Exhibit 10.1

 

LOGO [g298348g06v42.jpg]

January 27, 2012

Jonathan A. Leff, M.D.

178 Seminary Drive

Menlo Park, CA 94025

650.421.6618

 

  Re: Employment with InterMune, Inc.

Dear Jonathan:

On behalf of InterMune, Inc., I am pleased to extend to you this official offer
of employment with InterMune as Executive Vice President, Research and
Development, reporting to Dan Welch, Chairman, CEO & President in our Brisbane,
California office beginning on a mutually agreed-upon date. InterMune may change
your position, duties, supervisor and work location from time to time as it
deems appropriate. This position is a full time, exempt position.

Your employment is subject to approval by InterMune’s Board of Directors, to
proof of your legal right to work in the United States, and to your completing
the INS Employment Eligibility Verification Form I-9. Your employment also is
subject to successful verification of your professional references, and to our
standard pre-employment process, which includes completion of an employment
application and successful completion of a standard background check.

Compensation

If you accept this offer and begin employment, you will receive an initial base
salary of $35,416.67 per month (equivalent to $425,000 per year), paid on a
semi-monthly basis on our regular paydays. Deductions required by law or
authorized by you will be taken from each paycheck. In addition, the Company
will provide you with a one-time sign-on bonus of $25,000 to be paid upon your
first day of employment.

Additionally, you will be eligible to participate in our discretionary incentive
bonus program designed to provide a financial reward for achieving performance
goals. The incentive plan will be based on two criteria: your individual
performance against your goals as determined by your manager and InterMune’s
performance as determined by InterMune’s senior management. For 2012, your
target bonus will be 40% of your base pay; the maximum bonus generally available
is 150% of target.

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

Jonathan A. Leff, M.D.

January 27, 2012

Page 2

 

You also will be eligible to participate in InterMune’s Equity Incentive Plan.
Following commencement of your employment, a grant of an option to purchase
376,000 equity units under InterMune’s Equity Incentive Plan will be recommended
to the Compensation Committee of the InterMune Board of Directors on your
behalf. The grant will be comprised of (a) 188,000 shares of Common Stock, and
(b) 75,200 shares of Restricted Stock. The shares will vest over a period of
four years beginning on the date of your employment and the option exercise
price will be the NASDAQ closing price of InterMune’s common stock on the fifth
business day of the month following the month in which you begin employment. The
exercise of any options will be subject in all respects to the terms of your
stock option agreement and the Equity Incentive Plan. All option grants are
subject to final approval by the Compensation Committee of the InterMune Board
of Directors.

Employee Benefits

As a full-time employee, you will be eligible for paid time-off benefits, such
as sick leave and holidays, in accordance with our policies for similarly
situated employees. You also will be eligible to participate in InterMune’s
employee benefit plans, in accordance with the terms and eligibility
requirements of those plans. Currently, InterMune maintains group health
insurance, vision and dental plans, a short and long-term disability plan, a
Flexible Spending Account plan, a group Life Insurance and AD&D plan, a 401(k)
savings plan, a Long Term Care plan and an Employee Stock Purchase Plan.

InterMune reserves the right to modify, amend or discontinue any benefit plan at
any time, in its sole discretion. You may receive such other benefits as we may
determine from time to time, in our sole discretion.

Benefits upon Separation

Severance Pay in the Event of Termination (Not For Cause) Absent a Change in
Control of InterMune. As a member of the Company’s Executive Committee, you will
be entitled to the following benefits in the event your employment is terminated
other than for “Cause” or in the event of a “Change in Control” of InterMune (as
those terms are defined below). Although you at all times will remain an at-will
employee of InterMune, InterMune agrees that in the event you are terminated by
the Company other than for “Cause” in the absence of a “Change in Control” of
InterMune, you will receive the following benefits within fourteen (14) days
after receipt by the Company of a general release duly signed by the you that
releases the Company from all of your actual or potential claims against
InterMune:

 

  •  

If you have completed less than one (1) full year of service, you will receive
six (6) months’ base salary at your final rate of pay, six (6) months benefits
continuation (i.e., Company-provided COBRA payments or equivalent), and six
(6) months immediate acceleration of vesting of each of your outstanding equity
grants, whether stock options or restricted shares

 

3280 Bayshore Boulevard, Brisbane, CA 94005  Tel: 415.466.2200 Fax: 415.466.2300

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

Jonathan A. Leff, M.D.

January 27, 2012

Page 3

 

  •  

If you have completed at least one (1) year but less than two (2) years of
service, you will receive nine (9) months’ base salary at your final rate of
pay, nine (9) months benefits continuation (i.e., Company-provided COBRA
payments or equivalent), and nine (9) months immediate acceleration of vesting
of each of your outstanding equity grants, whether stock options or restricted
shares

 

  •  

If you have completed two (2) years of service or more, you will receive twelve
(12) months’ base salary at your final rate of pay, twelve (12) months benefits
continuation (i.e., Company-provided COBRA payments or equivalent), and twelve
(12) months immediate acceleration of vesting of each of your outstanding equity
grants, whether stock options or restricted shares

 

  •  

If such termination not for Cause occurs in the second half of the calendar
year, you also will receive a pro rata share of your target bonus for that year.

The acceleration of vesting provided for in this section of this agreement is
intended to be in lieu of any acceleration rights provided in any operative
Stock Option Agreement you may sign, and in addition to any acceleration rights
provided in the operative Stock Plan documents. All other terms and conditions
applicable to your equity grants, e.g., with regard to exercise after
termination, forfeiture, etc., will continue to be governed by the operative
Stock Option Agreement and Stock Plan document. Cash compensation required to be
paid pursuant to this section of this Agreement will be paid either in a single
lump-sum payment or ratably on a monthly basis over the severance period, in the
Company’s sole discretion.

Compensation upon Change in Control of InterMune. In the event of a Change in
Control of the Company that results in: (i) your termination without Cause, or
(ii) your resignation for “Good Reason,” which for purposes of this Agreement
shall mean either (a) a material diminution in your duties, title or
compensation, or (b) a requirement that you relocate more than 80 km (50 miles)
from your then-current employment location, any of which event occurs within one
(1) year of the change in control (a “Triggering Event”), you will receive the
following benefits within fourteen (14) days after receipt by the Company of a
general release duly signed by the you that releases the Company from all of
your actual or potential claims against InterMune:

(a) Cash Compensation: Two (2) years base salary at your final rate of pay and
two (2) years benefits continuation (i.e., Company-provided COBRA payments or
equivalent). If a Triggering Event occurs in the second half of the calendar
year, you also will receive a pro rata share of your target bonus for that year.

(b) Options or Restricted Share Grants: Vesting of all outstanding equity grants
(including InterMune stock option grants, InterMune restricted stock grants,

 

3280 Bayshore Boulevard, Brisbane, CA 94005  Tel: 415.466.2200 Fax: 415.466.2300

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

Jonathan A. Leff, M.D.

January 27, 2012

Page 4

 

and any grants made by the acquiring entity) will immediately accelerate. The
acceleration of vesting provided for in this section of this Agreement is
intended to be in lieu of any acceleration rights provided in the operative
Stock Option Agreement, and in addition to any acceleration rights provided in
the operative Stock Plan document. All other terms and conditions applicable to
your equity grants, e.g., with regard to exercise after termination, forfeiture,
etc., will continue to be governed by the operative Stock Option Agreement and
Stock Plan documents.

Definitions

For purposes of this agreement, “Cause” shall mean any of the following:

 

  •  

Willful refusal to follow lawful and reasonable corporate policy or Chief
Executive Officer directives; or

 

  •  

Willful failure, gross neglect or refusal to perform duties; or

 

  •  

Willful act that intentionally or materially injures the reputation or business
of the Company; or

 

  •  

Willful breach of confidentiality that has a material adverse affect on the
Company; or

 

  •  

Fraud or embezzlement; or

 

  •  

Indictment for criminal activity.

For purposes of this Agreement, “Change in Control” shall mean any of the
following:

 

  •  

A sale, lease or other disposition of all or substantially all of the securities
or assets of the Company; or

 

  •  

A merger or consolidation in which the Company is not the surviving corporation;
or

 

  •  

A reverse merger in which the Company is the surviving corporation but the
shares of Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise.

Employment with InterMune is at will. “Employment at will” means that you are
free to resign from your employment at any time, for any reason or no reason,
with or without cause and with or without notice. Similarly, InterMune may
terminate your employment at any time for any legal reason, with or without
cause and with or without notice. By accepting this offer of employment, you
agree that your employment is at will, and acknowledge that no one, other than
the Chief Executive Officer of InterMune, has the authority to promise you
anything to the contrary and that any such agreement must be in writing and
signed by both you and the Chief Executive Officer of InterMune to be effective.

 

3280 Bayshore Boulevard, Brisbane, CA 94005  Tel: 415.466.2200 Fax: 415.466.2300

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

Jonathan A. Leff, M.D.

January 27, 2012

Page 5

 

We believe that your employment with InterMune requires a full-time commitment.
Employment with any other entity, or for yourself in competition with InterMune,
is not permitted unless expressly authorized by InterMune in writing.

As an InterMune employee, you will be expected to abide by company rules and
regulations and acknowledge in writing that you have read and agree to abide by
the provisions of InterMune’s Employee Handbook.

During the course of your employment, you may create, develop or have access to
confidential information belonging to InterMune, including trade secrets and
proprietary information, such as clinical and other scientific data, customer
information, business plans, marketing plans, unpublished financial information,
software, source codes, and personnel information. You agree that as a condition
of your employment with InterMune, you will sign and comply with the enclosed
InterMune Proprietary Information and Inventions Agreement, which contains
certain commitments regarding confidentiality. By accepting employment with
InterMune, you also agree to keep all InterMune information strictly
confidential, and not to use it or disclose it to any person or entity, except
as is necessary in the ordinary course of performing your work. You further
acknowledge that your obligation to protect our confidential information from
disclosure exists both during your employment and after it ends. You also agree
that at the termination of your employment, for any reason, you will return to
us all copies (including electronic copies) of any documents or other materials
you have that refer to or contain InterMune’s confidential information,
including notebooks, manuals, letters and customer lists.

In your work for InterMune, you will be expected not to use or disclose any
confidential information, including trade secrets, of any former employer or
other person to whom you have an obligation of confidentiality. You agree to act
in accordance with any valid non-disclosure agreements to which you may be
subject. You will be expected to use only that information which is generally
known and used by persons with training and experience comparable to your own,
which is common knowledge in the industry or otherwise legally in the public
domain, or which is otherwise provided or developed by InterMune. By accepting
this offer of employment, you acknowledge that you will be able to perform your
duties within these guidelines. You further agree that you will not bring onto
InterMune’s premises any unpublished documents or property belonging to any
former employer or other person to whom you have an obligation of
confidentiality.

You also agree, if you accept this offer of employment, that for a period of two
years after your employment ends, you will not solicit any InterMune employee or
consultant to leave his or her employment or consulting relationship with
InterMune in order to begin employment or a consulting relationship with any
company or business in actual or potential competition with InterMune.

The terms described in this letter, together with your Proprietary Information
and Inventions Agreement, replace all prior agreements, understandings, and
promises between

 

3280 Bayshore Boulevard, Brisbane, CA 94005  Tel: 415.466.2200 Fax: 415.466.2300

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

Jonathan A. Leff, M.D.

January 27, 2012

Page 6

 

InterMune and you, whether oral or written, concerning the terms and conditions
of your employment with InterMune. Any modification of this agreement will be
effective only if it is in writing and is signed by both you and the Chief
Executive Officer of InterMune.

Jonathan, I am pleased to extend this offer of employment to you, and hope that
your association with InterMune will be successful and rewarding. Please
indicate your acceptance of this offer by signing this letter below and
returning the letter as soon as possible. A copy of this letter is enclosed for
your records.

 

Sincerely, InterMune, Inc. /s/ Daniel G. Welch Daniel G. Welch Chairman, CEO &
President

I understand and agree to the foregoing terms and conditions of employment with
InterMune, Inc.

 

/s/ Jonathan Leff

Jonathan A. Leff, M.D.

Date    6.Feb.2012

 

3280 Bayshore Boulevard, Brisbane, CA 94005  Tel: 415.466.2200 Fax: 415.466.2300