Letter Agreement re: Your Resignation of Employment and Board Positions, dated January 1, 2018, by and between the registrant and Paul Hastings

Exhibit 10.7(D)

ONCOMED LETTERHEAD

January 1, 2018

Paul J. Hastings

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          Re:     Your Resignation of Employment and Board Positions

Dear Paul:

This letter agreement (this “Agreement”) confirms our recent discussions about your employment as Chairman, President and CEO of OncoMed Pharmaceuticals, Inc. (the “Company”).

As you know, you and the Company entered into an offer letter dated November 12, 2005, as amended July 2, 2013 (together, the “Employment Agreement”), a Change in Control and Severance Agreement dated October 12, 2015 (the “Severance Agreement”), and numerous stock option agreements and restricted stock unit agreements in conjunction with equity awards made to you (collectively, the “Equity Agreements”).  As stated in the Employment Agreement and Severance Agreement, either you or the Company may elect to end your employment relationship at any time and for any reason.  However, upon any Covered Termination (as defined in the Severance Agreement) outside the Change in Control (as defined in the Severance Agreement) context, you are entitled to compensation and benefits described in Section 3 of the Severance Agreement subject to you executing and not revoking this Agreement.

You have notified the Company’s Board of Directors that you wish to resign from your employment and related positions.  The Company accepts your resignation, to be effective January 1, 2018 (the “Separation Date”). This letter serves as the Notice of Termination pursuant to the Severance Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, you and the Company agree as follows:

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(a)As soon as administratively practicable on or after the Separation Date, the Company will pay Executive all accrued but unpaid base salary and all accrued and unused vacation or paid time off earned through the Separation Date, subject to standard payroll deductions and tax withholdings.  

(b)The Company will reimburse Executive for all outstanding expenses incurred by Executive prior to the Separation Date that are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documenting such expenses.  

(c)Executive shall receive a 2017 calendar year bonus at 25% of corporate score, has been approved by the Board of Directors at 80%, or 20% of bonus target, reduced by tax withholdings.  The 2017 bonus will be paid to Executive at the same time that 2017 calendar year bonuses are paid to other Company employees, but in no event later than March 15, 2018.  

Executive is entitled to the payments of this Section 3 regardless whether Executive executes this Agreement.

(a)Severance.  The Company shall continue to pay to Executive his base salary as in effect as of the Separation Date for a period of twelve (12) months from the Separation Date (the “Salary Continuation Payments”).  All Salary Continuation Payments shall be made in accordance with the Company’s regular payroll practices, and reduced by tax withholdings, with the first such payment to be made on the first normal payroll date following the Effective Date and to include any installments that would have been made had this Agreement been effective as of the Separation Date.  

(b)Healthcare Continuation Coverage.   If Executive timely elects to receive continued healthcare coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly pay the COBRA premiums for Executive and Executive’s covered dependents through the earlier of (i) twelve (12) months, or (ii) the date on which Executive and/or Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s); provided, that after the Company ceases to directly pay premiums pursuant to this Section 4(b), Executive may, if eligible, elect to continue healthcare coverage at Executive’s expense in accordance with the provisions of COBRA. Notwithstanding the foregoing, if the Company is unable to continue to cover Executive under its group health plans without penalty under applicable law (including without limitation, Section 2716 of the Public Health Service Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments.  Executive acknowledges that Executive shall be solely responsible for all matters relating to Executive’s continuation of coverage pursuant to COBRA, including, without limitation, Executive’s election of such coverage.  

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(c)Payment of Target Bonus for 2018.  The Company shall pay to Executive an amount equal to Executive’s target annual bonus for 2018, reduced by tax withholdings, such payment to be made on the first normal payroll date after the Effective Date.

(d)Acceleration of Vesting and Extension of Exercise Period.  The vesting and, if applicable, exercisability of each outstanding stock option and restricted stock unit award held by Executive as of the Separation Date shall be accelerated in respect of that number of shares of Company common stock that would have vested had Executive’s employment with the Company continued through December 31, 2018.  In addition, each vested stock option held by Executive (after giving effect to such vesting acceleration) shall remain exercisable until the earlier of the original expiration date of such stock option or December 31, 2018.  Executive acknowledges that each incentive stock option, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), held by Executive that has an exercise price per share that is lower than the closing trading price of a share of Company common stock on the date Executive executes this Agreement shall thereupon automatically convert to a nonqualified stock option and each other incentive stock option held by Executive shall automatically convert to a nonqualified stock option on the three-month anniversary of the Separation Date.  Each Equity Agreement shall be deemed amended to the extent necessary to reflect the terms of this Section 4(d).

(e)Sole Separation Benefit.  Executive agrees that the payments and other benefits provided by this Section 4 exceed amounts to which Executive is entitled by contract, or under the Company’s normal policies and procedures.  Executive acknowledges and agrees that the payments referenced in this Section 4 constitute adequate and valuable consideration, in and of themselves, for the promises contained in this Agreement.

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(a)Released Claims.  On behalf of Executive and Executive’s heirs, assigns, executors, administrators, trusts, spouse and estate, Executive hereby releases and forever discharges the “Releasees” hereunder, consisting of the Company and each of its owners, affiliates, subsidiaries, predecessors, successors, assigns, agents, directors, officers, partners, employees, and insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which Executive now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof, including, without limiting the generality of the foregoing, any Claims arising out of, based upon, or relating to Executive’s hire, employment, remuneration or termination by the Releasees, or any of them, Claims arising under federal, state, or local laws relating to employment, Claims of any kind that may be brought in any court or administrative agency, including any Claims arising under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §  2000, et seq.; Americans with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq.; Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621, et seq.; Civil Rights Act of 1866, and Civil Rights Act of 1991; 42 U.S.C. § 1981, et seq.; Equal Pay Act, as amended, 29 U.S.C. § 206(d); regulations of the Office of Federal Contract Compliance, 41 C.F.R. Section 60, et seq.; The Family and Medical Leave Act, as amended, 29 U.S.C. § 2601 et seq.; the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; the Worker Adjustment and Retraining Notification Act, as amended, 29 U.S.C.  § 2101 et seq.; the California Fair Employment and Housing Act, as amended, Cal. Lab. Code § 12940 et seq.; the California Equal Pay Law, as amended, Cal. Lab. Code §§ 1197.5(a),199.5; the Moore-Brown-Roberti Family Rights Act of 1991, as amended, Cal. Gov’t Code §§12945.2, 19702.3; California Labor Code §§ 1101, 1102; the California WARN Act, California Labor Code §§ 1400 et. seq; California Labor Code §§ 1102.5(a),(b); Claims for wages under the California Labor Code and any other federal, state or local laws of similar effect; the employment and civil rights laws of California; Claims for breach of implied or express contract; Claims arising in tort, including, without limitation, Claims of wrongful dismissal or discharge, discrimination, harassment, retaliation, fraud, misrepresentation, defamation, libel, slander, defamation, infliction of emotional distress, violation of public policy, and/or breach of the implied covenant of good faith and fair dealing; and Claims for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney’s fees.  

(b)Unreleased Claims.  Notwithstanding the generality of the foregoing, Executive does not release (i) his rights under this Agreement; (ii) claims for unemployment compensation, insurer-paid disability, or any state disability insurance benefits pursuant to the terms of applicable state law; (iii) Claims for workers’ compensation benefits under the terms of any workers’ compensation policy; (iv) Claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of COBRA; (v) Claims for indemnification under any written indemnification agreement between Executive and the Company, the Company’s Bylaws, or applicable law; (vi) Executive’s right to bring to the attention of the Equal Employment Opportunity Commission or California Department of Fair Employment and Housing Claims of discrimination, harassment, retaliation or failure to accommodate; provided, however, that

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Executive does release Executive’s right to secure any damages for any such alleged Claims; and (vii) Executive’s right to communicate or cooperate with any government agency.

(c)Acknowledgement.  In accordance with the Older Workers Benefit Protection Act of 1990, Executive has been advised of the following:

(i)Executive should consult with an attorney before signing this Release;

(ii)Executive has been given at least twenty-one (21) days to consider this Agreement;

(iii)Executive has seven (7) days after signing this Agreement to revoke it.  If Executive wishes to revoke this Agreement, Executive must deliver notice of Executive’s revocation in writing, no later than 5:00 p.m. on the 7th day following Executive’s execution of this Agreement to Alan Mendelson, email:   ***@***. Executive understands that if he revokes this Agreement, it will be null and void in its entirety, and he will not be entitled to any payments or benefits provided in Section 4 of this Agreement.

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

BEING AWARE OF SAID CODE SECTION, TO THE EXTENT OF THEIR RESPECTIVE RELEASES, EXECUTIVE AND THE COMPANY HEREBY EXPRESSLY WAIVE ANY RIGHTS HE OR IT MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

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(a)Non-Disparagement.  Executive agrees that he shall not disparage, criticize or defame the Company, its affiliates and their respective affiliates, directors, officers, agents, partners, stockholders, employees, products, services, products or businesses, either publicly or privately.  The Company agrees that it shall not, and shall instruct its directors and officers to not, disparage, criticize or defame the Executive.  Nothing in this Section 10(a) shall have application to any evidence or testimony required by any court, arbitrator or government agency.

(b)Transition.  Each of the Company and Executive shall use their respective reasonable efforts to cooperate with each other in good faith to facilitate a smooth transition of Executive’s duties to other executive(s) of the Company.  Without limiting the foregoing, Executive shall be available, on a non-exclusive basis, to respond to, and shall respond with reasonable promptness and completeness to, e-mail and telephone inquiries from the Company regarding transitional matters provided that such inquiries would not interfere in any significant manner with other business pursuits (including other employment) by Executive.  For the avoidance of doubt, nothing in this Section 10(b) shall entitle Executive to the additional vesting of any stock options or otherwise prevent Executive’s unvested and unaccelerated stock options from terminating effective as of the Separation Date.

(c)Transfer of Company Property.  On or promptly following the Separation Date, Executive shall turn over to the Company all files, memoranda, records, and other documents, and any other physical or personal property which are the property of the Company (including but not limited to office keys or key cards, Company-issued electronic equipment, and Company credit cards) and which he had in his possession, custody or control at the time he signed this Agreement.

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[Signature page follows]

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Thank you for your many years of service and contributions to OncoMed.  We wish you all the best in the future.

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