Exhibit 10.3

TRIMERIS, INC.

2007 EMPLOYEE STOCK PURCHASE PLAN

 

Purpose    Trimeris, Inc. 2007 Employee Stock Purchase Plan (the “ESPP” or the
“Plan”) provides employees of Trimeris, Inc. (the “Company”) and its Eligible
Subsidiaries with an opportunity to become owners of the Company through
purchasing shares of the Company’s common stock (the “Common Stock”). The
Company intends this Plan to qualify as an employee stock purchase plan under
Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), and
its terms should be construed accordingly. The Plan is effective as of
December 1, 2007. Eligibility    An Employee whom the Company or an Eligible
Subsidiary employs as of the first day of a Payroll Deduction Period (and has
employed for such prior waiting period, initially set at 90 days, as the
Committee determines) is eligible to participate in the ESPP for that Payroll
Deduction Period. However, an Employee may not make a purchase under the ESPP if
such purchase would result in the Employee’s owning Common Stock possessing 5%
or more of the total combined voting power or value of the Company’s outstanding
stock. In determining an individual’s amount of stock ownership, any options to
acquire shares of Company Common Stock are counted as shares of stock, and the
attribution rules of Section 424(d) of the Code apply.    “Employee” means any
person employed as a common law employee of the Company or an Eligible
Subsidiary. Employee excludes anyone who, with respect to any particular period
of time, was not treated initially on the payroll records as a common law
employee, unless the Committee determines that including the person is necessary
to preserve tax treatment. Administrator    A committee of the Board of
Directors (the “Board”) of the Company, (the “Committee”), will administer the
ESPP. The Committee is vested with full authority and discretion to make,
administer, and interpret such rules and regulations as it deems necessary to
administer the ESPP (including rules and regulations considered necessary in
order to comply with the requirements of section 423 of the Code). Any
determination or action of the Committee in connection with administering or
interpreting the ESPP will be final and binding upon each Employee, Participant,
and all persons claiming under or through any Employee or Participant.   
Without shareholder consent and without regard to whether the actions might
adversely affect Participants, the Committee (or the Board) may   

establish and change the Payroll Deduction Periods and Offering Periods,

  

limit or increase the frequency and/or number of changes in the amounts withheld
during a Payroll Deduction Period,

  

establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars,

  

lengthen or shorten the waiting period before an Employee becomes eligible to
participate, as long as the change applies uniformly,

  

permit payroll withholding in excess of the amount the Participant designated to
adjust for delays or mistakes in the Company’s processing of properly completed
withholding elections,

  

specify a smaller discount to the Fair Market Value (i.e. a higher Purchase
Price) to apply in connection with a shortened period during which Participants
are required to hold the shares after purchase;

  

establish reasonable waiting and adjustment periods and/or accounting and
crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each Participant properly correspond with amounts withheld from
the Participant’s Compensation,

  

delegate its functions (other than those with respect to setting Payroll
Deduction or Offering Periods or determining the price of stock and the number
of shares to be offered under the Plan) to officers or employees of the Company,
and

  

establish such other limitations or procedures as it determines in its sole
discretion advisable and consistent with the Plan.

   The Committee may also increase the price provided in Step 2 under Granting
of Options (by decreasing the discount and/or by designating that the price is
determined as of either the beginning or the ending date of an Offering Period
or Payroll Deduction Period or the higher of both rather than as of the lower)
for Offering Periods and Payroll Deduction Periods beginning after Committee
action.

--------------------------------------------------------------------------------

Offering Periods    Offering Periods are successive and overlapping 12 month
periods beginning on the first trading day on or after December 1 and June 1 of
each year and ending on the last trading day in the 12 month period. Payroll   
Payroll Deduction Periods are the periods during which the Company collects
payroll deductions for a particular purchase. Period Deduction    Unless the
Committee specifies otherwise, the Payroll Deduction Periods will be successive
six month periods beginning December 1 and June 1, with the first such Period
beginning as of December 1, 2007. Participation    An eligible Employee may
become a “Participant” for an Offering Period by completing an authorization
notice and delivering it to the Committee through the Company’s Human Resources
professionals within a reasonable period of time before the first day of such
Offering Period. All Participants receiving options under the ESPP will have the
same rights and privileges. Method of Payment    A Participant may contribute to
the ESPP solely through payroll deductions as follows:    The Participant must
elect on an authorization notice or other required documentation to have
deductions made from his Compensation for each payroll period during the Payroll
Deduction Period at or above a minimum percentage and under terms the Committee
determines. Payroll deductions will be at a rate from 1% to 10% of Compensation.
Compensation under the Plan means an Employee’s regular compensation, including
overtime, shift premiums, bonuses, and commissions (but expressly excluding
income from stock options or other noncash compensation), from the Company or an
Eligible Subsidiary paid during a Payroll Deduction Period.    All payroll
deductions will be credited to the Participant’s account under the ESPP. No
interest will accrue on the account.    Payroll deductions will begin on the
first payday coinciding with or following the first day of each Payroll
Deduction Period and will end with the last payday preceding or coinciding with
the end of that Payroll Deduction Period, unless the Participant sooner
withdraws as authorized under Withdrawal from the Plan below.    A Participant
may not alter the rate of payroll deductions during the Offering Period, except
as provided under Withdrawal from the Plan.    The Company may use the
consideration it receives for general corporate purposes. Granting of Options   
On the first day of each Offering Period, a Participant will receive options to
purchase a number of shares of Common Stock with funds withheld from his or her
Compensation. Such number of shares will be determined at the end of the Payroll
Deduction Period according to the following procedure:   

Step 1 — Determine the amount the Company withheld from Compensation since the
beginning of the Payroll Deduction Period;

  

Step 2 — Determine the “Purchase Price” to be the Fair Market Value, provided
that, before an Offering Period begins, the Committee can decrease the price to
an amount that represents at least 85% of the lower of the Fair Market Value of
a share of Common Stock on the first day of the Offering Period and the last day
of the Payroll Deduction Period; and

  

Step 3 — Divide the amount determined in Step 1 by the amount determined in Step
2.

  

Any amounts in Step 3 not used to purchase whole shares will be carried forward
to the next Payment Deduction Period, unless the Committee decides instead to
have such amounts refunded to the Participant.

Fair Market Value    The Fair Market Value of a share of Common Stock for
purposes of the Plan as of each date described in Step 2 will be determined as
follows:   

while the Common Stock trades on a national securities exchange, the closing
price as reported on NASDAQ Global Market System on a given trading day;

  

if the Common Stock does not trade on any such exchange, the closing sale price
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System (“Nasdaq”) for such date;

  

if no such closing sale price information is available, the average of the
closing bid and asked prices that Nasdaq reports for such date;

  

if there are no such closing bid and asked prices, the average of the closing
bid and asked prices as reported by any other commercial service for such date;
or

  

if the Company has no publicly-traded stock, the Committee will determine the
Fair Market Value for purposes of the Plan using any measure of value it
determines in good faith to be appropriate;

   For any date described in Step 2, the Fair Market Value of a share of Common
Stock for such date will be determined by using the pricing method described
above for the trading day. For any date that is not a trading day, the Fair
Market Value will be determined as of the next preceding trading day, unless the
Committee determines that the time elapsed since

--------------------------------------------------------------------------------

   trading ceased makes such prior day an inappropriate measure of Fair Market
Value. The Committee can substitute a particular time of day or other measure of
“closing sale price” or “bid and asked prices” if appropriate because of changes
in exchange or market procedures.    The Committee has sole discretion to
determine the Fair Market Value for purposes of this Plan, and all participation
is conditioned on the Participant’s agreement that the Committee’s determination
is conclusive and binding even though others might make a different
determination.    No Participant can receive options:   

if, immediately after the grant, that Participant would own shares, or hold
outstanding options to purchase shares, or both, possessing 5% or more of the
total combined voting power or value of all classes of shares of the Company or
any Subsidiaries (as defined below); or

  

that permit the Participant to purchase shares under all employee stock purchase
plans of the Company and any Subsidiary with a Fair Market Value (determined at
the time the options are granted) that exceeds $25,000 in any calendar year.

Exercise of Option    Unless a Participant effects a timely withdrawal under the
Withdrawal paragraph below, his option for the purchase of shares of Common
Stock during a Payroll Deduction Period will be automatically exercised as of
the last day of the Payroll Deduction Period for the purchase of the maximum
number of shares (including, if the Committee so provides, fractional shares)
that the sum of the payroll deductions credited to the Participant’s account
during such Payroll Deduction Period can purchase under the formula specified in
Granting of Options. In not event shall the number of shares purchased by a
single participant exceed 2,000 shares on the last day of any Payroll Deduction
Period. Delivery of Common Stock    As soon as administratively feasible after
the options are used to purchase Common Stock, the Company will credit to each
Participant or, in the alternative, to an agent or custodian that the Committee
designates, the shares of Common Stock the Participant purchased upon the
exercise of the option. If delivered to an agent or custodian, the agent or
custodian may hold the shares in nominee name and may commingle shares held in
its custody in a single account or stock certificate without identification as
to individual Participants. Subsequent Offerings    A Participant will be deemed
to have elected to participate in each subsequent Payroll Deduction Period
following his initial election to participate in the ESPP, unless the
Participant files a written withdrawal notice with the Finance Department (or
such other recipient as the Department designates) at least 10 days before the
beginning of the Payroll Deduction Period as of which the Participant desires to
withdraw from the ESPP. Withdrawal from the Plan    A Participant may withdraw
all, but not less than all, payroll deductions credited to his account for a
Payroll Deduction Period before the end of such Payroll Deduction Period by
delivering a written notice to the Finance Department or its designee on behalf
of the Committee at least 30 days before the end of such Payroll Deduction
Period (or by such other deadline as the Committee determines). A Participant
who for any reason, including retirement, termination of employment, or death,
ceases to be an Employee before the last day of any Payroll Deduction Period
will be deemed to have withdrawn from the ESPP as of the date of such cessation,
unless the Committee establishes other procedures.    When a Participant
withdraws from the ESPP, his or her outstanding options under the ESPP will
immediately terminate.    Unless the Committee determines otherwise, if a
Participant withdraws from the ESPP for any reason, the Company will pay to the
Participant all payroll deductions credited to his account or, in the event of
death, to the persons designated as provided in Designation of Beneficiary, as
soon as administratively feasible after the date of such withdrawal and no
further deductions will be made from the Participant’s Compensation.    A
Participant who has elected to withdraw from the ESPP may resume participation
in the same manner and under the same rules as any Employee making an initial
election to participate in the ESPP (i.e., he may elect to participate in the
next following Payroll Deduction Period so long as he or she files the
authorization form by the deadline for that Payroll Deduction Period). Stock
Subject To Plan    The shares of Common Stock that the Company will sell to
Participants under the ESPP will be shares of authorized but unissued Common
Stock, shares held as treasury stock, and shares purchased on the market. The
maximum number of shares made available for sale under the ESPP will be 250,000
(subject to the provisions of the Adjustments Upon Changes in Capital Stock
section below). If the total number of shares for which options are to be
exercised in a Payroll Deduction Period exceeds the number of shares then
available under the ESPP, the Company will make, so far as is practicable, a pro
rata allocation of the shares available and will, within 30 days following the
end of that Payroll Deduction Period, refund any additional payroll deductions
to the applicable Participants.    A Participant will have no interest in shares
covered by his participation until the last day of the applicable Payroll
Deduction Period.    Following purchase under the ESPP, a Participant’s shares
will be registered in the name of the Participant or, at the Participant’s
election, in street name or will otherwise be recognized as owned by the
Participant on the Company’s stock ledger. Adjustments Upon Changes in Capital
Stock    Subject to any required action by the Company (which it will promptly
take) or its stockholders, and subject to the provisions of applicable corporate
law, if, during a Payroll Deduction Period,

--------------------------------------------------------------------------------

  

the outstanding shares of Common Stock increase or decrease or change into or
are exchanged for a different number or kind of security because of any
recapitalization, reclassification, stock split, reverse stock split,
combination of shares, exchange of shares, stock dividend, or other distribution
payable in capital stock, or

  

some other increase or decrease in such Common Stock occurs without the
Company’s receiving consideration (excluding, unless the Committee determines
otherwise, stock repurchases),

   the Committee must make a proportionate and appropriate adjustment in the
number of shares of Common Stock underlying the options, so that the
proportionate interest of the Participant immediately following such event will,
to the extent practicable, be the same as immediately before such event. Any
such adjustment to the options will not change the total price with respect to
shares of Common Stock underlying the Participant’s election but will include a
corresponding proportionate adjustment in the price of the Common Stock, to the
extent consistent with Section 424 of the Code.    The Board or the Committee
may take any actions described in the Adjustments upon Changes in Capital Stock
section without any requirement to seek optionee consent.    The Committee will
make a commensurate change to the maximum number and kind of shares provided in
the Stock Subject to Plan section.    Any issue by the Company of any class of
preferred stock, or securities convertible into shares of common or preferred
stock of any class, will not affect, and no adjustment by reason thereof will be
made with respect to, the number of shares of Common Stock subject to any
options or the price to be paid for stock except as this Adjustments section
specifically provides. The grant of an option under the Plan will not affect in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, or to merge or to consolidate, or to dissolve, liquidate, sell, or
transfer all or any part of its business or assets. Substantial Corporate Change
   Upon a Substantial Corporate Change, the Plan and the offering will terminate
and all accumulated funds will be distributed as though the Participants had
elected to withdraw unless provision is made in writing in connection with such
transaction for   

the assumption or continuation of outstanding elections, or

  

the substitution for such options or grants of any options covering the stock or
securities of a successor employer corporation, or a parent or subsidiary of
such successor, with appropriate adjustments as to the number and kind of shares
of stock and prices, in which event the options will continue in the manner and
under the terms so provided.

   A Substantial Corporate Change means the   

sale of all or substantially all of the assets of the Company to one or more
individuals, entities, or groups (other than an “Excluded Owner” as defined
below),

  

complete or substantially complete dissolution or liquidation of the Company;

  

a person, entity, or group (other than an Excluded Owner) acquires or attains
ownership of 80% of the undiluted total voting power of the Company’s
then-outstanding securities eligible to vote to elect members of the Board
(“Company Voting Securities”);

  

completion of a merger, consolidation or reorganization of the Company with or
into any other entity (other than an Excluded Owner) unless the holders of the
Company Voting Securities outstanding immediately before such completion,
together with any trustee or other fiduciary holding securities under a Company
benefit plan, hold securities that represent immediately after such merger or
consolidation more than 20% of the combined voting power of the then outstanding
voting securities of either the Company or the other surviving entity or its
ultimate parent, or

  

any other transaction (including a merger or reorganization in which the Company
survives) approved by the Board that results in any person or entity (other than
an Excluded Owner) owning 100% of Company Voting Securities.

   An “Excluded Owner” consists of the Company, any Company Subsidiary, any
Company benefit plan, or any underwriter temporarily holding securities for an
offering of such securities. Designation of Beneficiary    A Participant may
file with the Committee a written designation of a beneficiary who is to receive
any payroll deductions credited to the Participant’s account under the ESPP or
any shares of Common Stock owed to the Participant under the ESPP if the
Participant dies. A Participant may change a beneficiary at any time by filing a
notice in writing with the Human Resources professionals on behalf of the
Committee.    Upon the death of a Participant and upon receipt by the Committee
of proof of the identity and existence of the Participant’s designated
beneficiary, the Company will deliver such cash or shares, or both, to the
beneficiary. If a Participant dies and is not survived by a beneficiary that the
Participant designated in accordance with the immediate

--------------------------------------------------------------------------------

   preceding paragraph, the Company will deliver such cash or shares, or both,
to the personal representative of the estate of the deceased Participant. If, to
the knowledge of the Committee, no personal representative has been appointed
within 90 days following the date of the Participant’s death, the Committee, in
its discretion, may direct the Company to deliver such cash or shares, or both,
to the surviving spouse of the deceased Participant, or to any one or more
dependents or relatives of the deceased Participant, or if no spouse, dependent,
or relative is known to the Committee, then to such other person as the
Committee may designate.    No designated beneficiary may acquire any interest
in such cash or shares before the death of the Participant. Subsidiary Employees
   Employees of Eligible Subsidiaries will be entitled to participate in the
ESPP, except as the Committee otherwise designates.    Eligible Subsidiary means
each of the Company’s Subsidiaries, except as the Board or Committee otherwise
specifies. Subsidiary means any corporation (other than the Company) in an
unbroken chain of corporations including the Company if, at the time an option
is granted to a Participant under the ESPP, each of the corporations (other than
the last corporation in the unbroken chain) owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain. Subsidiary includes any single member limited
liability company with its corporate member in the foregoing chain. Transfers,
Assignments, and Pledges    A Participant may not assign, pledge, or otherwise
dispose of payroll deductions credited to the Participant’s account or any
rights to exercise an option or to receive shares of Common Stock under the ESPP
other than by will or the laws of descent and distribution or under a qualified
domestic relations order, as defined in the Employee Retirement Income Security
Act. Any other attempted assignment, pledge or other disposition will be without
effect, except that the Company may treat such act as an election to withdraw
under the Withdrawal section. Amendment or Termination of Plan    The Board of
Directors of the Company or the Committee may at any time terminate or amend the
ESPP, whether during or at the end of any Payroll Deduction Period, without the
consent of any Participant. Any amendment of the ESPP that (i) materially
increases the benefits to Participants, (ii) materially increases the number of
securities that may be issued under the ESPP, or (iii) materially modifies the
eligibility requirements for participation in the ESPP must be approved by the
shareholders of the Company to take effect. The Company will refund to each
Participant the amount of payroll deductions credited to his account as of the
date of termination as soon as administratively feasible following the effective
date of the termination. Effect on Other Plans    Whether exercising or
receiving an option causes the Participant to accrue or receive additional
benefits under any pension or other plan is governed solely by the terms of such
other plan. Notices    All notices or other communications by a Participant to
the Committee or the Company will be considered to have been duly given when the
Finance Department of the Company receives them or when any other person or
entity the Company designates receives the notice or other communication in the
form the Company specifies. General Assets    Any amounts the Company invests or
otherwise sets aside or segregates to satisfy its obligations under this ESPP
will be solely the Company’s property (except as otherwise required by Federal
or state wage laws), and the optionee’s claim against the Company under the
ESPP, if any, will be only as a general creditor. The optionee will have no
right, title, or interest whatever in or to any investments that the Company may
make to aid it in meeting its obligations under the ESPP. Nothing contained in
the ESPP, and no action taken under its provisions, will create or be construed
to create an implied or constructive trust of any kind or a fiduciary
relationship between the Company and any Employee, Participant, former Employee,
former Participant, or any beneficiary. Privileges of Stock Ownership    No
Participant and no beneficiary or other person claiming under or through such
Participant will have any right, title, or interest in or to any shares of
Common Stock allocated or reserved under the Plan except as to such shares of
Common Stock, if any, that have been issued to such Participant. Tax Withholding
   To the extent that a Participant realizes ordinary income or wages for
employment tax purposes in connection with a sale or other transfer of any
shares of Common Stock purchased under the Plan or the crediting of interest to
an account, the Company may withhold amounts needed to cover such taxes from any
payments otherwise due to the Participant. Any Participant who sells or
otherwise transfers shares purchased under the Plan within two years after the
beginning of the Payroll Deduction Period in which he purchased the shares must,
within 30 days of such transfer, notify the Company’s Payroll Department in
writing of such transfer. Each Participant, as a condition of participation,
agrees that the Company may treat the purchase of shares and/or their
disposition as taxable events requiring the withholding or other collection of
income and employment taxes and further agrees to pay any such taxes for which
the Company cannot reasonably withhold. Limitations on Liability   
Notwithstanding any other provisions of the ESPP, no individual acting as a
director, employee, or agent of the Company shall be liable to any Employee,
Participant, former Employee, former Participant, or any spouse or beneficiary
for any claim, loss, liability, or expense incurred in connection with the ESPP,
nor shall such individual be personally liable because of any contract or other
instrument he executes in such other capacity. The Company will indemnify and
hold harmless each director, employee, or agent of the Company to whom any duty
or power relating to the administration or interpretation of the ESPP has been
or will be delegated, against any cost or expense (including attorneys’ fees) or
liability (including any sum paid in settlement of a claim with the Board’s
approval) arising out of any act or omission to act concerning this ESPP unless
arising out of such person’s own fraud or bad faith.

--------------------------------------------------------------------------------

No Employment Contract    Nothing contained in this Plan constitutes an
employment contract between the Company or an Eligible Subsidiary and any
Employee. The ESPP does not give an Employee any right to be retained in the
Company’s employ, nor does it enlarge or diminish the Company’s right to
terminate the Employee’s employment. Applicable Law    The laws of the State of
Delaware (other than its choice of law provisions) govern the ESPP and its
interpretation. Legal Compliance    The Company will not issue any shares of
Common Stock under the Plan until the issuance satisfies all applicable
requirements imposed by Federal and state securities and other laws, rules, and
regulations, and by any applicable regulatory agencies or stock exchanges. To
that end, the Company may require the optionee to take any reasonable action to
comply with such requirements before issuing such shares. No provision in the
Plan or action taken under it authorizes any action that Federal or state laws
otherwise prohibit.    The Plan is intended to conform to the extent necessary
with all provisions of the Securities Act of 1933, as amended, (“Securities
Act”) and the Securities Exchange Act of 1934, as amended, and all regulations
and rules the Securities and Exchange Commission issues under those laws,
including specifically Rule 16b-3. Notwithstanding anything in the Plan to the
contrary, the Committee and the Board must administer the Plan, and Participants
may purchase Common Stock, only in a way that conforms to such laws, rules, and
regulations. To the extent applicable law permits, the Plan and any offers will
be deemed amended to the extent necessary to conform to such laws, rules, and
regulations. Approval of Stockholders    The ESPP must be submitted to the
shareholders of the Company for their approval within 12 months after the Board
adopts the ESPP. The adoption of the ESPP is conditioned upon the approval of
the shareholders of the Company, and failure to receive their approval will
render the ESPP and any outstanding options thereunder void and of no effect.

Adopted by the Board of Directors on June 20, 2007.