EX-10.25



 Exhibit 10.25 

Cerulean Pharma Inc. 

Change in Control Severance Plan 

1. Establishment of Plan. Cerulean Pharma Inc. (the “Company” or “Cerulean”) hereby
establishes an unfunded severance benefits plan (the “Plan”) that is intended to be a welfare benefit plan within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). The Plan is in effect for covered employees whose employment terminates under circumstances specified herein following a Change in Control (defined below) occurring after March 7, 2012 (the “Effective
Date”) and before the termination of this Plan. Except as set forth in Section 5(1) of this Plan, this Plan supersedes any and all severance plans or separation policies applying to covered employees that may have been in effect before
the Effective Date throughout the Company with respect to any termination of employment during the Protected Period (defined below). 

2. Purpose. The purpose of the Plan is to establish the conditions under which covered employees (defined below) will receive
severance benefits described herein if employment with the Company (or its successor in a Change in Control) terminates during the Protected Period under the circumstances specified herein. The severance benefits paid under the Plan are intended to
assist employees in making a transition to new employment. 
 3. Coverage. Covered employees may be entitled to receive the
severance benefits under the Plan if the Company terminates their employment without “Cause” (defined below) or they resign for “Good Reason” (defined below) within the one-year period following the closing of the Change in
Control (the “Protected Period”). In order to receive the severance benefits under the Plan, covered employees must meet the eligibility and other requirements provided below in Sections 5 and 6 of the Plan. 

A. To be a covered employees, an individual must (i) be a regular full-time
employee (either exempt or non-exempt) who has a title of Vice President or higher (ii) whose employment with the Company is terminated by the Company without Cause or by the employee for Good Reason
during the Protected Period (“covered employees” or “participants”) and (iii) who is designated as eligible to receive severance benefits under the Plan as provided in Section 5. Part-time employees
otherwise satisfying the criteria to be a covered employee is eligible to be designated as covered employees under the Plan and to therefore be eligible for severance benefits under the Plan solely to the extent designated by the Plan Administrator.
Temporary employees are not eligible for severance benefits under the Plan. 
 B. For the purpose of this Plan,
“regular full-time employee” is an employee, other than a temporary employee, normally scheduled to work at least 32 hours a week unless the Company’s local practices, as from time to
time in force, whether or not in writing, establish a different hours threshold for a regular full-time employee. A “part-time employee” is an employee who is not a full-time employee and is treated as such by the Company. A
“temporary employees” is an employee treated as such by the Company, whether or not in writing. An employee’s full-time, part-time or temporary 








 
status for the purpose of this Plan is determined by the Plan Administrator (defined below) upon review of the employee’s status immediately before termination. 

C. Any person who is classified by the Company as an independent contractor or third party employee is not eligible for
severance benefits even if such classification is modified retroactively. 
 4. Definitions. For purposes of this Plan, 

A. “Change in Control” shall mean the occurrence of any of the following events: 

 

	 	(i)	any merger or consolidation that results in the voting securities of Cerulean outstanding immediately prior thereto representing (either by remaining outstanding or by being converted into voting securities of the
surviving or acquiring entity) less than 50% of the combined voting power of the voting securities of Cerulean or such surviving or acquiring entity outstanding immediately after such merger or consolidation; 


 

	 	(ii)	any sale of all or substantially all of the assets of Cerulean; 

  

	 	(iii)	the complete liquidation or dissolution of Cerulean; or 

  

	 	(iv)	the acquisition of “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act) of securities of Cerulean representing 50% or more of the combined voting power of Cerulean’s then outstanding
securities (other than through a merger or consolidation or an acquisition of securities directly from Cerulean) by any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than Cerulean, any trustee or
other fiduciary holding securities under an employee benefits plan of Cerulean or any corporation owned directly or indirectly by the stockholders of Cerulean in substantially the same proportion as their ownership of stock of Cerulean;


 provided, however, that no event shall constitute a Change in Control unless: (A) such event results in proceeds
received by Cerulean’s stockholders or by Cerulean, as the case may be, on or before the closing date of such event, in an amount equal to or greater than $150 million (such amount including any amount retained by the acquiring entity in an
escrow to secure indemnification obligations) and (B) such event or occurrence constitutes a change in the ownership or effective control of Cerulean, or a change in the ownership of a substantial portion of the assets of Cerulean, as defined
in Treasury Regulation §§1.409A-3(i)(5)(v), (vi) and (vii). 
 B. “Cause” shall mean
(i) a material breach of any material term of any offer letter, employment or other similar agreement or the Non-Disclosure, Non-Competition and Assignment of Intellectual Property Agreement, in each case between the participant


  
 2 








 
and the Company, (ii) a plea of guilty or nolo contendere to, or conviction of, the commission of a felony offense or a crime of dishonesty, (iii) repeated unexplained or unjustified
absences, refusals or failures to carry out the lawful directions of the Board of Directors of the Company (the “Board”) or the Chief Executive Officer, or the employee’s supervisor, or (iv) willful misconduct that results or is
reasonably likely to result in material harm to Cerulean. 
 C. “Good Reason” is defined as: (1) a
material diminution in the employee’s base compensation; (2) a material diminution in the employee’s authority, duties, or responsibilities, provided that a change in scope solely as a result of the Company becoming a subsidiary of
another corporation (including a publicly-traded corporation) will not constitute Good Reason; (3) a material change in the geographic location at which the Officer must perform the services; or (4) any other action or inaction that
constitutes a material breach by the Company of any agreement under which the employee provides services. 
 In order to establish a
“Good Reason” for terminating employment, an employee must provide written notice to the Company of the existence of the condition giving rise to the Good Reason, which notice must be provided within 90 days of the initial existence of
such condition, the Company must fail to cure the condition within 30 days thereafter, and an employee’s termination of employment must occur no later than one year following the initial existence of the condition giving rise to Good Reason.

 5. Eligibility for Severance Benefits. The following employees will not be eligible for severance benefits, except
to the extent specifically determined otherwise by the Plan Administrator: (1) an employee who is a party to an employment, retention, or other agreement with the Company that provides for severance benefits; (2) an employee who is
terminated for Cause; (3) an employee who retires, terminates employment as a result of an inability to perform his duties due to physical or mental disability or dies; (4) an employee who voluntarily terminates his employment, except a
termination for Good Reason; (5) an employee who is employed for a specific period of time in accordance with the terms of a written employment agreement; (6) an employee who accepts employment with an acquirer of any of the businesses,
operations or assets of the Company or refuses an offer of such employment in a position providing comparable responsibilities and compensation. 

6. Release; Timing of Severance Benefits. Receipt of any severance benefits under the Plan requires that the covered employee:
(1) comply with the provisions of any applicable noncompetition, nonsolicitation, and other obligations to the Company; and (2) execute and deliver a suitable waiver and release under which the covered employee releases and discharges the
Company and its affiliates from and on account of any and all claims that relate to or arise out of the employment relationship between the Company and the covered employee, which release shall be provided by the Company to the covered employee on
or before his or her last day of employment with the Company (the “Release”). To be eligible for the receipt of severance benefits under the Plan, the Release must be executed by the covered employee and any applicable revocation
period with respect thereto must lapse within 60 days following the 

  
 3 








 
covered employee’s termination of employment. The “Severance Pay” (as defined below) will be paid in a lump sum within 10 business days after the applicable revocation
period with respect to such Release lapses. The “Benefits Continuation” (as defined below) will be paid in the amount and at the time such premium payments are made to other participants in the Company’s health benefit plans with the
same coverage, commencing within 10 business days after the applicable revocation period with respect to such Release lapses. The “Equity Acceleration” (as defined below) shall occur as of the date the covered employee’s employment is
terminated; provided, however, that (x) the employee may not exercise or dispose of any such otherwise unvested portions of the equity grants until the Release has become binding (as provided above) and (y) provided further that, if the
Release does not become binding within such 60 days the portion of the employee’s equity grants that became vested or with respect to which the substantial risk of forfeiture lapsed pursuant to the earlier part of this sentence shall expire or
be forfeited, as applicable, as of the date of termination from employment. 
 To the extent that a participant dies following execution of
the Release but prior to payment or provision of the Severance Pay, the Benefits Continuation or the Equity Acceleration, such severance benefits shall be provided to the estate of such participant. 

The payment and provision of severance benefits under the Plan shall be subject to the terms and conditions set forth in
Exhibit A. 
 7. Cash Severance. The cash portion of the severance benefits to be paid (“Severance
Pay”) will be equal to the amount of the covered employee’s monthly base salary multiplied by the “Severance Period,” as provided in the table below. In calculating the Severance Pay, the “base salary” shall be the
base rate of pay as in effect immediately before termination (or prior to the Change of Control, if greater) and exclusive of any bonuses, overtime pay, shift differentials, “adders,” any other form of premium pay, or other forms of
compensation. 
  

			
	Job title of participant	 	Severance Period
	 	 
	 Senior Vice
President and above
	 	Six (6) months + one (1) additional month for each Year of Service (defined below), up to a maximum of nine (9) months
	 	 
	 Vice
President
	 	Six (6) months

 The covered employee’s years of service (“Years of Service”) with the Company are calculated by dividing
the total number of days between and including an employee’s hire date and termination date by 365 and taking that number to the second decimal point. 

8. Other Severance Benefits. In addition to the foregoing Severance Pay, the severance benefits under the Plan shall include the
following: 

  
 4 








 A. Company contributions to the cost of COBRA (Consolidated Omnibus Budget
Reconciliation Act) coverage on behalf of the covered employee and any applicable dependents for no longer than the Severance Period if the covered employee elects COBRA coverage, and only so long as such coverage continues in force. Such costs
shall be determined on the same basis as the Company’s contribution to Company-provided health and dental insurance coverage in effect immediately before termination of the covered employee’s employment for an active employee with the same
coverage elections; provided that if the covered employee commences new employment and is eligible for a new group health plan, the Company’s continued contributions toward health and dental coverage shall end when the new employment begins
(“Benefits Continuation”); 
 B. Full vesting of all of the covered employee’s unvested equity grants,
other than equity grants with vesting based on performance and/or the achievement of milestones (“Equity Acceleration”); and 

C. The amount of any bonus for the prior year that was approved but not yet paid to the covered employee at the time of the
employee’s termination of employment, paid in a manner and timing consistent with the payments to other similarly situated employees and consistent with the requirements of Section 409A of the Code. 

9. Recoupment. If a covered employee fails to comply with the terms of the Plan, including the provisions of Section 6
above, the Company may require payment to the Company of any Severance Pay, Benefits Continuation or any value upon vesting or exercise of any equity grants the vesting of which was accelerated under the provision for Equity Acceleration that the
covered employee has already received to the extent permitted by applicable law and with the “value” determined in the sole discretion of the Plan Administrator. Payment is due in cash or by check within 10 days after the Company
provides notice to a covered employee that it is enforcing this provision. Any Severance Pay, Benefits Continuation or Equity Acceleration not yet received will be immediately forfeited. 

10. Withholding. The Company may withhold from any payment or benefit under the Plan: (1) any federal, state, or local
income or payroll taxes required by law to be withheld with respect to such payment; (2) such sum as the Company may reasonably estimate is necessary to cover any taxes for which the Company may be liable and which may be assessed with regard
to such payment; and (3) such other amounts as appropriately may be withheld under the Company’s payroll policies and procedures from time to time in effect. 

11. Plan Administration. 

A. Plan Administrator. The Plan Administrator shall be the Board or a Committee thereof designated by the Board (the
“Committee”); provided, however, that the Board or such Committee may in its sole discretion appoint a new Plan Administrator to administer the Plan following a Change in Control. The Chief Executive Officer of the Company may be
designated by the Board or the Committee as the Plan Administrator 

  
 5 








 
solely for purposes of determining whether any or all part-time employees are eligible to be designated as a covered employee entitled to severance benefits under the Plan. The Plan Administrator
shall also serve as the Named Fiduciary of the Plan under ERISA. The Plan Administrator shall be the “administrator” within the meaning of Section 3(16) of ERISA and shall have all the responsibilities and duties contained therein.

 The Plan Administrator can be contacted at the following address: 

Change in Control Severance Plan Administrator 

c/o Cerulean Pharma Inc. 
 840
Memorial Drive, 5th Floor 
 Cambridge, MA 02139 

B. Decisions, Powers and Duties. The general administration of the Plan and the responsibility for carrying out its
provisions shall be vested in the Plan Administrator. The Plan Administrator shall have such powers and authority as are necessary to discharge such duties and responsibilities which also include, but are not limited to, interpretation and
construction of the Plan, the determination of all questions of fact, including, without limit, eligibility, participation and benefits, the resolution of any ambiguities and all other related or incidental matters, and such duties and powers of the
plan administration which are not assumed from time to time by any other appropriate entity, individual or institution. The Plan Administrator may adopt rules and regulations of uniform applicability in its interpretation and implementation of the
Plan. 
 The Plan Administrator shall discharge its duties and responsibilities and exercise its powers and authority in its sole discretion
and in accordance with the terms of the controlling legal documents and applicable law, and its actions and decisions that are not arbitrary and capricious shall be binding on any employee, and employee’s spouse or other dependent or
beneficiary and any other interested parties whether or not in being or under a disability. 
 12. Indemnification. To the extent
permitted by law, all employees, officers, directors, agents and representatives of the Company shall be indemnified by the Company and held harmless against any claims and the expenses of defending against such claims, resulting from any action or
conduct relating to the administration of the Plan, whether as a member of the Committee or otherwise, except to the extent that such claims arise from gross negligence, willful neglect, or willful misconduct. 

13. Plan Not an Employment Contract. The Plan is not a contract between the Company and any employee, nor is it a condition of
employment of any employee. Nothing contained in the Plan gives, or is intended to give, any employee the right to be retained in the service of the Company, or to interfere with the right of the Company to discharge or terminate the employment of
any employee at any time and for any reason. No employee shall have the right or claim to benefits beyond those expressly provided in this Plan, if any. All rights and 

  
 6 








 
claims are limited as set forth in the Plan. 
 14. Severability. In
case any one or more of the provisions of this Plan (or part thereof) shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions hereof, and this Plan
shall be construed as if such invalid, illegal or unenforceable provisions (or part thereof) never had been contained herein. 
 15.
Non-Assignability. No right or interest of any covered employee in the Plan shall be assignable or transferable in whole or in part either directly or by operation of law or otherwise, including,
but not limited to, execution, levy, garnishment, attachment, pledge or bankruptcy. 
 16. Integration With Other Pay or Benefits
Requirements. The severance payments and benefits provided for in the Plan are the maximum benefits that the Company will pay to covered employees on a termination of employment following a Change in Control, except to the extent otherwise
specifically provided in a separate agreement. To the extent that the Company owes any amounts in the nature of severance benefits under any other program, policy or plan of the Company that is not otherwise superseded by this Plan, or to the extent
that any federal, state or local law, including, without limitation, so-called “plant closing” laws, requires the Company to give advance notice or make a payment of any kind to an employee because
of that employee’s involuntary termination due to a layoff, reduction in force, plant or facility closing, sale of business, or similar event, the benefits provided under this Plan or the other arrangement shall either be reduced or eliminated
to avoid any duplication of payment. The Company intends for the benefits provided under this Plan to partially or fully satisfy any and all statutory obligations that may arise out of an employee’s involuntary termination for the foregoing
reasons and the Company shall so construe and implement the terms of the Plan. 
 17. Amendment or Termination. The Board may
amend, modify, or terminate the Plan at any time in its sole discretion; provided, however, that (i) any such amendment, modification or termination made prior to a Change in Control that adversely affects the rights of any covered employee
shall be approved by a majority of the Company’s Board of Directors, including the Chief Executive Officer, (ii) no such amendment, modification or termination may affect the rights of a covered employee then receiving payments or benefits
under the Plan without the consent of such person, and (iii) neither the Board, the Company, any successor to the Company nor the Plan Administrator may amend, modify or terminate the Plan for one year following a Change in Control. The Board
intends to review the Plan at least annually. 
 18. Governing Law. The Plan and the rights of all persons under the Plan
shall be construed in accordance with and under applicable provisions of ERISA, and the regulations thereunder, and the laws of the Commonwealth of Massachusetts (without regard to conflict of laws provisions) to the extent not preempted by federal
law. 

  
 7 








 EXHIBIT A 

Section 409A of the Code 

It is expected that the payments and benefits provided under this Plan will be exempt from the application of Section 409A of the
Code, and the guidance issued thereunder (“Section 409A”). The Plan shall be interpreted consistent with this intent to the maximum extent permitted and generally, with the provisions of Section 409A. A termination of
employment shall not be deemed to have occurred for purposes of any provision of this Plan providing for the payment of any amounts or benefits upon or following a termination of employment (which amounts or benefits constitute nonqualified deferred
compensation within the meaning of Section 409A) unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Plan, references to a
“termination,” “termination of employment” or like terms shall mean “separation from service”. Neither the participant nor the Company shall have the right to accelerate or defer the delivery of any payment or benefit
except to the extent specifically permitted or required by Section 409A. 
 Notwithstanding the foregoing, to the extent the
severance payments or benefits under this Plan are subject to Section 409A, the following rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to participants under this Plan: 

A. Each installment of the payments and benefits provided under this Plan will be treated as a separate “payment”
for purposes of Section 409A. Whenever a payment under this Plan specifies a payment period with reference to a number of days (e.g., “payment shall be made within 10 days following the date of termination”), the actual date of
payment within the specified period shall be in the Company’s sole discretion. Notwithstanding any other provision of this Plan to the contrary, in no event shall any payment under this Plan that constitutes “non-qualified deferred
compensation” for purposes of Section 409A be subject to transfer, offset, counterclaim or recoupment by any other amount unless otherwise permitted by Section 409A. 

B. Notwithstanding any other payment provision herein to the contrary, if the Company or appropriately-related affiliates
become publicly-traded and a covered employee is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B) with respect to such entity, then each of the following
shall apply: 
 (i) With regard to any payment that is considered “non-qualified deferred compensation” under
Section 409A payable on account of a “separation from service,” such payment shall be made on the date which is the earlier of (A) the day following the expiration of the six month period measured from the date of such
“separation from service” of the covered employee, and (B) the date of the covered employee death (the “Delay Period”) to the extent required under Section 409A. Upon the expiration of the Delay Period, all
payments delayed pursuant to this provision (whether otherwise payable in a single sum or in 

  
 8 








 
installments in the absence of such delay) shall be paid to or for the covered employee in a lump sum, and all remaining payments due under this Plan shall be paid or provided for in accordance
with the normal payment dates specified herein; and 
 (ii) To the extent that any benefits to be provided during the Delay
Period are considered “non-qualified deferred compensation” under Section 409A payable on account of a “separation from service,” and such benefits are not otherwise exempt from Section 409A, the covered employee shall
pay the cost of such benefits during the Delay Period, and the Company shall reimburse the covered employee, to the extent that such costs would otherwise have been paid by the Company or to the extent that such benefits would otherwise have been
provided by the Company at no cost to the covered employee, the Company’s share of the cost of such benefits upon expiration of the Delay Period. Any remaining benefits shall be reimbursed or provided by the Company in accordance with the
procedures specified in this Plan. 
 C. The severance benefits payable hereunder are conditioned on the effectiveness of
the Release required under Section 6 of the Plan. Once any statutory revocation period with respect to the Release has expired, the following shall apply: 

(i) To the extent any severance benefits to be provided are not “non-qualified deferred compensation” for purposes
of Section 409A, then such benefits shall commence upon the first scheduled payment date immediately after the date the Release is executed and no longer subject to revocation (the “Release Effective Date”). The first such cash
payment shall include all amounts that otherwise would have been due prior thereto under the terms of this Agreement applied as though such payments commenced immediately upon the termination of covered employee’s employment with the Company,
and any payments made after the Release Effective Date shall continue as provided herein. The delayed benefits shall in any event expire at the time such benefits would have expired had such benefits commenced immediately following the termination
of covered employee’s employment with the Company. 
 (ii) To the extent any such severance benefits to be provided are
“non-qualified deferred compensation” for purposes of Section 409A, then the Release must become irrevocable within 60 days of the date of termination and benefits shall be made or commence upon the date provided in Section 6,
provided that if the 60th day following the termination of Executive’s employment with the Company falls in the calendar year following the calendar year containing the date of termination, the benefits will be made no earlier than the first
business day of that following calendar year. The first such cash payment shall include all amounts that otherwise would have been due prior thereto under the terms of this Agreement had such payments commenced immediately upon the termination of
Executive’s employment with the Company, and any payments made after the 

  
 9 








 
first such payment shall continue as provided herein. The delayed benefits shall in any event expire at the time such benefits would have expired had such benefits commenced immediately following
the termination of Executive’s employment with the Company. 
 D. The Company makes no representations or warranties
and shall have no liability to any participant or any other person, other than with respect to payments made by the Company in violation of the provisions of this Plan, if any provisions of or payments under this Plan are determined to constitute
deferred compensation subject to Section 409A of the Code but not to satisfy the conditions of that section. 

  
 10