee.  Nothing contained in this
Plan gives, or is intended to give, any employee the right to be retained in the
service of the Company or any successor employer, or to interfere with the right
of the Company or any successor employer to discharge or terminate the
employment of any employee at any time and for any reason.  No employee, spouse
or beneficiary shall have any right or claim to benefits beyond those expressly
provided in this Plan.  All rights and claims are limited as set forth in this
Plan.

 

15.                               Indemnification.  To the extent permitted by
law, the Plan Administrator and all employees of the Company or any successor
employer working under the supervision or direction of the Plan Administrator
shall be indemnified by the Company or successor employer, as applicable, and
saved harmless against any claims, and the expenses of defending against such
claims, resulting from any action or conduct relating to the administration of
this Plan except to the extent that such claims arise from gross negligence,
willful neglect or willful misconduct of the Plan Administrator or others
covered by this indemnification.  However, the Company and any successor
employer will have the right to select counsel and to control the prosecution or
defense of the suit.  Also, the Company and any successor employer will not be
required to indemnify any person for any amount incurred through any settlement
unless the Company or successor employer, as applicable, consents to the
settlement.

 

16.                               Separability.  In case any one or more of the
provisions of this Plan (or part thereof) shall be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions hereof, and this Plan shall be construed
as if such invalid, illegal or unenforceable provisions (or part thereof) never
had been contained herein.

 

17.                               Non-Assignability by Eligible Employee.  No
right or interest of any Eligible Employee in this Plan shall be assignable or
transferable in whole or in part either directly or by operation of law or
otherwise, including, but not limited to, execution, levy, garnishment,
attachment, pledge or bankruptcy involving such Eligible Employee.

 

18.                               Integration with Other Pay or Benefits
Requirements.  Severance Benefits provided for in this Plan are the maximum
benefits that the Company will provide, except (a) to the extent required by
applicable law or, (b) if applicable, under the terms of the Optimer US Amended
and Restated Severance Benefit Plan.  To the extent any agreement between an
Eligible Employee and the Company requires the Company to provide benefits of
any kind to such Eligible Employee because of such Eligible Employee’s
involuntary termination, the Severance Benefits provided under this Plan shall
be reduced as determined by the Plan

 

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Administrator to the extent of any such other benefits.  To the extent that any
non-U.S., federal, state, provincial, or local law, including, without
limitation, so-called “plant closing” laws, or the Worker Adjustment and
Retraining Notification act (“WARN Act”), requires the Company to provide
benefits of any kind to an Eligible Employee because of that Eligible Employee’s
involuntary termination or similar event, the Severance Benefits provided under
this Plan shall be reduced as determined by the Plan Administrator to the extent
of any such other benefits.  The Company intends for the Severance Benefits
provided under this Plan to satisfy any and all statutory obligations which may
arise out of an employee’s involuntary termination for the foregoing reasons
(including for the avoidance of doubt notice or pay-in-lieu of notice), and the
Plan Administrator shall so construe and implement the terms of this Plan.

 

19.                               Governing Law.  This Plan and the rights of
all persons under this Plan shall be construed in accordance with and under
applicable provisions of ERISA, and the regulations thereunder, and the laws of
the Commonwealth of Massachusetts to the extent not preempted by federal law.

 

20.                               Gender and Number.  Except where otherwise
indicated by the context, any masculine gender used herein shall also include
the feminine and vice versa, and the definition of any term herein in the
singular shall also include the plural, and vice versa.

 

21.                               Acceptance, Cooperation.  If Severance
Benefits are accepted under this Plan, the Eligible Employee shall be considered
to have accepted the Plan’s terms, and the Eligible Employee agrees to perform
any act and to execute any documents which may be necessary or desirable to
carry out the terms of this Plan.

 

22.                               Facility of Payment.  When an Eligible
Employee is under a legal disability or, in the opinion of the Plan
Administrator is in any way incapacitated so as to be unable to manage his or
her financial affairs, the Plan Administrator may make payments of cash
Severance Benefits to the Eligible Employee’s legal representative.  If there is
no legal representative, the Plan may make cash Severance Benefit payments to a
relative or close friend of the Eligible Employee for the Eligible Employee’s
benefit.  Any payment made in accordance with this provision will be a full and
complete discharge of any liability for such payment under the Plan.

 

23.                               Statement of ERISA Rights.  As an Eligible
Employee in the Plan, you are entitled to certain rights and protections under
the Employee Retirement Income Security Act of 1974 (ERISA).  ERISA provides
that all plan participants shall be entitled to:

 

a.                                      Receive Information About Your Plan and
Benefit.

 

(i)                                     Examine, without charge, at the Plan
Administrator’s office and at other specified locations, such as worksites, all
documents governing the plan, and a copy of the latest annual report (Form 5500
Series) filed by the plan with the U. S. Department of Labor and available at
the Public Disclosure Room of the Employee Benefits Security Administration.

 

11

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(ii)                                  Obtain, upon written request to the Plan
Administrator, copies of documents governing the operation of the plan, and
copies of the latest annual report (Form 5500 Series) and updated summary plan
description.  The Plan Administrator may make a reasonable charge for the
copies.

 

(iii)                               Receive a summary of the plan’s annual
financial report.  The Plan Administrator is required by law to furnish each
participant with a copy of this summary annual report.

 

b.                                      Prudent Actions by Plan Fiduciaries.  In
addition to creating rights for plan participants ERISA imposes duties upon the
people who are responsible for the operation of the employee benefit plan.  The
people who operate your plan, called “fiduciaries” of the plan, have a duty to
do so prudently and in the interest of you and other plan participants and
beneficiaries.  No one, including your employer, or any other person, may fire
you or otherwise discriminate against you in any way to prevent you from
obtaining a welfare benefit or exercising your rights under ERISA.

 

c.                                       Enforce Your Rights.  If your claim for
a severance benefit is denied or ignored, in whole or in part, you have a right
to know why this was done, to obtain copies of documents relating to the
decision without charge, and to appeal any denial, all within certain time
schedules.

 

Under ERISA, there are steps you can take to enforce the above rights.  For
instance, if you request a copy of plan documents or the latest annual report
from the plan and do not receive them within 30 days, you may file suit in a
Federal court.  In such a case, the court may require the Plan Administrator to
provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the Plan Administrator.  If you have a claim for benefits that is
denied or ignored, in whole or in part, you may file suit in a state of Federal
court.  If it should happen that you are discriminated against for asserting
your rights, you may seek assistance from the U. S. Department of Labor, or you
may file suit in a Federal court.  The court will decide who should pay court
costs and legal fees.  If you are successful the court may order the person you
have sued to pay these costs and fees.  If you lose, the court may order you to
pay these costs and fees, for example, if it finds your claim is frivolous.

 

d.                                      Assistance with Your Questions.  If you
have any questions about your plan, you should contact the Plan Administrator. 
If you have any questions about this statement or about your rights under ERISA,
or if you need assistance in obtaining documents form the Plan Administrator,
you should contact the nearest office of the Employee Benefits Security
Administration.  U. S. Department of Labor, listed in your telephone directory
or the Division of Technical Assistance and Inquiries, Employee Benefits
Security Administration, U.S. Department of Labor, 200 Constitution Avenue,
N.W., Washington, D. C. 20210.  You may also obtain certain publications about
your rights and responsibilities under ERISA by calling the publications hotline
of the Employee Benefits Security Administration at 800.998.7542.

 

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IN WITNESS WHEREOF, Cubist Pharmaceuticals, Inc. has caused this instrument to
be executed in its name and on its behalf by its officer thereunto duly
authorized, on this 7th day of December, 2014.

 

 

 

By:

CUBIST PHARMACEUTICALS, INC.

 

 

 

 

 

 

 

 

/s/ Thomas J. DesRosier

 

 

 

 

 

Name:

Thomas J. DesRosier

 

 

 

 

 

 

Title:

Executive Vice President, Chief Legal and Administrative Officer

 

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MISCELLANEOUS INFORMATION

 

1.                                      PLAN NAME:

 

Cubist Pharmaceuticals, Inc. 2014 Severance Plan

 

2.                                      EMPLOYER (PLAN SPONSOR):

 

Cubist Pharmaceuticals, Inc.

 

ADDRESS:                                                          65 Hayden
Avenue

Lexington, Massachusetts 02421

 

TELEPHONE:                                         (781) 860-8660

 

3.                                      EMPLOYER IDENTIFICATION NUMBER: 
22-3192085

 

4.                                      PLAN NUMBER:  503

 

5.                                      PLAN YEAR:  calendar year, January 1 —
December 31

 

6.                                      PLAN ADMINISTRATOR AND AGENT FOR SERVICE
OF LEGAL PROCESS:

 

Senior Vice President of Human Resources

Cubist Pharmaceuticals, Inc.

65 Hayden Avenue

Lexington, Massachusetts 02421

(781) 860-8660

 

7.                                      TYPE OF PLAN:

 

The Plan is an employee welfare benefit plan under ERISA offering severance
benefits.

 

13

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SCHEDULE A

 

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SCHEDULE B

 

Level of Employment

 

Severance Period

 

Outplacement Period

U.S. VP and above and Non-U.S. EVP and SVP

 

As provided in individual agreements

 

12 months

Non-U.S. VP

 

52 weeks

 

12 months

Sr. Director

 

22 weeks plus two weeks for every year of service to a maximum of 52 weeks

 

12 months

Director/Associate

Director/Principal Scientist

 

19 weeks plus two weeks for every year of service to a maximum of 52 weeks

 

6 months

Sr. Manager/Sr. Scientist

 

16 weeks plus two weeks for every year of service to a maximum of 52 weeks

 

6 months

Manager/Scientist

 

14 weeks plus two weeks for every year of service to a maximum of 52 weeks

 

6 months

Below Manager

 

12 weeks plus two weeks for every year of service to a maximum of 52 weeks

 

6 months

 

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