Exhibit 10.1

Sarepta Therapeutics, Inc.

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (this “Agreement”) dated as of September 20, 2016, between
Sarepta Therapeutics, Inc., a Delaware corporation (the “Company”), and Edward
M. Kaye, M.D. (the “Executive”).

 

W I T N E S S E T H

 

WHEREAS, the Company desires to employ the Executive as the President and Chief
Executive Officer of the Company; and

 

WHEREAS, the Company and the Executive desire to enter into this Agreement as to
the terms of the Executive’s employment with the Company.

 

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
contained herein and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

1.POSITION AND DUTIES.

(a)During the Employment Term (as defined in Section 2 hereof), the Executive
shall serve as the President and Chief Executive Officer of the Company.  In
this capacity, the Executive shall have the duties, authorities and
responsibilities commensurate with the duties, authorities and responsibilities
of persons in similar capacities in similarly sized companies, and such other
duties, authorities and responsibilities as the Board of Directors of the
Company (the “Board”) shall designate from time to time that are not
inconsistent with the Executive’s position as the President and Chief Executive
Officer of the Company.  The Executive shall report to the Board.

(b)During the Employment Term, the Executive shall devote all of the Executive’s
business time, energy and skill and the Executive’s efforts to the performance
of the Executive’s duties with the Company, provided that the foregoing shall
not prevent the Executive from (i) serving on up to one board of directors of a
non-profit organization and/or, with the prior written approval of the Board,
one for-profit company board of directors, (ii) participating in charitable,
civic, educational, professional, community or industry affairs, and (iii)
managing the Executive’s passive personal investments so long as such
activities, individually or in the aggregate, do not materially interfere or
conflict with the Executive’s duties hereunder or create a potential business or
fiduciary conflict.

(c)The Executive shall become a member of the Board as of the Effective Date (as
defined in Section 2 hereof).  Subject to Section 8(e), during the Employment
Term the Board shall nominate the Executive for re-election as a member of the
Board at the expiration of the then current term, provided that the foregoing
shall not be required to the extent prohibited by legal or regulatory
requirements.

 

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2.EMPLOYMENT TERM.  The Company agrees to employ the Executive under and
pursuant to the terms of this Agreement, and the Executive agrees to be so
employed as President and Chief Executive Officer, for an initial term of one
year (the “Initial Term”) commencing as of the date hereof (the “Effective
Date”).  At the conclusion of the Initial Term, and on each anniversary of the
Effective Date following the Initial Term, the term of this Agreement shall be
automatically extended for successive one-year periods, provided, however, that
either party hereto may elect not to extend the term of this Agreement by giving
written notice to the other party at least 60 days prior to any such
date.  Notwithstanding the foregoing, the Executive’s employment hereunder may
be terminated prior to the end of the then current Employment Term (as defined
below) in accordance with Section 7  hereof, subject to Section 8 hereof.  The
period of time between the Effective Date and the termination or expiration of
the term of this Agreement shall be referred to herein as the “Employment Term.”
Except as otherwise agreed in writing by the Company and the Executive, this
Agreement shall terminate (without renewal or extension) upon the expiration of
the Employment Term. Employment thereafter, if any, shall be on an on an at-will
basis.  For the avoidance of doubt, a non-renewal of the Agreement by the
Company shall not constitute a termination of the executive’s employment by the
Company without Cause and a non-renewal of the Agreement by the Executive shall
not constitute a termination of the Executive’s employment by Executive for Good
Reason, and if Executive’s employment with the Company terminates at such time
of non-renewal (other than for Cause), the Executive shall be entitled to
receive the Accrued Benefits (as defined in Section 8(a)), and such Accrued
Benefits shall be the only amount that Executive is entitled to receive pursuant
to this Agreement.  For the avoidance of doubt, the termination or expiration of
this Agreement shall not operate to terminate that certain Change in Control
Agreement entered into between Executive and the Company as of November 7, 2013
(the “Severance Agreement”).

3.BASE SALARY.  The Company agrees to pay the Executive a base salary at an
annual rate of not less than $550,000, payable in accordance with the regular
payroll practices of the Company, but not less frequently than monthly.  The
Executive’s Base Salary shall be subject to annual review by the Board (or a
committee thereof), and may be increased, but not decreased below its then
current level, from time to time by the Board.  The base salary as determined
herein from time to time shall constitute “Base Salary” for purposes of this
Agreement.

4.ANNUAL BONUS.  During the Employment Term, the Executive shall be eligible to
receive an annual discretionary incentive payment under the Company’s annual
bonus plan as in effect from time to time (the “Annual Bonus”) based on a target
bonus opportunity of at least 65% of the Executive’s Base Salary (the “Target
Bonus”), upon the attainment of one or more pre-established performance goals
established by the Board or the Company’s Compensation Committee (the
“Committee”) following good-faith consultation with the Executive.  To the
extent determined by the Committee, all or any portion of Executive’s Annual
Bonus may be paid in the form of equity compensation awards under the Company’s
Amended and Restated 2011 Equity Incentive Plan, as amended and/or restated from
time to time, or any successor shareholder-approved Company equity compensation
plan.  Any portion of the Annual Bonus payable in cash shall be deemed “earned”
if the Executive is employed on the last day of the applicable year, and the
Annual Bonus, whether paid in cash or equity, shall be paid or delivered no
later than March 15th of the calendar year immediately following the applicable
year to which the Annual Bonus relates.  

 

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5.EQUITY AWARDS.  Beginning in 2016 and in each calendar year during the
Employment Term thereafter, the Executive shall be eligible to receive a
long-term incentive award commensurate with the Executive’s position as the
President Chief Executive Officer of the Company, in such amount and form, and
subject to such terms and conditions, as may be determined by the Board or the
Committee.

6.EMPLOYEE BENEFITS.

(a)BENEFIT PLANS.  The Executive shall be entitled to participate in any
employee benefit plan that the Company has adopted or may adopt, maintain or
contribute to for the benefit of its employees generally, on the same basis as
those benefits are generally made available to other executives of the Company,
subject to satisfying the applicable eligibility requirements.

(b)VACATIONS.  The Executive shall be entitled to paid vacation in accordance
with the Company’s policy on accrual and use applicable to employees as in
effect from time to time.

(c)BUSINESS AND TRAVEL EXPENSES.  Upon presentation of appropriate
documentation, the Executive shall be reimbursed in accordance with the
Company’s expense reimbursement policy, for all reasonable business expenses
incurred in connection with the performance of the Executive’s duties hereunder
and the Company’s policies with regard thereto.  

7.TERMINATION.  The Executive’s employment and the Employment Term hereunder
shall terminate on the first of the following to occur:

(a)DISABILITY.  Upon thirty (30) days’ prior written notice by the Company to
the Executive of termination due to Disability.  For purposes of this Agreement,
“Disability” shall be defined as the inability of the Executive to have
performed the Executive’s material duties hereunder due to a physical or mental
injury, infirmity or incapacity for one hundred eighty (180) days (including
weekends and holidays) in any 365-day period.  Notwithstanding the foregoing, in
the event that as a result of earlier absence because of mental or physical
incapacity Executive incurs a “separation from service” within the meaning of
such term under “Code Section 409A” (as defined in Section 25(a) hereof),
Executive shall on such date automatically be terminated from employment as a
Disability termination.

(b)DEATH.  Automatically on the date of death of the Executive.

(c)CAUSE.  Subject to this Section 7(c), immediately upon written notice by the
Company to the Executive of a termination for Cause.  “Cause” shall mean:

(i)The Executive’s substantial and repeated failure to attempt in good faith to
perform the Executive’s duties or follow the reasonable and legal written
direction of the Board;

(ii)The Executive’s willful material misconduct with respect to any material
aspect of the business of the Company;

(iii)The indictment for, conviction of, or pleading of guilty or nolo contendere
to, a felony or any crime involving moral turpitude;

 

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(iv)The Executive’s performance of any material act of theft, fraud or
malfeasance in connection with the performance of the Executive’s duties to the
Company; or

(v)A material breach of this Agreement or a material violation of the Company’s
code of conduct or other written material policy.

(d)WITHOUT CAUSE.  Immediately upon written notice by the Company to the
Executive of an involuntary termination without Cause (other than for death or
Disability).

(e)GOOD REASON.  Upon thirty (30) days’ prior written notice by the Executive to
the Company of a termination for Good Reason.  “Good Reason” shall mean the
occurrence of any of the following events:

(i)Material diminution in the Executive’s Base Salary or Target Bonus;

(ii)Material diminution in the Executive’s title or responsibilities (other than
temporarily while physically or mentally incapacitated or as required by
applicable law);

(iii)Relocation of the Executive’s primary work location by more than 50 miles
from its then current location; or

(iv)A material breach by the Company of this Agreement or any equity award
agreement, including, without limitation, the removal of the Executive from the
Board by the Company (other than for Cause) or the failure to nominate the
Executive for re-election to serve on the Board

The Executive shall provide the Company with a written notice detailing the
specific circumstances alleged to constitute Good Reason within ninety (90) days
after the first occurrence of such circumstances, and the Company shall have
thirty (30) days following receipt of such notice to cure such circumstances in
all material respects, provided, that, no termination for Good Reason shall
occur after the 180th day following the first occurrence of any Good Reason
event.

(f)WITHOUT GOOD REASON.  Upon thirty (30) days’ prior written notice by the
Executive to the Company of the Executive’s voluntary termination of employment
without Good Reason (which the Company may, in its sole discretion, make
effective earlier than any notice date).

8.CONSEQUENCES OF TERMINATION.

(a)DEATH OR DISABILITY.  In the event that the Executive’s employment is
terminated due to the Executive’s death or Disability, the Executive or the
Executive’s legal representative or estate, as the case may be, shall be
entitled to the following:

(i)The “Accrued Benefits,” which shall mean: (A) any earned but unpaid Base
Salary through the date of termination, payable in accordance with the regular
payroll practices of the Company, but no later than thirty (30) days following
the date of termination; (B) any Annual Bonus earned but unpaid with respect to
the fiscal year ending

 

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on or preceding the date of termination, payable at the time such bonuses would
have been paid if the Executive was still employed with the Company; (C)
reimbursement for any unreimbursed business expenses incurred through the date
of termination within thirty (30) days following the date of termination; (D)
any accrued but unused vacation time in accordance with Company policy; and (E)
all other payments, benefits or fringe benefits to which the Executive shall be
entitled under the terms of any applicable compensation arrangement or benefit,
equity or fringe benefit plan or program or grant or this Agreement; and

(ii)Any additional vesting of any equity awards pursuant to and in accordance
with the terms of the 2011 Sarepta Therapeutics Equity Incentive Plan (“Plan”),
as amended, and equity award agreements (“Equity Agreements”) executed in
connection with each equity grant by the Company to Executive.  

Notwithstanding anything to the contrary in this Section 8(a), in the event of a
termination for disability, Executive shall be paid any earned but unpaid Base
Salary and accrued but unused vacation time on the date of termination.

(b)TERMINATION FOR CAUSE.  If the Executive’s employment is terminated by the
Company for Cause, the Company shall pay to the Executive the Accrued Benefits
(other than the benefit described in Section 8(a)(i)(B) hereof). Notwithstanding
anything to the contrary in Section 8(a), in the event of a termination for
cause, Executive shall be paid any earned but unpaid Base Salary and accrued but
unused vacation time on the date of termination.

(c)TERMINATION WITHOUT GOOD REASON OR AS A RESULT OF NON-EXTENSION OF THIS
EMPLOYMENT TERM.  If the Executive’s employment is terminated by (x) the
Executive without Good Reason or (y) as a result of non-extension of the
Employment Term as provided in Section 2 hereof, the Company shall pay to the
Executive the Accrued Benefits.

(d)TERMINATION WITHOUT CAUSE OR FOR GOOD REASON OUTSIDE OF CHANGE IN CONTROL
PERIOD.  If during the Employment Term and outside of a Change in Control Period
(as defined in the Severance Agreement), the Executive’s employment by the
Company is terminated (x) by the Company without Cause, or (y) by the Executive
for Good Reason, the Company shall pay or provide the Executive with the
following, subject to the provisions of Section 22 hereof:

(i)The Accrued Benefits;

(ii)The Pro-Rata Bonus;

(iii)An aggregate amount equal to the sum of (1) 18 months of the Executive’s
then current Base Salary and (2) the Executive’s Target Bonus, payable in
substantially equal instalments in accordance with the regular payroll policies
of the Company, over a period of 18 months following the date of termination of
employment, except that the first installment shall be paid on the sixtieth
(60th) day following the date of termination and shall include any prior
installment that would have been payable if the Release requirement set forth in
Section 9 were satisfied on the date of termination;

 

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(iv)A monthly amount equal to the monthly amount of the COBRA continuation
coverage premium under the Company’s group medical plans as in effect from time
to time less the amount of the Executive’s portion of the premium as if
Executive was an active employee for a period of 18 months, except that the
first installment shall be paid on the sixtieth (60th) day following the date of
termination and shall include any prior installment that would have been payable
if the Release requirement set forth in Section 9 were satisfied on the date of
termination;

(v)Each outstanding unvested equity award issued to Executive as of the date of
termination and scheduled to vest over the 12 months following the date of
termination, (excluding, for this purpose, any performance-based grants
(“Performance Awards”) which are addressed below) shall automatically become
vested and, if applicable, exercisable and any forfeiture restrictions or rights
of repurchase thereto shall immediately lapse. For Performance Awards, each
outstanding unvested Performance Award eligible for vesting as a result of
having achieved performance milestones prior to the date of termination and
scheduled to vest over the 12 months following the date of termination shall
automatically become vested and, if applicable, exercisable and any forfeiture
restrictions or rights of repurchase thereto shall immediately lapse.  For the
sake of clarity, to the extent a performance milestone under a Performance Award
is not met as of the termination date, no award grants or vesting contingent on
the achievement of such milestone or milestones shall be eligible for
accelerated vesting even if met at a later date. Notwithstanding the foregoing,
the Compensation Committee may at its sole discretion authorize the accelerated
vesting of a portion of or all unvested Performance Awards to the extent
permitted under the plan, but shall be under no obligation to do so.  Any
remaining unvested equity awards as of the termination date shall be immediately
forfeited and of no further force or effect.  

(vi)Outplacement services at a level commensurate with the Executive’s position
in accordance with the Company’s practices as in effect from time to time
provided that the cost of such outplacement shall not exceed $20,000; and
provided, further, that such outplacement benefits shall end not later than the
last day of the second calendar year that begins after the date of termination.

(e)OTHER OBLIGATIONS.  Upon any termination of the Executive’s employment with
the Company, the Executive shall promptly resign from the Board and any other
position as an officer, director or fiduciary of any Company-related entity. To
the extent Executive remains an employee of the Company but, is no longer
serving in the capacity of the Chief Executive Officer, Executive shall promptly
resign from the Board upon such change in responsibilities.

(f)EXERCISE PERIOD. In the event of a termination without Cause by the Company
or termination for Good Reason by Executive, Executive shall have no less than
12 months from the date of termination (but in no event beyond the remaining
term of such equity awards) to exercise any equity awards (a) already vested as
of the date of termination or (b) vested in accordance with Section 8(d)(v).  In
the event of termination for any reason other than without cause or Good Reason,
the time period to exercise any equity awards already vested as of the date of
termination shall be as set forth in the Plan or Equity Agreements.

 

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(g)TERMINATION DURING A CHANGE IN CONTROL PERIOD. In the event of a termination
of the Executive’s employment with the Company during the Change in Control
Period that is coincident with the Employment Term, then Executive shall be
entitled to severance benefits under Severance Agreement in accordance with its
terms and conditions.

9.RELEASE; NO MITIGATION.  Any and all amounts payable and benefits or
additional rights provided pursuant to Section 8(d) hereof beyond the Accrued
Benefits shall only be payable only if the Executive delivers to the Company and
does not revoke a general release of claims in favor of the Company
substantially in the same form as attached hereto as Exhibit A (the
“Release”).  Such Release shall be executed and delivered (and no longer subject
to revocation, if applicable) within sixty (60) days following the date of
termination; provided that the Company delivers to Executive such Release within
seven (7) days after the date of termination.  In no event shall the Executive
be obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement, nor shall the amount of any payment hereunder be reduced by
any compensation earned by the Executive as a result of employment by a
subsequent employer, except as provided in Section 8(d)(iv) hereof.

10.RESTRICTIVE COVENANTS.

(a)CONFIDENTIALITY.  The Executive agrees that the Executive shall not, directly
or indirectly, use, make available, sell, disclose or otherwise communicate to
any person, other than in the course of the Executive’s assigned duties and for
the benefit of the Company, either during the period of the Executive’s
employment or at any time thereafter, any business and technical information or
trade secrets, nonpublic, proprietary or confidential information, knowledge or
data relating to the Company, any of its subsidiaries, affiliated companies or
businesses, which shall have been obtained by the Executive during the
Executive’s employment by the Company (or any predecessor).  The foregoing shall
not apply to information that (i) was known to the public prior to its
disclosure to the Executive; (ii) becomes generally known to the public
subsequent to disclosure to the Executive through no wrongful act of the
Executive or any representative of the Executive; or (iii) the Executive is
required to disclose by applicable law, regulation or legal process (provided
that the Executive provides the Company with prior notice of the contemplated
disclosure and cooperates with the Company at its expense in seeking a
protective order or other appropriate protection of such information).  In
addition, nothing in this Agreement shall be construed to prohibit the Executive
from reporting possible violations of federal or state law or regulations to any
governmental agency or self-regulatory organization with oversight
responsibility for the Company, or making other disclosures that are protected
under whistleblower or other provisions of any applicable federal or state law
or regulations.  Prior authorization of the Company is not required to make any
such reports or disclosures, and the Executive is not required to notify the
Company that he has made such reports or disclosures.

(b)NONCOMPETITION.  The Executive acknowledges that the Executive performs
services of a unique nature for the Company that are irreplaceable, and that the
Executive’s performance of such services to a competing business will result in
irreparable harm to the Company.  Accordingly, during the Executive’s employment
hereunder and for a period of one (1) year thereafter, the Executive agrees that
the Executive will not, directly or indirectly, own, manage, operate, control,
be employed by (whether as an employee, consultant, independent

 

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contractor or otherwise, and whether or not for compensation) or render services
to any person, firm, corporation or other entity, in whatever form, engaged in
the research, development or sale of Duchenne Muscular Dystrophy treatments,
oligonucleotide based therapies, or chemistry platforms that compete with
Company or any of its subsidiaries or affiliates or in any other material
business in which the Company or any of its subsidiaries or affiliates is
engaged on the date of termination or in which they have planned, on or prior to
such date, to be engaged in on or after such date, in any locale of any country
in which the Company conducts business.  Notwithstanding the foregoing, nothing
herein shall prohibit the Executive from being a passive owner of not more than
one percent (1%) of the equity securities of a publicly traded corporation
engaged in a business that is in competition with the Company or any of its
subsidiaries or affiliates, so long as the Executive has no active participation
in the business of such corporation.  In addition, the provisions of this
Section 10(b) shall not be violated by the Executive commencing employment with
a subsidiary, division or unit of any entity that engages in a business in
competition with the Company or any of its subsidiaries or affiliates so long as
the Executive and such subsidiary, division or unit does not engage in a
business in competition with the Company or any of its subsidiaries or
affiliates.

(c)NONSOLICITATION; NONINTERFERENCE; NONDISPARAGEMENT.  (i)  During the
Executive’s employment with the Company and for a period of one (1) year
thereafter, the Executive agrees that the Executive shall not, except in the
furtherance of the Executive’s duties hereunder, directly or indirectly,
individually or on behalf of any other person, firm, corporation or other
entity, solicit, aid or induce any customer of the Company or any of its
subsidiaries or affiliates to purchase goods or services then sold by the
Company or any of its subsidiaries or affiliates from another person, firm,
corporation or other entity or assist or aid any other persons or entity in
identifying or soliciting any such customer.

(ii)During the Executive’s employment with the Company and for a period of one
(1) year thereafter, the Executive agrees that the Executive shall not, except
in the furtherance of the Executive’s duties hereunder, directly or indirectly,
individually or on behalf of any other person, firm, corporation or other
entity, (A) solicit, aid or induce any employee, representative or agent of the
Company or any of its subsidiaries or affiliates to leave such employment or
retention or to accept employment with or render services to or with any other
person, firm, corporation or other entity unaffiliated with the Company or hire
or retain any such employee, representative or agent, or take any action to
materially assist or aid any other person, firm, corporation or other entity in
identifying, hiring or soliciting any such employee, representative or agent, or
(B) interfere, or aid or induce any other person or entity in interfering, with
the relationship between the Company or any of its subsidiaries or affiliates
and any of their respective vendors, joint venturers or licensors.  An employee,
representative or agent shall be deemed covered by this Section 10(c)(ii) while
so employed or retained and for a period of six (6) months thereafter, or (C)
either publicly or privately, disparage, criticize or defame the Company, its
affiliates and their respective affiliates, directors, officers, agents,
partners, stockholders, individuals or the Company’s, products, services,
technology or business.

(iii)Notwithstanding the foregoing, the provisions of this Section 10(c) shall
not be violated by (A) general advertising or solicitation not specifically
targeted at Company-related persons or entities, (B) the Executive serving as a
reference, upon request, for any

 

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employee of the Company or any of its subsidiaries or affiliates, or (C) actions
taken by any person or entity with which the Executive is associated if the
Executive is not personally involved in any manner in the matter and has not
identified such Company-related person or entity for soliciting or hiring.

(d)RETURN OF COMPANY PROPERTY.  On the date of the Executive’s termination of
employment with the Company for any reason (or at any time prior thereto at the
Company’s request), the Executive shall return all property belonging to the
Company or its affiliates (including, but not limited to, any Company-provided
laptops, computers, cell phones, wireless electronic mail devices or other
equipment, or documents and property belonging to the Company).  The Executive
may retain the Executive’s rolodex and similar address books provided that such
items only include contact information.  To the extent that the Executive is
provided with a cell phone number by the Company during employment, the Company
shall cooperate with the Executive in transferring such cell phone number to the
Executive’s individual name following the date of termination.

(e)REFORMATION.  If it is determined by a court of competent jurisdiction in any
state that any restriction in this Section 10 is excessive in duration or scope
or is unreasonable or unenforceable under the laws of that state, it is the
intention of the parties that such restriction may be modified or amended by the
court to render it enforceable to the maximum extent permitted by the laws of
that state.

(f)TOLLING.  In the event of any violation of the provisions of this Section 10,
the Executive acknowledges and agrees that the post-termination restrictions
contained in this Section 10 shall be extended by a period of time equal to the
period of such violation, it being the intention of the parties hereto that the
running of the applicable post-termination restriction period shall be tolled
during any period of such violation.

(g)SURVIVAL OF PROVISIONS.  The obligations contained in Sections 10 and 11
hereof as well as those set forth in the Confidential Proprietary Rights and
Non-Disclosure Agreement attached as Exhibit B (the “Confidentiality Agreement”)
shall survive the termination or expiration of the Employment Term and any
termination of the Executive’s employment with the Company and shall be fully
enforceable thereafter.

11.COOPERATION.  Upon the receipt of reasonable notice from the Company
(including outside counsel), the Executive agrees that while employed by the
Company and thereafter, the Executive will respond and provide information with
regard to matters in which the Executive has knowledge as a result of the
Executive’s employment with the Company, and will provide reasonable assistance
to the Company, its affiliates and their respective representatives in defense
of any claims that may be made against the Company or its affiliates, and will
assist the Company and its affiliates in the prosecution of any claims that may
be made by the Company or its affiliates, to the extent that such claims may
relate to the period of the Executive’s employment with the Company.  The
Executive agrees to promptly inform the Company if the Executive becomes aware
of any lawsuits involving such claims that may be filed or threatened against
the Company or its affiliates.  The Executive also agrees to promptly inform the
Company (to the extent that the Executive is legally permitted to do so) if the
Executive is asked to assist in any investigation of the Company or its
affiliates (or their actions), regardless of whether a lawsuit or

 

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other proceeding has then been filed against the Company or its affiliates with
respect to such investigation, and shall not do so unless legally
required.  Upon presentation of appropriate documentation, the Company shall pay
or reimburse the Executive for all reasonable out-of-pocket travel, duplicating
or telephonic expenses incurred by the Executive in complying with this Section
11 and, in the event Executive is no longer receiving any compensation or
benefits under this Agreement or as a Company employee, shall pay Executive a
reasonable hourly rate for any work performed at Company’s request.

12.EQUITABLE RELIEF AND OTHER REMEDIES.  The Executive acknowledges and agrees
that the Company’s remedies at law for a breach or threatened breach of any of
the provisions of Section 10 or Section 11 hereof would be inadequate and, in
recognition of this fact, the Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company,
without posting any bond, shall be entitled to obtain equitable relief in the
form of specific performance, a temporary restraining order, a temporary or
permanent injunction or any other equitable remedy which may then be
available.  In the event that a court of competent jurisdiction or an arbitrator
determines that Executive has violated Section 10 or Section 11 hereof, any
severance being paid to the Executive pursuant to this Agreement or otherwise
shall immediately cease, and any severance previously paid to the Executive
(other than $1,000) shall be immediately repaid by the Executive to the Company.

13.NO ASSIGNMENTS.  This Agreement is personal to each of the parties
hereto.  Except as provided in this Section 13 hereof, no party may assign or
delegate any rights or obligations hereunder without first obtaining the written
consent of the other party hereto.  The Company may assign this Agreement to any
successor to all or substantially all of the business and/or assets of the
Company, provided that the Company shall require such successor to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.  As used in this Agreement, “Company” shall mean the Company
and any successor to its business and/or assets, which assumes and agrees to
perform the duties and obligations of the Company under this Agreement by
operation of law or otherwise.

14.NOTICE.  For purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given (a) on the date of delivery, if delivered by hand, (b) on the
date of transmission, if delivered by confirmed facsimile or electronic mail,
(c) on the first business day following the date of deposit, if delivered by
guaranteed overnight delivery service, or (d) on the fourth business day
following the date delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

 

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If to the Executive:

 

At the address (or to the facsimile number) shown
on the records of the Company

 

If to the Company:

Sarepta Therapeutics, Inc.

215 First St.

Cambridge, MA 02142

Attention: Ty Howton, General Counsel

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

15.SECTION HEADINGS; INCONSISTENCY.  The section headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.  In the event of any
inconsistency between the terms of this Agreement and any form, award, plan or
policy of the Company, the terms of this Agreement shall govern and control
except in the case of any such form, award, plan or policy approved by the
shareholders of the Company in which case the terms such form, award, plan or
policy shall prevail.

16.SEVERABILITY.  The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.

17.COUNTERPARTS.  This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

18.ARBITRATION.  Any dispute or controversy arising under or in connection with
this Agreement or the Executive’s employment with the Company, other than
injunctive relief under Section 12 hereof, shall be settled exclusively by
arbitration, conducted before a single arbitrator in Boston, Massachusetts
(applying Massachusetts law) in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association then
in effect.  The decision of the arbitrator will be final and binding upon the
parties hereto.  Judgment may be entered on the arbitrator’s award in any court
having jurisdiction.  The parties acknowledge and agree that in connection with
any such arbitration and regardless of outcome, (a) each party shall pay all of
its own costs and expenses, including, without limitation, its own legal fees
and expenses, and (b) the arbitration costs shall be borne entirely by the
Company.

19.INDEMNIFICATION.  The Company hereby agrees to indemnify Executive and hold
Executive harmless to the fullest extent permitted by law against and in respect
of any and all actions, suits, proceedings, claims, demands, judgments, costs,
expenses (including advancement of reasonable attorney’s fees), losses, and
damages resulting from Executive’s good faith performance of Executive’s duties
and obligations with the Company and the Company’s affiliates.  These
obligations shall survive the expiration of the Employment Term and the
termination of Executive’s employment with the Company.

20.LIABILITY INSURANCE.  The Company shall cover the Executive under directors’
and officers’ liability insurance both during and, while potential liability
exists, after the term of this Agreement in the same amount and to the same
extent as the Company covers its other officers and directors.  These
obligations shall survive the expiration of the Employment Term and the
termination of Executive’s employment with the Company.

 

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21.MISCELLANEOUS.  No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and such officer or director as may be designated by
the Board.  No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  This Agreement, together with all exhibits hereto, the
Confidentiality  Agreement and the Severance Agreement, sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes any and all prior agreements or understandings between the
Executive and the Company with respect to the subject matter hereof.  No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the Commonwealth of Massachusetts without regard to the choice of law principles
thereof.

22.REPRESENTATIONS.  The Executive represents and warrants to the Company that
(a) the Executive has the legal right to enter into this Agreement and to
perform all of the obligations on the Executive’s part to be performed hereunder
in accordance with its terms, and (b) the Executive is not a party to any
agreement or understanding, written or oral, and is not subject to any
restriction, which, in either case, could prevent the Executive from entering
into this Agreement or performing all of the Executive’s duties and obligations
hereunder.  In addition, the Executive acknowledges that the Executive is aware
of Section 304 (Forfeiture of Certain Bonuses and Profits) of the Sarbanes-Oxley
Act of 2002 and the right of the Company to be reimbursed for certain payments
to the Executive in compliance with any policy Company may adopt in connection
therewith.

23.LEGAL FEES.  Within thirty (30) days upon presentation of appropriate
documentation, the Company shall pay all reasonable and documented legal fees
and related expenses incurred in connection with the drafting, negotiation and
execution of this Agreement and other documents relating to equity arrangements,
up to a maximum of $5,000.

24.TAX WITHHOLDING.  The Company may withhold from any and all amounts payable
under this Agreement such federal, state and local taxes as may be required to
be withheld pursuant to any applicable law or regulation.

25.CODE SECTION 409A COMPLIANCE.

(a)The intent of the parties is that payments and benefits under this Agreement
comply with, or be exempt from, Internal Revenue Code Section 409A and the
regulations and guidance promulgated thereunder (collectively “Code Section
409A”) and, accordingly, to the maximum extent permitted, this Agreement shall
be interpreted to be in compliance therewith.  If the Executive notifies the
Company (with specificity as to the reason therefor) that the Executive believes
that any provision of this Agreement (or of any award of compensation, including
equity compensation or benefits) would cause the Executive to incur any
additional tax or interest under Code Section 409A and the Company concurs with
such belief or the Company (without any obligation whatsoever to do so)
independently makes such determination, the Company shall, after consulting with
the Executive, reform such provision to try to comply with Code Section 409A

 

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through good faith modifications to the minimum extent reasonably appropriate to
conform with Code Section 409A.  To the extent that any provision hereof is
modified in order to comply with Code Section 409A, such modification shall be
made in good faith and shall, to the maximum extent reasonably possible,
maintain the original intent and economic benefit to the Executive and the
Company of the applicable provision without violating the provisions of Code
Section 409A.

(b)A termination of employment shall not be deemed to have occurred for purposes
of any provision of this Agreement providing for the payment of any amounts or
benefits upon or following a termination of employment that are considered
“nonqualified deferred compensation” under Code Section 409A unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.”  If the Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Code Section 409A(a)(2)(B), then with regard to any payment that is considered
non-qualified deferred compensation under Code Section 409A payable on account
of a “separation from service,” such payment or benefit shall be made or
provided at the date which is the earlier of (i) the expiration of the six
(6)-month period measured from the date of such “separation from service” of the
Executive, and (ii) the date of the Executive’s death (the “Delay
Period”).  Upon the expiration of the Delay Period, all payments and benefits
delayed pursuant to this Section 25 (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) shall
be paid or reimbursed to the Executive in a lump sum without interest, and any
remaining payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for them herein.

(c)With regard to any provision herein that provides for reimbursement of costs
and expenses or in-kind benefits, except as permitted by Code Section 409A, (i)
the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit, (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided that the foregoing
clause (ii) shall not be violated without regard to expenses reimbursed under
any arrangement covered by Internal Revenue Code Section 105(b) solely because
such expenses are subject to a limit related to the period the arrangement is in
effect and (iii) such payments shall be made on or before the last day of
Executive’s taxable year following the taxable year in which the expense
occurred.

(d)For purposes of Code Section 409A, the Executive’s right to receive any
installment payments pursuant to this Agreement shall be treated as a right to
receive a series of separate and distinct payments.  In no event may the
Executive, directly or indirectly, designate the calendar year of any payment to
be made under this Agreement that is considered nonqualified deferred
compensation.  In no event shall the timing of Executive’s execution of the
Release, directly or indirectly, result in the Executive designating the
calendar year of payment, and if a payment that is subject to execution of the
Release could be made in more than one taxable year, payment shall be made in
the later taxable year.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

 

COMPANY

 

 

 

By:/s/ M. Kathleen Behrens
Name:M. Kathleen Behrens

Title:Chairwoman of the Board of Directors

 

 

 

EXECUTIVE

 

By:/s/ Edward M. Kaye, M.D.
Name: Edward M. Kaye, M.D.

 

 

 

 

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EXHIBIT A

 

[RELEASE OF CLAIMS]

 

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EXHIBIT B

 

[CONFIDENTIAL PROPRIETARY RIGHTS AND NON-DISCLOSURE AGREEMENT]