Document:

srpt-ex102_217.htm

EXHIBIT 10.2

[DATE]

[Executive Name]

c/o Sarepta Therapeutics, Inc.

215 First Street, Suite 415

Cambridge, MA 02142

 

Dear [______]:

 

We are pleased to confirm our agreement relating to your continued employment with Sarepta Therapeutics, Inc. (the “Company”) pursuant to the terms and conditions as set forth in this letter agreement (this “letter agreement”).  Defined terms that are used but not defined herein shall have the meanings given to such terms as shown on Annex A.  All payments and benefits payable pursuant to this letter agreement will be subject to applicable withholding taxes. This letter agreement replaces and supersedes any prior employment agreement or other letter agreement providing for severance payments or benefits (“Prior Agreement”), other than the Change in Control Severance Agreement dated as of the same date written above and entered into simultaneously with this letter agreement (the “CIC Severance Agreement”).

1.Severance.

(a)Subject to Section 1(b), Annex B and the other terms and conditions of this letter agreement, in the event that your employment is terminated without Cause or you resign for Good Reason (any such termination, a “Qualifying Termination”), in addition to any unpaid salary, accrued but unpaid bonus for the year preceding the year of termination, and vested benefits (including, but not limited to, reimbursement for reimbursable business expenses incurred prior to such termination, unused vacation, and unused sick days) owed to you as of the date of such termination, you (or in the event of your death following a Qualifying Termination, your beneficiary) shall be entitled to: 

(i)a severance payment (“Severance Payment”) equal to the sum of (x) 9 months of your then annual base salary and (y) your target bonus for the year of termination, which Severance Payment shall be paid to you, with respect to the salary component, in substantially equal installments in accordance with the Company’s regular payroll policies over a period of nine (9) months commencing on the first payroll period following the final payment of your Non-Competition Consideration (as defined below), and with respect to the bonus component, in a lump sum on the 61st day following the Qualifying Termination; 

 

 

(ii)a monthly payment of an amount equal to the monthly premiums for continuation coverage under the Company’s group health plans (in which you and your applicable covered dependents participated immediately prior to your Qualifying Termination) for the period beginning on your employment termination date and ending on the earlier of (x) twelve (12) months following the date of such termination, and (y) the date you become eligible for group health insurance coverage through a new employer (subject to your timely completion and submission of the necessary election forms, and further subject to your co-payment of the monthly premiums (if any) at the applicable active employees’ rate and any administrative fee) (the “COBRA Payments”); provided that if such continuation coverage violates federal non-discrimination laws or rules applicable to such group health insurance plan(s) in a manner that adversely affects the Company or any of its affiliates, as reasonably determined by the Company in its sole discretion, you and the Company will work together to identify an alternative arrangement that provides substantially the same economic benefit as these COBRA Payments without any increase in cost to the Company; and

(b)Notwithstanding anything herein to the contrary, the Company’s (or any of its affiliates’) obligations to pay you the Severance Payments and pay you the COBRA Payments shall be conditioned upon your execution, delivery, and non-revocation of a valid and enforceable release of claims in favor of the Company and its affiliates that is substantially in the form attached hereto as Annex C (the “Release”) which Release, within 60 days after your termination date, has become effective and is no longer subject to revocation under applicable law.  Subject to the foregoing and the provisions set forth herein, the Severance Payments and COBRA Payments will commence to be paid to you on the 61st day following your employment termination date, and shall include any Severance Payments and COBRA Payments that were otherwise scheduled to be paid prior thereto, provided that the salary component of your Severance Payments shall be paid to you commencing on the first payroll period following the final payment of your Non-Competition Consideration. 

(c)In consideration of your agreement to be bound by, and in return for your compliance with, the terms, conditions, and restrictions set forth in this letter agreement, including without limitation the non-competition provisions contained herein, if you are terminated for Cause, or should you resign with or without Good Reason, you will receive continued payment of your base salary at the then-current rate per pay period, reduced by all applicable taxes and withholdings, for a period of three (3) months following your termination. In the event that you are terminated without Cause, your receipt of the Severance Payments and COBRA Payments shall be conditioned upon your execution of a separation agreement in a form substantially similar to this letter agreement, except that such separation agreement shall contain a 12-month non-competition provision.  In the event that you are terminated without Cause, in addition to the Severance Payment you will also receive continued payment of your base salary at the then-current rate per pay period, reduced by all applicable taxes and withholdings, for a period of three (3) months following your termination in consideration for you agreeing to be bound by, and your compliance with, the non-competition provision contained in such separation agreement (this three-month salary continuation, together with the salary continuation described in the first sentence of this Section 1(c), the “Non-Competition Consideration”).  The Non-Competition Consideration will be in addition to any Severance Payments for which you are eligible. 

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2.Equity Exercise Period and Payments.  In the event of your Qualifying Termination, you shall have no less than twelve (12) months from the termination date (but in no event beyond the remaining term of such equity awards) to exercise any exercisable portion of your equity awards that have vested as of the termination date, provided that, the foregoing shall not apply to any equity awards that were granted to you prior to the date of this letter agreement (which prior awards shall be subject to the existing exercisability provisions in the applicable award agreements). In addition, you hereby agree and acknowledge that notwithstanding the foregoing, if you exercise any stock option that is intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (“ISO”) that was granted to you after the date of this letter agreement at any time other than the time periods set forth in the regulations promulgated under Section 422 of the Internal Revenue Code of 1986, as amended, your ISOs may cease to qualify as “incentive stock options”.  Unless otherwise approved in writing by the Board of Directors or its designee, in the event of your termination for any reason other than without Cause or Good Reason, the time period to exercise or receive payment for any equity awards already vested as of the date of termination shall be as set forth in the equity award plan documents or award agreements. To the extent you were entitled to accelerated vesting of any equity awards granted prior to the date hereof, whether by virtue of terms of applicable award agreement or a Prior Agreement, you expressly agree that you shall not be entitled to such accelerated vesting, other than to the extent provided in the CIC Severance Agreement.

3.Company’s Property. Within five business days of your termination of employment with the Company for any reason (including, without limitation, due to a Qualifying Termination) (or at any time prior thereto at the Company’s request), you shall return all property belonging to the Company or its affiliates (including, but not limited to, any Company-provided laptops, computers, cell phones, wireless electronic mail devices or other equipment, and documents and property belonging to the Company).  To the extent any Company records reside on personal devices you shall promptly delete such records unless otherwise prohibited by law.  You may retain your rolodex and similar address books provided that such items only include contact information.  To the extent that you are provided with a cell phone number by the Company during employment, the Company shall cooperate with you in transferring such cell phone number to your individual name following the date of termination.

4.Confidentiality; Non-Interference; Non-Solicitation; and Non-Disparagement Covenants.

(a)Confidentiality. During your employment with the Company and at any time thereafter you will remain subject to the terms of the Confidentiality Agreement provided, however, the foregoing shall not apply to information that (i) was known to the public prior to its disclosure to you; (ii) becomes generally known to the public subsequent to disclosure to you through no wrongful act of you or any representative of you; or (iii) you are required to disclose by applicable law, regulation or legal process (provided that you provide the Company with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).  In addition, nothing in this letter agreement shall be construed to prohibit you from reporting possible violations of federal or state law or regulations to any governmental entity or self-regulatory organization with oversight responsibility for the Company, or making other disclosures that are protected under whistleblower or other provisions of any applicable federal or state law or regulations.  Prior authorization of the Company is not required to make any such reports or disclosures, and you are not required to notify the Company that he has made such reports or disclosures.

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(b)Non-Interference. During your employment with the Company and for a period of one (1) year thereafter (such one (1) year period “Restriction Period”), you agree that you shall not, except in the furtherance of your duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, solicit, aid or induce any customer of the Company or any of its subsidiaries or affiliates to purchase goods or services then sold by the Company or any of its subsidiaries or affiliates from another person, firm, corporation or other entity or assist or aid any other persons or entity in identifying or soliciting any such customer.

(c)Non-Solicitation. During your employment with the Company and for the Restriction Period, you agree that you shall not, except in the furtherance of your duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, (A) solicit, aid or induce any employee, representative or agent of the Company or any of its subsidiaries or affiliates to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company or hire or retain any such employee, representative or agent, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, representative or agent, or (B) interfere, or aid or induce any other person or entity in interfering, with the relationship between the Company or any of its subsidiaries or affiliates and any of their respective vendors, joint venturers, or licensors.  An employee, representative or agent shall be deemed covered by this Section 4 while so employed or retained and for a period of six (6) months thereafter. Notwithstanding the foregoing, the provisions of this Section 4(c) shall not be violated by (A) general advertising or solicitation not specifically targeted at Company-related persons or entities, (B) you serving as a reference, upon request, for any employee of the Company or any of its subsidiaries or affiliates, or (C) actions taken by any person or entity with which you are associated if you are not personally involved in any manner in the matter and have not identified such Company-related person or entity for soliciting or hiring.

(d)Non-Disparagement. You agree that you will not, whether directly or indirectly, by name or innuendo, disparage or encourage or induce others to disparage the Company, the members of its Board of Directors, its officers, or any other member of the Company’s senior management team (collectively, the “Company Representatives”).  The Company, by and through each of its Company Representatives, shall not disparage or encourage or induce others, including the Company, to disparage you to third parties. For the purposes of this letter agreement, the term “disparage” includes the making of false, defamatory or derogatory comments that could reasonably be expected to damage your reputation or the reputation of the Company or any of the Company Representatives; provided, however, that nothing in this letter agreement shall restrict communications protected as privileged under federal or state law, or any testimony or communications ordered and required by any administrative agency or court of competent jurisdiction.

 

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(e)DTSA Notice. Nothing in this letter agreement is intended to interfere with or discourage you from communicating with government agencies about possible violations of law or otherwise providing information to government agencies or participating in government agency investigations or proceedings. You are not required to notify the Company of any such communications; provided however, that nothing herein authorizes the disclosure of information you obtained through a communication that was subject to the attorney-client privilege. Further, you are hereby advised in accordance with the Defend Trade Secrets Act of 2016 that you will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

 

You are further notified that if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the Company’s trade secrets to your attorney and use the trade secret information in the court proceeding only if you: (a) file any document containing the trade secret under seal; and (b) do not disclose the trade secret, except pursuant to court order.

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5.Non-Competition Covenant. You acknowledge that you perform services of a unique nature for the Company that are irreplaceable, and that your performance of such services to a competing business will result in irreparable harm to the Company.  Accordingly, during your employment hereunder and, other than in the event that your employment is terminated by the Company without Cause, for the Restriction Period, you agree that you will not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to any person, firm, corporation or other entity, in whatever form, engaged in the research, development or sale of Duchenne Muscular Dystrophy treatments (“DMD”), oligonucleotide based therapies with respect to DMD, or chemistry platforms with respect to DMD that compete with Company or any of its subsidiaries or affiliates or in any other material business in which the Company or any of its subsidiaries or affiliates is engaged on the date of termination or in which they have planned, on or prior to such date, to be engaged in on or after such date, in any locale of any country in which the Company conducts business.  Notwithstanding the foregoing, nothing herein shall prohibit you from being a passive owner of not more than one percent (1%) of the equity securities of a publicly traded corporation engaged in a business that is in competition with the Company or any of its subsidiaries or affiliates, so long as you have no active participation in the business of such corporation.  In addition, the provisions of this Section 5 shall not be violated by you commencing employment with a subsidiary, division, or unit of any entity that engages in a business in competition with the Company or any of its subsidiaries or affiliates so long as you and such subsidiary, division or unit do not engage in a business in competition with the Company or any of its subsidiaries or affiliates.

6.Tolling. In the event you violate any of the provisions of Section 3, 4, or 5, you acknowledge and agree that the post-termination restrictions contained in Sections 3, 4, and 5 shall be extended by a period of time equal to the period of such violation, it being the intention of the parties hereto that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.

7.Cooperation. Upon the receipt of reasonable notice from the Company (including outside counsel), you agree that while employed by the Company and thereafter, you will respond and provide information with regard to matters in which you have knowledge as a result of your employment with the Company, and you will provide reasonable assistance to the Company, its affiliates, and their respective representatives in defense of any claims that may be made against the Company or its affiliates, and you will assist the Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of your employment with the Company.  You agree that while you are employed by the Company to promptly inform the Company if you become aware of any lawsuits or government investigation involving any claim that may be filed or threatened against the Company and its affiliates, and that after termination of your employment with the Company, you will promptly inform the Company if you (i)  are served with a complaint, summons, subpoena, pleading, order or other similar document relating to the Company or its affiliates, or (ii) otherwise receive written notice of any lawsuit, government investigation or regulatory body action involving any claim that may be filed or threatened against the Company or its affiliates.  You also agree to promptly inform the Company (to the extent that you are legally permitted to do so) if you are asked to assist in any investigation of the Company or its affiliates (or their actions), regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not do so unless legally required.  Upon presentation of appropriate documentation, the Company shall pay or reimburse you for all reasonable out-of-

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pocket travel, duplicating, and telephonic expenses incurred by you in complying with this Section 7, including reasonable attorneys’ fees, and, in the event you are no longer receiving any compensation or benefits under this letter agreement or as a Company employee, shall pay you a reasonable hourly rate for any work performed at Company’s request.  Notwithstanding anything in this Section 7 to the contrary, you shall not be required to comply with the provisions of this Section 7 to the extent you are required by a court order, judicial process or directive of a governmental agency not to comply with all or any portion of any provision in this Section 7.

8.Remedies. You hereby acknowledge and agree that monetary damages may not be a sufficient remedy for any breach of this letter agreement, including, without limitation, a breach of the covenants contained in this letter agreement and that the Company (or its affiliates) shall be entitled, without waiving any other rights or remedies, to obtain legal, injunctive, or equitable relief as may be deemed proper by a court of competent jurisdiction, without obligation to post any bond.  In the event of a material breach of this letter agreement by you, as determined by a court of competent jurisdiction, of Section 3, 4, 5, 6, or 7 hereof, any Severance Payments, COBRA Payments, and any other benefit of any type being paid or provided to you pursuant to this letter agreement or otherwise shall immediately cease upon such written judgment, and solely to the extent determined by a court of competent jurisdiction, you shall immediately repay the Company for the value of any Severance Payments, COBRA Payments (determined as of the date of termination), and any other benefit of any type that is or was paid or provided to you pursuant to this letter agreement (other than $1,000).

9.Reasonableness. You acknowledge and agree that the restrictions contained in this letter agreement are reasonable and will not prevent you from finding other employment if your employment with the Company ends.  You also acknowledge and agree that if you use the Company’s (or its affiliates’) confidential information, or compete with the Company (or its affiliates) in violation of the terms of this letter agreement, that you will be causing the Company and its affiliates irreparable harm.

10.Severability; Revision by Court. The provisions of this letter agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.  If any provision in this letter agreement is found by a court of competent jurisdiction to be unenforceable or unreasonable as written, you and the Company hereby specifically and irrevocably authorize and request said court to revise the unenforceable or unreasonable provisions in a manner that shall result in the provision being enforceable while remaining as similar as legally possible to the purpose and intent of the original.

11.Miscellaneous. The terms and conditions of Annexes A, B, C, and D are incorporated herein and made a part hereof by reference as if fully set forth herein.  This letter agreement along with the Confidentiality Agreement and the CIC Severance Agreement constitute the entire agreement and understanding of the parties hereto with respect to the obligations addressed herein and supersedes all prior or contemporaneous oral or written agreements regarding the subject matter hereof.  Any addition or modification to this letter agreement, or waiver of any provision hereof, must be in writing and signed by the parties hereto.

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12.Successors and Assigns. You understand and agree that you cannot assign or otherwise transfer any of your obligations under this letter agreement.  You also understand and agree that the Company or its affiliates may, at its option, assign or transfer its rights under this letter agreement to another organization or individual.  You understand and agree that if there is an assignment or transfer of the Company’s (or any of its affiliates’) rights under this letter agreement, then this letter agreement will continue to be effective, will continue to bind you, and will inure to the benefit of the organization or individual to whom the transfer or assignment is made.

13.Governing Law; Arbitration. This letter agreement shall be governed by the laws of the Commonwealth of Massachusetts without regard to conflicts of laws principles.  Any dispute or controversy arising under or in connection with this letter agreement, other than injunctive relief under Section 8 hereof, shall be resolved as follows:

(a)First, parties will attempt to resolve the dispute or controversy by negotiations between the parties. Either party may declare the negotiations at an impasse.

(b)Second, if the negotiations do not succeed in resolving the dispute or controversy, the dispute or controversy shall be submitted to non-binding mediation before a mutually agreeable private mediator. Either party may declare the mediation at an impasse; and

(c)Finally, if the dispute or controversy is not resolved through mediation, the dispute or controversy shall be resolved exclusively by arbitration, conducted before a single arbitrator in Boston, Massachusetts (applying Massachusetts law) in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association then in effect. The decision of the arbitrator will be final and binding upon the parties hereto. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The parties acknowledge and agree that in connection with any such arbitration and regardless of outcome, (a) each party shall pay all of its own costs and expenses, including, without limitation, its own legal fees and expenses, and (b) the arbitration costs shall be borne entirely by the Company.

14.No Mitigation. In no event shall you be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to you under any of the provisions of this letter agreement, nor shall the amount of any payment hereunder be reduced by any compensation earned by you as a result of employment by a subsequent employer, except as provided in Section 1(a)(ii)(y) hereof.

15.Survival of Provisions. The obligations contained in Sections 3, 4, 5, 6, 7, and 8 hereof, as well as those set forth in the Confidential Proprietary Rights and Non-Disclosure Agreement attached as Annex D (the “Confidentiality Agreement”) shall survive the termination of your employment with the Company and shall be fully enforceable thereafter

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16.Termination During Change in Control Period. In the event of a termination of your employment with the Company during the Change in Control Period (as defined in the CIC Severance Agreement), then you shall be entitled to severance benefits under the CIC Severance Agreement in accordance with its terms and conditions, and you shall have no rights or entitlements under Section 1 of this letter agreement, including, without limitation, the Severance Payments, and COBRA Payments, other than the Non-Competition Consideration.  With respect to the application and effectiveness of the CIC Severance Agreement, that agreement is intended to apply solely if a Change in Control thereunder is a change in control event as defined under the Treasury Regulations under Code Section 409A. 

17.Limits and Termination of this Letter Agreement. Subject to Section 15 hereof, this letter agreement shall expire and terminate upon the date that all obligations of the parties hereto with respect to this letter agreement have been satisfied.

18.Legal Counsel. You have been advised and encouraged to seek your own counsel to assist you with this letter agreement. YOU ACKNOWLEDGE THAT YOU HAVE HAD THIS LETTER AGREEMENT IN YOUR POSSESSION FOR AT LEAST FORTY-EIGHT (48) HOURS PRIOR TO SIGNING IT, YOU HAVE HAD REASONABLE OPPORTUNITY TO READ IT AND TO OBTAIN INDEPENDENT LEGAL ADVICE AS TO ITS PROVISIONS, AND FULLY UNDERSTAND ITS CONTENTS.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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If the terms of this letter agreement are acceptable to you, please confirm your agreement by executing below and returning a signed copy of it to me. 

Sincerely,

 

	
Sarepta Therapeutics, Inc.

	
 
	
 

	
By:
	
 

	
 
	
Douglas Ingram

	
 
	
President and Chief Executive Offıcer

 

Acknowledged and Agreed this __ day of _________, 2019

 

	
By:
	
 

	
 
	
 

	
 
	
 

 

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Annex A

Definitions

“Board of Directors” means: the Board of Directors of the Company.

“Cause” means: 

(a)Your substantial and repeated failure to perform in good faith your duties or follow the reasonable and legal written direction of the Chief Executive Officer (after the Company has provided you with written notice of such failure and your failure to cure, to the extent curable, within ten (10) business days of your receipt of such notice);

(b)Your willful material misconduct with respect to any material aspect of the business of the Company;

(c)Your conviction of, or pleading of guilty or nolo contendere to, a felony or any crime involving moral turpitude;

(d)Your performance of any material act of theft or fraud in connection with the performance of your duties to the Company; or

(e)A material breach of this letter agreement, the Confidentiality Agreement, the CIC Severance Agreement, any written employment agreement between you and the Company then in effect, any other written restrictive covenant agreement between you and the Company, or a material violation of the Company’s code of conduct or other written material policy of the Company (after the Company has provided you with written notice of such breach or violation and your failure to cure within ten (10) business days of your receipt of such notice).

“Code” means: the Internal Revenue Code of 1986, as amended.

“Good Reason” means: the occurrence of any of the following events, without your express written consent, unless such events are cured by the Company within thirty (30) days following written notification by you to the Company that you intend to terminate your employment for one of the reasons set forth below: 

(a)a material diminution in your base salary at the rate or your bonus target at the percentage, in each case, as in effect immediately prior to the reduction; or 

(b)a material diminution in your duties, authority or responsibilities (other than temporarily while physically or mentally incapacitated or as required by applicable law and other than in connection with any service on any informal management committees associated with the Company or its affiliates); 

(c)a change by the Company in the location at which you perform your principal duties for the Company to a new location that is more than thirty (30) miles from the Company’s current location in Cambridge, Massachusetts; or

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(d)a material breach by the Company of this letter agreement, any equity award agreement, the CIC Severance Agreement or the Confidentiality Agreement, or any written employment agreement between you and the Company then in effect.

You shall provide the Company with a written notice detailing the specific circumstances alleged to constitute Good Reason within ninety (90) days after the first occurrence of such circumstances (or any claim of such circumstances as “Good Reason” shall be deemed irrevocably waived by you), and in no event shall you be entitled to resign for “Good Reason” more than one hundred and eighty (180) days following the occurrence of any event alleged to constitute “Good Reason.”

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Annex B

Code Section 409A & 4999/280G Matters

 

Section 409A Matters

a.It is intended that the provisions of the letter agreement comply with, or be exempt from, Code Section 409A, and all provisions of the letter agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A.  Notwithstanding the foregoing, the Company shall have no liability with regard to any failure to comply with Code Section 409A so long as it has acted in good faith with regard to compliance therewith.

b.If, under the letter agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment.

c.A termination of employment shall not be deemed to have occurred for purposes of any provision of the letter agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Code Section 409A and, for purposes of any such provision of the letter agreement, references to a “resignation,” “voluntary termination,” “termination,” “termination of employment” or like terms shall mean Separation from Service.

d.If you are deemed on the date of termination of your employment to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code and using the identification methodology selected by the Company from time to time, or if none, the default methodology, then: 

i.With regard to any payment, the providing of any benefit or any distribution of equity upon Separation from Service that constitutes “deferred compensation” subject to Code Section 409A, such payment, benefit or distribution shall not be made or provided prior to the earlier of (i) the expiration of the six-month period measured from the date of your Separation from Service or (ii) the date of your death; and

ii.On the first day of the seventh month following the date of your Separation from Service or, if earlier, on the date of your death, all payments delayed pursuant to this Section (d) (whether they would otherwise have been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a lump sum, and any remaining payments and benefits due under the letter agreement shall be paid or provided in accordance with the normal dates in accordance with the terms of the letter agreement.

In determining the amounts that are subject to the six-month delay requirement described above, the Company shall use all exclusions from the six-month delay rule that are available to the payments made to you.  Please be advised that the Company reserves the right to adopt an alternate method of complying with the six-month delay requirement which may result in you being deemed a specified employee.

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e.Whenever a payment under the letter agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

Section 4999/280G Matters

If any payment or benefit (including payments and benefits pursuant to this letter agreement) that you would receive from the Company or in connection with a change of effective ownership or control of the Company (“Transaction Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this provision, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Transaction Payment are paid to you, which of the following two alternative forms of payment would result in your receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) payment of only a part of the Transaction Payment so that you receive the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”).

For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, (x) you shall have no rights to any additional payments and/or benefits constituting the Transaction Payment, and (y) reduction in payments and/or benefits shall occur in the manner that results in the greatest economic benefit to you as determined in this paragraph.  If more than one method of reduction will result in the same economic benefit, the portions of the Payment shall be reduced pro rata.

The independent registered public accounting firm engaged by the Company as of the day prior to the effective date of the change of ownership or control of the Company shall make all determinations required to be made under this Annex B. If the independent registered public accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change of control, the Company shall appoint a nationally recognized independent registered public accounting firm that is reasonably acceptable to you (and such acceptance shall not be unreasonably withheld) to make the determinations required hereunder.  The Company shall bear all reasonable expenses with respect to the determinations by such independent registered public accounting firm required to be made hereunder.  The independent registered public accounting firm engaged to make the determinations under this Annex B shall provide its calculations, together with detailed supporting documentation, to the Company and you within fifteen (15) calendar days after the date on which your right to a Transaction Payment is triggered or such other time as reasonably requested by the Company or you.  If the independent registered public accounting firm determines that no Excise Tax is payable with respect to the Transaction Payment, either before or after the application of the Reduced Amount, it shall furnish the Company and you with detailed supporting calculations of its determinations that no Excise Tax will be imposed with respect to such Transaction Payment.  Any good faith determinations of the accounting firm made hereunder shall be final, binding, and conclusive upon the Company and you.

14srpt-ex103_218.htm

EXHIBIT 10.3

 

SAREPTA THERAPEUTICS, INC.

 

CHANGE IN CONTROL AND SEVERANCE AGREEMENT

 

This Change in Control and Severance Agreement (the "Agreement") is made and entered into by and between [●] (the "Executive") and Sarepta Therapeutics, Inc. (the "Company"), effective as of the latest date set forth by the signatures of the parties hereto below (the "Effective Date").

R E C I T A L S

 

A.It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change in control.  The Board of Directors of the Company (the "Board") recognizes that such consideration as well as the possibility of an involuntary termination or reduction in responsibility in connection with •a change in control can be a distraction to Executive and can cause Executive to consider alternative employment opportunities.  The Board has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication and objectivity of Executive, notwithstanding the possibility, threat or occurrence of such an event.

 

B.The Board believes that it is in the best interests of the Company and its stockholders to provide Executive with an incentive to continue Executive's employment and to motivate Executive to maximize the value of the Company upon a Change in Control (as defined below).

 

C.The Board believes that it is imperative to provide Executive with severance benefits upon certain terminations of Executive's service to the Company following a Change in Control that enhance Executive's financial security and provide incentive and encouragement to Executive to remain with the Company notwithstanding the possibility of such an event.

 

D.Certain capitalized terms used in this Agreement are defined in Section 6 below. 

The parties hereto agree as follows:

1.Term of Agreement.  This Agreement shall become effective as of the Effective Date and terminate upon the date that all obligations of the parties hereto with respect to this Agreement have been satisfied.

 

2.At-Will Employment.   The Company and Executive acknowledge that Executive's employment is and shall continue to be "at-will," as defined under applicable law.  Executive's employment may terminate at any time for any reason, and in case of termination, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement and/or the Severance Agreement (as defined herein).

 

1

EXHIBIT 10.3

 

3.Covered Termination During a Change in Control Period.  If Executive experiences a Covered Termination during a Change in Control Period, and if Executive delivers to the Company a general release of claims in a form acceptable to the Company (the "Release of Claims") that becomes effective and irrevocable within sixty (60) days following such Covered Termination, then in addition to any accrued but unpaid salary, bonus, vacation and expense reimbursement payable in accordance with applicable law, the Company shall provide Executive with the following:

 

(a)Severance.  Executive shall be entitled to receive an amount equal to eighteen (18) months of Executive's base salary at the rate in effect immediately prior to Executive's termination of employment payable in a cash lump sum, less applicable withholdings, as soon as administratively practicable following the date the Release of Claims is not subject to revocation and, in any event, within sixty (60) days following the date of the Covered Termination.

 

(b)Bonus.  Executive shall be entitled to receive an amount equal to one hundred percent (100%) of Executive's annual target bonus assuming achievement of performance goals at one hundred percent (100%) payable in a cash lump sum, less applicable withholdings, as soon as administratively practicable following the date the Release of Claims is not subject to revocation and, in any event, within sixty (60) days following the date of the Covered Termination.

 

(c)Equity Awards.  Each outstanding equity award, including, without limitation, each stock option and restricted stock award, held by Executive shall automatically become vested and, if applicable, exercisable and any forfeiture restrictions or rights of repurchase thereon shall immediately lapse, in each case, with respect to one hundred percent (100%) of shares subject thereto. The Executive hereby agrees and acknowledges that the accelerated vesting provided for in this Section 3(c) may result in all or a portion of the Executive’s stock options that are intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended, if any, to cease to qualify as “incentive stock options”. 

 

(d)Continued Healthcare. If Executive is eligible for and elects to receive continued healthcare coverage pursuant to the provisions of COBRA, the Company shall directly pay, or reimburse Executive for, the premium for Executive and Executive's covered dependents through the earlier of (i) the eighteen (18) month anniversary of the date of Executive's termination of employment and (ii) the date Executive and Executive's covered dependents, if any, become eligible for healthcare coverage under another employer's plan(s).  After the Company ceases to pay premiums pursuant to the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive's expense in accordance with the provisions of COBRA.

 

2

EXHIBIT 10.3

 

4.Other Terminations.  If Executive's service with the Company is terminated by the Company or by Executive for any or no reason other than as a Covered Termination during a Change in Control Period, then Executive shall not be entitled to any benefits hereunder other than accrued but unpaid salary, bonus, vacation and expense reimbursement in accordance with applicable law and to elect any continued healthcare coverage as may be required under COBRA or similar state law.

 

5.Limitation on Payments. Notwithstanding anything in this Agreement to the contrary, if any payment or distribution Executive would receive pursuant to this Agreement or otherwise ("Payment") would (a) constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then such Payment shall either be (i) delivered in full, or (ii) delivered as to such lesser extent which would result in no portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the largest payment, notwithstanding that all or some portion of the Payment may be taxable under Section 4999 of the Code. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.  The accounting firm shall provide its calculations to the Company and Executive within fifteen (15) calendar days after the date on which Executive's right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive.  Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.  Any reduction in payments and/or benefits pursuant to this Section 5 will occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of equity awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits payable to Executive.

 

6.Definition of Terms.  The following terms referred to in this Agreement shall have the following meanings:

 

(a)Cause.  "Cause" means (i) any material act of theft or fraud made by Executive in connection with Executive's responsibilities as an employee; (ii) Executive's conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude; (iii) Executive's willful material misconduct with respect to any material aspect of the business of the Company; (iv) Executive's unauthorized  use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of Executive's relationship with the Company; (v) Executive's willful breach of any obligations under any written agreement or covenant with the Company; or (vi) Executive's failure to perform his or her employment duties after Executive has received a written notice from the Company which specifically sets forth the factual basis for the Company's belief that Executive has not substantially performed his or her duties, and which Executive fails to cure to the Company's satisfaction within ten (10) business days after receiving such notice.

3

EXHIBIT 10.3

 

(b)Change in Control.  “Change in Control” means the occurrence of any of the following events:

(i)Change in Ownership of the Company. A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group ("Person"), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection (i), the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting power of the stock of the Company will not be considered a Change in Control; or

(ii)Change in Effective Control of the Company. If the Company has a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by members of the Board whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or

(iii)Change in Ownership of a Substantial Portion of the Company's Assets. A change in the ownership of a substantial portion of the Company's assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company's assets: (A) a transfer to an entity that is controlled by the Company's shareholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company's stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

 

4

EXHIBIT 10.3

 

Further and for the avoidance of doubt, a transaction shall not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company's incorporation, or (ii) its sole purpose is to create a holding company that shall be owned in substantially the same proportions by the persons who held the Company's securities immediately before such transaction.

 

(c)Change in Control Period.  "Change in Control Period" means the twelve (12) month period of time commencing upon a Change in Control.

 

(d)Constructive Termination.  "Constructive Termination" means Executive's resignation from employment with the Company within ninety (90) days after the occurrence of one or more of the following conditions without Executive's consent:  (i) a material diminution in Executive's authority, duties, or responsibilities;  (ii) a material diminution in Executive's base salary, other than a diminution ratably applied to other senior executives of the Company; (iii) a material change in the geographic location at which Executive must perform Executive's services hereunder (which shall in no event include a relocation of Executive's office which results in an increased commuting distance from Executive's home to the office of less than thirty (30) miles); or (iv) any other action or inaction that constitutes a material breach of this or any written agreement or covenant between Executive and the Company by the Company; and which, in the case of any of the foregoing, continues uncured by the Company beyond thirty (30) days after Executive has provided the Company written notice that Executive believes in good faith that such condition giving rise to such claim of Constructive Termination has occurred.  Any such notice shall be provided to the Company within thirty (30) days following the initial occurrence of the condition or event giving rise to Constructive Termination.

 

(e)Covered Termination.  "Covered Termination" shall mean Executive's Constructive Termination or the termination of Executive's employment by the Company other than for Cause.

 

7.Successors.

 

(a)Company’s Successors.  Any successor to the Company (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the obligations under this Agreement and agree expressly to perform the obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession.  For all purposes under this Agreement, the term "Company" shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement described in this Section 7(a) or which becomes bound by the terms of this Agreement by operation of law.

 

(b)Executive’s Successors.  The terms of this Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

5

EXHIBIT 10.3

 

8.Notices.  Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or one (1) day following mailing via Federal Express or similar overnight courier service.  In the case of Executive, mailed notices shall be addressed to Executive at Executive's home address that the Company has on file for Executive.  In the case of the Company, mailed notices shall be addressed to its corporate headquarters, 215 First Street, Cambridge, MA 02142, and all notices shall be directed to the attention of its Chief Financial Officer and the Senior Director, Human Resources.

 

9.Confidentiality; Non-Solicitation.

 

(a)Confidentiality.  While Executive is employed by the Company, and thereafter, Executive shall not directly or indirectly disclose or make available any Confidential Information (as defined in the Confidential Proprietary Rights and Non-Disclosure Agreement between Executive and the Company dated [●] (the “Confidentiality Agreement” attached hereto as Exhibit A)) disclosed to Executive or known by Executive as a consequence of or through his or her relationship with the Company.  During Executive’s employment and following the termination of Executive's employment with the Company, Executive shall continue to be subject to any and all confidentiality and intellectual property agreements between Executive and the Company, including, without limitation, the Confidentiality Agreement, (collectively, the "Confidential  Information Agreements").

 

For the avoidance of doubt, this Agreement does not prohibit or restrict Executive from lawfully (A) communicating or cooperating with, providing relevant information to, or otherwise assisting in an investigation by any governmental or regulatory body or official(s) or self-regulatory organization regarding a possible violation of any federal law relating to fraud or any rule or regulation of the Securities and Exchange Commission; (B) filing an administrative complaint with the Equal Employment Opportunity Commission, U.S. Department of Labor, National Labor Relations Board, or other federal, state or local agency responsible for administering fair employment, wage-hour, labor and other employment laws and regulations; (C) cooperating in an investigation, or responding to an inquiry from any such agency; or (D) testifying, participating in, or otherwise assisting in an action or proceeding relating to a possible violation of any such law, rule or regulation; provided, however, that Executive agrees that, to the maximum extent permitted by law, the Executive waives any claim for individual monetary relief in connection with any such action, investigation or proceeding. 

 

(b)Non-Disparagement.  Executive also agrees not to disparage, criticize or defame the Company, its affiliates and their respective affiliates, directors, officers, agents, partners, stockholders, individuals who are known by Executive to be employees of the Company, products, services, technology or business, either publicly or privately; provided however, nothing in this Section shall have application to any evidence or testimony required by any court, arbitrator or government agency or to any truthful statements necessary in any litigation regarding the enforcement of this Agreement.

 

(c)Non-Solicitation.  Executive acknowledges and agrees that the Company has invested substantial time, money and resources in the development of its Confidential 

6

EXHIBIT 10.3

 

Information (as defined in the Executive’s Confidentiality Agreement) and the development and retention of its customers, clients, collaborators, and employees.  Executive further acknowledges that during the course of his/her employment, he/she may be introduced to customers, clients, and collaborators of the Company, and agrees that any “goodwill” associated with any customer, client, or collaborator belongs exclusively to the Company.  In recognition of the foregoing, Executive specifically acknowledges and agrees that while he/she is employed by the Company and for a period of one (1) year after termination of such employment (for any reason, whether voluntary or involuntary) Executive will not directly or indirectly in any position or capacity engage in the following activities for himself/herself or for any other person, business, corporation, partnership or other entity:

 

(i)call upon, solicit, divert, or accept, or attempt to solicit or divert any of the Company’s business or prospective business from any of the Company’s customers, clients, collaborators, or prospective customers, clients or collaborators with whom Executive had contact or whose dealings with the Company Executive coordinated or supervised or about whom Executive obtained Confidential Information (as defined in the Executive’s Confidentiality Agreement), at any time during the two (2) year period prior to the termination of Executive’s employment, unless Executive obtains prior written consent of the Company;  or

(ii)request, solicit, induce, hire (or attempt or assist in doing any of these actions) any employee or other person (including consultants) who may have performed work or services for the Company within one (1) year prior to the termination of Executive’s employment with the Company to perform work or services for any person or entity other than the Company.

EXECUTIVE ACKNOWLEDGES THAT THESE RESTRICTIONS SHALL APPLY AND BE BINDING REGARDLESS OF CHANGES IN EXECUTIVE’S POSITION, DUTIES, GEOGRAPHIC LOCATION, RESPONSIBILITIES OR COMPENSATION DURING HIS/HER EMPLOYMENT.

 

(d)Remedies.  Executive acknowledges and agrees that the provisions of this Agreement are of a special and unique nature, the loss of which cannot be accurately compensated for in damages by an action at law, and that the breach or threatened breach of this Agreement by the Executive or any of his or her representatives would cause the Company and its affiliates irreparable harm and that money damages would not be an adequate remedy.  Executive agrees on behalf of him or herself and his or her representatives that the Company (and its affiliates) shall be entitled to  equitable relief, including, without limitation, an injunction or injunctions (without the requirement of posting a bond, other security or any similar requirement or proving any actual damages), to prevent breaches or threatened breaches of this Agreement by Executive or any of his or her representatives and to specifically enforce the terms and provisions of this Agreement, this being in addition to any other remedy to which the Company (or its affiliates) may be entitled at law or in equity.

 

7

EXHIBIT 10.3

 

(e)Survival of Provisions.  The provisions of this Section 9 shall survive the termination or expiration of the applicable Executive's employment with the Company and shall be fully enforceable thereafter.  If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 9 is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state.

 

(f)DTSA Notice. Nothing in this Agreement is intended to interfere with or discourage Executive from communicating with government agencies about possible violations of law or otherwise providing information to government agencies or participating in government agency investigations or proceedings. Executive is not required to notify the Company of any such communications; provided however, that nothing herein authorizes the disclosure of information Executive obtained through a communication that was subject to the attorney-client privilege. Further, Executive is hereby advised in accordance with the Defend Trade Secrets Act of 2016 that Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.

 

Executive is further notified that if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the Company’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding only if Executive: (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.

 

10.Dispute Resolution.  To ensure the timely and economical resolution of disputes that arise in connection with this Agreement, Executive and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance or interpretation  of this Agreement, Executive's employment, or the termination  of Executive's employment, shall be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in Boston, Massachusetts, conducted by Judicial Arbitration and Mediation Services, Inc. ("JAMS") under the applicable JAMS employment rules. By agreeing to this arbitration procedure, both Executive and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding.  The arbitrator shall:  (i) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (ii) issue a written arbitration decision, to include the arbitrator's essential findings and conclusions and a statement of the award. The arbitrator shall be authorized to award any or all remedies that Executive or the Company would be entitled to seek in a court of law.  The Company shall pay all JAMS' arbitration fees in excess of the amount of court fees that would be required if the dispute were decided in a court of law. Nothing in this Agreement is intended to prevent either Executive or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Notwithstanding the foregoing, Executive and the Company each have the right to resolve any issue or dispute over intellectual property rights or the Executive’s obligations under Section 9 of this Agreement by Court action instead of arbitration.

8

EXHIBIT 10.3

 

 

11.Miscellaneous Provisions.

 

(a)Section 409A.

(i)General.  It is intended that the provisions of this Agreement comply with, or be exempt from, Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Section 409A”), and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  Notwithstanding the foregoing, the Company shall have no liability with regard to any failure to comply with Section 409A.  If, under this Agreement, an amount is to be paid in two or more installments, for purposes of Section 409A, each installment shall be treated as a separate payment.

(ii)Separation from Service.  Notwithstanding  any provision to the contrary in this Agreement, no amount deemed deferred compensation subject to Section 409A shall be payable pursuant to Section 3 unless Executive's termination of employment constitutes a "separation from service" with the Company within the meaning of Section 409A and the Department of Treasury regulations and other guidance promulgated thereunder ("Separation from Service") and, except as provided under Section 1l(a)(iii) of this Agreement, any such amount shall not be paid, or in the case of installments, commence payment, until the sixtieth (60th) day following Executive's  Separation from Service.  Any installment payments that would have been made to Executive during the sixty (60) day period immediately following Executive's Separation from Service but for the preceding sentence shall be paid to Executive on the sixtieth (60th) day following Executive's Separation from Service and the remaining payments shall be made as provided in this Agreement.

(iii)Specified Employee.  Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed at the time of his/her separation from service to be a "specified employee" for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive's benefits shall not be provided to Executive prior to the earlier of (a) the expiration of the six (6)-month period measured from the date of the Executive's Separation from Service or (b) the date of Executive's death. Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 1l (a)(iii) shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid as otherwise provided herein.

(iv)Expense Reimbursements.  To the extent that any reimbursements payable pursuant to this Agreement are subject to the provisions of Section 409A, any such reimbursements payable to Executive pursuant to this Agreement shall be paid to Executive no later than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and Executive's right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.

9

EXHIBIT 10.3

 

(b)Confidentiality of this Agreement.  Executive understands and agrees that, to the extent permitted by law and except as otherwise permitted by Sections 9(a) or (f) of this Agreement, the terms and contents of this Agreement, and the contents of the negotiations and discussions resulting in this Agreement, shall be maintained by Executive in confidence and shall not be disclosed to any third party, provided however, that Executive may disclose the terms and contents of this Agreement to his/her spouse and legal and financial advisors on condition that those parties agree not disclose same to others or to enforce the Executive’s rights under this Agreement. 

(c)Waiver.  No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by Executive and by an authorized officer of the Company (other than Executive).  No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(d)Whole Agreement.  This Agreement, the Confidential Information Agreement, and that certain Severance Agreement, by and between the Company and the Executive, dated as of the date hereof, (the “Severance Agreement”) represent the entire understanding of the parties hereto with respect to the subject matter hereof and supersede all prior arrangements and understandings regarding same, including, without limitation, any accelerated vesting provisions of Executive's offer letter agreement, employment agreement and/or stock option agreement.

(e)Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. The parties agree that any court action or proceeding authorized by this Agreement may only be brought in the state or federal courts located in the Commonwealth of Massachusetts.

(f)Severability.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(g)Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.

 

(Signature page follows)

10

EXHIBIT 10.3

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year set forth below.

 

	
SAREPTA THERAPEUTICS, INC.

	
 

	
By:
	
 

	
 
	
 

	
Title:
	
 

	
 
	
 

	
Date:
	
 

	
 
	
 

	
 
	
 

	
EXECUTIVE

	
 

	
By:
	
 

	
 
	
 

	
Title:
	
 

	
 
	
 

	
Date:
	
 

 

11

EXHIBIT 10.3

 

Exhibit A

 

Confidential Proprietary Rights and Non-Disclosure Agreement between Executive

and the Company dated [●]

12

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