EXHIBIT 10.12

 

January 9, 2016

 

VIA EMAIL

 

Thomas E. Rollins

xxxxx xxxxxxxxx xxx

xxxxxx, xx xxxxx

 

Re: Employment Terms

Dear Tom,

 

On behalf of Assembly Biosciences, Inc. (" Assembly" or the " Company"), we are
pleased to offer employment to you on the following terms: 

1.          Position: Your initial title will be Chief Development Officer and
Head of Microbiome Program and you will initially report to the Company’s Chief
Executive Officer (“CEO”). This is a full-time position. You will perform the
duties of Chief Development Officer and Head of Microbiome Program faithfully.
You will devote your full working time, attention and energies to the business
of the Company. You acknowledge that the Company has offices in New York City,
Indiana and San Francisco, California and, notwithstanding where you live, you
agree to travel to the Company’s offices and such other locations as deemed
necessary and appropriate by the Company to perform your duties for the Company.
You understand that as the Company’s Head of Microbiome Program your relocation
may be required to best serve this program. While the Company would not ask you
to relocate prior to 2017, you understand that it is an issue we may discuss
with you at some point. The Company would of course pay all reasonable expenses
incurred by you in connection with any such relocation, subject to submitting
supporting documentation. While you render services to the Company, you will not
engage in any other employment, consulting or other business activity (whether
full-time or part-time), without prior written consent from the CEO. For
avoidance of doubt, you may serve on the boards of charitable, educational and
other non-profit organizations so long as they don’t interfere with your work.
By signing this letter agreement, you confirm to the Company that you have no
contractual commitments or other legal obligations that would prohibit you from
performing your duties for the Company.

 

2.          Start Date: Unless otherwise agreed, your first day of employment
will be January 11, 2016.

 

3.          Salary: The Company will pay you a starting salary at the rate of
$360,000.00 per year (your “Base Salary”), payable in accordance with the
Company’s standard payroll schedule. This salary will be subject to adjustment
pursuant to the Company’s employee compensation policies in effect from time to
time.

 

4.          Bonuses: You will be eligible to receive annual performance bonuses
of up to 35% of your Base Salary. The actual bonus is discretionary and will be
subject to the assessment of your performance, as well as business conditions at
the Company as determined by the Company’s Board of Directors (the “Board”) or
the Compensation Committee, in its sole discretion. No bonus is earned until
paid. To the extent the Company decides to award you a bonus, such bonus will be
paid to you no later than two and one-half (22) months following the end of the
calendar year in which such bonus was earned.

 

5.          Benefits: As a regular employee of the Company, you will be eligible
to participate in a number of Company-sponsored benefits. In addition, you will
be entitled to paid vacation in accordance with the Company’s vacation policy,
as in effect from time to time.

 

6.          Stock Options: Subject to the approval of the Board or its
Compensation Committee, you will be granted an option to purchase 125,000 shares
of the Company’s Common Stock. The exercise price per share will be determined
by the Board or the Compensation Committee when the option is granted and will
be equal to at least the fair market value of the Company’s Common Stock as of
the date of grant. The option will be subject to the terms and conditions
applicable to options granted under the Company’s 2010 Stock Incentive Plan (the
“Plan”), as described in the Plan and the applicable stock option agreement. The
option will vest and become exercisable in four equal annual installments of 1/4
of the underlying shares of Common Stock on each anniversary of your employment
start date with the Company, such that all shares of Common Stock underlying the
option will be vested and exercisable on the date four (4) years after your
employment start date, subject to your continued employment with the Company
through each applicable vesting date.

 

7.          Separation Benefits. Except as provided at the end of this
paragraph, in the event you are terminated by the Company without Cause (as
defined below) provided that you sign and do not revoke a Release Agreement in a
form provided by the Company within the time period specified therein (which
time period shall not exceed sixty (60) days), the Company shall provide the
following benefits to you, referred to herein as the “Separation Benefits”: (i)
the continued payment in installments of yours then-current Base Salary (less
applicable taxes and withholdings) for a period of twelve (12) months following
the date of termination (the “Separation Pay”) (unless the termination date
occurs upon a Change in Control (as defined in Section 409A (as defined below))
or within the six month period thereafter, in which case the Separation Pay
shall include an amount equal to the annual bonus at target and shall be paid in
a lump sum within 60 days of the date of termination); (ii) all Equity Awards
which would have become vested during the twelve (12) months following the
termination date shall accelerate and vest (unless termination date occurs
within the six month period after a Change in Control, in which case all of the
time–based Equity Awards will become immediately vested); (iii) the extension of
the exercise period for all vested Stock Options to the end of their term; and
(iv) provided that you properly and timely elect to continue your health
insurance benefits under COBRA or applicable state continuation coverage after
the date of termination, reimbursement for your applicable health care
continuation coverage premiums for the lesser of (A) the twelve (12) month
period following the month in which the termination date occurs, or (B) the
maximum period permitted by applicable law, provided that the Company’s
obligation to pay a portion of your health continuation coverage premiums will
terminate if you become eligible for insurance benefits from another employer
during the reimbursement period. Except as noted above, the Separation Pay will
be paid in installments until the end of the 12-month period at the same rate as
the Base Salary in accordance with the Company’s normal payroll practices for
its employees. You understand that if you are eligible to receive the Separation
Benefits, such Separation Benefits shall be in lieu of and not in addition to
any other severance benefits. Notwithstanding the foregoing, if you are entitled
to receive the Separation Benefits but you violate any provisions of this
Agreement or any other agreement entered into by you and the Company, the
Company will be entitled to immediately stop paying any further installments of
the Separation Benefits. Notwithstanding anything in this paragraph to the
contrary, if the Company makes the determination that it is in the best interest
of the Company or its Microbiome Program for you to relocate and you decide that
you are unwilling to relocate, in lieu of the Separation Benefit provided above,
the Company and you will negotiate in good faith a reasonable modified
“separation benefit” that provides for less Separation Pay and less vesting of
options than provided above.

 

 

 

 

“Cause”” shall mean (i) your conviction of (A) a felony or (B) any misdemeanor
involving moral turpitude, deceit, dishonesty or fraud; (ii) your gross
negligence, willful misconduct or insubordination with respect to the Company or
any affiliate of the Company; or (iii) your material violation of any provision
of any agreement(s) between you and the Company including relating to
noncompetition, nonsolicitation, nondisclosure and/or assignment of inventions,
which, if curable, such violation is not cured within thirty (30) calendar days
following delivery of written notice to you specifying in reasonable detail key
elements of such violation.

 

8.          Proprietary Information and Inventions Agreement. Like all Company
employees, you will be required, as a condition of your employment with the
Company, to sign the Company’s standard Proprietary Information and Inventions
Agreement, a copy of which is attached hereto as Exhibit A. Additionally, as a
Company employee, you will be expected to abide by Company rules and
regulations, sign and comply with the Company Insider Trading Policy and,
acknowledge in writing that you have read the Company’s Employee Handbook.

 

9.          Representation Regarding Other Obligations: This offer is
conditioned on your representation that you are not subject to any
confidentiality, non-competition agreement or any other similar type of
restriction that may affect your ability to devote your full business time and
attention to your work at the Company. If you have entered into any agreement
that may restrict your activities on behalf of the Company, please provide me
with a copy of the agreement as soon as possible. The Company reserves the right
to rescind this offer should it determine that any such restriction poses a
legal risk to the Company. Additionally, please understand it is the policy of
the Company not to solicit or accept proprietary information and / or trade
secrets of other companies or third parties. If you have or have had access to
trade secrets or other confidential, proprietary information from your former
employer or another third party, the use of such information in performing your
duties at the Company is prohibited. This may include, but is not limited to,
confidential or proprietary information in the form of documents, magnetic
media, software, customer lists, and business plans or strategies. Rather, you
will be expected to use only that information which is generally known and used
by persons with training and experience comparable to your own, which is common
knowledge in the industry or otherwise legally in the public domain, or which is
otherwise provided or developed by the Company. During our discussions about
your proposed job duties, you assured us that you would be able to perform those
duties within the guidelines just described.

 

10.         Employment Relationship. Employment with the Company is for no
specific period of time. Your employment with the Company will be “at will,”
meaning that either you or the Company may terminate your employment at any time
and for any reason, with or without cause. Any contrary representations that may
have been made to you are superseded by this letter agreement. This is the full
and complete agreement between you and the Company on this term. Although your
job duties, title, reporting relationship, compensation and benefits, as well as
the Company’s personnel policies and procedures, may change from time to time,
the “at will” nature of your employment may only be changed in an express
written agreement signed by you and a duly authorized officer of the Company
(other than you).

 

11.         Taxes. All forms of compensation referred to in this letter
agreement are subject to reduction to reflect applicable withholding and payroll
taxes and other deductions required by law. You agree that the Company does not
have a duty to design its compensation policies in a manner that minimizes your
tax liabilities, and you will not make any claim against the Company or its
Board of Directors related to tax liabilities arising from your compensation.

 

12.         Section 409A. For purposes of this letter agreement, a termination
of employment will be determined consistent with the rules relating to a
“separation from service” as defined in Section 409A of the Code and the
regulations thereunder (“Section 409A”). Notwithstanding anything else provided
herein, to the extent any payments provided under this letter agreement in
connection with your termination of employment constitute deferred compensation
subject to Section 409A, and you are deemed at the time of such termination of
employment to be a “specified employee” under Section 409A, then such payment
shall not be made or commence until the earlier of (i) the expiration of the 6-
month period measured from your separation from service from the Company or (ii)
the date of your death following such a separation from service; provided,
however, that such deferral shall only be effected to the extent required to
avoid adverse tax treatment to you including, without limitation, the additional
tax for which you would otherwise be liable under Section 409A(a)(1)(B) in the
absence of such a deferral. To the extent that any provision of this letter
agreement is ambiguous as to its compliance with Section 409A, the provision
will be read in such a manner so that all payments hereunder comply with Section
409A. Payments pursuant to this letter agreement are intended to constitute
separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury
Regulations. Except as otherwise expressly provided herein, to the extent any
expense reimbursement or the provision of any in-kind benefit under this letter
agreement is determined to be subject to Section 409A of the Code, the amount of
any such expenses eligible for reimbursement, or the provision of any in- kind
benefit, in one calendar year shall not affect the expenses eligible for
reimbursement in any other taxable year (except for any lifetime or other
aggregate limitation applicable to medical expenses), in no event shall any
expenses be reimbursed after the last day of the calendar year following the
calendar year in which you incurred such expenses, and in no event shall any
right to reimbursement or the provision of any in-kind benefit be subject to
liquidation or exchange for another benefit. Notwithstanding anything to the
contrary in this letter agreement, if the Change in Control does not constitute
a change in the ownership or effective control of the Company, or in the
ownership of a substantial portion of the assets of the Company, within the
meaning of Section 409A, the amount of cash Separation Pay, if any, shall be
paid in equal installments in accordance with the Company’s then payroll
practice over a 12-month period. Solely for purposes of Section 409A of the
Code, each installment payment is considered a separate payment.

 

 

 

 

13.         Interpretation, Amendment and Enforcement. This letter agreement and
Exhibit A constitute the complete agreement between you and the Company, contain
all of the terms of your employment with the Company and supersede any prior
agreements, representations or understandings (whether written, oral or implied)
between you and the Company. This letter agreement may not be amended or
modified, except by an express written agreement signed by both you and a duly
authorized officer of the Company. The terms of this letter agreement and the
resolution of any disputes as to the meaning, effect, performance or validity of
this letter agreement or arising out of, related to, or in any way connected
with, this letter agreement, your employment with the Company or any other
relationship between you and the Company will be governed by Indiana law,
excluding laws relating to conflicts or choice of law.

 

We hope that you will accept our offer to join the Company. You may indicate
your agreement with these terms and accept this offer by signing and dating both
the enclosed duplicate original of this letter agreement and the enclosed
Proprietary Information and Inventions Agreement and returning them to me. This
offer, if not accepted, will expire at the close of business on January 11,
2016. As required by law, your employment with the Company is contingent upon
your providing legal proof of your identity and authorization to work in the
United States.

 

Sincerely,

 

/s/ Derek Small   Derek Small Chief Executive Officer

 

I have read and accept this employment offer:

 

/s/ Thomas E. Rollins  

Signature of Thomas E. Rollins Dated: January 9, 2016 Attachment

Exhibit A: Proprietary Information and Inventions Agreement