**Exhibit 10.40**

 

 

April 28, 2003

 

 

Douglas Treco, Ph.D.

87 Brantwood Road

Arlington, MA  02476

** **

Dear Doug:

 

In connection with thetermination of your employment with Transkaryotic Therapies, Inc., (the“Company”) on June 30, 2003, you are eligible to receive the severance benefitsdescribed in the “Description of Severance Benefits” attached to this letter asAttachment A if you sign and return this letter agreement to Linda Pettingellby May 23, 2003.  By signing andreturning this letter agreement, you will be entering into a binding agreementwith the Company and will be agreeing to the terms and conditions set forth inthe numbered paragraphs below, including the release of claims set forth inparagraph 3.  Therefore, you are advisedto consult with your attorney before signing this letter agreement and you maytake up to twenty-one (21) days to do so. If you sign this letter agreement, you may change your mind and revokeyour agreement during the seven (7) day period after you have signed it bynotifying Linda Pettingell of your revocation in writing.  If you do not so revoke, this letteragreement will become a binding agreement between you and the Company upon theexpiration of the seven (7) day revocation period.

 

If you choose not to signand return this letter agreement by May 23, 2003 or if you timely revoke your agreement in writing, you shall notreceive any severance benefits from the Company.  You will, however, receive payment upon your termination for allwages 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 groupmedical insurance pursuant to the federal “COBRA” law, 29 U.S.C. § 1161 etseq.  All premium costs shall bepaid by you on a monthly basis for as long as, and to the extent that, youremain eligible for COBRA continuation. You should consult the COBRA materials to be provided by the Company fordetails regarding these benefits.  Allother benefits, including life insurance and long term disability, will ceaseupon your Termination Date.  You willhave up to thirty (30) days after the Termination Date to exercise any vestedstock rights you may have (as provided for by the plans).  All unvested stock rights will be cancelledon the Termination Date. All vested options must be vested within 30 days ofyour 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 91,000options (dated 2/4/00, Numbers 00000972 and 00000973; dated 12/13/00, Number2000-667; dated 12/13/01, Numbers 2001-360 and 2001-

 

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359) and return theoption rights to the Company.

** **

The following numberedparagraphs set forth the terms and conditions, which will apply if you timelysign and return this letter agreement and do not revoke it in writing withinthe seven (7) day period:

 

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

 

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

 

**3.****              Release**- In consideration of the payment of the severance benefits, which youacknowledge you would not otherwise be entitled to receive, you hereby fully,forever, irrevocably and unconditionally release, remise and discharge theCompany, its officers, directors, stockholders, corporate affiliates,subsidiaries, parent companies, agents and employees (each in their individualand corporate capacities) (hereinafter, the “Released Parties”) from any andall 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 ReleasedParties arising out of your employment with and/or separation from the Company,including, but not limited to, all employment discrimination claims under TitleVII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq., the AgeDiscrimination in Employment Act, 29 U.S.C. § 621 etseq., theAmericans With Disabilities Act of 1990, 42 U.S.C., §12101 etseq.,the Family and Medical Leave Act, 29 U.S.C. § 2601 etseq., theWorker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 etseq, and the Rehabilitation Actof 1973, 29 U.S.C. § 701 etseq., all as amended; allclaims arising out of the Fair Credit Reporting Act, 15 U.S.C. §1681 etseq.,the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1001 etseq., 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 and11I, 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 etseq.,the Massachusetts Privacy Act, M.G.L. c. 214, §1B, and the MassachusettsMaternity Leave Act, M.G.L. c. 149, §105(d), all as amended; all common lawclaims including, but not limited to, actions in tort, defamation and breach ofcontract; all claims to any non-vestedownership interest in the Company, contractual or otherwise, including but notlimited to claims to stock or stock options; and any claim or damagearising out of your employment with or separation from the Company (including aclaim for retaliation) under any common law theory or any federal, state orlocal statute or ordinance not expressly referenced above; provided, however, that nothing in thisletter agreement prevents you from filing, cooperating with, or participatingin any proceeding before the EEOC or a state 

 

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

 

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Attachments B and C respectively.

 

4.**               Non-Disclosureand Non-Competition -** You acknowledge and reaffirm your obligation tokeep confidential all non-public information concerning the Company which youacquired during the course of your employment with the Company, as stated morefully in the Confidentiality,Inventions and Non-competition Agreement and the NondisclosureAgreement, both of which you executed at the inception of your employment andwhich 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 letteragreement, the parties agree that Paragraph 3 of the Confidentiality, Inventions and Non-competition Agreement shall onlyapply to Amgen Inc, Biomarin Pharmaceutical Inc., Genzyme Corporation and/orany of their respective subsidiaries and parent companies.****Shouldthe Company choose to publish information that you directed and/or werematerially involved in conceptualizing, executing or otherwise completing, youwill be recognized as an author or in an acknowledgement, as appropriate foryour contributions, and consistent with scientific publishing customs. In suchcases you will not unreasonably withhold your assistance in preparingmanuscripts for submission.  Should you,in the pursuit of new employment, wish to present unpublished work that youdirected while at TKT, the Company shall not unreasonably withhold permissionto do so.

 

**4.**              **Return of Company Property** - Youconfirm that you have returned to the Company all keys, files, records (andcopies 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-ownedproperty in your possession or control and have left intact all electronic Companydocuments, including but not limited to those which you developed or helpdevelop during your employment.  Youfurther confirm that you have cancelled all accounts for your benefit, if any,in the Company’s name, including but not limited to, credit cards, telephonecharge cards, cellular phone and/or pager accounts and computer accounts.Exceptions to 

 

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

 

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

 

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group,financial institution or current or former employee, consultant, client orcustomer 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 bemodified in any manner, except by an instrument in writing of concurrent orsubsequent date signed by duly authorized representatives of the partieshereto.  This letter agreement is bindingupon and shall inure to the benefit of the parties    and their respective agents, assigns, heirs, executors,successors and     administrators.

 

8.               **Waiver ofRights** - No delay or omission by the Company in exercising anyright under this letter agreement shall operate as a waiver of that or anyother right.  A waiver or consent givenby the Company on any one occasion shall be effective only in that instance andshall 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 byany court of competent jurisdiction to be illegal or invalid, the validity ofthe remaining parts, terms or provisions shall not be affected thereby and saidillegal or invalid part, term or provision shall be deemed not to be a part ofthis letter agreement.

 

10.         **Confidentiality**- You understand and agree that as a condition for payment to you of theseverance benefits herein described, the terms and contents of this letteragreement, and the contents of the negotiations and discussions resulting inthis letter agreement, shall be maintained as confidential by you and youragents and representatives and shall not be disclosed except to the extentrequired by federal or state law or as otherwise agreed to in writing by theCompany.

 

11.         **Nature ofAgreement** - You understand and agree that this letter agreementis a severance agreement and does not constitute an admission of liability orwrongdoing on the part of the Company.

 

12.         **Acknowledgments**- You acknowledge that you have been given at least twenty-one (21) days toconsider this letter agreement, including Attachment A, B, and C, and that theCompany advised you to consult with an attorney of your own choosing prior tosigning this letter agreement.  Youunderstand 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 notbe effective or enforceable until the expiration of this seven (7) dayrevocation period.  You understand and agree that by enteringinto this letter agreement you are waiving any and all rights or claims youmight have under The Age Discrimination in Employment Act, as amended by TheOlder Workers Benefit Protection Act, and that you have received considerationbeyond that to which you were previously entitled.

 

13.         **VoluntaryAssent** - You affirm that no other promises or agreements of anykind have been made to or with you by any person or entity whatsoever to causeyou to sign this letter agreement, and that you fully understand the meaningand intent of this letter agreement. You state and represent that you have had an opportunity to fullydiscuss and review the terms of this letter agreement with an attorney.  You further state and 

 

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

 

14.         **ApplicableLaw** - This letter agreement shall be interpreted and construedby the laws of the Commonwealth of Massachusetts, without regard to conflict oflaws provisions.  You hereby irrevocablysubmit to and acknowledge and recognize the jurisdiction of the courts of theCommonwealth of Massachusetts, or if appropriate, a federal court located inMassachusetts (which courts, for purposes of this letter agreement, are theonly courts of competent jurisdiction), over any suit, action or otherproceeding arising out of, under or in connection with this letter agreement orthe subject matter hereof.

 

15.         **Entire Agreement** -This letter agreement, including Attachment A, contains and constitutes theentire understanding and agreement between the parties hereto with respect toyour severance benefits and the settlement of claims against the Company andcancels all previous oral and written negotiations, agreements, commitments,writings in connection therewith. Nothingin this paragraph, however, shall modify, cancel or supersede your obligationsset forth in paragraph 4 herein.

 

16.**         PostTermination Transition and Consulting Services**.  You agree that, for one year following theTermination Date, you shall make yourself available at the Company’s offices orby telephone for consultation to use your best efforts to assist the Companywith the orderly and successful transition of your responsibilities as SeniorVice President, Research****to otheremployees on an as-needed basis upon the Company’s request, for up to 240hours.  You agree that the SeveranceBenefits described in Attachment A****arebeing provided to you as consideration for your compliance with all terms andconditions of this letter agreement, including without limitation thepost-termination transition responsibilities described herein, and that you arenot entitled to any additional compensation or benefit for performing suchtransition responsibilities. You will be reimbursed for any reasonable anddocumented out-of-pocket expenses in connection with the above responsibilitiesand in accordance with the Company’s reimbursement policies then in-effect.Should you be required to travel by airplane on behalf of the Company inperforming these duties, the Company will pay you a consulting fee of $2,000per day and reimburse you for business class airfare (for transcontinental andoverseas flights only).

 

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If you have any questionsabout 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 theterms 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 datebelow.  I intend that this letter agreementbecome a binding agreement between me and the Company if I do not revoke myacceptance 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**

 

TheCompany will pay you salary continuation based on your current annual salary ofThree Hundred and Eight Thousand dollars ($308,000), less applicable federaland state taxes and withholdings until June 30, 2004.  This component of your severance benefits shall be paid in equalinstallments in accordance with the Company’s normal payroll schedule, but inno event earlier than the eighth (8th) day after execution of thisletter agreement.

 

Finally, the Company willprovide you with up to twelve (12) months of executive outplacement servicesthrough 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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