EXECUTION COPY LETTER AGREEMENT
Exhibit 10.5
EXECUTION COPY
LETTER AGREEMENT
LETTER AGREEMENT
Xx. Xxxxxxx Xxxxxxxx
0 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
0 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Dear Xxxx:
On behalf of Amicus Therapeutics, Inc., (the “Company”), this Letter Agreement, dated as of
December 30, 2008, shall serve to confirm our agreement in the event Amicus terminates your
employment without cause or in the event of a Change in Control, Sale or Merger of the Company. By
accepting the terms of this Letter Agreement, you agree that the rights identified in this Letter
Agreement contain the complete understanding between you and the Company related to Severance and
Change in Control payments and supersedes and replaces all previous agreements related to such
payments. The December 15, 2004 Offer of Employment Letter countersigned by you (“December 15, 2004
Offer Letter,” attached hereto), shall otherwise remain in full force and effect and is hereby
confirmed and ratified.
Severance Pay
In the event that your employment is terminated by the Company, except for “Cause” as
defined below, you will be eligible to receive the following:
| 1. | six (6) months salary continuation to be paid in accordance with the Company’s payroll practices; | ||
| 2. | an additional six (6) months of option vesting; | ||
| 3. | in the event that your termination occurs after June 30th of the calendar year, you will be entitled to a payment of a bonus equal to the bonus earned in the preceding year pro-rated for the number of months actually worked in the year of termination, payable on the date of termination; and |
0 Xxxxx Xxxxx Xxxxx Xxxxxxxx, XX 00000 T: 609-662-2000 F: 000-000-0000 xxx.xxxxxxxxxxxxxxxxxx.xxx
| 4. | you will be entitled to a continuation of your health benefit coverage under COBRA, premiums to be paid by the Company, for a period of twelve (12) months, which shall commence on the date of termination and run concurrently with the period of salary continuation. |
For purposes of this Agreement, “Cause” means termination for any of the following reasons: (1)
willful or deliberate misconduct by you that materially damages the Company; (2) misappropriation
of Company assets; (3) conviction of, or a plea of guilty or “no contest” to, a felony; or (4) any
willful disobedience of the lawful and unambiguous instructions of the CEO of the Company; provided
that the CEO has given you written notice of such disobedience or neglect and you have failed to
cure such disobedience or neglect within a period reasonable under the circumstances.
Change in Control
If there is a Change in Control Event and either (i) you are terminated without Cause within
twelve months of such Change in Control Event or (ii) a condition occurs which constitutes Good
Reason within twelve months of such Change in Control Event and after you have complied with the
applicable notice period and the Company has failed to remedy such condition, you actually resign
(all as described in detail in the definition of “Good Reason” in the following paragraph), then
(i) you will be entitled to receive twelve (12) months of salary continuation, to be paid in
accordance with the Company’s payroll practices, plus, in the event that the resignation for Good
Reason or termination without Cause following a change in control event occurs after June
30th of the calendar year, you will be entitled to a payment of a bonus equal to the
bonus earned in the preceding year pro-rated for the number of months actually worked in the year
of your resignation or termination, payable on the date of termination or resignation for Good
Reason. In addition, you will be entitled to continuation of your health benefit coverage under
COBRA, premiums to be paid by the Company, for a period of twelve (12) months, which shall commence
on the date of resignation or termination and run concurrently with the period of salary
continuation, and (ii) all unvested stock options will have their remaining vesting schedule
accelerated so that all stock options are fully vested.
“Change in Control Event” means any of the following: (i) any person or entity (except for a
current stockholder) becomes the beneficial owner of greater than 50% of the then outstanding
voting power of the Company; (ii) a merger or consolidation with another entity where the voting
securities of the Company outstanding immediately before the transaction constitute less than a
majority of the voting power of the voting securities of the Company or the surviving entity
outstanding immediately after the transaction, or (iii) the sales or disposition of all or
substantially all of the Company’s assets. “Good Reason” means (i) a material diminution in your
authorities, duties, or responsibilities, or (ii) a material change in the geographic location at
which you must perform services; provided, however, that you must provide the Company with
notice of the existence of the Good Reason condition within ninety (90) days of its initial
existence after which the Company will have a period of thirty (30) day within which it may remedy
the condition and not be required to pay the severance payment; and provided, further, that any
Good Reason termination must occur within two (2) years of the initial existence of the Good Reason
condition.
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Your right to receive accelerated vesting and severance payments pursuant to this letter
agreement shall be subject to the condition that you execute a full release and waiver of all
claims against the Company and related parties, in a form acceptable to the Company;
provided that such payments and benefits will be paid, if ever, only on the date specified
as the deadline for signing and delivering the release, (the “Release Deadline”), even if your
release becomes irrevocable (i.e., you sign and deliver the release to the Company) before that
date. In the event the Release Deadline is more than thirty (30) days and you sign and deliver the
release before the Release Deadline, the Company may elect to make such severance payments no
earlier than thirty (30) days prior to the Release Deadline.
It is the intention of the parties that compensation paid or delivered to you by the Company
either is paid in compliance with, or is exempt from, Section 409A of the Internal Revenue Code of
1986, as amended and the rules and regulations promulgated thereunder (collectively, “Section
409A”). However, the Company does not warrant to you that all compensation paid or delivered to you
for your services will be exempt from, or paid in compliance with, Section 409A. Notwithstanding
any other provisions of this Agreement, in the event that any payment or benefit under this
Agreement received or to be received by you (the “Payment”) is determined to be subject (in
whole or part) to the penalties imposed by Section 409A of the Code (the “Additional Taxes”), then
you shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such
that after payment by you of the Additional Taxes, you retain an amount equal to the Payment net of
any applicable taxes and withholdings other than Additional Taxes. All determinations required to
be made under this provision , including whether and when a Gross-Up Payment is required, the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the Company’s accountants or such other certified public accounting
firm designated by you and reasonably acceptable to the Company. Any certified public accounting
firm chosen by you shall provide detailed supporting calculations both to the Company and you. Any
Gross-Up Payment due under this paragraph shall be paid to you no later than December 31 of the
calendar year following the calendar year in which you remit the Additional Taxes to the applicable
authorities.
For the purposes of determining when amounts otherwise payable on account of your termination
of employment will be paid, which amounts become due because of your termination of employment,
“termination of employment” or words of similar import shall be construed as the date that you
first incur a “separation from service” for purposes of Section 409A on or following termination of
employment. Furthermore, if you are a “specified employee” of a public company as determined
pursuant to Section 409A as of your termination of employment, any amounts payable on account of
your termination of employment which constitute deferred compensation within the meaning of Section
409A and which are otherwise payable during the first six months following your termination (or
prior to your death after termination) shall be paid to you in a cash lump-sum on the earlier of
(1) the date of your death and (2) the first business day of the seventh calendar month immediately
following the month in which your termination occurs.
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In applying Section 409A to amounts paid pursuant to this letter, any right to a series of
installment payments shall be treated as a right to a series of separate payments.
Employment “At-Will”
It is important that you understand that the Company does not guarantee employment for any specific
period of time. You will continue to be employed on at “at-will” basis. This means that both the
Company and you will have the right to terminate your employment at any time, for any reason, with
or without prior notice or cause. Neither you nor the Company will have an express or implied
contract limiting your right to resign or the Company’s right to terminate your employment at any
time, for any reason, with or without prior notice or cause. The “at-will” relationship will apply
to you throughout your employment and cannot be changed except by an express individual written
employment agreement signed by you and the Chief Executive Officer of the Company.
It is understood and agreed that this Letter Agreement constitutes the full agreement between you
and the Company on the subjects of Severance and Change in Control payments. By signing below, you
agree that no other promises, express or implied, have been made to you either verbally or in
writing and that no further modifications to these terms and conditions will be effective except by
a written agreement signed by the Chief Executive Officer of the Company and you and as authorized
by the Company’s Board of Directors or an authorized Committee thereof. This Letter Agreement may
be executed in counterparts, each of which shall be deemed an original but all of which shall
together constitute on and the same agreement.
[Signature Page Follows]
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| Amicus Therapeutics, Inc. |
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| /s/ Xxxx X. Xxxxxxx | ||||
| By: Xxxx X. Xxxxxxx | ||||
| President and Chief Executive Officer | ||||
| Accepted and Agreed: |
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| By: | /s/ Xxxxxxx Xxxxxxxx | |||
| Xxxxxxx Xxxxxxxx | ||||
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