Document:

Exhibit 10.3

 

 

May 9, 2013

 

Eric Sirota

12 Edgehill Avenue

Chatham, NJ 07928

 

Dear Eric:

 

It is with great pleasure that I offer you the position of Chief Operating Officer with Optimer Pharmaceuticals, Inc. (“Optimer” or the “Company”), performing such duties as are normally associated with this position and such duties as are assigned to you from time to time.  You will report to Hank McKinnell, Optimer’s CEO.  We at Optimer have greatly benefited from your expertise as a consultant to the Company and are very excited about your now becoming a key member of our executive team.  We look forward to the prospect of working with you in your new capacity.

 

Associated with this opportunity, the Company offers the following compensation and benefits:

 

1.              Initial Salary:  $380,000 U.S. Dollars on an annualized basis, subject to standard federal and state payroll withholding requirements and paid semi-monthly in accordance with the Company’s payroll practices.

 

2.              Optimer has an incentive compensation plan which provides for discretionary annual performance bonuses to our employees based on their position.  Your target incentive compensation is 40% of your annual salary, subject to payroll withholdings and deductions.  Actual bonuses paid under the incentive compensation plan are based on your continuous performance of services to the Company through the date the bonus is paid, the achievement of established corporate and individual goals, and the approval of the Company’s Board of Directors (the “Board”).  Neither the fact nor the amount of any bonus is guaranteed.  Rather, the Board shall determine, in its sole discretion, the amount of any bonus earned by you based upon its evaluation of (a) your achievements of certain milestones and performance objectives established for you by the Board and/or Compensation Committee of the Board and (b) the Company’s achievement of key milestones and objectives established by the Board and/or Compensation Committee of the Board.  Plan participants must be hired by September 1st to participate in the plan year.  Bonus amounts will be pro-rated for plan participants that are hired after January 1st, but before August 31st in the plan year.  The bonus shall be subject to the terms of any applicable incentive compensation plan adopted by the Company, as amended by the Company from time to time.  The bonus, if earned, will be paid to you within the time period set forth in the incentive compensation plan; or if no such time period was established, within a reasonable time after completion of the period for which performance is being measured as determined by the Company but in no event shall the bonus be paid after March 15th of the year following the year in which it is earned.  In the event your employment with the Company ends for any 

 

 

reason prior to the date the bonus is paid, you are not eligible for any bonus, prorated or otherwise.  For the avoidance of doubt, you acknowledge and agree that you have no contractual right under this letter agreement to any bonus payment or any target percentage, and that any bonus that is paid to you shall be at the sole discretion of the Board.

 

3.              Following commencement of your employment as Chief Operating Officer and as approved by Optimer’s Board of Directors, you will be granted a Restricted Stock Unit award (the “RSU”) which represents the right to be issued on a future date 10,000 shares of Common Stock of Optimer Pharmaceuticals, Inc.  The RSU will be subject to the terms and conditions applicable to restricted stock unit awards granted under the Company’s 2012 Equity Incentive Plan and the applicable Restricted Stock Unit Agreement.  The shares subject to the RSU will be issued to you according to the following  vesting schedule:  one half (1/2) will vest as of one year from the date of grant and the other half (1/2) will vest as of the second year from the date of grant, subject to your continuous employment with the Company on such dates.

 

4.              Optimer offers a competitive benefit package to you and your eligible dependents that currently includes Medical, Dental, Vision, Group Term Life Insurance, Long Term Disability Insurance, a 401(k) plan and several voluntary benefit options.  You will be eligible to participate in these benefit plans on the same basis as similarly situated employees.  Details about these benefit plans are available for your review.  All matters of eligibility for coverage or benefits under any benefit plan shall be determined in accordance with the provisions of such plan.  The Company reserves the right to change, alter, or terminate any benefit plan in its sole discretion.

 

5.              You will be provided 22 paid vacation days a year (7.33 hours per pay period) beginning with your first pay period as a full-time employee.  You will also be provided with 5 days of sick time per year.  Details about these benefits are provided in the employee sourcebook.

 

6.              You will be eligible to participate in Optimer’s Amended and Restated Severance Benefit Plan (the “Severance Plan”) at the level of Company Officer; provided, however, that notwithstanding any provision of the Severance Plan to the contrary, your Base Salary Continuation Period for purposes of Appendix A-2(a) and A-3(a) of the Severance Plan will be the greater of (a) 6 months and (b) the number of months (rounded down in the event of any partial months) during which you are employed by the Company from and after the date of this offer letter, up to a maximum of 15 months (in the case of a “Regular Covered Termination” under Appendix A-2(a) of the Severance Plan) or 18 months (in the case of a “Change of Control Covered Termination” under Appendix A-3(a) of the Severance Plan.  All other terms and conditions of the Severance Plan, including qualifying termination criteria and the length of continued health care coverage, will apply to you without modification.

 

Please understand that this offer is contingent upon your successful completion of a background check.  You will be required to give your consent for Optimer, through an outside firm, to complete a criminal background check and verification of information provided on your employment application.  Attached is a form for you to complete giving Optimer authorization

 

101 HUDSON STREET, SUITE 3501, JERSEY CITY, NJ 07302     TEL: 201-333-8819   FAX: 201-333-8870

 

 

to conduct your background investigation.  This offer of employment is further contingent upon your submission to a drug test to be administered under the Company’s Drug Testing Policy and upon the Company’s receipt of satisfactory test results.  By signing this letter, you acknowledge and agree that you may be subjected to additional drug testing during your employment and the tests may be the same or different in each case, which testing will be administered under the Company’s Drug Testing Policy.  For the avoidance of doubt, and notwithstanding that this offer as a whole is contingent upon your satisfactory completion of a background investigation and initial drug screening, should the results of either your background investigation or initial drug screening be unsatisfactory to the Company in its sole discretion, (i) the RSU granted to you under paragraph 3 above shall be forfeited and (ii) you will not be eligible for participation in the Severance Plan.

 

We would like you to start as Chief Operating Officer on or before May 9, 2013.

 

You should be aware that your employment with the Company is for no specified period and constitutes at-will employment.  As a result, you are free to resign at any time, for any reason or for no reason.  Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause, and with or without notice.  Your employment at-will status can only be modified in a written agreement signed by you and by an officer of Optimer.

 

For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States.  Such documentation must be provided to us at orientation but in no event later than three (3) business days of your date of hire, or our employment relationship with you may be terminated.

 

As a Company employee, you will be expected to abide by company rules and policies as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion.  You will be specifically required to sign an acknowledgment that you have read and understand the company rules of conduct, which is included in our employee sourcebook.  You will receive access to the employee sourcebook at orientation.

 

You will also be expected to sign and comply with an Employee Confidential Information and Inventions Assignment Agreement, which requires, among other provisions, the assignment of rights to inventions made during your employment at the Company and non-disclosure of proprietary information.   Enclosed is a copy of the Employee Confidential Information and Inventions Assignment Agreement for your review and execution.

 

By signing this letter, you are representing that you have full authority to accept this position and perform the duties of the position without conflict with any other obligations and that you are not involved in any situation that might create, or appear to create, a conflict of interest with respect to your loyalty to or duties for the Company.  You specifically warrant that you are not subject to an employment agreement or restrictive covenant preventing full performance of your duties to the Company.

 

By signing this letter, you acknowledge that the terms described in this letter, together with the Employee Confidential Information and Inventions Assignment Agreement attached hereto, sets forth the entire understanding between us and supersedes any prior representations or agreements, whether written or oral.  There are no terms, conditions, representations,

 

 

warranties or covenants other than those contained herein.  No term or provision of this letter may be amended waived, released, discharged or modified except in writing, signed by you and an authorized officer of Optimer, except that the Company may, in its sole discretion, adjust salaries, incentive compensation, stock plans, benefits, job titles, locations, duties, responsibilities, and reporting relationships.

 

By signing this letter, you agree that the Consulting Agreement, dated March 8, 2013, and Initial Statement of Work, dated March 8, 2013 and amended on March 25, 2013, between you and the Company (together, the “Consulting Arrangements”) will immediately terminate, and you and the Company hereby agree to waive any right to notice of termination of the Consulting Arrangements.  You will remain entitled to any accrued but unpaid compensation under the Consulting Arrangements, including a pro-rata payment of your monthly cash fee through May 8th, except that you will not receive any pro-rata payment of restricted stock units for the month of May, and certain provisions of the Consulting Arrangements will continue in accordance with their terms.  However, you acknowledge that your change from consultant to to employee of the Company is not a “separation from service” for the purposes of the Consulting Arrangements, and therefore the restricted stock units that you have been or will be granted under the Consulting Arrangements will remain outstanding and will fully vest and deliver in accordance with their terms (i.e., on the earlier of a “change in control” of the Company or your “separation from service” within the meaning of Section 409A of the Code, which would generally be expected to correspond to termination of your employment by the Company).

 

We do hope that you will decide to accept this opportunity to join us at Optimer during what is a particularly exciting time in the growth and development of the Company.  If there is anything further that you wish to discuss or any issues that require clarification, please do not hesitate to contact me at (201) 492-9208.

 

Eric, if you accept the terms of this offer, kindly sign and date both copies of this letter, the Employee Confidential Information and Inventions Assignment Agreement and the authorization for the background investigation, keep one set for yourself and return one set to Optimer by scanning the executed document and then emailing tduffy@optimerpharma.com.

 

	
Best   Regards,
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Linda E. Amper
    	
 
    	
 
    
	
Linda   Amper, Ph.D.
    	
 
    	
 
    
	
Senior   Vice President, Human Resources
    	
 
    	
 
    

 

	
 
    	
 
    	
 
    	
 
    
	
I   accept the offer as stipulated above:
    	
/s/   Eric Sirota
    	
 
    	
5/9/2013
    
	
 
    	
Signature
    	
 
    	
DateExhibit 4.1

 

 

AMAG PHARMACEUTICALS, INC.

 

Non-Statutory Stock Option Grant

(Non-Plan Inducement Grant)

 

1.                                      Grant of Option

 

AMAG Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby grants to Greg Madison (the “Recipient”), an option to purchase 75,000 shares of Common Stock, $.01 par value per share, of the Company as hereinafter set forth (the “Option”), as an inducement grant made pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules.  This Option satisfies the requirements of Section 3(c) of the Employment Agreement (as defined below).  The date of grant of this Option is January 2, 2013.

 

For the avoidance of doubt, this Option is not issued under the Company’s Second Amended and Restated 2007 Equity Incentive Plan, as amended from time to time (the “2007 Plan”) and does not reduce the share reserve under the 2007 Plan.  However, for purposes of interpreting the applicable provisions of this Option, the terms and the conditions of the 2007 Plan (other than those applicable to the share reserve) shall govern and apply to this Option as if such Option had actually been issued under the 2007 Plan.  All terms which are defined in the 2007 Plan shall have the same meanings herein.

 

2.                                      Vesting of Option

 

This Option shall be exercisable in cumulative monthly installments on each of the following dates; provided that the Recipient has maintained a continuous Business Relationship with the Company through each date specified below:

 

	
Date Exercisable
    	
 
    	
Number of Shares Exercisable
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On date of grant
    	
 
    	
- 0 -
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On January 2, 2014
    	
 
    	
18,750
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On January 2, 2015
    	
 
    	
37,500
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On January 2, 2016
    	
 
    	
56,250
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On January 2, 2017
    	
 
    	
75,000
    	
 
    

 

No additional shares shall vest and become exercisable between each of the vesting dates set forth above.

 

	
Inducement   Grant Stock Option Agreement
    	
Confidential   Document
    

 

 

3.                                      Term of Option

 

Unless terminated earlier as provided in Section 6 below, this Option shall terminate in ten (10) years on January 2, 2023.

 

4.                                      Exercise Price

 

The exercise price of this Option shall be $15.89 per share.

 

5.                                      Exercise and Payment

 

(a)                                 Method of Payment.    This Option shall be exercisable by delivery to the Company of written notice of exercise, specifying the number of shares for which this Option is being exercised (subject to Section 2 hereof), together with (i) payment to the Company for the total exercise price thereof in cash, by check, (ii) subject to the Company’s approval, by Common Stock of the Company already owned by the Recipient, (iii) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price, (iv) delivery by the Recipient to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price, or (v) by some combination thereof; provided that methods (iii) and (iv) shall only be permissible if the Company’s Common Stock is listed on the Nasdaq Global Select Market or other national securities exchange at such time.

 

(b)                                 Valuation of Shares Tendered in Payment of Purchase Price.    For the purposes hereof, the fair market value of any share of the Company’s Common Stock which may be delivered to the Company in exercise of this Option shall be determined in good faith by the Board of Directors of the Company, or, in the absence of such determination, shall be equal to the closing price of a share of the Company’s Common Stock as reported on the Nasdaq Global Select Market (or other national securities exchange or automated marketplace upon which the Company’s Common Stock is then traded) on the date of exercise of this Option.

 

(c)                                  Delivery of Shares Tendered in Payment of Purchase Price.    If the Company permits the Recipient to exercise Options by delivery of shares of Common Stock of the Company, the certificate or certificates representing the shares of Common Stock of the Company to be delivered shall be duly executed in blank by the Recipient or shall be accompanied by a stock power duly executed in blank suitable for purposes of transferring such shares to the Company.  Fractional shares of Common Stock of the Company will not be accepted in payment of the purchase price of shares acquired upon exercise of this Option.

 

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6.                                      Effect of Termination of Employment, Board Membership, or Service Provision or Death

 

This Option shall not be assignable or transferable either voluntarily or by operation of law, except as set forth in this Section 6.  Notwithstanding the foregoing, an Option may be transferred pursuant to a domestic relations order.  Further, notwithstanding the foregoing, the Recipient may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of the death of the Recipient, shall thereafter be the beneficiary of an Option with the right to exercise the Option and receive the Common Stock or other consideration resulting from an Option exercise.

 

Unless otherwise provided in the Employment Agreement, if the Recipient’s Business Relationship with the Company is terminated by the Company or by the Recipient for any reason, whether voluntarily or involuntarily, no additional shares subject to this Option shall become exercisable under any circumstances with respect to the Recipient and any unvested portion of this Option shall be forfeited.  Notwithstanding the foregoing, under certain circumstances set forth in the Employment Agreement and subject to compliance by the Recipient with the requirements of the Employment Agreement related to such circumstances, the vesting of the unvested portion of this Option may be accelerated as provided in the Employment Agreement.  Any determination under this Agreement as to Business Relationship status or other matters referred to above shall be made in good faith by the Board of Directors of the Company, whose decision shall be final and binding on all parties.

 

In the event the Recipient during his or her lifetime ceases to have a Business Relationship with the Company for any reason, other than death or disability, any unexercised portion of this Option which was otherwise exercisable on the date of termination of Recipient’s Business Relationship (after taking into account any accelerated vesting) shall expire unless exercised within three months of that date, but in no event after the expiration of the term hereof.

 

In the event of termination of the Recipient’s Business Relationship because of the death or disability of the Recipient (i) while the Recipient has a Business Relationship with the Company, or (ii) during the three-month period following termination of his or her Business Relationship for any reason other than death or disability, this Option shall be exercisable for the number of shares otherwise exercisable on the date of death, disability or termination, by the Recipient or his or her personal representatives, heirs or legatees, as the case may be, at any time prior to the expiration of one year from the date of the death or disability of the Recipient, but in no event after the expiration of the term hereof.

 

For purposes hereof, a Business Relationship shall not be considered as having terminated during any military leave, sick leave, or other leave of absence if approved in writing by the Company and if such written approval, or applicable law, contractually obligates the Company to continue the Business Relationship of the Recipient after the approved period of absence (an “Approved Leave of Absence”).  In the event of an 

 

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Approved Leave of Absence, vesting of the Option shall be suspended (and all subsequent vesting dates shall be postponed by the length of the period of the Approved Leave of Absence) unless otherwise provided in the Company’s written approval of the leave of absence that specifically refers to this Agreement.  For purposes hereof, a Business Relationship shall include a consulting arrangement between the Recipient and the Company that immediately follows termination of employment, but only if so stated in a written consulting agreement executed by the Company that specifically refers to this Agreement.

 

Notwithstanding the foregoing, if the Recipient, prior to the termination date of this Option,  (i) violates any provision of any employment agreement or any confidentiality or other agreement between the Recipient and the Company, (ii) commits any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof, (iii) attempts to commit, or participate in, a fraud or act of dishonesty against the Company, or (iv) commits gross misconduct, the right to exercise this Option shall terminate immediately upon written notice to the Recipient from the Company describing such violation or act.

 

“Business Relationship” means service to the Company or its successor in the capacity of an employee, officer, director, consultant, or advisor.

 

“Employment Agreement” shall mean the Employment Agreement, dated as of October 15, 2012, as amended from time to time, by and between the Company and the Recipient.

 

7.                                      Employment, Board Membership or Service

 

Nothing contained in this Option shall be construed as giving the Recipient any right to be retained in the employ, board membership, or service of the Company or any of its subsidiaries.

 

8.                                      Withholding Taxes

 

The Recipient acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Recipient any federal, state or local taxes of any kind required by law to be withheld with respect to exercise of this Option.

 

9.                                      2007 Plan Provisions

 

As stated above, this Option is not granted pursuant to the 2007 Plan.  Instead, this Option is granted as an inducement grant pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules.  However, for purposes of interpreting the applicable provisions of this Option, the terms and the conditions of the 2007 Plan (other than those applicable to the share reserve) shall govern and apply to this Option as if such Option had actually been issued under the 2007 Plan.

 

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10.                               Recipient Representation; Stock Certificate Legend

 

If the Recipient is an “affiliate” of the Company (as defined in Rule 144 promulgated under the Securities Act of 1933), all stock certificates representing shares of Common Stock issued to such Recipient pursuant to this Option shall have affixed thereto legends substantially in the following form:

 

“The shares represented by this certificate may be deemed to be held by an “affiliate” as defined by the Securities Act of 1933, as amended (the “Act”) and may not be sold, transferred or assigned unless such sale is pursuant to an effective registration statement under the Act or an opinion of counsel, satisfactory to the corporation, is obtained to the effect that such sale, transfer or assignment is exempt from the registration requirements of the Act.”

 

11.                               Notice

 

Any notice required to be given under the terms of this Option shall be properly addressed as follows:  to the Company at its principal executive offices, and to the Recipient at his or her address set forth below, or at such other address as either of such parties may hereafter designate in writing to the other.

 

12.                               Non-Qualified Stock Option

 

It is understood that this Option is not intended to qualify as an “incentive stock option” as defined in Section 422 of the Internal Revenue Code.

 

13.                               Enforceability

 

This Option shall be binding upon the Recipient, his or her estate, and his or her personal representatives and beneficiaries.

 

14.                               Effective Date

 

The effective date of this Option is January 2, 2013.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, this Option has been executed by a duly authorized officer of the Company as of the effective date.

 

	
 
    	
AMAG   PHARMACEUTICALS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Frank E. Thomas
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:   Executive Vice President, Chief Operating Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
Recipient’s   Acceptance:
    	
 
    
	
 
    	
 
    
	
The   undersigned hereby accepts this Option and agrees to the terms and provisions   set forth in this Option and in the 2007 Plan (a copy of which has been   delivered to him/her).
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/   Greg Madison
    	
 
    
	
(Signature   of Recipient)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Greg   Madison
    	
 
    
	
(Print   Name of Recipient)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Address: 
    	
[address]
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:  
    	
January 2, 2013
    	
 
    

 

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