Document:

Exhibit 10.6

 

KARYOPHARM THERAPEUTICS INC.

 

2013 EMPLOYEE STOCK PURCHASE PLAN

 

October 8, 2013

 

The purpose of this Plan is to provide eligible employees of Karyopharm Therapeutics Inc. (the “Company”) and certain of its subsidiaries with opportunities to purchase shares of the Company’s common stock, $0.0001 par value (the “Common Stock”), commencing at such time as the Board of Directors of the Company (the “Board”) shall determine.  Subject to adjustment under Section 15 hereof, the number of shares of Common Stock that have been approved for this purpose is the sum of:

 

(a)                                 800,000 shares of Common Stock; plus

 

(b)                                 an annual increase to be added on the first day of each fiscal year, commencing on January 1, 2015 and ending on December 31, 2023, equal to the least of (i) 1,600,000 shares of Common Stock, (ii) 1% of the outstanding shares on such date or (iii) an amount determined by the Board.

 

This Plan is intended to qualify as an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations issued thereunder, and shall be interpreted consistent therewith.

 

1.                                      Administration.  The Plan will be administered by the Board or by a Committee appointed by the Board (the “Committee”).  The Board or the Committee has authority to make rules and regulations for the administration of the Plan and its interpretation and decisions with regard thereto shall be final and conclusive.

 

2.                                      Eligibility.  All employees of the Company and all employees of any subsidiary of the Company (as defined in Section 424(f) of the Code) designated by the Board or the Committee from time to time (a “Designated Subsidiary”), are eligible to participate in any one or more of the offerings of Options (as defined in Section 9) to purchase Common Stock under the Plan provided that:

 

(a)                                 they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and for more than five months in a calendar year;

 

(b)                                 they have been employed by the Company or a Designated Subsidiary for at least 30 days prior to enrolling in the Plan; and

 

(c)                                  they are employees of the Company or a Designated Subsidiary on the first day of the applicable Plan Period (as defined below).

 

No employee may be granted an Option hereunder if such employee, immediately after the Option is granted, owns 5% or more of the total combined voting power or value of the stock of the Company or any subsidiary.  For purposes of the preceding sentence, the attribution rules

 

 

of Section 424(d) of the Code shall apply in determining the stock ownership of an employee, and all stock that the employee has a contractual right to purchase shall be treated as stock owned by the employee.

 

The Company retains the discretion to determine which eligible employees may participate in an offering pursuant to and consistent with Treasury Regulation Sections 1.423-2(e) and (f).

 

3.                                      Offerings.  The Company will make one or more offerings (“Offerings”) to employees to purchase stock under this Plan.  Offerings will begin at such time as the Board shall determine.  Each Offering will consist of a six-month period (a “Plan Period”) during which payroll deductions will be made and held for the purchase of Common Stock at the end of the Plan Period.  The Board or the Committee may, at its discretion, choose a different Plan Period of not more than twelve (12) months for Offerings.

 

4.                                      Participation.  An employee eligible on the first day of a Plan Period of any Offering may participate in such Offering by completing and forwarding either a written or electronic payroll deduction authorization form to the employee’s appropriate payroll office at least 15 days prior to the commencement of the applicable Plan Period.  The form will authorize a regular payroll deduction from the Compensation received by the employee during the Plan Period.  Unless an employee files a new form or withdraws from the Plan, his or her deductions and purchases will continue at the same rate for future Offerings under the Plan as long as the Plan remains in effect.  The term “Compensation” means the amount of money reportable on the employee’s Federal Income Tax Withholding Statement, excluding overtime, shift premium, incentive or bonus awards, allowances and reimbursements for expenses such as relocation allowances for travel expenses, income or gains associated with the grant or vesting of restricted stock, income or gains on the exercise of Company stock options or stock appreciation rights, and similar items, whether or not shown or separately identified on the employee’s Federal Income Tax Withholding Statement, but including, in the case of salespersons, sales commissions to the extent determined by the Board or the Committee.

 

5.                                      Deductions.  The Company will maintain payroll deduction accounts for all participating employees.  With respect to any Offering made under this Plan, an employee may authorize a payroll deduction in any percentage amount (in whole percentages) up to a maximum of 15% of the Compensation he or she receives during the Plan Period or such shorter period during which deductions from payroll are made.  The Board or the Committee may, at its discretion, designate a lower maximum contribution rate.  The minimum payroll deduction is such percentage of Compensation as may be established from time to time by the Board or the Committee.

 

6.                                      Deduction Changes.  An employee may decrease or discontinue his or her payroll deduction once during any Plan Period, by filing either a written or electronic new payroll deduction authorization form.  However, an employee may not increase his or her payroll deduction during a Plan Period.  If an employee elects to discontinue his or her payroll deductions during a Plan Period, but does not elect to withdraw his or her funds pursuant to Section 8 hereof, funds deducted prior to his or her election to discontinue will be applied to the purchase of Common Stock on the Exercise Date (as defined below).

 

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7.                                      Interest.  Interest will not be paid on any employee accounts, except to the extent that the Board or the Committee, in its sole discretion, elects to credit employee accounts with interest at such rate as it may from time to time determine.

 

8.                                      Withdrawal of Funds.  An employee may at any time prior to the close of business on the fifteenth business day prior to the end of a Plan Period and for any reason permanently draw out the balance accumulated in the employee’s account and thereby withdraw from participation in an Offering.  Partial withdrawals are not permitted.  The employee may not begin participation again during the remainder of the Plan Period during which the employee withdrew his or her balance.  The employee may participate in any subsequent Offering in accordance with terms and conditions established by the Board or the Committee.

 

9.                                      Purchase of Shares.

 

(a)                                 Number of Shares.  On the first day of each Plan Period, the Company will grant to each eligible employee who is then a participant in the Plan an option (an “Option”) to purchase on the last business day of such Plan Period (the “Exercise Date”) at the applicable purchase price (the “Option Price”) up to that number of shares of Common Stock determined by multiplying $2,083 by the number of full months in the Plan Period and dividing the result by the closing price (as determined below) on the first day of such Plan Period; provided, however, that no employee may be granted an Option which permits his or her rights to purchase Common Stock under this Plan and any other employee stock purchase plan (as defined in Section 423(b) of the Code) of the Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such Common Stock (determined at the date such Option is granted) for each calendar year in which the Option is outstanding at any time; and, provided, further, however, that the Committee may, in its discretion, set a fixed maximum number of shares of Common Stock that each eligible employee may purchase per Plan Period which number may not be greater than the number of shares of Common Stock determined by using the formula in the first clause of this Section 9(a) and which number shall be subject to the second clause of this Section 9(a).

 

(b)                                 Option Price.  The Board or the Committee shall determine the Option Price for each Plan Period, including whether such Option Price shall be determined based on the lesser of the closing price of the Common Stock on (i) the first business day of the Plan Period or (ii) the Exercise Date, or shall be based solely on the closing price of the Common Stock on the Exercise Date; provided, however, that such Option Price shall be at least 85% of the applicable closing price.  In the absence of a determination by the Board or the Committee, the Option Price will be 85% of the lesser of the closing price of the Common Stock on (i) the first business day of the Plan Period or (ii) the Exercise Date.  The closing price shall be (a) the closing price (for the primary trading session) on any national securities exchange on which the Common Stock is listed or (b) the average of the closing bid and asked prices in the over-the-counter-market, whichever is applicable, as published in The Wall Street Journal or another source selected by the Board or the Committee.  If no sales of Common Stock were made on such a day, the price of the Common Stock shall be the reported price for the next preceding day on which sales were made.

 

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(c)                                  Exercise of Option.  Each employee who continues to be a participant in the Plan on the Exercise Date shall be deemed to have exercised his Option at the Option Price on such date and shall be deemed to have purchased from the Company the number of whole shares of Common Stock reserved for the purpose of the Plan that his accumulated payroll deductions on such date will pay for, but not in excess of the maximum numbers determined in the manner set forth above.

 

(d)                                 Return of Unused Payroll Deductions.  Any balance remaining in an employee’s payroll deduction account at the end of a Plan Period will be automatically refunded to the employee.

 

10.                               Issuance of Certificates.  Certificates representing shares of Common Stock purchased under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or (in the Company’s sole discretion) in the name of a brokerage firm, bank, or other nominee holder designated by the employee.  The Company may, in its sole discretion and in compliance with applicable laws, authorize the use of book entry registration of shares in lieu of issuing stock certificates.

 

11.                               Rights on Retirement, Death or Termination of Employment.  If a participating employee’s employment ends before the last business day of a Plan Period, no payroll deduction shall be taken from any pay then due and owing to the employee and the balance in the employee’s account shall be paid to the employee.  In the event of the employee’s death before the last business day of a Plan Period, the Company shall, upon notification of such death, pay the balance of the employee’s account (a) to the executor or administrator of the employee’s estate or (b) if no such executor or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate.  If, before the last business day of the Plan Period, the Designated Subsidiary by which an employee is employed ceases to be a subsidiary of the Company, or if the employee is transferred to a subsidiary of the Company that is not a Designated Subsidiary, the employee shall be deemed to have terminated employment for the purposes of this Plan.

 

12.                               Optionees Not Stockholders.  Neither the granting of an Option to an employee nor the deductions from his or her pay shall make such employee a stockholder of the shares of Common Stock covered by an Option under this Plan until he or she has purchased and received such shares.

 

13.                               Options Not Transferable.  Options under this Plan are not transferable by a participating employee other than by will or the laws of descent and distribution, and are exercisable during the employee’s lifetime only by the employee.

 

14.                               Application of Funds.  All funds received or held by the Company under this Plan may be combined with other corporate funds and may be used for any corporate purpose.

 

15.                               Adjustment 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

 

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or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under this Plan, (ii) the share limitations set forth in Section 9, and (iii) the Option Price shall be equitably adjusted to the extent determined by the Board or the Committee.

 

(b)                                 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 is cancelled, (b) any transfer or disposition of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the Company.

 

(2)                                 Consequences of a Reorganization Event on Options.  In connection with a Reorganization Event, the Board or the Committee may take any one or more of the following actions as to outstanding Options on such terms as the Board or the Committee determines:  (i) provide that Options shall be assumed, or substantially equivalent Options shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to employees, provide that all outstanding Options will be terminated immediately prior to the consummation of such Reorganization Event and that all such outstanding Options will become exercisable to the extent of accumulated payroll deductions as of a date specified by the Board or the Committee in such notice, which date shall not be less than ten (10) days preceding the effective date of the Reorganization Event, (iii) upon written notice to employees, provide that all outstanding Options will be cancelled as of a date prior to the effective date of the Reorganization Event and that all accumulated payroll deductions will be returned to participating employees on such date, (iv) 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 surrendered in the Reorganization Event (the “Acquisition Price”), change the last day of the Plan Period to be the date of the consummation of the Reorganization Event and make or provide for a cash payment to each employee equal to (A) (1) the Acquisition Price times (2) the number of shares of Common Stock that the employee’s accumulated payroll deductions as of immediately prior to the Reorganization Event could purchase at the Option Price, where the Acquisition Price is treated as the fair market value of the Common Stock on the last day of the applicable Plan Period for purposes of determining the Option Price under Section 9(b) hereof, and where the number of shares that could be purchased is subject to the limitations set forth in Section 9(a), minus (B) the result of multiplying such number of shares by such Option Price, (v) provide that, in connection with a liquidation or dissolution of the Company, Options shall convert into the right to receive liquidation proceeds (net of the Option Price thereof) and (vi) any combination of the foregoing.

 

For purposes of clause (i) above, an Option shall be considered 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

 

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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 such number of shares of common stock of the acquiring or succeeding corporation (or an affiliate thereof) that the Board determines to be equivalent in value (as of the date of such determination or another date specified by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.

 

16.                               Amendment of the Plan.  The Board may at any time, and from time to time, amend or suspend this Plan or any portion thereof, except that (a) if the approval of any such amendment by the shareholders of the Company is required by Section 423 of the Code, such amendment shall not be effected without such approval, and (b) in no event may any amendment be made that would cause the Plan to fail to comply with Section 423 of the Code.

 

17.                               Insufficient Shares.  If the total number of shares of Common Stock specified in elections to be purchased under any Offering plus the number of shares purchased under previous Offerings under this Plan exceeds the maximum number of shares issuable under this Plan, the Board or the Committee will allot the shares then available on a pro-rata basis.

 

18.                               Termination of the Plan.  This Plan may be terminated at any time by the Board.  Upon termination of this Plan all amounts in the accounts of participating employees shall be promptly refunded.

 

19.                               Governmental Regulations.  The Company’s obligation to sell and deliver Common Stock under this Plan is subject to listing on a national stock exchange (to the extent the Common Stock is then so listed or quoted) and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such stock.

 

20.                               Governing Law.  The Plan shall be governed by Delaware law except to the extent that such law is preempted by federal law.

 

21.                               Issuance of Shares.  Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source.

 

22.                               Notification upon Sale of Shares.  Each employee agrees, by entering the Plan, to promptly give the Company notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the date of grant of the Option pursuant to which such shares were purchased.

 

23.                               Grants to Employees in Foreign Jurisdictions.  The Company may, to comply with the laws of a foreign jurisdiction, grant Options to employees of the Company or a Designated Subsidiary who are citizens or residents of such foreign jurisdiction (without regard to whether they are also citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) with terms that are less favorable (but not more favorable)

 

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than the terms of Options granted under the Plan to employees of the Company or a Designated Subsidiary who are resident in the United States.  Notwithstanding the preceding provisions of this Plan, employees of the Company or a Designated Subsidiary who are citizens or residents of a foreign jurisdiction (without regard to whether they are also citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from eligibility under the Plan if (a) the grant of an Option under the Plan to a citizen or resident of the foreign jurisdiction is prohibited under the laws of such jurisdiction or (b) compliance with the laws of the foreign jurisdiction would cause the Plan to violate the requirements of Section 423 of the Code.  The Company may add one or more appendices to this Plan describing the operation of the Plan in those foreign jurisdictions in which employees are excluded from participation or granted less favorable Options.

 

24.                               Authorization of Sub-Plans.  The Board may from time to time establish one or more sub-plans under the Plan with respect to one or more Designated Subsidiaries, provided that such sub-plan complies with Section 423 of the Code.

 

25.                               Withholding.  If applicable tax laws impose a tax withholding obligation, each affected employee shall, no later than the date of the event creating the tax liability, make provision satisfactory to the Board for payment of any taxes required by law to be withheld in connection with any transaction related to Options granted to or shares acquired by such employee pursuant to the Plan.  The Company may, to the extent permitted by law, deduct any such taxes from any payment of any kind otherwise due to an employee.

 

26.                               Effective Date and Approval of Shareholders.  The Plan shall take effect on October 8, 2013 subject to approval by the shareholders of the Company as required by Section 423 of the Code, which approval must occur within twelve months of the adoption of the Plan by the Board.

 

	
 
    	
Adopted   by the Board of Directors on
    
	
 
    	
October   8, 2013
    
	
 
    	
 
    
	
 
    	
Approved   by the stockholders on
    
	
 
    	
October   22, 2013
    

 

7Exhibit 10.7

 

KARYOPHARM THERAPEUTICS INC.

 

December 6, 2010

 

Michael Kauffman, M.D., Ph.D.
 15 Bontempo Rd.
 Newton, MA 02459

 

Dear Michael:

 

On behalf of Karyopharm Therapeutics Inc. (the “Company”), I am very pleased to offer you the position of President and Chief Executive Officer of the Company.

 

The terms of your position with the Company are as set forth below:

 

1.                                      Position.  On the Commencement Date, as defined in Section 2, you will become the President and Chief Executive Officer of the Company.  You will serve as President and Chief Executive Officer, reporting to the Company’s Board of Directors (the “Board”).  In your role you will have the responsibilities customarily associated with such position and those that are assigned to you by the Company’s Board.  During the term of your employment with the Company, you will devote your full professional time and efforts to the business of the Company, except that you may engage in the business activities and other activities described on Appendix A of this letter, and other activities that may be approved in advance by the Company’s Board.  You will be a member of the Board.

 

2.                                      Commencement Date.  You will commence your new position with the Company, effective on January 1, 2011 (the “Commencement Date”).

 

3.                                      Compensation.

 

a.                                      Base Salary.  You will be paid an annual base salary of Three Hundred Forty Thousand Dollars ($340,000).  Your base salary will be payable pursuant to the Company’s regular payroll policy.  Your salary will be reviewed annually and may be increased by the Board in connection with any such review.

 

b.                                      Bonus Program.  You will be eligible for an annual bonus that targets twenty-five percent (25%) of your annual base salary based upon achievement of certain performance goals and corporate milestones established by the Board in consultation with you.  Achievement of goals will be determined in the sole discretion of the Board or a Compensation Committee of the Board.  To earn any part of the bonus, you must be employed on December 31st of the applicable bonus year and such bonus shall be paid no later than March 15th of the year immediately following the year to which the applicable annual bonus relates.

 

c.                                       Option Grant.  As soon as practicable after the Commencement Date, subject to Board approval, the Company will grant to you a non-qualified stock option for

 

 

the purchase of 1,131,750 shares of the Company’s Common Stock, $.0001 par value per share (the “Common Stock”) at a purchase price of $.01 per share (the “Option”).  The Option shall vest as follows: 25% of the shares underlying the Option to vest on the first anniversary of the Commencement Date and an additional 2.0833% of the shares to vest each month thereafter over the following thirty-six (36) months.

 

The Option, including, but not limited to the foregoing vesting provisions, will be subject to the terms of the Company’s standard form of non-qualified stock option agreement (the “Stock Option Agreement”) and the Company’s 2010 Stock Incentive Plan (the “Plan”).

 

d.                                      Withholding.  The Company shall withhold from any compensation or benefits payable under this letter agreement any federal, state and local income, employment or other similar taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

4.                                      Benefits.

 

a.                                      Vacation and Holidays.  You will be eligible for three weeks of paid vacation each year and Company paid holidays consistent with the Company’s vacation policy offered to other executive level employees of the Company.

 

b.                                      Other.  You will be eligible to participate in such medical, retirement and other benefits as are approved by the Board and made available to other executive level employees of the Company.

 

As is the case with all employee benefits, such benefits will be governed by the terms and conditions of applicable plans or policies, which are subject to change or discontinuation at any time.

 

5.                                      At-Will Employment.  Your employment with the Company is and shall at all times during your employment hereunder be “at-will” employment.  The Company or you may terminate your employment at any time for any reason, with or without Cause, as defined in Section 6(d), and with or without notice.  The “at-will” nature of your employment shall remain unchanged during your tenure as an employee of the Company, and may only be changed by an express written agreement that is signed by you and the Board.

 

6.                                      Termination of Employment

 

a.                                      If you resign your employment with the Company or if the Company terminates your employment other than for “Cause” you will receive: (i) any unpaid base salary for services rendered prior to the date of termination or resignation; (ii) any earned but unpaid annual bonus for any year prior to the year in which termination of employment occurs; (iii) reimbursement of any un-reimbursed business expenses incurred as of the date of termination or resignation in accordance with the Company’s reimbursement policy, (iv)

 

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accrued but unused vacation (if applicable), earned through the effective resignation or termination date; and (v) all other payments, benefits or fringe benefits to which you shall be entitled under the terms of any applicable compensation arrangement or benefit, equity or fringe benefit plan or program or grant or this letter agreement (collectively, clauses (i) through (v) shall be referred herein as the “Accrued Benefits”), and, except as set forth in paragraph (b), you will not be entitled to any other compensation except as the Board may otherwise agree in its sole discretion.  If the Company terminates your employment for Cause, at any time, then you will receive no additional compensation other than the Accrued Benefits, except that the benefits described in this Section 6(a)(ii) shall not be paid to you.

 

b.                                      If the Company terminates your employment other than for “Cause” or if you terminate your employment for “Good Reason” after a Change of Control, as such terms are defined below, subject to you providing the Company with a fully effective separation agreement that includes a general release of claims in a form and manner reasonably satisfactory to the Company (the “Release”) within the 30-day period following the date of termination, the Company shall, in addition to the amounts payable under paragraph (a), pay you severance pay in the form of continuation of your base salary for eight (8) months (the “Severance Period”) in accordance with the Company’s payroll practice, beginning on the Company’s first regular payroll date that occurs 30 days after the date of termination (the “Severance Benefits”).  Solely for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), each salary continuation payment is considered a separate payment.  To the extent that any Severance Benefit constitutes “non-qualified deferred compensation” under Section 409A of the Code, then such payments or benefits shall be payable only upon the Executive’s “separation from service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-l(h).  Notwithstanding the foregoing, the Severance Benefits will be reduced dollar for dollar by any compensation you receive from another employer during the period between the date of termination of your employment and the end of the Severance Period if you become re-employed during such period.  You agree to give prompt written notice of any employment during the Severance Period and to respond promptly to any reasonable inquiries concerning your professional activities.  If the Company makes any overpayment of Severance Benefits, you agree to promptly return any such overpayment to the Company.  The foregoing shall not create any obligation on your part to seek reemployment after the date of termination of your employment.

 

For purposes of this paragraph, the following terms will have the following meanings:

 

(i)                                     “Good Reason” shall mean that you have complied with the “Good Reason Process,” as defined below, following the occurrence of any of the following events after a Change of Control: (i) a material diminution in your responsibilities, authority or duties; (ii) you are not elected to, or are removed, from the surviving company’s Board; (iii) you

 

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are made to report to anyone other than the surviving company’s Board; or (iv) the surviving company’s corporate headquarters are located outside Massachusetts.

 

(ii)                                  “Good Reason Process” shall mean that (i) you reasonably determine in good faith that a “Good Reason” condition has occurred; (ii) you notify the Company in writing of the first occurrence of the Good Reason condition within ten (10) days of the first occurrence of such condition; (iii) you cooperate in good faith with the Company’s efforts, for a period not less than thirty (30) days following such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) you terminate your employment within thirty (30) days after the end of the Cure Period.  If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

 

(iii)                               “Change of Control” shall mean any of the following:

 

1.  any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its subsidiaries), together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Act) of such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities having the right to vote in an election of the Board (“Voting Securities”) in such case other than as a result of an acquisition of securities directly from the Company; or

 

2.  the date a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the incumbent Board before the date of the appointment or election, provided, further that directors whose initial assumption of office is in connection with an actual or threatened election contest related to the election of directors of the Company will not be considered as members of the incumbent Board for purposes of this paragraph for a period of twelve (12) months following such initial assumption; or

 

3.  the consummation of (A) any consolidation or merger of the Company where the stockholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate more than fifty percent (50%) of the voting shares of the Company issuing cash or securities in the consolidation or merger (or of its ultimate parent

 

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corporation, if any,), or (B) any sale or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company.

 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred for purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the Company which, by reducing the number of shares of Voting Securities outstanding, increases the proportionate number of Voting Securities beneficially owned by any person to fifty percent (50%) or more of the combined voting power of all of the then outstanding Voting Securities; provided, however, that if any person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns fifty percent (50%) or more of the combined voting power of all of the then outstanding Voting Securities, then a “Change in Control” shall be deemed to have occurred for purposes of this Agreement.

 

c.                                       If your employment terminates because of your death or Disability, then you will receive the Accrued Benefits.  For purposes of this letter agreement, “Disability” shall be defined as your inability to have performed your material duties hereunder due to a physical or mental injury, infirmity or incapacity for one hundred eighty (180) days (including weekends and holidays) in any 365-day period.

 

For purposes of this letter agreement, “for Cause” shall mean: (i) dishonesty, embezzlement, misappropriation of assets or property of the Company; (ii) gross negligence, willful misconduct, neglect of duties, theft, fraud or breach of fiduciary duty to the Company; (iii) violation of federal or state securities law; (iv) the conviction of a felony or any crime involving moral turpitude, including a plea of guilty or nolo contendre; (v) a material breach of any of the Company’s written policies related to conduct or ethics; or (vi) a material breach of the Nondisclosure and Inventions Assignment Agreement executed in accordance with Section 7 of this letter agreement.

 

7.                                      Employee Confidentiality Agreement.  As an employee of the Company, you will have access to certain Company and third party confidential information and you may during the course of your employment develop certain information or inventions which will be the property of the Company.  To protect the interest of the Company you agree to sign the Company’s standard “Non-Disclosure and Inventions Assignment Agreement” as a condition of your employment, a copy of which has been provided.

 

8.                                      Resolution of Disputes.  Any controversy or claim arising out of or relating to your employment, this letter agreement, its enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of its provisions, shall be submitted to arbitration in Boston, Massachusetts before a single arbitrator (applying Massachusetts law), in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (“AAA”) as modified by the terms and conditions of this

 

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Section 8; provided, however, that provisional injunctive relief may, but need not, be sought in a court of law while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the arbitrator.  The arbitrator shall be selected by mutual agreement of the parties or, if the parties cannot agree, by striking from a list of arbitrators supplied by AAA.  The arbitrator shall issue a written opinion revealing, however briefly, the essential findings and conclusions upon which the award is based.  Final resolution of any dispute through arbitration may include any remedy or relief which the arbitrator deems just and equitable.  Any award or relief granted by the arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction.

 

The parties acknowledge that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with this letter agreement or your employment.

 

The Company shall pay the arbitrator’s fees and arbitration expenses and any other costs associated with the arbitration or arbitration hearing that are unique to arbitration.  The Company and you each shall separately pay its or your own deposition, witness, expert and attorneys’ fees and other expenses as and to the same extent as if the matter were being held in court unless otherwise provided by law.  The arbitrator shall have the sole and exclusive power and authority to decide any and all issues of or related to whether this letter agreement or any provision of this letter agreement is subject to arbitration.

 

9.                                      No Inconsistent Obligations.  By accepting this offer of employment, you represent and warrant to the Company that you are under no obligations or commitments, whether contractual or otherwise, that are inconsistent with your obligations set forth in this letter agreement or that would be violated by your employment by the Company.  You agree that you will not take any action on behalf of the Company or cause the Company to take any action that will violate any agreement that you have with a prior employer.

 

10.                               Indemnification and Liability Insurance.  The Company will provide you certain rights to indemnification as set forth in the Company’s standard form of indemnification agreement for executive officers and directors.

 

11.                               Miscellaneous.

 

a.                                      This letter agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

b.                                      The Company may only assign this letter agreement to a successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, provided, that such successor expressly agrees to assume and perform this letter agreement in the same manner and to the same

 

6

 

extent that the Company would have been required to perform it if no such assignment had taken place, and “Company” shall include any such successor that assumes and agrees to perform this letter agreement, by operation of law or otherwise.

 

c.                                       No provision of this letter agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer or director as may be designated by the Board.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this letter agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

12.                               The validity, interpretation, construction and performance of this letter agreement shall be governed by the laws of the Commonwealth of Massachusetts without regard to the choice of law principles thereof.

 

I look forward to your joining the Company to create a successful company, and I am confident that your employment with the Company will prove mutually beneficial.  If you have any further questions or require additional information, please feel free to contact me.

 

[Signatures appear on following page]

 

7

 

	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
KARYOPHARM   THERAPEUTICS INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ronald A. DePinho, M.D.
    
	
 
    	
 
    	
Ronald   A. DePinho, M.D.
    
	
 
    	
 
    	
Member   of Board of Directors
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mansoor Raza Mirza, M.D.
    
	
 
    	
 
    	
Mansoor   Raza Mirza, M.D.
    
	
 
    	
 
    	
Member   of Board of Directors
    
	
 
    	
 
    
	
I   hereby agree to the foregoing

terms   of employment:
    	
 
    
	
 
    	
 
    
	
Agreed:
    	
/s/   Michael Kauffman, M.D., Ph.D.
    	
 
    
	
 
    	
Michael   Kauffman, M.D., Ph.D.
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    	
 
    

 

 

	
Appendices:
    	
Appendix   A — Other Activities
    
	
 
    	
 
    
	
Attachments:
    	
Non-Disclosure   and Inventions Assignment Agreement
    

 

8

 

Appendix A

 

APPROVED ACTIVITIES

 

Employee may serve on the boards’ of directors of non-profit organizations; participate in charitable, civic, educational, professional, community or industry affairs; and manage Employee’s passive personal investments; and Employee may serve as a director or may participate as an investor in the following companies:

 

Board of Directors and Audit Committee Member, Zalicus Inc. (NASDAQ: ZLCS)

 

Kauffman Pharmaceutical Development Consulting

 

·                  consulting, primarily for Venture Capital Firms (along with some biopharma companies) on potential investments and/or development plans.

·                  approximately 4 hours per month average

 

Scientific Consultant, Bessemer Venture Partners

 

·                  intermittent review of current investment portfolio data

·                  opinions on potential new investments

·                  approximately 2 hours per month average

 

Consultancy to Onyx Pharmaceuticals Inc. (NASDAQ: ONXX)

 

·                  to be determined

·                  would focus on clinical development, data analysis, NDA messaging for carfilzomib

·                  less then 5 hours per week maximum

·                  low likelihood

 

provided, (i) in each case, such activities in the aggregate do not materially interfere with Employee’s duties or create a potential business or fiduciary conflict, and (ii) in the case of the consultancy with Onyx, any agreement that involves five hours or more per week of employee’s time or continues for more than one year will require the prior written consent of the Board, and the Board reserves the right to require an adjustment to the salary amount and option vesting provisions of this Agreement to reflect and accommodate any such additional commitment to Onyx.

 

*****

 

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