Exhibit 10.46
CURIS, INC.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
January 28, 2002
Xx. Xxxxx Platika
Curis, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Re: Severance Arrangements
Dear Doros,
This letter agreement is intended to reflect our agreements relating to
your ongoing relationship with Curis, Inc. (the "Company") and your continuing
role as Chairman of the Company.
The Company and you currently are parties to the following agreements:
o Employment Agreement dated June 17, 1996.
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o Secured Promissory Note dated June 17, 1996 in the original principal
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amount of $500,000 (with the current outstanding principal amount
equal to $200,000 plus accrued interest) (the "1996 Promissory Note"),
which is due upon the earliest of (a) June 30, 2003, (b) 30 days after
your resignation without Good Reason, or (c) 180 days after the
termination of your employment other than for Good Reason.
o Secured Promissory Note dated August 3, 2001 in the principal amount
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of $500,000 (the "2001 Promissory Note"), which is due upon the
earliest of (a) July 30, 2010, (b) a Change in Control of the Company,
or (c) the termination of your employment for any reason.
o First Amended and Restated Pledge Agreement dated August 3, 2001 (the
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"Pledge Agreement"), which secures the 1996 Promissory Note and the
2001 Promissory Note.
o Mortgage dated March 5, 1997 on 00 Xxxxx Xxxx property.
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o Non-Transferability Agreement dated August 3, 2001.
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o Invention and Non-Disclosure Agreement dated June 17, 1996.
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o Non-Competition and Non-Solicitation Agreement dated June 17, 1996.
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Xx. Xxxxx Platika
January 28, 2002
Page 2
In addition, you have entered into several stock option agreements with the
Company, including the following:
o Options to purchase 500,000 shares exercisable at $3.13 and vesting
25% on April 3, 2002 and an additional 6.25% each quarter thereafter;
options expire 90 days after termination if not exercised (the "April
2001 Option Grant")
o Options to purchase 1,000,000 shares exercisable at $14.50 and vesting
25% on August 1, 2001 and an additional 6.25% each quarter thereafter;
options expire 90 days after termination if not exercised (the "August
2000 Option Grant")
o Options to purchase 51,280 shares exercisable at $3.90 and 100%
vested; options expire 30 days after termination if not exercised
o Options to purchase 12,820 shares exercisable at $1.56 and 100%
vested; options expire 30 days after termination if not exercised
o Options to purchase 88,954 shares exercisable at $0.59 and 100%
vested; options expire 30 days after termination if not exercised
Since the Company and you wish to redefine the terms of your role as an
officer and as an employee of the Company, the Company and you agree as follows:
1. The Company shall retain you as Chairman of the Company, and you shall
remain employed by the Company in that position, from the date of this letter
agreement through at least April 30, 2002 (the "Employment Period"), unless such
employment is sooner terminated by either you or the Company pursuant to section
6 of the Employment Agreement. You further agree not to actively pursue any
other employment opportunities, including self employment opportunities, at any
time prior to April 30, 2002.
2. The August 2000 Option Grant shall terminate as of the date of this
letter agreement. All other option grants listed above shall remain in effect,
except as modified in paragraphs 3 and 4 below.
3. If (a)(i) the Company at any time (whether before or after April 30,
2002) terminates your employment for any reason other than for Cause (as defined
in section 4(e)(i) of the Employment Agreement, or (ii) you terminate your
employment (A) for Good Reason (as defined in section 4(e)(ii) of the Employment
Agreement, or (B) at any time after April 30, 2002, and (b) the Financing
Milestone (as defined below) has not been achieved on or before April 30, 2002,
the Company shall provide you with the severance benefits described below
(collectively, the "Severance Benefits"), subject to the remaining provisions of
this letter agreement, if you timely execute and do not revoke your assent to a
severance agreement containing a release of claims against the Company (the
"Severance Agreement") in a form substantially similar to Exhibit A to this
letter agreement:
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January 28, 2002
Page 3
(a) Severance Pay. The Company shall provide you with severance pay in the
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form of salary continuation at your base rate of pay in effect at the
time of termination, less all applicable local, state and federal
taxes and withholdings, for twelve (12) months (the "Severance
Period"). The salary continuation shall be paid to you in accordance
with the Company's regular payroll practices (as they may be
established or modified from time to time), but in no event will the
first salary continuation payment under this section be paid earlier
than the eighth (8th) day following the date you sign the Severance
Agreement nor later than the twenty second (22nd) day thereafter.
(b) Continuation of Benefits. If you are eligible for and elect
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continuation of group health insurance coverage under the federal
COBRA law, the Company shall pay the costs of your group health
insurance premium payments during the Severance Period. Thereafter,
you will be solely responsible for any and all payments during the
elected period of health insurance coverage under COBRA. During the
Severance Period, the Company will also continue your participation in
any other benefits that you enjoyed immediately prior to your
separation of employment, provided that you meet the eligibility
requirements for such benefits under the terms of any applicable
benefit plan documents.
(c) Loan Forgiveness. The 1996 Promissory Note and the 2001 Promissory
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Note will be forgiven and discharged in full, and the Pledge Agreement
and Mortgage shall be terminated. As provided in the Employment
Agreement, the forgiveness of the 1996 Promissory Note (but not the
2001 Promissory Note) shall be accompanied by the payment of a bonus
in the amount of any federal and state income tax payable by you as a
result of such forgiveness plus any federal and state income tax
payable by you with respect to such bonus.
(d) Vested Shares. A total of 250,000 shares under the April 2001 Option
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Grant shall be deemed to be vested as of the termination date, and the
remaining 250,000 shares under such grant shall cease to be subject to
such option, provided that the number of shares that shall be deemed
to be vested shall be increased by 31,250 shares for each full
three-month period after April 30, 2002 during which you remain
employed by the Company.
(e) Extension of Exercise Date. The exercise period for all outstanding
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options shall be 12 months following the termination date (it being
understood that if any incentive stock option is exercised more than
90 days after the termination date, it shall cease to be treated for
tax purposes as an incentive stock option, but rather shall constitute
a so-called non-statutory stock option).
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Xx. Xxxxx Platika
January 28, 2002
Page 4
4. If (a)(i) the Company at any time (whether before or after April 30,
2002) terminates your employment for any reason other than for Cause, or (ii)
you terminate your employment (A) for Good Reason, or (B) at any time after
April 30, 2002, and (b) the Financing Milestone has been achieved on or before
April 30, 2002, the Company shall provide you with the severance benefits
described below (collectively, the "Alternate Severance Benefits"), subject to
the remaining provisions of this letter agreement, if you timely execute and do
not revoke your assent to the Severance Agreement:
(a) Severance Pay. The Company shall provide you with a single lump sum
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payment equal to your annual base salary in effect at the time of
termination, less all applicable local, state and federal taxes and
withholdings (the "Lump Sum Payment"). The Lump Sum Payment will be
paid to you no earlier than the eighth (8th) day following the date
you sign the Severance Agreement nor later than the twenty second
(22nd) day thereafter.
(b) Continuation of Benefits. If you are eligible for and elect
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continuation of group health insurance coverage under the federal
COBRA law, the Company shall pay the costs of your group health
insurance premium payments for twelve (12) months consecutive months
following your termination. Thereafter, you will be solely responsible
for any and all payments during the elected period of health insurance
coverage under COBRA. The Company will also continue your
participation in any other benefits that you enjoyed immediately prior
to your separation of employment for a period of twelve (12)
consecutive months following your termination, provided that you meet
the eligibility requirements for such benefits under the terms of any
applicable benefit plan documents.
(c) Loan Forgiveness. The 1996 Promissory Note and the 2001 Promissory
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Note will be forgiven and discharged in full, and the Pledge Agreement
and Mortgage shall be terminated. The forgiveness of the 1996
Promissory Note shall be accompanied by the bonus set forth in Section
3(c) above.
(d) Vested Shares. All of the shares under the April 2001 Option Grant
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shall be deemed to be vested as of the termination date.
(e) Extension of Exercise Date. The exercise period for all outstanding
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options shall be 12 months following the termination date (it being
understood that if any incentive stock option is exercised more than
90 days after the termination date, it shall cease to be treated for
tax purposes as an incentive stock option, but rather shall constitute
a so-called non-statutory stock option).
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Xx. Xxxxx Platika
January 28, 2002
Page 5
5. If the Company terminates your employment for Cause or you terminate
your employment any reason other than for Good Reason prior to April 30, 2002,
all applicable provisions of the Employment Agreement, the 1996 Promissory Note
and the 2001 Promissory Note will apply, including the severance provisions
outlined in section 7(b) of the Employment Agreement.
6. Section 1 of this letter agreement shall modify section 2(a) of the
Employment Agreement and sections 3 and 4 of this letter agreement shall
supercede section 7(a) of the Employment Agreement. All other sections of and
exhibits to the Employment Agreement shall remain in full force and effect, the
terms of which are hereby incorporated by reference into this letter agreement,
including, without limitation, the terms of the Invention and Non-Disclosure
Agreement (Exhibit B to the Employment Agreement) and terms of the Non-Compete
and Non-Solicitation Agreement (Exhibit C to the Employment Agreement).
7. As used in sections 3 and 4 of this letter agreement, "Financing
Milestone" shall be deemed to be achieved at such time as the Company either (a)
closes on an equity financing or equity financings in which at least $20 million
is received by the Company, or (b) enters into one or more strategic alliance or
corporate partnership transactions in which the payments to be made to the
Company (excluding future royalty or profit sharing payments), as reasonably
determined by the Board of Directors, is equal to at least $20 million.
If the foregoing accurately sets forth our mutual agreement, please
indicate so by countersigning this letter agreement in the space provided below.
Sincerely yours,
CURIS, INC.
By: /s/ Xxxxx XxXxx
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Xxxxx XxXxx
Chairman, Executive Committee
I hereby agree to the terms and conditions set forth above. I intend that this
letter agreement will become a binding agreement between me and the Company.
/s/ Doros Platika
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Xx. Xxxxx Platika
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Xx. Xxxxx Platika
January 28, 2002
Page 6
Exhibit A
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SEVERANCE AGREEMENT AND RELEASE
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This AGREEMENT made by and between Curis, Inc. (the "Company") and Xx.
Xxxxx Platika (the "Executive").
WHEREAS, the parties wish to resolve amicably the Executive's separation
from the Company and establish the terms of the Executive's severance
arrangement;
NOW, THEREFORE, in consideration of the promises and conditions set forth
herein, the sufficiency of which is hereby acknowledged, the Company and the
Executive agree as follows:
1. Termination Date. The Executive's effective date of termination from the
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Company is _________________ (the "Termination Date").
2. Consideration. In return for the execution of this Severance Agreement and
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Release (the "Agreement"), the Company agrees to provide the Executive with
the Severance Benefits or the Alternate Severance Benefits, as defined in
sections 3 and 4 of the December __, 2001 letter agreement between the
Executive and the Company (the "Letter Agreement").
3. Releases.
(a) Executive Release. The Executive hereby fully, forever,
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irrevocably and unconditionally releases, remises and discharges the
Company, its officers, directors, stockholders, corporate affiliates,
subsidiaries, parent companies, agents, employees and successors (the
"Released Parties") from any and all claims, charges, complaints, demands,
actions, causes of action, suits, rights, debts, sums of money, costs,
accounts, covenants, contracts, agreements, promises, doings, omissions,
damages, executions, obligations, liabilities, and expenses (including
attorneys' fees and costs), of every kind and nature which he ever had or
now has against any or all of the Released Parties arising out of his
employment with or separation from the Company including, but not limited
to, all employment discrimination claims under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. ss.2000e et seq., the Age Discrimination in
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Employment Act, 29 U.S.C., ss.621 et seq., the Americans With Disabilities
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Act of 1990, 42 U.S.C., ss.12101 et seq., and the Family and Medical Leave
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Act, 29 U.S.C. ss.2601 et seq., all as amended, and similar state and local
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statutes including but not limited to the Massachusetts Fair Employment
Practices Act, M.G.L. c.151B, ss.1 et seq., all as amended, and all claims
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arising out of the Fair Credit Reporting Act, 15 U.S.C. ss.1681 et seq.,
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the Employee Retirement Income Security Act of 1974 ("ERISA"), 29
U.S.C.ss.1001 et seq., the Massachusetts Civil Rights Act, M.G.L. c.12
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ss.11H and 11I, the Massachusetts Equal Rights Act, M.G.L. c.93 ss.102 and
M.G.L. c.214, ss.1C, the Massachusetts Labor and Industries Act, M.G.L. c.
149, ss.1 et seq., and the Massachusetts Privacy Act, M.G.L. c.214, ss.1B,
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all as amended, and all common law claims including, but not limited to,
actions in tort, defamation and breach
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Xx. Xxxxx Platika
January 28, 2002
Page 7
of contract, any and all claims to any non-vested ownership interest
in the Company, contractual or otherwise, including but not limited to
claims to stock or stock options, and any claim or damage arising out of
the Executive's employment with or separation from the Company (including a
claim for retaliation) under any common law theory or any federal, state or
local statute or ordinance not expressly referenced above; provided,
however, that nothing in this Agreement prevents the Executive from (i)
filing, cooperating with, or participating in any discrimination proceeding
before the EEOC or a state Fair Employment Practices Agency (except that
the Executive acknowledges that he may not be able to recover any monetary
benefits in connection with any such claim, charge or proceeding) or (ii)
bringing any legal action for the purposes of enforcing any obligations of
the Company to the Executive under this Agreement or the Letter Agreement.
The Executive does not release the Company from any obligation to indemnify
the Executive to the fullest extent provided in the Company's By-Laws and
Certificate of Incorporation.
(b) Company Release. The Company hereby fully, forever, irrevocably
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and unconditionally releases, remises and discharges the Executive from any
and all claims, charges, complaints, demands, actions, causes of action,
suits, rights, debts, sums of money, costs, accounts, covenants, contracts,
agreements, promises, doings, omissions, damages, executions, obligations,
liabilities, and expenses (including attorneys' fees and costs), of every
kind and nature arising out of his employment with and separation from the
Company; provided, however, that nothing in this section 3(b) shall release
the Executive from any obligation expressly set forth in this Agreement or
any claims arising out of or related to the Executive's commission of acts
involving fraud, criminal activity or misconduct committed during his
employment with the Company.
4. Non-Disclosure and Non-Competition. The Executive acknowledges his
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obligation to keep confidential all non-public information concerning the
Company which he acquired during the course of his employment with the
Company. The Executive further acknowledges and reaffirms his obligations
under the Invention and Non-Disclosure Agreement and the Non-Compete and
Non-Solicitation Agreement he executed at the commencement of his
employment with the Company, the terms of which remain in full force and
effect.
5. Return of Company Property. The Executive agrees to return, within seven
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(7) days of his execution of this Agreement, all Company property in his
possession or control, including, but not limited to, keys, files, records
(and copies thereof), computer hardware and software, cellular phones and
pagers. The Executive further agrees to leave intact all electronic Company
documents, including those which he developed or help develop during his
employment.
6. Non-Disparagement. The Executive understands and agrees that as a condition
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for payment to him of the consideration described herein, he will not make
any false, disparaging or derogatory statements to any media outlet,
industry group, financial institution or current or former employee,
consultant, client or customer of the Company
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Xx. Xxxxx Platika
January 28, 2002
Page 8
regarding the Company or any of its directors, officers, employees, agents
or representatives or about the Company's business affairs and financial
condition. The Company agrees to direct its officers not to make any false,
disparaging, derogatory or defamatory statements in public or in private
regarding the Executive or the Executive's employment with the Company.
7. Confidentiality. To the extent permitted by law, the Executive understands
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and agrees that as a condition for payment to him of the consideration
herein described, the terms and contents of this Agreement, and the
contents of the negotiations and discussions resulting in this Agreement,
shall be maintained as confidential by the Executive, his agents and
representatives and none of the above shall be disclosed except to the
extent required by federal or state law or as otherwise agreed to in
writing by the Company.
8. Nature of Agreement. The Executive understands and agrees that this
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Agreement is a severance agreement and release and does not constitute an
admission of liability or wrongdoing on the part of the Company.
9. Amendment. This Agreement shall be binding upon the parties and may not be
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abandoned, supplemented, changed or modified in any manner, orally or
otherwise, except by an instrument in writing of concurrent or subsequent
date signed by a duly authorized representative of the parties. This
Agreement is binding upon and shall inure to the benefit of the parties and
their respective agents, assigns, heirs, executors, successors and
administrators.
10. Waiver of Rights. No delay or omission by the Company in exercising any
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rights under this Agreement shall operate as a waiver of that or any other
right. A waiver or consent given by the Company on any one occasion shall
be effective only in that instance and shall not be construed as a bar or
waiver of any right on any other occasion.
11. Validity. Should any provision of this Agreement be declared or be
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determined by any court of competent jurisdiction to be illegal or invalid,
the validity of the remaining parts, terms, or provisions shall not be
affected thereby and said illegal or invalid part, term or provision shall
be deemed not to be a part of this Agreement.
12. Applicable Law. This Agreement shall be governed by the laws of the
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Commonwealth of Massachusetts, without regard to conflict of laws
provisions. The parties hereby irrevocably submit to the jurisdiction of
the courts of the Commonwealth of Massachusetts, or if appropriate, a
federal court located in Massachusetts (which courts, for purposes of this
Agreement, are the only courts of competent jurisdiction), over any suit,
action or other proceeding arising out of, under, or in connection with
this Agreement or its subject matter.
13. Acknowledgments. The Executive acknowledges that he has been given
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twenty-one (21) days to consider this Agreement and that the Company
advised him to consult with an attorney of his own choosing prior to
signing this Agreement. Further, the Executive
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Xx. Xxxxx Platika
January 28, 2002
Page 9
acknowledges he may revoke this Agreement for a period of seven (7) days
after the execution of this Agreement, and the Agreement shall not be
effective or enforceable until the expiration of this seven (7) day
revocation period.
14. Voluntary Assent. The Executive affirms that no other promises or
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agreements of any kind (other than the Letter Agreement) have been made to
or with him by any person or entity whatsoever to cause him to sign this
Agreement, and that he fully understands the meaning and intent of this
Agreement. The Executive states and represents that he has had an
opportunity to fully discuss and review the terms of this Agreement with an
attorney. The Executive further states and represents that he has carefully
read this Agreement, understands the contents herein, freely and
voluntarily assents to all of the terms and conditions hereof, and signs
his name of his own free act.
15. Entire Agreement. This Agreement and the Letter Agreement contain and
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constitute the entire understanding and agreement between the parties with
respect to severance benefits and supersede all previous oral and written
negotiations, agreements, commitments, and writings in connection
therewith. Nothing in this section shall, however, modify, cancel or
supersede the Executive's obligations as set forth in section 4 above.
16. Counterparts. This Agreement may be executed in two (2) signature
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counterparts, each of which shall constitute an original, but all of which
taken together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, all parties have set their hand and seal to this Agreement.
CURIS, INC.
By: Date:
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Date:
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Xx. Xxxxx Platika
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