Document:

Exhibit 10.2

 

[SYNTA LETTERHEAD]

 

February 25, 2013

 

Sumant Ramachandra, MD, PhD

[ADDRESS]

 

Dear Sumant:

 

On behalf of Synta Pharmaceuticals, I am pleased to offer you the position of President, Research and Development reporting to Safi Bahcall, President and Chief Executive Officer for Synta Pharmaceuticals Corp. (hereinafter “Synta Pharmaceuticals” or the “Company”).

 

1.  Effective Date:  The effective date of your employment is March 11, 2013.

 

2.  Compensation:  Your initial base salary will be $480,000.00.annually, payable at a semi-monthly rate of $20,000.00, from which all applicable taxes and other customary employment-related deductions will be taken.

 

You will be eligible to receive up to $4,000.00 per month for up to 36 months following your start date with the Company as reimbursement for temporary housing rental, furniture rental, vehicle rental/lease expenses in Massachusetts, as well as travel between Massachusetts and Illinois.  You will be required to provide appropriate receipts for all such expenses, and to provide such receipts to the Company within 90 days of incurring any such expense, in order to be reimbursed for such expenses.  If, within 24 months of your start date at the Company, you voluntarily resign from your employment with the Company or if your employment with the Company is terminated by the Company for “Cause” (as that term is defined in the attached Severance and Change of Control Agreement), you agree to repay to the Company any payments, reimbursements or expenses paid to you or on your behalf as described in this paragraph, within 10 days following your last day of employment with the Company.

 

In addition to the above temporary living reimbursement, the Company will provide a full service pack and move of your household items from Illinois to Massachusetts so long as your relocation takes place on or before the end of June, 2018.

 

All reimbursements provided under this Agreement or other agreement between you and the Company shall, to the extent applicable,  be made or provided in accordance with the requirements of Section 409A of the Internal Revenue Code and the rules and regulations thereunder including, where applicable, the requirement that (a) any reimbursement is for expenses incurred during the term of this Agreement; (b) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (c) the reimbursement of an eligible expense shall be made no later than the last day of the calendar year following the year in which the expense is incurred; and (d) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.

 

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3. Bonus:  You will be eligible to receive an annual, discretionary performance based bonus. This cash bonus, for fully meeting and exceeding expectations under the Company’s bonus program, is expected to be at a target level of 50% of your base salary.  Such bonus, if any, will be granted at the discretion of the Company’s Board of Directors and will be paid to you by no later than March 15th of the calendar year immediately following the calendar year in which it was earned.

 

4. Stock Option:  You will be granted an incentive stock option to purchase 225,000 shares of the Company’s common stock pursuant to the terms of the Synta Pharmaceuticals Corp. 2006 Stock Plan (the “Plan”) and formal stock option agreement.  All stock option grants shall be priced at the fair market value (as defined in the 2006 plan) on the grant date and are subject to a vesting schedule over four years (25% vest on the first year anniversary of your hire date and the remainder in equal portions quarterly over the next three years).  If there is a conflict between the terms of the Plan, a copy of which will be provided to you with the grant, and any stock option agreement, the terms of the Plan will control.

 

You will also be granted 75,000 restricted shares of the Company’s common stock pursuant to the terms of the Plan and a formal restricted share agreement to be executed by you pursuant thereto.  These restricted shares shall be subject to the following vesting schedule: 50% vest on the second anniversary of your hire date and the remainder on the third anniversary of your hire date.   If there is conflict between the terms of the Plan, a copy of which will be provided to you with the grant, and any restricted share agreement

 

5. Severance and Change of Control:  Please refer to the document included with this offer of employment entitled Severance and Change of Control Agreement, a copy of which is attached hereto as Exhibit A.

 

6.  Benefits:  As a full-time employee, you will be eligible to participate in certain Company-sponsored benefit plans to the same extent as, and subject to the same terms, conditions and limitations applicable to other employees of the Company of similar rank and tenure. All benefits may be changed or modified from time to time at the Company’s sole discretion.

 

7.  Employment Period: Your employment with the Company will be at-will, meaning that you will not be obligated to remain employed by the Company for any specified period of time; likewise, the Company will not be obligated to continue your employment for any specific period and may terminate your employment at any time, with or without cause.

 

8.  Contingencies:  Our employment offer to you is contingent upon (1) your execution of the standard form of Non-Competition, Confidentiality and Inventions Agreement (a copy of which is attached hereto as Exhibit B); (2) your ability, as required under federal law, to establish your employment eligibility as a U.S. citizen, a lawful permanent resident of the U.S. or an individual specifically authorized for employment by the Immigration and Naturalization Service; and (3) completion of a satisfactory background check.  If any of the foregoing conditions are not met, this employment offer shall be null and void.

 

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9.  Jurisdiction and Waiver:  In the case of any dispute, this offer of employment shall be interpreted under the laws of the Commonwealth of Massachusetts.  By accepting this offer of employment, you agree that any action, demand, claim or counterclaim in connection with any aspect of your employment with the Company or any separation of employment (whether voluntary or involuntary) from the Company, shall be resolved in a court of competent jurisdiction in Massachusetts by a judge alone, and you knowingly waive and forever renounce your right to a trial before a civil jury; provided, however, that any claims related to the terms of the Severance and Change of Control Agreement shall be resolved in the arbitration forum specified in that agreement.

 

10.  Orientation:  On your first day of employment, please arrive at 45 Hartwell Avenue at 8:30am for benefits enrollment with Human Resources.

 

Sumant, we are very enthusiastic and looking forward to your joining us as a Synta Pharmaceuticals employee.  Please indicate your acceptance of the foregoing by signing one enclosed copy of this letter and returning it to Art McMahon by no later than February 26, 2013.   After that date, this offer will lapse.  If you need additional time to respond to this offer, please let us know immediately.

 

	
Sincerely,
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SYNTA PHARMACEUTICALS CORP.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Safi Bahcall
    	
 
    	
 
    
	
Safi Bahcall, Ph.D.
    	
 
    	
 
    
	
Director, President and Chief Executive   Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Agreed to and accepted:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
/s/ Sumant Ramachandra
    	
 
    	
Date:
    	
February   26, 2013
    
	
 
    	
Sumant Ramachandra, MD, PhD
    	
 
    	
 
    

 

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EXHIBIT B

 

Synta Pharmaceuticals Corp.

45 Hartwell Avenue

Lexington, MA  02421

 

February 25, 2013

 

Sumant Ramachandra, MD, PhD

[ADDRESS]

 

Dear Sumant:

 

This letter is to confirm our understanding with respect to (i) your agreement not to compete with Synta Pharmaceuticals Corp. or its subsidiaries or affiliates (collectively, the “Company”) and (ii) your agreement to protect and preserve information and property which is confidential and proprietary to the Company (the terms and conditions agreed to in this letter shall hereinafter be referred to as the “Agreement”).  You hereby acknowledge and agree that you are an “at-will” employee and that no provision of this Agreement shall be construed to create an express or implied employment contract, or a promise of employment for a specific period of time, and the Company expressly reserves the right to end your employment at any time, with or without notice or cause.

 

In consideration of your employment by the Company, the mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, we have agreed as follows:

 

1.              Prohibited Competition and Solicitation.

 

(a)         Certain Acknowledgments and Agreements.

 

(i)                                     We have discussed, and you recognize and acknowledge the competitive and proprietary aspects of the business of the Company.

 

(ii)                                  You acknowledge and agree that (A) you will devote your full time and efforts to the business of the Company during your employment with the Company, and (B) during the period of your employment with the Company (the “Term”) and, for a period of six (6) months following the termination of your employment (whether such termination is voluntary or involuntary), you shall not participate, directly or indirectly, in any capacity, in any business which is competitive with the Company without the prior written consent of the Company.  You acknowledge and agree that a business will be deemed competitive with the Company if, within the Field of Interest (as defined below), it conducts research, performs any of the services or manufactures or sells any of the products provided or offered by the Company or if it performs any other services and/or engages in the production, manufacture, distribution or sale of any product that may be purchased in lieu of purchasing services performed or products produced, manufactured, distributed or sold by the Company at any time during the period of your employment with the Company.

 

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(iii)                               You further acknowledge and agree that, during the course of your employment with the Company, the Company will furnish, disclose or make available to you confidential and proprietary information related to the Company’s business and that the Company may provide you with unique and specialized training.  You also acknowledge that such confidential information and such training have been developed and will be developed by the Company through the expenditure by the Company of substantial time, effort and money and that all such confidential information and training could be used by you to compete with the Company.

 

(b)         Non-Solicitation.  During the Term and for a period of twelve (12) months following termination of your employment, whether such termination is voluntary or involuntary, you shall not, without the prior written consent of the Company:

 

(i)                                     either individually or on behalf of or through any third party, solicit, divert or appropriate or attempt to solicit, divert or appropriate, any customer of the Company with which you had any contact at any time during the Term, for purposes of competing with the Company as described in Section 1(a)(ii) above; or

 

(ii)                                  either individually or on behalf of or through any third party, directly or indirectly, solicit, entice or persuade or attempt to solicit, entice or persuade any employees of or consultants to the Company (other than your spouse), who have been employees or consultants of the Company at any time during the Term, or who are employees at the time of the solicitation, to leave the services of the Company.

 

(c)          Field of Interest.  As used herein, the term “Field of Interest” means the research of, and/or the development, manufacture and sale of, any therapeutic or diagnostic product that is developed, manufactured or sold by the Company at any time during the Term, as documented in the bi-weekly scientific project reports or other scientific planning documents of the company (the “Scientific Reports”) prepared by the Company during the Term.  You hereby acknowledge and agree that the Field of Interest shall be assessed for purposes of this Agreement as of the date on which your employment with the Company terminates, which assessment shall include, without limitation, a review of the applicable Scientific Reports.

 

(d)         Reasonableness of Restrictions.  You further acknowledge and agree that (i) the activities which are prohibited by this Section 1 are narrow and reasonable in relation to the skills which represent your principal salable asset both to the Company and to your other prospective employers, and (ii) given the global nature of the Company’s business, including its need to market its services and sell its products in a large geographic area in order to have a sufficient customer base to make the Company’s business profitable, the geographic, length of time and substantive scope of the provisions of this Section 1 are reasonable, legitimate and fair to you.

 

(e)          Survival of Acknowledgments and Agreements.  Except as expressly set forth hereunder, your acknowledgments and agreements set forth in this Section 1 shall survive the termination of your employment with the Company for the periods set forth above.

 

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2.              Protected Information.

 

(a)         Confidentiality Obligations.  You shall at all times, both during the Term and thereafter, maintain in confidence and shall not, without the prior written consent of the Company, use, except in the course of performance of your duties for the Company, disclose or give to others any Confidential Information of the Company.  As used herein, the term “Confidential Information” shall mean any information which is disclosed to or developed by you during the course of performing services for, or receiving training from, the Company, and is not generally available to the public, including but not limited to confidential information concerning business plans, customers, future customers, suppliers, licensors, licensees, partners, investors, affiliates or others, training methods and materials, financial information, sales prospects, client lists, Company Inventions (as defined in Section 3), or any other scientific, technical, trade or business secret or confidential or proprietary information of the Company or of any third party provided to you during the Term.  In the event anyone not employed or otherwise engaged by the Company seeks information from you in regard to any such Confidential Information or any other secret or confidential work of the Company, or concerning any fact or circumstance relating thereto, you will promptly notify the chief executive officer of the Company.

 

(b)         Limited Exceptions.  The restrictions in Section 2(a) hereof shall not apply to information that, as can be established by competent written records:  (i) was publicly known at the time of the Company’s communication thereof to you; (ii) becomes publicly known through no fault of yours subsequent to the time of the Company’s communication thereof to you; (iii) was in your possession free of any obligation of confidence at the time of the Company’s communication thereof to you; or (iv) is developed by you independently of and without reference to or use of any of the Company’s Confidential Information.  In the event that you are required by law, regulation or court order to disclose any of the Company’s Confidential Information, you shall (i) first notify the Company of such disclosure requirement and (ii) furnish only that portion of the Confidential Information that is legally required and will exercise all reasonable efforts to obtain reliable assurances that confidential treatment will be accorded the Confidential Information.

 

(c)          Survival of Acknowledgements and Agreements.  Except as expressly set forth hereunder, your acknowledgements and agreements set forth in this Section 2 shall survive the termination of your employment with the Company.

 

3.              Ownership of Intellectual Property Ideas.

 

(a)         Property of the Company.  As used in this Agreement, the term “Inventions” shall mean all ideas, discoveries, creations, manuscripts and properties, innovations, improvements, know-how, inventions, designs, developments, apparatus, techniques, methods, biological processes, cell lines, laboratory notebooks and formulae, whether patentable, copyrightable or not, including all rights to obtain, register, perfect and enforce any of the foregoing.  You hereby agree that any Inventions which you may conceive, reduce to practice or develop during the Term in connection with the business activities of the Company or otherwise

 

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within the Field of Interest, alone or in conjunction with any other party, whether during or out of regular business hours, and whether at the request or upon the suggestion of the Company, or otherwise (collectively, the “Company Inventions”), shall be the sole and exclusive property of the Company.  You hereby assign to the Company all of your right, title and interest in and to all such Company Inventions and hereby agree that you shall not publish any of the Company Inventions without the prior written consent of the Company.

 

(b)         Cooperation.  During the Term, you agree that, without further compensation, you will disclose promptly to the Company in writing, all Company Inventions you conceive, reduce to practice or develop during the Term (or, if based on or related to any Confidential Information of the Company obtained by you during the Term, within one (1) year after the termination of your employment).  You further agree that you will fully cooperate with the Company, its attorneys and agents in the preparation and filing of all papers and other documents as may be reasonably required to perfect the Company’s rights in and to any of such Company Inventions, including, but not limited to, joining in any proceeding to obtain patents, copyrights, trademarks or other legal rights of the United States and of any and all other countries on such Company Inventions; provided, that, the Company will bear the expense of such proceedings (including all of your reasonable expenses).  You further agree that any patent or other legal right covering any Company Invention so issued to you, personally, shall be assigned by you to the Company without charge by you.  You further acknowledge that all original works of authorship made by you, whether alone or jointly with others within the scope of your employment and which are protectable by copyright are “works made for hire” within the meaning of the United States Copyright Act, 17 U.S.C. § 101, as amended, the copyright of which shall be owned solely, completely and exclusively by the Company.  If any Company Invention is considered to be work not included in the categories of work covered by the United States Copyright Act, 17 U.S.C. § 101, as amended, such work shall be owned solely by, or hereby assigned or transferred completely and exclusively to, the Company. If the Company is unable because of your mental or physical incapacity or for any other reason, after reasonable effort, to secure your signature on any document or documents needed to obtain or enforce any patent, copyright, trademarks or any other rights covering Inventions or original works of authorship assigned by you to the Company as required above, you hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as your agent and attorney-in-fact, to act for and in your behalf and stead to execute and file any application or assignment and to do all other lawfully permitted acts to further the prosecution and issuance to the Company of patents, copyright registrations, trademark registrations or similar protections covering the Inventions with the same legal force and effect as if executed by you.

 

4.              Provisions Necessary and Reasonable/Breach/Attorneys’ Fees. You agree that (i) the provisions of Sections 1, 2 and 3 of this Agreement are necessary and reasonable to protect the Company’s Confidential Information, Company Inventions, and goodwill and (ii) in the event of any breach of any of the covenants set forth herein, the Company would suffer substantial irreparable harm and would not have an adequate remedy at law for such breach.  In recognition of the foregoing, you agree that in the event of a breach or threatened breach of any of these

 

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covenants, in addition to such other remedies as the Company may have at law, without posting any bond or security, the Company shall be entitled to seek and obtain equitable relief, in the form of specific performance, and/or temporary, preliminary or permanent injunctive relief, or any other equitable remedy which then may be available.  The seeking of such injunction or order shall not affect the Company’s right to seek and obtain damages or other equitable relief on account of any such actual or threatened breach.

 

5.              Disclosure to Future Employers.  You agree that you will provide, and that the Company may similarly provide in its discretion, a copy of the covenants contained in Sections 1, 2 and 3 of this Agreement to any business or enterprise which you may directly, or indirectly, own, manage, operate, finance, join, control or in which you participate in the ownership, management, operation, financing, or control, or with which you may be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise.

 

6.              Representations Regarding Prior Work and Legal Obligations.

 

(a)         You represent that you have no agreement or other legal obligation with any prior employer or any other person or entity that restricts your ability to engage in employment discussions with, employment with, or to perform any function for, the Company.

 

(b)         You represent that you have been advised by the Company that at no time should you divulge to or use for the benefit of the Company, any trade secret or confidential or proprietary information of any previous employer.  You acknowledge that you have not divulged or used any such information for the benefit of the Company.

 

(c)          You acknowledge that the Company is basing important business decisions on these representations, and affirm that all of the statements included herein are true.

 

7.              Records.  Upon termination of your employment relationship with the Company, you shall deliver to the Company any property of the Company which may be in your possession including products, materials, memoranda, notes, records, reports, or other documents or photocopies of the same.

 

8.              No Conflicting Agreements.  You hereby represent and warrant that, with the exception of the non-competition, non-solicitation agreement between you and Hospira, Inc. (a copy of which will be provided to the Company prior to your effective date of employment) you have no commitments or obligations inconsistent with this Agreement and you hereby agree to indemnify and hold the Company harmless against loss, damage, liability or expense arising from any claim based upon circumstances alleged to be inconsistent with such representation and warranty.

 

9.              General.

 

(a)         Notices.  All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party’s address set forth below or to such other address as a party may designate by notice hereunder, and shall be either (i) delivered by

 

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hand, (ii) made by telex, telecopy or facsimile transmission with confirmed receipt thereof (and with a copy of such telex, telecopy or facsimile, together with a copy of the confirmation sent to the recipient by regular U.S. mail on the next business day), (iii) sent by overnight courier, or (iv) sent by registered mail, return receipt requested, postage prepaid.

 

	
If to the Company:
    	
Synta Pharmaceuticals Corp.
    
	
 
    	
45 Hartwell Avenue
    
	
 
    	
Lexington, MA 02421
    
	
 
    	
Attn: Chief Executive Officer
    
	
 
    	
 
    
	
If to you:
    	
To the address set forth on the signature   page of
    
	
 
    	
this Agreement.
    

 

All notices, requests, consents and other communications hereunder shall be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if made by telex, telecopy or facsimile transmission, at the time that receipt thereof has been acknowledged by electronic confirmation or otherwise, (iii) if sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, or (iv) if sent by registered mail, on the fifth business day following the day such mailing is made.

 

(b)         Entire Agreement.  This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

 

(c)          Modifications and Amendments.  The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto.

 

(d)         Waivers and Consents.  The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

 

(e)          Assignment.  The Company may assign its rights and obligations hereunder to any person or entity that succeeds to all or substantially all of the Company’s business or that aspect of the Company’s business in which you are principally involved.  Your rights and obligations under this Agreement may not be assigned by you without the prior written consent of the Company.

 

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(f)           Benefit.  All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto.  Nothing in this Agreement shall be construed to create any rights or obligations except among the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement.

 

(g)          Governing Law.  This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of laws principles thereof.

 

(h)         Jurisdiction.  Any legal action or proceeding with respect to this Agreement may be brought in the courts of the Commonwealth of Massachusetts or of the United States of America.  By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts.

 

(i)             Severability.  The parties intend this Agreement to be enforced as written.  However, (i) if any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a duly authorized court having jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law and (ii) if any provision, or part thereof, is held to be unenforceable because of the duration of such provision or the geographic area covered thereby, the Company and you agree that the court making such determination shall have the power to reduce the duration and/or geographic area of such provision, and/or to delete specific words and phrases (“blue-penciling”), and in its reduced or blue-penciled form such provision shall then be enforceable and shall be enforced.

 

(j)            Headings and Captions.  The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify, or affect the meaning or construction of any of the terms or provisions hereof.

 

(k)         No Waiver of Rights, Powers and Remedies.  No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of the party.  No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder.  The election of any remedy by a party hereto shall not constitute a waiver of the right of such party to pursue other available remedies.  No notice to or demand on a party not expressly required under this Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.

 

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(l)             Counterparts.  This Agreement may be executed in one or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

If the foregoing accurately sets forth our agreement, please so indicate by signing and returning to us the enclosed copy of this letter.

 

	
 
    	
 
    	
Very truly yours,
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
SYNTA PHARMACEUTICALS CORP.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Safi Bahcall
    
	
 
    	
 
    	
Safi Bahcall, Ph.D.
    
	
 
    	
 
    	
Director, President and Chief Executive   Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
Agreed to and accepted:
    	
 
    
	
 
    	
 
    
	
/s/ Sumant Ramachandra
    	
 
    
	
Name: Sumant Ramachandra, MD, PhD
    	
 
    
	
 
    	
 
    
	
[ADDRESS]
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    
	
Date:
    	
February   26, 2013
    	
 
    
				

 

A-11Exhibit 10.3

 

SEVERANCE AND CHANGE OF CONTROL AGREEMENT

 

This Agreement (the “Agreement”) is entered into as of the 25th day of February, 2013 by and between Synta Pharmaceuticals Corp., a Delaware corporation (the “Company”), and Sumant Ramachandra (the “Executive”).

 

WHEREAS Executive is employed by the Company, and because of such employment, possesses detailed knowledge of the Company and its business and operations;

 

WHEREAS Executive’s continued service to the Company is very important to the future success of the Company;

 

WHEREAS the Company desires to enter into this Agreement to provide Executive with certain financial protection in the event that Executive’s employment terminates under certain circumstances, and thereby to provide Executive with incentives to remain with the Company; and

 

WHEREAS the Board of Directors of the Company (the “Board”) acting through the Compensation Committee has determined that it is in the best interests of the Company to enter into this Agreement.

 

NOW THEREFORE for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Executive agree as follows:

 

1.                                      Definitions.

 

(a)                                 Cause.  As used herein, “Cause” shall include (and is not limited to): (i) material misrepresentation with respect to the Company or any affiliate, parent or subsidiary of the Company; (ii) insubordination; (iii) substantial malfeasance or nonfeasance of duty; (iv) unauthorized disclosure of confidential information; (v) Executive’s breach of any material provision of any employment, consulting, advisory, non-disclosure, invention assignment, non-competition, or similar agreement between Executive and the Company; or (vi) conduct substantially prejudicial to the business of the Company or any affiliate, parent or subsidiary of the Company.  The Board shall have sole discretion to determine the existence of “Cause,” and its determination will be conclusive on Executive and the Company; provided that the Board may delegate its power to act under this paragraph (a) to a committee of the Board in which case the determination of such committee shall be conclusive.  “Cause” is not limited to events which have occurred prior to the termination of Executive’s service, nor is it necessary that the Board’s finding of “Cause” occur prior to such termination.  If the Board determines, subsequent to Executive’s termination of service, that either prior or subsequent to Executive’s termination Executive engaged in conduct which would constitute “Cause,” then Executive shall have no right to any benefit or compensation under this Agreement.

 

(b)                                 Change of Control.  As used herein, a “Change of Control” shall mean the occurrence of any of the following events:

 

 

(i)            Ownership.  Any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “Beneficial Owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, or any affiliate, parent or subsidiary of the Company, or by any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions which the Board does not approve; or

 

(ii)           Merger/Sale of Assets.  (A) A merger or consolidation of the Company whether or not approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or the parent of such corporation) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation, as the case may be, outstanding immediately after such merger or consolidation; (B) or the stockholders of the Company approve an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; or

 

(iii)          Change in Board Composition.  A change in the composition of the Board, as a result of which fewer than a majority of the directors are Incumbent Directors.  “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the date of this Agreement, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors, or by a committee of the Board made up of at least a majority of the Incumbent Directors, at the time of such election or nomination (but shall not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company).

 

(c)                                  Good Reason.  As used herein, a “Good Reason” shall mean: (i) Executive, as a condition of remaining an employee of the Company, is required to change the principal location where Executive renders services to the Company to a location more than fifty (50) miles from Executive’s then-current location of employment; (ii) there occurs a material adverse change in

 

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Executive’s duties, authority, reporting structure (reporting to CEO) or responsibilities which causes Executive’s position with the Company to become of significantly less responsibility or authority than Executive’s position is on the date hereof; or (iii) there occurs a material reduction in Executive’s base salary from Executive’s base salary received on the date hereof, provided that any notice of termination by Executive for Good Reason shall be given by Executive within fifteen (15) business days of Executive’s becoming aware of the occurrence of the facts giving rise to such Good Reason.  For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it will not cause adverse tax consequences for either party with respect to Section 409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”), and any successor statute, regulation and guidance thereto.

 

(d)                                 Base Salary.  As used herein, “Base Salary” shall mean Executive’s annual base salary, excluding reimbursements, bonuses, benefits, and amounts attributable to stock options and other non-cash compensation.

 

2.                                      Severance for Termination by the Company Other than For Cause or by Executive for Good Reason.  In the event that (i) Executive’s employment is terminated by action of the Company other than for Cause, or (ii) Executive terminates Executive’s employment for Good Reason, then Executive shall receive the following (subject to Executive’s execution of a release of claims as described in Section 7):

 

(a)                                 Severance Payments.  Continuation of payments in an amount equal to Executive’s then-current Base Salary for a six (6) month period less all customary and required taxes and employment-related deductions, in accordance with the Company’s normal payroll practices (provided such payments will be made at least monthly.)

 

(b)                                 Equity Acceleration.  Acceleration of vesting of any and all outstanding stock option awards that would have vested during the period commencing on Executive’s date of termination through and including the date that is six (6) months following Executive’s date of termination.

 

(c)                                  COBRA Payments.  Upon completion of the appropriate COBRA(1) forms, and subject to all the requirements of COBRA, the Company shall continue Executive’s participation in the Company’s health and dental insurance plans at the Company’s cost (except for Executive’s co-pay, if any, which shall be deducted from Executive’s severance compensation) for the six (6) months following Executive’s date of termination, to the same extent that such insurance is provided to similarly situated Company executives, provided that this benefit will cease and the Company will be under no obligation to provide it if Executive has become eligible for coverage under another employer’s group coverage, and Executive hereby agrees to notify the Company promptly and in writing should that occur.  Notwithstanding the foregoing, any Company subsidy for Executive’s COBRA premiums will cease upon the earlier of (i) a determination the same is illegal under applicable laws, or (ii) the date the same is determined, in good faith by the Company, to be discriminatory under applicable Sections of the Code, the Patient Protection and Affordable Care Act, and/or the Health Care and Education Reconciliation Act.

 

(1)                                 “COBRA” is the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

 

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(d)                                 No Duplication.  In the event that Executive is eligible for the severance payments and benefits under Section 3 below, Executive shall not be eligible for and shall not receive any of the severance payments and benefits as provided in this Section 2.

 

3.                                      Change of Control Severance.  In the event that a Change of Control occurs and within a period of one (1) year following the Change of Control, either: (i) Executive’s employment is terminated other than for Cause, or (ii) Executive terminates Executive’s employment for Good Reason, then Executive shall receive the following (subject to Executive’s execution of a release of claims, as described in Section 7):

 

(a)                                 Lump Sum Severance Payment.  On the sixtieth (60th) day following Executive’s termination, payment of an amount equal to twelve (12) months of Executive’s then-current Base Salary less all customary and required taxes and employment-related deductions.

 

(b)                                 Separation Bonus.  On the sixtieth (60th) day following Executive’s termination, payment of a separation bonus in an amount equal to the target annual bonus to which Executive may have been entitled for the year in which Executive is terminated, prorated for the portion of the year in which Executive was employed.

 

(c)                                  Equity Acceleration.  Full acceleration as of the date of termination of vesting of any and all equity awards outstanding immediately prior to termination.

 

(d)                                 COBRA Payments.  Upon completion of the appropriate COBRA forms, and subject to all the requirements of COBRA, the Company shall continue Executive’s participation in the Company’s health and dental insurance plans at the Company’s cost (except for Executive’s co-pay, if any, which shall be deducted from Executive’s severance compensation) for the twelve (12) months following Executive’s date of termination, to the same extent that such insurance is provided to similarly situated Company executives, provided that this benefit will cease and the Company will be under no obligation to provide it if Executive has become eligible for coverage under another employer’s group coverage, and Executive hereby agrees to notify the Company promptly and in writing should that occur.  Notwithstanding the foregoing, any Company subsidy for Executive’s COBRA premiums will cease upon the earlier of (i) a determination the same is illegal under applicable laws, or (ii) the date the same is determined, in good faith by the Company, to be discriminatory under applicable Sections of the Code, the Patient Protection and Affordable Care Act, and/or the Health Care and Education Reconciliation Act.

 

(e)                                  No Duplication.  In the event that Executive is eligible for the severance payments and benefits under Section 2 above, Executive shall not be eligible for and shall not receive any of the severance payments and benefits as provided in this Section 3.

 

4.                                      No Severance.  In the event that Executive’s employment is terminated for any reason other than those outlined in Sections 2 or 3, then Executive shall have no right to any of the severance payments and benefits provided under this Agreement.

 

5.                                      Distribution Limitation.  If any payment or benefit Executive would receive under this Agreement, when combined with any other payment or benefit Executive receives pursuant to a

 

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Change of Control (for purposes of this section, a “Payment”) would: (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”); and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be either: (x) the full amount of such Payment; or (y) such lesser amount (with cash payments being reduced before stock option compensation) as would result in no portion of the Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local employments taxes, income taxes, and the Excise Tax, results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.

 

6.                                      Section 409A.   Notwithstanding any other provision with respect to the timing of payments under Sections 2 or 3:

 

(a)                                 Notwithstanding any other provision with respect to the timing of payments under Sections 2 or 3, if, at the time of Executive’s termination, Executive is deemed to be a “specified employee” of the Company (within the meaning of Code Section 409A(a)(2)(B)(i) and any successor statute, regulation and guidance thereto (“Code Section 409A”)), then limited only to the extent necessary to comply with the requirements of Code Section 409A, any payments to which Executive may become entitled under Sections 2 or 3 which are subject to Code Section 409A (and not otherwise exempt from its application) will be withheld until the first (1st) business day of the seventh (7th) month following the termination of Executive’s employment, at which time Executive shall be paid an aggregate amount equal to the accumulated, but unpaid, payments otherwise due to Executive under the terms of Sections 2 or 3

 

(b)                                 If any payments to which Executive may become entitled under Sections 2 or 3 constitute “non-qualified deferred compensation” subject to Code Section 409A(a)(2)(B)(i) and any successor statute, regulation and guidance thereto, then any termination of Executive’s employment triggering payment of benefits under Section 4 must constitute a “separation from service” under Code Section 409A(a)(2)(A)(i) and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination of Executive’s employment does not constitute a separation of service under Code Section 409A(a)(2)(A)(i) and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by Executive to Company at the time Executive’s employment terminates), any such payments that constitute non-qualified deferred compensation under Code Section 409A shall be delayed until after the date of a subsequent event constituting a separation of service under Code Section 409A(a)(2)(A)(i) and Treas. Reg. §1.409A-1(h).  For purposes of clarification, this Section shall not cause any forfeiture of benefits on Executive’s part, but shall only act as a delay until such time as a “separation from service” occurs.

 

7.                                      Release of Claims.  The Company shall not be obligated to pay Executive any of the compensation set forth in Sections 2 and 3 unless and until Executive has executed a timely full and general release of all claims against the Company and any affiliate, parent or subsidiary, and its and their officers, directors, employees, and agents, in a form satisfactory to the Company.  The Company shall provide such release of claims to Executive within five (5) days following any qualifying separation from service, and such release must be effective and irrevocable before

 

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the sixtieth (60th) day following the effective date of Executive’s termination of employment (the “Review Period”).  If Executive executes and does not revoke such agreement within the Review Period, then the compensation set forth in Section 2 or 3, as applicable, shall be paid or shall commence, as applicable, on the sixtieth (60) day following your termination of employment.

 

8.                                      No Impact on Employment Status.  This Agreement is not intended to confer, and shall not be interpreted as conferring, any additional employment rights on Executive, and has no impact on either party’s right to terminate Executive’s employment under contract or applicable law.

 

9.                                      Enforceability; Reduction.  If any provision of this Agreement shall be deemed invalid or unenforceable as written, this Agreement shall be construed, to the greatest extent possible, or modified, to the extent allowable by law, in a manner which shall render it valid and enforceable and any limitation on the scope or duration of any provision necessary to make it valid and enforceable shall be deemed to be a part thereof.  No invalidity or unenforceability of any provision contained herein shall affect any other portion of this Agreement.

 

10.                               Notices.

 

(a)                                 All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party’s address set forth below or to such other address as a party may designate by notice hereunder, and shall be either (i) delivered by hand, (ii) made by telex, telecopy or facsimile transmission, (iii) sent by overnight courier, or (iv) sent by registered or certified mail, return receipt requested, postage prepaid.

 

If to the Company:

 

President and Chief Executive Officer

Synta Pharmaceuticals Corp.

45 Hartwell Avenue

Lexington, MA 02421

 

With a copy to:

 

General Counsel

Synta Pharmaceuticals Corp.

45 Hartwell Avenue

Lexington, MA 02421

 

If to Executive:

 

Sumant Ramachandra, MD, PhD

[ADDRESS]

 

(b)                                 All notices, requests, consents and other communications hereunder shall be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at

 

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the address of such party set forth above, (ii) if made by telex, telecopy or facsimile transmission, at the time that receipt thereof has been acknowledged by electronic confirmation or otherwise, (iii) if sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, or (iv) if sent by registered or certified mail, on the fifth (5th) business day following the day such mailing is made.

 

11.                               Entire Agreement / No Duplication of Compensation or Benefits.  This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof including, but not limited to, any offer letter or employment agreement previously entered into between the Executive and the Company.  No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.  The terms of Sections 2 and 3 above shall replace any agreement, policy or practice which otherwise would obligate the Company to provide any severance compensation and/or benefits to Executive, provided that this provision shall not be construed to otherwise limit Executive’s rights to payments or benefits provided under any pension plan (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended), deferred compensation, stock, stock option or similar plan sponsored by the Company.

 

12.                               Modifications and Amendments.  The terms and provisions of this Agreement may be modified or amended only by written agreement executed by all parties hereto. Any such amendment shall comply with the requirements of Code Section 409A, if applicable.

 

13.                               Waivers and Consents.  The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

 

14.                               Assignment.  The rights and obligations under this Agreement may be assigned by the Company.

 

15.                               Benefit.  All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto.  Nothing in this Agreement shall be construed to create any rights or obligations except among the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement.

 

16.                               Arbitration.  Any controversy, dispute or claim arising out of or in connection with this Agreement will be settled by final and binding arbitration to be conducted in Boston, Massachusetts pursuant to the national rules for the resolution of employment disputes of the American Arbitration Association then in effect.  The decision or award in any such arbitration will be final and binding upon the parties, and judgment upon such decision or award may be entered in

 

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any court of competent jurisdiction, or application may be made to any such court for judicial acceptance of such decision or award and an order of enforcement.  In the event that any procedural matter is not covered by the aforesaid rules, the procedural law of Massachusetts will govern.  Any disagreement as to whether a particular dispute is arbitrable under this Agreement shall itself be subject to arbitration in accordance with the procedures set forth herein. Notwithstanding the foregoing, any right or obligation arising out of or concerning any separate contract or agreement between the parties (including but not limited to any employee, non-competition, non-solicitation, non-disclosure and invention agreement) shall be decided in accordance with the dispute resolution mechanism provided for by such contract or agreement.

 

17.                               Governing Law / Jurisdiction / Service of Process.  This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the Commonwealth of Massachusetts, without giving effect to the conflict of law principles thereof.  Any legal action or proceeding with respect to this Agreement that is not subject to arbitration pursuant to Section 16 will be brought in the courts of the Commonwealth of Massachusetts in Middlesex County or of the United States of America for the District of Massachusetts, sitting in Boston.  By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts.  Each of the parties hereto irrevocably consents to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by certified mail, postage prepaid, to the party at its address set forth in Section 10.

 

18.                               Counterparts.  This Agreement may be executed in one or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

 

	
 
    	
SYNTA PHARMACEUTICALS CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Safi R. Bahcall
    
	
 
    	
 
    	
Safi R. Bahcall, Ph.D.
    
	
 
    	
 
    	
President and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
/s/ Sumant Ramachandra
    
	
 
    	
Sumant Ramachandra, MD, PhD
    
	
 
    	
President,   Research and Development
    

 

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