Separation Agreement, effective as of February 3, 2022, by and between Arian Pano and Kiniksa Pharmaceuticals Corp
[***] Certain information in this document has been excluded pursuant to
Regulation S-K, Item 601(a)(6).
January 31, 2022
The purpose of this letter agreement (“Agreement”) is to confirm the terms of your separation from Kiniksa Pharmaceuticals Corp. (“Kiniksa” or the “Company”).1 Unless you rescind your assent as set forth in Section 6(iii) below, this Agreement shall be effective on the eighth (8th) day after you sign it (the “Effective Date”), at which time it shall become final and binding on all parties.
1.Separation Date. Your employment with the Company shall separate effective January 31, 2022 (the “Separation Date”). You acknowledge that from and after the Separation Date, you shall have no authority to represent yourself as an employee or agent of the Company, and you agree not to represent yourself in the future as an employee or agent of the Company. On or before the Separation Date, the Company shall pay your accrued but unused vacation time and your final pay earned through the Separation Date in accordance with applicable law. Regardless of whether you execute this Agreement, and provided you timely complete the required election forms (which will be provided to you separately), you are eligible to continue receiving group medical and/or dental insurance pursuant to Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) at your cost.
2.Consideration. If you do not rescind this Agreement as set forth in Section 6(iii) below, then the Company will provide you with the following (the “Consideration”) in accordance your Employment Agreement with the Company dated April 1, 2021 (the “Employment Agreement”):
|(i)||a lump sum severance payment in the amount of $333,540.09, which is equivalent to nine (9) months of your annual base salary, less all applicable income and payroll taxes, deductions and withholdings, and less any amounts you may owe to the Company (the “Severance Payment”), which shall be paid within sixty (60) days after the Separation Date;|
1. Except for the obligations set forth in Section 2, which shall be solely the obligations of Kiniksa Pharmaceuticals Corp., whenever the terms “Kiniksa Pharmaceuticals Corp.,” “Kiniksa” or the “Company” are used in this Agreement (including, without limitation, Section 6), they shall be deemed to include Kiniksa Pharmaceuticals Corp. and any and all of its divisions, affiliates and subsidiaries and all related entities (including, without limitation, Kiniksa Pharmaceuticals, Ltd.) and its and their directors, officers, employees, agents, successors and assigns.
|(ii)||a one-time, lump-sum bonus payment of $16,500.00, less all applicable income and payroll taxes, deductions and withholdings (the “One-Time Bonus”), which shall be paid within sixty (60) days after the Separation Date;|
|(iii)||a one-time, lump sum post-termination bonus of $12,971, which is equivalent to the pro-rata share of your 2022 Target Bonus, less all applicable income and payroll taxes, deductions and withholdings (the “Post-Termination Bonus”), which will be paid at or around the time that annual bonuses are paid to other similarly situated employees of the Company, but in no event later than March 15, 2023; and|
twelve (12) months of accelerated vesting on any time-based unvested equity award(s) as of the Separation Date; for the avoidance of doubt, vesting will not be accelerated on any performance-based or partially performance-based equity awards and the exercisability of any vested equity awards shall continue to be governed by the applicable equity award agreements and plan(s).
3.Acknowledgments. You acknowledge and agree that:
this Agreement and the Consideration are neither intended to nor shall constitute a severance plan and shall confer no benefit on anyone other than Kiniksa and you;
unless you execute this Agreement, the Consideration provided for herein is not otherwise due or owing to you under any employment agreement (oral or written);
except for (a) any unpaid regular wages (including accrued but unused vacation time) earned through (and including) the Separation Date, which shall be paid by the Company on the Separation Date and (b) any vested monies due to you pursuant to any retirement programs in which you participate, you have been paid and provided all wages, vacation pay, holiday pay, earned paid sick time, bonuses, commissions and any other form of compensation or benefit that may be due to you now or which would have become due in the future in connection with your employment with or separation of employment from Kiniksa; and
in order to be reimbursed for all outstanding business expenses that you may have incurred on behalf of the Company, all expense reports and supporting documentation must be submitted in accordance with Company policies within five (5) days after the Separation Date.
4.Unemployment Insurance. After the Separation Date, you may seek unemployment benefits. Decisions regarding eligibility for and amounts of unemployment benefits are made by the relevant state agency, not by Kiniksa. Kiniksa will not contest any application you may make for unemployment benefits; provided that, under no circumstances shall Kiniksa provide false or misleading information to any governmental agency or representative.
5.Return of Company Property; Confidentiality; Trade Secrets; Non-Disparagement. You hereby agree to:
|(i)||promptly return to Kiniksa all property and documents (whether in hard copy or electronic form) of Kiniksa in your custody and possession ;|
|(ii)||abide by the terms of your Employee Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement with the Company dated November 11, 2019 (the “Non-Competition Agreement”), a copy of which is attached hereto as Exhibit A (and the terms of which are hereby incorporated into this Agreement by reference), including promptly executing and delivering to the Company the Termination Certificate attached as Exhibit A thereto. You understand that nothing in this Agreement prohibits you from reporting possible violations of federal law or `regulation to any governmental agency or entity, including but not limited to the Department of|
|Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. You understand that you do not need the prior authorization of the Company to make any such reports or disclosures and that you are not required to notify the Company that you have made such reports or disclosures;|
|(iii)||abide by any applicable common law and/or statutory obligations relating to the protection and non-disclosure of Kiniksa’s trade secrets and/or confidential and proprietary documents and information, and you specifically agree that you will not disclose any confidential or proprietary information that you acquired as an employee of Kiniksa to any other person or entity, or use such information in any manner that is detrimental to the interests of Kiniksa; Further, notwithstanding your confidentiality and nondisclosure obligations, you are hereby advised as follows pursuant to the Defend Trade Secrets Act: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.”;|
|(iv)||keep confidential and not publicize or disclose the existence and terms of this Agreement, other than to (a) an immediate family member, legal counsel, accountant or financial advisor, provided that any such individual to whom disclosure is made shall be bound by these confidentiality obligations; or (b) a state or federal tax authority or government agency to which disclosure is mandated by applicable state or federal law; and|
|(v)||not make any statements that are disparaging about or adverse to the business interests of Kiniksa or which are intended to harm the reputation of Kiniksa, including, but not limited to, any statements that disparage any product, service, finances, employees, officers, capability or any other aspect of the business of Kiniksa.|
Your breach of this Section 5 will constitute a material breach of this Agreement and, in addition to any other legal or equitable remedy available to Kiniksa, will relieve Kiniksa of the obligation to provide any Consideration not already paid and will entitle Kiniksa to recover any Consideration already paid.
6.Release of Claims.
You hereby acknowledge and agree that by signing this Agreement and accepting the Consideration, you are waiving your right to assert any form of legal claim against Kiniksa (as defined in footnote number 1 to this Agreement) of any kind whatsoever from the beginning of time through and including the date on which you sign this Agreement, except for claims related to the Company’s failure to perform its obligations under this Agreement. Your waiver and release is intended to bar any form of legal claim, charge, complaint or any other form of action (jointly referred to as “Claims”) against Kiniksa seeking any form of relief including, without limitation, equitable relief (whether declaratory, injunctive or otherwise), the recovery of any damages or any other form of monetary recovery whatsoever (including, without limitation, back pay, front pay, compensatory damages, emotional distress damages, punitive damages, attorneys’ fees and any other costs) against Kiniksa up through and including the date on which you sign this Agreement. You understand that there could be unknown or unanticipated Claims resulting from your employment with Kiniksa and the termination thereof and agree that such Claims are intended to be, and are, included in this waiver and release.
Without limiting the foregoing general waiver and release, you specifically waive and release the Company from any Claims arising from or related to your employment relationship with the Company or the termination thereof, including without limitation:
(a)Claims under any local, state or federal discrimination, harassment, fair employment practices or other employment related statute, regulation or executive order, including, without limitation, the Massachusetts Fair Employment Practices Act (also known as Chapter 151B), the Age Discrimination in Employment Act (“ADEA”) and Title VII of the Civil Rights Act of 1964, each as they may have been amended through the Effective Date;
(b)Claims under any local, state or federal employment related statute, regulation or executive order relating to wages, hours, whistleblowing, leaves of absence or any other terms and conditions of employment, including, without limitation, the Family and Medical Leave Act of 1993, the Worker Adjustment and Retraining Notification (WARN) Act, the Massachusetts Payment of Wages Law (Massachusetts General Laws Chapter 149, §§ 148, 150), Massachusetts General Laws Chapter 149 in its entirety and Massachusetts General Laws Chapter 151 in its entirety (including, without limitation, the sections concerning payment of wages, minimum wage and overtime), each as they may have been amended through the Effective Date. You specifically acknowledge that you are waiving any Claims for unpaid wages under these and other statutes, regulations and executive orders;
(c) Claims under any local, state or federal common law theory; and
(d)any other Claim arising under other local, state or federal law.
Because you are over 40 years of age, you are granted specific rights under the Older Workers Benefit Protection Act (“OWBPA”), which prohibits discrimination on the basis of age. The release set forth in this Section 6 is intended to release any rights you may have against Kiniksa alleging discrimination on the basis of age. You have twenty-one (21) days to consider and accept the provisions of this Agreement, and you agree that any changes to this Agreement, whether material or immaterial, will not restart the running of this period. In addition, you may rescind your assent to this Agreement if, within seven (7) days after the date you sign this Agreement, you deliver a written notice of rescission. To be effective, such notice of rescission must be postmarked, and sent by certified mail, return receipt requested, or delivered within the seven-day period to Kiniksa Pharmaceuticals Corp., 100 Hayden Avenue, Lexington, MA 02421, Attn: Chief Legal Officer.
Consistent with federal and state discrimination laws, nothing in this release shall be deemed to prohibit you from challenging the validity of this release under federal or state discrimination laws or from filing a charge or complaint of age or other employment related discrimination with the Equal Employment Opportunity Commission (“EEOC”) or similar state agency, or from participating in any investigation or proceeding conducted by the EEOC or similar state agency. Further, nothing in this release or Agreement shall be deemed to limit the Company’s right to seek immediate dismissal of such charge or complaint on the basis that your signing of this Agreement constitutes a full release of any individual rights under federal or state discrimination laws, or the Company’s right to seek restitution or other legal remedies to the extent permitted by law of the economic benefits provided to you under this Agreement in the event that you successfully challenge the validity of this release and prevail in any claim under federal or state discrimination laws.
(v) The general release in this Paragraph 6 shall not limit any right you may have to receive a whistleblower award or bounty for information provided to the Securities and Exchange Commission.
|(vi)||The general release in this Paragraph 6 is not affected or limited by the recitation of the specific releases in this Paragraph 6.|
7.Cooperation. For a period of two (2) weeks following the Separation Date, you agree to make yourself available to Kiniksa, upon reasonable notice (either by telephone or, if Kiniksa believes necessary, in person) to assist Kiniksa in any matter relating to the services performed by you during your employment with Kiniksa including, but not limited to, transitioning your duties to others.
8.No Prior Actions. You represent that you have not filed or asserted any cause of action, claim, charge or other action or proceeding against Kiniksa, and to the best of your knowledge, no other person, organization or entity has done so on your behalf.
|(i)||Except for (a) any equity awards or grants from the Company, as may be amended herein; (b) the Non-Competition Agreement; and (c) the Indemnification Agreement between you and Kiniksa Pharmaceuticals, Ltd. dated June 10, 2021, all of which shall remain in full force and effect, this Agreement supersedes any and all prior oral and/or written agreements, and sets forth the entire agreement between Kiniksa and you in respect to your separation from Kiniksa including, without limitation, the Employment Agreement.|
|(ii)||No variations or modifications of this Agreement shall be deemed valid unless reduced to writing and signed by Kiniksa and you.|
|(iii)||The provisions of this Agreement are severable, and if for any reason any part hereof shall be found to be unenforceable, the remaining provisions shall be enforced in full.|
|(iv)||The validity, interpretation and performance of this Agreement, and any and all other matters relating to your employment and separation of employment from Kiniksa, shall be governed by and construed in accordance with the internal laws of the Commonwealth of Massachusetts, without giving effect to conflict of law principles. Both parties agree that any action, demand, claim or counterclaim relating to (a) your employment and separation of your employment, and (b) the terms and provisions of this Agreement or to its breach, shall be commenced in the Commonwealth of Massachusetts in a court of competent jurisdiction.|
|(v)||Both parties further agree that any such dispute shall be tried by a judge alone, and both parties hereby waive and forever renounce the right to a trial before a civil jury in any such dispute.|
It is Kiniksa’s desire and intent to make certain that you fully understand the provisions and effects of this Agreement. To that end, you have been encouraged and given an opportunity to consult with legal counsel. By executing this Agreement, you are acknowledging that (a) you have been afforded sufficient time to understand the provisions and effects of this Agreement and to consult with legal counsel; (b) your agreements and obligations under this Agreement are made voluntarily, knowingly and without duress; and (c) neither Kiniksa nor its agents or representatives have made any representations inconsistent with the provisions of this Agreement.
If the foregoing correctly sets forth our arrangement, please sign, date and return the enclosed copy of this Agreement to me within the time frame set forth above, but in any event not on or before the Separation Date.
Very truly yours,
KINIKSA PHARMACEUTICALS CORP.
/s/ Melissa Manno
Senior Vice President, Chief Human Resources Officer
Accepted and Agreed To:
/s/ Arian Pano
Dated: February 2, 2022
Employee Proprietary Information, Inventions, Non-Competition and Non-Solicitation Agreement with the Company
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KINIKSA PHARMACEUTICALS CORP.
EMPLOYEE PROPRIETARY INFORMATION, INVENTIONS ASSIGNMENT, NON COMPETITION AND NON-SOLICITATION AGREEMENT
In consideration and as a condition of my employment by Kiniksa Pharmaceuticals Corp. (together with any of its successors or assigns collectively, the "Company"), a Delaware corporation and wholly-owned subsidiary of Kiniksa Pharmaceuticals, Ltd., a Bermuda exempted company (together with any of its successors or assigns collectively the "Parent"), my receipt of the compensation paid to me by the Company in the context of that employment, my access to of the Organization's confidential and proprietary business information and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, I, the undersigned, agree as follows. For purposes of all sections of this Employee Proprietary Information, Inventions Assignment, Non-Competition and Non-Solicitation Agreement (this "Agreement"), the term "Organization" shall include the Parent, the Company and all other subsidiaries of the Parent.
IN WITNESS WHEREOF, I have executed this Employee Proprietary Information, Inventions Assignment, Non-Competition and Non-Solicitation Agreement under seal as of November 11, 2019.
Employee (sign): /s/ Arian Pano
Employee (print): Arian Pano
Date employment first commenced: 11/11/19
AGREED AND ACKNOWLEDGED:
KINIKSA PHARMACEUTICALS CORP.
By: /s/ Thomas Beetham
Name: Thomas Beetham
Title: EVP and Chief Legal Officer
l, the undersigned, hereby certify that I do not have in my possession, nor have I failed to return, any documents or materials relating to the business of Kiniksa Pharmaceuticals Corp. or its affiliates (the “Company”), or copies thereof, including, without limitation, any item of Proprietary information listed in Section 3 of the Company's Employee Proprietary Information, Inventions Assignment, Non- Competition and Non-Solicitation Agreement (the "Agreement") to which I am a party, but not including copies of my own employment records.
I further certify that I have complied with all of the terms of the Agreement signed by me, including the reporting of any Inventions (as defined in the Agreement) covered by the Agreement.
I further agree that in compliance with the Agreement, I will preserve as confidential any information relating to the Company or any of its business partners, clients, consultants or licensees that has been disclosed to me in confidence du ring the course of my employment by the Company unless authorized in writing to disclose such information by an executive officer of the Company. I understand that, provided I comply with all other provisions of the Agreement, nothing herein or in the Agreement limits my ability to communicate with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, and Agency Inspector General or any other federal, state or local governmental agency or commission (each a “Government Agency”), including to report possible violations of federal law or regulation or making other disclosures that are protected under the whistleblower provisions of federal law or regulation, or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice, to any Government Agency.
(Printed or Typed Name of Employee)
List here prior contracts to assign Inventions that are between any other person or entity and you, and in existence as of the effective date of this Agreement.
List here prior contracts that are now in existence that require you to refrain from competing directly or indirectly, wit the business of any previous employer or any other party or to refrain from soliciting employees, customers or suppliers of such previous employer or other party.
Galapagos Employment Agreement
List here previous Inventions which you desire to have specifically excluded from the operation of this Agreement. Please include any relevant patent and patent application numbers, if available. Continue on reverse side if necessary.
CALIFORNIA LABOR CODE
California Labor Code § 2870. Application of provision providing that employee shall assign or offer
to assign rights in invention to employer
Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:
Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or
(2) Result from any work performed by the employee for the employer.
To the extent â provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.