Exhibit 10.3

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Tetraphase Pharmaceuticals, Inc.

480 Arsenal Street, Suite 110

Watertown, MA 02472

 

 

VIA HAND DELIVERY

July 31, 2019

Guy Macdonald

8 Gracewood Park

Cambridge, MA 02138

 

Dear Guy:

As we discussed, your employment with Tetraphase Pharmaceuticals, Inc. (the
“Company”) will end effective July 31, 2019 (the “Separation Date”).  As we also
discussed, you will be eligible to receive the severance benefits described in
paragraph 1 below if you sign and return this letter agreement to me by
September 15, 2019 (but no earlier than the Separation Date) and do not revoke
your agreement (as described below).  By signing and returning this letter
agreement and not revoking your acceptance, you will be entering into a binding
agreement with the Company and will be agreeing to the terms and conditions set
forth in the numbered paragraphs below, including the release of claims set
forth in paragraph 2.  Therefore, you are advised to consult with an attorney
before signing this letter agreement and you have been given at least forty-five
(45) days to do so.  If you sign this letter agreement, you may change your mind
and revoke your agreement during the seven (7) day period after you have signed
it (the “Revocation Period”) by notifying me in writing.  If you do not so
revoke, this letter agreement will become a binding agreement between you and
the Company upon the expiration of the Revocation Period.

Although your receipt of the severance benefits is expressly conditioned on you
entering into this letter agreement, the following will apply regardless of
whether or not you timely sign and return this letter agreement:  

 

•

As of the Separation Date, all salary payments from the Company will cease and
any benefits you had as of the Separation Date under Company-provided benefit
plans, programs, or practices will terminate, except as required by federal or
state law.

 

•

You will receive on the Separation Date payment for your final wages and any
unused vacation time accrued through the Separation Date.  

 

•

You may, if eligible and at your own cost, elect to continue receiving group
medical insurance pursuant to the “COBRA” law. Please consult the COBRA
materials to be provided under separate cover for details regarding these
benefits.

 

•

You are obligated to keep confidential and not to use or disclose any and all
non-public information concerning the Company that you acquired during the
course of your employment with the Company, including any non-public information
concerning the Company’s business affairs, business prospects, and financial
condition, except as otherwise permitted by paragraph 9 below.  Further, you
remain subject to your continuing confidentiality and non-solicitation
obligations to the Company as set forth in

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the Non-Solicitation, Non-Disclosure and Developments Agreement you previously
executed for the benefit of the Company, which remain in full force and effect.

 

•

You must return to the Company on the Separation Date all Company property.

 

•

You will have three (3) months following the Separation Date to exercise any
stock options under the Company’s 2103 Stock Incentive Plan that were vested as
of the Separation Date.  After that three (3) month period, your stock options
will expire and you will no longer have any rights with respect thereto.

If you elect to timely sign and return this letter agreement and do not revoke
your acceptance within the Revocation Period, the following terms and conditions
will also apply:

 

1.

Severance Benefits –The Company will provide you with the following severance
benefits (the “severance benefits”):

 

a.

Severance Pay.  The Company will pay to you $580,000, less all applicable taxes
and withholdings, as severance pay (an amount equivalent to 52 weeks of your
current base salary). This severance pay will be paid in installments in
accordance with the Company’s regular payroll practices, but in no event shall
payments begin earlier   than the Company’s first payroll date following
expiration of the Revocation Period.

 

 

b.

COBRA Benefits.  Should you timely elect and be eligible to continue receiving
group health insurance pursuant to the “COBRA” law, the Company will, until the
earlier of (x) the date that is 52 weeks following the Separation Date, and (y)
the date on which you obtain alternative coverage (as applicable, the “COBRA
Contribution Period”), continue to pay the share of the premiums for such
coverage to the same extent it was paying such premiums on your behalf
immediately prior to the Separation Date.  The remaining balance of any premium
costs during the COBRA Contribution Period, and all premium costs thereafter,
shall be paid by you on a monthly basis for as long as, and to the extent that,
you remain eligible for COBRA continuation.  You agree that, should you obtain
alternative medical and/or dental insurance coverage prior to the date that is
52 weeks following the Separation Date, you will so inform the Company in
writing within five (5) business days of obtaining such coverage.

 

You will not be eligible for, nor shall you have a right to receive, any
payments or benefits from the Company following the Separation Date other than
as set forth in this paragraph.

 

 

2.

Release of Claims – In consideration of the severance benefits, which you
acknowledge you would not otherwise be entitled to receive, you hereby fully,
forever, irrevocably and unconditionally release, remise and discharge the
Company, its affiliates, subsidiaries, parent companies, predecessors, and
successors, and all of their respective past and present officers, directors,
stockholders, partners, members, employees, agents, representatives, plan
administrators, attorneys, insurers and fiduciaries (each in their individual
and corporate capacities) (collectively, the “Released Parties”) from any and
all claims, charges, complaints, demands, actions, causes of action, suits,
rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts,
agreements, promises, doings, omissions, damages, executions, obligations,
liabilities, and expenses (including attorneys’ fees and costs), of every kind
and nature that you ever had or now have against any or all of the Released
Parties, whether known or

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unknown, including, but not limited to, any and all claims arising out of or
relating to your employment with and/or separation from the Company, including,
but not limited to, all claims under Title VII of the Civil Rights Act, the
Americans With Disabilities Act, the Age Discrimination in Employment Act, the
Genetic Information Nondiscrimination Act, the Family and Medical Leave Act, the
Worker Adjustment and Retraining Notification Act, the Rehabilitation Act,
Executive Order 11246, Executive Order 11141, the Fair Credit Reporting Act, and
the Employee Retirement Income Security Act, all as amended; all claims arising
out of the Massachusetts Fair Employment Practices Act, Mass. Gen. Laws ch.
151B, § 1 et seq., the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, § 148 et
seq. (Massachusetts law regarding payment of wages and overtime), the
Massachusetts Civil Rights Act, Mass. Gen. Laws ch. 12, §§ 11H and 11I, the
Massachusetts Equal Rights Act, Mass. Gen. Laws. ch. 93, § 102 and Mass. Gen.
Laws ch. 214, § 1C, the Massachusetts Labor and Industries Act, Mass. Gen. Laws
ch. 149, § 1 et seq., Mass. Gen. Laws ch. 214, § 1B (Massachusetts right of
privacy law), the Massachusetts Maternity Leave Act, Mass. Gen. Laws ch. 149, §
105D, and the Massachusetts Small Necessities Leave Act, Mass. Gen. Laws ch.
149, § 52D, all as amended; all common law claims including, but not limited to,
actions in defamation, intentional infliction of emotional distress,
misrepresentation, fraud, wrongful discharge, and breach of contract; all claims
to any non-vested ownership interest in the Company, contractual or otherwise;
all state and federal whistleblower claims to the maximum extent permitted by
law; and any claim or damage arising out of your employment with and/or
separation from the Company (including a claim for retaliation) under any common
law theory or any federal, state or local statute or ordinance not expressly
referenced above; provided, however, that this release of claims does not
prevent you from filing a charge with, cooperating with, or participating in any
investigation or proceeding before, the Equal Employment Opportunity Commission
or a state fair employment practices agency (except that you acknowledge that
you may not recover any monetary benefits in connection with any such charge,
investigation, or proceeding, and you further waive any rights or claims to any
payment, benefit, attorneys’ fees or other remedial relief in connection with
any such charge, investigation or proceeding).

 

3.

Continuing Obligations – You acknowledge and reaffirm your confidentiality and
non-disclosure obligations discussed on page 1 of this letter agreement, as well
as the obligations set forth in the Non-Solicitation, Non-Disclosure and
Developments Agreement, which survive your separation from employment with the
Company.

 

4.

Non-Disparagement – You understand and agree that, to the extent permitted by
law and except as otherwise permitted by paragraph 9 below, you will not, in
public or private, make any false, disparaging, derogatory or defamatory
statements, online (including, without limitation, on any social media,
networking, or employer review site) or otherwise, to any person or entity,
including, but not limited to, any media outlet, industry group, financial
institution or current or former employee, board member, consultant, client or
customer of the Company, regarding the Company or any of the other Released
Parties, or regarding the Company’s business affairs, business prospects, or
financial condition.

 

5.

Company Affiliation – You agree that, following the Separation Date, you will
represent yourself as a member of the Company’s Board of Directors.

 

6.

Return of Company Property – You confirm that you have returned to the Company
all keys, files, records (and copies thereof), equipment (including, but not
limited to, computer hardware, software, printers, flash drives and other
storage devices, wireless handheld devices, cellular phones, tablets, etc.),
Company identification, and any other Company owned property in your possession
or control, and that you have left intact all, and have otherwise not destroyed,
deleted,

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or made inaccessible to the Company, any electronic Company documents,
including, but not limited to, those that you developed or helped to develop
during your employment, and that you have not (a) retained any copies in any
form or media; (b) maintained access to any copies in any form, media, or
location; (c) stored any copies in any physical or electronic locations that are
not readily accessible or not known to the Company or that remain accessible to
you; or (d) sent, given, or made accessible any copies to any persons or
entities that the Company has not authorized to receive such electronic or hard
copies. You further confirm that you have cancelled all accounts for your
benefit, if any, in the Company’s name, including but not limited to, credit
cards, telephone charge cards, cellular phone accounts, and computer accounts.

 

 

7.

Business Expenses and Final Compensation – You acknowledge that you have been
reimbursed by the Company for all business expenses incurred in conjunction with
the performance of your employment and that no other reimbursements are owed to
you.  You further acknowledge that you have received payment in full for all
services rendered in conjunction with your employment by the Company, including
payment for all wages, bonuses, commissions, and accrued, unused vacation time,
and that no other compensation is owed to you except as provided herein.

 

 

8.

Confidentiality – You understand and agree that, to the extent permitted by law
and except as otherwise permitted by paragraph 9 below, the terms and contents
of this letter agreement, and the contents of the negotiations and discussions
resulting in this letter agreement, shall be maintained as confidential by you
and your agents and representatives and shall not be disclosed except as
otherwise agreed to in writing by the Company.

 

9.

Scope of Disclosure Restrictions – Nothing in this letter agreement prohibits
you from communicating with government agencies about possible violations of
federal, state, or local laws or otherwise providing information to government
agencies, filing a complaint with government agencies, or participating in
government agency investigations or proceedings.  You are not required to notify
the Company of any such communications; provided, however, that nothing herein
authorizes the disclosure of information you obtained through a communication
that was subject to the attorney-client privilege.  Further, notwithstanding
your confidentiality and nondisclosure obligations, you are hereby advised as
follows pursuant to the Defend Trade Secrets Act: “An individual shall not be
held criminally or civilly liable under any Federal or State trade secret law
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.  An
individual who files a lawsuit for retaliation by an employer for reporting a
suspected violation of law may disclose the trade secret to the attorney of the
individual and use the trade secret information in the court proceeding, if the
individual (A) files any document containing the trade secret under seal; and
(B) does not disclose the trade secret, except pursuant to court order.”

 

10.

Cooperation – You agree that, to the extent permitted by law, you shall
cooperate fully with the Company in the investigation, defense or prosecution of
any claims or actions which already have been brought, are currently pending, or
which may be brought in the future against the Company by a third party or by or
on behalf of the Company against any third party, whether before a state or
federal court, any state or federal government agency, or a mediator or
arbitrator.  Your full cooperation in connection with such claims or actions
shall include, but not be limited to, being available to meet with the Company’s
counsel, at reasonable times and locations designated by the Company, to
investigate or prepare the Company’s claims or defenses, to prepare for trial or
discovery or an administrative hearing, mediation, arbitration or other
proceeding and to act as a

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witness when requested by the Company.  You further agree that, to the extent
permitted by law, you will notify the Company promptly in the event that you are
served with a subpoena (other than a subpoena issued by a government agency), or
in the event that you are asked to provide a third party (other than a
government agency) with information concerning any actual or potential complaint
or claim against the Company.

 

 

11.

Amendment and Waiver – This letter agreement shall be binding upon the parties
and may not be modified in any manner, except by an instrument in writing of
concurrent or subsequent date signed by duly authorized representatives of the
parties hereto.  This letter agreement is binding upon and shall inure to the
benefit of the parties and their respective agents, assigns, heirs, executors,
successors and administrators.  No delay or omission by the Company in
exercising any right under this letter agreement shall operate as a waiver of
that or any other right.  A waiver or consent given by the Company on any one
occasion shall be effective only in that instance and shall not be construed as
a bar to or waiver of any right on any other occasion.

 

12.

Validity – Should any provision of this letter agreement be declared or be
determined by any court of competent jurisdiction to be illegal or invalid, the
validity of the remaining parts, terms or provisions shall not be affected
thereby and said illegal or invalid part, term or provision shall be deemed not
to be a part of this letter agreement.

 

13.

Nature of Agreement – You understand and agree that this letter agreement is a
severance agreement and does not constitute an admission of liability or
wrongdoing on the part of the Company.  

 

14.

Eligibility for Severance Program - Attached to this letter agreement as
Attachment A is a description of (i) any class, unit or group of individuals
covered by the program of severance benefits which the Company has offered to
you, and any applicable time limits regarding such severance benefit program;
and (ii) the job title and ages of all individuals eligible or selected for such
severance benefit program, and the ages of all individuals in the same job
classification or organizational unit who are not eligible or who were not
selected for such severance benefit program.

 

 

15.

Acknowledgments – You acknowledge that you have been given at least forty-five
(45) days to consider this letter agreement and Attachment A, and that the
Company is hereby advising you to consult with an attorney of your own choosing
prior to signing this letter agreement.  You understand that you may revoke this
letter agreement for a period of seven (7) days after you sign this letter
agreement by notifying me in writing, and the letter agreement shall not be
effective or enforceable until the expiration of this seven (7) day revocation
period.  You understand and agree that by entering into this letter agreement,
you are waiving any and all rights or claims you might have under the Age
Discrimination in Employment Act, as amended by the Older Workers Benefit
Protection Act, and that you have received consideration beyond that to which
you were previously entitled.

 

16.

Voluntary Assent – You affirm that no other promises or agreements of any kind
have been made to or with you by any person or entity whatsoever to cause you to
sign this letter agreement, and that you fully understand the meaning and intent
of this letter agreement.  You further state and represent that you have
carefully read this letter agreement, understand the contents herein, freely and
voluntarily assent to all of the terms and conditions hereof, and sign your name
of your own free act.

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17.

Applicable Law – This letter agreement shall be interpreted and construed by the
laws of the Commonwealth of Massachusetts, without regard to conflict of laws
provisions.  You hereby irrevocably submit to and acknowledge and recognize the
jurisdiction of the courts of the Commonwealth of Massachusetts, or if
appropriate, a federal court located in the Commonwealth of Massachusetts (which
courts, for purposes of this letter agreement, are the only courts of competent
jurisdiction), over any suit, action or other proceeding arising out of, under
or in connection with this letter agreement or the subject matter hereof.

 

18.

Entire Agreement – This letter agreement, including Attachment A, contains and
constitutes the entire understanding and agreement between the parties hereto
with respect to your severance benefits and the settlement of claims against the
Company and cancels all previous oral and written negotiations, agreements, and
commitments in connection therewith.  

 

19.

Tax Acknowledgement – In connection with the severance benefits provided to you
pursuant to this letter agreement, the Company shall withhold and remit to the
tax authorities the amounts required under applicable law, and you shall be
responsible for all applicable taxes with respect to such severance benefits
under applicable law.  You acknowledge that you are not relying upon the advice
or representation of the Company with respect to the tax treatment of any of the
severance benefits set forth in paragraph 1 of this letter agreement.

If you have any questions about the matters covered in this letter agreement,
please call me at (617) 715-3591.  

Very truly yours,

By: __________________________________

 

Paul Fanning

 

Senior Vice President, Human Resources

I hereby agree to the terms and conditions set forth above.  I have been given
at least forty-five (45) days to consider this letter agreement, and I have
chosen to execute this on the date below.  I intend that this letter agreement
will become a binding agreement between me and the Company if I do not revoke my
acceptance in seven (7) days.

 

_____________________________

Guy Macdonald

_________________________

Date

To be returned in a timely manner as set forth on the first page of this letter
agreement.

 

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Tetraphase Pharmaceuticals, Inc.

480 Arsenal Street, Suite 110

Watertown, MA 02472

 

 

ATTACHMENT A

 

OLDER WORKERS BENEFIT PROTECTION ACT

NOTICE TO EMPLOYEES

The Company has taken a strategic decision to concentrate it’s time, resources
and capital on our marketed product Xerava.  Tetraphase believes the best
opportunity for success is to restructure the organization with a complete focus
on growing Xerava revenue.  As a result of this restructuring, your employment
with the Company is being terminated and you have been selected to receive an
offer of severance benefits in exchange for signing a release and waiver of
claims.  Employees were selected for termination based on the Company’s decision
to eliminate and/or restructure certain positions/roles and reduce the number of
employees in others.  Employees were selected for termination based on necessity
of position, future business needs and skill sets.  In connection with the
severance program, you are being provided with information as to: (i) any class,
unit or group of individuals terminated and covered by such program, any
eligibility factors for such termination and, therefore, eligibility for such
program, and any time limits applicable to such program; and (ii) the job title
and ages of all individuals terminated and, therefore, eligible or selected for
the program, and the job titles and ages of all individuals in the same job
classification or organizational unit who are not being terminated and,
therefore, are not eligible or selected for the program.

 

The Company determined that all employees in the classes, units or departments
in the chart below would be eligible for the severance program.  All persons who
are being terminated in connection with this restructuring have been selected
for the program and their job titles and ages have been indicated in the chart
below.  The job titles and ages of individuals who were not selected for the
program are also indicated in the below chart.

 

Employees who were selected and are age forty and over shall have forty-five
(45) days to consider the Company’s severance offer and may revoke their
agreement to participate in the severance program within seven (7) days of their
execution of such an agreement.  Employees who were selected and are under age
forty shall have at least seven (7) days to consider the Company’s severance
offer and do not have a right of revocation.

 

Class/Unit/

Department

Job Title and Ages

of Employees Selected

Job Title and Ages of

Employees Not Selected

CMC/Analytical

 

 

 

 

 

Associate Director, Analytical Chemistry (62)

Research Scientist II (54)

Scientist II, Analytical Chemistry (41)

Research Scientist II (52)

Scientist II, Analytical Chemistry (52)

Vice President, CMC (47)

 

 

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Manufacturing

VP, Manufacturing (56)

Director, Chemical Development (43)

Scientist I, Chemical Development

(32)

Director, CMC (50, 54)

Principal Scientist, CMC (46)

 

Associate Director, Sterile Manufacturing (30)

 

Preclinical R&D Management

 

Chief Scientific Officer (53)

 

Biology and Project Management

Project Manager I, CMC (30)

 

Director, Project Management, CMC (44)

Project Manager II, CMC (28)

Research Scientist I, Biology (32)

Research Scientist I, Pharmacology (34)

Medicinal Chemistry

Senior VP, Medicinal Chemistry (54)

Director, Chemistry (44)

 

 

Clinical

Associate Director, Data Sciences (35)

Clinical Trial Associate II (31)

Manager, Trial Master File (60)

Senior Clinical Data Manager (35)

Senior Clinical Project Manager (41)

 

Chief Medical Officer (47)

Senior Clinical Project Manager

(47)

Finance & Accounting

Senior Accountant, (29)

 

 

SVP, Finance, (54)

Senior Director, Controller (44)

Assistant Controller, (42)

Senior Manager, Accounting (52)

Manager, Accounting, (53)

Senior Accounts Payable Coordinator, (29)

Staff Accountant II, (26)

Senior Manager, Financial Planning & Analysis, (30)

 

 

HR and Operations

Senior Director, Human Resources, (43)

 

Operations Assistant, (24)

Buyer/Supply Chain Associate, (28)

HR/Corporate Communications Specialist, (28)

Systems Administrator, (45)

Senior Director, IT, (46)

Senior Director, Operations, (42)

SVP, Human Resources, (61)

 

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Executive Staff and Program Management

Chief Executive Officer, (60)

Associate Director, Program Management, (32)

Executive Assistant, (57)

Executive Director, IR and Corp Comm, (47)

VP, Program & Alliance Management, (50)

Administrative Assistant, Commercial Ops, (33)

 

Note – Terminations to occur from June 12 through August 1.

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