Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS AGREEMENT

is made and entered into this the 24th day of January, 2008, by and between
TRIMERIS, INC., a Delaware corporation (the "Company"), and ANDREW L. GRAHAM
("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 continued 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 1st day of January, 2008 (the "Effective Date").

2. Position and Duties.

(a) As of the Effective Date, Executive shall serve as Chief Financial Officer
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 Company's Chief Executive Officer (the "CEO").
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 CEO or the
Board of Directors of the Company (the "Board") consistent with this Agreement
and shall report directly to the CEO.

(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.

3. Compensation.

(a) Base Salary. The Company shall pay to Executive during the Term of
Employment a rate of not less than One Hundred Seventy-Five Thousand dollars
($175,000) 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 30% 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. The Bonus, if any, should be paid no later than 70 days
following the conclusion of such annual 12 month period.

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.

5. Term; Termination of Employment.

As used herein, the phrase "Term of Employment" shall begin with the Effective
Date and continue indefinitely. 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 at least 60 days' advance 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 Financial Officer in the
Company or the Company's removal of Executive as Chief Financial Officer;

(II) a requirement that he relocate his primary place of employment by more than
30 miles from his place of employment as of the Effective Date (or such later
place of employment as to which he agrees in writing to relocate); or

(III) a material adverse alteration in the nature or status of Executive's
responsibilities; or

(IV) 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. 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. 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, but does not revise any option plans
or arrangements.

(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 (together with, if the termination is by the Company, a
payment of base salary with respect to the positive difference, if any, between
60 and the days of advance notice given by the Company), 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;
provided, however, that any amounts due after December 31, 2008 shall, to the
extent permitted by Section 409A of the Internal Revenue Code of 1986 (the
"Code") and after compliance with subjection (e) hereof, be paid in a single
lump sum on the later of the first business day of January 2009 or the 60th day
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;

(ii) Executive's employment is terminated for Cause or Disability, as defined
herein;

(iii) Executive terminates his employment with Company for a reason other than
Good Reason as defined herein; or

(iv) Executive revokes his agreement to release the Company from any and all
claims related to his employment pursuant to the Settlement Agreement and
Release executed in satisfaction of Section 6(e) hereof.

(g) Tax Treatment; Section 409A. Executive's severance benefits shall be subject
to mandatory withholding, including federal, state and local income taxes, as
well as FICA and withholding for applicable insurance premiums. If and to the
extent any portion of any payment, compensation or other benefit provided to
Executive in connection with his "separation from service" as determined under
Section 409A of Code is determined to constitute "nonqualified deferred
compensation" within the meaning of Code Section 409A and the Employee is a
specified employee as defined in Code Section 409A(a)(2)(B)(i), as determined by
the Company in accordance with its procedures, by which determination Executive
hereby agrees that he is bound, such portion of the payment, compensation or
other benefit shall not be paid before the day that is six months plus one day
after the date of separation from service (the "New Payment Date"), except as
Section 409A may then permit. The aggregate of any payments that otherwise would
have been paid to Executive during the period between the date of separation
from service and the New Payment Date shall be paid to Executive in a lump sum
on such New Payment Date, and any remaining payments will be paid on their
original schedule. For purposes of this Agreement, each amount to be paid or
benefit to be provided shall be construed as a separate identified payment for
purposes of Section 409A, and any payments described in Section 6 that are due
within the "short term deferral period" as defined in Section 409A shall not be
treated as deferred compensation unless applicable law requires otherwise.
Neither the Company nor Executive shall have the right to accelerate or defer
the delivery of any such payments or benefits except to the extent specifically
permitted or required by Section 409A. This Agreement is intended to comply with
the provisions of Section 409A and the Agreement shall, to the extent
practicable, be construed in accordance therewith. Terms defined in the
Agreement shall have the meanings given such terms under Section 409A if and to
the extent required to comply with Section 409A. Notwithstanding the foregoing,
to the extent that the Agreement or any payment or benefit hereunder shall be
deemed not to comply with Section 409A, then neither the Company, the Board nor
its or their designees or agents shall be liable to Executive or any other
person for any actions, decisions or determinations made in good faith.

(h) Parachute Treatment. The Company will make the payments under or referenced
by this Agreement without regard to whether the deductibility of such payments
(or any other payments or benefits) would be limited or precluded by Section
280G of the Code and without regard to whether such payments would subject
Executive to the federal excise tax levied on certain "excess parachute
payments" under Section 4999 of the Code; provided, however, that if the Total
After-Tax Payments (as defined below) would be increased by the reduction or
elimination of any payment and/or other benefit (including any vesting of
options) under this Agreement or otherwise in connection with a covered change
in control, then the amounts payable will be reduced or eliminated as follows:
(i) first, by reducing or eliminating any cash payments or other benefits (other
than the vesting of the options) and (ii) second, by reducing or eliminating the
vesting of the options that occurs as a result of an event covered by Section
280G of the Code, to the extent necessary to maximize the Total After-Tax
Payments. The Company's independent, certified public accounting firm will
determine whether and to what extent payments or vesting under this Agreement
are required to be reduced in accordance with the preceding sentence. If there
is an underpayment or overpayment under this Agreement (as determined after the
application of this paragraph), the amount of such underpayment or overpayment
will be immediately paid to Executive or refunded by Executive, as the case may
be, with interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code. For purposes of this Agreement, "Total After-Tax
Payments" means the total of all "parachute payments" (as that term is defined
in Section 280G(b)(2) of the Code) made to or for the benefit of Executive
(whether made under the Agreement or otherwise), after reduction for all
applicable federal taxes (including, without limitation, the tax described in
Section 4999 of the Code).

7. Confidential Information, Non-Solicitation and Non-Competition.

(a) Executive acknowledges and agrees that:

(i) As a result of his employment with the Company, Executive will become
knowledgeable of and familiar with the Company's Confidential Information (as
defined below), including know-how related to the Company's services, plus the
special requirements or preferences of the Company's research, development,
marketing, licensing agreements or arrangements and investor relations, so that
he would have a competitive advantage against the Company following termination
of his employment with the Company absent the protection afforded by the
restrictive covenants in this Section 7 (the "Restrictive Covenants");

(ii) The time, territory and scope of the Restrictive Covenants are reasonable
and necessary for protection of the Company's legitimate business interests;

(iii) Executive has received sufficient and valuable consideration in exchange
for his agreement to the Restrictive Covenants, including but not limited to his
salary and benefits under this Agreement, the possibility of salary continuation
pursuant to Section 6 hereof and any other consideration provided to him under
this Agreement;

(iv) Executive agrees that the non-compete covenant of Section 7(c) will not
impose undue hardship on Executive or prevent Executive from being able to earn
an adequate living following termination of this Agreement;

(v) While the Company employs Executive, he agrees that he will not, without the
Board's prior written consent, directly or indirectly, provide services to any
other person or organization (except as provided in Section 2(b) hereof). (This
prohibition excludes any work performed at the Company's direction.) Executive
represents to the Company that he is not subject to any agreement, commitment,
or policy of any third party that would prevent him from entering into or
performing his duties under this Agreement, and he agrees that he will not enter
into any agreement or commitment that would prevent or hinder his performance of
duties and obligations under this Agreement, provided that this Section 7(a)(v)
shall not limit Executive's accepting future employment while employed
hereunder, provided he promptly notifies the Company of such acceptance;

(vi) The parties agree that the Company may request an arbitrator or court to
take into account as part of an equitable or other remedy an extension of the
time period of protection provided by the Restrictive Covenants for any period
of time during which Executive is in violation of such covenants and any period
of time required for litigation to enforce such covenants and Executive may
oppose any such request; and

(vi) Executive has read and reviewed the Restrictive Covenants before agreeing
to the terms of this Agreement.

(b) During the Term of Employment and at all times thereafter, Executive shall
not, except as he deems necessary or desirable in good faith discretion to
perform his duties hereunder or as required by applicable law, disclose to
others or use, whether directly or indirectly, any Confidential Information
regarding the Company. "Confidential Information" shall mean information about
the Company, its subsidiaries and affiliates, and their respective clients and
customers that is not available to the general public or generally known in the
industry and that was learned by Executive in the course of his employment by
the Company, including (without limitation) (i) any proprietary knowledge, trade
secrets, ideas, processes, formulas, cell lines, sequences, developments,
designs, assays and techniques, data, formulae, and client and customer lists
and all papers, resumes, records (including computer records), (ii) information
regarding plans for research, development, new products, marketing and selling,
business plans, budgets and unpublished financial statements, licenses, prices
and costs, suppliers and customers (iii) information regarding the skills and
compensation of other employees of Company and (iv) the documents containing
such Confidential Information. Executive's rolodex and similar address books
shall not be deemed Confidential Information if and to the extent they contain
only the names and contact information he has personally used while employed (or
acquired prior to employment hereunder) and no other information that would
otherwise be Confidential Information. Executive acknowledges that such
Confidential Information is specialized, unique in nature and of great value to
the Company, and that such information gives the Company a competitive
advantage. Upon the termination of employment for any reason whatsoever,
Executive shall promptly deliver to the Company all documents, slides, computer
tapes and disks (and all copies thereof) containing any Confidential
Information.

(c) During the Term of Employment and for the one year thereafter, Executive
shall not, directly or indirectly in any manner or capacity (e.g., as an
advisor, principal, agent, partner, officer, director, shareholder, employee,
member of any association or otherwise) engage in, work for, consult, provide
advice or assistance or otherwise participate in any activity with respect to a
Competing Business, as defined below and except as provided below, provided,
however, that the "beneficial ownership" by Executive, either individually or as
a member of a "group," as such terms are used in Rule 13d of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") of not more than three percent of the voting stock of any
publicly held corporation shall not be a violation of this Agreement. Executive
agrees that the market area for the Company is worldwide and that, by the nature
of the business, it operates globally. Executive also expressly agrees that the
Company will or would suffer irreparable injury if Executive were to compete
with the Company or any subsidiary or affiliate of the Company in violation of
this Agreement.

"Competing Business" is defined as the business of the discovery, development,
testing, manufacturing, and/or marketing therapeutic components for the
treatment of human viral diseases based on a viral fusion protein target and any
other business in which the Company may engage or propose to engage during the
term of this Agreement, with the proposed businesses being documented by Board
minutes or written Company business plans during the Term of Employment.

(d) During the Term of Employment and for one year thereafter, Executive shall
not, directly or indirectly, influence or attempt to influence customers or
suppliers of the Company or any of its subsidiaries or affiliates, to divert
their business to any Competing Business for which subsection (c) would prevent
his employment.

(e) Executive recognizes that he will possess confidential information about
other employees of the Company relating to their education, experience, skills,
abilities, compensation and benefits, and interpersonal relationships with
customers of the Company. Executive recognizes that the information he will
possess about these other employees is not generally known, is of substantial
value to the Company in developing its business and in securing and retaining
customers, and will be acquired by him because of his business position with the
Company. Executive agrees that, during the Term of Employment (except in the
good faith performance of his duties), and for a period of one year thereafter,
he will not, directly or indirectly, solicit or recruit any employee of the
Company for the purpose of being employed by him or by any competitor of the
Company on whose behalf he is acting as an agent, representative or employee.

(f) Executive agrees and understands that Company has received, and in the
future will receive, from third parties confidential or proprietary information
("Third Party Information") subject to a duty on Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. During the term of Executive's employment and thereafter, Executive
will hold Third Party Information in the strictest of confidence and will not
disclose (to anyone other than Company personnel who Executive in good faith
determines need to know such information in connection with their work for
Company), or use, except in connection with his duties for Company, Third Party
Information unless required by legal process.

(g) Inventions

(i) Assignment. Executive hereby assigns to Company all his right, title and
interest in and to any and all Inventions (and all patent rights, copyright,
trade secret rights and all other rights throughout the world in connection
therewith, whether or not patentable or registerable under copyright, trademark
or similar statutes), together with all goodwill associated therewith, (all of
the foregoing being hereinafter referred to collectively as "Proprietary
Rights"), made, conceived, reduced to practice or learned by Executive, either
alone or jointly with others, during his period of employment (and prior
consulting arrangement) with Company. Inventions assigned under this Section 7
are hereinafter referred to as "Company Inventions". Executive agrees to
reasonably assist Company in every reasonably necessary way (but at Company's
expense) to obtain or enforce any patents, copyrights or any proprietary rights
relating to Company Inventions and to execute all documents and applications
necessary to vest in Company's full legal title to such Company Inventions, and
Executive agrees to continue this assistance after the termination of his
employment with Company. Furthermore, Executive hereby designates and appoints
Company and its officers and agents as his agents and attorneys-in-fact to
execute and file any certificates, applications or documents and to do all other
lawful acts reasonably necessary in the opinion of Company to protect Company's
rights in Company Inventions. Executive expressly acknowledges that the
foregoing power of attorney is coupled with an interest and is therefore
irrevocable and will survive Executive's termination of employment, death or
incompetency.

(ii) Government. Executive also will assign to or as directed by Company all his
right, title and interest in and to any and all Inventions, full title to which
may be required to be in the United States by a contract between Company and the
United States or any of its agencies.

(iii) Independent Inventions. Notwithstanding anything in this Agreement to the
contrary, Executive's obligation to assign or offer to assign Executive's rights
in an Invention to Company will not extend or apply to an Invention that
Executive has developed entirely on Executive's own time without using Company's
equipment, supplies, facilities or trade secret information unless such
Invention: (a) relates to Company's business or actual demonstrably anticipated
research or development or (b) results from any work performed by Executive for
Company. Executive will bear the burden of proof in establishing that the
Invention qualifies for exclusion under this Section 7(g)(iii).

(iv) Assignment of Company Inventions. Executive will reasonably assist Company
in every proper way to obtain and from time to time enforce United States and
foreign Proprietary Rights related to Company Inventions in any and all
countries. Executive's obligation to reasonably assist Company with respect to
Proprietary Rights relating to such Company Inventions will continue beyond the
termination of Executive's employment, but Company will compensate Executive at
a reasonable rate after Executive's termination for the time actually spent by
executive at Company's request on such assistance.

Executive hereby waives and quitclaims to Company all claims, of any nature
whatsoever, which Executive may or may hereafter have for infringement,
including past infringements, of any Proprietary Rights assigned hereunder to
Company.

(v) Obligation to Keep Company Informed. During the period of Executive's
employment, Executive will promptly disclose to Company fully and in writing,
and will hold in trust for the sole right and benefit of Company, any and all
Inventions. In addition, after termination of Executive's employment, Executive
will disclose any filing of any patent applications by him or on his behalf
within a year after termination of such employment.

(vi) Prior Inventions. Inventions, if any, patented or unpatented, which
Executive made prior to Executive's commencement of employment with Company are
excluded from the scope of this Agreement. To preclude any possible uncertainty,
Executive has set forth on the attached Exhibit A, a complete list of all
Inventions that Executive has, alone or jointly with others, conceived,
developed or reduced to practice or caused to be conceived, developed or reduced
to practice prior to the commencement of or during Executive's employment with
Company, that Executive considers to be Executive's property or the property of
the third parties, and Executive wishes to have excluded from the scope of this
Agreement. If disclosure of any such Invention on Exhibit A would cause
Executive to violate any prior confidentiality agreement with another party,
Executive understands that he is not to list such Inventions in Exhibit A but
that Executive is to inform Company in writing that all such Inventions have not
been listed for that reason.

If it is determined by a court of competent jurisdiction in any state that any
restriction in this Section 7 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of that state, it is the intention
of the parties that such restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of that state.

8. Return of Company Documents. In the event Executive leaves the employment of
Company for whatever reason, Executive agrees to deliver to Company any and all
laboratory notebooks, drawings, notes, memoranda, specifications, devices,
software, databases, formulas, molecules, cells and documents, together with all
copies thereof, and any other material containing or disclosing any Company
Inventions, Third Party Information or Confidential Information of Company.
Executive further agrees that any property situated on Company's premises and
owned by Company including disks and other storage media, filing cabinets or
other work areas, is subject to inspection by Company personnel at any time,
with or without notice, for the purpose of protecting Company's rights and
interests in its intellectual property.

9. Taxes. All payments to be made to Executive under this Agreement will be
subject to any applicable withholding of federal, state and local income and
employment taxes.

10. Miscellaneous. This Agreement shall also be subject to the following
miscellaneous considerations:

(a) Executive and the Company each represent and warrant to the other that he or
it has the authorization, power and right to deliver, execute, and fully perform
his or its obligations under this Agreement in accordance with its terms.

(b) This Agreement (including the attached Exhibits) contains a complete
statement of all the arrangements between the parties with respect to
Executive's employment by the Company. This Agreement supersedes all prior and
existing negotiations and agreements between the parties concerning Executive's
employment, including specifically the employment agreement between the Company
and Executive dated March 9, 2007. This Agreement can only be changed or
modified pursuant to a written instrument duly executed by each of the parties
hereto.

(c) If any provision of this Agreement or any portion thereof is declared
invalid, illegal, or incapable of being enforced by any court of competent
jurisdiction, the remainder of such provisions and all of the remaining
provisions of this Agreement shall continue in full force and effect.

(d) This Agreement shall be governed by and construed in accordance with the
internal, domestic laws of the State of North Carolina.

(e) The Company may assign this Agreement to any parent of the Company that owns
all of the stock of the Company. The Company may only assign this Agreement to a
successor (whether by merger, consolidation, purchase or otherwise) of all or
substantially all of the stock, assets or business of the Company and this
Agreement shall be binding upon and inure to the benefit of such successors and
assigns, provided that such successor promptly delivers to Executive a written
assumption of the obligations hereunder. Except as expressly provided herein,
Executive may not sell, transfer, assign, or pledge any of his rights or
interests pursuant to this Agreement, provided that any amounts due hereunder
shall, upon Executive's death, be paid to his estate unless Executive has
designated a beneficiary therefor in accordance with any applicable plan.

(f) Any rights of Executive hereunder shall be in addition to any rights
Executive may otherwise have under benefit plans of the Company to which he is a
party or in which he is a participant, including, but not limited to, any
Company-sponsored employee benefit plans. Provisions of this Agreement shall not
in any way abrogate Executive's rights under such other plans.

(g) For the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered personally or by overnight service or delivered
or mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed to the Company at its executive office or
the Executive at the address on the records of the Company; provided that all
notices to the Company shall be directed to the attention of the Chairman of the
Board of Directors with a copy to the Secretary of the Company, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.

(h) Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.

(i) Failure to insist upon strict compliance with any of the terms, covenants,
or conditions hereof shall not be deemed a waiver of such term, covenant, or
condition, nor shall any waiver or relinquishment of, or failure to insist upon
strict compliance with, any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.

(j) This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.

(k) Executive acknowledges that no representation, promise or inducement has
been made other than as set forth in the Agreement, and that he does not enter
into this Agreement in reliance upon any representation, promise or inducement
not set forth herein. The Agreement supersedes all prior negotiations and
understandings of any kind with respect to the subject matter and contains all
of the terms and provisions of the agreement between Executive and the Company
with respect to the subject matter hereof. Any representation, promise or
condition, whether written or oral, not specifically incorporated herein, shall
be of no binding effect.

11. Legal and Equitable Remedies. Because the Executive's services are personal
and unique, and because the Executive will have access to and become acquainted
with Proprietary Rights, Company Inventions and Confidential Information of
Company, Company will have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other equitable relief in any
court of competent jurisdiction, without prejudice to any other rights and
remedies that Company may have for a breach of this Agreement.

12. Survival of Provisions. The executory provisions of this Agreement will
survive the termination of this Agreement or the assignment of this Agreement by
Company to any successor in interest or other assignee. For this purpose,
executory provisions include but are not limited to the medical coverage
described in Section 4(a) (other than in the event of a termination for Cause).

13. Resolution of Disputes. Except as otherwise specifically provided in Section
11 above, any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration administered by the
American Arbitration Association and conducted before one arbitrator in New York
City, New York, all in accordance with its Commercial Arbitration rules then in
effect. The Company and Executive hereby agree that the arbitrator will not have
the authority to award punitive damages, damages for emotional distress or any
other damages that are not contractual in nature. Judgment shall be final and
binding upon the parties and judgment may be entered on the arbitrator's award
in any court having jurisdiction; provided, however, that the Company shall be
entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any violation or the continuation thereof, of the
provisions of Section 7 of this Agreement, and Executive consents that such
restraining order or injunction may be granted without the necessity of the
Company's posting any bond except to the extent otherwise required by applicable
law.

14. Indemnification. The Executive shall be indemnified to the fullest extent
permitted by law with regard to actions or inactions taken as an officer or
director of the Company or any affiliate or as a fiduciary of any benefit plan.
The Executive shall be covered by directors and officers liability insurance
with regard to the foregoing to the highest extent of any other officer or
director both during his service to the Company and thereafter while any
liability may exist.

 

 

Signatures on Page Following

IN WITNESS WHEREOF

, the parties hereto have executed this Agreement as of the day and year first
above written.

 

EXECUTIVE TRIMERIS, INC.

 

By: ____/s/ Andrew L. Graham________ By: __/s/ Martin Mattingly _______

Name: Andrew L. Graham Name: Martin Mattingly

Title: Chief Executive Officer

 

EXHIBIT A

TO

EXECUTIVE EMPLOYMENT AGREEMENT

The following is a complete list of all inventions or improvements relevant to
the subject matter of my employment by Company that have been made or conceived
or first reduced to practice by me alone or jointly with others prior to my
employment by Company and therefore should be excluded from the coverage of this
Agreement:

____ Additional sheets attached.

_x___ No pertinent inventions or improvements.

____ Due to confidentiality agreements with one or more prior employers, I
cannot disclose certain inventions that would otherwise be included on the
above-described list.

I propose to bring to my employment the following devices, materials and
documents of a former employer or other person to whom I have an obligation of
confidentiality and that are not generally available to the public. These
materials and documents may be used in my employment pursuant to the express
written authorization of my former employer or such other person (a copy of
which is attached hereto). If no such authorization is in place, I will consult
with Company management to determine what steps should be taken to protect the
interests of all parties concerned.

____ Additional sheets attached.

__x__ No material.

 

EXECUTIVE:

 

/s/ Andrew L. Graham

Andrew L. Graham

Date: January 24, 2008

Attachment to Exhibit A

(Prior Inventions)

None