Exhibit 10.1

CHANGE IN CONTROL SEVERANCE AGREEMENT

This Change in Control Severance Agreement (the “Agreement”) is made as of
October 13, 2015, by and between Cempra, Inc., a Delaware corporation with its
principal executive offices at 6320 Quadrangle Drive, Suite 360, Chapel Hill, NC
27517 (the “Company”), and David W. Oldach, M.D. (the “Employee”).

W  I  T  N  E  S  S  E  T  H:

WHEREAS, the Company presently employs Employee as its Chief Medical Officer;

WHEREAS, the Company and Employee desire to set forth consideration to be paid
to Employee if his employment is terminated under certain circumstances
following a “Change in Control” of the Company as defined herein; and

WHEREAS, the Company wishes to protect its investment in its business,
employees, customer relationships, and confidential information, by requiring
Employee to abide by certain restrictive covenants regarding competition and
other matters, each of which is an inducement to the Company to provide Employee
with the benefits described in this Agreement;

NOW, THEREFORE, in consideration of the foregoing, the mutual promises herein
contained, and other good and valuable consideration, including the continued
employment of Employee by the Company and the compensation received by Employee
from the Company from time to time, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:

1. Definitions. For the purposes of the Agreement, the following terms shall be
defined as set out below:

(a) “Base Salary” shall mean Employee’s then current annual base salary.

(b) “Board” means the Company’s Board of Directors.

(c) “Effective Date” shall mean the date first written above.

(d) A “Change In Control” shall be deemed to have occurred upon the consummation
of (i) a merger or consolidation in which the shareholders of the Company
immediately prior to the merger or consolidation cease to own at least 50% of
the combined entity immediately following the merger or consolidation; (ii) a
sale of all or substantially all of the assets of the Company; (iii) the
acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
of beneficial ownership of any capital stock of the Company, if, after such
acquisition, such individual, entity or group owns more than 50% of either
(A) the then-outstanding common stock of the Company or (B) the combined voting
power of the then-outstanding securities of the Company entitled to vote in the
election of directors; or (iv) the liquidation or dissolution of the Company.

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(e) “Cause” shall be determined by a majority of the Board (excluding Employee
if a Board member) and shall mean:

(i) The willful failure, disregard or refusal by Employee to perform his duties
as an employee of the Company;

(ii) Any willful, intentional or grossly negligent act by Employee having the
effect of injuring, in a material way (whether financial or otherwise), the
business or reputation of the Company or any of its affiliates;

(iii) Willful misconduct by Employee in respect of the duties or obligations of
Employee, including, without limitation, insubordination with respect to lawful
directions received by Employee from the Company or the Board;

(iv) Employee’s conviction of any felony (including entry of a nolo contendere
or no contest plea);

(v) The determination by the Company, after a reasonable and good-faith
investigation by the Company following a written allegation by another employee
of the Company, that Employee personally engaged in some form of discrimination,
harassment or retaliatory conduct prohibited by law (including, without
limitation, discrimination based on race, color, religion, sex, national origin,
age, disability or other status protected by law);

(vi) Any violation of the Company’s Code of Conduct (as it may be modified from
time to time) or Insider Trading Policy or other similar policies that injures,
or in the determination of the Board, has the potential to injure in a material
way (whether financial or otherwise), the business or reputation of the Company
or any of its affiliates that, if capable of being cured, is not cured by
Employee within thirty (30) days after notice thereof is given to Employee by
the Company;

(vii) Any misappropriation or embezzlement of the property of the Company or its
affiliates (whether or not a misdemeanor or felony);

(viii) Breach by Employee of the Confidentiality and Assignment of Inventions
Agreement entered into by and between Employee and the Company prior to the date
hereof (the “Confidentiality and Assignment of Inventions Agreement”), that, if
capable of being cured, is not cured by Employee within thirty (30) days after
notice thereof is given to Employee by the Company; and

(ix) Breach by Employee of any provision of this Agreement other than those
contained in the Confidentiality and Assignment of Inventions Agreement, that,
if capable of being cured, is not cured by Employee within thirty (30) days
after notice thereof is given to Employee by the Company.

(f) The “Code” means the Internal Revenue Code of 1986, as amended.

 

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(g) “Good Reason” shall mean any of the following: (i) the assignment to
Employee of duties materially inconsistent with Employee’s position, duties,
responsibilities, titles or offices as described herein; (ii) material reduction
by the Company of Employee’s duties and responsibilities; (iii) any reduction or
series of reductions in excess of ten percent (10%) by the Company of Employee’s
compensation or benefits payable hereunder (it being understood that a reduction
of benefits applicable to all employees of the Company, including Employee,
shall not be deemed a reduction of Employee’s compensation package for purposes
of this definition); or (iv) a change of more than thirty-five (35) miles in the
geographic location at which Employee must perform services for the Company.
Notwithstanding the foregoing, Employee shall not have Good Reason for
termination unless Employee gives written notice of termination for Good Reason
within thirty (30) days after the event giving rise to Good Reason occurs, and
the Company does not correct the action or failure to act that constitutes the
grounds for Good Reason, as set forth in Employee’s notice of termination,
within thirty (30) days after the date on which Employee gives written notice of
termination.

(h) “Disability” shall mean that Employee has been unable to substantially
perform the essential job duties of his position hereunder with or without a
reasonable accommodation for ninety (90) or more consecutive days, or more than
one hundred twenty (120) days in any consecutive twelve (12) month period, by
reason of any physical or mental illness or injury, as determined by the Board
in its reasonable discretion.

(i) The “Term” of this Agreement shall mean an initial period of five (5) years
following the Effective Date, plus successive one (1) year renewal periods
thereafter so long as the Company does not provide Employee with written notice
of its intention not to renew this Agreement at least ninety (90) days prior to
the expiration of the initial five (5) year period or any additional one
(1) year renewal period.

(j) “Termination Date” shall mean the effective date of Employee’s termination
of employment with the Company.

(k) “Effective Release” is defined as a general release of claims in favor of
the Company in a form reasonably acceptable to the Company’s counsel that is
executed by Employee after the Termination Date and within any consideration
period required by applicable law and that is not revoked by Employee within any
legally prescribed revocation period.

2. Compensation upon Termination.

(a) Upon termination of employment by either party for any reason whatsoever,
Employee shall be entitled to continue to receive his Base Salary, minus
applicable withholdings required by law or authorized by Employee, and
reimbursement of any accrued, unpaid and appropriately documented business
expenses through the Termination Date.

(b) In addition, if during the Term of this Agreement, Employee’s employment
with the Company is terminated within twelve (12) months after a Change in
Control, either by the Company without Cause (and other than due to death or
Disability) or by

 

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Employee for Good Reason, and (1) such termination results in Employee incurring
a “separation from service” as defined under Treasury Regulation 1.409A-1(h);
(2) Employee has not breached this Agreement or the Confidentiality and
Assignment of Inventions Agreement; and (3) conditioned upon Employee’s
execution of an Effective Release, Employee shall be entitled to, in lieu of any
other separation payment or severance benefit:

(i) Payment of an amount equal to twelve (12) months of his Base Salary, minus
applicable withholdings required by law or authorized by Employee, to be paid
pursuant to the Company’s standard payroll practices and procedures, beginning
on the Company’s next regular pay day occurring sixty (60) days following the
Termination Date;

(ii) Payment in a lump sum, on the Company’s next regular pay day occurring
sixty (60) days following the Termination Date, of a pro rata bonus based upon
Employee’s target bonus amount for the year in which the Termination Date
occurs, pro-rated for the portion of the calendar year through the Termination
Date;

(iii) Accelerated vesting of all outstanding and unvested stock options and
other equity in the Company held by Employee, which shall become immediately and
fully exercisable, subject to all other terms of the applicable equity plan and
award agreement; and

(iv) Conditioned on Employee’s proper and timely election to continue his health
insurance benefits under COBRA after the Termination Date, reimbursement of
Employee’s applicable COBRA premiums for the lesser of twelve (12) months
following the Termination Date or until Employee becomes eligible for insurance
benefits from another employer, provided, however, that the Company has the
right to terminate such payment of COBRA premium reimbursement to Employee and
instead pay Employee a lump sum amount equal to the applicable COBRA premium
multiplied by the number of months remaining in the specified period if the
Company determines in its discretion that continued payment of the COBRA
premiums is or may be discriminatory under Section 105(h) of the Internal
Revenue Code.

(c) Upon termination of Employee’s employment (i) as a result of Employee’s
death or Disability, (ii) by the Company for Cause, (iii) by Employee without
Good Reason, or (iv) for any reason following the Term of this Agreement,
Employee shall not be entitled to additional compensation under this Agreement
beyond that accrued as of the Termination Date.

3. Section 409A.

(a) The parties hereby acknowledge and agree that all benefits or payments
provided by the Company to Employee pursuant to this Agreement are intended
either to be exempt from the provisions of Section 409A of the Code and the
regulations and other guidance thereunder and any state law of similar effect
(collectively, “Section 409A”), or to be in compliance with Section 409A, and
the Agreement shall be interpreted to the greatest extent possible to be so
exempt or in compliance. If there is an ambiguity in the language of the
Agreement, or if Section 409A guidance indicates that a change to the Agreement
is required or desirable to achieve exemption or compliance with Section 409A,
Company and Employee agree to attempt to renegotiate in good faith to clarify
the ambiguity or make such change.

 

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(b) If any severance or other payments that are required by the Agreement are to
be paid in a series of installment payments, each individual payment in the
series shall be considered a separate payment for purposes of Section 409A.

(c) If any severance compensation or other benefit provided to Employee pursuant
to this Agreement that constitutes “nonqualified deferred compensation” within
the meaning of Section 409A is considered to be paid on account of “separation
from service” within the meaning of Section 409A, and Employee is a “specified
employee” within the meaning of Section 409A, no payments of any of such
severance or other benefit shall made for six (6) months plus one (1) day after
the Separation Date (the “New Payment Date”). The aggregate of any such payments
that would have otherwise been paid during the period between the Separation
Date and the New Payment Date shall be paid to the Employee in a lump sum on the
New Payment Date.

4. Excess Parachute Payments. If any payments or benefits received or to be
received by Employee pursuant to this Agreement in connection with or contingent
on a change in ownership or control are deemed to be an “excess parachute
payment” within the meaning of Section 280G of the Code (“Excess Parachute
Payment”), and if the Company has no publicly traded stock, the Company will use
commercially reasonable efforts to obtain “shareholder approval” within the
meaning of Section 280G(b)(5) of the Code of such payments or benefits in order
to exempt such payments or benefits from being considered an Excess Parachute
Payment. If, notwithstanding the foregoing, such payments or benefits still
would be considered to result in an Excess Parachute Payment, then, at Company’s
election, such payments under this Agreement shall either be paid in full or
reduced to the extent necessary to avoid being considered an Excess Parachute
Payment, based upon Company’s determination, in its sole discretion, as to which
alternative results in the better tax consequences for the Employee.

5. Employment At Will. Nothing herein is meant to alter the “at will” status of
Employee’s employment with the Company. Subject to the provisions of Section 2
above regarding payments in connection with a termination following a Change in
Control, Employee’s employment with the Company may be terminated at any time,
for any or no cause or reason, by either Employee or by the Company.

6. Non-Competition, Non-Solicitation and Non-Disparagement.

(a) While Employee is employed by the Company and for a period of twelve
(12) months after the termination or cessation of such employment by either
party for any reason whatsoever, Employee will not, directly on Employee’s own
behalf or indirectly for or in conjunction with others:

(i) Within the Restricted Territory (as defined in subsection (b) below), engage
in any business or enterprise (whether as owner, partner, officer, director,
employee, consultant, investor, lender or otherwise) that develops,
manufactures, markets, licenses or sells any pharmaceutical antibiotic products
that compete with the products being

 

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sold or developed by the Company at the time of Employee’s termination
(collectively, the “Competitive Products”) in any management or executive role
in which Employee would perform duties that are the same or substantially
similar to those duties actually performed by Employee for the Company in the
twelve (12) months immediately prior to the termination of Employee’s
employment, or in any position where Employee or such business or enterprise
would benefit from Employee’s use or disclosure of the Company’s Proprietary
Information as defined in the Confidentiality and Assignment of Inventions
Agreement;

(ii) Within the Restricted Territory, solicit or accept employment or be
retained by an individual or entity who, at any time during the term of this
Agreement, was an agent, client, licensee, or customer of the Company, where
Employee would have any management or executive role or be in any position
(whether as an employee, contractor or consultant) in which Employee would
perform duties that are the same or substantially similar to those duties
actually performed by Employee for the Company in the twelve (12) months
immediately prior to the termination of Employee’s employment or in any position
where Employee or such individual or entity would benefit from Employee’s use or
disclosure of the Company’s Proprietary Information as defined in the
Confidentiality and Assignment of Inventions Agreement;

(iii) Within the Restricted Territory, become financially interested in an
enterprise that is engaged, as a substantial part of its operations, in
developing, manufacturing, marketing, licensing or selling the Competitive
Products; provided, however, that nothing in this Agreement shall be construed
to prevent Employee from owning less than five percent (5%) of the outstanding
voting securities of any entity whose voting securities are listed on a national
securities exchange;

(iv) Solicit or accept the business of any customer of the Company whom Employee
solicited or serviced for the Company during the last twelve (12) months of
Employee’s employment with the Company for the purpose of selling or providing
Competitive Products to such customer; and/or

(v) Solicit, induce or encourage any employee, consultant, or independent
contractor of the Company to terminate his or her employment or contracting
relationship with the Company.

(b) For purposes of this Agreement, the “Restricted Territory” means North
America; but if such territory is determined to be overly broad, then the United
States; and, if such territory is also determined to be overly broad, then each
state or province in North America in which the Company engages in material
business activities or sells or licenses its products. Provided, however, that
it shall not be a violation of this Section 6 for Employee to work outside of
the Restricted Territory for any business or enterprise that develops,
manufactures, markets, licenses or sells Competitive Products, so long as that
business or enterprise does not manufacture, market, license or sell any
Competitive Products that compete with the Company’s products within the
Restricted Territory.

(c) During Employee’s employment with the Company and at all times

 

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thereafter, the Company and Employee each further agree that neither party shall
directly or indirectly disparage or defame the name or reputation of the other
party or any of its affiliates, including but not limited to any officer,
director, employee or shareholder of the Company or any of its affiliates.

(d) In the event of a breach or threatened breach of this Section 6 by Employee,
then, in addition to any other rights which the Company may have, (i) the
Company will have the right to immediately terminate any remaining payment
obligations to Employee pursuant to Sections 2(b)(i), 2(b)(ii), and 2(b)(iv)
above without any further obligation to Employee, and Employee will immediately
repay to the Company any amounts previously paid to Employee pursuant to
Section 2(b)(i), 2(b)(ii), and 2(b)(iv) above; (ii) the Company will be entitled
to injunctive relief to enforce this Section 6 (and notwithstanding anything set
forth in Section 7(b) below, the Company may seek injunctive relief in any court
of competent jurisdiction without waiving the right to arbitration under
Section 7(b)); and (iii) the Company will have the right to require Employee to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments and other benefits (collectively, the “Benefits”) derived
or received by Employee as a result of any transaction constituting a breach of
any of the provisions of Section 6, and Employee hereby agrees to account for
and pay over such Benefits to the Company. Notwithstanding the foregoing, the
sole remedy available to the Company with respect to a breach by Employee of
(a)(i), (a)(iii) or (a)(iv) above that relates to Competitive Products other
than a product or products in the fusidane or macrolide classes of products
shall be termination effective as of the breach of any remaining payment
obligations pursuant to Section 2(b) of this Agreement.

(e) Each of the rights and remedies enumerated in Section 6(d) shall be
independent of the others and shall be in addition to, and not in lieu of, any
other rights and remedies available to the Company at law or in equity. If any
of the covenants contained in this Section 6, or any part of any of them, is
hereafter construed or adjudicated to be invalid or unenforceable, the same
shall not affect the remainder of the covenant or covenants or rights or
remedies which shall be given full effect without regard to the invalid
portions. If any of the covenants contained in this Section 6 is held to be
invalid or unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court or arbitrator making such
determination shall have the power to reduce the duration and/or area of such
provision and in its reduced form such provision shall then be enforceable. No
such holding of invalidity or unenforceability in one jurisdiction shall bar or
in any way affect the Company’s right to the relief provided in this Section 6
or otherwise in the courts of any other state or jurisdiction within the
geographical scope of such covenants as to breaches of such covenants in such
other respective states or jurisdictions, such covenants being, for this
purpose, severable into diverse and independent covenants.

(f) The provisions of this Section 6 will survive any termination of this
Agreement and the termination of Employee’s employment with the Company.

7. Miscellaneous.

(a) This Agreement is governed by and will be construed and interpreted in
accordance with the laws of the State of North Carolina, without reference to
its conflict of laws principles.

 

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(b) Any dispute arising out of, or relating to, this Agreement or the breach
thereof, or regarding the interpretation thereof, shall be finally settled by
binding arbitration conducted in Raleigh, North Carolina and administered by the
American Arbitration Association (“AAA”) pursuant to its then-current Employment
Arbitration Rules and Mediation Procedures (available at www.adr.org). The
arbitration shall be conducted by a single experienced arbitrator or retired
judge, to be chosen via the AAA’s selection procedures. The arbitrator’s award
shall be final and binding. Judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof. The arbitrator may
award monetary damages and, in the arbitrator’s discretion, attorneys’ fees
and/or costs to the prevailing party if allowed by statute. The arbitrator may
not award punitive damages or any other type of exemplary damages unless such
damages are specifically authorized by statute. Any filing fees and the fees and
costs of the arbitrator shall be paid equally by the Company and Employee. Each
party shall pay the fees of his or its attorneys, the expenses of his or its
witnesses, and any other expenses that party incurs in connection with the
arbitration. For the purpose of any judicial proceeding to enforce such award or
incidental to such arbitration or to compel arbitration, the parties hereby
submit to the sole and exclusive jurisdiction of the state or federal courts
sitting in Orange County, North Carolina, and agree that service of process in
such arbitration or court proceedings shall be satisfactorily made upon it or
him if sent by registered mail addressed to it or him at the address referred to
in Section 7(g) of this Agreement.

(c) This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, legal representatives, successors and
assigns.

(d) This Agreement, and Employee’s rights and obligations hereunder, may not be
assigned by Employee. The Company may assign its rights, together with its
obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets, but no such
assignment shall release the Company of its obligations hereunder.

(e) This Agreement cannot be amended orally, or by any course of conduct or
dealing, but only by a written agreement signed by the parties hereto.

(f) The failure of either party to insist upon the strict performance of any of
the terms, conditions and provisions of this Agreement shall not be construed as
a waiver or relinquishment of future compliance therewith, and such terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.

(g) All notices, requests, consents and other communications, required or
permitted to be given hereunder, shall be in writing and shall be delivered
personally or by an overnight courier service or sent by registered or certified
mail, postage prepaid, return receipt requested, to the parties at the addresses
set forth on the first page of this Agreement, and shall be deemed given when so
delivered personally or by overnight courier, or, if mailed, five days after the
date of deposit in the United States mail. Either party may designate another
address, for receipt of notices hereunder by giving notice to the other party in
accordance with this paragraph (g).

 

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(h) This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.

(i) As used in this Agreement, an “affiliate” of a specified person or entity
shall mean and include any person or entity controlling, controlled by or under
common control with the specified person or entity.

(j) The section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.

(k) This Agreement may be executed in any number of counterparts, each of which
shall constitute an original, but all of which together shall constitute one and
the same instrument.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

CEMPRA, INC. By:  

/s/ Prabhavathi Fernandes, Ph.D.

Name:   Prabhavathi Fernandes, Ph.D. Title:   President and CEO

 

EMPLOYEE By:  

/s/ David W. Oldach, M.D.

Name:   David W. Oldach, M.D.

[Signature Page to Change in Control Severance Agreement – D. Oldach]