Offer letter, dated June 19, 2020, by and between the registrant and Matthew Norkunas, as amended July 6, 2020
By Electronic Mail
July 6, 2020
RE: Offer of Employment
We are very excited to offer you the position of Chief Financial Officer where you will play an essential role in building Generation Bios foundation and long-term business and scientific success. Below are the terms of employment for your review and execution. If these terms are acceptable, please sign and return a copy to us within five business days.
Position: Your initial position with Generation Bio will be as Chief Financial Officer where you will be initially reporting to Chief Executive Officer. This is a full-time position with a principal workplace at Generation Bios headquarters in Cambridge, Massachusetts. In this role you will be responsible for Generation Bios finance function, leading our financial and capital strategy and helping to shape our strategic planning, capital-raising, and corporate development activities, as well as other related activities as directed by the Company from time to time. You agree to devote your full business time, best efforts, skill, knowledge, attention and energies to the advancement of the Companys business and interests and to the performance of your duties and responsibilities as an employee and officer of the Company, and shall not engage in any other employment, consulting or other business activity without the prior written consent of the Company. Please review and sign the attached job description, which provides additional details about the position.
Start Date: Your employment will begin on July 22, 2020 (the Start Date).
Salary: Generation Bio will pay you an annual Base Salary of $400,000, payable in accordance with Generation Bios standard payroll schedule and subject to applicable deductions and withholdings. This salary will be subject to periodic review and adjustments at Generation Bios discretion. Because this is an exempt position, you will not be eligible for any overtime pay.
Bonus: During the term of your employment with Generation Bio, you will be eligible for an annual incentive bonus (Bonus) for each fiscal year of your employment with Generation Bio. The amount, terms and conditions of such bonus are to be determined at the sole discretion of the Board of Directors of Generation Bio (the Board), and such terms may be changed and conditions may be changed at any time with or without notice to you. Your target annual Bonus shall be up to 40% of your annual salary. Your actual Bonus percentage is discretionary and will be subject to Generation Bios assessment of your performance as well as the performance of Generation Bio during the applicable
|fiscal year. Any Bonus payable for the year in which you begin working for the Company shall be prorated based on your Start Date. Payment of the Bonus shall be contingent upon you being employed by Generation Bio as of the last day of the fiscal year in which it was earned. The annual Bonus, if any, shall be paid on or before March 15th of the calendar year following the fiscal year for which such Bonus is earned.|
In addition, the Company will pay you a $70,000 one-time bonus within one month of your start date less appropriate payroll taxes. The bonus is deemed fully earned after twelve (12) months of active employment. Should you leave the company for any reason, voluntarily or involuntarily other than due to your termination by the Company without cause or your death, before you have completed twelve (12) months of active employment, 100% of the bonus is required to be repaid. Any repayment must be made on or before your final date of active employment and shall be by certified check to the Company or may be deducted from your final payroll.
Incentive Equity Grant: You will be eligible to participate in the Companys stock incentive program. Subject to the approval of the Board, you will be granted options to purchase 330,000 shares of Generation Bios common stock (the Option Grant). The options subject to the Option Grant (Options) will vest as to 25% of the underlying shares on the first anniversary of the Start Date and will vest as to the balance in equal quarterly installments of 6.25% thereafter until the fourth anniversary of the Start Date. The Option Grant will be subject to the terms and conditions of a written stock option agreement which you will be required to sign, and/or the Companys written stock plan (the Grant Documents). The Options shall have an exercise price per share equal to the fair market value of the Companys common stock at the time of grant, as determined by the Board.
Benefits: You may participate in the benefit programs offered by the Company to its employees, provided that you are eligible under and subject to all provisions of the plan documents that govern those programs. Benefits are subject to change at any time in the Companys sole discretion. You will also be entitled to paid vacation and sick leave each year in accordance with the terms and conditions set forth in the Companys policies. You will also be entitled to receive reimbursement for all reasonable business expenses incurred by you in performing your services to the Company in keeping with Company policies. In addition, you may be eligible for other benefits offered by the Company as set forth in the Employee Guide, which can be accessed on the Companys intranet portal.
Accrued Obligations: If your employment terminates for any reason, including for Cause or as a result of Involuntary Termination, the Company will pay you the Accrued Obligations earned through your last day of employment (the Separation Date) on or before the time required by law or applicable policy, except to the extent any such payments would accelerate compensation in a manner inconsistent with compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the Code).
Severance Benefits: If you are subject to an Involuntary Termination, in addition to the Accrued Obligations, you will be eligible to receive severance benefits as described under Sections 2(A) or (B) below, as applicable (Severance Benefits), provided you have: (i) returned all Company property in your possession on or prior to the Separation Date, (ii) resigned as a member of the Board of Directors of the Company (the Board) or of any subsidiary of the Company, to the extent you are then a Director of the Company or of any such subsidiary, and (iii) entered into a separation agreement that has become enforceable and irrevocable and includes a general release of all claims you may have against the Company or persons affiliated with the Company (the Separation Agreement). Notwithstanding the foregoing, except as set forth in Section 8(B)(iv), no term of this Agreement or the Separation Agreement shall impact or affect in any way your rights with respect to, and the Separation Agreement shall not include a waiver or release of any claims related to: (x) your status as a stockholder or equity holder of the Company or any rights you have under the terms of any equity award agreement between you and the Company, including any claims with respect to any options or other equity awards owned or held by you at the time your employment is terminated, or (y) any rights to indemnification from the Company, pursuant to any applicable governing documents of the Company or any applicable written agreement between you and the Company, rights under ERISA or rights which, as a matter of law, cannot be waived. The Separation Agreement, in a form to be provided to you by the Company, must be executed and become enforceable and irrevocable within 52 days following the Separation Date, or such shorter period of time prescribed by the Company (the date by which the Separation Agreement must become enforceable and irrevocable, the Prescribed Deadline). If the Separation Agreement is not executed or is executed but has not become enforceable and irrevocable by the Prescribed Deadline, you shall be entitled to the Accrued Obligations only and not to any Severance Benefits. Any Severance Benefits shall be paid, or begin to be paid, in the first regular payroll beginning after the Separation Agreement becomes enforceable and irrevocable, provided that if the foregoing 52-day period begins in the year in which your Separation Date occurs and ends in the following year, the Company will not make any payments before the first payroll date falling after the later of (A) January 1 of the year following the year in which your Separation Date occurs and (B) the date on which Separation Agreement becomes enforceable and irrevocable (the date the Severance Benefits are paid or commence pursuant to this sentence, the Payment Date). The first payroll shall include, however, all amounts that would otherwise have been paid to you between the Separation Date and your receipt of the first payment.
Involuntary Termination Prior to or More than 12 months Following a Change in Control In the event of your Involuntary Termination prior to or more than 12 months following a Change in Control, you are eligible to receive the following Severance Benefits:
Salary. The Company shall continue to pay you your base salary as in effect on the Separation Date for a period of nine (9) months, payable in accordance with the Companys standard payroll schedule;
Bonus Payment. The Company may pay you an amount determined by reference to your target annual incentive bonus for the year in which the Separation Date occurs, based on Company and individual performance for such year, as determined by the Board in its sole discretion, and pro-rated based on the number of days you were employed by the Company in such year, which payment (if any) will be paid to you in a single lump sum amount on the later of (1) the Payment Date or (2) the date on which bonuses are paid to other executives of the Company but no later than two and one-half (2.5) months following the end of the year in which the Separation Date occurs; and
Health Insurance. If you are participating in the Companys group health plan immediately prior to the Separation Date and you are eligible for and timely elect COBRA health and dental continuation, then the Company will continue to pay the share of the premium the Company would have paid to provide health and dental coverage to you and your eligible dependents if you had remained employed by the Company for a period ending on the earlier of the date that is nine (9) months following the Separation Date or the date COBRA eligibility ends, as such premiums become due, provided that the Companys payment for COBRA coverage shall only apply if and while permitted under applicable tax or other laws as nondiscriminatory.
Involuntary Termination On or Within 12 Months Following a Change in Control
In the event of your Involuntary Termination on or within 12 months following a Change in Control (including the one-year anniversary thereof), you are eligible to receive the following Severance Benefits:
Salary. The Company shall pay you a lump sum amount on the Payment Date equal to twelve (12) months of your base salary as in effect on the Separation Date;
Bonus Payment. The Company shall pay you a lump sum amount on the Payment Date equal to your target annual incentive bonus for the year in which your Separation Date occurs;
Health Insurance. If you are participating in the Companys group health plan immediately prior to the Separation Date and you are eligible for and timely elect COBRA health and dental continuation, then the Company will continue to pay the share of the premium the Company would have paid to provide health and dental coverage to you and your eligible dependents if you had remained employed by the Company for a period ending on the earlier of the date that is twelve (12) months following the Separation Date or the date COBRA eligibility ends, as such premiums become due, provided that the Companys payment for COBRA coverage shall only apply if and while permitted under applicable tax or other laws as nondiscriminatory; and iv. Equity. One hundred percent (100%) of the unvested portion of any then-outstanding Equity Grant shall vest and become fully exercisable or non-forfeitable as of the Separation Date, provided however, that:
no such acceleration shall be effective until the Separation Agreement has become enforceable and irrevocable; and
if the Separation Agreement does not become enforceable and irrevocable, the portions of the Equity Grants that would have vested as a result of this provision shall not vest and shall be treated in accordance with the terms and conditions of the applicable award agreement.
Representation Regarding Other Obligations. Your employment is contingent upon your signing the Companys Invention, Non-Disclosure, Non-Competition and Non-Solicitation Agreement (the Non-Disclosure Agreement). Further, you hereby represent to the Company that you are not a party to any agreement of any type which may impact or limit your ability to become employed by or perform your job at the Company or which is in any way inconsistent with the terms of this offer letter. You represent and agree that you will not disclose to the Company, use, or induce the Company to use any confidential or proprietary information or material belonging to any current or previous employer or others. Further, you hereby represent that (i) your employment with the Company and this offer letter does not and will not violate or conflict with any obligations you may have to or any agreements you may have with any former employer and (ii) you have provided the Company with all written agreements that describe any continuing postemployment obligations to any former employer.
All forms of compensation referred to in this letter are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law. You hereby acknowledge that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities and that you will not make any claim against the Company or the Board related to tax liabilities arising from your compensation.
Payments Subject to Section 409A.
Notwithstanding anything to the contrary in this Agreement, no severance payments that may be due under this Agreement may begin prior to the date of your Separation (determined as set forth below) which may occur on or after the termination of your employment. The following rules shall apply with respect to distribution of the severance payments, if any, to be provided to you under this Agreement, as applicable:
It is intended that each installment of the severance payments provided under this Agreement shall be treated as a separate payment for purposes of Section 409A of the Code (Section 409A). Neither the Company nor you shall have the right to accelerate or defer the delivery of any such payments except to the extent specifically permitted or required by Section 409A.
If, as of the date of your Separation from the Company, you are not a specified employee (within the meaning of Section 409A), then each installment of the severance payments shall be made on the dates and terms set forth in this Agreement.
If, as of the date of your Separation from the Company, you are a specified employee (within the meaning of Section 409A), then:
Each installment of the severance payments due under this Agreement that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when your Separation occurs, be paid within the short-term deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A and shall be paid on the dates and terms set forth this Agreement; and
Each installment of the severance payments due under this Agreement that is not described in this Section 3(B)(iii)(1) and that would, absent this subsection, be paid within the six-month period following your Separation from the Company shall not be paid until the date that is six months and one day after such Separation (or, if earlier, as soon as practicable following your death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your Separation and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of payments if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of your second taxable year following the taxable year in which the Separation occurs.
The determination of whether and when your Separation from the Company has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely for purposes of this Section 10, Company shall include all persons with whom the Company would be considered a single employer under Section 414(b) and 414(c) of the Code.
All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in this letter agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.
The Company makes no representation or warranty and shall have no liability to you or to any other person if any of the provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section.
Interpretation, Amendment and Enforcement. This offer letter, along with the Non-Disclosure Agreement and the Grant Documents, constitute the complete agreement between you and the Company, contain all the terms of your employment, and supersede any prior agreements, representations or understandings (whether written, oral or implied) between you and the Company. The terms of this offer letter and the resolution of any disputes as to the meaning, effect, performance or validity of this offer letter or arising out of, related to, or in any way connected with, this offer letter, your employment with the Company or any other relationship between you and the Company (the Disputes) will be governed by Massachusetts law, excluding laws relating to conflicts or choice of law. You and the Company submit to the exclusive personal jurisdiction of the federal and state courts located in the Commonwealth of Massachusetts in connection with any Dispute or any claim related to any Dispute.
Other Terms. This offer letter shall not be construed as an agreement, either express or implied, to employ you for any stated term, and shall in no way alter the Companys policy of employment at-will, which means that you have the right to terminate your employment relationship with the Company at any time for any reason and the Company has the right to terminate its employment relationship with you at any time for any reason, with or without cause or notice. Similarly, nothing in this letter shall be construed as an agreement, either express or implied, to pay you any compensation or grant you any benefit beyond the end of your employment with the Company, except as may be required by, and subject to the conditions set forth in, Section 8. You have the right to consult with counsel before signing this offer letter.
Definitions: The following terms have the meaning set forth below wherever they are used in this letter:
a. Accrued Obligations means: (i) any earned but unpaid base salary as of the Separation Date, (ii) any accrued, but unused vacation time as of the Separation Date, (iii) any vested benefits you may have under any employee benefit plan of the Company as of the Separation Date in accordance with the terms of the applicable benefit plan, (iv) any unpaid expense reimbursements accrued prior to the Separation Date for which you have timely submitted appropriate documentation in accordance with Company policy, and (v) any unpaid but earned bonus approved by the Board for a fiscal year preceding the year in which your employment is terminated.
b. Cause means (i) your material breach of the Non-Disclosure Agreement, (ii) your conviction of, or your plea of guilty or no contest to, a felony under the laws of the United States or any State, (iii) your gross negligence or willful misconduct in the performance of your duties, (iv) your continuing failure to perform assigned duties after receiving written notification of the failure from the Company, or (v) your failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested your cooperation; provided, however, that Cause shall not be deemed to have occurred pursuant to subsection (iii), (iv), or (v) hereof unless you have first received written notice from the Company specifying in reasonable detail the particulars of such grounds and that the Company intends to terminate your employment hereunder for such grounds, and you have failed to cure such grounds to the Companys satisfaction within a period of thirty (30) days from the date of such notice.
c. Change in Control means the occurrence of any one or more of the following events, in each case only to the extent that such event also constitutes a change in ownership of the Company or a change in the ownership of a substantial part of the Companys assets for the purposes of Section 409A: (i) the consummation of a merger or consolidation of the Company with any other entity, other than a merger or consolidation in which voting securities of the Company outstanding immediately prior thereto continue to represent more than fifty percent (50%) percent of the total voting power entitled to vote generally in the election of directors: (A) the surviving or resulting corporation; or (B) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation immediately after such merger or consolidation; (ii) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a Person) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the total voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors; provided, however, that for purposes of this subsection (ii), the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the Company or (B) any acquisition by any corporation pursuant to a merger or consolidation which falls within the exception provided in subsection (i) above; or (iii) the sale, transfer or exclusive license of all or substantially all of the assets of the Company.
d. Involuntary Termination means either (i) your Termination Without Cause, or (ii) your Resignation for Good Reason.
e. Resignation for Good Reason means a Separation as a result of your resignation within three (3) months after one of the following conditions has come into existence without your consent: (i) a reduction in your base salary by more than 10% (unless such reduction is part of a broad-based salary reduction program at the Company); (ii) a material diminution of your authority, duties or responsibilities; or (iii) a relocation of your principal workplace by more than forty (40) miles.
A Resignation for Good Reason will not be deemed to have occurred unless you give the Company written notice of the condition within thirty (30) days after the condition comes into existence and the Company fails to remedy the condition within thirty (30) days after receiving your written notice.
f. Separation means a separation from service, as defined in the regulations under Section 409A.
g. Termination Without Cause means a Separation as a result of a termination of your employment by the Company without Cause, provided you are willing and able to continue performing services within the meaning of Treasury Regulation 1.409A-1(n)(1).
A. Severability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement shall remain be valid and enforceable to the fullest extent permitted under applicable law.
B. Jurisdiction. You and the Company hereby agree that the state and federal courts in the Commonwealth of Massachusetts shall have the exclusive jurisdiction to consider any matters related to this Agreement, including without limitation any claim of a violation of this Agreement. With respect to any such court action, you submit to the jurisdiction of such courts and you acknowledge that venue in such courts is proper.
C. Governing Law; Interpretation. This Agreement shall be interpreted and enforced under the laws of the Commonwealth of Massachusetts, without regard to conflict of law principles. In the event of any dispute, this Agreement is intended by the parties to be construed as a whole, to be interpreted in accordance with its fair meaning, and not to be construed strictly for or against either you or the Company or the drafter of all or any portion of this Agreement.
D. Entire Agreement. This Agreement shall be effective as of the date first set forth above. This Agreement constitutes the entire agreement between you and the Company with respect to the subject matter herein. This Agreement supersedes any previous agreements or understandings between you and the Company with respect to the subject matter herein, except for the Non-Disclosure Agreement, which remain in full force and effect.
We are excited about welcoming you to the Generation Bio team. We are eager to add your talent and energy to building a company capable of transforming patients lives around the world. This offer is valid for five business days from the date of this letter; we look forward to receiving a response from you acknowledging, by signing below, that you have accepted this offer of employment.
Very truly yours,
Generation Bio Co.
|By:||/s/ Geoff McDonough|
Chief Executive Officer
I have read and accept this employment offer
|/s/ Matthew Norkunas|
Name: Matthew Norkunas
Dated: July 6, 2020