Exhibit 10.31


 





 


[                    ]


 


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 between Cubist and Lindon M. Fellows, David W.J.
McGirr, and Robert J. Perez are each dated October 9, 2007


 


The Retention Letter between Cubist and Steven C. Gilman is dated August 11,
2008


 


The Retention Letter between Cubist and Tamara L. Joseph is dated October 30,
2008


 


The Retention Letter between Cubist and Gregory Stea is dated February 12,
2009


 


The Retention Letter between Cubist and Santosh Vetticaden is dated July 17,
2009


 


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