Document:

Exhibit 10.36

 

FINAL

 

TRANSKARYOTIC THERAPIES,
INC.

 

2002 STOCK
INCENTIVE PLAN

 

1.             Purpose

 

The purpose of this 2002 Stock Incentive Plan (the
“Plan”) of Transkaryotic Therapies, Inc., a Delaware  corporation (the “Company”),
is to advance the interests of the Company’s stockholders by enhancing the
Company’s ability to attract, retain and motivate persons who make (or are
expected to make) important contributions to the Company by providing such
persons with equity ownership opportunities and performance-based incentives
and thereby better aligning the interests of such persons with those of the
Company’s stockholders.  Except where
the context otherwise requires, the term “Company” shall include any of the
Company’s present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder (the “Code”) and any other business
venture (including, without limitation, joint venture or limited liability company)
in which the Company has a controlling interest, as determined by the Board of
Directors of the Company (the “Board”).

 

2.             Eligibility

 

All of the Company’s employees, officers, directors,
consultants and advisors are eligible to be granted options or restricted stock
awards (each, an “Award”) under the Plan. 
Each person who has been granted an Award under the Plan shall be deemed
a “Participant”.

 

3.             Administration
and Delegation

 

(a)           Administration by
Board of Directors.  The Plan will
be administered by the Board.  The Board
shall have authority to grant Awards and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan as it shall
deem advisable.  The Board may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award in the manner and to the extent it shall deem expedient to carry the
Plan into effect and it shall be the sole and final judge of such
expediency.  All decisions by the Board
shall be made in the Board’s sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award.  No director or person acting pursuant to the
authority delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.  Subject to the provisions of the Plan, the
Board shall have complete authority, in its sole discretion, to make or to
select the manner of making any and all determinations required for the
operation of the Plan, and without limiting the generality of the foregoing,
shall have the authority to:

 

(1)           grant Awards to eligible individuals
pursuant to the terms of the Plan;

 

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(2)           determine whether and to what extent Awards
are to be granted hereunder;

 

(3)           determine the number of shares of
Common Stock to be covered by each Award granted hereunder;

 

(4)           determine
the terms and conditions, not inconsistent with the terms of the Plan, of any
Award (which need not be identical in every case), including, but not limited
to, the price of the restricted stock or the exercise price of the option and
any restriction or limitation, or any vesting acceleration or forfeiture waiver
regarding any Award and the shares of Common Stock relating thereto, based on
such factors as the Board shall determine;

 

(5)           determine
whether and under what circumstances an Award may be settled, as provided in
Section 5(f);

 

(6)           determine
whether and under what circumstances an Award may be exercised without a
payment of cash as provided in Section 5(f); and

 

(7)           determine
whether, to what extent and under what circumstances Common Stock and other
amounts payable with respect to an Award under this Plan shall be deferred
either automatically or at the election of the Participant.

 

In making such determinations, the Board may take into
account the nature of the services rendered by the respective individuals,
their present and potential contributions to the success of the Company, and
such other factors as the Board in its discretion shall deem relevant.  Subject to the provisions of the Plan, the
Board shall also have complete authority, in its sole discretion, to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to it,
to determine the terms and provisions of any Award issued under the Plan (and
any agreements relating thereto), to resolve all disputes arising under the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan.

 

(b)           Appointment of Committees.  To
the extent permitted by applicable law, the Board may delegate any or all of
its powers under the Plan to one or more committees or subcommittees of the
Board (a “Committee”).  All references
in the Plan to the “Board” shall mean the Board or a Committee of the Board or
the executive officers referred to in Section 3(c) to the extent that the
Board’s powers or authority under the Plan have been delegated to such
Committee.

 

(c)           Delegation to Executive
Officers.  To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to grant Awards to employees or officers of the Company or
any of its present or future subsidiary corporations and to exercise such other
powers under the Plan as the Board may determine, provided that the Board shall
fix the terms of the Awards to be granted by such executive officers (including
the exercise of such Awards, which may include a formula by which the exercise
price will be determined) and the maximum number of shares subject to Awards
that the executive officers may grant; provided, further, however, that no
executive officer shall be

 

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authorized to grant Awards to any “executive officer” of the Company
(as defined in Rule 3b-7 under the Securities Act of 1934, as amended (the
“Exchange Act”)) or to any “officer” of the Company (as defined by Rule 16a-1
under the Exchange Act).

 

4.             Stock
Available for Awards

 

(a)           Number of Shares. Subject to
adjustment under Section 7, Awards may be made under the Plan for up to
2,500,000 shares of common stock, 0.01 par value per share, of the Company (the
“Common Stock”).  If any Award expires
or is terminated, surrendered or canceled without having been fully exercised
or is forfeited in whole or in part (including as the result of shares of
Common Stock subject to such Award being repurchased by the Company at the
original issuance price pursuant to a contractual repurchase right) or results in
any Common Stock not being issued, the unused Common Stock covered by such
Award shall again be available for the grant of Awards under the Plan, subject,
however, in the case of Incentive Stock Options (as hereinafter defined), to
any limitations under the Code.  Shares
issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.

 

(b)           Per-Participant Limit.  Subject to adjustment under Section 7,
the maximum number of shares of Common Stock with respect to which Awards may
be granted to any Participant under the Plan shall be  500,000 per calendar
year.  The per-Participant limit
described in this Section 4(b) shall be construed and applied consistently with
Section 162(m) of the Code (“Section 162(m)”).

 

5.             Stock
Options

 

(a)           General.  The Board may grant options to purchase
Common Stock (each, an “Option”) and determine the number of shares of Common
Stock to be covered by each Option, the exercise price of each Option and the
conditions and limitations applicable to the exercise of each Option, including
conditions relating to applicable federal or state securities laws, as it
considers necessary or advisable.  An
Option which is not intended to be an Incentive Stock Option (as hereinafter
defined) shall be designated a “Nonstatutory Stock Option”.

 

(b)           Incentive Stock Options.  An Option that the Board intends to be an
“incentive stock option” as defined in Section 422 of the Code (an “Incentive
Stock Option”) shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code.  The Company shall have
no liability to a Participant, or any other party, if an Option (or any part
thereof) which is intended to be an Incentive Stock Option is not an Incentive
Stock Option.

 

(c)           Exercise Price.  The Board shall establish the exercise price
at the time each Option is granted and specify it in the applicable option
agreement; provided, however, that the exercise price shall be not less than
100% of the fair market value of the Common Stock, as determined by the Board
at the time the Option is granted.

 

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(d)           Duration of Options.  Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement provided, however, that no Option will be granted
for a term in excess of 10 years.

 

(e)           Exercise of Option.  Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.

 

(f)            Payment Upon Exercise.  Common Stock purchased upon the exercise of
an Option granted under the Plan shall be paid for as follows:

 

(1)           in
cash or by check, payable to the order of the Company;

 

(2)           except
as the Board may, in its sole discretion, otherwise provide in an option
agreement, by (i) delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price and any required tax withholding or (ii) delivery by the
Participant 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 and any required tax
withholding;

 

(3)           for
so long as the Common Stock is registered under the Securities Exchange Act of
1934 (the “Exchange Act”), by delivery of shares of Common Stock owned by the
Participant valued at their fair market value as determined by (or in a manner
approved by) the Board in good faith (“Fair Market Value”), provided (i) such
method of payment is then permitted under applicable law and (ii) such Common
Stock, if acquired directly from the Company was owned by the Participant at
least six months prior to such delivery;

 

(4)           to
the extent permitted by the Board and provided for in an option agreement or
certificate, in its sole discretion by (i) delivery of a promissory note of the
Participant to the Company on terms determined by the Board, or
(ii) payment of such other lawful consideration as the Board may
determine; or

 

(5)           by
any combination of the above permitted forms of payment.

 

(g)           Substitute Options.  In connection with a merger or consolidation
of an entity with the Company or the acquisition by the Company of property or
stock of an entity, the Board may grant Options in substitution for any options
or other stock or stock-based awards granted by such entity or an affiliate
thereof.  Substitute Options may be
granted on such terms as the Board deems appropriate in the circumstances,
notwithstanding any limitations on Options contained in the other sections of
this Section 5 or in Section 2.

 

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6.             Restricted
Stock.

 

(a)           Grants.  The Board may grant Awards entitling recipients
to acquire shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares at their issue price or other stated or
formula price (or to require forfeiture of such shares if issued at no cost)
from the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a
“Restricted Stock Award”).

 

(b)           Terms and Conditions.  The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any.

 

(c)           Stock Certificates.  Any stock certificates issued in respect of
a Restricted Stock Award shall be registered in the name of the Participant
and, unless otherwise determined by the Board, deposited by the Participant,
together with a stock power endorsed in blank, with the Company (or its
designee).  At the expiration of the applicable
restriction periods, the Company (or such designee) shall deliver the
certificates no longer subject to such restrictions to the Participant or if
the Participant has died, to the beneficiary designated, in a manner determined
by the Board, by a Participant to receive amounts due or exercise rights of the
Participant in the event of the Participant’s death (the “Designated
Beneficiary”).  In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant’s estate.

 

7.             Adjustments
for Changes in Common Stock and Certain Other Events

 

(a)           Changes in Capitalization.  In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this
Plan, (ii) the per-Participant limit set forth in Section 4(b), (iii) the
number and class of securities and exercise price per share subject to each
outstanding Option, and (iv) the repurchase price per share subject to each
outstanding Restricted Stock Award shall be appropriately adjusted by the
Company (or substituted Awards may be made, if applicable) to the extent the
Board shall determine, in good faith, that such an adjustment (or substitution)
is necessary and appropriate.  If this
Section 7(a) applies and Section 7(c) also applies to any event, Section 7(c)
shall be applicable to such event, and this Section 7(a) shall not be
applicable.

 

(b)           Liquidation or Dissolution.  In the event of a proposed liquidation or
dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date.  The Board
may specify the effect of a liquidation or dissolution on any Restricted Stock
Award granted under the Plan at the time of the grant.

 

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(c)           Reorganization Events

 

(1)           Definition.  A “Reorganization Event” shall mean:  (a) any merger or consolidation of the
Company with or into another entity as a result of which all of the Common
Stock of the Company is converted into or exchanged for the right to receive
cash, securities or other property or (b) any exchange of all of the Common
Stock of the Company for cash, securities or other property pursuant to a share
exchange transaction.

 

(2)           Consequences
of a Reorganization Event on Options. 
Upon the occurrence of a Reorganization Event, or the execution by the
Company of any agreement with respect to a Reorganization Event, the Board
shall provide that all outstanding Options shall be assumed, or equivalent
options shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof).  For purposes
hereof, an Option shall be considered to be assumed if, following consummation
of the Reorganization Event, the Option confers the right to purchase, for each
share of Common Stock subject to the Option immediately prior to the
consummation of the Reorganization Event, the consideration (whether cash,
securities or other property) received as a result of the Reorganization Event
by holders of Common Stock for each share of Common Stock held immediately
prior to the consummation of the Reorganization Event (and if holders were
offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding shares of Common Stock); provided,
however, that if the consideration received as a result of the Reorganization
Event is not solely common stock of the acquiring or succeeding corporation (or
an affiliate thereof), the Company may, with the consent of the acquiring or
succeeding corporation, provide for the consideration to be received upon the
exercise of Options to consist solely of common stock of the acquiring or
succeeding corporation (or an affiliate thereof) equivalent in fair market
value to the per share consideration received by holders of outstanding shares
of Common Stock as a result of the Reorganization Event.

 

Notwithstanding the foregoing, if the acquiring or
succeeding corporation (or an affiliate thereof) does not agree to assume, or
substitute for, such Options, then the Board shall, upon written notice to the
Participants, provide that all then unexercised Options will become exercisable
in full as of a specified time prior to the Reorganization Event and will
terminate immediately prior to the consummation of such Reorganization Event, except
to the extent exercised by the Participants before the consummation of such
Reorganization Event; provided, however, that in the event of a Reorganization
Event under the terms of which holders of Common Stock will receive upon
consummation thereof a cash payment for each share of Common Stock surrendered
pursuant to such Reorganization Event (the “Acquisition Price”), then the Board
may instead provide that all outstanding Options shall terminate upon
consummation of such Reorganization Event and that each Participant shall
receive, in exchange therefor, a cash payment equal to the amount (if any) by
which (A) the Acquisition Price multiplied by the number of shares of Common
Stock subject to such outstanding Options (whether or not then exercisable), exceeds
(B) the aggregate exercise price of such Options. To the extent all or any
portion of an Option becomes exercisable solely as a result of the first
sentence of this paragraph, upon exercise of such Option the Participant shall
receive shares subject to a right of repurchase by the Company or its successor
at the Option exercise price.

 

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Such repurchase right (1) shall lapse at the same rate as the Option
would have become exercisable under its terms and (2) shall not apply to any
shares subject to the Option that were exercisable under its terms without
regard to the first sentence of this paragraph.

 

(3)           Consequences
of a Reorganization Event on Restricted Stock Awards.  Upon the occurrence of a Reorganization
Event, the repurchase and other rights of the Company under each outstanding
Restricted Stock Award shall inure to the benefit of the Company’s successor
and shall apply to the cash, securities or other property which the Common
Stock was converted into or exchanged for pursuant to such Reorganization Event
in the same manner and to the same extent as they applied to the Common Stock
subject to such Restricted Stock Award.

 

8.             General
Provisions Applicable to Awards

 

(a)           Transferability of Awards.  Except as the Board may otherwise determine
or provide in an option agreement or certificate, Awards shall not be sold,
assigned, transferred, pledged or otherwise encumbered by the person to whom
they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution, and, during the life of the Participant,
shall be exercisable only by the Participant. 
References to a Participant, to the extent relevant in the context,
shall include references to authorized transferees.

 

(b)           Documentation.  Each Award shall be evidenced in such form
(written, electronic or otherwise) as the Board shall determine.  Each Award may contain terms and conditions
in addition to those set forth in the Plan.

 

(c)           Board Discretion.  Except as otherwise provided by the Plan,
each Award may be made alone or in addition or in relation to any other
Award.  The terms of each Award need not
be identical, and the Board need not treat Participants uniformly.

 

(d)           Termination of Status.  The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or
other  change in the employment or other
status of a Participant and the extent to which, and the period during which,
the Participant, the Participant’s legal representative, conservator, guardian
or Designated Beneficiary may exercise rights under the Award.

 

(e)           Withholding.  Each Participant shall pay to the Company,
or make provision satisfactory to the Board for payment of, any taxes required
by law to be withheld in connection with Awards to such Participant no later
than the date of the event creating the tax liability.  Except as the Board may otherwise provide in
an Award, when the Common Stock is registered under the Exchange Act, Participants
may satisfy such tax obligations in whole or in part by delivery of shares of
Common Stock, including shares retained from the Award creating the tax
obligation, valued at their Fair Market Value; provided, however, that the
total tax withholding where stock is being used to satisfy such tax obligations
cannot exceed the Company’s minimum statutory withholding obligations (based on
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to such supplemental taxable

 

7

 

income).  The Company may, to
the extent permitted by law, deduct any such tax obligations from any payment
of any kind otherwise due to a Participant.

 

(f)            Amendment of Award.  The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant’s consent to such action shall be
required unless the Board determines that the action, taking into account any
related action, would not materially and adversely affect the Participant.

 

(g)           Conditions on Delivery of Stock.  The Company will not be obligated to deliver
any shares of Common Stock pursuant to the Plan or to remove restrictions from
shares previously delivered under the Plan until (i) all conditions of the
Award have been met or removed to the satisfaction of the Company, (ii) in
the opinion of the Company’s counsel, all other legal matters in connection
with the issuance and delivery of such shares have been satisfied, including
any applicable securities laws and any applicable stock exchange or stock
market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.

 

(h)           Acceleration.  The Board may at any time provide that any
Award shall become immediately exercisable in full or in part, free of some or
all restrictions or conditions, or otherwise realizable in full or in part, as
the case may be.

 

9.             Miscellaneous

 

(a)           No Right To Employment or Other
Status.  No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any
other relationship with the Company. 
The Company expressly reserves the right at any time to dismiss or
otherwise terminate its relationship with a Participant free from any liability
or claim under the Plan, except as expressly provided in the applicable Award.

 

(b)           No Rights As Stockholder.  Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.  Notwithstanding the foregoing, in the event
the Company effects a split of the Common Stock by means of a stock dividend
and the exercise price of and the number of shares subject to such Option are
adjusted as of the date of the distribution of the dividend (rather than as of
the record date for such dividend), then an optionee who exercises an Option
between the record date and the distribution date for such stock dividend shall
be entitled to receive, on the distribution date, the stock dividend with
respect to the shares of Common Stock acquired upon such Option exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.

 

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(c)           Effective Date and Term of Plan.  The Plan shall become effective on the date
on which it is adopted by the Board, but no Award granted to a Participant that
is intended to comply with Section 162(m) shall become exercisable, vested or
realizable, as applicable to such Award, unless and until the Plan has been
approved by the Company’s stockholders to the extent stockholder approval is
required by Section 162(m) in the manner required under Section 162(m)
(including the vote required under Section 162(m)).  No Awards shall be granted under the Plan after the completion of
ten years from the earlier of (i) the date on which the Plan was adopted by the
Board or (ii) the date the Plan was approved by the Company’s stockholders, but
Awards previously granted may extend beyond that date.

 

(d)           Amendment of Plan.  The Board may amend, suspend or terminate
the Plan or any portion thereof at any time, provided that to the extent
required by Section 162(m), no Award granted to a Participant that is intended
to comply with Section 162(m) after the date of such amendment shall become
exercisable, realizable or vested, as applicable to such Award, unless and
until such amendment shall have been approved by the Company’s stockholders if
required by Section 162(m) (including the vote required under Section 162(m)).

 

(e)           Governing Law.  The provisions of the Plan and all Awards
made hereunder shall be governed by and interpreted in accordance with the laws
of the State of Delaware, without regard to any applicable conflicts of law.

 

Board Approved Plan on
March 6, 2002

 

Stockholders Approved
Plan on June 6, 2002

 

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AMENDMENT NO. 1

TO

TRANSKARYOTIC
THERAPIES, INC.

2002 STOCK
INCENTIVE PLAN

 

1.             The following subsection is hereby inserted immediately
following section 6(c) of the Transkaryotic Therapies, Inc. 2002 Stock
Incentive Plan (the “2002 Plan”):

 

“(d)         Vesting of Restricted Stock Awards.  Any Restricted Stock Award, to the extent
such Award vests other than on the basis of the passage of time, will not vest
in full until at least one year from the date of the Award unless such Award
vests in full as a result of a change in control of the Company or from the
death or disability of the Participant. Any Restricted Stock Award, to the
extent such Award vests on the basis of the passage of time, will not vest in
full until at least three years from the date of the Award unless such Award
vests in full as a result of a change in control of the Company or from the
death or disability of the Participant.”

 

2.             Section 8(d) of the Plan is hereby deleted in its
entirety and the following is inserted in lieu thereof:

 

“(d)         Termination of Status.  Upon the disability, death, retirement,
authorized leave of absence or other change in the employment or other status
of a Participant in the Plan, the Participant, the Participant’s legal
representative, conservator, guardian or designated beneficiary may exercise
rights under an Award for ninety (90) days following the date of such event.”

 

3.             Section 8(f) (“Amendment of Award”) of the Plan is
hereby deleted in its entirety.

 

4.             Section
9(d) of the Plan is hereby deleted in its entirety and the following is
inserted in lieu thereof:

 

“(d)         Amendment of Plan.  The Board may amend, suspend or terminate
the Plan or any portion thereof at any time, provided that to the extent
required by Section 162(m), no Award granted to a Participant that is intended
to comply with Section 162(m) after the date of such amendment shall become
exercisable, realizable or vested, as applicable to such Award, unless and
until such amendment shall have been approved by the Company’s stockholders if
required by Section 162(m) (including the vote required under
Section 162(m)).  The Board may not
amend, suspend or terminate the Plan or any portion thereof at any time without
stockholder approval if such approval is required by law, or the rules of the
Securities and Exchange Commission, the Internal Revenue Service or (other than  Section 162(m)), or The Nasdaq National
Market.”

 

Amendment Approved by
Board on September 19, 2002

 

10Exhibit
10.37

 

INDEMNIFICATION
AGREEMENT

 

This Agreement is made as
of the 30th day of April 2003, by and between Transkaryotic Therapies, Inc., a
Delaware corporation (the “Corporation”), and Michael J. Astrue (the
“Indemnitee”), a director and an officer of the Corporation.

 

WHEREAS, it is essential
to the Corporation to retain and attract as directors and officers the most
capable persons available, and

 

WHEREAS, the substantial
increase in corporate litigation subjects directors and officers to expensive
litigation risks at the same time that the availability of directors’ and
officers’ liability insurance has been severely limited, and

 

WHEREAS, it is now and
has always been the express policy of the Corporation to indemnify its
directors and officers, and

 

WHEREAS, the Indemnitee
does not regard the protection available under the Corporation’s Certificate of
Incorporation, as amended to date, and insurance as adequate in the present
circumstances, and may not be willing to serve or continue to serve as a
director and an officer without adequate protection, and

 

WHEREAS, the Corporation
desires the Indemnitee to serve, or continue to serve, as a director and an
officer of the Corporation.

 

NOW THEREFORE, the
Corporation and the Indemnitee do hereby agree as follows:

 

1.                                       Agreement to
Serve.  The Indemnitee agrees to
serve or continue to serve as a director and an officer of the Corporation for
so long as the Indemnitee is duly elected or appointed or until such time as
the Indemnitee tenders a resignation in writing.

 

2.                                       Definitions.  As used in this Agreement:

 

(a)                                  The
term “Proceeding” shall include any threatened, pending or completed action,
suit, arbitration, alternative dispute resolution proceeding, administrative
hearing or other proceeding, whether brought by or in the right of the
Corporation or otherwise and whether of a civil, criminal, administrative or
investigative nature, and any appeal therefrom.

 

(b)                                 The
term “Corporate Status” shall mean the status of a person who is or was a
director or officer of the Corporation, or is or was serving, or has agreed to
serve, at the request of the Corporation, as a director, officer, partner,
trustee, member, employee or agent of another corporation, partnership, joint
venture, trust, limited liability company or other enterprise.

 

(c)                                  The
term “Expenses” shall include, without limitation, reasonable attorneys’ fees,
retainers, court costs, transcript costs, fees and expenses of experts, travel

 

 

expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees and other disbursements or expenses of the types
customarily incurred in connection with investigations and judicial or
administrative proceedings or appeals, but shall not include the amount of
judgments, fines or penalties against Indemnitee or amounts paid in settlement
in connection with such matters.

 

(d)                                 References
to “other enterprise” shall include employee benefit plans; references to
“fines” shall include any excise tax assessed with respect to any employee
benefit plan; references to “serving at the request of the Corporation” shall
include any service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in a
manner such person reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Corporation”
as referred to in this Agreement.

 

3.                                       Indemnification
in Third-Party Proceedings.  The
Corporation shall indemnify the Indemnitee in accordance with the provisions of
this Paragraph 3 if the Indemnitee was or is a party to or threatened to
be made a party to or otherwise involved in any Proceeding (other than a
Proceeding by or in the right of the Corporation to procure a judgment in its
favor) by reason of the Indemnitee’s Corporate Status or by reason of any
action alleged to have been taken or omitted in connection therewith, against
all Expenses, judgments, fines, penalties and amounts paid in settlement
actually and reasonably incurred by or on behalf of the Indemnitee in
connection with such Proceeding, if the Indemnitee acted in good faith and in a
manner which the Indemnitee reasonably believed to be in, or not opposed to,
the best interests of the Corporation and, with respect to any criminal
Proceeding, had no reasonable cause to believe that his conduct was
unlawful.  The termination of any
Proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption
that the Indemnitee did not act in good faith and in a manner which the
Indemnitee reasonably believed to be in, or not opposed to, the best interests
of the Corporation, and, with respect to any criminal Proceeding, had
reasonable cause to believe that his conduct was unlawful.

 

4.                                       Indemnification
in Proceedings by or in the Right of the Corporation.  The Corporation shall indemnify the
Indemnitee in accordance with the provisions of this Paragraph 4 if the
Indemnitee was or is a party to or threatened to be made a party to or
otherwise involved in any Proceeding by or in the right of the Corporation to
procure a judgment in its favor by reason of the Indemnitee’s Corporate Status
or by reason of any action alleged to have been taken or omitted in connection
therewith, against all Expenses and, to the extent permitted by law, amounts
paid in settlement actually and reasonably incurred by or on behalf of the
Indemnitee in connection with such Proceeding, if the Indemnitee acted in good
faith and in a manner which the Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the Corporation, except that no
indemnification shall be made under this Paragraph 4 in respect of any
claim, issue, or matter as to which the Indemnitee shall have been adjudged to
be liable to the Corporation, unless, and only to the extent, that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of such
liability but in view of all the circumstances of the case, the

 

2

 

Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses as the Court of Chancery or
such other court shall deem proper.

 

5.                                       Exceptions
to Right of Indemnification. 
Notwithstanding anything to the contrary in this Agreement, except as
set forth in Paragraph 10, the Corporation shall not indemnify the
Indemnitee in connection with a Proceeding (or part thereof) initiated by the
Indemnitee unless the initiation thereof was approved by the Board of Directors
of the Corporation.  Notwithstanding
anything to the contrary in this Agreement, the Corporation shall not indemnify
the Indemnitee to the extent the Indemnitee has actually been reimbursed from the
proceeds of insurance, and in the event the Corporation makes any
indemnification payments to the Indemnitee and the Indemnitee is subsequently
reimbursed from the proceeds of insurance, the Indemnitee shall promptly refund
such indemnification payments to the Corporation to the extent of such
insurance reimbursement.

 

6.                                       Indemnification
of Expenses of Successful Party. 
Notwithstanding any other provision of this Agreement, to the extent
that the Indemnitee has been successful, on the merits or otherwise, in defense
of any Proceeding or in defense of any claim, issue or matter therein, the
Indemnitee shall be indemnified against all Expenses incurred by or on behalf
of the Indemnitee in connection therewith. 
Without limiting the foregoing, if any Proceeding or any claim, issue or
matter therein is disposed of, on the merits or otherwise (including a
disposition without prejudice), without (i) the disposition being adverse
to the Indemnitee, (ii) an adjudication that the Indemnitee was liable to
the Corporation, (iii) a plea of guilty or nolo  contendere
by the Indemnitee, (iv) an adjudication that the Indemnitee did not act in
good faith and in a manner the Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation, and (v) with respect to
any criminal proceeding, an adjudication that the Indemnitee had reasonable
cause to believe his conduct was unlawful, the Indemnitee shall be considered
for the purposes hereof to have been wholly successful with respect thereto.

 

7.                                       Notification
and Defense of Claim.  As a
condition precedent to the Indemnitee’s right to be indemnified, the Indemnitee
must notify the Corporation in writing as soon as practicable of any Proceeding
for which indemnity will or could be sought. 
With respect to any Proceeding of which the Corporation is so notified,
the Corporation will be entitled to participate therein at its own expense
and/or to assume the defense thereof at its own expense, with legal counsel
reasonably acceptable to the Indemnitee. 
After notice from the Corporation to the Indemnitee of its election so
to assume such defense, the Corporation shall not be liable to the Indemnitee
for any legal or other expenses subsequently incurred by the Indemnitee in
connection with such Proceeding, other than as provided below in this
Paragraph 7.  The Indemnitee shall
have the right to employ his own counsel in connection with such Proceeding,
but the fees and expenses of such counsel incurred after notice from the
Corporation of its assumption of the defense thereof shall be at the expense of
the Indemnitee unless (i) the employment of counsel by the Indemnitee has
been authorized by the Corporation, (ii) counsel to the Indemnitee shall
have reasonably concluded that there may be a conflict of interest or position
on any significant issue between the Corporation and the Indemnitee in the
conduct of the defense of such Proceeding or (iii) the Corporation shall
not in fact have employed counsel to assume the defense of such Proceeding, in
each of which cases the reasonable fees and expenses of counsel for the
Indemnitee shall be at the expense of the Corporation, except as otherwise
expressly provided by this Agreement. 
The Corporation shall not be entitled, without the

 

3

 

consent of the
Indemnitee, to assume the defense of any claim brought by or in the right of
the Corporation or as to which counsel for the Indemnitee shall have reasonably
made the conclusion provided for in clause (ii) above.  The Corporation shall not be required to
indemnify the Indemnitee under this Agreement for any amounts paid in
settlement of any Proceeding effected without its written consent.  The Corporation shall not settle any Proceeding
in any manner which would impose any penalty or limitation on the Indemnitee
without the Indemnitee’s written consent. 
Neither the Corporation nor the Indemnitee will unreasonably withhold or
delay their consent to any proposed settlement.

 

8.                                       Advancement
of Expenses.  Subject to the provisions
of Paragraph 9 of this Agreement, in the event that the Corporation does
not assume the defense pursuant to Paragraph 7 of this Agreement of any
Proceeding of which the Corporation receives notice under this Agreement, any
Expenses incurred by or on behalf of the Indemnitee in defending such
Proceeding shall be paid by the Corporation in advance of the final disposition
of such Proceeding; provided, however, that the payment of such
Expenses incurred by or on behalf of the Indemnitee in advance of the final
disposition of such Proceeding shall be made only upon receipt of an
undertaking by or on behalf of the Indemnitee to repay all amounts so advanced
in the event that it shall ultimately be determined that the Indemnitee is not
entitled to be indemnified by the Corporation as authorized in this
Agreement.  Such undertaking shall be
accepted without reference to the financial ability of the Indemnitee to make
repayment.

 

9.                                       Procedure for
Indemnification.  In order to obtain
indemnification or advancement of Expenses pursuant to Paragraphs 3, 4, 6 or 8
of this Agreement, the Indemnitee shall submit to the Corporation a written
request.  Any such indemnification or
advancement of Expenses shall be made promptly, and in any event within 30 days
after receipt by the Corporation of the written request of the Indemnitee,
unless with respect to requests under Paragraphs 3, 4 or 8, by clear and
convincing evidence, the Corporation determines within such 30-day period that
the Indemnitee did not meet the applicable standard of conduct set forth in
Paragraph 3 or 4, as the case may be. 
Such determination, and any determination that advanced Expenses must be
repaid to the Corporation, shall be made in each instance (a) by a
majority vote of the directors of the Corporation consisting of persons who are
not at that time parties to the Proceeding (“disinterested directors”), whether
or not a quorum, (b) by a committee of disinterested directors designated
by a majority vote of disinterested directors, whether or not a quorum,
(c) if there are no disinterested directors, or if the disinterested
directors so direct, by independent legal counsel (who may, to the extent
permitted by applicable law, be regular legal counsel to the Corporation) in a
written opinion, or (d) by the stockholders of the Corporation.

 

10.                                 Remedies.  The right to indemnification or advancement
of Expenses as provided by this Agreement shall be enforceable by the
Indemnitee in any court of competent jurisdiction.  Unless otherwise required by law, the burden of proving that
indemnification is not appropriate shall be on the Corporation.  Neither the failure of the Corporation to
have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met
the applicable standard of conduct, nor an actual determination by the
Corporation pursuant to Paragraph 9 that the Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a presumption
that the Indemnitee has not met the applicable standard of conduct.  The Indemnitee’s expenses (of the type
described in the definition of “Expenses” in Paragraph 2(c)) reasonably
incurred in connection

 

4

 

with successfully
establishing the Indemnitee’s right to indemnification, in whole or in part, in
any such Proceeding shall also be indemnified by the Corporation.

 

11.                                 Partial
Indemnification.  If the Indemnitee
is entitled under any provision of this Agreement to indemnification by the
Corporation for some or a portion of the Expenses, judgments, fines, penalties
or amounts paid in settlement actually and reasonably incurred by or on behalf
of the Indemnitee in connection with any Proceeding but not, however, for the
total amount thereof, the Corporation shall nevertheless indemnify the
Indemnitee for the portion of such Expenses, judgments, fines, penalties or
amounts paid in settlement to which the Indemnitee is entitled.

 

12.                                 Subrogation.  In the event of any payment under this
Agreement, the Corporation shall be subrogated to the extent of such payment to
all of the rights of recovery of the Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Corporation to bring
suit to enforce such rights.

 

13.                                 Term of Agreement.  This Agreement shall continue until and
terminate upon the later of (a) six years after the date that the Indemnitee shall
have ceased to serve as a director or an officer of the Corporation or, at the
request of the Corporation, as a director, officer, partner, trustee, member,
employee or agent of another corporation, partnership, joint venture, trust,
limited liability company or other enterprise or (b) the final termination of
all Proceedings pending on the date set forth in clause (a) in respect of which
the Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by the Indemnitee pursuant to
Paragraph 10 of this Agreement relating thereto.

 

14.                                 Indemnification
Hereunder Not Exclusive.  The
indemnification and advancement of Expenses provided by this Agreement shall
not be deemed exclusive of any other rights to which the Indemnitee may be
entitled under the Certificate of Incorporation, as amended to date, the
By-Laws, as amended to date, any other agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of Delaware, any other law
(common or statutory), or otherwise, both as to action in the Indemnitee’s
official capacity and as to action in another capacity while holding office for
the Corporation.  Nothing contained in
this Agreement shall be deemed to prohibit the Corporation from purchasing and
maintaining insurance, at its expense, to protect itself or the Indemnitee
against any expense, liability or loss incurred by it or the Indemnitee in any
such capacity, or arising out of the Indemnitee’s status as such, whether or not
the Indemnitee would be indemnified against such expense, liability or loss
under this Agreement; provided that the Corporation shall not be liable under
this Agreement to make any payment of amounts otherwise indemnifiable hereunder
if and to the extent that the Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.

 

15.                                 No Special Rights.  Nothing herein shall confer upon the
Indemnitee any right to continue to serve as a director or an officer of the
Corporation for any period of time or at any particular rate of compensation.

 

5

 

16.                                 Savings Clause.  If this Agreement or any portion thereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify the Indemnitee as to Expenses,
judgments, fines, penalties and amounts paid in settlement with respect to any
Proceeding to the full extent permitted by any applicable portion of this
Agreement that shall not have been invalidated and to the fullest extent
permitted by applicable law.

 

17.                                 Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall constitute the original.

 

18.                                 Successors and
Assigns.  This Agreement shall be
binding upon the Corporation and its successors and assigns and shall inure to
the benefit of the estate, heirs, executors, administrators and personal
representatives of the Indemnitee.

 

19.                                 Headings.  The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.

 

20.                                 Modification and
Waiver.  This Agreement may be
amended from time to time to reflect changes in Delaware law or for other
reasons.  No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto.  No waiver of any
of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof nor shall any such waiver constitute a
continuing waiver.

 

21.                                 Notices.  All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given (i) when delivered by hand or (ii) if mailed by certified or
registered mail with postage prepaid, on the third day after the date on which
it is so mailed:

 

(a)                                  if
to the Indemnitee, to:

 

Michael J. Astrue

47 Benton Road

Belmont, MA 02478

 

 

(b)                                 if
to the Corporation, to:

 

Transkaryotic Therapies,
Inc.

700 Main Street

Cambridge, MA  02139

Attn:  Board of Directors

 

or to such other address
as may have been furnished to the Indemnitee by the Corporation or to the
Corporation by the Indemnitee, as the case may be.

 

22.                                 Applicable Law.  This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
Delaware.  The Indemnitee may elect to

 

6

 

have the right to
indemnification or reimbursement or advancement of Expenses interpreted on the
basis of the applicable law in effect at the time of the occurrence of the
event or events giving rise to the applicable Proceeding, to the extent
permitted by law, or on the basis of the applicable law in effect at the time
such indemnification or reimbursement or advancement of Expenses is
sought.  Such election shall be made, by
a notice in writing to the Corporation, at the time indemnification or reimbursement
or advancement of Expenses is sought; provided, however, that if
no such notice is given, and if the General Corporation Law of Delaware is
amended, or other Delaware law is enacted, to permit further indemnification of
the directors and officers, then the Indemnitee shall be indemnified to the
fullest extent permitted under the General Corporation Law, as so amended, or
by such other Delaware law, as so enacted.

 

23.                                 Enforcement.  The Corporation expressly confirms and
agrees that it has entered into this Agreement in order to induce the Indemnitee
to continue to serve as a director or an officer of the Corporation, and
acknowledges that the Indemnitee is relying upon this Agreement in continuing
in such capacity.

 

24.                                 Entire Agreement.  This Agreement, together with the employment
agreement between the parties and any directors and officers liability
insurance coverage that may be provided by the Corporation to the Indemnitee,
sets forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supercedes all prior agreements, whether oral or
written, by any officer, employee or representative of any party hereto in
respect of the subject matter contained herein; and any prior agreement of the
parties hereto in respect of the subject matter contained herein is hereby
terminated and cancelled.  For avoidance
of doubt, the parties confirm that the foregoing does not apply to or limit the
Indemnitee’s rights under Delaware law or the Corporation’s Certificate of Incorporation
or By-Laws, each as amended to date.

 

25.                                 Consent to Suit.  In the case of any dispute under or in
connection with this Agreement, the Indemnitee may only bring suit against the
Corporation in the Court of Chancery of the State of Delaware.  The Indemnitee hereby consents to the
exclusive jurisdiction and venue of the courts of the State of Delaware, and
the Indemnitee hereby waives any claim the Indemnitee may have at any time as
to forum non conveniens with respect to such venue.  The Corporation shall have the right to institute any legal
action arising out of or relating to this Agreement in any court of competent
jurisdiction.  Any judgment entered
against either of the parties in any proceeding hereunder may be entered and
enforced by any court of competent jurisdiction.

 

 

[Remainder of Page Intentionally Left Blank]

 

7

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year first above written.

 

	
   

  	
  TRANSKARYOTIC
  THERAPIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  Rodman W. Moorhead III

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Rodman W. Moorhead III

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman of the Board
  of

  Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Michael J. Astrue

  	
   

  

 

8

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