Exhibit 10.20


 


Executive Officer Compensation Summary


 


The executive officers of Momenta
Pharmaceuticals, Inc. (the “Company”) are: (i) Craig A. Wheeler,
President and Chief Executive Officer; (ii) John E. Bishop, Senior Vice
President, Pharmaceutical Sciences; (iii) Steven B. Brugger, Chief
Operating Officer; (iv) James M. Roach, M.D., Chief Medical Officer and
Senior Vice President, Development; (v) Richard P. Shea, Senior Vice
President, Chief Financial Officer and Treasurer; and (vi) Ganesh
Venkataraman, Chief Scientific Officer and Senior Vice President, Research.


 


The compensation structure for executive
officers of the Company consists of three components: (i) base salary, (ii) discretionary
cash bonuses and (iii) stock options and other equity-based awards.


 


Employment
Agreements With Executive Officers


 


The Company has entered into employment
agreements with Craig A. Wheeler and Ganesh Venkataraman. The annual salary,
severance and termination provisions of such agreements are as follows:


 


Craig A. Wheeler


 


On August 22, 2006, the Company entered
into an employment agreement with Craig A. Wheeler, pursuant to which Mr. Wheeler
serves as the Company’s President, Chief Executive Officer and as a Class II
director of the Company.  Pursuant
to his employment agreement, Mr. Wheeler initially received an annual base
salary of $500,000, subject to annual increases by the Company’s Board of
Directors.  Mr. Wheeler’s annual
base salary for 2007 was $500,000 and was increased to $515,000 for 2008.  Beginning with fiscal year 2007, Mr. Wheeler
is eligible to receive bonuses of up to 150% of his base salary for the
applicable fiscal year, with an annual bonus target of 60% of the
then-applicable base salary.  The
Compensation Committee of the Company’s Board of Directors (the “Committee”)
approved a $273,000 bonus paid to Mr. Wheeler in 2008 based on Company
achievements in 2007.  Mr. Wheeler
is also entitled to specified benefits, including: (i) participation in
Company sponsored benefit programs, (ii) reimbursement for life insurance
premium expenses and related tax gross-up payments, and (iii) reimbursement
of tax and financial advisor fees incurred by Mr. Wheeler during the
period of his employment.


 


Mr. Wheeler’s employment agreement
provides for the grant or issuance, as applicable, of the following stock-based
awards to Mr. Wheeler. On August 22, 2006, the Company granted Mr. Wheeler
an option to purchase 375,000 shares of the Company’s common stock, $0.0001 par
value per share (the “Common Stock”), at an exercise price of $16.18  per share (the “Initial Option Grant”).
The Initial Option Grant vested as to 25% of the shares subject to such option
on August 22, 2007 and as to 6.25% of the shares subject to such option at
the end of each three-month period thereafter. Additionally, on August 22,
2006, the Company issued to Mr. Wheeler 100,000 shares of restricted
Common Stock (the “Time-Based Grant”). The shares of Common Stock subject to
the Time-Based Grant vest and become free from forfeiture on the fourth anniversary
of the date of issuance. On January 17, 2007, the Company issued to Mr. Wheeler
175,000 shares of restricted Common Stock (the “Performance Grant”). Subject to
the acceleration provisions set forth in Mr. Wheeler’s employment
agreement, the shares of Common Stock subject to the Performance Grant shall
vest and become free from forfeiture upon fulfillment of any of the following
conditions:


 


(1) on the date that the Board of Directors
certifies that the Company (or any of the Company’s partners or collaborators)
has commercially launched M-Enoxaparin in the United States, provided that (A) such
commercial launch shall have occurred prior to January 17, 2011 and (B) Mr. Wheeler
is then employed by the Company.


 


(2) on January 17, 2011, provided that Mr. Wheeler
is then employed by the Company and the Board of Directors certifies that any
one of the three following events shall have occurred: (A) the Company has
consummated a public offering of shares of its Common Stock pursuant to a
registration statement filed with the Securities and Exchange Commission with
gross proceeds to the Company totaling at least $40.0 million; (B) the
Company has executed a collaboration agreement with an unaffiliated third party
partner (and has fulfilled the conditions to closing set forth in such
agreement or related agreement(s)), the terms of which shall include an
irrevocable commitment from such third party to provide cash payments of at
least $40.0 million to the Company within four years of the date of execution
of such collaboration agreement, provided that such unaffiliated third party
partner shall not include any party (i) with which the Company has an
executed agreement or (ii) with which the Company has actively negotiated
a collaboration, in each case prior to the date of the employment agreement; or
(C) the closing price of the Common Stock on the Nasdaq Global Market has
equaled or exceeded $25.00 over a period of 20 consecutive trading days (such
price to be adjusted in the event of a stock split, reverse stock split, stock 


 

















 


dividend,
recapitalization, combination of shares, reclassification of shares, spin-off
or other similar change in capitalization or event).


 


Notwithstanding the foregoing, if at any time
during the four year-period ending on January 17, 2011 the Board of
Directors elects to abandon the M-Enoxaparin program and no longer pursue the
commercialization of M-Enoxaparin either for strategic reasons or as a result
of adverse events in the regulatory process, the shares of Common
Stock subject to the Performance Grant shall vest and become free from the
forfeiture on the date that the Board certifies that any one of the three
events set forth in item (2) above shall have occurred.


 


(3) in the event the shares of Common Stock
subject to the Performance Grant do not vest before January 17, 2011 in
accordance with the conditions set forth in items (1) or (2) above,
provided that Mr. Wheeler is then employed by the Company, the date the
Board of  Directors certifies that (A) the Company has
commercially launched M-Enoxaparin in the United States or (B) any one of
the three events set forth in item (2)(A)-(C) above shall have occurred,
in each case on or after January 17, 2011 but prior to January 17,
2013.


 


In addition to the
Initial Option Grant, the Time-Based Grant and the Performance Grant, on February 22,
2008, the Company granted Mr. Wheeler (i) 75,000 shares of restricted
Common Stock subject to vesting over four (4) years (the “First Target
Grant”) and (ii) an option to purchase 100,000 shares of Common Stock
subject to vesting over four (4) years, with an exercise price of $7.41
per share (the “Second Target Grant”).


 


In the event that Mr. Wheeler’s
employment is terminated by the Company without cause, by reason of his death
or disability or by him for good reason, other than in connection with a change
in control, (as those terms are defined in the employment agreement), (i) the
vesting schedules applicable to the Initial Option Grant, the Time-Based Grant
and the Performance Grant will be fully accelerated and the shares thereunder
fully vested (except in the case of a termination without cause, in which case
a total of 75,000 of the shares subject to the Performance Grant shall
immediately vest), (ii) the vesting schedules applicable to the First
Target Grant and Second Target Grant will accelerate by an additional 12 months
and (iii) the vesting schedule applicable to all future stock-based awards
held by Mr. Wheeler at the time of such termination will accelerate by
25%.


 


In the event Mr. Wheeler’s
employment is terminated by the Company without cause within 24 months
following a change of control (as such term is defined in the employment
agreement) or is terminated by Mr. Wheeler for good reason within 24
months following a change of control, the unvested portions of the Initial
Option Grant, the Time-Based Grant, the First Target Grant, the Second Target
Grant, the Performance Grant and all future stock-based awards shall fully and
immediately vest.


 


Under his employment
agreement, Mr. Wheeler or the Company may terminate his employment at any
time, subject to the following severance benefits. In the event Mr. Wheeler’s
employment is terminated without cause by the Company, as the result of death
or disability or Mr. Wheeler terminates his employment for good reason, other
than in connection with a change in control, Mr. Wheeler will receive a
lump sum cash payment equal to (i) 12 months of the highest base salary in
effect during the 12 months prior to the date of termination and (ii) the
greater of 60% of Mr. Wheeler’s base salary or his last paid bonus.


 


If Mr. Wheeler
terminates his employment for good reason within 24 months following a change
of control of the Company, or if the Company terminates Mr. Wheeler’s
employment without cause within 24 months following a change of control, Mr. Wheeler
will receive a lump-sum cash payment equal to (i) 24 months of Mr. Wheeler’s
highest base-salary in effect during the 12 months prior to termination of his
employment, (ii) an amount equal to the greater of 60% of Mr. Wheeler’s
last two years of base salary and an amount equal to two times the last bonus
paid to by Mr. Wheeler and (iii) if the aggregate purchase price paid
in a change of control transaction equals or exceeds $1.1 billion, an additional
amount equal to 12 months of base salary in effect at the time of Mr. Wheeler’s
termination and the greater of 60% of one year of base salary and the last
bonus paid to Mr. Wheeler.


 


Ganesh Venkataraman


 


The Company entered into an employment
agreement with Dr. Venkataraman, dated June 13, 2001, which was
amended and restated on April 10, 2002. Pursuant to this agreement, Dr. Venkataraman
is to receive an annual base salary subject to increases upon review at least
once every 12 months.  Dr. Venkataraman’s
base salary during 2007 was $290,928, which was increased to $302,565 for
2008.  Under the agreement, as amended,
either the Company or Dr. Venkataraman may terminate his employment
at any time, subject to continuation of salary payment and benefits for three months
if the 


 

















 


Company terminates Dr. Venkataraman’s
employment without cause or Dr. Venkataraman terminates his employment for
good reason.


 


Executive Retention
Agreements with Certain Executive Officers


 


On March 14,
2007, the Company entered into Executive Retention Agreements with Mr. Bishop,
Mr. Brugger, Mr. Shea and Dr. Venkataraman, and on February 22,
2008 the Company entered into an Executive Retention Agreement with Dr. Roach.
Pursuant to the Executive Retention Agreements,
if the Company terminates an executive’s employment without cause (as defined
in the Executive Retention Agreement) or the Executive terminates employment
with good reason (as defined in the Executive Retention Agreement) within one
year following a change in control of the Company (as defined in the Executive
Retention Agreement), the Company will
provide the executive (i) accrued obligations as of the date of such
termination, consisting of accrued and unpaid salary, value of accrued vacation
days and amount of unreimbursed and incurred expenses, (ii) acceleration
of each outstanding award then held by the executive under the Company’s
outstanding equity incentive  plans,
(iii) the sum of (A) the amount equal to the executive’s annual base
salary during the one year period prior to the date of termination and (B) the
greater of (x) the target bonus for the executive for the fiscal year in
which the termination occurs and (y) the annual bonus paid to the
executive for the most recently completed fiscal year, and (iv) insurance,
medical, dental, health and accident and disability benefits as in effect
immediately prior to the termination date for a period of 12 months. The
Executive Retention Agreements automatically renew for successive one year
terms unless 90 days prior to the end of any calendar year, the Company
provides written notice that the term shall not be extended.


 


Executive
Officer Compensation for 2007; 2008 Increases


 


The Committee approved the following
compensation, including base salary (effective January 1, 2008) to be paid
to the Company’s executive officers:


 


·                  Mr. Wheeler.
Pursuant to his employment agreement, the Committee approved a $273,000 bonus
paid in 2008 based on Company achievements in 2007. On February 22,
2008, the Company granted to Mr. Wheeler 75,000 shares of restricted
Common Stock and 100,000 stock options, as described above under the heading “Employment
Agreements with Executive Officers – Craig A. Wheeler.” Mr. Wheeler’s
annual base salary was increased to $515,000 for 2008 from $500,000 in 2007.


 


·                  Mr. Bishop. The Committee
approved a $90,428.55 bonus paid in 2008 based on Mr. Bishop’s and Company
achievements in 2007, the grant of an option to purchase 39,963 shares of
Common Stock, and an award of 10,800 shares of restricted stock. Mr. Bishop’s
annual base salary was increased to $283,379.28 for 2008 from $270,400.08 in
2007.


 


·                  Mr. Brugger.
The Committee approved a $146,575.41 bonus paid in 2008 based on Mr. Brugger’s
and Company achievements in 2007, the grant of an option to purchase 40,000
shares of Common Stock, and an award of 5,000 shares of restricted stock. Mr. Brugger’s
annual base salary was increased to $353,280.00 for 2008 from $345,000.00 in
2007.


 


·                  Mr. Shea. The Committee
approved a $85,995.00 bonus paid in 2008 based on Mr. Shea’s and Company
achievements in 2007, the grant of an option to purchase 34,750 shares of
Common Stock, and an award of 10,800 shares of restricted stock. Mr. Shea’s
annual base salary was increased to $280,800.00 for 2008 from $270,000.00 in
2007.


 


·                  Dr. Venkataraman.
The Committee approved a $92,660.58 bonus paid in 2008 based on Dr. Venkataraman’s
and Company achievements in 2007, the grant of an option to purchase 34,750
shares of Common Stock, and an award of 5,000 shares of restricted stock. Dr. Venkataraman’s
annual base salary was increased to $302,565.16 for 2008 from $290,928.04 in
2007.


 


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