Exhibit
10.32


 





 


[                    ]


 


BY HAND DELIVERY


[                            ]


Cubist Pharmaceuticals, Inc.


65 Hayden Avenue


Lexington, MA  02421


 


Re:  Retention
Letter


 


Dear  [                   ]:


 


You are a highly valuable
employee of Cubist Pharmaceuticals, Inc. (including any successor
organizations, “Cubist”).  Cubist wishes
to retain you as an employee, and is therefore willing to make certain
commitments in order to induce you to remain an employee.  This letter will confirm the agreement between
you and Cubist (“Agreement”) in that regard. 
The Agreement is as follows:


 


1.             Definitions.  For the purposes of this Agreement, the
following definitions apply:


 


(a)                                  “Cause”
means: (i) you commit of an act of dishonesty, fraud or misrepresentation in
connection with your employment; (ii) you are convicted of, or plead nolo contendere to, a felony or a crime involving moral
turpitude; (iii) you breach any material obligation under your Proprietary
Information and Inventions Agreement or Cubist’s Code of Conduct and Ethics;
(iv) you engage in substantial or continuing inattention to or neglect of your
duties and responsibilities reasonably assigned to you by Cubist; (v) you
engage in substantial or continuing acts to the detriment of Cubist or inconsistent
with Cubist’s policies or practices; or (vi) you fail to carry out the
reasonable and lawful instructions of your supervisor or the Cubist Board of
Directors that are consistent with your duties.


 


(b)                                 “Good Reason”
means: (i) the failure of Cubist to employ you in your current or a
substantially similar position, without regard to title, such that your duties
and responsibilities are materially diminished without your consent (ii) a material
reduction in your total target cash compensation  without your consent (unless such reduction is
in connection with a proportional reduction in compensation to all or
substantially all of Cubist’s employees); or (iii) a relocation of your primary
place of employment more than 35 miles from 


 


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your current site of employment without
your consent; provided however, if any of these conditions occur, you are
required to provide notice of any such condition to Cubist’s Board of Directors
within 60 days of the initial occurrence of the condition, and Cubist will then
have 30 days to remedy the condition, prior to the existence of such condition
being deemed to be “Good Reason.


 


(c)                                  a “Change of Control” occurs: (i) when any
person or entity other than Cubist or one of its subsidiaries becomes the owner
more than  fifty percent (50%) of Cubist’s
common stock or (ii) upon the effective date of an agreement of acquisition,
merger, or consolidation that has been approved by Cubist’s stockholders and
that contemplates that all or substantially all of the business and/or assets
of Cubist shall be owned or otherwise controlled by another person or entity
upon the effective date of such agreement.


 


(d)                                 “Bonus”
shall mean the greater of either (i) the current year target annual bonus amount
or (ii) the previous year’s actual bonus amount.


 


2.                                       Severance.  (a) Except as set forth in Section 2(b)
below, in the event that your employment is terminated by Cubist for any reason
other than for Cause, then, following receipt by Cubist of your signed release as
more fully described in Section 7 below, Cubist shall pay you an amount equal
to eighteen (18) months of your then-current base salary, with such payment to
be made in twelve (12) equal semi-monthly installments.


 


(b) In the event that, within
twenty-four (24) months after a Change of Control, your employment is
terminated either (i) by Cubist for any reason other than for Cause or (ii) by
you for Good Reason, then Cubist shall make a one-time, lump-sum payment to you
equal to eighteen (18) months of your then current base salary plus Bonus on
the later of (i) your termination date or (ii) the eighth day following receipt
by Cubist of your signed release.


 


Notwithstanding any other
provision with respect to the timing of payments under this Section 2, in order
to comply with the requirements of Section 409A of the Internal Revenue Code of
1986 (“Section 409A”), any payment or portion thereof, to which you are
entitled under this Section 2 which is not exempt from the application of
Section 409A’s “six month delay” provision (in Cubist’s sole discretion), shall
be withheld until the first business day of the seventh month following your
termination. At such time, you shall be paid the remaining balance otherwise
owed to you under this Section 2 in a lump sum.


 


3.                                       Withholding.  All payments made by Cubist under this
Agreement shall be reduced by any tax or other amounts required to be withheld
by Cubist under applicable law.


 


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4.                                       Medical and Dental Benefits.  In the event that
your employment is terminated by Cubist for any reason other than for Cause, or
by you for Good Reason within twenty four (24) months after a Change of Control,
then Cubist will maintain your medical and dental insurance coverage for a
period of up to eighteen (18) months after the month in which your employment
terminates, provided that you pay the employee portion for such coverage by
making a payment to Cubist during the first five (5) days of any month in which
you elect to continue such coverage. 
Except for any right you have to continue participation in Cubist’s
group health and dental plans as provided herein or under the federal law known
as “COBRA,” all employee benefits shall terminate in accordance with the terms
of the applicable benefit plans as of the date of termination of your
employment. The “qualifying event” under COBRA, which triggers your right to
continue your health insurance post employment, shall be deemed to have
occurred on your termination date.


 


5.                                       Equity Acceleration.  In
the event that, within twenty-four (24) months after a Change of Control, your
employment is terminated either (i) by Cubist for any reason other than for
Cause or (ii) by you for Good Reason, then all outstanding unvested stock options
and/or restricted stock awards granted to you under any Cubist equity plan
prior to the Change of Control shall become exercisable and vested in full, and
all restrictions thereon shall lapse, notwithstanding any vesting schedule or
other provisions to the contrary in the agreements evidencing such options or
awards, and Cubist and you hereby agree that such stock option agreements and
restricted stock awards are hereby, and will be deemed to be, amended to give
effect to this provision.


 


6.                                       No Contract of Employment.  This Agreement is not a contract
of employment for a specific term, and your employment is “At Will” and may be
terminated by Cubist at any time.


 


7.                                       Employee Release.  Any obligation of Cubist to provide you
severance payments or other benefits under this Agreement is expressly
conditioned upon your reviewing and signing (and not revoking during any
applicable revocation period) a general release of claims in a form reasonably
satisfactory to Cubist within the time period specified in such release.  Cubist shall provide you with the general
release promptly after the date on which you give or receive, as the case may
be, notice of termination of your employment.


 


8.                                       Assignment.  You shall not make any assignment of this
Agreement or any interest in it, by operation of law or otherwise, without the
prior written consent of Cubist.  Cubist
may assign its rights and obligations under this Agreement without your
consent. This Agreement shall inure to the benefit of and be binding upon you
and Cubist, and each of our respective successors, executors, administrators,
heirs and permitted assigns, including any organization involved in a Change of
Control.


 


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9.                                       Severability.  If any portion or provision 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 hereof shall be valid and enforceable
to the fullest extent permitted by law.


 


10.                                 Miscellaneous.  This
Agreement will commence on the date hereof and will expire three (3) years from
the date hereof, unless Cubist experiences a Change of Control prior to the
expiration of the term of this Agreement, in which case this Agreement will
expire on the later of: (a) three (3) years from the date hereof or (b) two (2)
years from the date of the closing of such Change of Control.  This Agreement sets forth the entire
agreement between you and Cubist in connection with the subject matter hereof,
and replaces all prior and contemporaneous communications, agreements and
understandings, written or oral, with respect to the subject matter hereof,
other than any obligations set forth in your employee confidentiality agreement
with Cubist, which obligations shall remain in full force and effect.  In consideration of the benefits provided to
you hereunder, you agree that, in the event of your termination from Cubist,
such benefits shall be in complete satisfaction of any and all obligations that
Cubist may have to you.  This Agreement may
not be modified or amended, and no breach shall be deemed to be waived, unless
agreed to in writing by you and an expressly authorized representative of
Cubist.  This Agreement may be executed
in two counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument.  This Agreement shall be governed by the laws
of the Commonwealth of Massachusetts, without regard to its conflicts of laws
principles, and all disputes hereunder shall be adjudicated in the courts of
the Commonwealth of Massachusetts, to whose personal jurisdiction you hereby
consent.


 


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If
the foregoing is acceptable to you, please sign both copies of this letter in
the space provided, at which time this letter will take effect as a binding
agreement between you and Cubist.  Please
keep one original for your records and return one original to me.


 


	
   

  	
  Cubist Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Michael W. Bonney

  
	
   

  	
  Date: 

  



 


Accepted and Agreed:


 


 


	
  By:

  	
   

  	
   

  
	
  Name: 

  	
   

  
	
  Date: 

  	
   

  



 


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Retention Letter Details


 


The Retention Letters by and between Cubist and Lindon M. Fellows,
David W.J. McGirr, and Robert J. Perez have an effective date of October 9,
2007


 


The
Retention Letter by and between Cubist and Steven C. Gilman has an effective
date of August 11, 2008


 


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