Exhibit 10.1
(TRANS1 LOGO) [g22961g2296100.gif]
April 13, 2010
Joe Slattery
19316 Cissel Manor Drive
Poolesville, Maryland 20837
     Re: Offer of Employment with TranS1 Inc.
Dear Joe:
     On behalf of TranS1 Inc., a Delaware corporation (the “Company”), I am
pleased to invite you to join the Company as its Executive Vice President and
Chief Financial Officer. The first day of your employment will be no later than
Monday, April 19, 2010, or such other date as you and the Company mutually agree
in writing (“Effective Date”).
     The terms of this offer of employment are as follows:
     1. At-Will Employment; Position and Duties.
          (a) At-Will Employment. You should be aware that your employment with
the Company is for no specified period and constitutes “at-will” employment. As
a result, either you or the Company may terminate your employment with the
Company at any time and for any or no reason. We request that you give the
Company at least thirty (30) days’ notice in the event of a resignation without
Good Reason (as defined under Section 6 below).
          (b) Position and Duties. As of the Effective Date, you will serve as
the Chief Financial Officer of the Company, reporting directly to me, the
Company’s Chief Executive Officer. In this position, you will be expected to
devote your full business time, attention and energies to the performance of
your duties with the Company; provided, however, we acknowledge and consent to
your being on and serving on two outside boards of directors, so long as such
service does not impair your ability to serve in your new role with us.
          (c) Board of Directors. In connection with your commencement of
employment with the Company you shall resign your positions on the Board of
Directors and the Audit Committee of the Company. Options granted to you as a
member of our Board of Directors will remain in effect and continue to vest in
accordance with their original terms.
     2. Compensation. The Company will pay you a salary at the rate of
$285,000.00 per year payable in accordance with the Company’s standard payroll
policies, including compliance with applicable withholding (the “Base Salary”).
Any increased or decreased Base Salary shall serve as the “Base Salary” for
future employment under this offer letter. The first and last payment by the

 

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Joe Slattery
April 13, 2010
Page 2
Company to you will be adjusted, if necessary, to reflect a commencement or
termination date other than the first or last working day of a pay period.
     3. Stock Option.
          (a) Grant. Subject to approval by the Company’s Board of Directors,
you will be granted an option pursuant to the Company’s 2005 Stock Plan (the
“Plan”) to purchase 200,000 shares of the Company’s Common Stock at an exercise
price equal to the fair market value per share of the Company’s Common Stock on
the date the Board of Directors approves the option grant (the “Option Grant”).
The Option Grant shall be subject to the terms and conditions of the Plan and
the Company’s standard form of stock option agreement. The Option Grant shall be
made in the form of an incentive stock option, to the maximum extent permitted
by law, with the remainder of the grant made in the form of non-qualified stock
options.
          (b) Vesting Schedule; Exercise Terms. One-fourth (1/4th) of the shares
subject to the Option Grant will vest on the first anniversary of the Effective
Date and an additional one thirty-sixth (1/36th) of the remaining number of such
shares will vest each month thereafter, subject to your continued employment
with the Company on each such date. The Option Grant shall be exercisable up to
the number of vested shares according to the vesting schedule set forth in the
preceding sentence. The term of the option grant will be [10] years from date of
grant.
          (c) Change of Control. In the event of a Change of Control, if you are
not employed by the successor of our business as the Chief Financial Officerof
the successor all then-unvested options under the Option Grant shall vest and
become exercisable on the effective date of such Change of Control. If you are
so employed as the Chief Financial Officer or such higher position as you should
then hold with the Company of the successor’s business and the successor assumes
or replaces your Options, then your Options will continue to vest as provided
above. If you are so employed and your employment with the successor is
terminated by the successor without Cause or by you for Good Reason within
twelve months of the effective date of such Change of Control your Options shall
vest and become exercisable.
     4. Bonus.
          Annual Bonus. You will be eligible to earn a target bonus of forty
percent (40%) of your Base Salary, based upon the achievement of Company and
individual goals that will be determined by the Company’s Board of Directors.
The bonus, if any, will be determined and paid on an annual basis at the sole
discretion of the Board of Directors, at the time and manner to be determined by
the Board of Directors. You must be employed on the date that your bonus, if
any, is to be paid in order to earn and be eligible to receive the bonus.
     5. Benefits.
          (a) Standard. During the term of your employment, you will be eligible
to participate in the Company’s standard benefits covering Company employee
executives at your level, as such may be in effect from time to time. Upon your
employment, you will be granted four (4) weeks of paid vacation time.

 

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Joe Slattery
April 13, 2010
Page 3
          (b) Relocation. In connection with your joining the Company we have
agreed that you shall move your permanent residence to the Raleigh/Durham, North
Carolina area. In connection with such move from your current principal
residence in Maryland, the Company shall reimburse you for all relocation
expenses incurred during the twelve (12) month period commencing on April 19,
2010, including (i) travel, lodging and ground transportation for at least two
house hunting trips, each of which may be for up to three (3) days, (ii) packing
and moving all household goods, not including items requiring special takedown
or setup or special handling or transporting, (iii) $75,000 of insurance
covering household goods during the move, (iv) transportation of household goods
from your present residence in Maryland to your new home in Raleigh, North
Carolina, (v) up to 30 days of storage of your household goods, (vi) reasonable
temporary housing expense for up to sixty (60) days and one trip returning to
your current residence for every three weeks of temporary residency,
(vii) reimbursement for reasonable and customary realtor commissions and
conventional closing costs for the sale and purchase of new homes of equivalent
values, (viii) a $12,000 stipend for miscellaneous costs associated with moving
into a new home, such as utility and telecommunication hookups, and (ix) tax
“gross-up” payment for any incremental personal Federal and state tax liability
associated with moving expenses reimbursed. Please remember that all expenses
for relocation will require proper receipts and prior approval from the CEO to
qualify for reimbursement. Should you resign your employment with the Company
during the first twelve (12) months of your employment one hundred percent
(100%) of your relocation costs paid to you or on your behalf will be refunded
to the Company by you, unless such resignation is for Good Reason as defined
below. In the event you resign your employment with the Company during the
period from twelve (12) months to twenty-four (24) months after your
commencement date you will reimburse to the Company fifty percent (50%) of the
relocation expense paid to you or on your behalf unless you resign for Good
Reason as defined below.
     6. Definitions.
          (a) Cause. For purposes of this offer letter, “Cause” shall mean:
(1) your gross negligence in the performance of or failure to perform the duties
and obligations of your position with the Company or under this offer letter
(for reasons other than death or Disability), which gross negligence, if curable
within the discretion of the Company’s Board of Directors, is not cured to the
reasonable satisfaction of the Company’s Board of Directors within thirty
(30) days after receipt of written notice from the Board of Directors of such
failure; (ii) any act of personal dishonesty, fraud, embezzlement,
misrepresentation, or any unlawful act committed by you that results in your
substantial gain or personal enrichment at the expense of the Company; (iii)
your violation of a federal or state law or regulation applicable to the
Company’s business; (iv) your violation of or a plea of nolo contendere or
guilty to, a felony under the laws of the United States or any state; or
(v) your material breach of the terms of this offer letter or the
Confidentiality Agreement.
          (b) Change of Control. For purposes of this offer letter, “Change of
Control” shall mean the occurrence of any of the following events:
               (i) Any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company’s then outstanding voting securities, except that any
change in the beneficial ownership of the securities of the Company as a result
of an equity financing

 

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Joe Slattery
April 13, 2010
Page 4
of the Company that is approved by the Company’s Board of Directors, shall not
be deemed to be a Change in Control; or
               (ii) The consummation of the sale or disposition by the Company
of all or substantially all of the Company’s assets; or
               (iii) The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation.
          (c) Disability. For purposes of this offer letter, “Disability” shall
mean that you, at the time notice is given have been unable to substantially
perform your duties of your position with the Company or under this offer letter
for not less than one-hundred and twenty (120) work days within a twelve
(12) consecutive month period as a result of your incapacity due to a physical
or mental condition and, if reasonable accommodation is required by law, after
any reasonable accommodation.
          (d) Good Reason. For purposes of this offer letter and prior to a
Change of Control, “Good Reason” shall mean, without your written consent:
(i) there is a material reduction of the level of your compensation (excluding
any bonuses) (except where there is a general reduction applicable to the
management team generally); (ii) there is a material reduction in your overall
responsibilities or authority, or scope of duties; or (iii) there is a material
change in the geographic location at which you must perform your services;
provided however, that in no instance will such a relocation to an office
location fifty (50) miles or less from the Company’s current office location or
a relocation that does not require you to move from your anticipated new home in
Raleigh, North Carolina be deemed material for purposes of this offer letter.
For purposes of this offer letter and after a Change of Control but prior to the
expiration of the twelve months after the Change of Control, “Good Reason” shall
mean, without your written consent: (i) there is a material reduction of the
level of your compensation (excluding any bonuses) below the amount set forth in
the first sentence of Section 2 above; (ii) you are not the Chief Financial
Officer of the successor’s business; or (iii) there is a material change in the
geographic location at which you must perform the your services after the Change
of Control; provided however, that in no instance will such a relocation to an
office location fifty (50) miles or less from the Company’s office location
immediately preceding the Change of Control or a relocation that does not
require you to move from your anticipated new home in Raleigh, North Carolina be
deemed material for purposes of this offer letter.
     7. Immigration Laws. For purposes of federal immigration laws, you will be
required to provide to the Company documentary evidence of your identity and
eligibility for employment in the United States. Such documentation must be
provided within three (3) business days of the effective date of your
employment, or your employment relationship with the Company may be terminated.
You understand and agree that any termination under this Section 10 for failure
to properly provide the requested documentation shall be considered the same as
a termination for Cause under this offer letter.

 

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Joe Slattery
April 13, 2010
Page 5
     8. Employee Proprietary Information Agreement. As a condition of this offer
of employment, you will be required to complete, sign and return the Company’s
standard form of At-Will Employee Confidential and Proprietary Information
Agreement (the “Confidentiality Agreement”). A copy of the Confidentiality
Agreement is attached hereto as Exhibit A.
     9. General. This offer letter, the Confidentiality Agreement and the stock
option agreement (as approved by the Board of Directors) covering the Option
Grant, when signed by you, set forth the terms of your employment with the
Company and supersede any and all prior representations and agreements, whether
written or oral. In the event of a conflict between the terms and provisions of
this offer letter and the Confidentiality Agreement and the stock option
agreement, the terms and provisions of the Confidentiality Agreement and the
stock option agreement will control. Any amendment of this offer letter or any
waiver of a right under this offer letter must be in a writing signed by you and
an officer of the Company or a member of the Company’s Board of Directors (other
than yourself). North Carolina law will govern this offer letter.
     We look forward to you joining the Company. If the foregoing terms are
agreeable, please indicate your acceptance by signing this offer letter and
returning it to me, along with your completed and signed Confidentiality
Agreement.
[Signature pages to follow]

 

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            Sincerely,

TRANS1 INC.
      By:   /s/ Richard Randall        Richard Randall, Chief Executive Officer 
           

     
AGREED TO AND ACCEPTED:
   
 
   
“Employee”
   
 
   
 
   
/s/ Joseph P. Slattery
 
Joseph P. Slattery
   

Signature Page to Employment Offer Letter

 

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Exhibit A
Confidentiality Agreement