Exhibit 10.11


 


MICHAEL N.
CHANG


EMPLOYMENT
AGREEMENT


 


This EMPLOYMENT AGREEMENT (the “Agreement”)
dated as of June 17, 2005, is between OPTIMER PHARMACEUTICALS, INC.,
a Delaware corporation (“Company”),
and MICHAEL N. CHANG (“Executive”).
Together, Executive and Company are the “parties” and each is a “party” hereto.


 


WHEREAS, the Company and the
Executive previously entered into an employment agreement dated March 1,
2001 (the “Prior Agreement”).


 


WHEREAS, THE Company wishes for
Executive to continue in his role as Chief Executive Officer and President of
the Company.


 


NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:


 


1.                                       EFFECTIVENESS
OF AGREEMENT


 


1.1                                 General.  This Agreement shall become effective as of
the date hereof and shall replace, void, and supersede any section of the Prior
Agreement that conflicts with this Agreement.


 


2.                                       EMPLOYMENT
AND DUTIES


 


2.1                                 General.  The Company hereby employs the Executive, and
the Executive agrees to serve, as President and Chief Executive Officer of the
Company, upon the terms and conditions herein contained. In such capacity,
Executive shall report directly to the Board of Directors of the Company (“Board”). The Executive shall perform such
other duties and services for the Company as may be reasonably designated from
time to time by the Company and as are consistent with Executive’s title. The
Executive agrees to serve the Company faithfully and to the best of his ability
under the direction of the Company.


 


2.2                                 Exclusive
Services.  Except as
may otherwise be approved in advance by the Board, and except during vacation
periods and reasonable periods of absence due to sickness, personal injury or
other disability, the Executive shall devote his full working time throughout
the Employment Term (as defined below) to the services required of him
hereunder. The Executive shall render his services exclusively to the Company
during the Employment Term, and shall use his best efforts, judgment and energy
to improve and advance the business and interests of the Company in a manner
consistent with the duties of his position. Executive may participate in
charitable and philanthropic activities so long as they don’t interfere with
his duties hereunder. However, the foregoing shall not prevent Executive from
providing services as a member of the Board of Directors of another third party
or parties nor consulting services to Pharmanex, provided that the total of all such services to such
entities cumulatively shall not exceed four
days per month.


 


2.3                                 Term
of Employment.  The
Executive’s employment under this Agreement (the “Employment Term”) shall commence as of the
effective date hereof and shall terminate on the earlier of (a) the forth
year anniversary of the date hereof, or (b) the termination of the
Executive’s employment pursuant to this Agreement. Executive may terminate his
employment with the Company at any time and for any reason upon thirty
(30) days’ prior written notice to the Company.


 


2.4                                 Reimbursement
of Expenses.  The Company
shall reimburse the Executive for reasonable travel and other business expenses
incurred by him in the fulfillment of his duties hereunder upon presentation by
the Executive of an itemized account of such expenditures, such reimbursement
to be in accordance with the Company’s policies and procedures.


 

















 


3.                                       SALARY


 


3.1                                 Base
Salary.  From the date hereof, the
Executive shall receive a base salary (“Base
Salary”) at a rate of $271,695.35 per annum, payable twice monthly
in arrears in equal installments in accordance with the Company’s payroll
practices.


 


3.2                                 Annual
Review.  The Executive’s Base Salary
shall be reviewed for potential increase by Company, based upon the Executive’s
performance, not less often than annually. Any positive adjustments in Base
Salary effected as a result of such review shall be made by Company in its sole
discretion.


 


4.                                       LONG-TERM
INCENTIVE COMPENSATION


 


The Company will provide the Executive with the following long-term
incentive compensation arrangement.


 


4.1                                 Subject to the
approval of the Board, the Executive will be granted a stock option to purchase
up to 570,744 shares o the Company’s Common Stock at a price per share
equal to the fair market value per share of the Common Stock on the date of
grant (the “Option”).
Subject to Section 4.2 below, 25% of the shares subject to the Option
shall vest 12 months after the date of Executive’s vesting begins and the
remaining shares shall vest monthly over the following 36 months in equal
monthly amounts subject to Executive continuing eligibility.


 


4.2                                 Notwithstanding
the foregoing, upon (i) the occurrence of a change of control (the “Change of Control Transaction”) of the
Company (defined as the Company’s being merged with or into or combined with a
third party such that the security holders of the Company prior to such
transaction do not hold at least 50% of the securities of the resulting entity
after such transaction by virtue of such transaction), and (ii) within
twelve (12) months thereafter Executive’s employment is terminated by the
Company (or its successor in interest), then all unvested shares subject
to the Option shall immediately vest and be exercisable (and, in the case of
shares already purchased with the Company maintaining a right of repurchase,
the Company shall cease to have the right to repurchase any such unvested
shares); provided that the
Executive is employed by the Company on such transaction date.


 


5.                                       EMPLOYEE
BENEFITS


 


The Executive shall, during his employment under this Agreement, be included
to the extent eligible thereunder in all employee benefit plans, programs or
arrangements (including, without limitation, any plans, programs or
arrangements providing for retirement benefits, profit sharing, disability
benefits, health and life insurance, or vacation and paid holidays) that shall
be established or adopted by the Company for, or made available to, the Company’s
senior executives. In addition, the Company shall furnish the Executive with
the following benefits during his employment under this Agreement:


 


(a)                                  In connection
with the Prior Agreement, Executive received a relocation and housing
assistance loan (the “Loan”)
in the principal amount of $300,000. 25% of the Loan shall be forgiven each
year after the date hereof, such that the Loan shall be fully forgiven on the
four year anniversary of the date hereof, subject to the Executive being an
employee of the Company on such anniversary dates. Notwithstanding the
foregoing, subject to the Executive being an employee of the Company immediately
prior to a Change of Control Transaction, the Loan shall be forgiven
immediately prior to the close of a Change of Control Transaction.


 


(b)                                 Four (4) weeks
vacation per annum.


 


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6.                                       TERMINATION
OF EMPLOYMENT


 


6.1                                 Termination
Without Cause.


 


6.1.1                        Severance.  Subject to the provisions of
Sections 6.1.3 and 6.1.4, if, prior to the expiration of the
Employment Term, the Executive’s employment is terminated by the Company
without Cause (as defined below), the Company shall continue to pay the
Executive the Base Salary (at the rate in effect on the date of such
termination) for twelve (12) months (such period being referred to
hereinafter as the “Severance Period”),
at such intervals as the same would have been paid had the Executive remained
in the active service of the Company. The Executive shall have no further right
to receive any other compensation or benefits after such termination or
resignation of employment, except as determined in accordance with the terms of
the employee benefit plans or programs of the Company or as provided in this
Agreement.


 


6.1.2                        Accelerated
Vesting.  To the
extent that any of the shares would have vested at the end of the twelve months
after Executive is terminated under Section 4 of this Agreement but for
the termination of the Executive without Cause, all such shares which would
have vested within the twelve months had Executive remained employed shall vest
at the Company’s declared termination date, and Executive shall have ninety
(90) days from the Company’s declared termination date to exercise the
Option. The Company shall notify Executive within ten days after the necessary
calculations under Section 4 have been completed (which calculations shall
be made no later than thirty (30) days after the termination date in
question) as to whether any of the shares have vested. This provision shall
survive termination of the Agreement.


 


6.1.3                        Conditions
Applicable to the Severance Period.  (a) If, during the Severance Period, the
Executive breaches any of his obligations under Section 8, the Company
may, upon written notice to the Executive, terminate the Severance Period and
cease to make any further payments or provide any benefits described in Section 6.1.1.
(b) If, during the Severance Period, the Executive obtains other
employment, then the Base Salary payments due shall be reduced by an amount
equivalent (dollar for dollar) to what Executive receives from such other
employment. Executive shall promptly notify Company of such employment and
other payments.


 


6.1.4                        Death
During Severance Period.  In
the event of the Executive’s death during the Severance Period, payments of
Base Salary under Section 6.1.1 shall continue to be made during the
remainder of the Severance Period to the beneficiary designated in writing for
this purpose by the Executive or, if no such beneficiary is specifically
designated, to the Executive’s estate.


 


6.1.5                        Date
of Termination.  The date of
termination of employment without Cause shall be the date specified in a
written notice of termination to the Executive as the last day of the Executive’s
employment.


 


6.1.6                        Constructive
Termination.  The term “Constructive
Termination” means:


 


(a)                                  the continued
assignment to Executive of any duties or the continued material reduction in
Executive’s duties, either of which is materially inconsistent with Executive’s
position with the Company, for thirty (30) calendar days after Executive’s
delivery of written notice to the Company objecting to such assignment or reduction;
or


 


(b)                                 the relocation
of the principal place for the rendering of Executive’s services hereunder to a
location more than thirty (30) miles from the Company’s business offices
in the San Diego Area; or


 


(c)                                  a material
reduction in compensation and benefits under this Agreement, which remains in
effect for thirty (30) calendar days after Executive delivers written
notice to the Company of such material reduction which reduction is not
applicable to all Company’s senior executive employees.


 


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None of the foregoing will constitute a Constructive Termination to the
extent mutually agreed upon in advance of the occurrence thereof by the
Executive and the Company. A Constructive Termination will be treated as a
termination of the Executive by the Company without Cause for all purposes
within this Agreement.


 


6.2                                 Termination
for Cause: Resignation.


 


6.2.1                        General.  If, prior to the expiration
of the Employment Term, the Executive’s employment is terminated by the Company
for Cause, or the Executive resigns from his employment hereunder, the
Executive shall be entitled only to payment of his Base Salary as then in
effect through and including the date of termination or resignation. The
Executive shall have no further right to receive any other compensation or
benefits after such termination or resignation of employment, except as
determined in accordance with the terms of the employee benefit plans or
programs of the Company or as provided in this Agreement.


 


6.2.2                        Date
of Termination.  The date of
termination for Cause shall be the date specified in a written notice of
termination to the Executive as the last day of the Executive’s employment. The
date of resignation shall be the date specified in the written notice of
resignation from the Executive to the Company as the last day of the Executive’s
employment, which shall be no more than three months and no less than thirty
(30) days in advance, or if no date is specified therein, receipt by the
Company of written notice of resignation from the Executive.


 


6.3                                 Cause.  Termination for “Cause” shall mean termination of the Executive’s employment
because of:


 


(a)                                  any act or
omission that constitutes a material breach by the Executive of any of his
obligations under this Agreement or his failure to discharge the duties
lawfully assigned to him by the Board;


 


(b)                                 the willful and
continued failure or refusal of the Executive to substantially perform the
duties required of him in his position with the Company, which failure is not
cured within twenty (20) days following written notice of such failure;


 


(c)                                  any willful
violation by the Executive of any material law or regulation applicable to the
business of the Company or any of its subsidiaries or affiliates, or the Executive’s
conviction of, or a plea of nolo contendere
to, a felony, or any act by the Executive of common law fraud or its
equivalent, or any Executive violation of a Company policy applicable to all
employees which is materially detrimental to the Company, all as determined by
a disinterested majority of the Board of Directors; or


 


(d)                                 any other
misconduct by the Executive that is materially injurious to the financial
condition or business reputation of, or is otherwise materially injurious to,
the Company or any of its subsidiaries or affiliates.


 


7.                                       DEATH
OR DISABILITY


 


In the event of termination of employment by reason of death or
Disability (as hereinafter defined), the Executive (or his estate, as
applicable) shall be entitled to Base Salary through the date of termination.
Other benefits shall be determined in accordance with the terms of the benefit
plans maintained by the Company, and the Company shall have no further
obligation hereunder. In addition, the Executive (or his estate or the
person or persons to whom the Options may have been transferred by will or by
the laws of descent and distribution, as applicable) may, but only within
twelve months after Executive ceases to be an employee, exercise Executive’s
Options to the extent Executive was entitled to exercise such Options on the
date of his death or on the date he is terminated by the Company by reason of
Disability. To the extent that the Executive was not otherwise entitled to


 


4

















 


exercise
the Options on such date, or if he (or his estate or the person or persons
to whom the Options may have been transferred by will or by the laws of descent
and distribution, as applicable) fails to exercise the Options within the time
specified in the preceding sentence, such Options will terminate. For purposes
of this Agreement, “Disability”
means a physical or mental disability or infirmity of the Executive, as
determined by a physician of recognized standing selected by the Company, that
prevents (or, in the opinion of such physician, is reasonably expected to
prevent) the normal performance of his duties as an employee of the Company for
any continuous period of 180 days, or for 180 days during any one
12-month period.


 


8.                                       CONFIDENTIALITY
AND NONSOLICITATION


 


8.1                                 Key-Employee
Covenants.  The
Executive agrees to perform his obligations and duties and to be bound by the
terms of the Key-Employee Covenants attached hereto as Appendix A which
are incorporated by reference and which shall be in force unless otherwise
expressly modified by this Agreement.


 


8.2                                 Certain
Remedies.  Without
intending to limit the remedies available to the Company, the Executive agrees
that a breach of any of the covenants contained in the Key-Employee Covenants
will result in material and irreparable injury to the Company or its
subsidiaries or affiliates for which there is no adequate remedy at law, that
it will not be possible to measure damages for such injuries precisely and
that, in the event of such a breach or threat thereof, the Company shall be
entitled to seek a temporary restraining order or a preliminary or permanent
injunction, or both, without bond or other security, restraining the Executive
from engaging in activities prohibited by the Key-Employee Covenants or such
other relief as may be required specifically to enforce any of the covenants in
the Key-Employee Covenants. Such injunctive relief in any court shall be
available to the Company in lieu of, or prior to or pending determination in,
any arbitration proceeding.


 


9.                                       ARBITRATION


 


Any dispute or controversy arising under or in connection with this
Agreement that cannot be mutually resolved by the parties hereto shall be
settled exclusively by arbitration pursuant to the rules of the American
Arbitration Association in San Diego before one arbitrator of exemplary
qualifications and stature with experience in such similar disputes. The
parties shall choose an independent arbitrator meeting such qualifications
within thirty (30) business days after demand for arbitration is made; if
they cannot so agree, then an arbitrator meeting such qualifications shall be
selected by the American Arbitration Association in accordance with its then
current commercial.  Judgment may be
entered on the arbitrator’s award in any court having jurisdiction. The
arbitrator shall be empowered to enter an equitable decree mandating specific
enforcement of the terms of this Agreement. No discovery shall be permitted in
arbitration, other than an exchange of documents, and the number of hearing days
shall be limited to five (5) in total, all consecutive. The party that
prevails in any arbitration hereunder shall be reimbursed by the other party
hereto for its reasonable legal fees and out-of-pocket expenses directly
attributable to such arbitration, and such other party shall bear all expenses
of the arbitrator. The arbitration award shall specify the factual and legal
basis for the award and issue a written decision for same.


 


10.                                 MISCELLANEOUS


 


10.1                           Communications.  All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered or on the fifth business day after
mailed if delivered personally or mailed by registered or certified mail
(postage prepaid, return receipt requested) to the party at the following
addresses (or at such other


 


5

















 


address for a party as shall
be specified by like notice, except that notices of changes of address shall be
effective upon receipt):


 


(a)                        if to the
Company:


 


c/o Optimer, Inc.


10130 Sorrento Valley Rd.,


Suite C


San Diego, CA 92121


 


(b)                       if to the
Executive:


 


[address]


 


10.2                           Waiver
of Breach: Severability.  (a) The
waiver by the Executive or the Company of a breach of any provision of this
Agreement by the other party hereto shall not operate or be construed as a
waiver or any subsequent breach by either party.


 


(b)                       The parties
hereto recognize that the laws and public policies of various jurisdictions may
differ as to the validity and enforceability of covenants similar to those set
forth herein. It is the intention of the parties that the provisions hereof be
enforced to the fullest extent permissible under the laws and policies of each
jurisdiction in which enforcement may be sought, and that the un-enforceability
(or the modification to conform to such laws or policies) of any
provisions hereof shall not render unenforceable, or impair, the remainder of
the provisions hereof. Accordingly, if at the time of enforcement of any
provision hereof, a court of competent jurisdiction holds that the restrictions
stated herein are unreasonable under circumstances then existing, the parties
hereto agree that the maximum period, scope, or geographic area reasonable
under such circumstances will be substituted for the stated period, scope or
geographical area and that such court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and
geographical area permitted by law.


 


10.3                           Assignment;
Successors.  No right,
benefit or interest hereunder shall be assigned, encumbered, charged, pledged,
hypothecated or be subject to any setoff or recoupment by the Executive. This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company; provided,
however that the Company may not
assign this Agreement without Executive’s consent.


 


10.4                           Entire
Agreement.  This
Agreement and the Appendices attached hereto, (collectively the “Agreement”) which are incorporated herein
by this reference, contain the entire agreement of the parties with respect to
the subject matter hereof, and on and after the Effective Time, and except as
otherwise set forth herein, supersedes all prior agreements, promises,
covenants, arrangements, representations and warranties between them, whether
written or oral, with respect to the subject matter hereof.


 


10.5                           Withholding.  The payment of any amount pursuant to this
Agreement shall be subject to applicable withholding and payroll taxes, and
such other deductions as may be required under the Company’s employee benefit
plans, if any.


 


10.6                           Governing
Law.  This Agreement shall be
governed by, and construed with, the law of the State of California.


 


10.7                           Headings.  The headings in this Agreement are for convenience
only and shall not be used to interpret or construe any of its provisions.


 


10.8                           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of together
shall constitute one and the same instrument.


 


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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed, has agreed and accepted terms hereof, and the Executive has hereunto
set his hand, as of the day and year first above written.


 


	
   

  	
  Optimer Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chi-Huey Wong

  
	
   

  	
   

  	
  Name: Chi-Huey Wong

  
	
   

  	
   

  	
  Title:

  



 


Agreed
and accepted as to its duties pursuant to this Agreement:


 


 


	
  By:

  	
  /s/ Michael N. Chang

  	
   

  
	
   

  	
  Michael N. Chang

  	
   

  
	
   

  	
   

  	
   

  



 


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APPENDIX A


 


KEY-EMPLOYEE COVENANTS


 


Optimer Pharmaceuticals, Inc. (the “Company”) operates in a
highly competitive industry competing for product market share as well as
recruitment and retention of key talent. The success of the Company depends on
maintaining a competitive edge in this industry through the introduction of
innovative products and attracting and retaining talents. Accordingly, as a
condition of and in consideration of employment or continued employment with
the Company pursuant to the Agreement to which this Appendix A is
attached, the parties to such Agreement acknowledge and agree as follows
(for purposes hereof, “Employee” shall be the “Executive” identified in
the Agreement):


 


1.                                       Confidential
Information:  The Employee
acknowledges that during the term of employment with the Company he or she may
develop, learn and be exposed to information about the Company and its
business, including but not limited to formulas, business plans, financial
data, vendor lists, product and marketing plans, distributor lists, and other
trade secrets which information is secret, confidential and vital to the
continued success of the Company (“Confidential Information”). The term “Confidential
shall not include, and the obligations set forth in this Section shall not
apply to, any information that (a) is publicly available, (b) becomes
publicly available without breach of this Agreement by the Employee, (c) the
Employee already possess without obligation of confidentiality, (d) the
Employee develops independently, or (e) the Employee rightfully receives
without obligation of confidentiality from a third party. The Employee agrees
that he or she will not, without the express written consent of the Company or
except as required by law or court order disclose, copy, retain, remove from
the Company’s premises or make any use of such Confidential Information except
as may be required in the course of his employment with the Company.


 


2.                                       Conflict
of Interest:  During
employment with the Company, the Employee shall not engage in any transaction
which involves a conflict of interest with the Company without the Company’s
consent. The Employee must discharge his responsibility solely on the basis of
what is in the best interest of the Company and independent of personal considerations
or relationships. Although it is difficult to identify every activity that
might give rise to a conflict of interest, and not by way of making an all
inclusive list, some of the more common circumstances and practices that might
result in such conflicts are set forth below. Should the Employee have any
questions regarding this matter, the Employee should consult with and receive
written permission from the Company’s Board of Directors.


 


a.                                       While employed
by the Company, the Employee shall maintain impartial business relationships
with vendors, suppliers and distributors.


 


b.                                      While employed
by the Company, the Employee shall not have a direct or indirect ownership
interest in vendors of the Company nor any company doing or seeking to do
business with the Company unless such ownership interest is owned by the
Employee at the time his employment with the Company commences or unless such
ownership is in the form of (a) securities in a company with publicly
traded securities (provided that the securities held by the Employee represent
less than 1% of the total outstanding securities of the company) or (b) and
interest in investment vehicles, limited partnerships, hedge funds or stock
funds where the Employee is a passive investor.


 


c.                                       While employed
by the Company, unless approved by the Company in writing, the Employee shall
not have a direct or indirect ownership in any company which competes with the
Company in any product category, unless such ownership interest is owned by the
Employee at the time his employment with the Company commences or unless (a) such
company’s securities are publicly traded and the Employee’s ownership interest
is less than 1% of the 


 


8

















 


total
outstanding securities of such company, or (b) except for any ownership
interest held as of the date of this Agreement, or (c) such company’s
securities are held by an investment vehicle, limited partnership, hedge fund
or stock fund where the Employee is a passive investor in such funds.


 


d.                                      While employed
by the Company, the Employee shall not perform services of any kind for any
entity doing or seeking to do business with the Company. As to employment with
or service to another company while employed by the Company, the Employee shall
not allow any such activity to detract from his job performance, use the
Company’s time, resources, or personnel, or require such long hours to affect
his physical or mental effectiveness.


 


e.                                       The Employee
shall disclose to the Board of Directors of the Company any and all areas
posing a potential or actual conflict of interests. Said disclosure shall be
made as promptly as possible after such conflict arises.


 


3.                                       Work
Product:  The Company
shall have the sole proprietary interest in the work product of the Employee
during his employment with the Company (“Work Product”), and the Employee
expressly assigns to the Company or its designee all rights, title and interest
in and to all copyrights, patents, trade secrets, improvements, inventions,
sketches, models and all documents related thereto, manufacturing processes and
innovations, special calibration techniques, software, service code, systems
designs and any other Work Product developed by the Employee, either solely or
jointly with others, where said Work Product relates to any business activity
or research and development activity in which the Company is involved or plans
to be involved at the time of or prior to the Employee’s creating such Work
Product or if such Work Product is developed with the use of the Company’s
time, material, or facilities; and the Employee further agrees to disclose any
and all such Work Product to the Company without delay. This provision shall
relate to Work Product created prior to the date of the Employee’s execution of
this Agreement as well as Work Product developed after execution of the
Agreement.


 


4.                                       Ethical
Standards:  The Employee
agrees to maintain the highest business ethical and legal standards in his
conduct, to be scrupulously honest and straight-forward in all of his business
dealings and to use his best efforts to avoid all situations which might
project the appearance of being unethical from a business standpoint or
illegal.


 


5.                                       Product
Resale:  As an employee of the Company,
the Employee may receive Company products and materials either at no charge or
at discount as specified from time to time by the Company in its sole
discretion. Employee agrees that the products received from the Company are
strictly limited to the Employee’s personal use and that of the Employee’s
immediate family and may not be resold, given or disposed of to any other
person or entity in a manner inconsistent with the personal use herein
described.


 


6.                                       Gratuities:  The Employee shall neither seek nor retain
gifts, gratuities, entertainment or other forms of compensation, benefit, or
persuasion from suppliers, distributors, vendors or their representatives
without the consent of the Company’s Board of Directors with the exception of
meals provided in the ordinary course of business on an infrequent basis.


 


7.                                       Non-Solicitation:  The Employee shall not in any way, directly
or indirectly, at any time during employment or within two (2) years after
either a voluntary or involuntary employment termination: (a) solicit,
divert, or take away the Company’s distributors or resellers: (b) solicit
in any manner the Company’s employees for employment with a third party or
encourage any such employee or refer any such employee (by identifying
such employee or otherwise) to a third party for employment purposes, or (c) assist
any other person in any manner or persons in an attempt to do any of the
foregoing.


 


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8.                                       Acknowledgment:  The Employee acknowledges that his position
and work activities with the Company are “key” and vital to the on-going
success of the Company’s operation in each product category and in each
geographic location in which the Company operates. In addition, the Employee
acknowledges that his employment or involvement with any other multi- level
marketing company would create the impression that the Employee has left the
Company for a “better opportunity,” which could damage the Company by this
perception in the minds of the Company’s employees or independent distributors.
Therefore, the Employee acknowledges that his confidentiality and
non-solicitation covenants hereunder are fair and reasonable and should be
construed to apply to the fullest extent possible by applicable laws. The
Employee has carefully read the Agreement, has consulted with independent legal
counsel to the extent the Employee deems appropriate, and has given careful
consideration to the restraints imposed by the Agreement. The Employee
acknowledges that the terms of the Agreement are enforceable of the manner in
which the Employee’s employment is terminated, whether voluntary or
involuntary.


 


THESE COVENANTS HAVE BEEN READ, UNDERSTOOD AND FREELY
ACCEPTED BY:


 


 


	
  /s/
  MICHAEL N. CHANG

  	
   

  



 


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Optimer
Pharmaceuticals, Inc.


10110 Sorrento
Valley Road, Suite C


San Diego,
CA  92121


 


October 2,
2008


 


Michael N. Chang,
Ph.D.


Optimer
Pharmaceuticals, Inc.


10110 Sorrento
Valley Road, Suite C


San Diego,
CA  92121


 


Re:                             Amendment to Employment Agreement


 


Dear Michael:


 


This Amendment (the “Amendment”)
to your Employment Agreement with Optimer Pharmaceuticals, Inc. (the “Company”) dated June 17, 2005
(the “Agreement”) amends the terms
and conditions of the Agreement to the extent provided herein.  The Company is proposing to adopt a Severance
Benefit Plan under which you will be eligible to participate (the “Plan”).  In exchange for the potential benefits you
may receive under the Plan, by your acknowledgement below, you will forego your
severance benefits currently set forth in the Agreement as they pertain to your
termination by the Company without cause.


 


Contingent and
effective upon the Company’s Compensation Committee or Board of Directors duly
adopting the Plan, the Agreement shall be amended as follows:


 


1.                                      Section 6 of the Agreement shall be
amended and restated in its entirety to read as follows:


 


“6.                                TERMINATION
OF EMPLOYMENT


 


6.1                                Date of
Termination.    The date of termination
shall be the date specified in a written notice of termination to the Executive
as the last day of the Executive’s employment. The date of resignation shall be
the date specified in the written notice of resignation from the Executive to
the Company as the last day of the Executive’s employment, which shall be no
more than three months and no less than thirty (30) days in advance, or if no
date is specified therein, receipt by the Company of written notice of
resignation from the Executive.


 


6.2                                Severance
Benefits.


 


6.2.1                        General.    If,
prior to the expiration of the Employment Term, the Executive’s employment
terminates for any reason, the Executive shall be entitled to payment of his
Base Salary as then in effect through and including the date of termination or
resignation. Except as otherwise expressly provided herein, the Executive shall
have no further right to receive any other compensation or benefits under this
Agreement after such termination of employment, but may be 


 

















 


eligible for other benefits in accordance
with the terms of the employee benefit plans or programs of the Company.


 


6.2.2                        Severance
Benefit Plan.  During the
Employment Term, Executive shall be eligible to participate in the Company’s
Severance Benefit Plan dated October 2, 2008, and as may be amended
thereafter (the “Severance Plan”), in
accordance with its terms. 
Notwithstanding anything to the contrary set forth in the Severance
Plan, in the event of Executive’s Constructive Termination (as such term is
defined below) Executive will be deemed to have had a “Covered Termination” as
such term is defined in the Severance Plan for all purposes of the Severance
Plan, and thereby entitled to severance benefits thereunder, subject to the
conditions set forth therein.


 


6.2.3                        Constructive
Termination.    The term “Constructive Termination” means the occurrence of one or more of the
following events, provided that Executive has first provided written notice to
the Company within 90 days of the first such occurrence of such condition
specifying the event(s) constituting Constructive Termination and
specifying that Executive intends to terminate employment not earlier than 30
days after providing such notice, and the Company (or surviving corporation)
has not cured such event(s) within 30 days (or such longer period as may
be specified by Executive in such notice) after such written notice is received
by the Company (the “Cure Period”),
and Executive resigns within thirty (30) days following the end of the Cure
Period:


 


(a)                                  a material diminution in Executive’s authority, duties
or responsibilities; or


 


(b)                                 the relocation of the
principal place for the rendering of Executive’s services hereunder to a
location that requires a one-way increase in Executive’s driving distance of
more than thirty (30) miles; or


 


(c)                                  a material reduction by the Company of the Executive’s
annual base compensation, which reduction is not applicable to all
Company’s senior executive employees.


 


However, none of the foregoing will
constitute a Constructive Termination to the extent mutually agreed upon in
advance of the occurrence thereof by the Executive and the Company.”


 


2.                                       Section 10.4
of the Agreement shall be amended and restated in its entirety to read as
follows:


 


 “10.4    Entire Agreement.    This Agreement, the Severance Plan, and the
Appendices attached hereto, (collectively the “Agreement”) which are
incorporated herein by this reference, contain the entire agreement of the
parties with respect to the subject matter hereof, and on and after the
Effective Time, and except as otherwise set forth herein, supersedes all prior
agreements, promises, 


 


2

















 


covenants, arrangements, representations and
warranties between them, whether written or oral, with respect to the subject
matter hereof.”


 


Except as specifically
amended by this Amendment, the terms and conditions of the Agreement shall
remain in full force and effect.  This
Amendment may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
instrument.  Please sign this Amendment and
return it to the Company at your earliest convenience.


 


Sincerely,


 


	
  OPTIMER PHARMACEUTICALS, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ John D. Prunty

  	
   

  
	
   

  	
  John D. Prunty

  	
   

  
	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  
	
   

  
	
  ACCEPTED AND AGREED:

  
	
   

  
	
   

  
	
  /s/ Michael N. Chang, Ph.D.

  	
   

  
	
  Michael N. Chang, Ph.D.

  



 


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