EXHIBIT 10.3
EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) made effective as of July 17, 2009 by
and between BioMimetic Therapeutics, Inc., a Delaware corporation (the
“Company”), and Larry Bullock (the “Executive”).

In consideration of the mutual covenants contained in this Agreement, the
parties hereby agree as follows:

1.           Employment.  The Company agrees to employ the Executive and the
Executive agrees to be employed by the Company as Chief Financial Officer and to
be responsible for the typical management responsibilities expected of an
officer holding such position and such other responsibilities customarily
pertaining to such office as may be assigned to Executive from time to time by
the Chief Executive Officer of the Company, all for the Period of Employment as
provided in Section 2 below and upon the terms and conditions provided in the
Agreement.

2.           Term.  The period of Executive's employment under this Agreement,
will commence on July 17, 2009 , and shall continue for a period of three (3)
years through July 16, 2012, subject to extension or termination as provided in
this Agreement (“Period of Employment”).  Any expiration or termination of this
Agreement shall not affect the term of the Indemnification Agreement dated May
12, 2006 (“Indemnification Agreement”) and the Confidential Information and
Inventions Agreement dated January 14, 2004 (“Confidential Information and
Inventions Agreement”) between the Parties.  To the extent that Executive’s
employment continues following the expiration and nonrenewal of this Agreement,
the Executives employment shall continue at-will, however Executive’s rights
with respect to Without Cause Termination shall continue to the extent set forth
in Section 8(d)(ii).

3.           Duties.  During the Period of Employment, the Executive shall
devote their full business time, attention and skill to the business and affairs
of the Company and its Affiliates.  The Executive will perform faithfully the
duties that may be assigned to him from time to time in accordance herewith by
the Chief Executive Officer of the Company.

4.           Compensation.  For all services rendered by the Executive in any
capacity during the Period of Employment, the Executive shall be compensated as
follows:

(a)           Base Salary.  The Company shall pay the Executive an annual base
salary of $245,500 (“Base Salary”).  Base Salary shall be payable according to
the customary payroll practices of the Company but in no event less frequently
than twice each month.  The Base Salary shall be reviewed each fiscal period and
shall be subject to increase according to the policies and practices adopted by
the Company from time to time.

(b)           Incentive Compensation Award.  The Executive shall also be
eligible to receive annual incentive bonuses consisting of cash and/or options
to purchase Company common stock consistent with annual incentive awards for
other members of the senior management team.  The payment of such bonuses shall
be based on the performance and satisfaction of specific milestones mutually
agreed upon by the Chief Executive Officer and the Executive, and shall be
further based upon the Executive’s performance as evaluated by the Chief
Executive Officer.  In no event shall the payment of any annual incentive bonus
to the Executive be made later than March 15 of the calendar year next following
the calendar year during which such annual incentive bonus is earned.

 
 

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(d)           Additional Benefits.  The Executive will be entitled to
participate in all employee benefit plans or programs and receive all benefits
and perquisites for which any salaried employees are eligible under any existing
or future plan or program established by the Company or its affiliates and
available to similarly situated employees of the Company, including
participation in stock option plans. The Executive may participate to the extent
permissible under the terms and provisions of such plans or programs.  These may
include group hospitalization, health, dental care, life or other insurance,
sick leave plans, travel or accident insurance and disability
insurance.  Nothing in this Agreement will preclude the Company or Company
affiliates from amending or terminating any of the plans or programs applicable
to salaried employees or senior executives as long as the total value of all
benefits is not materially decreased.  The Executive will be entitled to annual
paid time off, consistent with the Company’s paid time off policy and Company
holidays as determined by the Company. The Company will provide Executive with
sufficient equipment, supplies and resources to accomplish their duties and will
purchase and/or reimburse Executive for the cost of maintaining preapproved
professional memberships.

5.           Business Expenses and Other Expenses.  The Company will reimburse
the Executive for all reasonable travel and other expenses incurred by the
Executive in connection with the performance of their duties and obligations
under this Agreement.

6.           Disability.

(a)  In the event of disability of the Executive during the Period of
Employment, the Company will continue to pay the Executive according to the
compensation provisions of this Agreement during the period of the disability,
until such time as any long term disability insurance benefits accruing to the
Executive are available.  However, in the event the Executive is disabled for
twelve (12) weeks (consecutive or nonconsecutive) during any twelve (12) month
period, the Company may terminate the employment of the Executive.  In this
case, normal compensation will cease, except for earned but unpaid Base Salary
and, effective as of his termination date, the Executive shall be entitled to
receive salary continuation for a period of six (6) months thereafter, to be
paid in substantially equal installments in accordance with the Company’s
regular payroll practices applicable to similarly situated active employees and
determined by reference to his Base Salary as in effect on the day immediately
prior to his termination date.

(b)           During the period the Executive is receiving payments of either
regular compensation or disability insurance described in this Agreement and to
the extent reasonable considering the Executive's disability, the Executive will
furnish information and assistance to the Company and from time to time will
make themselves available to the Company to undertake assignments consistent
with their prior position with the Company.  If the Company fails to make a
payment or provide a benefit required as part of the Agreement, the Executive's
obligation to furnish information and assistance will end.

(c)           For purposes of this Agreement, the Executive will be considered
to be “disabled” if he satisfies the requirements necessary to receive benefits
under the Company’s long-term disability plan or, in the absence of any such
plan, under any insurance policy providing benefits for long-term disabilities
that is procured for the Executive pursuant to this Agreement or otherwise.

 
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7.           Death.  In the event of the death of the Executive during the
Period of Employment, the Company's obligation to make payments under this
Agreement shall cease as of the date of death, except for earned but unpaid Base
Salary.

8.           Effect of Termination of Employment.

(a) If the Executive's employment terminates due to a Without Cause Termination,
as defined below, the Company will provide the Executive nine (9) months' Base
Salary as in effect at the time of the termination plus an appropriately
prorated amount of the previous year’s cash bonus on the Company’s regular
payroll dates for such Base Salary or cash bonus. Additionally, the benefits and
perquisites described in this Agreement as in effect at the date of termination
of employment will be continued for nine (9) months to the extent permissible
under the law and consistent with the tax status of such benefit
plans.   Amounts that the Company is obligated to pay hereunder, including
amounts paid by the Company to third parties to maintain benefit and
perquisites, shall be less any amount the Executive receives from a third party
for services provided as an employee, consultant, agent or the like, including
any cash or non-cash consideration such as stock or stock options.  Furthermore,
all outstanding stock options, restricted stock, restricted stock units, and any
other unvested equity incentives shall become fully exercisable and vested as of
the Date of Termination and shall remain exercisable for their stated
terms.   Subject to Section 12 below, the salary continuation payments described
in this Section 8 will commence within fourteen (14) days of the Company’s
receipt of the Executive’s executed general release of claims under Section 8(b)
of this Agreement, and to the extent permissible under Section 12 below, such
salary continuation payments shall be made retroactive back to the date the
Executive’s employment with the Company terminates.

(b)           All severance compensation provided for herein shall be expressly
conditioned upon the Executive’s execution, delivery, and non-revocation of a
general release of claims in the form set forth as Exhibit A, hereto.   All
severance compensation provided for herein shall be further expressly
conditioned upon the Executive complying with all post-employment obligations
set forth herein and set forth in the Indemnification Agreement and the
Confidential Information and Inventions Agreement.

(c)           If the Executive's employment terminates due to Termination for
Cause (as defined below), breach of this Agreement by Executive or resignation
by Executive, earned but unpaid Base Salary will be paid on a pro-rated basis
for the year in which the termination occurs.  No other payments will be made or
benefits provided by the Company.

(d)           For this Agreement, the following terms have the following
meanings:

(i)           “Termination for Cause” means termination of the Executive's
employment by the Company's Chief Executive Officer or Board of Directors acting
in good faith by the Company by written notice to the Executive specifying the
event relied upon for such termination, due to the Executive's willful
misconduct with respect to their duties under this Agreement, including but not
limited to conviction for a felony or a common law fraud that results in or is
likely to result in economic damage to the Company.  Executive will be provided
a reasonable opportunity prior to any determination for “Cause”, to present his
case before the Board of Directors of the Company with counsel.

 
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(ii)           “Without Cause Termination” means “constructive termination” or
actual termination of the Executive's employment other than due to death,
disability, Termination for Cause, or resignation by Executive.  Constructive
Termination shall occur upon Employee’s resignation as a result of either of the
following trigger events: (A) a significant change to job scope or job
responsibilities, (B) a relocation of Company headquarters of more than 50
miles, or (C) the expiration of this Agreement in the absence of a renewal,
extension, or superseding Agreement; provided that the Executive gives the
Company notice of such Constructive Termination within ninety (90) days of such
trigger event, and the Company fails to cure such trigger event within thirty
(30) days of such notice of Constructive Termination and such resignation is
effective within sixty (60) days of expiration of the Company’s thirty (30) day
cure period.

9.           Other Duties of the Executive during and after the Period of
Employment.

(a)           The Executive will, with reasonable notice during or after the
Period of Employment, furnish information as may be in their possession and
cooperate with the Company as may reasonably be requested in connection with any
claims or legal actions in which the Company is or may become a party.

(b)           The Executive recognizes and acknowledges that all non-public
information pertaining to the affairs, business, clients, customers or other
relationships of the Company is confidential and is a unique and valuable asset
of the Company.  Access to and knowledge of this information are essential to
the performance of the Executive's duties under this Agreement.  The Executive
will not during the Period of Employment and for 36 months thereafter except to
the extent reasonably necessary in performance of the duties under this
Agreement, or as required by law, give to any person, firm, association,
corporation or governmental agency any non-public information, including but not
limited to information relating to the affairs, business, clients, customers,
technology or other relationships of the Company and any Confidential
Information as that term is defined in the Confident Information and Inventions
Agreement.  The Executive will not make use of such information for his own
purposes or for the benefit of any person or organization other than the
Company.  All records, memoranda, etc., relating to the business of the Company,
whether made by the Executive or otherwise coming into his possession, are
confidential and will remain the property of the Company.  Confidential
information shall not include information that (i) becomes generally available
to the public other than as a result of disclosure by the Executive, (ii) was
available to the Executive on a non-confidential basis prior to disclosure to
the Executive in connection with his duties to the Company, provided that the
source of such information is not known to the Executive to be bound by a
confidentiality agreement or other contractual obligation of confidentiality to
the Company or (iii) becomes available to the Executive on a non-confidential
basis from a source other than the Company (or any agent, employee or affiliate
of Company) provided such source is not known to the Executive to be bound by a
confidentiality agreement or other contractual obligation of confidentiality to
the Company.
 
 
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(c)           During the Period of Employment, the Executive will not use his
status with the Company to obtain loans, goods or services from another
organization on terms that would not be available to him in the absence of his
relationship to the Company.  During the period of his employment and for a
period of 12 months thereafter, the Executive will not directly or indirectly
manage, consult or work for, serve as employee, officer, director, consultant,
agent or subcontractor for, finance, or own any part of or exercise management
control over any business or entity wherein the Executive is directly or
indirectly engaged in the development and/or commercialization of a Competitive
Product.  A “Competitive Product” shall mean any product that contains
recombinant platelet-derived growth factor, recombinant insulin-like growth
factor, or any recombinant osteoinductive protein, including bone morphogenetic
proteins, or any product containing any other protein intended to be used for
tissue repair or regeneration.  In addition, during such 12 month period
Executive will not engage, directly or indirectly, in any business activity or
enterprise which is a “Competitive Activity”.  For purposes hereof, “Competitive
Activity” means the making of investments in or the provision of capital to any
enterprise (or an Affiliate), or to any person in connection with any enterprise
(or an Affiliate thereof), with respect in which the Company has invested or
provided capital or proposed, in writing, to invest or provide capital during
the term of the Executive's employment, or to pursue any similar investment
opportunity with any individual or enterprise introduced to the Executive or
Company directly in connection with the performance of the Executive's duties to
the Company during the term of his employment, in each case in the area of
tissue repair or regeneration.  For purposes of this restriction, the receipt of
stock, stock options or restricted stock for any reason (including as
consideration for services or otherwise) shall be deemed an investment in the
issuing company or any Affiliates thereof.  This restriction shall not apply to
any investment opportunity that has been declined by the Company.  “Affiliate”
shall mean any company, corporation, business or entity that is controlled by,
controlling, or under common control with a company.  The Executive acknowledges
that the covenants contained herein are reasonable as to geographic and temporal
scope.  For a twelve month period after termination of the Period of Employment
for any reason, the Executive will not solicit to hire any employee of the
Company or solicit any employee to leave the employ of the Company.

(d) After the Period of Employment, upon reasonable notice the Executive shall
provide the Company with sufficient information to verify compliance with his
post-employment obligations hereunder, including providing periodic reports
detailing any compensation received from another party during the severance
period outlined above, and promptly responding to specific requests from the
Company regarding possible violations of any restrictive covenant hereunder or
under any other agreement with the Company.

(e)           The Executive acknowledges that the breach or threatened or
attempted breach of any provision of Section 9 would cause irreparable harm to
the Company not compensable in monetary damages and that the Company shall be
entitled, in addition to all other applicable remedies, to a temporary and
permanent injunction and a decree for specific performance of the terms of
Section 9 without being required to prove damages or furnish any bond or other
security.

(f)           The Executive shall not be bound by the provisions of Section 9 in
the event of the default by the Company in its obligations under this Agreement
that are to be performed upon or after termination of this Agreement, provided
that such default is not cured by the Company within sixty (60) days of the
Company’s receipt from the Executive of a written notice of default.

 
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(g)           For purposes of Section 9, the “Company” shall include any person
or entity that, directly or indirectly, controls or is controlled by the Company
or is under common control with the Company.

10.           Indemnification; Litigation.

The Executive and the Company previously entered into the Indemnification
Agreement under which the Company has agreed to indemnify the Executive from and
against certain liability associated with his providing services as an executive
of the Company.  The parties hereby reaffirm the Indemnification Agreement,
which shall remain effective together with this Employment Agreement.  In the
event of a conflict between this Agreement and the Indemnification Agreement,
the Indemnification Agreement shall supersede this Agreement.

11.           Effect of Change in Control.

(a) In the event there is a Change in Control (as defined below) and within the
twelve (12) month period following such event Executive is terminated in a
Without Cause Termination, or Executive elects to resign upon written notice to
the Company following an event that constitutes Good Reason (as defined below),
all outstanding stock options, restricted stock, restricted stock units, and any
other unvested equity incentives shall become fully exercisable and vested as of
the Date of such Change of Control and shall remain exercisable for their stated
terms.  In addition, the Company shall pay Executive upon such termination or
resignation, in exchange for the Executive complying with the obligations and
restriction set forth or referred to in Section 8, the severance payments and
benefits due under Section eight (8)(a) above with respect to a Without Cause
Termination, but such payments and benefits shall be provided for a period of
twelve (12) months following termination or resignation pursuant to this
Section.

(b) A “Change in Control” shall be deemed to have occurred if (i) a tender offer
shall be made and consummated for the ownership of more than fifty percent (50%)
of the outstanding voting securities of the Company, (ii) the Company shall be
merged or consolidated with another corporation or entity and as a result of
such merger or consolidation less than fifty percent (50%) of the outstanding
voting securities of the surviving or resulting corporation or entity shall be
owned in the aggregate by the former shareholders of the Company, as the same
shall have existed immediately prior to such merger or consolidation, (iii) the
Company shall sell all or substantially all of its assets to another corporation
or entity which is not a wholly-owned subsidiary, or (iv) a person, within the
meaning of Section 3(a)(9) or of Section 13 (d)(3) (as in effect on the date
hereof) of the Securities and Exchange Act of 1934 (“Exchange Act”), shall
acquire more than fifty percent (50%) of the outstanding voting securities of
the Company (whether directly, indirectly, beneficially, or of record).  For
purposes hereof, ownership of voting securities shall take into account and
shall include ownership as determined by applying the provisions of Rule
13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Exchange Act.
 
 
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(c) A resignation for “Good Reason” shall be deemed to have occurred if the
Executive resigns his employment with the Company after the occurrence of any of
the following events, to which the Executive has not expressly consented in
writing: (i) a material reduction in the Executive’s Base Salary (other than one
applicable to all senior management); (ii) a material reduction in job duties,
authority, responsibilities and requirements inconsistent with the Executive’s
position with the Company and the Executive’s prior duties, authority,
responsibilities, and requirements or a change in the Executive’s reporting
relationship; (iii) a relocation of the Executive to a facility or location more
than fifty (50) miles from the address of the Company’s headquarters office as
of the effective date of this Agreement, or (iv) material breach by the Company
of any of the material covenants herein.  Any of the foregoing conditions
described in this Section 11(c) will constitute “Good Reason” only if the
Executive first delivers a notice of termination to the Company identifying such
condition (or conditions) within ninety (90) days after the initial occurrence
of such condition (or conditions) and such condition continues uncured for a
period of thirty (30) days after the delivery of such notice of
termination.  Notwithstanding the foregoing, the Executive’s termination of
employment will not be considered to be for Good Reason unless the Company fails
to cure such condition and such termination of employment occurs within sixty
(60) days  of the expiration of the Company’s (30) day cure period.

12.         Tax Provisions.

(a)           Notwithstanding any other provision of this Agreement whatsoever,
the Company shall have the right, after consulting with and securing the
approval of the Executive (which approval shall not unreasonably be withheld),
to provide for the application and effects of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) (relating to deferred compensation
arrangements) and any related regulatory or administrative guidance issued by
the Internal Revenue Service such that the severance and other benefits provided
under this Agreement shall not trigger the additional tax, interest, and any
related penalties imposed by Code Section 409A(l)(B).  Although the Company
intends to administer the Agreement so that it will comply with the requirements
of Code Section 409A, the Company does not represent or warrant that the
Agreement will comply with Code Section 409A or any other provision of federal,
state, local or non-United States law.  Neither the Company, its subsidiaries,
nor their respective directors, officers, employees or advisers will be liable
to the Executive (or any other individual claiming a benefit through the
Executive) for any tax, interest, or penalties the Executive may owe as a result
of compensation paid under the Agreement, and the Company and its subsidiaries
will have no obligation to indemnify or otherwise protect the Executive from the
obligation to pay any taxes pursuant to Code Section 409A.

(b)           The Company shall delay the payment of any severance benefits
payable under this Agreement as required to comply with Code Section
409A(a)(2)(B)(i) (relating to payments made to certain “specified employees” of
certain publicly-traded companies) and in such event, any such amount to which
the Executive would otherwise be entitled during the six (6) month period
immediately following his termination of employment shall instead be accumulated
through and paid or provided on the first business day following the expiration
of such six (6) month period, or if earlier, the date of his death.  For the
avoidance of doubt, no portion of  any such  severance benefits shall be subject
to the foregoing delay if and to the extent that such benefits (i) constitute a
“short term deferral” within the meaning of Section 1.409A-1(a)(4) of the
Treasury Regulations, or (ii) (A) are being paid due to the Executive’s
“involuntary separation from service” (within the meaning of Section 1.409A-1(n)
of the Treasury Regulations); (B) do not exceed two times the lesser of (1) the
Executive’s annualized compensation from the Company for the calendar year prior
to the calendar year in which the termination occurs, or (2) the maximum amount
that may be taken into account under a qualified plan pursuant to Code Section
401(a)(17) for the year in which the Executive’s employment terminates; and (C)
the payment is required under this Agreement to be paid no later than the last
day of the second (2nd) calendar year following the calendar year during which
the Executive’s “separation from service” (within the meaning of Code Section
409A) occurs.  For purposes of Code Section 409A, the Executive’s right to
receive installment payments pursuant to any provision in this Agreement shall
be treated as a right to receive a series of separate and distinct
payments.  The determination of whether the Executive is a “specified employee”
for purposes of Code Section 409A(a)(2)(B)(i) as of the time of his termination
of employment shall made by the Company in accordance with the terms of Code
Section 409A and the applicable guidance thereunder (including without
limitation Treasury Regulation Section 1.409A-1(i) and any successor provision
thereto).

 
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(c)           The continued employee benefits available under Sections 8 and 11
above that are taxable benefits (and that are not disability pay or death
benefit plans within the meaning of Code Section 409A) are intended to comply,
to the maximum extent possible, with the exception to Code Section 409A set
forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations (and any
successor thereto).  To the extent that any of those benefits either do not
qualify for that exception, or are provided beyond the applicable time periods
set forth in Section 1.409A-1(b)(9)(v) of the Treasury Regulations, then such
amounts will be reimbursed or provided no later than December 31 of the year
following the year in which the expense was incurred and will be subject to the
following additional rules:  (i) the amount of in-kind benefits provided, during
any calendar year shall not affect the amount of in-kind benefits to be
provided, during any other calendar year; and (ii) the right to in-kind benefits
shall not be subject to liquidation or exchange for another benefit.

(d)           For the avoidance of doubt, no amount subject to the requirements
of Code Section 409A shall become payable to the Executive as a result of a
termination of employment that does not constitute a “separation from service”
within the meaning of Code Section 409A(a)(2)(A)(i) and Section 1.409A-1(h) of
the Treasury Regulations.

13.         Consolidation; Merger or Sale of Assets.  Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another corporation that
assumes this Agreement and all obligations and undertakings of the Company
hereunder.  Upon such a consolidation, merger or sale of assets, the term “the
Company” as used will mean the other corporation and this Agreement shall
continue in full force and effect.

14.         Modification.  This Agreement may not be modified or amended except
in writing signed by the parties.  No term or condition of this Agreement will
be deemed to have been waived, except in writing by the party charged with
waiver.  A waiver shall operate only as to the specific term or condition waived
and will not constitute a waiver for the future or act on anything other than
that which is specifically waived.

15.         Governing Law.  This Agreement has been executed and delivered in
the State of Tennessee and its validity, interpretation, performance and
enforcement shall be governed by the laws of that state.

16.         Notices.  All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been made when
delivered or mailed first-class postage prepaid by registered mail, return
receipt requested, or when delivered if by hand, overnight delivery service or
confirmed facsimile transmission, to the following:

 
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(a)           If to the Company, to:

Chief Executive Officer
BioMimetic Therapeutics, Inc.,
389 Nichol Mill Lane
Franklin, TN 37067

with a copy to:

General Counsel
BioMimetic Therapeutics, Inc.
389 Nichol Mill Lane
Franklin, TN 37067

or at such other address as may have been furnished to the Executive by the
Company in writing; or

(b)           If to the Executive, at:  5205 Shaw Ct., Brentwood, TN  37027, or
such other address as may have been furnished to the Company by the Executive in
writing.

17.         Entire Agreement. This Agreement, together with the Indemnification
Agreement and the previously executed Confidential Information and Inventions
Agreement constitute the entire agreement between the Parties as to the subject
matter hereof, and all prior negotiations, representations, agreements and
understandings are merged into, extinguished by and completely expressed by this
Agreement.  In the event of a conflict between this Agreement and the
Confidential Information and Inventions Agreement, this Agreement shall
supersede the Confidential Information and Inventions Agreement.  In the event
of a conflict between this Agreement and the Indemnification Agreement, the
Indemnification Agreement shall supersede this Agreement.

18.         Binding Agreement.  This Agreement shall be binding on the parties'
successors, heirs and assigns.

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
17th  day of July 2009.
 
LARRY BULLOCK
     
BIOMIMETIC THERAPEUTICS, INC.
 
By:
   
Samuel E. Lynch
 
President and Chief Executive Officer

 
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