Exhibit 10.1
EXECUTION COPY
SETTLEMENT AGREEMENT AND
RELEASE
THIS SETTLEMENT AGREEMENT AND
RELEASE (“Settlement Agreement”) sets out
the complete agreement and understanding between TRIMERIS,
INC. (the “Company”) and STEVEN SKOLSKY (the
“Executive” or “Mr. Skolsky”)
regarding the termination of Executive’s employment with the
Company.
WHEREAS, Mr. Skolsky has been
employed by the Company since September 8, 2004;
and
WHEREAS, on November 14, 2006,
the Company delivered to the Executive a notice of termination
without Cause (as defined in that certain Separation and Severance
Agreement dated as of the 8th day of September, 2004 between the
Company and Executive (the “Severance Agreement”)
terminating the Executive’s employment with the Company 60
days thereafter;
NOW, THEREFORE, in consideration of
the promises and conditions set forth herein, the sufficiency of
which is hereby acknowledged, the Company and the Executive agree
as follows:
1. Separation Date .
Mr. Skolsky ceased to be Chief Executive Officer of the
Company as of November 14, 2006 and his employment with the
Company shall terminate effective with the close of business on
January 15, 2007 (the “Separation Date”). Prior to
the Separation Date, the Executive shall continue to perform such
executive level and transition duties with the Company as shall be
reasonably requested by the Chairman of the Company’s Board
of Directors or the new Chief Executive Officer of the
Company.
2. Resignation from Officer and
Board Positions . Mr. Skolsky hereby resigns, effective as
of the date hereof, from his position on the Company’s Board
of Directors and from any and all positions as an officer or
director of any of the Company’s subsidiaries or
affiliates.
3. Execution of this Settlement
Agreement . The Company hereby advises Mr. Skolsky to
consult with an attorney of his own choosing before signing this
Settlement Agreement and the Supplemental Release and he may take
21 calendar days to do so (although Mr. Skolsky may
voluntarily sign this Settlement Agreement before the end of the
21-day period). Mr. Skolsky must execute and return this
Settlement Agreement to Michael Alrutz, c/o Trimeris, Inc., 3500
Paramount Parkway, Morrisville, NC 27560, no later than 5:00 pm EST
on December 19, 2006 and must execute and return the
Supplemental Release no earlier than 5:00 pm EST on
January 15, 2007 and no later than 5:00 pm EST on
January 17, 2007, to the same address.
4. Payments and Rights
.
(a) On the Separation Date,
Mr. Skolsky shall be entitled to receive the Accrued Amounts
and Rights (as defined in Section 5(c) of the employment
agreement between the Executive and the Company, dated as of
September 4, 2004 (the “Employment Agreement”)).
The Company shall pay the Executive any payment portion of the
Accrued Amounts and Rights on the Separation Date; provided that,
payment of any bonus for 2006 shall be paid when bonuses are paid
to other senior executives of the Company but in no event later
than March 15, 2007.
(b) The Company shall continue to
provide Mr. Skolsky with his benefits pursuant to
Section 4(a) of the Employment Agreement through the
Separation Date (with the medical coverage provided through
continuation health coverage as of December 1, 2006 because of
reduced hours), including, without limitation, the financial
planning and tax preparation provided therein. In addition,
Mr. Skolsky shall continue to accrue vacation ratably under
Section 4(b) of the Employment Agreement through the
Separation Date. No bonus shall be paid for any service after
December 31, 2006.
(c) Mr. Skolsky’s stock
options and restricted stock shall become partially vested on the
Separation Date pursuant to the terms of the applicable grant
agreements referenced in Section 3(c) of the Employment
Agreement, any remaining unvested stock options and restricted
stock under Section 3(c) and otherwise shall then immediately
expire and be forfeited, and all of his then vested stock options
shall be exercisable in accordance with the terms of the applicable
grant agreements.
(d) Assuming Mr. Skolsky
executes and does not revoke this Settlement Agreement and the
Supplemental Release, the Company shall pay and provide
Mr. Skolsky the payments and benefits described in
Section 3 of the Severance Agreement. In accordance with
Section 409A of the Internal Revenue Code of 1986, as amended
(“Section 409A”) payments owed by the Company to the
Executive pursuant to Section 3(a) of the Severance Agreement
will be delayed to the extent the Company considers necessary to
avoid the imposition of any accelerated or additional tax to the
Executive under Section 409A until the day that is six months
plus one day after the Separation Date or such earlier date as
permitted under Section 409A (the “New Payment
Date”) and provided that in no event shall any payments begin
sooner than the eighth day following execution of this Settlement
Agreement. (Mr. Skolsky agrees that, absent new and contrary
guidance from the Internal Revenue Service before the New Payment
Date, no amounts in Section 3(a) of the Severance Agreement
shall be paid before the New Payment Date, except that the
six-month payment delay shall not apply if he dies before the New
Payment Date.) The aggregate of any payments that otherwise would
have been paid to Executive during the period between the
Separation Date and the New Payment Date pursuant to
Section 3(a) of the Severance Agreement shall be paid to the
Executive in a lump sum on such New Payment Date. Thereafter, the
payments pursuant to Section 3 of the Severance Agreement that
remain outstanding as of the day immediately following the New
Payment Date shall be paid ratably and without delay in accordance
with the Company’s regular payroll practices for the
remainder of the period set forth in Section 3 of the
Severance Agreement. The medical coverage provided in
Section 3(b) of the Severance Agreement will consist of COBRA
continuation coverage for the period COBRA applies (beginning, as
indicated above in Section 4(b) of this Settlement Agreement
at December 1, 2006 and running until May 14, 2008 or
such earlier date as of which
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he ceases to be eligible under COBRA (or
extended, as applicable for a second qualifying event under Code
Section 4980B). During such coverage (but not beyond the
Salary Continuation Period as defined in the Severance Agreement),
the Company will pay directly the portion of the premiums it paid
for him while employed. The parties anticipate that the direct
payment of premiums will not be taxable to the Executive, but, if
Internal Revenue Service prevails in a position to the contrary,
the Company will pay any income taxes applicable to the payment of
the premiums and the payments pursuant to this sentence (but not
interest and penalties due from Mr. Skolsky); provided that,
to the extent necessary to avoid the imposition of any accelerated
or additional tax to the Executive under Section 409A, such
payments of income taxes shall be delayed until the New Payment
Date and the aggregate of any such payments that otherwise would
have been paid to Executive during the period between the
Separation Date and the New Payment Date shall be paid to the
Executive in a lump sum on such New Payment Date.
5. Release and Waiver . For
and in partial consideration of the severance benefits payments
described in Section 4(d) above, Executive hereby releases,
waives and forever discharges the Company, its parent, affiliates
and subsidiaries, and all of its benefit plans, plan
administrators, trustees, agents, subsidiaries, affiliates,
employees, officers, directors, shareholders, successors and
assigns (hereafter the “Releasees”) from any and all
liability, actions, charges, causes of action, demands, damages,
attorneys’ fees or claims for relief or remuneration of any
kind whatsoever, whether known or unknown at this time, arising out
of or in any way connected with Executive’s employment, or
the termination of employment, with the Company. These include, but
are not limited to, any claim (including related attorneys’
fees and costs) under the Age Discrimination in Employment Act,
Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Worker’s Adjustment and Retraining
Notification Act, the Equal Pay Act, the Corporate and Criminal
Fraud Accountability Act of 2002 (Sarbanes-Oxley whistleblower
provision), the North Carolina Equal Employment Practices Act, the
North Carolina Persons With Disabilities Protection Act, the North
Carolina Human Relations Commission Bias law, the North Carolina
Hazardous Chemicals Right to Know Act and the North Carolina
Retaliatory Employment Discrimination Act, all as amended, or any
other federal, state or local law or ordinance, and any claim for
benefits or other claims under the Employee Retirement Income
Security Act of 1974, as amended (except as expressly provided
below). This waiver, release and discharge also includes without
limitation, any wrongful or unlawful discharge claims, discipline
or retaliation claims, any claims relating to any contract of
employment, whether express or implied, any claims related to
promotions or demotions, any claims for or relating to relocation,
compensation including commissions, short term or long term
incentives, the Company’s Executive benefit plans and the
management thereof (except as expressly provided below), any claims
for defamation, slander, libel, invasion of privacy,
misrepresentation, fraud, infliction of emotional distress, any
claims based on stress to the extent permitted by law, any claims
for breach of any covenant of good faith and fair dealing, and any
other claims relating to the Executive’s employment with the
Company and termination thereof. This Settlement Agreement does not
apply to any claims or rights that may arise under the Age
Discrimination in Employment Act after the date that this
Settlement Agreement is signed; and provided further that nothing
in this Settlement Agreement prevents Executive from filing,
cooperating with or participating in any proceeding before the
Equal Employment Opportunity Commission or a state Fair Employment
Practices Agency (except that he acknowledges that he may not be
able to recover any monetary benefits in connection with any such
claim, charge or proceeding).
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Executive expressly waives all
claims, including those that he does not know or suspect to
exist in his favor as of the date of this Settlement Agreement.
As used in this Settlement Agreement, the parties understand the
word “claims” to include all actions, claims and
grievances, whether actual or potential, known or unknown, and
specifically but not exclusively including all claims against the
Releasees arising from Executive’s employment with the
Company, the termination thereof or any other conduct by the
Releasees occurring on or prior to the date Executive signs this
Settlement Agreement. All such claims are forever barred by this
Settlement Agreement whether they arise in contract or tort or
under a statute or any other law.
Executive also understands and
agrees that this release extinguishes all claims, whether known or
unknown, foreseen or unforeseen, and expressly waives any rights or
benefits under any law or j
