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|Item 5.02|| |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 11, 2022, Fulcrum Therapeutics, Inc., or Fulcrum, announced that its board of directors promoted Mel Hayes, its current chief commercial officer, to the position of chief operating officer effective August 9, 2022, such date the Effective Date. In connection with his promotion, Mr. Hayes will serve as Fulcrum’s principal operating officer.
Mr. Hayes, 52, has served as Fulcrum’s chief operating officer since the Effective Date, and served as chief commercial officer from September 2021 to the Effective Date. Prior to joining Fulcrum, Mr. Hayes provided consulting services to the biotech and specialty pharmaceutical industries as principal of a consulting firm from March 2020 through August 2021. Prior to operating his own consulting firm, Mr. Hayes served as global head commercial, vice president, rare blood disorders, at Sanofi-Genzyme from January 2019 to February 2020, where he led the commercial organization for hemophilia and complement assets. From October 2017 to January 2019, Mr. Hayes served as U.S. vice president, hemophilia and global head, hematology rare blood disorders at Bioverativ (acquired by Sanofi-Genzyme). From June 2016 to October 2016, he was global vice president, head of global marketing and launch excellence at Shire, and before that global vice president hemophilia at Baxalta (acquired by Shire) from July 2015 to June 2016. Mr. Hayes also spent 10 years at Bayer and nine years at Bristol Myers Squibb in progressive leadership roles where he was responsible for launching products in diabetes, cardiovascular disease, neurology, rheumatology, multiple sclerosis and Parkinson’s disease. Mr. Hayes holds dual bachelor’s degrees in business and communications from Southern Methodist University and an MBA from Columbia University.
In connection with Mr. Hayes’ initial employment, Mr. Hayes entered into an employment agreement with Fulcrum as of September 7, 2021, which agreement provides for an annual base salary and an annual discretionary performance bonus with a target of 40% of his then annual base salary based upon the board of directors’ assessment of his performance and Fulcrum’s attainment of goals as set by the board of directors in its sole discretion. In connection with his promotion, and as contemplated by his employment agreement which provides the board of directors discretion to adjust his salary, the board of directors increased Mr. Hayes’ annual base salary to $453,000 with retroactive effect to July 1, 2022.
Mr. Hayes is also eligible to receive equity awards as determined from time to time by the board of directors, and in connection with his promotion, Mr. Hayes was granted an option to purchase 137,000 shares of Fulcrum’s common stock pursuant to the Fulcrum 2019 Stock Incentive Plan, or the 2019 Plan on the Effective Date. The stock option has an exercise price per share equal to $7.40, which “fair market value” (as defined in the 2019 Plan) on the grant date, and will vest over four years as follows: 25% of the shares underlying the option will vest on the first anniversary of the Effective Date, with additional 6.25% of the shares vesting in equal quarterly installments over the twelve successive quarters following the first anniversary of the Effective Date.
In the event of the termination of Mr. Hayes’ employment by Fulcrum without cause, or by him for good reason, prior to or more than 12 months following a “change in control” (as such terms are is defined in his employment agreement), Mr. Hayes would be entitled to his base salary that has accrued and to which he is entitled as of the termination date and other accrued benefits, collectively, the accrued obligations. In addition, he is entitled to (1) continued payment of his then-current base salary, in accordance with Fulcrum’s regular payroll procedures, for a period of nine months and (2) provided he is eligible for and timely elects to continue receiving group medical insurance under COBRA and the payments would not result in the violation of nondiscrimination requirements of applicable law, payment by Fulcrum of the portion of health coverage premiums it pays for similarly situated, active employees who receive the same type of coverage, for a period of up to nine months following his date of termination.
In the event of the termination of Mr. Hayes’ employment by Fulcrum without cause, or by him for good reason, within 12 months following a “change in control” (as such terms are is defined in his employment agreement), Mr. Hayes is entitled to the accrued obligations. In addition, he is entitled to (1) continued payment of his then-current base salary (or, if higher, his base salary in effect immediately prior to the change in control), in accordance with Fulcrum’s regular payroll procedures, for a period of 12 months, (2) provided he is eligible for and timely elects to continue receiving group
medical insurance under COBRA and the payments would not result in the violation of nondiscrimination requirements of applicable law, payment by us of the portion of health coverage premiums Fulcrum pays for similarly-situated, active employees who receive the same type of coverage, for a period of up to 12 months following his date of termination, (3) a lump sum payment equal to 100% of his target bonus for the year in which his employment is terminated or, if higher, his target bonus immediately prior to the change in control and (4) full vesting acceleration of his then-unvested equity awards that vest solely based on the passage of time, such that his time-based equity awards become fully exercisable and non-forfeitable as of the termination date.
In addition, pursuant to Fulcrum’s standard form of indemnification agreement Mr. Hayes entered into in connection with his promotion to chief operating officer, the form of which was filed with the Securities and Exchange Commission as Exhibit 10.15 to Fulcrum’s registration statement on Form S-1 (File No. 333-232260) on June 21, 2019, Fulcrum may be required, among other things, to indemnify Mr. Hayes for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts actually and reasonably incurred by him in any action or proceeding arising out of his service as an officer or director of Fulcrum.
The foregoing description of Mr. Hayes’ employment agreement is not complete and is qualified in its entirety by reference to the full text of such agreement a copy of which is filed herewith as Exhibit 10.1, and is incorporated by reference herein.
|Item 9.01|| |
Financial Statements and Exhibits
|10.1||Employment Agreement by and between Mel Hayes and Fulcrum Therapeutics, Inc., dated as of September 7, 2021|
|104||Cover Page Interactive Data File (embedded within the Inline XBRL Document).|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|FULCRUM THERAPEUTICS, INC.|
|Date: August 11, 2022||By:|
|Title:||Chief Legal Officer|
THIS EMPLOYMENT AGREEMENT (the Agreement), is made as of September 7, 2021 (Executives first day of employment, after all eligibility criteria have been met) by and between Fulcrum Therapeutics, Inc. (the Company), and Mel Hayes (the Executive) (together, the Parties).
WHEREAS, the Company desires to employ the Executive as its Chief Commercial Officer; and
WHEREAS, the Executive has agreed to accept such employment on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the Parties herein contained, the Parties hereto agree as follows:
1. Agreement. This Agreement shall be effective as of the Effective Date (Date of Hire). Following the Effective Date, the Executive shall continue to be an employee of the Company until such employment relationship is terminated in accordance with Section 7 hereof (the Term of Employment).
2. Position. During the Term of Employment, the Executive shall serve as the Chief Commercial Officer of the Company, working out of the Companys office in Cambridge, Massachusetts, and travelling as reasonably required by the Executives job duties.
3. Scope of Employment. During the Term of Employment, the Executive shall be responsible for the performance of those duties consistent with the Executives position as Chief Commercial Officer. The Executive shall report to the President, Chief Executive Officer and shall perform and discharge faithfully, diligently, and to the best of the Executives ability, the Executives duties and responsibilities hereunder. The Executive shall devote substantially all of the Executives business time, loyalty, attention and efforts to the business and affairs of the Company and its affiliates. Membership on boards of directors of any other companies will be permitted only with the express approval of the Companys board of directors (the Board); provided, however, that the Executive may engage in community and charitable activities or participate in industry associations and serve on the boards of up to two (2) community, charitable or industry organizations, without the approval of the Board, provided such activities do not create a conflict of interest or otherwise interfere with the Executives performance of the Executives duties hereunder. The Executive agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein that may be adopted from time to time by the Company.
4. Compensation. As full compensation for all services rendered by the Executive to the Company and any affiliate thereof, during the Term of Employment, the Company will provide to the Executive the following:
(a) Base Salary. Effective as of the Effective Date, the Executive shall receive a base salary at the annualized rate of $415,000 (the Base Salary). The Executives Base Salary shall be paid in equal installments in accordance with the Companys regularly established payroll procedures. The Executives Base Salary will be reviewed on an annual or more frequent basis by the Board and is subject to change in the discretion of the Board.
(b) Annual Discretionary Bonus. Effective as of the Effective Date, the Executive will be eligible to earn an annual performance bonus of up to 40% of the Executives Base Salary (the Target Bonus), based upon the Boards assessment of the Executives performance and the Companys attainment of targeted goals as set by the Board in its sole discretion. To the extent the Executives Base Salary and/or target bonus percentage of Base Salary is changed during the year to which the performance bonus relates, the Target Bonus shall be calculated based on base salary actually paid during such year (and not solely on the Executives Base Salary at the end of such year) and shall apply the initial target bonus percentage of Base Salary and the revised target bonus percentage of Base Salary based on the portion of the year during which each was in effect. The Board may determine to provide the bonus in the form of cash, equity award(s), or a combination of cash and equity. Following the close of each calendar year, the Board will determine whether the Executive has earned a performance bonus, and the amount of any performance bonus, based on the set criteria. No amount of the annual bonus is guaranteed, and the Executive must be an employee in good standing on the date of payment in order to be eligible for any annual bonus, except as specifically set forth below. The annual performance bonus, if earned, will be paid by no later than March 15 of the calendar year after the year to which it relates. The Executives bonus eligibility will be reviewed on an annual or more frequent basis by the Board and is subject to change in the discretion of the Board.
(c) Equity Award. The Executive will be eligible to receive equity awards, if any, at such times and on such terms and conditions as the Board shall, in its sole discretion, determine. As part of your initial offer and subject to the approval of the Companys Board of Directors, and as a material inducement to you entering into employment with the Company, you will receive a one- time grant of options to purchase 140,000 shares of the Companys Common Stock (Option). The exercise price per share of the Option shall be equal to the closing price per share of the Common Stock on the Nasdaq Select Market on the effective date of the Option. The Option is subject to adjustment for stock splits, combinations or other recapitalizations. The Option shall be issued outside the Companys 2019 Stock Incentive Plan, as an inducement grant within the meaning of Nasdaq Listing Rule 5635(c)(4), will be a non-qualified stock option for United States tax purposes and will be subject to all of the terms set forth in a written agreement covering the Option. Subject to the terms of the stock option agreement evidencing the Option and your continued employment, the Option shall vest over four years at the rate of 25% on the first anniversary of the Start Date and an additional 6.25% per quarter for the next twelve successive quarters of employment when, after four full years of employment, the Option will be fully vested.
(d) Paid Time Off. The Executive shall be entitled to paid time off, vacation time plus sick time, consistent with the Companys policies.
(e) Benefits. Subject to eligibility requirements and the Companys polices, you shall have the right, on the same basis as other similarly situated employees of the Company, to participate in, and to receive benefits under, any medical, vision and dental insurance policy maintained by the Company and the Company shall pay a portion of the cost of the premiums for such medical, vision and dental insurance that is consistent with the Companys then current employee benefit policy if you elect to participate in such plans.
(f) Withholdings. All compensation payable to the Executive shall be subject to applicable taxes and withholdings.
5. Expenses. The Executive will be reimbursed for his actual, necessary and reasonable business expense pursuant to Company policy, subject to the provisions of Section 3 of Exhibit A attached hereto.
6. Restrictive Covenants Agreement. The Executive hereby acknowledges that in connection with entering into this Agreement, the Executive shall be required to enter into an Employee Confidentiality and Assignment Agreement with the Company.
7. Employment Termination. This Agreement and the employment of the Executive shall terminate upon the occurrence of any of the following:
(a) Upon the death or Disability of the Executive. As used in this Agreement, the term Disability shall mean a physical or mental illness or disability that prevents the Executive from performing the duties of the Executives position for a period of more than any three consecutive months or for periods aggregating more than twenty-six weeks. The Company shall determine in good faith and in its sole discretion whether the Executive is unable to perform the services provided for herein.
(b) At the election of the Company, with or without Cause (as defined below), immediately upon written notice by the Company to the Executive. As used in this Agreement, Cause shall mean:
Executives dishonest statements or acts with respect to the Company or any affiliate of the Company, or any current or prospective customers, suppliers, vendors or other third parties with which such entity does business that results in or is reasonably anticipated to result in material harm to the Company;
Executives conviction of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud;
Executives gross negligence, willful misconduct or insubordination with respect to the Company that results in or is reasonably anticipated to result in material harm to the Company, provided, however, that the Executive shall have a period of not less than ten(10) days to cure any curable act or omission constituting Cause described in this Section 7(b)(iii) following the Companys delivery to the Executive of written notice of such act or omission; or
Executives material violation of any provision of any agreement(s) between the Executive and the Company relating to non-solicitation, nondisclosure and/or assignment of inventions.
(c) At the election of the Executive, with or without Good Reason (as defined below), immediately upon written notice by the Executive to the Company (subject, if it is with Good Reason, to the timing provisions set forth in the definition of Good Reason). As used in this Agreement, Good Reason shall mean (without the Executives consent):
a material diminution of the Executives base compensation, other than in connection with, and substantially proportionate to, reductions by the Company of the base compensation of all or substantially all senior executives of the Company;
a material diminution in the Executives duties, authority or responsibilities;
the Companys requiring Executive to relocate Executives primary office more than fifty (50) miles from the Executives then-current primary office; or
any material breach of this Agreement, or any other agreement between the Company and the Executive, by the Company not otherwise covered by this paragraph;
provided, however, that in each case, the Company shall have a period of not less than thirty (30) days to cure any act constituting Good Reason following Executives delivery to the Company of written notice within sixty (60) days of the action or omission constituting Good Reason and that the Executive actually terminates employment within thirty (30) days following the expiration of the Companys cure period.
8. Effect of Termination.
(a) All Terminations Other Than by the Company Without Cause or by the Executive With Good Reason. If the Executives employment is terminated under any circumstances other than a Qualifying Termination (as defined below) (including a voluntary termination by the Executive without Good Reason pursuant to Section 7(c), a termination by the Company for Cause pursuant to Section 7(b) or due to the Executives death or Disability pursuant to Section 7(a)), the Companys obligations under this Agreement shall immediately cease and the Executive shall only be entitled to receive (i) the Base Salary that has accrued and to which the Executive is entitled as of the effective date of such termination and to the extent consistent with general Company policy, to be paid in accordance with the Companys established payroll procedure and applicable law but no later than the next regularly scheduled pay period, (ii) unreimbursed business expenses for which expenses the Executive has timely submitted appropriate documentation in accordance with Section 5 hereof, and (iii) any amounts or benefits to which the Executive is then entitled under the terms of the benefit plans then-sponsored by the Company in accordance with their terms (and not accelerated to the extent acceleration does not satisfy Section 409A of the Internal Revenue Code of 1986, as amended, (the Code)) (the payments described in this sentence, the Accrued Obligations).
(b) Termination by the Company Without Cause or by the Executive With Good Reason Prior to or More Than Twelve Months Following a Change in Control. If the Executives employment is terminated by the Company without Cause pursuant to Section 7(b) or by the Executive with Good Reason pursuant to Section 7(c) (in either case, a Qualifying Termination) prior to or more than twelve (12) months following a Change in Control (as
defined below), the Executive shall be entitled to the Accrued Obligations. In addition, and subject to Exhibit A and the conditions of Section 8(d), the Company shall: (i) continue to pay to the Executive, in accordance with the Companys regularly established payroll procedures, the Executives Base Salary for a period of nine (9) months and (ii) provided the Executive is eligible for and timely elects to continue receiving group medical insurance pursuant to the COBRA law, continue to pay (but in no event longer than nine (9) months following the Executives termination date) the share of the premium for health coverage that is paid by the Company for active and similarly-situated employees who receive the same type of coverage, unless the Companys provision of such COBRA payments will violate the nondiscrimination requirements of applicable law, in which case this benefit will not apply (collectively, the Severance Benefits).
(c) Termination by the Company Without Cause or by the Executive With Good Reason Within Twelve Months Following a Change in Control. If a Qualifying Termination occurs within twelve (12) months following a Change in Control, then the Executive shall be entitled to the Accrued Obligations. In addition, and subject to Exhibit A and the conditions of Section 8(d), the Company shall: (i) continue to pay to the Executive, in accordance with the Companys regularly established payroll procedures, the Executives Base Salary (or, if higher, the Executives Base Salary in effect immediately prior to the Change in Control) for a period of twelve (12) months; (ii) pay to the Executive, in a single lump sum on the Payment Date (as defined below) an amount equal to 100% of the Executives Target Bonus for the year in which termination occurs or, if higher, the Executives Target Bonus immediately prior to the Change in Control, (iii) provided the Executive is eligible for and timely elects to continue receiving group medical insurance pursuant to the COBRA law, continue to pay (but in no event longer than twelve(12) months following the Executives termination date) the share of the premium for health coverage that is paid by the Company for active and similarly-situated employees who receive the same type of coverage, unless the Companys provision of such COBRA payments will violate the nondiscrimination requirements of applicable law, in which case this benefit will not apply, and (iv) provide that the vesting of the Executives then-unvested equity awards that vest based solely on the passage of time shall be accelerated, such that all then-unvested equity awards that vest based solely on the passage of time vest and become fully exercisable or non- forfeitable as of the termination date (collectively, the Change in Control Severance Benefits).
(d) Release. As a condition of the Executives receipt of the Severance Benefits or the Change in Control Severance Benefits, as applicable, the Executive must execute and deliver to the Company a severance and release of claims agreement in a form to be provided by the Company (the Severance Agreement), which Severance Agreement must become irrevocable within 60 days following the date of the Executives termination of employment (or such shorter period as may be directed by the Company). The Severance Benefits or the Change in Control Severance Benefits, as applicable, will be paid or commence to be paid in the first regular payroll beginning after the Severance Agreement becomes effective, provided that if the foregoing 60 day period would end in a calendar year subsequent to the year in which the Executives employment ends, the Severance Benefits or Change in Control Severance Benefits, as applicable, will not be paid or begin to be paid before the first payroll of the subsequent calendar year (the date the Severance Benefits or Change in Control Severance Benefits, as applicable, commence pursuant to this sentence, the Payment Date). The Executive must continue to comply with the Employee Confidentiality and Assignment Agreement and any similar agreement with the Company in order to be eligible to continue receiving the Severance Benefits or Change in Control Severance Benefits, as applicable.
(e) Change in Control Definition. For purposes of this Agreement, Change in Control shall mean the occurrence of any of the following events, provided that such event or occurrence constitutes a change in the ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, as defined in Treasury Regulation §§ 1.409A-3(i)(5)(v), (vi) and (vii): (i) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (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) fifty percent (50%) or more of either (x) the then-outstanding shares of common stock of the Company (the Outstanding Company Common Stock) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company or (2) any acquisition by any entity pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (iii) of this definition; or (ii) a change in the composition of the Board that results in the Continuing Directors (as defined below) no longer constituting a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term Continuing Director means at any date a member of the Board (x) who was a member of the Board on the Effective Date or (y) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (y) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or (iii) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company, or a sale or other disposition of all or substantially all of the assets of the Company (a Business Combination), unless, immediately following such Business Combination, each of the following two (2) conditions is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Companys assets either directly or through one (1) or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the Acquiring Corporation) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, fifty percent (50%) or
more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or (iv) the liquidation or dissolution of the Company.
9. Absence of Restrictions. The Executive represents and warrants that the Executive is not bound by any employment contracts, restrictive covenants or other restrictions that prevent the Executive from entering into employment with, or carrying out the Executives responsibilities for, the Company, or which are in any way inconsistent with any of the terms of this Agreement.
10. Notice. Any notice delivered under this Agreement shall be deemed duly delivered three (3) business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, one (1) business day after it is sent for next-business day delivery via a reputable nationwide overnight courier service, or immediately upon hand delivery, in each case to the address of the recipient set forth below.
At the address set forth in the Executives personnel file
Fulcrum Therapeutics, Inc.
26 Landsdowne Street, 5th Floor
Cambridge, MA 02139
Either Party may change the address to which notices are to be delivered by giving notice of such change to the other Party in the manner set forth in this Section 10.
11. Applicable Law; Jury Trial Waiver. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts (without reference to the conflict of laws provisions thereof). Any action, suit or other legal proceeding arising under or relating to any provision of this Agreement shall be commenced only in a court of the Commonwealth of Massachusetts (or, if appropriate, a federal court located within the Commonwealth of Massachusetts), and the Company and the Executive each consents to the jurisdiction of such a court. The Company and the Executive each hereby irrevocably waives any right to a trial by jury in any action, suit or other legal proceeding arising under or relating to any provision of this Agreement.
12. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of both Parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business; provided, however, that the obligations of the Executive are personal and shall not be assigned by the Executive.
13. At-Will Employment. During the Term of Employment, the Executive will continue to be an at-will employee of the Company, which means that, notwithstanding any other provision set forth herein, the employment relationship can be terminated by either Party for any reason, at any time, with or without prior notice and with or without Cause.
14. Acknowledgment. The Executive states and represents that the Executive has had an opportunity to fully discuss and review the terms of this Agreement with an attorney. The Executive further states and represents that the Executive has carefully read this Agreement, understands the contents herein, freely and voluntarily assents to all of the terms and conditions hereof, and signs the Executives name of the Executives own free act.
15. No Oral Modification, Waiver, Cancellation or Discharge. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Executive. No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar to or waiver of any right on any other occasion.
16. Captions and Pronouns. The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.
17. Interpretation. The Parties agree that this Agreement will be construed without regard to any presumption or rule requiring construction or interpretation against the drafting Party. References in this Agreement to include or including should be read as though they said without limitation or equivalent forms. References in this Agreement to the Board shall include any authorized committee thereof.
18. Severability. Each provision of this Agreement must be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Moreover, if a court of competent jurisdiction determines any of the provisions contained in this Agreement to be unenforceable because the provision is excessively broad in scope, whether as to duration, activity, geographic application, subject or otherwise, it will be construed, by limiting or reducing it to the extent legally permitted, so as to be enforceable to the extent compatible with then applicable law to achieve the intent of the Parties.
19. Entire Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement, including, without limitation, the Existing Agreement.
[Signatures on Page Following]
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year set forth above.
|FULCRUM THERAPEUTICS, INC.|
|By:||/s/ Kim Hazen|
|Title:||SVP, Human Resources|
|/s/ Mel Hayes|
Payments Subject to Section 409A
1. Subject to this Exhibit A, any severance payments that may be due under the Agreement shall begin only upon the date of the Executives separation from service (determined as set forth below) which occurs on or after the termination of the Executives employment. The following rules shall apply with respect to distribution of the severance payments, if any, to be provided to the Executive under the Agreement, as applicable:
(a) It is intended that each installment of the severance payments provided under the Agreement shall be treated as a separate payment for purposes of Section 409A of the Internal Revenue Code (Section 409A). Neither the Company nor the Executive 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.
(b) If, as of the date of the Executives separation from service from the Company, the Executive is 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 the letter agreement.
(c) If, as of the date of the Executives separation from service from the Company, the Executive is a specified employee (within the meaning of Section 409A), then:
Each installment of the severance payments due under the Agreement that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when the Executives separation from service 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 in the Agreement; and
Each installment of the severance payments due under the Agreement that is not described in this Exhibit A, Section 1(c)(i) and that would, absent this subsection, be paid within the six-month period following the Executives separation from service from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, 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 the Executives separation from service 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 the Executives second taxable year following the taxable year in which the separation from service occurs.|
2. The determination of whether and when the Executives separation from service from the Company has occurred shall be made and in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely for purposes of Section 2 of this Exhibit A, 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.
3. All reimbursements and in-kind benefits provided under the 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 the Executives lifetime (or during a shorter period of time specified in the 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.
4. The Company makes no representation or warranty and shall have no liability to the Executive or to any other person if any of the provisions of the Agreement (including this Exhibit A) are determined to constitute deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section.
5. The Agreement is intended to comply with, or be exempt from, Section 409A and shall be interpreted accordingly.
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