**Exhibit 10.11**

 

**MICHAEL N.CHANG**

**EMPLOYMENTAGREEMENT**

 

This EMPLOYMENT AGREEMENT (the “*Agreement*”)dated as of June 17, 2005, is between OPTIMER PHARMACEUTICALS, INC.,a Delaware corporation (“*Company*”),and MICHAEL N. CHANG (“*Executive*”).Together, Executive and Company are the “parties” and each is a “party” hereto.

 

**WHEREAS**, the Company and theExecutive previously entered into an employment agreement dated March 1,2001 (the “*Prior Agreement*”).

 

**WHEREAS**, THE Company wishes forExecutive to continue in his role as Chief Executive Officer and President ofthe Company.

 

**NOW**, **THEREFORE**, in consideration of the covenants and agreementshereinafter set forth, the parties hereto agree as follows:

 

1.                                       *EFFECTIVENESSOF AGREEMENT*

 

1.1                                 *General.*  This Agreement shall become effective as ofthe date hereof and shall replace, void, and supersede any section of the PriorAgreement that conflicts with this Agreement.

 

2.                                       *EMPLOYMENTAND DUTIES*

 

2.1*                                **General.*  The Company hereby employs the Executive, andthe Executive agrees to serve, as President and Chief Executive Officer of theCompany, upon the terms and conditions herein contained. In such capacity,Executive shall report directly to the Board of Directors of the Company (“*Board*”). The Executive shall perform suchother duties and services for the Company as may be reasonably designated fromtime to time by the Company and as are consistent with Executive’s title. TheExecutive agrees to serve the Company faithfully and to the best of his abilityunder the direction of the Company.

 

2.2*                                **ExclusiveServices.*  Except asmay otherwise be approved in advance by the Board, and except during vacationperiods and reasonable periods of absence due to sickness, personal injury orother disability, the Executive shall devote his full working time throughoutthe Employment Term (as defined below) to the services required of himhereunder. The Executive shall render his services exclusively to the Companyduring the Employment Term, and shall use his best efforts, judgment and energyto improve and advance the business and interests of the Company in a mannerconsistent with the duties of his position. Executive may participate incharitable and philanthropic activities so long as they don’t interfere withhis duties hereunder. However, the foregoing shall not prevent Executive fromproviding services as a member of the Board of Directors of another third partyor parties nor consulting services to Pharmanex, *provided that* the total of all such services to suchentities cumulatively shall not exceed *four*days per month.

 

2.3*                                **Termof Employment.*  TheExecutive’s employment under this Agreement (the “*Employment Term*”) shall commence as of theeffective date hereof and shall terminate on the earlier of (a) the forthyear anniversary of the date hereof, or (b) the termination of theExecutive’s employment pursuant to this Agreement. Executive may terminate hisemployment with the Company at any time and for any reason upon thirty(30) days’ prior written notice to the Company.

 

2.4*                                **Reimbursementof Expenses.*  The Companyshall reimburse the Executive for reasonable travel and other business expensesincurred by him in the fulfillment of his duties hereunder upon presentation bythe Executive of an itemized account of such expenditures, such reimbursementto be in accordance with the Company’s policies and procedures.

 

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3.                                       SALARY

 

3.1*                                **BaseSalary.*  From the date hereof, theExecutive shall receive a base salary (“*BaseSalary*”) at a rate of $271,695.35 per annum, payable twice monthlyin arrears in equal installments in accordance with the Company’s payrollpractices.

 

3.2*                                **AnnualReview.*  The Executive’s Base Salaryshall be reviewed for potential increase by Company, based upon the Executive’sperformance, not less often than annually. Any positive adjustments in BaseSalary effected as a result of such review shall be made by Company in its solediscretion.

 

4.                                       *LONG-TERMINCENTIVE COMPENSATION*

 

The Company will provide the Executive with the following long-termincentive compensation arrangement.

 

4.1                                 Subject to theapproval of the Board, the Executive will be granted a stock option to purchaseup to 570,744 shares o the Company’s Common Stock at a price per shareequal to the fair market value per share of the Common Stock on the date ofgrant (the “*Option*”).Subject to Section 4.2 below, 25% of the shares subject to the Optionshall vest 12 months after the date of Executive’s vesting begins and theremaining shares shall vest monthly over the following 36 months in equalmonthly amounts subject to Executive continuing eligibility.

 

4.2                                 Notwithstandingthe foregoing, upon (i) the occurrence of a change of control (the “*Change of Control Transaction*”) of theCompany (defined as the Company’s being merged with or into or combined with athird party such that the security holders of the Company prior to suchtransaction do not hold at least 50% of the securities of the resulting entityafter such transaction by virtue of such transaction), and (ii) withintwelve (12) months thereafter Executive’s employment is terminated by theCompany (or its successor in interest), then all unvested shares subjectto the Option shall immediately vest and be exercisable (and, in the case ofshares already purchased with the Company maintaining a right of repurchase,the Company shall cease to have the right to repurchase any such unvestedshares); *provided that* theExecutive is employed by the Company on such transaction date.

 

5.                                       *EMPLOYEEBENEFITS*

 

The Executive shall, during his employment under this Agreement, be includedto the extent eligible thereunder in all employee benefit plans, programs orarrangements (including, without limitation, any plans, programs orarrangements providing for retirement benefits, profit sharing, disabilitybenefits, health and life insurance, or vacation and paid holidays) that shallbe established or adopted by the Company for, or made available to, the Company’ssenior executives. In addition, the Company shall furnish the Executive withthe following benefits during his employment under this Agreement:

 

(a)                                  In connectionwith the Prior Agreement, Executive received a relocation and housingassistance loan (the “*Loan*”)in the principal amount of $300,000. 25% of the Loan shall be forgiven eachyear after the date hereof, such that the Loan shall be fully forgiven on thefour year anniversary of the date hereof, subject to the Executive being anemployee of the Company on such anniversary dates. Notwithstanding theforegoing, subject to the Executive being an employee of the Company immediatelyprior to a Change of Control Transaction, the Loan shall be forgivenimmediately prior to the close of a Change of Control Transaction.

 

(b)                                 Four (4) weeksvacation per annum.

 

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6.                                       *TERMINATIONOF EMPLOYMENT*

 

6.1                                 *TerminationWithout Cause.*

 

6.1.1*                       **Severance.*  Subject to the provisions ofSections 6.1.3 and 6.1.4, if, prior to the expiration of theEmployment Term, the Executive’s employment is terminated by the Companywithout Cause (as defined below), the Company shall continue to pay theExecutive the Base Salary (at the rate in effect on the date of suchtermination) for twelve (12) months (such period being referred tohereinafter as the “*Severance Period*”),at such intervals as the same would have been paid had the Executive remainedin the active service of the Company. The Executive shall have no further rightto receive any other compensation or benefits after such termination orresignation of employment, except as determined in accordance with the terms ofthe employee benefit plans or programs of the Company or as provided in thisAgreement.

 

6.1.2*                       **AcceleratedVesting.*  To theextent that any of the shares would have vested at the end of the twelve monthsafter Executive is terminated under Section 4 of this Agreement but forthe termination of the Executive without Cause, all such shares which wouldhave vested within the twelve months had Executive remained employed shall vestat the Company’s declared termination date, and Executive shall have ninety(90) days from the Company’s declared termination date to exercise theOption. The Company shall notify Executive within ten days after the necessarycalculations under Section 4 have been completed (which calculations shallbe made no later than thirty (30) days after the termination date inquestion) as to whether any of the shares have vested. This provision shallsurvive termination of the Agreement.

 

6.1.3*                       **ConditionsApplicable to the Severance Period.*  (a) If, during the Severance Period, theExecutive breaches any of his obligations under Section 8, the Companymay, upon written notice to the Executive, terminate the Severance Period andcease to make any further payments or provide any benefits described in Section 6.1.1.(b) If, during the Severance Period, the Executive obtains otheremployment, then the Base Salary payments due shall be reduced by an amountequivalent (dollar for dollar) to what Executive receives from such otheremployment. Executive shall promptly notify Company of such employment andother payments.

 

6.1.4*                       **DeathDuring Severance Period.*  Inthe event of the Executive’s death during the Severance Period, payments ofBase Salary under Section 6.1.1 shall continue to be made during theremainder of the Severance Period to the beneficiary designated in writing forthis purpose by the Executive or, if no such beneficiary is specificallydesignated, to the Executive’s estate.

 

6.1.5*                       **Dateof Termination.*  The date oftermination of employment without Cause shall be the date specified in awritten notice of termination to the Executive as the last day of the Executive’semployment.

 

6.1.6*                       **ConstructiveTermination.*  The term “ConstructiveTermination” means:

 

(a)                                  the continuedassignment to Executive of any duties or the continued material reduction inExecutive’s duties, either of which is materially inconsistent with Executive’sposition with the Company, for thirty (30) calendar days after Executive’sdelivery of written notice to the Company objecting to such assignment or reduction;or

 

(b)                                 the relocationof the principal place for the rendering of Executive’s services hereunder to alocation more than thirty (30) miles from the Company’s business officesin the San Diego Area; or

 

(c)                                  a materialreduction in compensation and benefits under this Agreement, which remains ineffect for thirty (30) calendar days after Executive delivers writtennotice to the Company of such material reduction which reduction is notapplicable to all Company’s senior executive employees.

 

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None of the foregoing will constitute a Constructive Termination to theextent mutually agreed upon in advance of the occurrence thereof by theExecutive and the Company. A Constructive Termination will be treated as atermination of the Executive by the Company without Cause for all purposeswithin this Agreement.

 

6.2                                 *Terminationfor Cause: Resignation.*

 

6.2.1*                       **General. *If, prior to the expirationof the Employment Term, the Executive’s employment is terminated by the Companyfor Cause, or the Executive resigns from his employment hereunder, theExecutive shall be entitled only to payment of his Base Salary as then ineffect through and including the date of termination or resignation. TheExecutive shall have no further right to receive any other compensation orbenefits after such termination or resignation of employment, except asdetermined in accordance with the terms of the employee benefit plans orprograms of the Company or as provided in this Agreement.

 

6.2.2*                       **Dateof Termination.*  The date oftermination for Cause shall be the date specified in a written notice oftermination to the Executive as the last day of the Executive’s employment. Thedate of resignation shall be the date specified in the written notice ofresignation from the Executive to the Company as the last day of the Executive’semployment, which shall be no more than three months and no less than thirty(30) days in advance, or if no date is specified therein, receipt by theCompany of written notice of resignation from the Executive.

 

6.3*                                **Cause.*  Termination for “*Cause*” shall mean termination of the Executive’s employmentbecause of:

 

(a)                                  any act oromission that constitutes a material breach by the Executive of any of hisobligations under this Agreement or his failure to discharge the dutieslawfully assigned to him by the Board;

 

(b)                                 the willful andcontinued failure or refusal of the Executive to substantially perform theduties required of him in his position with the Company, which failure is notcured within twenty (20) days following written notice of such failure;

 

(c)                                  any willfulviolation by the Executive of any material law or regulation applicable to thebusiness of the Company or any of its subsidiaries or affiliates, or the Executive’sconviction of, or a plea of *nolo contendere*to, a felony, or any act by the Executive of common law fraud or itsequivalent, or any Executive violation of a Company policy applicable to allemployees which is materially detrimental to the Company, all as determined bya disinterested majority of the Board of Directors; or

 

(d)                                 any othermisconduct by the Executive that is materially injurious to the financialcondition or business reputation of, or is otherwise materially injurious to,the Company or any of its subsidiaries or affiliates.

 

7.                                       *DEATHOR DISABILITY*

 

In the event of termination of employment by reason of death orDisability (as hereinafter defined), the Executive (or his estate, asapplicable) shall be entitled to Base Salary through the date of termination.Other benefits shall be determined in accordance with the terms of the benefitplans maintained by the Company, and the Company shall have no furtherobligation hereunder. In addition, the Executive (or his estate or theperson or persons to whom the Options may have been transferred by will or bythe laws of descent and distribution, as applicable) may, but only withintwelve months after Executive ceases to be an employee, exercise Executive’sOptions to the extent Executive was entitled to exercise such Options on thedate of his death or on the date he is terminated by the Company by reason ofDisability. To the extent that the Executive was not otherwise entitled to

 

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exercisethe Options on such date, or if he (or his estate or the person or personsto whom the Options may have been transferred by will or by the laws of descentand distribution, as applicable) fails to exercise the Options within the timespecified in the preceding sentence, such Options will terminate. For purposesof this Agreement, “*Disability*”means a physical or mental disability or infirmity of the Executive, asdetermined by a physician of recognized standing selected by the Company, thatprevents (or, in the opinion of such physician, is reasonably expected toprevent) the normal performance of his duties as an employee of the Company forany continuous period of 180 days, or for 180 days during any one12-month period.

 

8.                                       *CONFIDENTIALITYAND NONSOLICITATION*

 

8.1*                                **Key-EmployeeCovenants.*  TheExecutive agrees to perform his obligations and duties and to be bound by theterms of the Key-Employee Covenants attached hereto as Appendix A whichare incorporated by reference and which shall be in force unless otherwiseexpressly modified by this Agreement.

 

8.2*                                **CertainRemedies.*  Withoutintending to limit the remedies available to the Company, the Executive agreesthat a breach of any of the covenants contained in the Key-Employee Covenantswill result in material and irreparable injury to the Company or itssubsidiaries or affiliates for which there is no adequate remedy at law, thatit will not be possible to measure damages for such injuries precisely andthat, in the event of such a breach or threat thereof, the Company shall beentitled to seek a temporary restraining order or a preliminary or permanentinjunction, or both, without bond or other security, restraining the Executivefrom engaging in activities prohibited by the Key-Employee Covenants or suchother relief as may be required specifically to enforce any of the covenants inthe Key-Employee Covenants. Such injunctive relief in any court shall beavailable to the Company in lieu of, or prior to or pending determination in,any arbitration proceeding.

 

9.                                       *ARBITRATION*

 

Any dispute or controversy arising under or in connection with thisAgreement that cannot be mutually resolved by the parties hereto shall besettled exclusively by arbitration pursuant to the rules of the AmericanArbitration Association in San Diego before one arbitrator of exemplaryqualifications and stature with experience in such similar disputes. Theparties shall choose an independent arbitrator meeting such qualificationswithin thirty (30) business days after demand for arbitration is made; ifthey cannot so agree, then an arbitrator meeting such qualifications shall beselected by the American Arbitration Association in accordance with its thencurrent commercial.  Judgment may beentered on the arbitrator’s award in any court having jurisdiction. Thearbitrator shall be empowered to enter an equitable decree mandating specificenforcement of the terms of this Agreement. No discovery shall be permitted inarbitration, other than an exchange of documents, and the number of hearing daysshall be limited to five (5) in total, all consecutive. The party thatprevails in any arbitration hereunder shall be reimbursed by the other partyhereto for its reasonable legal fees and out-of-pocket expenses directlyattributable to such arbitration, and such other party shall bear all expensesof the arbitrator. The arbitration award shall specify the factual and legalbasis for the award and issue a written decision for same.

 

10.                                 *MISCELLANEOUS*

 

10.1*                          **Communications.*  All notices and other communications given ormade pursuant hereto shall be in writing and shall be deemed to have been dulygiven or made as of the date delivered or on the fifth business day aftermailed if delivered personally or mailed by registered or certified mail(postage prepaid, return receipt requested) to the party at the followingaddresses (or at such other

 

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address for a party as shallbe specified by like notice, except that notices of changes of address shall beeffective upon receipt):

 

(a)                        if to theCompany:

 

c/o Optimer, Inc.

10130 Sorrento Valley Rd.,

Suite C

San Diego, CA 92121

 

(b)                       if to theExecutive:

 

[address]

 

10.2*                          **Waiverof Breach: Severability.*  (a) Thewaiver by the Executive or the Company of a breach of any provision of thisAgreement by the other party hereto shall not operate or be construed as awaiver or any subsequent breach by either party.

 

(b)                       The partieshereto recognize that the laws and public policies of various jurisdictions maydiffer as to the validity and enforceability of covenants similar to those setforth herein. It is the intention of the parties that the provisions hereof beenforced to the fullest extent permissible under the laws and policies of eachjurisdiction in which enforcement may be sought, and that the un-enforceability(or the modification to conform to such laws or policies) of anyprovisions hereof shall not render unenforceable, or impair, the remainder ofthe provisions hereof. Accordingly, if at the time of enforcement of anyprovision hereof, a court of competent jurisdiction holds that the restrictionsstated herein are unreasonable under circumstances then existing, the partieshereto agree that the maximum period, scope, or geographic area reasonableunder such circumstances will be substituted for the stated period, scope orgeographical area and that such court shall be allowed to revise therestrictions contained herein to cover the maximum period, scope andgeographical area permitted by law.

 

10.3*                          **Assignment;Successors.*  No right,benefit or interest hereunder shall be assigned, encumbered, charged, pledged,hypothecated or be subject to any setoff or recoupment by the Executive. ThisAgreement shall inure to the benefit of and be binding upon the successors andassigns of the Company; *provided*,*however* that the Company may notassign this Agreement without Executive’s consent.

 

10.4*                          **EntireAgreement.*  ThisAgreement and the Appendices attached hereto, (collectively the “*Agreement*”) which are incorporated hereinby this reference, contain the entire agreement of the parties with respect tothe subject matter hereof, and on and after the Effective Time, and except asotherwise set forth herein, supersedes all prior agreements, promises,covenants, arrangements, representations and warranties between them, whetherwritten or oral, with respect to the subject matter hereof.

 

10.5*                          **Withholding.*  The payment of any amount pursuant to thisAgreement shall be subject to applicable withholding and payroll taxes, andsuch other deductions as may be required under the Company’s employee benefitplans, if any.

 

10.6*                          **GoverningLaw.*  This Agreement shall begoverned by, and construed with, the law of the State of California.

 

10.7*                          **Headings.*  The headings in this Agreement are for convenienceonly and shall not be used to interpret or construe any of its provisions.

 

10.8*                          **Counterparts.*  This Agreement may be executed in two or morecounterparts, each of which shall be deemed an original but all of togethershall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be dulyexecuted, has agreed and accepted terms hereof, and the Executive has hereuntoset his hand, as of the day and year first above written.

 
|   | Optimer Pharmaceuticals, Inc. |
|--------|------------------------------------|
|   |                               |
|   | By:                                | /s/ Chi-Huey Wong |
|   |                               | Name: Chi-Huey Wong |
|   |                               | Title: |

 

Agreedand accepted as to its duties pursuant to this Agreement:

 

 
| By:    | /s/ Michael N. Chang |   |
|--------|----------------------|--------|
|   | Michael N. Chang     |   |
|   |                 |   |

 

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**APPENDIX A**

 

KEY-EMPLOYEE COVENANTS

 

Optimer Pharmaceuticals, Inc. (the “Company”) operates in ahighly competitive industry competing for product market share as well asrecruitment and retention of key talent. The success of the Company depends onmaintaining a competitive edge in this industry through the introduction ofinnovative products and attracting and retaining talents. Accordingly, as acondition of and in consideration of employment or continued employment withthe Company pursuant to the Agreement to which this Appendix A isattached, the parties to such Agreement acknowledge and agree as follows(for purposes hereof, “Employee” shall be the “Executive” identified inthe Agreement):

 

1.*                                      **ConfidentialInformation:*  The Employeeacknowledges that during the term of employment with the Company he or she maydevelop, learn and be exposed to information about the Company and itsbusiness, including but not limited to formulas, business plans, financialdata, vendor lists, product and marketing plans, distributor lists, and othertrade secrets which information is secret, confidential and vital to thecontinued success of the Company (“Confidential Information”). The term “Confidentialshall not include, and the obligations set forth in this Section shall notapply to, any information that (a) is publicly available, (b) becomespublicly available without breach of this Agreement by the Employee, (c) theEmployee already possess without obligation of confidentiality, (d) theEmployee develops independently, or (e) the Employee rightfully receiveswithout obligation of confidentiality from a third party. The Employee agreesthat he or she will not, without the express written consent of the Company orexcept as required by law or court order disclose, copy, retain, remove fromthe Company’s premises or make any use of such Confidential Information exceptas may be required in the course of his employment with the Company.

 

2.*                                      **Conflictof Interest:*  Duringemployment with the Company, the Employee shall not engage in any transactionwhich involves a conflict of interest with the Company without the Company’sconsent. The Employee must discharge his responsibility solely on the basis ofwhat is in the best interest of the Company and independent of personal considerationsor relationships. Although it is difficult to identify every activity thatmight give rise to a conflict of interest, and not by way of making an allinclusive list, some of the more common circumstances and practices that mightresult in such conflicts are set forth below. Should the Employee have anyquestions regarding this matter, the Employee should consult with and receivewritten permission from the Company’s Board of Directors.

 

a.                                       While employedby the Company, the Employee shall maintain impartial business relationshipswith vendors, suppliers and distributors.

 

b.                                      While employedby the Company, the Employee shall not have a direct or indirect ownershipinterest in vendors of the Company nor any company doing or seeking to dobusiness with the Company unless such ownership interest is owned by theEmployee at the time his employment with the Company commences or unless suchownership is in the form of (a) securities in a company with publiclytraded securities (provided that the securities held by the Employee representless than 1% of the total outstanding securities of the company) or (b) andinterest in investment vehicles, limited partnerships, hedge funds or stockfunds where the Employee is a passive investor.

 

c.                                       While employedby the Company, unless approved by the Company in writing, the Employee shallnot have a direct or indirect ownership in any company which competes with theCompany in any product category, unless such ownership interest is owned by theEmployee at the time his employment with the Company commences or unless (a) suchcompany’s securities are publicly traded and the Employee’s ownership interestis less than 1% of the 

 

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totaloutstanding securities of such company, or (b) except for any ownershipinterest held as of the date of this Agreement, or (c) such company’ssecurities are held by an investment vehicle, limited partnership, hedge fundor stock fund where the Employee is a passive investor in such funds.

 

d.                                      While employedby the Company, the Employee shall not perform services of any kind for anyentity doing or seeking to do business with the Company. As to employment withor service to another company while employed by the Company, the Employee shallnot allow any such activity to detract from his job performance, use theCompany’s time, resources, or personnel, or require such long hours to affecthis physical or mental effectiveness.

 

e.                                       The Employeeshall disclose to the Board of Directors of the Company any and all areasposing a potential or actual conflict of interests. Said disclosure shall bemade as promptly as possible after such conflict arises.

 

3.*                                      **WorkProduct:*  The Companyshall have the sole proprietary interest in the work product of the Employeeduring his employment with the Company (“Work Product”), and the Employeeexpressly assigns to the Company or its designee all rights, title and interestin and to all copyrights, patents, trade secrets, improvements, inventions,sketches, models and all documents related thereto, manufacturing processes andinnovations, special calibration techniques, software, service code, systemsdesigns and any other Work Product developed by the Employee, either solely orjointly with others, where said Work Product relates to any business activityor research and development activity in which the Company is involved or plansto be involved at the time of or prior to the Employee’s creating such WorkProduct or if such Work Product is developed with the use of the Company’stime, material, or facilities; and the Employee further agrees to disclose anyand all such Work Product to the Company without delay. This provision shallrelate to Work Product created prior to the date of the Employee’s execution ofthis Agreement as well as Work Product developed after execution of theAgreement.

 

4.*                                      **EthicalStandards:*  The Employeeagrees to maintain the highest business ethical and legal standards in hisconduct, to be scrupulously honest and straight-forward in all of his businessdealings and to use his best efforts to avoid all situations which mightproject the appearance of being unethical from a business standpoint orillegal.

 

5.*                                      **ProductResale:*  As an employee of the Company,the Employee may receive Company products and materials either at no charge orat discount as specified from time to time by the Company in its solediscretion. Employee agrees that the products received from the Company arestrictly limited to the Employee’s personal use and that of the Employee’simmediate family and may not be resold, given or disposed of to any otherperson or entity in a manner inconsistent with the personal use hereindescribed.

 

6.*                                      **Gratuities:*  The Employee shall neither seek nor retaingifts, gratuities, entertainment or other forms of compensation, benefit, orpersuasion from suppliers, distributors, vendors or their representativeswithout the consent of the Company’s Board of Directors with the exception ofmeals provided in the ordinary course of business on an infrequent basis.

 

7.*                                      **Non-Solicitation:*  The Employee shall not in any way, directlyor indirectly, at any time during employment or within two (2) years aftereither a voluntary or involuntary employment termination: (a) solicit,divert, or take away the Company’s distributors or resellers: (b) solicitin any manner the Company’s employees for employment with a third party orencourage any such employee or refer any such employee (by identifyingsuch employee or otherwise) to a third party for employment purposes, or (c) assistany other person in any manner or persons in an attempt to do any of theforegoing.

 

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8.*                                      **Acknowledgment:*  The Employee acknowledges that his positionand work activities with the Company are “key” and vital to the on-goingsuccess of the Company’s operation in each product category and in eachgeographic location in which the Company operates. In addition, the Employeeacknowledges that his employment or involvement with any other multi- levelmarketing company would create the impression that the Employee has left theCompany for a “better opportunity,” which could damage the Company by thisperception in the minds of the Company’s employees or independent distributors.Therefore, the Employee acknowledges that his confidentiality andnon-solicitation covenants hereunder are fair and reasonable and should beconstrued to apply to the fullest extent possible by applicable laws. TheEmployee has carefully read the Agreement, has consulted with independent legalcounsel to the extent the Employee deems appropriate, and has given carefulconsideration to the restraints imposed by the Agreement. The Employeeacknowledges that the terms of the Agreement are enforceable of the manner inwhich the Employee’s employment is terminated, whether voluntary orinvoluntary.

 

**THESE COVENANTS HAVE BEEN READ, UNDERSTOOD AND FREELYACCEPTED BY**:

 

 
| /s/  MICHAEL N. CHANG |   |
|-----------------------|--------|

 

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**OptimerPharmaceuticals, Inc.**

10110 SorrentoValley Road, Suite C

San Diego,CA  92121

 

October 2,2008

 

Michael N. Chang,Ph.D.

OptimerPharmaceuticals, Inc.

10110 SorrentoValley Road, Suite C

San Diego,CA  92121

 

**Re:****                            ****Amendment to Employment Agreement**

 

Dear Michael:

 

This Amendment (the “***Amendment***”)to your Employment Agreement with Optimer Pharmaceuticals, Inc. (the “***Company***”) dated June 17, 2005(the “***Agreement***”) amends the termsand conditions of the Agreement to the extent provided herein.  The Company is proposing to adopt a SeveranceBenefit Plan under which you will be eligible to participate (the “***Plan***”).  In exchange for the potential benefits youmay receive under the Plan, by your acknowledgement below, you will forego yourseverance benefits currently set forth in the Agreement as they pertain to yourtermination by the Company without cause.

 

Contingent andeffective upon the Company’s Compensation Committee or Board of Directors dulyadopting the Plan, the Agreement shall be amended as follows:

 

1.                                      Section 6 of the Agreement shall beamended and restated in its entirety to read as follows:

 

“6.                                *TERMINATIONOF EMPLOYMENT*

 

6.1                                Date ofTermination.    The date of terminationshall be the date specified in a written notice of termination to the Executiveas the last day of the Executive’s employment. The date of resignation shall bethe date specified in the written notice of resignation from the Executive tothe Company as the last day of the Executive’s employment, which shall be nomore than three months and no less than thirty (30) days in advance, or if nodate is specified therein, receipt by the Company of written notice ofresignation from the Executive.

 

6.2                                SeveranceBenefits*.*

 

6.2.1*                       **General.*    If,prior to the expiration of the Employment Term, the Executive’s employmentterminates for any reason, the Executive shall be entitled to payment of hisBase Salary as then in effect through and including the date of termination orresignation. Except as otherwise expressly provided herein, the Executive shallhave no further right to receive any other compensation or benefits under thisAgreement after such termination of employment, but may be 

 

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eligible for other benefits in accordancewith the terms of the employee benefit plans or programs of the Company.

 

6.2.2*                       **SeveranceBenefit Plan.*  During theEmployment Term, Executive shall be eligible to participate in the Company’sSeverance Benefit Plan dated October 2, 2008, and as may be amendedthereafter (the “***Severance Plan***”), inaccordance with its terms. Notwithstanding anything to the contrary set forth in the SeverancePlan, in the event of Executive’s Constructive Termination (as such term isdefined below) Executive will be deemed to have had a “Covered Termination” assuch term is defined in the Severance Plan for all purposes of the SeverancePlan, and thereby entitled to severance benefits thereunder, subject to theconditions set forth therein.

 

6.2.3*                       **ConstructiveTermination.*    The term “***Constructive Termination***” means the occurrence of one or more of thefollowing events, provided that Executive has first provided written notice tothe Company within 90 days of the first such occurrence of such conditionspecifying the event(s) constituting Constructive Termination andspecifying that Executive intends to terminate employment not earlier than 30days after providing such notice, and the Company (or surviving corporation)has not cured such event(s) within 30 days (or such longer period as maybe specified by Executive in such notice) after such written notice is receivedby the Company (the “***Cure Period***”),and Executive resigns within thirty (30) days following the end of the CurePeriod:

 

(a)                                  a material diminution in Executive’s authority, dutiesor responsibilities; or

 

(b)                                 the relocation of theprincipal place for the rendering of Executive’s services hereunder to alocation that requires a one-way increase in Executive’s driving distance ofmore than thirty (30) miles; or

 

(c)                                  a material reduction by the Company of the Executive’sannual base compensation, which reduction is not applicable to allCompany’s senior executive employees.

 

However, none of the foregoing willconstitute a Constructive Termination to the extent mutually agreed upon inadvance of the occurrence thereof by the Executive and the Company.”

 

2.                                       Section 10.4of the Agreement shall be amended and restated in its entirety to read asfollows:

 

 “10.4    Entire Agreement.    This Agreement, the Severance Plan, and theAppendices attached hereto, (collectively the “Agreement”) which areincorporated herein by this reference, contain the entire agreement of theparties with respect to the subject matter hereof, and on and after theEffective Time, and except as otherwise set forth herein, supersedes all prioragreements, promises, 

 

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covenants, arrangements, representations andwarranties between them, whether written or oral, with respect to the subjectmatter hereof.”

 

Except as specificallyamended by this Amendment, the terms and conditions of the Agreement shallremain in full force and effect.  ThisAmendment may be executed in two or more counterparts, each of which shall bedeemed an original and all of which together shall constitute one and the sameinstrument.  Please sign this Amendment andreturn it to the Company at your earliest convenience.

 

Sincerely,

 
| **OPTIMER PHARMACEUTICALS, INC.** |
|-----------------------------------|
| ** **                        |
|                              |
| By:                               | /s/ John D. Prunty |   |
|                              | John D. Prunty |   |
|                              | Chief Financial Officer |   |
|                              |
|                              |
| **ACCEPTED AND AGREED:**          |
| ** **                        |
|                              |
| /s/ Michael N. Chang, Ph.D.       |   |
| Michael N. Chang, Ph.D.           |

 

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