|
Exhibit 10.1
EXECUTION COPY
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this the 14th day of
November, 2007, by and between TRIMERIS, INC. , a Delaware
corporation (the " Company "), and MARTIN
MATTINGLY (" Executive ").
W I T N E S S E T H:
WHEREAS, Executive and the Company deem it to be in their
respective best interests to enter into an agreement providing for
the Company's employment of Executive pursuant to the terms herein
stated;
NOW, THEREFORE, in consideration of the premises and the
mutual promises and agreements contained herein, it is hereby
agreed as follows:
1. Effective Date . Executive's employment under this
Agreement shall be effective as of the 14th day of November, 2007
(the " Effective Date ").
2. Position and Duties .
-
-
(a) Executive shall serve as Chief Executive Officer beginning
as of the Effective Date and shall continue in such position for
the " Term of Employment " (as herein defined below).
In this capacity, Executive shall devote his full business time,
efforts and attention to the performance of his duties, subject to
(b) below. Executive shall have the duties, responsibilities and
authority customarily incident to such offices and positions and to
such other services commensurate with such positions as may be
agreed to by Executive and the Board of Directors of the Company
(the " Board "). Executive shall in his capacity as
an employee and officer of the Company be responsible to and obey
the reasonable and lawful directives of the Board consistent with
this Agreement and shall report directly to the Board.
(b) Executive shall devote his full time and attention to such
duties, except for sick leave, reasonable vacations, and excused
leaves of absences as more particularly provided herein, provided
that so long as this does not interfere to any substantial extent
with Executive's duties, Executive may manage his personal
investments, be involved in charitable and professional activities
and, with the consent of the Board, serve on for profit boards and
advisory committees, provided that nothing in this Section 2(b)
shall override Executive's obligations in Section 7 hereof.
Notwithstanding the foregoing, the Company acknowledges that
Executive has certain minimal duties under a consulting arrangement
with a prior employer and agrees that he can comply with those
obligations through February 2008, so long as his compliance does
not conflict with his obligations under Section 7 hereof.
(c) Executive currently resides in the San Diego, California
area, and the Company agrees that he shall not be required to
relocate his residence from that area without his prior written
consent (which may be withheld in his sole discretion), or from any
other area to which he may voluntarily move with the Company's
prior written consent, during the Term of the Executive's
employment.
(d) On the date hereof, the Board will appoint Executive to the
Company's Board. The Company intends that he remain on the Board
during the Term.
3. Compensation .
-
-
(a) Base Salary . The Company shall pay to Executive
during the Term of Employment a rate of not less than Three Hundred
Eighty-Five Thousand dollars ($385,000) per year, payable at least
monthly in accordance with the Company's normal payroll practices,
and agrees that such salary shall be reviewed at least annually,
beginning with a review on or around the first anniversary of the
Effective Date. On the first annual anniversary of the date hereof
(and each subsequent annual anniversary thereafter during which
this Agreement is in effect), Executive's salary shall be increased
by an increment of the then generally accepted cost-of-living
percentage increase and any other discretionary annual increases as
determined by the Compensation Committee of the Board of Directors.
(Executive's annual salary, as set forth above or as it may be
increased from time to time as set forth herein, shall be referred
to hereinafter as " Base Salary .")
(b) Performance Bonus . Executive shall be eligible to
receive an annual discretionary bonus (" Bonus "),
targeted at 50% to 75% of Executive's Base Salary, the achievement
of such Bonus to be based on the satisfaction of objective criteria
and performance standards as established in advance and agreed to
by Executive and the Compensation Committee of the Board with
respect to each 12 month period under this Agreement.
Notwithstanding anything contained in this Agreement to the
contrary, if an Acquisition Event (as such term is defined below)
has not taken place prior to the 12 month anniversary of this
Agreement, Executive shall receive a Bonus in an amount equal to
not less than 50% of Executive's Base Salary. The Bonus, if any,
should be paid no later than 70 days following the conclusion of
such annual 12 month period. In addition, the Executive will
receive a bonus of $100,000 in connection with the occurrence of an
" Acquisition Event " as defined in the Trimeris,
Inc. 2007 Stock Incentive Plan (the " Stock Incentive
Plan ") (other than clause (c) of such definition, relating
to liquidation), assuming he remains employed as of the closing of
the Acquisition Event (the "Acquisition Event Bonus"
).
(c) Options . The Compensation Committee has agreed to
award the Executive an option for 350,000 shares of the common
stock of the Company (the " Option "), contingent on
Executive's executing this Agreement, with the date of grant as
soon as practicable after the Effective Date. The Option will be
subject to the terms and conditions of the Stock Incentive Plan and
the provisions of an option agreement reflecting the grant. The
Option will vest and become exercisable as to 25% of the covered
shares on the first anniversary of the Effective Date and as to an
additional 2.08333% on the same day in each subsequent month,
assuming continued employment. Vesting will fully accelerate
immediately prior to (and subject to) or in connection with the
closing of an Acquisition Event as defined in the Stock Incentive
Plan. If Executive's employment ends for any reason while any
portion of the Option is unvested (and does not vest under the
preceding sentence or as provided in Section 6), the unvested
portion will be immediately forfeited, unless the Compensation
Committee provides otherwise.
4. Benefits During the Term of Employment .
-
-
(a) Executive shall be eligible to participate in any life,
health and long-term disability insurance programs, pension and
retirement programs, stock option and other incentive compensation
programs, and other fringe benefit programs made available to
senior executive employees of the Company from time to time
(subject, in the case of life, health and long-term disability
insurance programs, to his qualifying under the terms of the
insurance coverage), at a level commensurate with his position, and
Executive shall be entitled to receive such other fringe benefits
as may be granted to him from time to time by the Company's Board
of Directors.
(b) Executive shall be allowed four weeks of vacation with pay
and leaves of absence with pay on the same basis as other senior
executive employees of the Company.
(c) The Company shall reimburse Executive for reasonable
business expenses incurred in performing Executive's duties and
promoting the business of the Company, including, but not limited
to, reasonable entertainment expenses, travel and lodging expenses,
following presentation of documentation in accordance with the
Company's business expense reimbursement policies. The foregoing
shall include all expenses related to travel by Executive between
California and North Carolina and any lodging expenses incurred by
Executive in North Carolina in connection with the performance of
his services under this Agreement. Executive shall use reasonable
judgment in purchasing upgradeable coach class tickets for all
cross-country flights and upgradeable business class tickets for
all international flights.
5. Term; Termination of Employment .
-
-
As used herein, the phrase " Term of Employment "
shall mean the period ending on November 14, 2008 (the "
Expiration Date "); provided, however, that as of (i)
the Expiration Date and (ii) if applicable, the end of any Renewal
Period (as defined below), the Term of Employment shall
automatically be extended for a one year period (each a "
Renewal Period ") unless either the Company or
Executive provides 90 days' prior written notice to the contrary.
If employment ends as a result of a notice of nonrenewal by either
party, the cessation shall be treated as a contract expiration for
purposes of Sections 5 and 6 and not as a termination without Cause
or resignation for Good Reason. Notwithstanding the foregoing, the
Term of Employment shall expire on the first to occur of the
following:
-
-
(a) Termination by the Company .
(i) Notwithstanding anything to the contrary in this Agreement,
whether express or implied, the Company may, at any time, terminate
Executive's employment for any or no reason by giving Executive
written notice of the effective date of termination. Nothing in
this section prevents the Company from removing Executive from
service during the period, if any, between notice and
effectiveness.
(ii) " Cause " shall mean:
-
-
-
-
(I) fraud, misappropriation, embezzlement, or other act of
material misconduct against the Company or any of its
affiliates;
(II) substantial and willful failure to perform specific and
lawful written directives of the Board;
(III) willful and knowing violation of any rules or regulations
of any governmental or regulatory body that is materially injurious
to the financial condition of the Company;
(IV) conviction of or plea of guilty or nolo contendere to a
felony; or
(V) a material breach of the terms and conditions of this
Agreement.
provided , however , that with regard to
subclauses (II) and (V) above, Executive may not be terminated for
Cause unless and until the Board has given him reasonable written
notice of their intended actions and specifically describing the
alleged events, activities or omissions giving rise thereto and
with respect to those events, activities or omissions for which a
cure is possible, 30 days to cure such breach; and provided
further, however, that for purposes of determining whether any such
Cause is present, no act or failure to act by Executive shall be
considered " willful " if done or omitted to be done
by Executive in good faith and in the reasonable belief that such
act or omission was in the best interest of the Company and/or
required by applicable law.
(iii) " Disability " shall mean that as a result
of Executive's incapacity due to physical or mental illness (as
determined in good faith by a physician acceptable to the Company
and Executive), Executive shall have been absent from the full-time
performance of his duties with the Company for 120 consecutive days
during any 12 month period or if a physician acceptable to the
Company and Executive advises the Company that it is likely that
Executive will be unable to return to the full-time performance of
his duties for 120 consecutive days during the succeeding
12 month period.
(b) Termination by Executive .
(i) Notwithstanding anything to the contrary in this Agreement,
whether express or implied, the Executive may terminate his
employment with the Company at any time with or without Good Reason
upon at least 30 days' advance written notice of his intention to
terminate his employment hereunder.
(ii) " Good Reason " shall mean the occurrence of
any of the following events, provided that the Executive gives
written notice of his intent to resign pursuant to such event
within 90 days following such occurrence and provided that such
event is not fully corrected within 30 days following written
notification by Executive to the Company that he intends to
terminate his employment hereunder for one of the reasons set forth
below:
(I) a material breach by the Company of any provision of the
Employment Agreement including, but not limited to, the assignment
to Executive of any duties inconsistent with Executive's position
as Chief Executive Officer in the Company or the Company's removal
of Executive as Chief Executive Officer;
(II) a material adverse alteration in the nature or status of
Executive's responsibilities; or
(III) a material reduction in Executive's then current Base
Salary.
Executive must actually terminate his employment within 30 days
following the Company's failure to cure the applicable event to be
treated as resigning for Good Reason.
6. Salary and Benefits Upon Termination .
-
-
(a) Accrued Amounts and Rights . In the event of
termination of employment, Executive shall receive all regular Base
Salary due up to the date of termination, any accrued but unused
vacation (if and to the extent consistent with the Company's
policies), any incurred but unreimbursed business expenses, and if
it has not previously been paid to Executive, Executive shall be
paid any Bonus due to Executive for any fiscal year ending prior to
the effective date of such termination, any rights under any
benefit or equity plan, program or practice and his rights to
indemnification and directors and officers liability insurance (the
" Accrued Amounts and Rights "). For purposes of this
Section 6, " Base Salary " shall mean Executive's
regular rate of pay at the time of termination and shall not
include bonus or incentive plans, overtime pay, relocation
allowances or the value of any other benefits for which Executive
may be eligible and shall be before any deferrals. Except as
provided in the next paragraph, any of Executive's unvested stock
options shall immediately expire and be forfeited on the date
Executive's employment ends, and all of his then vested stock
options shall be exercisable in accordance with the terms of the
applicable grant agreements. Nothing in this Agreement shall be
construed as giving Executive any additional rights relating to
options other than those described in this Agreement or the
respective grants. Executive's right to severance benefits, if any,
shall be governed by the terms of this Agreement.
Notwithstanding anything in this Agreement to the contrary, any
unvested portions of the stock options shall then vest, but such
incrementally vested portion of the options shall only be
exercisable if the Company, within 90 days following termination or
resignation, enters into an agreement that would result in an
Acquisition Event (or closes a previously agreed Acquisition Event,
with either the agreement or the closing being a " Triggering
Event "). The incrementally vested portion shall then only
be exercisable upon the closing of such Acquisition Event and shall
be extended as required to allow exercise in connection with such
an Acquisition Event but not beyond the earlier of the first
anniversary of the date of termination or resignation and the date
that the options would expire if employment had not ended (i.e.,
the term of the options). Absent such Triggering Event, the
incrementally vested portion of the options shall expire on the
90th day and any otherwise vested portion shall expire in
accordance with its terms. If a Triggering Event occurs within the
90 day period described above, Executive shall receive the
Acquisition Event Bonus attributable to such Triggering Event
following the close of the associated Acquisition Event.
By way of example only, if the Company enters into a term sheet
for a proposed Acquisition Event within 90 days following the
Company's termination of Executive's employment without Cause or
the resignation by Executive for Good Reason and the Acquisition
Event set forth in such term sheet closes prior to the earlier of
the first anniversary of the date of Executive's termination or
resignation or the date Executive's options would have otherwise
expired had Executive not been terminated or resigned, the
incrementally vested portion of Executive's option shall be
exercisable upon the closing of such Acquisition Event and
Executive shall receive the Acquisition Event Bonus attributable
such event.
Section 6 provides the sole and exclusive agreement concerning
severance benefits for Executive in the event of a termination and
replaces any and all prior plans, policies and practices relating
to severance pay that may exist now or may have existed in the
past.
(b) Further Effect of Termination on Board and Officer
Positions. If Executive's employment ends for any reason,
Executive agrees that he will cease immediately to hold any and all
officer or director positions he then has with the Company or any
subsidiary, absent a contrary direction from the Board (which may
include either a request to continue such service or a direction to
cease serving upon notice without regard to whether his employment
has ended), except to the extent that Executive reasonably and in
good faith determines that ceasing to serve as a director would
breach his fiduciary duties to the Company. Executive hereby
irrevocably appoints the Company to be his attorney to execute any
documents and do anything in his name to effect his ceasing to
serve as a director and officer of the Company and any subsidiary,
should he fail to resign following a request from the Company to do
so. A written notification signed by a director or duly authorized
officer of the Company that any instrument, document or act falls
within the authority conferred by this clause will be conclusive
evidence that it does so.
(c) Responsibility for Benefits . The Company will pay
the entire cost of all benefits provided under Sections 6(a) and
6(d)(i) of this Agreement, solely from its general assets. The
benefits made available by those provisions are "unfunded."
(d) Payment of Benefits
(i) In the event Executive's employment is terminated by the
Company other than for Cause (and excluding Disability and death)
or the Executive terminates employment for Good Reason, Executive
shall receive the following severance benefits upon his
satisfaction of the condition in subsection (e) hereof and subject
to subsection (g) hereof: an amount equal to 12 months of the
Executive's Base Salary, paid in installments in accordance with
the regular payroll timing, with payment to begin on the payroll
date next following or coinciding with the date 60 days after
employment ends.
(ii) In the event Executive's employment is terminated (whether
by the Company or by Executive) as described in subsection (d)(i)
above or by death or Disability or resignation other than for Good
Reason, the Executive and his spouse and dependents shall be
entitled to continue to be covered by the Company's group medical
plan as described in Section 4(a) hereof as provided under COBRA
continuation requirements (if applicable) and the Company will pay
the premiums for such coverage for the shorter of the first 12
months of such coverage or his period of COBRA eligibility.
(e) Conditions to Receipt of Benefits . Upon the
occurrence of an event described in Section 6(d) above, Executive
will be eligible for severance benefits hereunder only if Executive
executes and delivers to the Company a Settlement Agreement and
Release of the Company in a form prepared by the Company, which
will include a general release of known and unknown claims, a
return of Company Property, nondisparagement and a requirement to
cooperate regarding any future litigation.
(f) Termination Events Not Covered . Except as
specifically set forth in this Agreement, the Company shall not pay
Executive severance benefits under this Agreement if:
(i) Executive dies during the term of his employment;
|
