EXHIBIT 10.1

Amended and Restated employment AGREEMENT
This Amended and Restated Employment Agreement (“Agreement”) is made as of the
29th day of December, 2018 (the “Effective Date”), between Axcella Health Inc. a
Delaware corporation (the “Company”), and Manu Chakravarthy, M.D., Ph.D. (the
“Executive”). Except with respect to the Restrictive Covenants Agreement and the
Equity Documents (each as defined below), this Agreement supersedes in all
respects all prior agreements between the Executive and the Company regarding
the subject matter herein, including without limitation the letter agreement
dated July 24, 2017 (the “Prior Agreement”), as well as any offer letter,
employment agreement or severance agreement.
WHEREAS, the Company desires to continue to employ the Executive and the
Executive desires to continue to be employed by the Company on the new terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1.Employment.
(a)Term. The Company shall employ the Executive and the Executive shall be
employed by the Company pursuant to this Agreement commencing as of the
Effective Date and continuing until such employment is terminated in accordance
with the provisions hereof (the “Term”). The Executive’s employment with the
Company will continue to be “at will,” meaning that the Executive’s employment
may be terminated by the Company or the Executive at any time and for any reason
subject to the terms of this Agreement.
(b) Position and Duties. During the Term, the Executive shall serve as the
Senior Vice President of Clinical Development and Chief Medical Officer of the
Company, and shall have such powers and duties as may from time to time be
prescribed by the Chief Executive Officer of the Company (the “CEO”). The
Executive shall devote his full working time and efforts to the business and
affairs of the Company. Notwithstanding the foregoing, the Executive may serve
on other boards of directors, with the approval of the Board of Directors of the
Company (the “Board”), or engage in religious, charitable or other community
activities as long as such services and activities are disclosed to the Board
and do not interfere with the Executive’s performance of his duties to the
Company.
2.Compensation and Related Matters.
(a) Base Salary. During the Term, the Executive’s initial annual base salary
shall be paid at the rate of $374,000 per year. The Executive’s base salary
shall be reviewed annually by the Board or the Compensation Committee of the
Board (the “Compensation Committee”). The base salary in effect at any given
time is referred to herein as “Base Salary.” The Base Salary shall be payable in
a manner that is consistent with the Company’s usual payroll practices for
senior executives.
(b) Incentive Compensation. During the Term, the Executive shall be eligible to
receive cash incentive compensation as determined by the Board or the
Compensation Committee from time to time. The Executive’s target annual
incentive compensation shall be 40 percent of his Base Salary (the “Target
Bonus”). Except as otherwise provided herein, to earn incentive compensation,
the Executive must be employed by the Company on the day such incentive
compensation is paid.

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(c) Expenses. The Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by him during the Term in performing
services hereunder, in accordance with the policies and procedures then in
effect and established by the Company for its senior executives.
(d) Other Benefits. During the Term, the Executive shall be eligible to
participate in or receive benefits under the Company’s policies and employee
benefit plans in effect from time to time, subject to the terms of such policies
and plans and to the Company’s ability to amend, modify, replace or terminate
such policies and plans, including with respect to paid time off.
(e) Equity. The equity awards held by the Executive shall be governed by the
terms and conditions of the Company’s applicable equity incentive plan(s) and
the applicable award agreement(s) governing the terms of such equity awards held
by the Executive (collectively, the “Equity Documents”); provided, however, and
notwithstanding anything to the contrary in the Equity Documents, Section
5(a)(ii) of this Agreement shall apply in the event of a termination by the
Company without Cause or by the Executive for Good Reason in either event within
the Change in Control Period (as such terms are defined below). If prior to
December 31, 2018 the Company (i) signs a partnership to develop therapeutic
products or (ii) initiates four (4) pre-IND "POC" studies in new indications
(excluding NAFL or epilepsy), the Company shall grant the Executive an option to
purchase Company shares at the shares' then fair market value ("FMV") which
shall equal approximately 0.5% of the Company's shares then outstanding on a
fully-diluted basis, including for such purposes the exercise of all options and
warrants, the conversion of all convertible securities and all shares reserved
for issuance under the Company's equity incentive plans (the "Equity Award"),
subject to the terms of and contingent upon the Executive’s execution of a stock
option award agreement (the "Option Agreement") issued pursuant to the Stock
Plan. For clarity, a "POC" study would include trials similar to those being
conducted at present in atrophy, NAFL, and epilepsy, i.e. trials seeking
proof-of-pharmacology signal(s) in small food studies. Should the Company's
strategy for moving into multiple indications change, the human trials portion
of this incentive will be matched to the new strategy.
3.Termination. During the Term, the Executive’s employment hereunder may be
terminated without any breach of this Agreement under the following
circumstances:
(a) Death. The Executive’s employment hereunder shall terminate upon his death.
(b) Disability. The Company may terminate the Executive’s employment if he is
disabled and unable to perform the essential functions of the Executive’s then
existing position or positions under this Agreement with or without reasonable
accommodation for a period of 180 days (which need not be consecutive) in any
12-month period. If any question shall arise as to whether during any period the
Executive is disabled so as to be unable to perform the essential functions of
the Executive’s then existing position or positions with or without reasonable
accommodation, the Executive may, and at the request of the Company shall,
submit to the Company a certification in reasonable detail by a physician
selected by the Company to whom the Executive or the Executive’s guardian has no
reasonable objection as to whether the Executive is so disabled or how long such
disability is expected to continue, and such certification shall for the
purposes of this Agreement be conclusive of the issue. The Executive shall
cooperate with any reasonable request of the physician in connection with such
certification. If such question shall arise and the Executive shall fail to
submit such certification, the Company’s determination of such issue shall be
binding on the Executive. Nothing in this Section 3(b) shall be construed to
waive the Executive’s rights, if any, under existing law including, without
limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq.
and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.
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(c) Termination by Company for Cause. The Company may terminate the Executive’s
employment hereunder for Cause. For purposes of this Agreement, “Cause” shall
mean: (i) conduct by the Executive constituting a material act of misconduct in
connection with the performance of his duties, including, without limitation,
misappropriation of funds or property of the Company or any of its subsidiaries
or affiliates other than the occasional, customary and de minimis use of Company
property for personal purposes; (ii) the commission by the Executive of any
felony or a misdemeanor involving moral turpitude, deceit, dishonesty or fraud,
or any conduct by the Executive that would reasonably be expected to result in
material injury or reputational harm to the Company or any of its subsidiaries
and affiliates if he were retained in his position; (iii) unsatisfactory
performance by the Executive of a material responsibility (other than by reason
of the Executive’s physical or mental illness, incapacity or disability) as
reasonably determined by the CEO, which has continued for not less than 30 days
following written notice from the CEO that identifies the unsatisfactory
performance; (iv) a breach by the Executive of any of the provisions contained
in Section 7 of this Agreement or the Restrictive Covenants Agreement; (v) a
material violation by the Executive of the Company’s written employment
policies; or (vi) failure to cooperate with a bona fide internal investigation
or an investigation by regulatory or law enforcement authorities, after being
instructed by the Company to cooperate, or the willful destruction or failure to
preserve documents or other materials known to be relevant to such investigation
or the inducement of others to fail to cooperate or to produce documents or
other materials in connection with such investigation.
(d) Termination without Cause. The Company may terminate the Executive’s
employment hereunder at any time without Cause. Any termination by the Company
of the Executive’s employment under this Agreement which does not constitute a
termination for Cause under Section 3(c) and does not result from the death or
disability of the Executive under Section 3(a) or (b) shall be deemed a
termination without Cause.
(e) Termination by the Executive. The Executive may terminate his employment
hereunder at any time for any reason, including but not limited to Good Reason.
For purposes of this Agreement, “Good Reason” shall mean that the Executive has
complied with the “Good Reason Process” (hereinafter defined) following the
occurrence of any of the following events: (i) a material diminution in the
Executive’s responsibilities, authority or duties; (ii) a material diminution in
the Executive’s Base Salary except for across-the-board salary reductions based
on the Company’s financial performance similarly affecting all or substantially
all senior management employees of the Company; (iii) a material change in the
geographic location at which the Executive provides services to the Company; or
(iv) the material breach of this Agreement by the Company. “Good Reason Process”
shall mean that (i) the Executive reasonably determines in good faith that a
“Good Reason” condition has occurred; (ii) the Executive notifies the Company in
writing of the first occurrence of the Good Reason condition within 60 days of
the first occurrence of such condition; (iii) the Executive cooperates in good
faith with the Company’s efforts, for a period not less than 30 days following
such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding
such efforts, the Good Reason condition continues to exist; and (v) the
Executive terminates his employment within 60 days after the end of the Cure
Period. If the Company cures the Good Reason condition during the Cure Period,
Good Reason shall be deemed not to have occurred.
(f) Notice of Termination. Except for termination as specified in Section 3(a),
any termination of the Executive’s employment by the Company or any such
termination by the Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a “Notice
of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.
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(g) Date of Termination. “Date of Termination” shall mean: (i) if the
Executive’s employment is terminated by his death, the date of his death; (ii)
if the Executive’s employment is terminated on account of disability under
Section 3(b) or by the Company for Cause under Section 3(c), the date on which
Notice of Termination is given; (iii) if the Executive’s employment is
terminated by the Company under Section 3(d), the date on which a Notice of
Termination is given or the date otherwise specified by the Company in the
Notice of Termination; (iv) if the Executive’s employment is terminated by the
Executive under Section 3(e) other than for Good Reason, 30 days after the date
on which a Notice of Termination is given, and (v) if the Executive’s employment
is terminated by the Executive under Section 3(e) for Good Reason, the date on
which a Notice of Termination is given after the end of the Cure Period.
Notwithstanding the foregoing, in the event that the Executive gives a Notice of
Termination to the Company, the Company may unilaterally accelerate the Date of
Termination and such acceleration shall not result in a termination by the
Company for purposes of this Agreement.
4.Compensation Upon Termination.
(a) Termination Generally. If the Executive’s employment with the Company is
terminated for any reason, the Company shall pay or provide to the Executive (or
to his authorized representative or estate) (i) any Base Salary earned through
the Date of Termination, unpaid expense reimbursements (subject to, and in
accordance with, Section 2(c) of this Agreement) and unused vacation that
accrued through the Date of Termination on or before the time required by law
but in no event more than 30 days after the Executive’s Date of Termination; and
(ii) any vested benefits the Executive may have under any employee benefit plan
of the Company through the Date of Termination, which vested benefits shall be
paid and/or provided in accordance with the terms of such employee benefit plans
(collectively, the “Accrued Benefit”).
(b) Termination by the Company without Cause or by the Executive for Good
Reason. During the Term, if the Executive’s employment is terminated by the
Company without Cause as provided in Section 3(d), or the Executive terminates
his employment for Good Reason as provided in Section 3(e), then the Company
shall pay the Executive his Accrued Benefit. In addition, subject to (i) the
Executive signing a separation agreement in a form provided by the Company (the
“Separation Agreement and Release”), which the Executive shall have seven (7)
business days to rescind acceptance of upon signing and which shall include,
without limitation, a general release of claims, a reaffirmation of the
Executive’s Restrictive Covenants Agreement and/or new restrictive covenants
provisions, and a statement that if the Executive breaches any provision of the
Restrictive Covenants Agreement or other restrictive covenants then in effect,
all payments of the Severance Amount (as defined below) shall immediately cease,
and (ii) the Separation Agreement and Release becoming irrevocable, all within
the time frame set forth in the Separation Agreement and Release but in no event
later than 60 days after the Date of Termination:
(i) the Company shall pay the Executive an amount equal to nine (9) months of
the Executive’s Base Salary (the “Severance Amount”); and
(ii) subject to the Executive’s copayment of premium amounts at the active
employees’ rate and the Executive’s proper election to receive benefits under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), the Company shall pay the monthly employer contribution that the
Company would have made to provide health insurance to the Executive if the
Executive had remained employed by the Company until the earliest of (A) the
nine (9) month anniversary of the Date of Termination; (B) the Executive’s
eligibility for group medical plan benefits under any other employer’s group
medical plan; or (C)
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the cessation of the Executive’s continuation rights under COBRA; provided,
however, if the Company determines that it cannot pay such amounts without
potentially violating applicable law (including, without limitation, Section
2716 of the Public Health Service Act), then the Company will convert such
payments to payroll payments directly to the Executive for the time period
specified above. Such payments shall be subject to tax-related deductions and
withholdings and paid on the Company’s regular payroll dates. For the avoidance
of doubt, the taxable payments described above may be used for any purpose,
including, but not limited to, continuation coverage under COBRA.
The amounts payable under this Section 4(b) shall be paid out in substantially
equal installments in accordance with the Company’s payroll practice over nine
(9) months commencing within 60 days after the Date of Termination; provided,
however, that if the 60-day period begins in one calendar year and ends in a
second calendar year, the Severance Amount shall begin to be paid in the second
calendar year by the last day of such 60-day period; provided, further, that the
initial payment shall include a catch-up payment to cover amounts retroactive to
the day immediately following the Date of Termination. Each payment pursuant to
this Agreement is intended to constitute a separate payment for purposes of
Treasury Regulation Section 1.409A-2(b)(2).
5.Change in Control Payment. The provisions of this Section 5 set forth certain
terms of an agreement reached between the Executive and the Company regarding
the Executive’s rights and obligations upon the occurrence of a Change in
Control of the Company. These provisions are intended to assure and encourage in
advance the Executive’s continued attention and dedication to his assigned
duties and his objectivity during the pendency and after the occurrence of any
such event. These provisions shall apply in lieu of, and expressly supersede,
the provisions of Section 4(b) regarding severance pay and benefits upon a
termination of employment, if such termination of employment occurs within 12
months after the occurrence of the first event constituting a Change in Control
(the “Change in Control Period”). These provisions shall terminate and be of no
further force or effect beginning after the Change in Control Period has ended.
(a) Change in Control. During the Term, if during the Change in Control Period,
the Executive’s employment is terminated by the Company without Cause as
provided in Section 3(d) or the Executive terminates his employment for Good
Reason as provided in Section 3(e), then, subject to the signing of the
Separation Agreement and Release by the Executive and the Separation Agreement
and Release becoming irrevocable, the time frame set forth in the Separation
Agreement and Release but in no event more than 60 days after the Date of
Termination:
(i) The Company shall pay the Executive a lump sum in cash in an amount equal to
one (1) times the sum of (A) the Executive’s then current Base Salary (or the
Executive’s Base Salary in effect immediately prior to the Change in Control, if
higher) plus (B) the Executive’s Target Bonus for the then-current year;
(ii) notwithstanding anything to the contrary in any applicable option agreement
or other stock-based award agreement, all time-based stock options and other
stock-based awards subject to time-based vesting held by the Executive (the
“Time-Based Equity Awards”) shall immediately accelerate and become fully
exercisable or nonforfeitable as of the later of (i) the Date of Termination or
(ii) the Effective Date of the Separation Agreement and Release (the
“Accelerated Vesting Date”); provided that any termination or forfeiture of the
unvested portion of such Time-Based Equity Awards that would otherwise occur on
the Date of Termination in the absence of this Agreement will be delayed until
the Effective Date of the Separation Agreement
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and Release and will only occur if the vesting pursuant to this subsection does
not occur due to the absence of the Separation Agreement and Release becoming
fully effective within the time period set forth therein. Notwithstanding the
foregoing, no additional vesting of the Time-Based Equity Awards shall occur
during the period between the Executive’s Date of Termination and the
Accelerated Vesting Date; and
(iii) subject to the Executive’s copayment of premium amounts at the active
employees’ rate and the Executive’s proper election to receive benefits under
COBRA, the Company shall pay the monthly employer contribution that the Company
would have made to provide health insurance to the Executive if the Executive
had remained employed by the Company until the earliest of (A) the 12 month
anniversary of the Date of Termination; (B) the Executive’s eligibility for
group medical plan benefits under any other employer’s group medical plan; or
(C) the cessation of the Executive’s continuation rights under COBRA; provided,
however, if the Company determines that it cannot pay such amounts without
potentially violating applicable law (including, without limitation, Section
2716 of the Public Health Service Act), then the Company will convert such
payments to payroll payments directly to the Executive for the time period
specified above. Such payments shall be subject to tax-related deductions and
withholdings and paid on the Company’s regular payroll dates. For the avoidance
of doubt, the taxable payments described above may be used for any purpose,
including, but not limited to, continuation coverage under COBRA.
The amounts payable under this Section 5(a) shall be paid or commence to be paid
within 60 days after the Date of Termination; provided, however, that if the
60-day period begins in one calendar year and ends in a second calendar year,
such payment shall be paid or commence to be paid in the second calendar year by
the last day of such 60-day period.
(b) Additional Limitation.
(i) Anything in this Agreement to the contrary notwithstanding, in the event
that the amount of any compensation, payment or distribution by the Company to
or for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, calculated
in a manner consistent with Section 280G of the Code and the applicable
regulations thereunder (the “Aggregate Payments”), would be subject to the
excise tax imposed by Section 4999 of the Code, then the Aggregate Payments
shall be reduced (but not below zero) so that the sum of all of the Aggregate
Payments shall be $1.00 less than the amount at which the Executive becomes
subject to the excise tax imposed by Section 4999 of the Code; provided that
such reduction shall only occur if it would result in the Executive receiving a
higher After Tax Amount (as defined below) than the Executive would receive if
the Aggregate Payments were not subject to such reduction. In such event, the
Aggregate Payments shall be reduced in the following order, in each case, in
reverse chronological order beginning with the Aggregate Payments that are to be
paid the furthest in time from consummation of the transaction that is subject
to Section 280G of the Code: (1) cash payments not subject to Section 409A of
the Code; (2) cash payments subject to Section 409A of the Code; (3)
equity-based payments and acceleration; and (4) non-cash forms of benefits;
provided that in the case of all the foregoing Aggregate Payments all amounts or
payments that are not subject to calculation under Treas. Reg. §1.280G-1,
Q&A-24(b) or (c) shall be reduced before any amounts that are subject to
calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).
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(ii) For purposes of this Section 5(b), the “After Tax Amount” means the amount
of the Aggregate Payments less all federal, state, and local income, excise and
employment taxes imposed on the Executive as a result of the Executive’s receipt
of the Aggregate Payments. For purposes of determining the After Tax Amount, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation applicable to individuals for the calendar year
in which the determination is to be made, and state and local income taxes at
the highest marginal rates of individual taxation in each applicable state and
locality, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.
(iii) The determination as to whether a reduction in the Aggregate Payments
shall be made pursuant to Section 5(b)(i) shall be made by a nationally
recognized accounting firm selected by the Company (the “Accounting Firm”),
which shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the Date of Termination, if applicable, or
at such earlier time as is reasonably requested by the Company or the Executive.
Any determination by the Accounting Firm shall be binding upon the Company and
the Executive.
(c) Definitions. For purposes of this Section 5, the following terms shall have
the following meanings:
“Change in Control” shall have the meaning of “Sale Event” as defined in the
Company’s 2010 Stock Option and Grant Plan, as amended, or any successor plan.
6.Section 409A.
(a) Anything in this Agreement to the contrary notwithstanding, if at the time
of the Executive’s separation from service within the meaning of Section 409A of
the Code, the Company determines that the Executive is a “specified employee”
within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent
any payment or benefit that the Executive becomes entitled to under this
Agreement on account of the Executive’s separation from service would be
considered deferred compensation otherwise subject to the 20 percent additional
tax imposed pursuant to Section 409A(a) of the Code as a result of the
application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be
payable and such benefit shall not be provided until the date that is the
earlier of (A) six months and one day after the Executive’s separation from
service, or (B) the Executive’s death. If any such delayed cash payment is
otherwise payable on an installment basis, the first payment shall include a
catch-up payment covering amounts that would otherwise have been paid during the
six-month period but for the application of this provision, and the balance of
the installments shall be payable in accordance with their original schedule.
(b) All in-kind benefits provided and expenses eligible for reimbursement under
this Agreement shall be provided by the Company or incurred by the Executive
during the time periods set forth in this Agreement. All reimbursements shall be
paid as soon as administratively practicable, but in no event shall any
reimbursement be paid after the last day of the taxable year following the
taxable year in which the expense was incurred. The amount of in-kind benefits
provided or reimbursable expenses incurred in one taxable year shall not affect
the in-kind benefits to be provided or the expenses eligible for reimbursement
in any other taxable year (except for any lifetime or other aggregate limitation
applicable to medical expenses). Such right to reimbursement or in-kind benefits
is not subject to liquidation or exchange for another benefit.
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(c) To the extent that any payment or benefit described in this Agreement
constitutes “non-qualified deferred compensation” under Section 409A of the
Code, and to the extent that such payment or benefit is payable upon the
Executive’s termination of employment, then such payments or benefits shall be
payable only upon the Executive’s “separation from service.” The determination
of whether and when a separation from service has occurred shall be made in
accordance with the presumptions set forth in Treasury Regulation Section
1.409A1(h).
(d) The parties intend that this Agreement will be administered in accordance
with Section 409A of the Code. To the extent that any provision of this
Agreement is ambiguous as to its compliance with Section 409A of the Code, the
provision shall be read in such a manner so that all payments hereunder comply
with Section 409A of the Code. Each payment pursuant to this Agreement is
intended to constitute a separate payment for purposes of Treasury Regulation
Section 1.409A2(b)(2). The parties agree that this Agreement may be amended, as
reasonably requested by either party, and as may be necessary to fully comply
with Section 409A of the Code and all related rules and regulations in order to
preserve the payments and benefits provided hereunder without additional cost to
either party.
(e) The Company makes no representation or warranty and shall have no liability
to the Executive or any other person if any provisions of this Agreement are
determined to constitute deferred compensation subject to Section 409A of the
Code but do not satisfy an exemption from, or the conditions of, such Section.
7.Confidential Information, Noncompetition and Cooperation.
(a) Restrictive Covenants Agreement. The terms of the Employee Non-Competition,
Non-Solicitation, Confidentiality and Assignment Agreement (the “Restrictive
Covenants Agreement”), between the Company and the Executive, attached hereto as
Exhibit A, continue to be in full force and effect provided that the Company
agrees to waive the enforcement of the last six (6) months of the “Restricted
Period” in Section 8 of the Restrictive Covenants Agreement.
(b) Third-Party Agreements and Rights. The Executive hereby confirms that the
Executive is not bound by the terms of any agreement with any previous employer
or other party which restricts in any way the Executive’s use or disclosure of
information or the Executive’s engagement in any business. The Executive
represents to the Company that the Executive’s execution of this Agreement, the
Executive’s employment with the Company and the performance of the Executive’s
proposed duties for the Company will not violate any obligations the Executive
may have to any such previous employer or other party. In the Executive’s work
for the Company, the Executive will not disclose or make use of any information
in violation of any agreements with or rights of any such previous employer or
other party, and the Executive will not bring to the premises of the Company any
copies or other tangible embodiments of non-public information belonging to or
obtained from any such previous employment or other party.
(c) Litigation and Regulatory Cooperation. During and after the Executive’s
employment, the Executive shall cooperate fully with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while the Executive was employed by the Company. The
Executive’s full cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the Company at
mutually convenient times. During and after the Executive’s employment, the
Executive also shall cooperate fully with the Company in connection with any
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investigation or review of any federal, state or local regulatory authority as
any such investigation or review relates to events or occurrences that
transpired while the Executive was employed by the Company. The Company shall
reimburse the Executive for any reasonable out-of-pocket expenses incurred in
connection with the Executive’s performance of obligations pursuant to this
Section 7(c).
(d) Injunction. The Executive agrees that it would be difficult to measure any
damages caused to the Company which might result from any breach by the
Executive of the promises set forth in this Section 7, and that in any event
money damages would be an inadequate remedy for any such breach. Accordingly,
subject to Section 8 of this Agreement, the Executive agrees that if the
Executive breaches, or proposes to breach, any portion of this Agreement, the
Company shall be entitled, in addition to all other remedies that it may have,
to an injunction or other appropriate equitable relief to restrain any such
breach without showing or proving any actual damage to the Company.
(e) Protected Disclosures and Other Protected Action. Nothing in this Agreement
shall be interpreted or applied to prohibit the Executive from making any good
faith report to any governmental agency or other governmental entity (a
“Government Agency”) concerning any act or omission that the Executive
reasonably believes constitutes a possible violation of federal or state law or
making other disclosures that are protected under the anti-retaliation or
whistleblower provisions of applicable federal or state law or regulation. In
addition, nothing contained in this Agreement limits the Executive’s ability to
communicate with any Government Agency or otherwise participate in any
investigation or proceeding that may be conducted by any Government Agency,
including the Executive’s ability to provide documents or other information,
without notice to the Company. In addition, for the avoidance of doubt, pursuant
to the federal Defend Trade Secrets Act of 2016, the Executive shall not be held
criminally or civilly liable under any federal or state trade secret law or
under this Agreement or the Restrictive Covenants Agreement for the disclosure
of a trade secret that (a) is made (i) in confidence to a federal, state, or
local government official, either directly or indirectly, or to an attorney; and
(ii) solely for the purpose of reporting or investigating a suspected violation
of law; or (b) is made in a complaint or other document filed in a lawsuit or
other proceeding, if such filing is made under seal.
8.Consent to Jurisdiction. The parties hereby consent to the jurisdiction of the
Superior Court of the Commonwealth of Massachusetts and the United States
District Court for the District of Massachusetts. Accordingly, with respect to
any such court action, the Executive (a) submits to the personal jurisdiction of
such courts; (b) consents to service of process; and (c) waives any other
requirement (whether imposed by statute, rule of court, or otherwise) with
respect to personal jurisdiction or service of process. ANY ACTION, DEMAND,
CLAIM OR COUNTERCLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE
EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, INCLUDING WITHOUT LIMITATION ANY CLAIMS
OF DISCRIMINATION ARISING UNDER STATE OR FEDERAL LAW, WILL BE RESOLVED BY A
JUDGE ALONE AND EACH OF THE COMPANY AND THE EXECUTIVE WAIVES ANY RIGHT TO A JURY
TRIAL THEREOF.
9.Integration. This Agreement, including the Restrictive Covenants Agreement,
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all prior agreements between the parties concerning
such subject matter, including without limitation the Prior Agreement, provided
that the Equity Documents remain in full force and effect.
10.Withholding; Tax Effect. All payments made by the Company to the Executive
under this Agreement shall be net of any tax or other amounts required to be
withheld by the Company under applicable law. Nothing in this Agreement shall be
construed to require the Company to make any
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payments to compensate the Executive for any adverse tax effect associated with
any payments or benefits or for any deduction or withholding from any payment or
benefit.
11.Successor to the Executive. This Agreement shall inure to the benefit of and
be enforceable by the Executive’s personal representatives, executors,
administrators, heirs, distributees, devisees and legatees. In the event of the
Executive’s death after his termination of employment but prior to the
completion by the Company of all payments due him under this Agreement, the
Company shall continue such payments to the Executive’s beneficiary designated
in writing to the Company prior to his death (or to his estate, if the Executive
fails to make such designation).
12.Enforceability. If any portion or provision of this Agreement (including,
without limitation, any portion or provision of any section of this Agreement)
shall to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
13.Survival. The provisions of this Agreement shall survive the termination of
this Agreement and/or the termination of the Executive’s employment to the
extent necessary to effectuate the terms contained herein.
14.Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the
performance of any term or obligation of this Agreement, or the waiver by any
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
15.Notices. Any notices, requests, demands and other communications provided for
by this Agreement shall be sufficient if in writing and delivered in person or
sent by a nationally recognized overnight courier service or by registered or
certified mail, postage prepaid, return receipt requested, to the Executive at
the last address the Executive has filed in writing with the Company or, in the
case of the Company, at its main offices, attention of the Board.
16.Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by a duly authorized representative of
the Company.
17.Governing Law. This is a Massachusetts contract and shall be construed under
and be governed in all respects by the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of laws principles of such
Commonwealth. With respect to any disputes concerning federal law, such disputes
shall be determined in accordance with the law as it would be interpreted and
applied by the United States Court of Appeals for the First Circuit.
18.Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute one and the same document.
19.Successor to Company. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place. Failure of the Company
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to obtain an assumption of this Agreement at or prior to the effectiveness of
any succession shall be a material breach of this Agreement.
20.Gender Neutral. Wherever used herein, a pronoun in the masculine gender shall
be considered as including the feminine gender unless the context clearly
indicates otherwise.
IN WITNESS WHEREOF, the parties have executed this Agreement effective on the
date and year first above written.
AXCELLA HEALTH INC.
By: /s/ William Hinshaw 
        William Hinshaw
Its: President and Chief Executive Officer
EXECUTIVE
/s/ Manu Chakravarthy 
Manu Chakravarthy, M.D., Ph.D.
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Exhibit A

Restrictive Covenants Agreement