(c) Equity. The Executive will be eligible for participation in the Cerevel Therapeutics, Inc. 2018 Equity Incentive plan (the “Plan”). Subject to the receipt of any required approvals and the Executive’s continued employment through the grant date, which will be as soon as practicable following the Effective Date, the Executive will be granted an option to purchase 215,385 shares of the Company’s common stock, which as of the date of this letter, represents approximately 0.40% of the Company’s fully diluted shares outstanding (the “Option” or “Award”). The Option will have an exercise price of not less than the fair market value of the Company’s common stock on the date it is granted, as determined by the Company. The Option will be evidenced by a form of stock option agreement and will be subject to the terms of the Plan, the applicable stock option agreement, any other applicable stockholders agreements, and any other restrictions and limitations generally applicable to the common stock of the Company or equity awards held by the Company’s executives or otherwise imposed by law. In the event of any conflict between this Agreement and the terms of the stock option agreement or Plan, the stock option agreement or Plan will control. In no event shall the Company or any person affiliated with the Company have any liability with respect to the failure of any compensation or benefits provided to the Executive to be exempt from, or comply with, Section 409A of the Internal Revenue Code.
(d) Participation in Employee Benefit Plans. The Executive will be entitled to participate in all employee benefit plans from time to time in effect for senior employees of comparable status of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided to the Executive under this Agreement (e.g., a severance pay plan). The Executive’s participation will be subject to the terms of the applicable plan documents and generally applicable Company policies, as the same may be in effect from time to time, and any other restrictions or limitations imposed by law. Until such time as the Company has established group medical, dental, vision, life or disability insurance plans, as applicable, the Company will reimburse the Executive for (i) the monthly premium costs for participation in any medical, dental and vision insurance plans for the Executive and his eligible dependents and (ii) the monthly premium costs of continuing his participation in the life and disability insurance plans offered by his former employer (or converting such coverage to an individual policy), plus an amount equal to (A) all federal, state, and local income taxes payable by the Executive with respect to such reimbursements (the “Insurance Reimbursement Taxes”), plus (B) all federal, state and local income taxes payable by the Executive with respect to the reimbursement for Insurance Reimbursement Taxes.
(e) Vacations. The Executive will be entitled to earn vacation days in accordance with the policies of the Company as in effect for senior employees of comparable status, as in effect from time to time. Vacation may be taken at such times and intervals as the Executive shall determine, subject to the business needs of the Company.
(f) Business Expenses. The Company will pay or reimburse the Executive for all reasonable business expenses incurred or paid by the Executive in the performance of his duties and responsibilities for the Company, subject to Company policy as in effect from time to time and to such reasonable substantiation and documentation as may be specified by the Company from time to time. The Executive’s right to payment or reimbursement hereunder or under Section 3(g) below shall be subject to the following additional rules: (i) the amount of expenses eligible for payment or reimbursement during any calendar year shall not affect the expenses eligible for payment or reimbursement in any other calendar year, (ii) payment or reimbursement shall be made not later than December 31 of the calendar year following the calendar year in which the expense or payment was incurred and (iii) the right to payment or reimbursement shall not be subject to liquidation or exchange for any other benefit.
(g) Co-Investment. To the extent the Company establishes a program allowing senior employees of comparable status to the Executive (“Senior Employees”) to purchase common stock of Parent, the Executive will be eligible to participate in such program.
(h) Tag-Along Rights. In the event Parent offers tag-along rights on sales by any Lead Investor (as defined in the Stockholders Agreement by and among Parent and the stockholders party thereto, dated September 24, 2018, as it may be amended from time to time) to Senior Employees with respect to their shares of common stock of Parent, the Executive will also be eligible for such rights on the same terms as applicable to other Senior Employees.
3. Confidential Information and Restricted Activities.
(a) Confidential Information. During the course of the Executive’s employment with the Company, the Executive will learn of Confidential Information, and will develop Confidential Information on behalf of the Company and its Affiliates. The Executive agrees that he will not use or disclose to any Person (except as required by applicable law or for the proper performance of his regular duties and responsibilities for the Company) any Confidential Information obtained by the Executive incident to his employment or any other association with the Company or any of its Affiliates. The Executive agrees that this restriction will continue to apply after his employment terminates, regardless of the reason for such termination. For the avoidance of doubt, (i) nothing contained in this Agreement limits, restricts or in any other way affects the Executive’s communicating with any governmental agency or entity, or communicating with any official or staff person of a governmental agency or entity, concerning matters relevant to such governmental agency or entity and (ii) the Executive will not be held criminally or civilly liable under any federal or state trade secret law for disclosing a trade secret (y) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (z) in a complaint or other document filed under seal in a lawsuit or other proceeding; provided, however, that notwithstanding this immunity from liability, the Executive may be held liable if he unlawfully accesses trade secrets by unauthorized means.
(b) Protection of Documents. All documents, records and files, in any media of whatever kind and description, relating to the business, present or otherwise, of the Company or any of its Affiliates, and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of the Company. The Executive agrees to safeguard all Documents and to surrender to the Company, at the time his employment terminates or at such earlier time or times as the Board or its designee may specify, all Documents then in his possession or control. The Executive also agrees to disclose to the Company, at the time his employment terminates or at such earlier time or times as the Board or its designee may specify, all passwords necessary or desirable to obtain access to, or that would assist in obtaining access to, any information which the Executive has password-protected on any computer equipment, network or system of the Company or any of its Affiliates.
(c) Assignment of Rights to Intellectual Property. The Executive shall promptly and fully disclose all Intellectual Property to the Company. The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) his full right, title and interest in and to all Intellectual Property. The Executive agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company (or as otherwise directed by the Company) and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property. The Company will compensate the Executive at an hourly rate calculated based on his final Base Salary for time spent in complying with these obligations at the request of the Company following the termination of the Executive’s employment. All copyrightable Intellectual Property that the Executive creates during his employment shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company.
(d) Restricted Activities. In consideration of and as a condition of Executive’s employment by the Company, and of the compensation and other benefits to be provided to Executive hereunder, and in recognition of the fact that, as an executive of the Company, Executive will have access to the Company’s Confidential Information, including trade secrets and in exchange for other good and valuable consideration, including without limitation the Annual Bonus opportunity, the Option, and the Severance Payments provided herein, the Executive agrees that the following restrictions on his activities during his employment are necessary to protect the goodwill, Confidential Information, trade secrets and other legitimate interests of the Company and its Affiliates:
(i) While the Executive is employed by the Company and during the twelve (12)-month period immediately following termination of his employment for any reason except termination due to layoff or termination by the Company without Cause (in the aggregate, the “Non-Competition Period”), the Executive will not, directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, engage in or compete with, or undertake any planning to engage in or compete with any small molecule programs directed at drugging the following targets with the specified pharmacological approaches: (a) Dopamine D1 receptor agonists, (b) GABA alpha2/alpha3 selective PAMs, (c) Muscarinic M4 receptor PAMs or full orthosteric agonists, (d) Dopamine D3 antagonists, (e) Kappa opiate receptor antagonist, (f) LRRK2 enzyme inhibitors, (g) PDE4 enzyme inhibitors, (h) GBA enzyme activators, and/or (i) APOE3 modulators, or any other program conducted or in active and definitive planning to be conducted by the Company or any of its Affiliates at any time during the Executive’s employment with the Company or, with respect to the portion of the Non-Competition Period that follows termination of the Executive’s employment, at the time of such termination (each, a “Competing Program”), in any case involving any of the services that the Executive provided to the Company or any of its Affiliates in connection with a Competing Program at any time during the Executive’s Employment with the Company or, with respect to the portion of the Non-Competition period that follows the termination of the Executive’s employment, during the last two (2) years of the Executive’s employment with the Company (collectively, the “Competitive Activities”), in any geographic area where the Company or any of its Affiliates conducts or is actively planning to conduct business any time during the Executive’s employment with the Company or, with respect to the portion of the Non-Competition Period that follows terminantion of the Executive’s employment, in any geographic area in which the Executive at any time within the last two (2) years of the Executive’s employment with the Company provided services or had a material presence or influence in each case in connection with a Competing Program.
(ii) While the Executive is employed by the Company and during the twenty-four (24)-month period immediately following termination of his employment for any reason (in the aggregate, the “Non-Solicitation period”), the Executive will not, directly or indirectly, solicit or encourage, or otherwise take any action that causes or is reasonably likely to cause, any customer, vendor, supplier or other business partner of the Company or any of its Affiliates to terminate or diminish his, her or its relationship with any of them; provided, however, that this restriction shall apply following termination of the Executive’s employment (y) only with respect to those Persons who are or have been a business partner of the Company or any of its Affiliates at any time within the twelve (12)-month period immediately prior to the Executive’s termination of employment or whose business has been solicited on behalf of the Company or any of its Affiliates by any of their officers, employees or agents within such twelve (12)-month period, other than by form letter, blanket mailing or published advertisement, and (z) only if the Executive has performed work for such Person during his employment with the Company or any of its Affiliates or been introduced to, or otherwise had contact with, such Person as a result of his employment or other associations with the Company or one of its Affiliates or has had access to Confidential Information which would assist in his solicitation of such Person.