Exhibit 10.40


 


 


April 28, 2003


 


 


Douglas Treco, Ph.D.


87 Brantwood Road


Arlington, MA  02476


 


Dear Doug:


 


In connection with the
termination of your employment with Transkaryotic Therapies, Inc., (the
“Company”) on June 30, 2003, you are eligible to receive the severance benefits
described in the “Description of Severance Benefits” attached to this letter as
Attachment A if you sign and return this letter agreement to Linda Pettingell
by May 23, 2003.  By signing and
returning this letter agreement, you will be entering into a binding agreement
with the Company and will be agreeing to the terms and conditions set forth in
the numbered paragraphs below, including the release of claims set forth in
paragraph 3.  Therefore, you are advised
to consult with your attorney before signing this letter agreement and you may
take up to twenty-one (21) days to do so. 
If you sign this letter agreement, you may change your mind and revoke
your agreement during the seven (7) day period after you have signed it by
notifying Linda Pettingell of your revocation in writing.  If you do not so revoke, this letter
agreement will become a binding agreement between you and the Company upon the
expiration of the seven (7) day revocation period.


 


If you choose not to sign
and return this letter agreement by May 23, 2003 or if you timely revoke your agreement in writing, you shall not
receive any severance benefits from the Company.  You will, however, receive payment upon your termination for all
wages earned and any unused vacation time accrued through the Termination Date,
as defined in paragraph 1.  Also,
regardless of signing this letter, you may elect to continue receiving group
medical insurance pursuant to the federal “COBRA” law, 29 U.S.C. § 1161 et
seq.  All premium costs shall be
paid by you on a monthly basis for as long as, and to the extent that, you
remain eligible for COBRA continuation. 
You should consult the COBRA materials to be provided by the Company for
details regarding these benefits.  All
other benefits, including life insurance and long term disability, will cease
upon your Termination Date.  You will
have up to thirty (30) days after the Termination Date to exercise any vested
stock rights you may have (as provided for by the plans).  All unvested stock rights will be cancelled
on the Termination Date. All vested options must be vested within 30 days of
your termination date, with the exception of 55,000 options dated 1/22/98
(Numbers 00000428 and 00000429) and 1/27/99 (Numbers 00000598 and 00000599),
which may be exercised up until July 31, 2006. 
In return, you will immediately waive your rights to exercise 91,000
options (dated 2/4/00, Numbers 00000972 and 00000973; dated 12/13/00, Number
2000-667; dated 12/13/01, Numbers 2001-360 and 2001-


 


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359) and return the
option rights to the Company.


 


The following numbered
paragraphs set forth the terms and conditions, which will apply if you timely
sign and return this letter agreement and do not revoke it in writing within
the seven (7) day period:


 


1.               Termination
Date - Your effective date of termination from the Company is
June 30, 2003 (the “Termination Date”).


 


2.               Description of
Severance Benefits - The severance benefits paid to you if you timely
sign and return this letter are described in the “Description of Severance
Benefits” attached as Attachment A (the “severance benefits”).


 


3.              Release
- In consideration of the payment of the severance benefits, which you
acknowledge you would not otherwise be entitled to receive, you hereby fully,
forever, irrevocably and unconditionally release, remise and discharge the
Company, its officers, directors, stockholders, corporate affiliates,
subsidiaries, parent companies, agents and employees (each in their individual
and corporate capacities) (hereinafter, the “Released Parties”) from any and
all claims, charges, complaints, demands, actions, causes of action, suits,
rights, debts, sums of money, costs, accounts, reckonings, covenants,
contracts, agreements, promises, doings, omissions, damages, executions,
obligations, liabilities, and expenses (including attorneys’ fees and costs),
of every kind and nature which you ever had or now have against the Released
Parties arising out of your employment with and/or separation from the Company,
including, but not limited to, all employment discrimination claims under Title
VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., the Age
Discrimination in Employment Act, 29 U.S.C. § 621 et  seq., the
Americans With Disabilities Act of 1990, 42 U.S.C., §12101 et  seq.,
the Family and Medical Leave Act, 29 U.S.C. § 2601 et  seq., the
Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et
seq, and the Rehabilitation Act
of 1973, 29 U.S.C. § 701 et  seq., all as amended; all
claims arising out of the Fair Credit Reporting Act, 15 U.S.C. §1681 et  seq.,
the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1001 et
seq., the Massachusetts Fair Employment Practices Act., M.G.L. c.151B,
§1 et seq., the Massachusetts Civil Rights Act, M.G.L. c.12 §§11H and
11I, the Massachusetts Equal Rights Act, M.G.L. c.93, §102 and M.G.L. c.214,
§1C, the Massachusetts Labor and Industries Act, M.G.L. c.149, §1 et  seq.,
the Massachusetts Privacy Act, M.G.L. c. 214, §1B, and the Massachusetts
Maternity Leave Act, M.G.L. c. 149, §105(d), all as amended; all common law
claims including, but not limited to, actions in tort, defamation and breach of
contract; all claims to any non-vested
ownership interest in the Company, contractual or otherwise, including but not
limited to claims to stock or stock options; and any claim or damage
arising out of your employment with or separation from the Company (including a
claim for retaliation) under any common law theory or any federal, state or
local statute or ordinance not expressly referenced above; provided, however, that nothing in this
letter agreement prevents you from filing, cooperating with, or participating
in any proceeding before the EEOC or a state 


 


Fair Employment Practices Agency (except that you acknowledge that you
may not be able to recover any monetary benefits in connection with any such
claim, charge or proceeding).  This
release shall not be construed to release or waive any claims you may have in
the future for indemnification by the Company which are attached hereto as 


 


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Attachments B and C respectively.


 


4.               Non-Disclosure
and Non-Competition - You acknowledge and reaffirm your obligation to
keep confidential all non-public information concerning the Company which you
acquired during the course of your employment with the Company, as stated more
fully in the Confidentiality,
Inventions and Non-competition Agreement and the Nondisclosure
Agreement, both of which you executed at the inception of your employment and
which remain in full force and effect. 
You further acknowledge and reaffirm any other obligations under the Confidentiality, Inventions and Non-competition Agreement.  However, for the purposes of this letter
agreement, the parties agree that Paragraph 3 of the Confidentiality, Inventions and Non-competition Agreement shall only
apply to Amgen Inc, Biomarin Pharmaceutical Inc., Genzyme Corporation and/or
any of their respective subsidiaries and parent companies.  Should
the Company choose to publish information that you directed and/or were
materially involved in conceptualizing, executing or otherwise completing, you
will be recognized as an author or in an acknowledgement, as appropriate for
your contributions, and consistent with scientific publishing customs. In such
cases you will not unreasonably withhold your assistance in preparing
manuscripts for submission.  Should you,
in the pursuit of new employment, wish to present unpublished work that you
directed while at TKT, the Company shall not unreasonably withhold permission
to do so.


 


4.              Return of Company Property - You
confirm that you have returned to the Company all keys, files, records (and
copies thereof), equipment (including, but not limited to, computer hardware,
software and printers, wireless handheld devices, cellular phones, pagers,
etc.), Company identification, Company vehicles and any other Company-owned
property in your possession or control and have left intact all electronic Company
documents, including but not limited to those which you developed or help
develop during your employment.  You
further confirm that you have cancelled all accounts for your benefit, if any,
in the Company’s name, including but not limited to, credit cards, telephone
charge cards, cellular phone and/or pager accounts and computer accounts.
Exceptions to 


 


the above include: 1
Power Mac G4 computer and software, 1 Sony Multiscan 200GS monitor, 1 Macintosh
iBook laptop computer and software.


 


6.               Non-Disparagement
- You understand and agree that as a condition for payment to you of the
consideration herein described, you shall not make any false, disparaging or
derogatory statements to any prospective employer, media outlet, industry
group, financial institution or current or former employee, consultant, client
or customer of the Company regarding the Company or any of its directors,
officers, employees, agents or representatives or about the Company’s financial
condition and business affairs, including but not limited to any statements
concerning the Company’s clinical trials and/or pharmaceutical products. The
Company agrees that it shall not make any false, disparaging or derogatory
statements to any prospective employer, media outlet, industry 


 


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group,
financial institution or current or former employee, consultant, client or
customer of the Company regarding you or your work while employed at TKT.


 


7.               Amendment
- This letter agreement shall be binding upon the parties and may not be
modified in any manner, except by an instrument in writing of concurrent or
subsequent date signed by duly authorized representatives of the parties
hereto.  This letter agreement is binding
upon and shall inure to the benefit of the parties    and their respective agents, assigns, heirs, executors,
successors and     administrators.


 


8.               Waiver of
Rights - No delay or omission by the Company in exercising any
right under this letter agreement shall operate as a waiver of that or any
other right.  A waiver or consent given
by the Company on any one occasion shall be effective only in that instance and
shall not be construed as a bar or waiver of any right on any other occasion.


 


9.               Validity
- Should any provision of this letter agreement be declared or be determined by
any court of competent jurisdiction to be illegal or invalid, the validity of
the remaining parts, terms or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be deemed not to be a part of
this letter agreement.


 


10.         Confidentiality
- You understand and agree that as a condition for payment to you of the
severance benefits herein described, the terms and contents of this letter
agreement, and the contents of the negotiations and discussions resulting in
this letter agreement, shall be maintained as confidential by you and your
agents and representatives and shall not be disclosed except to the extent
required by federal or state law or as otherwise agreed to in writing by the
Company.


 


11.         Nature of
Agreement - You understand and agree that this letter agreement
is a severance agreement and does not constitute an admission of liability or
wrongdoing on the part of the Company.


 


12.         Acknowledgments
- You acknowledge that you have been given at least twenty-one (21) days to
consider this letter agreement, including Attachment A, B, and C, and that the
Company advised you to consult with an attorney of your own choosing prior to
signing this letter agreement.  You
understand that you may revoke this letter agreement for a period of seven (7)
days after you sign this letter agreement, and the letter agreement shall not
be effective or enforceable until the expiration of this seven (7) day
revocation period.  You understand and agree that by entering
into this letter agreement you are waiving any and all rights or claims you
might have under The Age Discrimination in Employment Act, as amended by The
Older Workers Benefit Protection Act, and that you have received consideration
beyond that to which you were previously entitled.


 


13.         Voluntary
Assent - You affirm that no other promises or agreements of any
kind have been made to or with you by any person or entity whatsoever to cause
you to sign this letter agreement, and that you fully understand the meaning
and intent of this letter agreement. 
You state and represent that you have had an opportunity to fully
discuss and review the terms of this letter agreement with an attorney.  You further state and 


 


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represent
that you have carefully read this letter agreement, including Attachment A,
understand the contents herein, freely and voluntarily assent to all of the
terms and conditions hereof, and sign your name of your own free act.


 


14.         Applicable
Law - This letter agreement shall be interpreted and construed
by the laws of the Commonwealth of Massachusetts, without regard to conflict of
laws provisions.  You hereby irrevocably
submit to and acknowledge and recognize the jurisdiction of the courts of the
Commonwealth of Massachusetts, or if appropriate, a federal court located in
Massachusetts (which courts, for purposes of this letter agreement, are the
only courts of competent jurisdiction), over any suit, action or other
proceeding arising out of, under or in connection with this letter agreement or
the subject matter hereof.


 


15.         Entire Agreement -
This letter agreement, including Attachment A, contains and constitutes the
entire understanding and agreement between the parties hereto with respect to
your severance benefits and the settlement of claims against the Company and
cancels all previous oral and written negotiations, agreements, commitments,
writings in connection therewith. Nothing
in this paragraph, however, shall modify, cancel or supersede your obligations
set forth in paragraph 4 herein.


 


16.         Post
Termination Transition and Consulting Services.  You agree that, for one year following the
Termination Date, you shall make yourself available at the Company’s offices or
by telephone for consultation to use your best efforts to assist the Company
with the orderly and successful transition of your responsibilities as Senior
Vice President, Research  to other
employees on an as-needed basis upon the Company’s request, for up to 240
hours.  You agree that the Severance
Benefits described in Attachment A  are
being provided to you as consideration for your compliance with all terms and
conditions of this letter agreement, including without limitation the
post-termination transition responsibilities described herein, and that you are
not entitled to any additional compensation or benefit for performing such
transition responsibilities. You will be reimbursed for any reasonable and
documented out-of-pocket expenses in connection with the above responsibilities
and in accordance with the Company’s reimbursement policies then in-effect.
Should you be required to travel by airplane on behalf of the Company in
performing these duties, the Company will pay you a consulting fee of $2,000
per day and reimburse you for business class airfare (for transcontinental and
overseas flights only).


 


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If you have any questions
about the matters covered in this letter, please call Linda Petiingell, 


Vice President,
Human Resources.


 


	
   

  	
   

  	
  Very truly yours,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRANSKARYOTIC
  THERAPIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Linda
  H. Pettingell

  	
   

  
	
   

  	
   

  	
  Linda
  H. Pettingell

  
	
   

  	
   

  	
  VICE PRESIDENT, HUMAN RESOURCES

  
						



 


 


I hereby agree to the
terms and conditions set forth above and in attachment A.  I have been given at least twenty-one (21)
days to consider this agreement and I have chosen to execute this on the date
below.  I intend that this letter agreement
become a binding agreement between me and the Company if I do not revoke my
acceptance in seven (7) days by notifying Linda Pettingell in writing.


 


	
  /s/ Douglas Treco

  	
   

  	
  Date 

  	
      May
  6, 2003

  	
   

  
	
  Douglas Treco

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  To be returned by May
  23, 2003.

  	
   

  



 


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ATTACHMENT A


 


DESCRIPTION OF SEVERANCE BENEFITS


 


The
Company will pay you salary continuation based on your current annual salary of
Three Hundred and Eight Thousand dollars ($308,000), less applicable federal
and state taxes and withholdings until June 30, 2004.  This component of your severance benefits shall be paid in equal
installments in accordance with the Company’s normal payroll schedule, but in
no event earlier than the eighth (8th) day after execution of this
letter agreement.


 


Finally, the Company will
provide you with up to twelve (12) months of executive outplacement services
through Keystone Outplacement Services. 
The use of the outplacement services must occur within the eighteen (18)
month period following your Termination Date. 
The cost of these outplacement services will be paid by the Company.


 


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