EXHIBIT 10.66
February 25, 2003
BY HAND DELIVERY
Xx. Xxxxx X. Xxxxxxxx
Chairman & CEO
Cubist Pharmaceuticals, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
RE: TRANSITION AGREEMENT
Dear Xxxxx:
This letter agreement documents the transition agreement between you and
Cubist Pharmaceuticals, Inc. ("Cubist" or the "Company") regarding your
transition from your dual position as Cubist's Chairman of the Board of
Directors ("Chairman") and CEO to the position of Chairman. The Cubist Board of
Directors (the "Board") highly commends you for your many years of dedicated and
outstanding service to the Company, including the successful filing of its first
NDA, and wishes to recognize and reward you for those important contributions.
As agreed by you and the Board, it is in the best interest of the Company to
retain your services as Chairman and to appoint me to the position of President
& CEO, upon the following terms and conditions:
1. ANNOUNCEMENT OF TRANSITION.
The Company will promptly upon execution of this Agreement announce your
planned resignation as CEO, your continuation as Chairman, and my planned
appointment as President & CEO.
2. EFFECTIVE DATE OF TRANSITION AS CEO.
Your resignation as CEO will be effective immediately prior to the
Company's Annual Meeting of Stockholders on June 10, 2003, as evidenced by your
resignation letter to Dr. Xxxxx Xxxxxx, Chairman of the Compensation Committee,
executed this day and in the form attached as EXHIBIT A. At such time, I will be
appointed President & CEO of the Company and will be introduced to the Company
and its stockholders as such at the Annual Meeting.
3. EMPLOYMENT.
You will remain Chairman and an employee of the Company through
December 31, 2003, and you will receive your full salary and bonus through that
date. The last day of your employment with the Company will be December 31,
2003.
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4. OTHER COMPENSATION.
Subject to Section 9 of this Agreement, on January 5, 2004, you will
receive a one-time Special Recognition Award in an amount equal to $440,000, in
recognition of your many and significant contributions to the Company since June
of 1994.
After January 5, 2004, you will receive no compensation other than
compensation paid to the Company's outside Directors, as long as you are serving
as a Director or as Chairman. As long as you serve as Chairman your compensation
package shall be two times what other Directors earn, both in terms of cash
compensation and options.
5. STOCK OPTIONS.
All then unvested stock options granted to you as an employee of the
Company will vest on December 31, 2003, and will be exercisable until
December 31, 2006, except to the extent that options have expired by their terms
before that date.
6. BENEFITS.
To the maximum extent possible, the Company will continue your
participation in all of its health benefits until the later of (a) December 31,
2006 or (b) until you are no longer a member of the Board. Thereafter, assuming
that COBRA benefit legislation (or its equivalent) then exists in its present
form, you will be eligible for COBRA benefits (or benefits provided under
equivalent legislation).
7. CONTINUATION AS CHAIRMAN AND/OR DIRECTOR.
The Board believes that it is in the best interest of the Company for you
to continue to serve as Chairman and a Director through December 31, 2003 ("year
end"). You agree to continue to serve in those capacities through year end.
Although you have tendered your resignations as of year end, you also agree to
consider serving as Chairman (and a Director) after that date if requested to do
so by the Board.
8. NON-COMPETE.
You agree that, during the period of your employment by the Company as CEO,
you will not, without the Company's express written consent, engage in any
employment or business activity other than for the Company. In view of the
unique nature of the business of the Company and the need of the Company to
maintain its competitive advantage in the industry, you agree that for a period
of three (3) years after the termination of your tenure as CEO of the Company
for any reason whatsoever, you shall not directly or indirectly, within the
United States of America or its territories or possessions or within any other
part of the world (i) engage in, (ii) own an interest in (except that you may
own less than 5% of publicly traded companies) (iii) be employed by or consult
for or act as an advisor to any person or entity which engages in or (iv)
otherwise participate in any way in, any activity which competes with the
Business (as
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defined below). During the term of your tenure as CEO of the Company and for a
period of three (3) years thereafter, you shall not solicit or arrange to have
any other person or entity solicit any person or entity engaged by the Company
as an employee, customer, supplier, or consultant or advisor to the Company to
terminate such party's relationship with the Company. The time periods provided
for in this Section 8 shall be extended for a period of time equal to any period
of time in which you shall be in violation of any provision of this Section 8.
For purposes of this Section 8 the term "Business" shall mean: (i) the current
business of the Company, defined as the research, development, manufacture, use,
patenting, promotion, distribution, sale and license of treatments, in-vitro
diagnosis and therapies related to microbial diseases, and (ii) any other
business or businesses conducted by the Company at any time during your tenure
as an employee of the Company.
The Company shall have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other equitable relief,
without bond, and without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement. You waive the claim or defense
that the Company has an adequate remedy at law. You shall not, in any action or
proceeding to enforce any of the provisions of this Agreement, assert the claim
or defense that such an adequate remedy at law exists.
9. GENERAL RELEASE.
Any obligation of Cubist to provide you the Special Recognition Award or
other benefits under this Agreement after the termination of your employment is
expressly conditioned upon your signing and delivering to the Company by
December 26, 2003 (and not revoking during any applicable revocation period) a
general release of claims in the form attached as EXHIBIT B.
10. JURISDICTION AND VENUE; WAIVER OF JURY TRIAL; GOVERNING LAW.
This Agreement will be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts. In case of any dispute hereunder, the
parties will submit to the exclusive jurisdiction and venue of any court of
competent jurisdiction sitting in Middlesex County, Massachusetts, and will
comply with all requirements necessary to give such court jurisdiction over the
parties and the controversy. EACH PARTY HEREBY WAIVES ANY RIGHT TO A JURY TRIAL
AND TO CLAIM OR RECOVER PUNITIVE DAMAGES WITH RESPECT TO THIS AGREEMENT.
This Agreement will be publicly filed with the Company's Exchange Act
filings. The Board has adopted a resolution authorizing and instructing me to
execute this Agreement on behalf of Cubist. If the terms herein are acceptable
to you, please execute both originals, keep one for your records, and return one
to me.
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Thank you for your continued commitment to Cubist. I look forward to
working with you in your new role as Chairman.
Very truly yours,
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President & COO
ACCEPTED AND AGREED
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, Ph.D.
