Document:

alrn-ex1021_485.htm

D. Allen Annis

Page 1 of 9
 
Exhibit 10.21

November 15, 2007

 

D. Allen Annis, Ph.D.

508 Green Street, No. 3

Cambridge, MA 02139

 

Dear Allen:

 

It is my pleasure to extend to you this offer of employment with Aileron Therapeutics, Inc. (the “Company”). The purpose of this letter is to summarize the terms of your employment with the Company, should you accept our offer:

	
1.
	
Employment. You will be employed to serve as Senior Director of Biophysical and Analytical Technologies, effective November 19, 2007. As Senior Director of Biophysical and Analytical Technologies, you will be responsible for all internal and external pre-clinical and clinical development activities relating to the Company’s technologies, building the team and overall capabilities for the Company to successfully run clinical trials and assisting with the development of the Company’s strategic product direction, plus such other duties as may from time to time be assigned to you by the Company. You shall report directly to the Chief Scientific Officer of the Company and you agree to devote your full business time, best efforts, skill, knowledge, attention and energies to the advancement of the Company’ s business and interests and to the performance of your duties and responsibilities as an employee of the Company.

	
2.
	
Base Salary and Bonus. Your base salary will be at the rate of $14,583.33 per monthly pay period (which if annualized equals $175,000), less all applicable federal, state and local taxes and withholdings, to be paid in installments in accordance with the Company’s regular payroll practices (which shall not be less than twice per month). Your base salary may be adjusted in the sole discretion of the Company from time to time in accordance with normal business practices. Following the end of any calendar year in which you are employed by the Company, and subject to the approval of the Company’s Board of Directors (the “Board”), you may from time to time be eligible for a discretionary annual bonus award of up to 20% of your base salary. Any such bonus award would be based on both you and the Company achieving certain performance objectives, as determined by the Company in its sole discretion.

	
3.
	
Benefit Programs. You may choose to participate in any and all benefit programs that the Company establishes and makes available to its employees from time to time, provided you are eligible under (and subject to all provisions of) the plan documents governing those programs. The Company reserves the right to change, add, or cease any particular benefit without notice, in its sole discretion. At present, the Company offers eligible employees health insurance, dental insurance, and a 401(k) savings program.

	
4.
	
Business Expenses. The Company will reimburse you for all reasonable and documented business expenses. Expenses in excess of $500 will require pre-approval by the Chief Scientific Officer or his/her designate.

	
5.
	
Vacation. You will be eligible for a maximum of three (3) weeks of paid vacation per calendar year to be taken at such times as may be approved in advance by the Company, which approval will not be unreasonably withheld. The number of vacation days for which you are eligible shall accrue at the rate of 1.25 days per month that you are employed during such calendar year. Pursuant to Company policy, vacation time cannot be carried over from year to year.

	
6.
	
Equity. Subject to approval by the Board, you will receive stock options to purchase 75,000 shares of the Company’s Common Stock for a price per share equal to the fair market value of one share of the Common Stock on the date of the option grant as determined by the Board and pursuant and subject to the terms of the Company’s Option Agreement (which must be executed to receive the grant). The stock options will vest (become exercisable) as follows: 12.5% of the shares underlying the options shall vest upon the six (6) month anniversary of your employment commencement date and 1/42nd of the remainder of such shares will vest on a monthly basis in forty-two (42) equal monthly installments with the first such installment vesting on the seven (7) month anniversary of your employment commencement date, subject to your continued employment with the Company through each vesting date.

 

D. Allen Annis

Page 2 of 9
 
You may also be eligible for other grants of stock or stock options as determined by and in the sole discretion of the Board. Nothing in this section shall affect your status as an employee at will, as set forth below.

	
7.
	
Confidentiality, Inventions, Non-Solicitation and Non-Competition Agreement. As a condition of employment, you will be required to execute the Confidentiality, Inventions, Non-Solicitation and Non-Competition Agreement enclosed herewith as Exhibit A.

	
8.
	
Company Policies and Procedures. As an employee of the Company, you will be required to comply with all Company policies and procedures. Violations of the Company’s policies may lead to immediate termination of your employment. Further, the Company’s premises, including all workspaces, furniture, documents and other tangible materials, and all information technology resources of the Company (including computers, data and other electronic files, and all Internet and e-mail usage) are subject to oversight and inspection by the Company at any time. Company employees should have no expectation of privacy with regard to any Company premises, materials, resources or information.

	
9.
	
Proof of Legal Right to Work. For purposes of federal immigration law, you will be required to provide the Company with documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to the Company within three (3) business days of your date of hire, or our employment relationship with you may be terminated. You may need to obtain a work visa in order to be eligible to work in the United States. If that is the case, your employment with the Company will be conditioned upon your obtaining a work visa in a timely manner as determined by the Company.

	
10.
	
At-Will Employment. This letter shall not be construed as an agreement, either express or implied, to employ you for any stated term, and shall in no way alter the Company’s policy of employment at will, under which both you and the Company remain free to end the employment relationship for any reason, at any time, with or without cause or notice. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at­ will” nature of your employment may only be changed by a written agreement signed by you and the Chief Executive Officer of the Company which expressly states the intention to modify the at-will nature of your employment. Similarly, nothing in this letter shall be construed as an agreement, either express or implied, to pay you any compensation or grant you any benefit beyond the end of your employment  with the Company.  This letter supersedes any prior understandings, whether written or oral, relating to the terms of your employment with the Company.

	
11.
	
Other Agreements and Governing Law. You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter. Please note that this offer letter is your formal offer of employment and supersedes any and all prior or contemporaneous agreements, discussions and/or understandings, whether written or oral, relating to the subject matter of this letter or your employment with the Company. The resolution of any disputes under this letter will be governed by Massachusetts law.

If this letter correctly sets forth the initial terms under which you will be employed by the Company, please sign the enclosed duplicate of this letter in the space provided below, along with the enclosed Confidentiality, Inventions, Non-Solicitation and Non-Competition Agreement, and return them to me. If you do not accept this offer by November 22, 2007, the offer will be deemed withdrawn. This offer is contingent on satisfactory reference checks.

 

	
Very truly yours,

	
 
	
 
	
 

	
By:
	
 
	
/s/ Joseph A. Yanchik III

	
Name:
	
 
	
Joseph A. Yanchik III

	
Title:
	
 
	
Chief Executive Ifficer

 

 

 

 

 

 

D. Allen Annis

Page 3 of 9
 
The foregoing correctly sets forth the terms of my at-will employment with Aileron Therapeutics, Inc. I am not relying on any representations other than as set forth above.

 

	
/s/ D. Allen Annis
	
 
	
Date:
	
 
	
11/15/2007

	
Name:
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

 

 

 

 

D. Allen Annis

Page 4 of 9
 
EXHIBIT A

AILERON THERAPEUTICS, INC.

CONFIDENTIALITY, INVENTIONS, NON-SOLICITATION AND NON-COMPETITION AGREEMENT

In consideration of my employment by Aileron Therapeutics, Inc. or any of its predecessors, successors or subsidiaries (collectively , the “Company”), and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, I, intending to be legally bound, hereby agree as follows:

Confidentiality 

I understand that the Company continually obtains and develops valuable proprietary and confidential information concerning its business, business relationships and financial affairs (the “Confidential Information”) and valuable Biological and Biochemical Materials (as hereafter defined) which may become known to me in connection with my employment by the Company. By way of illustration, but not limitation, Confidential Information may include Inventions (as hereafter defined), trade secrets, technical information, know-how, research and development activities of the Company, product and marketing plans, customer and supplier information and information disclosed to the Company or to me by third parties of a proprietary or confidential nature or under an obligation of confidence. Confidential Information is contained in various documents and media, including without limitation, patent applications, computer programs in object and/or source code, flow charts and other program documentation, manuals, plans, drawings, designs, technical specifications, laboratory notebooks, supplier and customer lists, internal financial data and other documents and records of the Company. As used herein, “Biological and Biochemical Materials” means all biological and biochemical materials, including, without limitation, any and all reagents, substances, chemical compounds, subcellular constituents, cells or cell lines, organisms and progeny, mutants, derivatives or replications thereof or therefrom.

I hereby acknowledge that all Biological and Biochemical Materials and all Confidential Information, whether or not in writing and whether or not labeled or identified as confidential or proprietary, is and shall remain the exclusive property of the Company or the third party providing such information to me or the Company. I agree that I shall not, during the term of my employment by the Company and thereafter, publish, disclose or otherwise make available to any third party, other than employees, advisors and consultants of the Company, any Confidential Information or Biological and Biochemical Materials except as expressly authorized in writing by the Company. I agree that I shall use such Confidential Information and Biological and Biochemical Materials only in the performance of my employment duties to the Company and in accordance with Company policy with respect to the protection of Confidential Information and Biological and Biochemical Materials. I agree not to use such Confidential Information or Biological and Biochemical Materials for my own benefit or for the benefit of any other person or business entity.

I agree to exercise all reasonable precautions to protect the confidentiality of Confidential Information and Biological and Biochemical Materials in my possession. Upon the termination of my employment by the Company, or at any time upon the Company’s request, I shall return immediately to the Company any and all materials containing any Confidential Information or any Biological or Biochemical Materials then in my possession or under my control.

Neither Confidential Information nor Biological and Biochemical Materials shall include information which (a) is or becomes generally known within the Company’s industry through no fault of mine; (b) was known to me at the time it was disclosed as evidenced by my written records at the time of disclosure; (c) is lawfully and in good faith made available to me by a third party who did not derive it from the Company and who imposes no obligation of confidence on me; or (d) is required to be disclosed by a governmental authority or by order of a court of competent jurisdiction, provided that such disclosure is subject to all applicable governmental or judicial protection available for like material and reasonable advance notice is given to the Company. However, information shall not be deemed to be publicly available merely because it is embraced by general disclosures or because individual features or combinations thereof are publicly available.

 

D. Allen Annis

Page 5 of 9
 
Assignment of Inventions

I agree promptly to disclose to the Company any and all ideas, concepts, discoveries, inventions,  developments, original works of authorship, software programs, software and systems documentation, trade secrets, technical data, know-how and Biological and Biochemical Materials that are conceived, devised, invented, developed or reduced to practice or tangible medium by me, under my direction or jointly with others during any period that I am employed or engaged by the Company, whether or not during normal working hours or on the premises of the Company, which relate to the business of the Company and arise out of my employment by the Company (collectively, “Inventions”).

I hereby assign to the Company all of my right, title and interest to any and all Inventions and any and all related patent rights, copyrights and applications and registrations therefor which relate to the business of the Company and arise out of my employment by the Company. During and after my employment by the Company, I shall cooperate with the Company, at the Company’s expense, in obtaining proprietary protection for any such Inventions and I shall, upon the Company’s request, execute all documents necessary or advisable in order to perfect the Company’s rights in such Inventions. In order to protect the Company in the event that I should fail or refuse to execute all such documents within a reasonable period following the Company’s request, I hereby appoint the Company my agent and attorney-in-fact to execute and deliver any such documents on my behalf.

Notwithstanding the foregoing, any discoveries, improvements and inventions, made or conceived by me prior to my employment by the Company, or not otherwise covered by the foregoing, are expressly reserved and excerpted from the provisions of this Agreement.

I acknowledge that all original works of authorship created or developed by me within the scope of my employment by the Company which are protectable by copyright are intended to be “works made for hire”, as that term is defined in Section 101 of the United States Copyright Act of 1976 (the “Act”), and shall be the property of the Company and the Company shall be the sole author within the meaning of the Act. If the copyright to any such copyrightable work shall not be the property of the Company by operation of law, then, without further consideration, I hereby assign to the Company all of my right, title and interest in such copyrightable work and I will cooperate with the Company and its designees, at the Company’s expense, to secure, maintain and defend for the Company’s benefit copyrights and any extensions and renewals thereof on any and all such work. I hereby waive all claims to moral rights in any Inventions.

Non-competition

I agree that while I am an employee of the Company and for a period of one (1) year after the termination or cessation of such employment for any reason, I shall not, without the Company’s prior written consent, directly or indirectly, as a principal, employee, consultant, partner or stockholder of, or in any other capacity with, any business enterprise engaged in the Field of Interest (as defined on the attached Schedule A) (other than in my capacity as a holder of not more than 1% of the combined voting power of the outstanding stock of a publicly held company) develop, design, produce, market, sell or render (or assist any other person or entity in developing, designing, producing, marketing, selling or rendering) products or services competitive with those developed, designed, produced, marketed, sold or rendered by the Company during the period of my employment by the Company.

Non-Solicitation and Non-Interference

I agree that while I am an employee of the Company and for a period of one (1) year after the termination or cessation of such employment for any reason, I will not directly or indirectly induce or attempt to induce any employee or independent contractor of the Company or any of its affiliates to leave the employ of or cease providing services to the Company or such affiliate, or in any way interfere with the relationship between the Company or any of its affiliates and any employee or independent contractor thereof.

I agree that while I am an employee of the Company and for a period of one (1) year after the termination or cessation of such employment for any reason, I will not directly or indirectly hire, engage, send any work to, place orders with, or in any manner be associated with any supplier, contractor, subcontractor or other business relation of the Company or any of its affiliates if such could reasonably be expected to have a material adverse effect on the business, assets or financial condition of the Company or any of its affiliates or materially interfere with the relationship between any such person or entity and the Company or any of its affiliates.

 

D. Allen Annis

Page 6 of 9
 
Other Agreements

Except as identified on the attached Schedule A, I am not bound by any agreement with any person or company to disclose and assign inventions or refrain from competing with or using or disclosing any confidential or proprietary information in the Field of Interest (as defined on Schedule A) of that person or company. I will not disclose to the Company any confidential or proprietary information belonging to any other person or company. I will not perform any employment duties for the Company which could result in claims by any other person or company of rights in any Inventions without the express prior agreement of the Company and any such person or company.

General

In the event that any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and all other provisions shall remain in full force and effect. If any of the provisions of this Agreement is held to be excessively broad, it shall be reformed and construed by limiting and reducing it so as to be enforceable to the maximum extent permitted by law.

No delay or omission by the Company in exercising any right under this agreement will operate as a waiver of that or any other right. No waiver or consent given by the Company on any occasion will be construed as a bar to or continuing waiver of any right on any other occasion.

I acknowledge that the restrictions contained in this agreement are necessary for the protection of the business and goodwill of the Company and are reasonable for such purpose. I agree that any breach of this agreement by me will cause irreparable damage to the Company and that in the event of such breach the Company will have, in addition to any and all remedies of law, the right to an injunction, specific performance, or other equitable relief, to prevent the violation of my obligations hereunder.

 

 

 

 

D. Allen Annis

Page 7 of 9
 
This Agreement shall be construed as a sealed instrument and shall in all events and for all purposes be governed by, and construed in accordance with the laws of the Commonwealth of Massachusetts without regard to any choice of law principle that would dictate the application of the laws of another jurisdiction. This Agreement supersedes all prior agreements, written or oral, with respect to the subject matter hereof.

I HAVE READ ALL OF THE PROVISIONS OF THIS AGREEMENT AND I UNDERSTAND, AND AGREE TO, EACH OF SUCH PROVISIONS.

 

		
	
11/15/2007
	
/s/ D. Allen Annis

	
Date
	
(Signature)

 

			
	
Print Name:
	
 
	
/s/ D. Allen Annis

 

 

Acknowledged and Agreed:

 

AILERON THERAPEUTICS, INC.

 

	
By:
	
 
	
/s/ Joseph A. Yanchik III

	
Name:
	
 
	
JOSEPH A. YANCHIK III

	
Title:
	
 
	
President and CEO

 

 

 

 

 

D. Allen Annis

Page 8 of 9
 
Schedule A

“Field of Interest” shall mean those indications and compounds that, to your knowledge, the Company is developing or plans to develop.

Other Agreements

I am bound by agreements with the following entities:

 

/s/ Schering-Ploughalrn-ex1022_482.htm

Exhibit 10.22

SEVERANCE AGREEMENT

This SEVERANCE AGREEMENT (this “Agreement”) is made and entered into as of November 5, 2018 by and between Allen Annis (“Executive”) and Aileron Therapeutics, Inc. (the “Company”).

WHEREAS, Executive is employed as a senior executive of the Company, and the Company desires to continue to retain the services of Executive; and

WHEREAS, the Company is entering into this Agreement in order to provide certain compensation and benefits to Executive in the event Executive’s employment with the Company is terminated under certain circumstances.

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

	
1.
	
Definitions.  

	
 
	
1.1
	
“Affiliated Entity” means any corporation, partnership, trust or other entity of which the Company and/or any of its Affiliated Entities directly or indirectly owns a majority of the outstanding shares of any class of equity security thereof and any corporation, partnership, trust or other entity which directly or indirectly owns a majority of the outstanding shares of any class of any equity security of the Company or any of its Affiliated Entities. 

	
 
	
1.2
	
 “Cause” shall mean a finding by the Board that Executive: (i) materially breached Executive’s Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement or any similar agreement between Executive and the Company (a “Confidentiality Agreement”); (ii) engaged in fraud, or embezzlement; (iii) engaged in willful misconduct or gross negligence with regard to the Company that the Board determines in good faith is, or is reasonably likely to be, materially injurious to the Company and its reputation; (iv) materially violated the Company’s published policies, including those prohibiting unlawful harassment and discrimination, as in effect from time to time; or (v) was convicted of, or pleaded guilty or nolo contendere to any felony (other than traffic-related offenses).

	
 
	
1.3
	
“Change in Control Event” means 

	
 
	
1.3.1
	
the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) 50% or more of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of 

 

	
 
		
directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Subsection 1.3.1, the following acquisitions shall not constitute a Change in Control Event: (A) any acquisition directly from the Company or (B) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of Subsection 1.3.2 of this definition;

	
 
	
1.3.2
	
the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (x) the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination represent more than 50% of the then-outstanding shares of common stock or other common equity and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors or other governing body, respectively, of the resulting or acquiring entity in such Business Combination (which shall include, without limitation, an entity which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Entity”) and (y) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Entity) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring Entity, or of the combined voting power of the then-outstanding securities of such entity entitled to vote generally in the election of directors or other governing body (except to the extent that such ownership existed prior to the Business Combination); or

	
 
	
1.3.3
	
the liquidation or dissolution of the Company;

provided that such Change in Control Event also satisfies Treasury Regulation Section 1.409A-3(i)(5) where required for compliance with Section 409A of the Internal Revenue Code and the guidance issued thereunder (“Section 409A”).

	
 
	
1.4
	
“Date of Termination” means: (i) if Executive’s employment ends other than for death, Executive’s last day of employment with the Company and, (ii) if Executive’s employment is terminated by reason of death, the date of Executive’s death.  

	
 
	
1.5
	
“Disability” shall mean any long-term disability or incapacity due to physical or mental illness that renders Executive unable to substantially perform his duties for at least ninety (90) consecutive days or one hundred twenty (120) total days during any twelve (12) month period, provided that it may occur in a shorter period if, after its commencement, it is determined to be total and permanent by a physician selected by the Company and its insurers and such determination is acceptable to Executive or to Executive’s legal representative (with such agreement on acceptability not to be unreasonably withheld). 

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1.6
	
 “Good Reason” means (i) a material diminution in the nature or scope of Executive’s duties, responsibilities, or authority; (ii) a material reduction in Executive’s base salary then in effect; (iii) a material reduction by the Company in the kind or level of employee benefits to which Executive is entitled immediately prior to such reduction with the result that the overall benefits package is materially reduced, other than a reduction comparable to reductions generally applicable to similarly situated employees of the Company; or (iv) the Company’s requiring Executive’s ongoing and regular services to be performed at a location more than fifty (50) miles from the geographic location at which Executive was providing services before such requirement. In order to terminate Executive’s employment for Good Reason, Executive must (w) give notice to the Company of Executive’s intention to resign for Good Reason within ninety (90) days after the occurrence of the event (or series of events) that Executive asserts entitles Executive to resign for Good Reason, (x) state in that notice the event that Executive considers to provide Executive with Good Reason to resign, (y) provide the Company with at least thirty (30) days after Executive’s notice to cure the event, and (z) if the event is not cured within such thirty-day cure period, resign for Good Reason within thirty (30) days after the end of the thirty-day cure period. 

	
2.
	
Obligations of the Company upon Termination.  

	
 
	
2.1
	
Termination for Any Reason or No Reason.  In the event of the termination of Executive’s employment for any reason or for no reason, the Company will pay to Executive (or to his estate) (i) the portion of his annualized base salary that has accrued prior to such termination and has not yet been paid and, to the extent consistent with general Company policy, accrued but unused paid time off through and including the Date of Termination, (ii) any bonus amount not yet paid that was earned by and approved for payment to Executive by the Board during or with respect to the calendar year preceding the Date of Termination; (iii) reimbursement for expenses properly incurred by Executive on behalf of the Company prior to such termination and properly documented in accordance with Company policy, and (iv) to the extent not theretofore paid or provided, any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan or agreement of or with the Company through the Date of Termination (all such amounts, collectively, the “Accrued Obligations”).  The Accrued Obligations will be paid as required by law but in any event promptly after termination or as provided by any applicable policy, plan or agreement.  

	
 
	
2.2
	
Termination by the Company Other Than for Cause or by Reason of Executive’s Death or Disability; By Executive for Good Reason; and Other than Upon or within Twelve Months following a Change in Control Event.  Subject to the satisfaction of the Severance Conditions (as defined below), if Executive’s employment is terminated (i) by the Company other than (x) for Cause or (y) by reason of Executive’s death or Disability, or (ii) by Executive for Good Reason, and, in each case, other than upon or within twelve (12) months following a Change in Control Event (the “CIC Period”), then in addition to the Accrued Obligations, the Company shall:  

3

 

	
 
	
2.2.1
	
Pay to Executive a sum equal to nine (9) months of base salary at Executive’s most recent base salary rate, such payment to be made in approximately equal installments according to the Company’s then-current payroll practices.  

	
 
	
2.2.2
	
Provided that Executive is eligible for and elects to continue receiving medical insurance pursuant to the federal “COBRA” law, 29 U.S.C. § 1161 et seq., continue to pay on Executive’s behalf the share of the monthly premiums for such coverage that it pays for active and similarly situated employees receiving the same type of coverage for a period of up to nine (9) months following the Date of Termination.  The remaining balance of the premium costs and all premium costs after such nine (9) month period shall be paid by Executive on a monthly basis for as long as, and to the extent that, he remains eligible for and elects to continue receiving continued coverage under COBRA; provided, however, that notwithstanding the foregoing, in the event Executive becomes eligible during the nine (9) month period for the same or substantially similar group health insurance coverage through another employer, Executive shall immediately notify the Company in writing of the date of eligibility for such coverage (the “Eligibility Date”), and the Company’s obligation to make monthly premium payments pursuant to this Subsection 2.2.2 shall end on the Eligibility Date. Notwithstanding the foregoing, payments by the Company under this Subsection 2.2.2 (but not eligibility for COBRA) shall end early if the Company determines that the continued payments are reasonably likely to result in penalties on the Company, taxation of any other employee, or taxation of Executive on income other than the payment of the premiums; provided, however, that if the Company is able to reasonably conclude that making a taxable lump sum payment to Executive in the amount of and in lieu of any remaining COBRA premiums that would otherwise be paid by the Company on Executive’s behalf under this Subsection 2.2.2 would not result in any such penalties or taxation, the Company will make such lump sum payment no later than the last day of the nine (9) month period following the Date of Termination. 

	
 
	
2.3
	
Termination By the Company for Cause; By Reason of Executive’s Death or Disability; Or By Executive Other than for Good Reason.  If Executive’s employment is terminated by the Company for Cause, or by reason of Executive’s death or Disability, or by Executive for any reason other than for Good Reason, this Agreement shall terminate without further obligations to Executive or Executive’s legal representatives under this Agreement, other than for payment of the Accrued Obligations.  

	
 
	
2.4
	
Effect of Termination on Other Positions.  If, on the Date of Termination, Executive is a member of the Company’s Board of Directors (the “Board”) or the board of directors of any Affiliated Entity, or holds any other office or position with the Company or any Affiliated Entity, Executive shall, unless otherwise requested by the Company, be deemed to have resigned from all such offices and positions as of the Date of Termination.  Executive agrees to execute such documents and take such other actions as the Company may request to reflect such resignation.  

4

 

	
 
	
2.5
	
Conditions to Payment of Post-Separation Benefits.  As a condition of Executive’s receipt of the post-separation benefits in Section 2.2 and Section 3.1, Executive must execute and return to the Company a severance and release of claims agreement provided by and satisfactory to the Company (the “Release Agreement”), and such Release Agreement must become binding, enforceable and irrevocable within sixty (60) calendar days after Executive’s termination of employment (the “Severance Conditions”).  Payments will begin in the first pay period beginning after the Severance Conditions have been satisfied or as promptly as practicable thereafter, provided that if the foregoing sixty (60) day period would end in a calendar year subsequent to the year in which Executive’s employment ends, payments will not be made before the first payroll period of the subsequent year (the “Payment Date”).  Notwithstanding the foregoing, the acceleration of vesting of the Equity Awards contemplated by Subsection 3.1.4 below shall take immediate effect upon the Date of Termination; provided, however, that Executive agrees that the portion of such Equity Awards that shall have been accelerated pursuant to Subsection 3.1.4 (the “Accelerated Portion”) shall not be exercised prior to the date on which the Severance Conditions have been satisfied, that any shares to be issued or retained under other Equity Awards will not be issued or retained prior to the date on which the Severance Conditions have been satisfied and that if the Severance Conditions have not been satisfied within the prescribed time period, than, as of such date, the Accelerated Portion shall be cancelled and cease to be exercisable, forfeited, or not issued, as applicable on the basis of the type of Equity Award. 

	
3.
	
Change in Control.  

	
 
	
3.1
	
Subject to the satisfaction of the Severance Conditions, if, during the CIC Period, Executive’s employment is terminated by the Company without Cause and not for death or Disability, or if Executive resigns his employment for Good Reason, then, in addition to the Accrued Obligations, the Company shall:  

	
 
	
3.1.1
	
Pay to Executive a sum equal to twelve (12) months of base salary at Executive’s most recent base salary rate, such payment to be made in approximately equal installments according to the Company’s then-current payroll practices.  

	
 
	
3.1.2
	
Provided that Executive is eligible for and elects to continue receiving medical insurance under COBRA, continue to pay on Executive’s behalf the share of the monthly premiums for such coverage that it pays for active and similarly situated employees receiving the same type of coverage for a period of up to twelve (12) months following the Date of Termination.  The remaining balance of the premium costs and all premium costs after such twelve (12) month period shall be paid by Executive on a monthly basis for as long as, and to the extent that, he remains eligible for and elects to continue receiving continued coverage under COBRA; provided, however, that notwithstanding the foregoing, in the event Executive becomes eligible during the twelve (12) month period 

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for the same or substantially similar group health insurance coverage through another employer, Executive shall immediately notify the Company in writing of the Eligibility Date, and the Company’s obligation to make monthly premium payments pursuant to this Subsection 3.1.2 shall end on the Eligibility Date.  Notwithstanding the foregoing, payments by the Company under this Subsection 3.1.2 (but not eligibility for COBRA) shall end early if the Company determines that the continued payments are reasonably likely to result in penalties on the Company, taxation of any other employee, or taxation of Executive on income other than the payment of the premiums; provided, however that if the Company is able to reasonably conclude that making a taxable lump sum payment to Executive in the amount of and in lieu of any remaining COBRA premiums that would otherwise be paid by the Company on Executive’s behalf under this Subsection 3.1.2 would not result in any such penalties or taxation, the Company will make such lump sum payment no later than the last day of the twelve (12) month period following the Date of Termination.

	
 
	
3.1.3
	
Pay to Executive, on the Payment Date, a lump sum equal to one times (1 x) Executive’s target bonus award for the year in which the Date of Termination occurs without regard to whether the performance goals applicable to such target bonus had been established or satisfied at the Date of Termination.

	
 
	
3.1.4
	
Notwithstanding the terms of any stock option agreement, restricted stock agreement or other stock award (“Equity Award”), other than terms more favorable to Executive, effective as of the Termination Date, accelerate the vesting of all Equity Awards held by Executive at the Termination Date (other than Equity Awards that vest on the basis of performance and do not provide solely for time-based vesting), such that such Equity Awards shall become 100% vested. 

	
 
	
3.2
	
280G.  Notwithstanding any other provision of this Agreement to the contrary, if payments made hereunder or otherwise are considered “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then such excess parachute payments plus any other payments made by the Company and its affiliates that Executive is entitled to receive that are considered excess parachute payments shall be limited to the greatest amount that may be paid to Executive under Section 280G of the Code without causing any loss of deduction to the Company under such Code Section, but only if, by reason of such reduction, the “Net After Tax Benefit” (as defined below) to Executive exceeds the net after tax benefit if such reduction was not made.  “Net After Tax Benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive that would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, less (ii) the amount of federal, state and other income taxes payable with respect to the foregoing calculated at the maximum marginal tax rate for each year in which the 

6

 

	
 
		
foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the Code at the time of termination of Executive’s employment or the change in control), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described above by Section 4999 of the Code.  The determination of whether payments would be considered excess parachute payments and the calculation of all the amounts referred to in this section shall be made reasonably and in good faith by the parties, provided, that if the parties cannot agree, then such determination (and supporting calculations) shall be made by attorneys, accountants, or an executive compensation consulting firm each as selected by the Company at the expense of the Company (the “280G Service Providers”).  Any determination by the 280G Service Providers made in good faith shall be binding upon the Company and Executive.

	
4.
	
No Mitigation.  In no event, except as set forth expressly in this or another agreement signed by Executive, shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and, subject to the aforesaid exception, such amounts shall not be reduced whether or not Executive obtains other employment.  

	
5.
	
Restrictive Covenants.  As a condition of the effectiveness of this Agreement, Executive shall have previously, or contemporaneously with the execution of this Agreement, executed and delivered to the Company a Confidentiality Agreement in form and substance reasonably acceptable to the Company and Executive.

	
6.
	
Payments Subject to Section 409A.  Subject to the provisions in this Section 6, any severance payments or benefits under this Agreement shall begin only upon the date of Executive’s “separation from service” (determined as set forth below) which occurs on or after the date of termination of employment.  The following rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to Executive under this Agreement:  

	
 
	
6.1
	
It is intended that each installment of the severance payments and benefits provided under this Agreement shall be treated as a separate “payment” for purposes of Section 409A.  Neither Executive nor the Company shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.  

	
 
	
6.2
	
If, as of the date of Executive’s “separation from service” from the Company, Executive is not a “specified employee” (within the meaning of Section 409A), then each installment of the severance payments and benefits shall be made on the dates and terms set forth in this Agreement  

	
 
	
6.3
	
If, as of the date of Executive’s “separation from service” from the Company, Executive is a “specified employee” (within the meaning of Section 409A), then:  

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6.3.1
	
Each installment of the severance payments and benefits due under this Agreement that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when the separation from service occurs, be paid within the short-term deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A and shall be paid at the time and in the matter set forth in this Agreement; and  

	
 
	
6.3.2
	
Each installment of the severance payments and benefits due under this Agreement that is not described in Subsection 6.3.1 above and that would, absent this subsection, be paid within the six-month period following Executive’s “separation from service” from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, Executive’s death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following Executive’s separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of severance payments and benefits if and to the maximum extent that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service).  Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of Executive’s second taxable year following the taxable year in which the separation from service occurs.  

	
 
	
6.4
	
The determination of whether and when Executive’s separation from service from the Company has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h).  Solely for purposes of this Section 6.4, “Company” shall include all persons with whom the Company would be considered a single employer as determined under Treasury Regulation Section 1.409A-(h)(3).  

	
 
	
6.5
	
All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.  

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7.
	
Return of Company Property.  Upon termination of employment for any reason, Executive shall promptly return to the Company any keys, credit cards, passes, confidential documents or material, computer equipment, or other property belonging to the Company, and Executive shall also return all writings, files, records, correspondence, notebooks, notes and other documents and things (including any copies thereof) containing confidential information or relating to the business or proposed business of the Company or the Affiliated Entities or containing any trade secrets relating to the Company or the Affiliated Entities.  For purposes of the preceding sentence, the term “trade secrets” shall have the meaning ascribed to it under the Uniform Trade Secrets Act.  Executive agrees to represent in writing to the Company upon termination of employment that he has complied with the foregoing provisions of this Section.  

	
8.
	
Assistance with Claims.  Executive agrees that, consistent with Executive’s business and personal affairs, during and after his employment by the Company he will assist the Company and the Affiliated Entities in the defense of any claims, or potential claims that  may be made or are threatened to be made against any of them in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), and will assist the Company and the Affiliated Entities in the prosecution of any claims that may be made by the Company or the Affiliated Entities in any Proceeding, to the extent that such claims may relate to Executive’s employment or the period of Executive’s employment by the Company.  The Company agrees to (i) reimburse Executive for all of Executive’s reasonable out-of-pocket expenses associated with such assistance, including travel expenses and (ii) with respect to assistance provided after Executive’s employment, compensate Executive on an hourly basis, based on a rate commensurate with Executive’s base salary (assuming a forty (40) hour work week) in effect on the Date of Termination, for time Executive spends in excess of ten (10) hours in any calendar quarter providing such assistance to the Company, provided that such time shall not include any time spent testifying in any arbitration, trial, administrative hearing or other proceeding. Any amounts to be paid to Executive pursuant to this Section 8 shall be paid by the Company no later than thirty (30) days of the date on which Executive provides documentation to the Company that such expenses were incurred.  

	
9.
	
Successors.  This Agreement is personal to Executive and shall not be assignable by Executive without the prior written consent of the Company.  This Agreement and any rights and benefits hereunder shall inure to the benefit of and be enforceable by Executive’s legal representatives, heirs or legatees.  This Agreement and any rights and benefits hereunder shall inure to the benefit of and be binding upon the Company and its successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business.  

	
10.
	
Miscellaneous.  

	
 
	
10.1
	
Entire Agreement/Modification/Choice of Law/Enforceability/Jury Waiver.  Both Executive and the Company acknowledge that this Agreement is the entire agreement of the parties, and supersedes any prior or contemporaneous discussions, understandings, or agreements, with respect to the subject matter hereof.  For the avoidance of doubt and without limiting the foregoing, (a) 

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Executive shall not be eligible to receive severance or similar post-employment payments or benefits under any severance plan, program or policy now or hereafter maintained by the Company, and (b) any employment offer letter or employment agreement between Executive and the Company (such offer letter or employment agreement, the “Employment Agreement”) shall survive the execution and delivery of this Agreement and remain in full force and effect in accordance with its original terms; provided, however, that any provisions of the Employment Agreement relating to severance and post-employment payments and benefits shall be superseded hereby in their entirety and shall hereafter cease to be of any force or effect. This Agreement may be amended only in a written agreement duly executed by the parties hereto.  This Agreement shall be deemed to have been made in the Commonwealth of Massachusetts and shall be governed by and construed in accordance with the laws of such Commonwealth, without giving effect to conflict of law principles.  Both parties agree that any action, demand, claim or counterclaim relating to the terms and provisions of this Agreement, or to its formation or breach, or to Executive’s employment or the termination thereof, shall be commenced only in Massachusetts in a court of competent jurisdiction, and further acknowledge that venue for such actions shall lie exclusively in Massachusetts.  Both parties hereby waive and renounce in advance any right to a trial by jury in connection with such legal action.  

	
 
	
10.2
	
Withholding.  The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.  

	
 
	
10.3
	
No Guarantee of any Tax Consequences.  The Company makes no guarantee of any tax consequences with respect to any payment hereunder including, without limitation, under Section 409A.  

	
 
	
10.4
	
Severability.  The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, and this Agreement will be construed as if such invalid or unenforceable provision were omitted (but only to the extent that such provision cannot be appropriately reformed or modified).  

	
 
	
10.5
	
Waiver of Breach.  No waiver by any party hereto of a breach of any provision of this Agreement by any other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, will operate or be construed as a waiver of any subsequent breach by such other party of any similar or dissimilar provisions and conditions at the same or any prior or subsequent time.  

10

 

	
 
	
10.6
	
Notices.  Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or prepaid overnight courier to the parties at the addresses set forth below (or such other addresses as shall be specified by the parties by like notice):  

to the Company: 

Aileron Therapeutics, Inc. 
490 Arsenal Way

Watertown, MA 02472
Attention:  Chief Executive Officer

 

with a copy to: 

Wilmer Cutler Pickering Hale and Dorr, LP 
60 State Street
Boston, MA 02109
Attention: Stuart Falber 

or to Executive: 

At the most recent address maintained 
by the Company in its personnel records 

	
 
	
10.7
	
Each party, by written notice furnished to the other party, may modify the applicable delivery address, except that notice of change of address shall be effective only upon receipt.  Such notices, demands, claims and other communications shall be deemed given in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery; or in the case of certified or registered U.S. mail, five days after deposit in the U.S. mail; provided, however, that in no event shall any such communications be deemed to be given later than the date they are actually received. 

	
 
	
10.8
	
Not Employment Contract.  Executive acknowledges that this Agreement does not constitute a contract of employment, does not imply that the Company will continue his employment for any period of time and does not change the at-will nature of his employment.

	
 
	
10.9
	
Survivorship.  Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto shall survive such expiration or other termination to the extent necessary to carry out the intentions of the parties under this Agreement.  

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10.10
	
Counterparts.  This Agreement may be executed in separate facsimile or electronic counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.  

	
 
	
10.11
	
Representations.  Executive hereby acknowledges that he understands this Agreement and enters into this Agreement voluntarily. 

IN WITNESS THEREOF, Executive has hereunto set his hand, and the Company has caused this Agreement to be executed in its name and on its behalf, all as of the day and year first above written. 

 

			
	
AILERON THERAPEUTICS, INC.
	
 
	
Allen Annis

	
 
	
 
	
 

	
/s/ Don Dougherty

 
	
 
	
/s/ Allen Annis

 

	
Name: Don Dougherty
	
 
	
 

	
Title: Chief Financial Officer
	
 
	
 

 

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