Document:

exv10w28

Exhibit 10.28

September 30, 2009

Mary Yaroshevsky-Glanville

c/o Anadys Pharmaceuticals, Inc.

5871 Oberlin Drive, Suite 200

San Diego, CA 92121

	Re: 	 	 Severance Agreement and General Release

Dear Mary:

As we discussed, in connection with the Anadys Pharmaceuticals, Inc. (the “Company”) restructuring
and reduction in force, your employment with the Company will terminate on September
30th, 2009 (“Separation Date”). This letter will set forth our proposed agreement
concerning your separation from the Company, severance benefits from the Company and your release
of the Company from any obligations or claims after the Separation Date.

     1. You currently hold the position of Vice President, Human Capital. As of October 1, 2009,
your responsibilities as Vice President, Human Capital will cease, and all payments and benefits
from the Company will cease, except as provided in this letter Agreement (the “Agreement”) and the
consulting agreement to be entered into effective October 1, 2009.

     2. On your Separation Date, the Company shall provide you with a final paycheck through the
Separation Date which will include accrued and unused vacation pay, less all applicable federal,
state and local income, social security and other payroll taxes consistent with the Company’s
regular employment practices.

          (a) Pursuant to the Amended and Restated Severance and Change in Control Agreement by and
between you and the Company dated March 3, 2008 (the “Severance Agreement”) and contingent upon
satisfaction of the conditions described in the Severance Agreement, you are eligible for
Separation Benefits as defined under the Severance Agreement in exchange for your release of the
Company from all claims which you may have against the Company as of the Separation Date. A copy
of the Severance Agreement is attached to this Agreement as Attachment 1, and is incorporated by
reference herein.

     3. Within 14 days of the Separation Date you will be provided with election forms for medical
insurance continuation as provided by the Consolidated Omnibus Budget Reconciliation Act (COBRA).

 

 

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     4. On the Separation Date, you will deliver to a Company representative, at a location to be
determined, all Company property which you have in your possession, including all equipment and
accessories, office equipment, account lists or contact lists, credit cards, keys, and documents,
including copies of documents.

     5. If you continue to fulfill your job responsibilities through the Separation Date, and in
exchange for your agreement to the release terms set forth in Paragraph 6 of this Agreement, on the
date eight (8) days from your signature on this Agreement, or if the 8th day falls on a
weekend or a holiday, on the next business day, Anadys will provide the following considerations:
1) provide a partial acceleration of vesting applicable to all of your outstanding stock options
so that the options that otherwise would vest through December 31, 2009 immediately will be vested;
and 2) provide an amendment to your stock option agreements, such that all of your vested stock
options (including those accelerated pursuant to the foregoing clause) will be exercisable until
December 31, 2010 (subject to your formal separate agreement to this modification and potential
loss of ISO status). This offer expires as of 5:00 p.m., November 16th, 2009.

     6. Except for claims under the Workers’ Compensation Act and Unemployment Insurance, in
consideration for the separation benefits described in the Severance Agreement and the additional
benefits set out in Paragraph 5 above, you release and forever discharge the Company, its present
and former agents, employees, officers, directors, shareholders, principals, predecessors, alter
egos, partners, parents, subsidiaries, affiliates, attorneys, insurers, successors and assigns,
from any and all claims (excluding indemnification obligations and rights under the Company’s
director and officer insurance policies), demands, grievances, causes of action or suit of any kind
arising out of, or in any way connected with, the dealings between the parties to date, including
the employment relationship and its termination.

     This general release includes, but is not limited to: (1) all claims arising out of or in any
way related to your employment with the Company or the termination of that employment; (2) all
claims related to your compensation or benefits from the Company, including, but not limited to,
salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits,
stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of
contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing;
(4) all tort claims, including, but not limited to, claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal, state or administrative
claims, rule, regulation, or ordinance, including, but not limited to, claims arising under Title
VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the California Fair
Employment and Housing Act, or the Age Discrimination in Employment Act of 1967, as amended
(“ADEA”), and the Older Workers Benefit Protection Act, as amended (“OWBPA”) (except a claim
relating to whether this release or waiver is valid under the ADEA and except for any claims under
the ADEA that may arise after the date this agreement is executed by you). By executing this
Agreement, you acknowledge and agree that with the payments described in this Agreement, you have
received all compensation to which
you are entitled from the Company through the Separation Date, plus consideration in excess of that
amount.

 

 

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     7. You acknowledge that with this document you have been advised in writing to consult with an
attorney prior to executing this waiver of ADEA claims and that you have been given at least
forty-five (45) days from the date of this Agreement in which to consider entering into the waiver
of the ADEA claims, if any. If you decide to sign before November 16th, 2009 you
acknowledge that you are doing so knowingly and voluntarily. In addition, you acknowledge that you
have been informed that you may revoke a signed waiver of the ADEA claims for up to 7 days after
executing this agreement. To be effective, your revocation must be in writing, signed, dated and
delivered to Elizabeth, E. Reed Anadys Pharmaceuticals, Inc. no later than 7 days from the date on
which you sign this agreement. If the 7th day falls on a weekend or holiday, your
revocation must be delivered the next business day. You also acknowledge that you have been
provided a detailed list of the job titles and ages of all employees who were terminated in this
group termination and the ages of all employees in the same job classification or organizational
unit who were not terminated.

     8. By executing this agreement, you acknowledge that you have read the document and have had
the opportunity to receive independent legal advice with respect to executing this agreement and
that you expressly waive the rights and benefits you otherwise might have under California Civil
Code Section 1542, which provides:

A general release does not extend to claims which the
[employee] does not know or suspect to exist in his favor
at the time of executing the release, which if known by him
must have materially affected his settlement with the
[company].

          In other words, there may be additional facts or claims which you do not know about on the
date you sign this Agreement. By signing this Agreement, you understand and agree that you are
giving up your right to bring any known or unknown claim against the Company.

     9. The Company expressly denies liability of any kind to you, and nothing contained in this
agreement will be construed as an admission of any liability.

     10. You acknowledge and agree that you have a continuing obligation to keep confidential and
not to disclose information known or learned as a consequence of your employment with the Company,
including facts relating to the business operations, procedures, research strategies and
approaches, finances, product candidates, development plans and strategies, suppliers, and business
tactics, plans and strategies and other information which is not generally known in the industry.
You also agree that you have a continuing obligation under the terms of the Proprietary
Information and Inventions Agreement which you signed on April 17, 2001, and that the relevant
terms of that agreement will continue in full force and effect.

     11. Nothing in this Agreement alters the at-will nature of your employment. Anadys is an
at-will employer and as such your employment continues to be voluntarily and for no specified
period. As a result, you are free to resign or the company may terminate your employment at any
time, for any reason, with or without cause. No employee of Anadys can enter into an

 

 

Page 4       Wednesday September 30th , 2009

employment contract for a specified period of time, or make any agreement contrary to the at-will
policy of Anadys without the written approval of the Chief Executive Officer of Anadys.

     12. This Agreement has been executed and delivered within California, and our respective
rights and obligations shall be construed and enforced in accordance with and governed by
California law.

     13. You acknowledge that this Agreement and the Severance Agreement is the entire agreement
between the parties regarding severance benefits and/or compensation and supersedes all prior and
contemporaneous oral and written agreements and discussions. This agreement may be amended only by
an agreement in writing.

     14. Any dispute or claim arising out of this Agreement will be subject to final and binding
arbitration. The arbitration will be conducted by one arbitrator who is a member of the American
Arbitration Association (AAA) and will be governed by the Model Employment Arbitration rules of
AAA. The arbitration will be held in San Diego, California and the arbitrator will apply
California substantive law in all respects. The arbitrator shall have all authority to determine
the arbitrability of any claim and enter a final, binding judgment at the conclusion of any
proceedings. Any final judgment only may be appealed on the grounds of improper bias or improper
conduct of the arbitrator.

 

 

Page 5       Wednesday September 30th , 2009

We trust that the severance benefits and other consideration set out in this Agreement will assist
you in the smooth transition of your employment. This offer expires on November 16th,
2009 at 5 pm. We wish you the best in your future endeavors.

	 	 	 	 	 
	Sincerely yours,

Anadys Pharmaceuticals, Inc.

 	 	 
	/s/ Stephen T. Worland
 	 	 
	By:  Stephen T. Worland, Ph.D. 	 	 
	 	 	 

I understand, acknowledge and agree to the terms and conditions, including the releases and
waivers, set forth in this letter agreement.

	 	 	 	 	 
	 	 	 
	DATED: 09/30/2009 	/s/ Mary Yaroshevsky-Glanville
 	 
	 	Mary Yaroshevsky-Glanvilleexv10w29

Exhibit 10.29

EXHIBIT A-1

Anadys Pharmaceuticals, Inc.

Executive Officer Bonus Plan

Purpose of the Plan:

The bonus plan is intended to:

	 	a.	 	Strengthen the connection between individual compensation and Company success,
enhancing our ability to achieve the Corporate Goals (as determined by our Board of
Directors) and enhance shareholder value
	 
	 	b.	 	Encourage teamwork among all disciplines within the Company
	 
	 	c.	 	Reinforce the Company’s pay-for-performance philosophy by awarding higher bonuses to
higher performing employees
	 
	 	d.	 	Help ensure that the Company’s overall cash compensation for executive officers is
competitive

Plan Governance:

The Compensation Committee of the Board of Directors (the “Committee”) is responsible for reviewing
and approving the Plan and any proposed modifications to the Plan. The Committee is also
responsible for determining final bonus award amounts under the Plan for all Executive Officers.
Notwithstanding any provisions of the Plan, the Compensation Committee retains absolute discretion
to determine whether any bonus payments will be made in a particular year and the amount of any
bonus payments. Bonus determinations under this Plan will be made on an annual basis for the
applicable calendar year (each a “Plan Year”).

Eligibility:

In order to be eligible to receive any bonus award under this Plan, a participant (a) must have
commenced his/her employment with the Company prior to October 1st of the Plan Year and
remained continuously employed through the end of the Plan Year; (b) must be an employee in good
standing (i.e., not on a performance improvement plan or an Unacceptable Performance performer
(performance category = 1)), and (c) must be an executive officer of the Company as of October
1st of the Plan Year.

Bonus Awards:

Bonus awards will be paid annually in cash, based on achievement of the Plan Year Corporate Goals
and individual performance. Bonus awards will be calculated by using the base salary, bonus
opportunity, weighting factor, and performance-based multipliers as set forth below (pro-ration
will be applied for those employees employed less than the full year and for salary changes during
the year). Bonus awards will generally be paid on or about January 15 of the year immediately
following the Plan Year, though this timing may be altered at the discretion of the Committee.

 

 

Bonus Opportunity; Weighting Factors:

The bonus opportunity and weighting factors will be reviewed annually and adjusted as necessary or
appropriate. The bonus opportunities and weightings for the initial Plan Year and for subsequent
years unless and until adjusted will be as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	100% Bonus	 	Corporate	 	Individual
	 	 	Opportunity	 	Performance	 	Performance
	 	 	(as percentage of	 	Weighting	 	Weighting
	Position	 	base salary)	 	Factor	 	Factor
	President & CEO
	 	 	50	%	 	 	90	%	 	 	10	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Sr. VP, Drug Development &
CMO and Sr. VP, Legal Affairs &
General Counsel
	 	 	40	%	 	 	85	%	 	 	15	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Other Executive Officers
	 	 	30	%	 	 	80	%	 	 	20	%

Performance-Based Multipliers:

Both the Corporate Performance and Individual Performance portions of the Bonus awards will be
determined by applying a performance based multiplier. For Corporate Performance, the Committee or
the independent members of the Board of Directors will apply the scale to the pre-determined
Corporate Goals on a goal by goal basis (applied to each goal’s relative weighting) and then the
sum will be used as the total Corporate Performance Rating. For Individual Performance, the
individual’s annual performance review will result in a performance category and an appropriate
multiplier from the scale below will then be applied to the individual component of the bonus
award:

 

 

	 	 	 	 	 
	Corporate Goal Rating and Individual Performance Category	 	Multiplier
	4)
	Exceeded expectations performance	 	100% - 125%
	 
	• 	 The corporate goal was exceeded in view of	 	 
	 
	 	prevailing conditions	 	 
	 
	• 	 Overall individual performance was exceptional	 	 
	 
	 	and consistently exceeded expectations	 	 
	3)
	Met expectations performance	 	75%-100%
	 
	• 	 The corporate goal was achieved in view of	 	 
	 
	 	prevailing conditions	 	 
	 
	• 	 Overall individual performance met expectations	 	 
	2)
	Met some expectations performance	 	40%-75%
	 
	• 	 Some aspects of the corporate goal were achieved	 	 
	 
	 	but not all	 	 
	 
	• 	 Overall individual performance met some	 	 
	 
	 	expectations but not all	 	 
	1)
	Unacceptable performance	 	0%
	 
	• 	 The corporate goal was not achieved in view of	 	 
	 
	 	prevailing conditions	 	 
	 
	• 	 Overall individual performance was not	 	 
	 
	 	acceptable and did not meet expectations	 	 

Calculation of Award:

The example below shows a sample bonus award calculation under the Plan. First, a 100% bonus
opportunity amount is calculated for each Plan participant by multiplying the employee’s base
salary by the 100% bonus opportunity percentage. This dollar figure is then divided between the
corporate component and the individual component based on the weighting factors for that position.
This calculation establishes a specific dollar bonus award opportunity for the performance period
for each of the corporate and individual components.

At the end of the performance period, corporate and individual multipliers will be applied based on
performance using the criteria described above. For Corporate Performance, the Committee or Board
of Directors will apply the scale to the pre-determined Corporate Goals on a goal by goal basis
(applied to each goal’s relative weighting) and then the sum will be used as the total Corporate
Performance Rating. The Corporate Performance Rating, which is based on overall corporate
performance, is used to calculate the corporate component of the bonus awards for all Plan
participants. This is accomplished by multiplying the 100% corporate bonus opportunity established
for each individual by the actual Corporate Performance Rating. The individual multiplier, which
is based on an individual’s performance category, is used in the same way to calculate the actual
individual bonus award.

 

 

Example: Sample Cash Bonus Award Calculation

	 	 	 	 	 
	Position

	 	Officer

	Base Salary for Plan Year

	 	$	200,000	 
	100% bonus opportunity percentage

	 	 	30	%
	100% bonus opportunity amount

	 	 $60,000 

		 	Corporate Component          Individual Component

	

	 	$48,000 (100% bonus opportunity * 80%)        $12,000 (100% bonus opportunity * 20%)

	 	 	 
	Corporate Performance Rating

	 	70% — as provided by the Compensation Committee
	Individual Performance Category

	 	3 (multiplier of 90% — estimated)

	 	 	 	 	 
	Actual Cash Bonus Award Calculation:
	 	 	 	 
	Corporate Bonus Award

	 	$	33,600 	 ($48,000 x 70%)
	Individual Bonus Award

	 	$	10,800 	 ($12,000 x 90%)
	 

	 	 	 	 
	Total Actual Cash Bonus Award

	 	$	44,400	 

Absolute Discretion; Company’s Absolute Right to Alter or Abolish the Plan:

Notwithstanding the Plan parameters set forth above, the Committee retains absolute discretion to
approve bonus awards that fall above or below any amounts set forth in the Plan, or no bonus
awards.

Anadys reserves the right in its absolute discretion to abolish the Plan at any time or to alter
the terms and conditions under which bonus compensation will be paid. Such discretion may be
exercised any time before, during, and after the Plan Year is completed. No participant shall have
any vested right to receive any payment until actual delivery of such compensation.

Employment Duration/Employment Relationship:

This Plan does not, and Anadys’ policies and practices in administering this Plan do not,
constitute an express or implied contract or other agreement concerning the duration of any
participant’s employment with the Company. The employment relationship of each participant is “at
will” and may be terminated at any time by Anadys or by the participant with or without cause.

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