Exhibit 10.3


 


	
  

  	
  Cubist Employee
  Policy

  	
   AMENDED AND RESTATED

   

  CODE OF CONDUCT AND ETHICS

  



 


 
Introduction


 


This
Code of Conduct and Ethics (this “Code”) covers a wide range of business
practices and procedures.  It does not
cover every issue that may arise, but it sets out basic principles to guide all
employees of Cubist Pharmaceuticals, Inc. (the “Company”).  All of our employees must conduct themselves
accordingly and seek to avoid even the appearance of improper behavior.  This Code should also be provided to and
followed by the Company’s agents and representatives, including consultants.


 


If a law conflicts with a policy in this Code, you must comply with the
law; however, if a local custom or policy conflicts with this Code, you must
comply with the Code.  If you have any
questions about these conflicts, you should seek advice from: (i) your
Vice President, (ii) any director-level or higher employee in Human
Resources, (iii) any director-level or higher employee in the Law
Department, or (iv) the Chief Compliance Officer.


 


If you wish to report a violation or suspected violation of this Code,
you can contact the Company’s Corporate Responsibility Hotline, which is 781-860-8600.  The Chief Compliance Officer is responsible
for investigating such reports.


 


If you wish to report anonymously a violation or suspected violation of this
Code, including, but not limited to, those: 
(i) relating to accounting, internal accounting controls, or
auditing matters or (ii) by one or more of the Company’s Executive Officers,
you can contact the Company’s Confidential Corporate Responsibility Hotline, which is 617-241-1456.  The Company’s Internal Auditors will promptly
investigate all reports to the Confidential Corporate Responsibility Hotline
and, if after investigation, the Internal Auditors determine that further
action is necessary, they will report their findings to the Audit Committee.


 


A good basis for deciding when to get advice
is to ask whether the conduct might be embarrassing to the Company or the
employees involved if the details were fully disclosed to the public by the
media.


 


Those
who violate the standards in this Code will be subject to disciplinary action,
up to and including termination.


 


Section 1.                  Compliance with
Laws, Rules and Regulations


 


Obeying the law, both in letter and in spirit, is the foundation on
which this Company’s ethical standards are built.  All employees must respect and obey the laws
of the jurisdictions in which we operate. 
Although not all employees are expected to know the 


 





















 


details of these laws, it is important to know enough to determine when
to seek advice from:  (i) your Vice
President, (ii) any director-level or higher employee in Human Resources, (iii) any
director-level or higher employee in the Law Department, or (iv) the Chief
Compliance Officer.


 


The Company holds information and training sessions and has put in
place various policies and standard operating procedures in order to promote
compliance with laws, rules and regulations, including insider-trading
laws.  Each department head is
responsible for ensuring that his/her employees attend all mandatory training
sessions that are related to compliance with laws, rules and regulations.


 


Section 2.                  Conflicts of
Interest


 


All employees are expected to make decisions in the best interest of
the Company, and not for personal gain. 
Therefore, all employees are required to avoid “conflicts of interest.”


 


A
“conflict of interest” exists when a person’s private interest interferes in
any way with the interests of the Company. 
A conflict situation can arise when an employee, officer, or director
takes actions or has interests that may make it difficult to perform his or her
Company work objectively and effectively. 
Conflicts of interest may also arise when an employee, officer or
director, or members of his or her family, receives improper personal benefits
as a result of his or her position in the Company.  Loans to, or guarantees of obligations of,
employees and their family members may create conflicts of interest.


 


It
is almost always a conflict of interest for a Company employee to work
simultaneously for a competitor, customer, or supplier.  You are not allowed to work for a competitor
as a consultant or board member.  The
best policy is to avoid any direct or indirect business connection with our
customers, suppliers, or competitors, except on our behalf.


 


Conflicts
of interest are prohibited as a matter of Company policy, except if approved by
the Board of Directors on a case-by-case basis. 
Conflicts of interest may not always be clear-cut, so if you have a
question, you should seek advice from:  (i) your
Vice President, (ii) any director-level or higher employee in Human
Resources, or (iii) any director-level or higher employee in the Law
Department.  Any employee who becomes
aware of a conflict or potential conflict should bring it to the attention of: (i) his
or her Vice President, (ii) any director-level or higher employee in Human
Resources, (iii) any director-level or higher employee in the Law
Department, or (iv) the Chief Compliance Officer.


 


Section 3.                  Insider Trading


 


Employees
who have access to confidential information are not permitted to use or share
that information for stock trading purposes or for any other purpose except the
conduct of our business.  All non-public
information about the Company should be 


 





















 


considered
confidential information.  To use
non-public information for personal financial benefit or to “tip” others who
might make an investment decision on the basis of this information is not only
unethical but also illegal.  If you have
any questions, please refer to your copy of the Company’s  Policy on Insider Trading and
Confidentiality, and then ask the Law Department.


 


Section 4.                  Corporate
Opportunities


 


Employees,
officers, and directors are prohibited from exploiting for their personal
advantage opportunities that are discovered through the use of corporate
property, information, or position without the consent of the Board of
Directors.  No employee may use corporate
property, information, or position for improper personal gain, and no employee
may compete with the Company directly or indirectly.  Employees, officers, and directors owe a duty
to the Company to advance its legitimate interests when the opportunity to do
so arises.


 


Section 5.                  Competition and
Fair Dealing


 


We
seek to outperform our competition fairly and honestly.  We seek competitive advantages through
superior performance, never through unethical or illegal business practices.
Stealing proprietary information, possessing trade secret information that was
obtained without the owner’s consent, or inducing such disclosures by past or
present employees of other companies is prohibited.  Each employee should endeavor to respect the
rights of and deal fairly with the Company’s customers, suppliers, competitors,
and employees.  No employee should take
unfair advantage of anyone through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts, or any other intentional
unfair-dealing practice.


 


Drug development and commercialization is highly competitive, and it is
the policy of the Company to compete aggressively, but fairly.  A major part of this commitment to compete
fairly is a commitment to abide fully by the antitrust laws.  In general, these complex laws prohibit any
form of agreement or understanding — whether formal, informal, express, or
implied — that unreasonably reduces competition and business rivalry.  Our commitment in this regard also prohibits
any unfair or untrue disparagement of a Company competitor.


 


Absent compelling circumstances, the company should select all vendors
and contractors on the basis of written competitive bids.


 


The purpose of business entertainment and gifts in a commercial setting
is to create good will and sound working relationships, not to gain unfair
advantage with customers. Gifts or entertainment should not ever be offered,
given, provided or accepted by any Company employee, family member of an
employee or agent unless it: (1) is not a cash gift, (2) is consistent
with customary business practices, (3) is not excessive in value, (4) cannot
be construed as a bribe or payoff, (5) does not violate any laws or
regulations, and (6) is offered in compliance with applicable SOPs.   You can also refer to the “PhRMA Code” for
additional guidance (copies of which are available from the Law
Department).  Please seek advice
from:  (i) your Vice President, (ii) any
director-level or


 





















 


higher employee in Human Resources, 
(iii) any director-level or higher employee in the Law Department, or
(iv) the Chief Compliance Officer regarding any gifts or proposed gifts
which you are not certain are appropriate.


 


It
is the policy of the Company to comply with health care “fraud and abuse”
laws.  This includes Federal and State
anti-kickback laws that prohibit offering or giving kickbacks or other improper
inducements to those who may be in a position to purchase or prescribe (or to
arrange for or recommend the purchase or prescription of) our products.  Any arrangements with healthcare customers
(including but not limited to the provision of gifts, grants, and business
courtesies) should be reviewed to ensure compliance with applicable laws,
Company policies, and SOPs, which are available from the Law Department.


 


Section 6.                  Discrimination
and Harassment


 


The
diversity of the Company’s employees is a tremendous asset. We are firmly
committed to providing equal opportunity in all aspects of employment and will
not tolerate any discrimination or harassment of any kind. Please refer to Cubist’s
“Policy Against Sexual Harassment in the Workplace” for additional information
and guidance.


 


Section 7.                  Health and
Safety


 


The Company strives to provide each employee with a safe and healthful
work environment.  Each employee has
responsibility for maintaining a safe and healthy workplace for all employees
by following safety and health rules and practices and reporting
accidents, injuries and unsafe equipment, practices or conditions.


 


The
Company will not tolerate violence or threatening behavior. Employees should
report to work in condition to perform their duties, free from the influence of
illegal drugs or alcohol.  The Company
will not tolerate the use of illegal drugs in the workplace or on the Company’s
property.  Please see the Company’s employee
policies for further guidance.


 


Section 8.                  Record-Keeping


 


The Company follows the
accepted accounting rules and controls set forth by the U.S. Securities
and Exchange Commission and the Financial Accounting Standards Board.  The Company requires honest and accurate
recording and reporting of information in all circumstances, and without
exception.  The Company requires that its
certified public accountants have access to any and all information necessary
for them to conduct audits properly.


 


Business expense accounts
used by employees must be documented and recorded accurately.  If you are not sure whether a certain expense
is legitimate, ask your supervisor or the Controller.  Rules and guidelines are available from
the Controller.


 





















 


All of the Company’s books,
records, accounts and financial statements must be maintained in reasonable
detail, must appropriately reflect the Company’s transactions and must conform
both to applicable legal requirements and to the Company’s system of internal
controls. Unrecorded or “off the books” funds or assets should not be
maintained unless permitted by applicable law or regulation and approved in
writing by the Chief Financial Officer.


 


Business records and
communications often become public, and we should avoid exaggeration,
derogatory remarks, guesswork, or inappropriate characterizations of people and
companies that could be misunderstood. 
This applies equally to e-mail, internal memos, and formal reports.  Records should always be retained or
destroyed according to the Company’s record retention policies.  In accordance with those policies, in the
event of litigation or governmental investigation, threatened or known, please
consult with a director-level or higher employee in the Law Department.


 


Section 9.                  Confidentiality


 


Employees must maintain the
confidentiality of confidential information entrusted to them by the Company or
its customers, except when disclosure is authorized by a director-level or
higher employee in the Law Department, or required by laws or regulations.  Confidential information includes all
non-public information that might be of use to competitors, or harmful to the
Company or its customers, if disclosed. 
It also includes information that suppliers and customers have entrusted
to us.  The obligation to preserve
confidential information continues even after employment ends.


 


Section 10.           Protection and Proper
Use of Company Assets


 


All employees should
endeavor to protect the Company’s assets and ensure their efficient use.  Theft, carelessness, and waste have a direct
impact on the Company’s profitability. Any suspected incident of fraud or theft
should be immediately reported for investigation. Company equipment should not
be used for non-Company business, though incidental personal use may be
permitted.


 


The obligation of employees
to protect the Company’s assets includes its proprietary information.  Proprietary information includes intellectual
property such as trade secrets, patents, trademarks, and copyrights, as well as
business, marketing and service plans, engineering and manufacturing ideas,
designs, databases, records, salary information and any unpublished financial
data and reports.  Unauthorized use or
distribution of this information would violate Company policy.  It could also be illegal and result in civil
or even criminal penalties.  Please see
the Company’s policies on IT usage and confidentiality (copies of which are
located on Picasso)) for further guidance.


 





















 


Section 11.           Payments to Government
Personnel


 


The U.S. Foreign Corrupt
Practices Act prohibits giving anything of value, directly or indirectly, to
officials of foreign governments or foreign political candidates in order to
obtain or retain business.  It is
strictly prohibited to make payments to government officials of any country.


 


In addition, the U.S.
government has a number of laws and regulations regarding business gratuities,
which may be accepted by U.S. government personnel, including, but not limited
to, employees of Medicare, Medicaid, and the Veterans Administration.  The promise, offer or delivery to an official
or employee of the U.S. government of a gift, favor or other gratuity in
violation of these rules would not only violate Company policy but could
also be a criminal offense.  State and
local governments, as well as foreign governments, may have similar rules.


 


The
Company does not contribute, directly or indirectly, to any political campaign
or party.  Employees may not use company
expense accounts to pay for any personal political contributions or seek any
other form of company reimbursement.  In
addition, employees should not use company facilities or company assets for the
benefit of any party or candidate, including an employee individually running
for office.  Employees are not prohibited
from contributing to properly established political action committees.


 


Section 12.           Misrepresentations and
False Statements


 


Employees must never make a deliberate misrepresentation concerning the
Company or its business operations.  No
employee shall create, or assist another in creating, a false or misleading
entry on the Company’s books.


 


Section 13.           Responding to
Government Requests


 


Employees are expected to respond truthfully
to Governmental inquiries.  It is the
Company’s policy to cooperate with all reasonable requests from Governmental
agencies concerning the Company’s business operations.


 


Section 14.           Compliance Procedures


 


We
must all work to ensure prompt and consistent action against violations of this
Code.  However, in some situations it may
be difficult to know right from wrong. 
Since we cannot anticipate every situation that will arise, it is
important that we have a way to approach a new question or problem.  These are the steps to keep in mind:


 


•                        Make
sure you have all the facts.  In order
to reach the right solutions, we must be as fully informed as possible.


 


•                        Ask
yourself. What specifically am I being asked to do? Does it seem unethical or
improper?  This will enable you to
focus on the specific question you are faced with and the alternatives you
have.  Use your judgment and common
sense; if something seems unethical or improper, it probably is.


 





















 


•                        Clarify
your responsibility and role.  In
most situations, there is shared responsibility.  Are your colleagues informed?  It may help to get others involved and
discuss the problem.


 


•                        Discuss
the problem with your supervisor. 
This is the basic guidance for all situations.  In many cases, your supervisor will be more
knowledgeable about the question and will appreciate being brought into the
decision-making process.  Remember that
it is your supervisor’s responsibility to help you solve problems.


 


•                        Seek
help from Company resources.  In the
rare case where it may not be appropriate to discuss an issue with your
supervisor, or where you do not feel comfortable approaching your supervisor
with your question, discuss it with any director-level or higher employee of
Human Resources, any director-level or higher employee in the Law Department or
the Chief Compliance Officer.


 


•                        You
may report violations in confidence and without fear of retaliation.  You may report violations or suspected
violations of this Code by calling the Company’s Corporate Responsibility
Hotline at 781-860-8600.  All inquiries
to the Corporate Responsibility Hotline will be handled confidentially to the
extent reasonably possible.  You may anonymously report
violations or suspected violations of this Code, including, but not limited to,
those: (i) relating to accounting, internal accounting controls, or
auditing matters or (ii) by one or more of the Company’s Executive
Officers, by calling the Company’s Confidential Corporate Responsibility Hotline
at 617-241-1456.  The Company does not
permit retaliation of any kind against employees for good faith reports of
ethical violations.


 


•                        Always
ask first, act later.  If you are
unsure of what to do in any situation, seek guidance before you act.


 


Section 15.           How to Report any
Illegal or Unethical Behavior


 


Employees are encouraged to seek advice from:  (i) their respective Vice President, (ii) any
director-level or higher employee in Human Resources,  (iii) any director-level or higher
employee in the Law Department, or (iv) the Chief Compliance Officer about
observed illegal or unethical behavior and, when in doubt, about the best
course of action in a particular situation.


 


You should review Section 14
if you believe you have observed illegal or unethical behavior and promptly
report such behavior to: (i) your Vice President, (ii) any
director-level or higher employee in Human Resources, (iii) any
director-level or higher employee in the Law Department, or (iv) the Chief
Compliance Officer. You may also report such behavior to the Company’s
Corporate Responsibility Hotline at 781-860-8600.  If you wish to report such behavior anonymously,
you can call the Company’s Confidential Corporate Responsibility Hotline at 617-241-1456.  Employees are expected to cooperate in
internal investigations of misconduct.


 





















 


Section 16.           No Retaliation


 


The Company will not retaliate in any manner, including,
but not limited to, discharging, demoting, suspending, threatening, harassing,
or otherwise discriminating against an employee who reports in good faith
violations or suspected violations of this Code, including, but not limited to,
accounting fraud or securities law violations.


 


Section 17.           Waivers of the Code of
Business Conduct and Ethics


 


Any waiver of this Code for employees may be made only by the Board of
Directors.  Any waiver of this Code for
executive officers or directors may be made only by the Board of Directors and
will be promptly disclosed as required by law or Nasdaq regulation.


 


	
  Policy Owner: Compliance

  	
   

  	
  Effective: August 2,2005