Document:

Exhibit
10.1

 

March 20, 2006

 

Lynn Baird, Ph.D.

39 Riverside
Terrace

North Easton, MA
02356

 

Dear Lynn:

 

On behalf of
CombinatoRx, Incorporated (“the Company”), I am pleased to offer you the
position of Senior Vice President, Regulatory Affairs & QA/QC. This position will report to Alexis
Borisy, President & CEO.

 

1. Your job
responsibilities:

 

This position is a
member of the Executive Team and will be responsible for all aspects of
domestic and international regulatory affairs. This will include development of
strategic plans for regulatory approvals, implementation of strategies for the
earliest possible approval from IND to NDA submissions, insurance of corporate
compliance with all regulatory agencies, and direction of programs that
accelerate and support successful product approval and market introductions.

 

Specific responsibilities include:

•                  Lead
the planning, preparation and submission for all INDs, NDAs and international
equivalents.

•                  Insure
that all IND/NDA filings are properly maintained and updated and that annual
reports are filed.

•                  Serve
as the primary point of contact to the FDA on behalf of the Company ensuring
that information is conveyed effectively and efficiently.

•                  Build
effective relationships with regulatory authorities and their representatives;
prepare for and chair meetings with regulatory bodies.

•                  Interact
with all relevant internal departments so as to manage the collection, review
and presentation of scientific, clinical, manufacturing and administrative
sections of submissions.

•                  Help
select, communicate with and monitor the activities of regulatory consultants
and CROs, as required.

•                  Advise
on the impact of the changing regulatory environment, existing legislation, and
guidelines on development plans and registration strategy.

•                  Provide
effective communication, guidance and advice to senior management, project team
members, and others to achieve goals related to regulatory timelines,
regulatory strategy, clinical testing, quality assurance, manufacturing
formulations, processes and methods throughout the research and development
process.

•                  Create
Company SOPs detailing processes.

•                  Attend
relevant industry meetings, participate in conferences and be active in
professional societies as a representative of the Company.

 

2. Effective Date:  The effective date of your employment with
the Company will be on or about Monday, April 24, 2006. 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 subject to
clause 5 below.

 

3. Compensation:
Your base pay will be $11,250.00 (equivalent to $270,000.00 annually), paid
twice per month.

 

 

Further, in
accordance with the Company’s 2004 Incentive Plan (the “Plan”), and Incentive
Stock Option Grant Agreement (the “ISO Agreement”), you are hereby eligible to
be granted an Incentive Stock Option (the “Option”) to purchase fifty thousand
(50,000) shares of the Company’s Common Stock at an exercise price at the
fair market value. The shares will vest over a four year period as will be
specified in the ISO Agreement.

 

Further, in
accordance with the Plan, and a Restricted Stock Agreement to be entered into
between you and the Company (the “Agreement”), you will be granted twenty
thousand (20,000) shares of the Company’s Common Stock. The shares will be
restricted stock with repurchase restrictions that will lapse over a four year
period as will be specified in the Agreement. In addition, we provide benefits
that are described in the section following.

 

Upon
recommendation of the President/CEO and based on the Company’s financial and
cash position and your contribution to the Company’s achievement of its annual
goals, the Company may, in its discretion, award an annual performance bonus of
up to thirty (30%) percent of your then annual base compensation.

 

4. Benefits:  You will be eligible for the Company’s
standard benefits package. Benefits include participation in a company
sponsored health care plan, dental plan, flexible spending account plan,  life insurance, short term disability
insurance, and long term disability insurance. You will be eligible for a
Company-matched 401(k) plan upon employment. In addition to your compensation,
you will be entitled to three (3) weeks’ vacation (in addition to our Winter
Holiday Week) earned on a pro-rata basis. Standard paid holidays will also be
observed. The Company, however, reserves the right to modify its employee
benefit programs.

 

5. Severance:  In the event that the company elects to
terminate your employment without cause, you then will be entitled to receive
your base compensation and medical and dental benefits for a period of six (6)
months from the date of termination.

 

The Company may terminate your employment,
upon notice, for Cause, meaning that there has been a reasonable, good faith
determination that one or more of the following events has occurred, which
determination is made after notice to you specifying in reasonable detail the
nature of the Cause and a reasonable opportunity for you to be heard. The
following shall constitute Cause for termination:

 

(i)                                     Conviction
of a felony;

(ii)                                  Willful
failure to perform (other than by reason of disability), or gross negligence in
the performance of, your duties and responsibilities as set forth in your job
description.

(iii)                               Material
breach by you of any provision of this letter, which breach continues or
remains uncured after thirty (30) days’ notice setting forth in reasonable
detail the nature of such breach; or

(iv)                              Material
fraudulent conduct by you with respect to the Company.

 

6. Change of
Control. If a Change of Control (as defined below) occurs and, within two
(2) years following such Change of Control, the Company terminates your
employment other than for Cause, then, the Company (A) shall provide you six
(6) months of severance pay, at the rate of the Base Salary in effect
immediately prior to the termination, payable in a single lump sum within ten
(10) business days following termination of employment; (B) shall pay the
premium cost of your participation in the Company’s group medical and dental
plans for a period of six (6) months following the date of termination,
provided that you are entitled to continue such participation under applicable
law and plan terms; and (C) shall cause to become vested on the date of
termination 100% of the options granted pursuant to Section 3 hereof or otherwise
which remain unvested on that date and you shall be entitled to not less than
ninety (90) days following the date of termination to exercise all or any
portion of such options.

 

 

In the event that
it is determined that any payments or benefits provided by the Company to you
or for your benefit, either under this Agreement or otherwise, will be subject
to the excise tax imposed by section 4999 of the Internal Revenue Code or any
successor provision (“section 4999”), you may elect either to pay such excise
tax or to have such payments and benefits reduced to the extent necessary so
that he shall not be liable for any such excise tax.

 

“Change of
Control” means the occurrence hereafter of (i) a sale, merger or consolidation
after which securities possessing more than fifty (50%) percent of the total
combined voting power of the Company’s outstanding securities have been
transferred to or acquired by a Person or Persons different from the Persons
who held such percentage of the total combined voting power immediately prior
to such transaction; (ii) the sale, transfer or other disposition of all or
substantially all of the Company’s assets to one or more Persons (other than a
wholly owned subsidiary of the Company or a parent company whose stock ownership
after the transaction is the same as the Company’s ownership before the
transaction), or (iii) an acquisition, merger or similar transaction or a
divestiture of a substantial portion of the Company’s business after which your
role is not substantially the same as such role prior to the transaction.

 

7. Employment
Eligibility Verification: 
Please note that all persons employed in the United States are required
to complete an Employment Eligibility Verification Form (Form I–9) on the first
day of employment and submit an original document or documents that establish
identity and employment eligibility within three business days of employment.
This is contingent upon your being able to verify that you can legally work in
the U.S.

 

8. Competition and
Confidentiality: 
During the term of your employment, you agree that you will not engage
in any activity that is directly or indirectly competitive with the Company.
Upon your separation from the Company, you agree to return to the Company all
documents or property, or reproductions of any such documents or property,
developed by you or in your possession.

 

In connection with
your employment, you will be required to sign the Company’s Standard
Confidential Information and Inventions Assignment Agreement (the “Invention
Agreement”), a copy of which is attached to this Letter Agreement.

 

Please indicate
that you are in agreement with the above the foregoing by signing one enclosed
copy of this Letter Agreement and the attached Invention Agreement, and
returning these to Ms. Melinda Keegan, CombinatoRx, Inc., 650 Albany Street,
Boston, MA  02118.

 

We are all very
enthusiastic about you joining us and have the highest expectation of your
contributions.

 

Sincerely,

 

 

	
  /s/ Alexis
  Borisy

  	
   

  

 

Alexis Borisy

President &
CEO

CombinatoRx

 

The within Letter
Agreement and attached Invention Agreement are hereby acknowledged, accepted
and agreed to:

 

	
      /s/ Lynn
  Baird

  	
   

  	
  Date:

  	
      March
  31, 2006

  	
   

  
	
  Lynn BairdExhibit
10.2

 

Lynn
Baird

Name
of Employee

 

COMBINATORX, INCORPORATED

2004 Incentive Plan

 

Restricted
Stock Award Agreement

 

CombinatoRx, Incorporated

245 First Street

Sixteenth Floor

Cambridge, MA 02142

 

Attn:  Alexis Borisy

 

Ladies and Gentlemen:

 

The undersigned (i)
acknowledges that he has received an award (the “Award”) of restricted stock
from CombinatoRx, Incorporated (the “Company”) under the 2004 Incentive Plan
(the “Plan”), subject to the terms set forth below and in the Plan; (ii)
further acknowledges receipt of a copy of the Plan as in effect on the date
hereof; and (iii) agrees with the Company as follows:

 

1.               Effective Date. This Agreement shall take effect as of April 24, 2006, which is the
date of grant of the Award.

 

2.               Shares Subject to Award. The Award consists of 20,000 shares (the
“Shares”) of common stock of the Company (“Stock”). The undersigned’s rights to
the Shares are subject to the restrictions described in this Agreement and the
Plan (which is incorporated herein by reference with the same effect as if set
forth herein in full) in addition to such other restrictions, if any, as may be
imposed by law.

 

3.               Meaning of Certain Terms. Except as otherwise expressly provided, all
terms used herein shall have the same meaning as in the Plan. The term “vest”
as used herein with respect to any Share means the lapsing of the restrictions
described herein with respect to such Share.

 

4.               Nontransferability of
Shares. The Shares
acquired by the undersigned pursuant to this Agreement shall not be sold,
transferred, pledged, assigned or otherwise encumbered or disposed of except as
provided below and in the Plan.

 

5.               Accelerated Vesting of
Unvested Shares After a Change of Control. If a Change of Control (as defined below) occurs, and within two (2) years
following the consummation date of such Change of Control the Company
terminates employment of the undersigned other than for Cause (as defined
below), then all unvested Shares will immediately become vested.

 

For purposes of this
Agreement, the term “Change of Control” shall mean: (a) a sale, merger or
consolidation after which securities possessing more than fifty (50%) percent
of the total combined voting power of the Company’s outstanding securities have
been transferred to or acquired by a person or persons different from the
persons who held such percentage of the total combined voting power immediately
prior to such transaction; or (b) the sale, transfer or other disposition of
all or substantially all of the Company’s assets to one or more persons

 

 

(other than a wholly owned
subsidiary of the Company or a parent company whose stock ownership after the
transaction is the same as the Company’s ownership before the transaction); or
(c) an acquisition, merger or similar transaction or a divestiture of a
substantial portion of the Company’s business after which the role of the
undersigned is not substantially the same as such role prior to the
transaction.

 

For the purposes of this
Agreement, the term “Cause” shall mean (a) the conviction of the undersigned of
any felony; (b) the willful failure to perform or gross negligence in the
performance of the duties and responsibilities of the undersigned in accordance
with the terms or requirements of her employment; (c) material breach by the
undersigned of any terms or requirements of her employment, which breach
continues or remains uncured after thirty (30) days’ notice to the undersigned
setting forth in reasonable detail the nature of such breach; or (d) engaging
in material fraudulent conduct toward the Company.

 

6.               Forfeiture Risk. If the undersigned ceases to be employed by the Company and its
subsidiaries because of death or disability or for any reason other than as
specified in Section 5 above, any then outstanding and unvested Shares acquired
by the undersigned hereunder shall be automatically and immediately forfeited. With
respect to any Shares that are forfeited under this Section 6, the undersigned
hereby (i) appoints the Company as the attorney-in-fact of the undersigned to
take such actions as may be necessary or appropriate to effectuate a transfer
of the record ownership of any such shares that are unvested and forfeited
hereunder, (ii) agrees to deliver to the Company, as a precondition to the
issuance of any certificate or certificates with respect to unvested Shares
hereunder, one or more stock powers, endorsed in blank, with respect to such
Shares, and (iii) agrees to sign such other powers and take such other actions
as the Company may reasonably request to accomplish the transfer or forfeiture
of any unvested Shares that are forfeited hereunder.

 

7.               Retention of Certificates. Any certificates representing unvested
Shares shall be held by the Company. If unvested Shares are held in book entry
form, the undersigned agrees that the Company may give stop transfer
instructions to the depository to ensure compliance with the provisions hereof.

 

8.               Vesting of Shares. The shares acquired hereunder shall vest in
accordance with the provisions of this Section 8 and applicable provisions of
the Plan, as follows: 25% percent of the Shares on April 24, 2007 and an
additional 6.25% on each three months anniversary thereafter until April 24,
2010.

 

Notwithstanding the
foregoing, no shares shall vest on any vesting date specified above unless the
undersigned is then, and since the date of grant has continuously been,
employed by the Company or its subsidiaries.

 

9.               Legends. Any certificates representing unvested
Shares shall be held by the Company, and any such certificate shall contain
legends substantially in the following form:

 

THE TRANSFERABILITY OF THIS
CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS
AND CONDITIONS (INCLUDING FORFEITURE) OF THE 2004 INCENTIVE PLAN AND A
RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND
COMBINATORX, INCORPORATED. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE
OFFICES OF COMBINATORX, INCORPORATED.

 

2

 

THESE SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

As soon as practicable
following the vesting of any such Shares the Company shall cause a certificate
or certificates covering such vested Shares to be issued and delivered to the
undersigned without the first legend set forth above referencing the Restricted
Stock Award Agreement. If any Shares are held in book-entry form, the Company
may take such steps as it deems necessary or appropriate to record and manifest
the restrictions applicable to such Shares.

 

10.         Dividends, etc.. The undersigned shall be entitled to (i)
receive any and all dividends or other distributions paid with respect to those
Shares of which he is the record owner on the record date for such dividend or
other distribution, and (ii) vote any Shares of which he is the record owner on
the record date for such vote; provided,
however, that any property (other than cash) distributed with
respect to a share of Stock (the “associated share”) acquired hereunder,
including without limitation a distribution of Stock by reason of a stock
dividend, stock split or otherwise, or a distribution of other securities with
respect to an associated share, shall be subject to the restrictions of this
Agreement in the same manner and for so long as the associated share remains subject
to such restrictions, and shall be promptly forfeited if and when the
associated share is so forfeited;  and further provided, that the
Administrator may require that any cash distribution with respect to the Shares
other than a normal cash dividend be placed in escrow or otherwise made subject
to such restrictions as the Administrator deems appropriate to carry out the
intent of the Plan. References in this Agreement to the Shares shall  refer, mutatis
mutandis, to any such restricted amounts.

 

11.         Sale of Vested Shares. The undersigned understands that he will be
free to sell any Share once it has vested, subject to (i) satisfaction of any
applicable tax withholding requirements with respect to the vesting or transfer
of such Share; (ii) the completion of any administrative steps (for
example, but without limitation, the transfer of certificates) that the Company
may reasonably impose; and (iii) applicable requirements of federal and state
securities laws.

 

12.         Certain Tax Matters. The undersigned expressly acknowledges the
following:

 

a.               The undersigned has been advised to confer
promptly with a professional tax advisor to consider whether the undersigned
should make a so-called “83(b) election” with respect to the Shares. Any such
election, to be effective, must be made in accordance with applicable
regulations and within thirty (30) days following the date of this Award. The
Company has made no recommendation to the undersigned with respect to the
advisability of making such an election.

 

b.              The award or vesting of the Shares acquired
hereunder, and the payment of dividends with respect to such Shares, may give
rise to “wages” subject to withholding. The undersigned expressly acknowledges
and agrees that his rights hereunder are subject to his promptly paying to the
Company in cash (or by such other means as may be acceptable to the Company in
its discretion, including, if the Administrator so determines, by the delivery
of previously acquired Stock or shares of Stock acquired

 

3

 

hereunder or by the
withholding of amounts from any payment hereunder) all taxes required to be
withheld in connection with such award, vesting or payment.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
     /s/ Lynn
  Baird

  	
   

  
	
   

  	
  (Signature of Employee)

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  
	
  The foregoing Restricted
  Stock

  	
   

  
	
  Award Agreement is hereby
  accepted:

  	
   

  
	
   

  	
   

  
	
  COMBINATORX,
  INCORPORATED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
      /s/
  Alexis Borisy

  	
   

  	
   

  
						

 

4

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