Exhibit 10.1

 

 

*** Certain information in this exhibit has been excluded because it either (1)
is both (a) not material and (b) would likely cause competitive harm if publicly
disclosed or (2) constitutes personal information which, if disclosed, would
constitute a clearly unwarranted invasion of privacy.

 

Assembly Biosciences, Inc.

 

May 6,  2019

 

PERSONAL AND CONFIDENTIAL

 

Uri A. Lopatin, M.D.

[***]

 

Re:       Separation Agreement and General Release of Claims

 

Dear Uri:

This letter (this “Agreement”) provides notice to you that effective today, May
6,  2019 (the “Separation Date”), your employment with Assembly Biosciences,
Inc. (the “Company”) is being terminated without Cause pursuant to Section 8(e)
of that certain Amended and Restated Employment Agreement by and between you and
the Company entered into as of October 10, 2018 (the “Employment
Agreement”).  Each capitalized term used herein and not otherwise defined shall
have the meaning assigned to such term in the Employment Agreement. The Company
thanks you for your contributions and wishes you well in your future endeavors.

This Agreement also sets forth the terms of the Release referenced in Section
9(c) of the Employment Agreement and you acknowledge that this Agreement
becoming effective is a condition of your right to receive the Base Separation
Benefits defined in such Section 9(c).  Finally, you are eligible to receive
additional compensation in return for you providing consulting services to the
Company, as described in more detail below.

Regardless of whether you enter into this Agreement, you shall be entitled to
the Accrued Benefits as defined in Section 9(a) of the Employment
Agreement.  Also regardless of whether you enter into this Agreement, you will
remain bound by your continuing obligations to the Company under Section 5
[Confidential Information and Inventions] of your Employment Agreement, your
June 12, 2015 Proprietary Information and Inventions Agreement (as modified by
your Employment Agreement) (“PIIA”),  and Section 6  [Non-Solicitation] of your
Employment Agreement, and the other provisions of the Employment Agreement which
by their terms or by the nature of the obligation survive the termination of
your employment (the “Continuing Obligations”).  Such Continuing Obligations
include, without limitation, your confidentiality obligations, return of
property obligations, and non-solicitation obligations.

The remainder of this Agreement sets forth the terms of the Agreement.  You
acknowledge that you are entering into this Agreement knowingly and
voluntarily.  With those understandings, you and the Company agree as follows:

 

 

Uri A. Lopatin, M.D.

May 6, 2019

Page 2

1.          Separation from Employment

This confirms that your employment with the Company shall terminate on the
Separation Date. As of such date you shall be deemed to have resigned as an
officer of the Company and each subsidiary effective as of the Separation Date.
Accordingly, your right to participate in the employee benefit plans of the
Company shall cease on the Separation Date, except you will continue under the
Company’s health insurance benefit through the last day of the month in which
the Separation Date occurs and as noted in Section 2(d) below, if applicable.

2.          Separation Benefits

Subject to this Agreement becoming effective and your compliance with this
Agreement and the Continuing Obligations, the Company shall provide you with the
following “Separation Benefits” as set forth in Section 9(c) of the Employment
Agreement except as modified by this Agreement:

(a)         Separation Pay.  The Company shall provide you with lump sum payment
equal to twelve (12) months of your final Base Salary (which is at the
annualized rate of $410,000) (such payment  being the “Separation Pay”).  The
Separation Pay will be paid on the Company’s first regular payday occurring
after the Effective Date of this Agreement in an amount equal to the Separation
Pay, less applicable taxes and withholdings, in accordance with the Company’s
normal payroll practices for its employees.

(b)         Acceleration of Equity Awards.  The table in Exhibit A attached
hereto sets forth all of your outstanding Equity Awards (as defined in the
Employment Agreement) as of the date hereof.  As provided in your Employment
Agreement, all Equity Awards which would have vested during the six (6) months
following the Separation Date shall accelerate and vest on the Separation Date
as set forth on Exhibit A attached hereto. For avoidance of doubt, any
acceleration of vesting set forth in an equity award that provides for
acceleration in connection with a termination of employment by the Company shall
have no further effect following the cessation of your employment.  Upon the
effective date of your Consulting Agreement, each of your outstanding Equity
Awards to the extent unvested as of the effective date of your Consulting
Agreement shall be hereby modified to provide that upon the termination of your
Continuous Service by the Company for any reason other than for Cause within 6
months following the occurrence of a Corporate Transaction (as defined in the
applicable stock incentive plan), all unvested Options or RSUs, as applicable,
shall immediately vest.

(c)         Extension of Exercise Period.  The post-termination exercise period
for all Stock Options that are vested as of the Separation Date shall be
extended as provided in your Employment Agreement and Equity Awards to the date
noted in Exhibit A attached hereto.  Unvested options under your 2018 stock
option award grants that vest during the term of the Consulting Agreement, shall
have the same post-termination exercise period as those 2018 stock options that
were vested as of Separation Date as noted in Exhibit A attached hereto.  The
post-termination exercise period for all stock options under your 2019 stock
option award grants  that vest during your provision of Continuous Services

 

Uri A. Lopatin, M.D.

May 6, 2019

Page 3

under your Consulting Agreement shall be as set forth in such Equity Awards and
as noted on Exhibit A attached hereto.

(d)         Health Benefit.  Notwithstanding anything in the contrary in the
Employment Agreement, provided that you properly and timely elect to continue
your health insurance benefits (including health, dental and/or vision) and
remain eligible under COBRA after the Separation Date, the Company shall pay
your applicable COBRA premiums, directly to the applicable plan
administrator/insurance company, for the eighteen (18) months following your
Separation Date  or until you become eligible under another employer’s health
insurance, whichever is earlier (the “Health Benefit”).

3.          Consulting Agreement

(a)         Upon signing this Agreement, the Company will enter into the
consulting agreement with you set forth as Exhibit B attached hereto (the
“Consulting Agreement”), to be effective as of May 7, 2019.  Your service as a
Consultant pursuant to the Consulting Agreement will constitute “Continuous
Service” (as defined in the Company’s Amended and Restated 2014 Stock Incentive
Plan and 2018 Stock Incentive Plan) and any portion of the Equity Awards that
remain unvested as of the Separation Date will continue to vest during the term
of the Consulting Agreement in accordance with the terms of the applicable stock
incentive plan and equity award grant agreement.  For avoidance of doubt, any
acceleration of vesting associated with a termination of employment by the
Company shall not be applicable to a termination of services under the
Consulting Agreement. Your sole rights to any acceleration of equity awards
following the termination of your employment shall be as provided under your
equity awards (as modified in Section 2(b) above) and the applicable stock
incentive plan. No modification to any of your outstanding equity awards is
intended to occur as a result of the change in your status to a consultant
except those changes that occur by operation of law and those expressly set
forth in Sections 2(b) and 2(c) of this Agreement.

(b)         During the term of the Consulting Agreement, your Company email
address and telephone number will remain active, the Company will provide you
with access to its email, telephone and computer systems to the extent necessary
to perform the services under the Consulting Agreement, and you will retain
possession of the Lenovo X1 laptop computer previously provided to you by the
Company.   You agree to work with the Company to remove Company information from
your Lenovo X1 laptop computer that is not necessary for you to retain in
connection with the provision of your consulting services under the Consulting
Agreement and subject to your retention of contact information as provided in
Section 7(a) below.

4.          Release of Claims

In consideration for, among other terms, the Base Separation Benefits and Health
Benefits, to which you acknowledge you would otherwise not be entitled, you, on
behalf of yourself and your heirs, executors, representatives, agents, insurers,
administrators, successors and assigns (collectively, the “Releasors”)
voluntarily release and forever discharge the Company, its affiliated and
related entities, its and their respective predecessors, successors and

 

Uri A. Lopatin, M.D.

May 6, 2019

Page 4

assigns, its and their respective employee benefit plans and fiduciaries of such
plans, the  Company’s former affiliated professional employer organization,
Insperity PEO Services, L.P., and the current and former officers, directors,
shareholders, employees, attorneys, insurers, accountants and agents of each of
the foregoing in their official and personal capacities (collectively referred
to as the “Releasees”) generally from all claims, demands, debts, damages and
liabilities of every name and nature, known or unknown (“Claims”) that, as of
the date when you sign this Agreement, you and the other Releasors have, ever
had, now claim to have or ever claimed to have had against any or all of the
Releasees.  This release includes, without limitation, all Claims: relating to
your employment by the Company and the termination of your employment; of
wrongful discharge or violation of public policy; of breach of contract; of
defamation or other torts; of retaliation or discrimination under federal, state
or local law (including, without limitation, Claims of discrimination or
retaliation under the Age Discrimination in Employment Act, the Americans with
Disabilities Act, Title VII of the Civil Rights Act of 1964, the California Fair
Employment and Housing Act,  and the Indiana Civil Rights Law); under any other
federal or state statute (including, without limitation, Claims under the Fair
Labor Standards Act, the California Family Rights Act and the Family and Medical
Leave Act); for wages, bonuses, incentive compensation, commissions, stock,
stock options, vacation pay or any other compensation or benefits, either under
the California Labor Code, or otherwise; and for damages or other remedies of
any sort, including, without limitation, compensatory damages, punitive damages,
injunctive relief and attorney’s fees; provided, however, that this release
shall not waive any rights to worker’s compensation, state disability or
unemployment insurance benefits or any other claims that cannot be waived as a
matter of law.  Furthermore, this release shall not affect your rights to claims
under state workers' compensation or unemployment laws and your right to file an
administrative charge or complaint with or participate in a charge by the Equal
Employment Opportunity Commission (the "EEOC"), or any other local, state, or
federal administrative body or government agency that is authorized to enforce
or administer laws related to employment, against the Company (with the
understanding that any such filing or participation does not give you the right
to recover any monetary damages against the Company; your release of claims
herein bars you from recovering such monetary relief from the Company). This
release will not waive any of your rights, or obligations of the Company,
regarding: (a) any right to indemnification and/or contribution, advancement or
payment of related expenses that you may have pursuant to the Company’s Bylaws,
Articles of Incorporation or other organizing documents, under any written
indemnification or other agreement between the parties, and/or under applicable
law; (b) any rights that you may have to insurance coverage under any directors
and officers liability insurance, other insurance policies of the Company, COBRA
or any similar state law; (c) rights to any vested benefits under any equity,
compensation or other employee benefit plan or agreement with the Company,
including the Company’s Section 401(k) plan and the Equity Awards; (d) rights to
any applicable severance benefits under this Agreement; (e) your rights as a
shareholder of the Company, if applicable, and (f) any claims arising after the
date you sign this Agreement.

You agree not to accept damages of any nature, other equitable or legal remedies
for your own benefit or attorney's fees or costs from any of the Releasees with
respect to any Claim released by this Agreement. As a material inducement to the
Company to enter into this Agreement, you represent that you have not assigned
any Claim to any third party.

 

Uri A. Lopatin, M.D.

May 6, 2019

Page 5

In granting the release herein, you understand that this Agreement includes a
release of all claims known or unknown. In giving this release, which includes
claims which may be unknown to you at present, you acknowledge that you have
read and understand Section 1542 of the California Civil Code which reads as
follows: "A general release does not extend to claims which the creditor or
releasing party does not know or suspect to exist in his or her favor at the
time of executing the release and that, if known by him or her would have
materially affected his or her settlement with the debtor or released party."
You hereby expressly waive and relinquish all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to the
release of any unknown or unsuspected claims you may have against the Company.

5.          Non-Disparagement

You agree not to make any disparaging statements concerning the Company, or any
of its affiliates, or its or their current or former officers, directors,
shareholders, employees or agents, or any of the Company’s or its respective
affiliates’ products or services.  These non-disparagement obligations shall not
in any way affect your obligation to testify truthfully in any legal proceeding
or your rights under Section 7(c).

The Company will not issue any official statements or press releases disparaging
you.  The Company will instruct each of the Company’s executive officers not to
make any disparaging statements concerning you.  These non-disparagement
obligations shall not in any way affect the Company’s obligation to (i) testify
truthfully in any legal proceeding, (ii) disclose your name, position and dates
of employment in response to any reference inquiries, (iii) provide truthful
information about the reasons for your termination in response to inquiries from
any state unemployment insurance agency, in pubic filings, as required by law
and in any legal or administrative proceeding.

6.          Confidentiality of Agreement-Related Information

You agree, to the fullest extent permitted by law, to keep all Agreement-Related
Information completely confidential. "Agreement-Related Information" means the
negotiations leading to this Agreement. Notwithstanding the foregoing, you may
disclose Agreement-Related Information to your spouse, your attorney and your
financial and tax advisors, and to them only provided that they first agree for
the benefit of the Company to keep Agreement-Related Information confidential.
Nothing in this Agreement or any other agreement between you and the Company
shall be construed to prevent you from disclosing Agreement-Related Information
or any other information or documents to the extent required by applicable law,
a lawfully issued subpoena or duly issued court order; provided that, except
where otherwise prohibited by law, you provide the Company with advance written
notice and a reasonable opportunity to contest such subpoena or court order.  In
addition, nothing in this Agreement or any other agreement between you and the
Company prohibits you from disclosing any information or documents in any action
for enforcement of this Agreement, but solely to the extent relevant and
necessary for such enforcement action.

 

Uri A. Lopatin, M.D.

May 6, 2019

Page 6

7.          Other Provisions

(a)         Maintenance of Information.  Notwithstanding anything to the
contrary in the PIIA or any other agreement between you and the Company,
following the Separation Date, you may retain and use, in hardcopy and/or
electronic format, the contact information in your Microsoft Outlook Contacts
and similar contact information maintained by you as of the Separation Date,
and, at your expense, may also continue to maintain and use any personal or
professional profile, accounts or contacts contained on any LinkedIn, Facebook
or other social media site or system existing as of the Separation Date.  It
being agreed and understood that such social media sites will be updated
appropriately to reflect your change in status and nothing in the foregoing is
intended to include any Company social media site or impose any obligations or
expenses on the Company.

(b)         Termination of Payments.  If you breach any of your obligations
under this Agreement or your Continuing Obligations, in addition to any other
legal or equitable remedies the Company may have for such breach, the Company
shall have the right to terminate future payments under this Agreement and if
the breach is material and willful the Company may seek recovery of the payments
by the Company to you or for your benefit under this Agreement.  The termination
of such payments in the event of such breach will not affect your obligations
under this Agreement or your Continuing Obligations.

(c)         Protected Disclosures and Other Protected Actions.  Nothing
contained in this Agreement or in your Continuing Obligations limits your
ability to file a charge or complaint with any federal, state or local
governmental agency or commission (a “Government Agency”).  In addition, nothing
contained in this Agreement or your Continuing Obligations limits your ability
to communicate with or respond accurately and fully to any question, inquiry or
request for information from any Government Agency or otherwise participate in
any civil, criminal or regulatory investigation or proceeding that may be
conducted by any Government Agency, including your ability to provide documents
or other information, without notice to the Company, nor does anything contained
in this Agreement apply to truthful testimony in litigation.  If you file any
charge or complaint with any Government Agency and if the Government Agency
pursues any claim on your behalf, or if any other third party pursues any claim
on your behalf, you waive any right to monetary or other individualized relief
(either individually, or as part of any collective or class action); provided
that nothing in this Agreement limits any right you may have to receive a
whistleblower award or bounty for information provided to the Securities and
Exchange Commission.

(d)         Absence of Reliance.  In signing this Agreement, you are not relying
upon any promises or representations made by anyone at or on behalf of the
Company.

(e)         Enforceability.  If any portion or provision of this Agreement
(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion

 

Uri A. Lopatin, M.D.

May 6, 2019

Page 7

and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.

(f)         Waiver; Modification.  No waiver of any provision of this Agreement
shall be effective unless made in writing and signed by the waiving party.  The
failure of a party to require the performance of any term or obligation of this
Agreement, or the waiver by a party of any breach of this Agreement, shall not
prevent any subsequent enforcement of such term or obligation or be deemed a
waiver of any subsequent breach.  The terms of this Agreement may only be
amended with the prior written consent of both parties.

(g)         Jurisdiction.  You and the Company hereby agree that the state and
federal courts situated in San Francisco, California shall have the exclusive
jurisdiction to consider any matters related to this Agreement, including
without limitation any claim of a violation of this Agreement.  With respect to
any such court action, you and the Company agree to submit to the jurisdiction
of such courts and consent that venue in such courts is proper.  In the event of
any dispute arising out of, or relating to, this Agreement, the parties agree to
submit any differences to nonbinding mediation prior to pursuing resolution
through the courts.

(h)         Relief.  You agree that it would be difficult to measure any harm
caused to the Company that might result from any breach by you of your
Continuing Obligations or the promises set forth in Section 4 of this
Agreement.  You further agree that money damages would be an inadequate remedy
for any breach of Sections 4,  Section 5 or Section 6.  Accordingly, you agree
that if you breach, or propose to breach, any of your Continuing Obligations,
Section 4, Section 5 or Section 6, the Company shall be entitled, in addition to
all other remedies it may have, to an injunction or other appropriate equitable
relief to restrain any such breach, without showing or proving any actual damage
to the Company and without the necessity of posting a bond.

(i)          Governing Law; Interpretation.  This Agreement shall be interpreted
and enforced under the laws of the State of California, without regard to
conflict of law principles.  In the event of any dispute, this Agreement is
intended by the parties to be construed as a whole, to be interpreted in
accordance with its fair meaning, and not to be construed strictly for or
against either you or the Company or the “drafter” of all or any portion of this
Agreement.

(j)          Entire Agreement.  This Agreement and the exhibits attached hereto
constitute the entire agreement between you and the Company.  This Agreement
supersedes any previous agreements or understandings between you and the
Company, except the Continuing Obligations, the Company’s applicable stock
incentive plans and your Equity Award agreements (as such documents may be
amended by Sections 2(b) and 2(c) above), and any other obligations specifically
preserved in this Agreement.

(k)         Time for Consideration; Effective Date.  You acknowledge that you
have knowingly and voluntarily entered into this Agreement and that the Company
advises you to consult with an attorney before signing this Agreement.  You
understand and acknowledge that you have been given the opportunity to consider
this Agreement for twenty-one (21) days from your receipt of this Agreement
before signing it (the “Consideration Period”).  To accept this

 

Uri A. Lopatin, M.D.

May 6, 2019

Page 8

Agreement, you must return a signed original,  DocuSign or a signed PDF copy of
this Agreement so that it is received by Elizabeth Lacy
(elizabeth@assemblybio.com) at or before the expiration of the Consideration
Period.  If you sign this Agreement before the end of the Consideration Period,
you acknowledge that such decision was entirely voluntary and that you had the
opportunity to consider this Agreement for the entire Consideration Period.  For
the period of seven (7) days from the date when the Company receives the signed
Agreement as provided above, you have the right to revoke this Agreement by
written notice to Ms. Lacy, provided that such notice is delivered so that it is
received at or before the expiration of the seven (7) day revocation
period.  This Agreement shall not become effective or enforceable during the
revocation period.  This Agreement shall become effective on the first business
day following the expiration of the revocation period (the “Effective Date”).

(l)          Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same original, binding document. Any
facsimile, PDF reproduction of original signatures or other electronic
transmission of a signed counterpart shall be deemed to be an original
counterpart and any signature appearing thereon shall be deemed to be an
original signature.

[signature page follows]

 

Uri A. Lopatin, M.D.

May 6, 2019

Page 9

Please indicate your agreement to the terms of this Agreement by signing and
returning to the Company’s General Counsel the original or a PDF copy of this
letter within the time period set forth above.

Sincerely,

ASSEMBLY BIOSCIENCES, INC.

 

By:

/s/ Derek A. Small

 

May 6, 2019

 

Derek A. Small

 

Date

 

Chief Executive Officer and President

 

 

 

You are advised to consult with an attorney before signing this Agreement. This
is a legal document.  Your signature will commit you to its terms.  By signing
below, you acknowledge that you have carefully read and fully understand all of
the provisions of this Agreement and that you are knowingly and voluntarily
entering into this Agreement.

///s/

 

 

/s/ Uri A. Lopatin, M.D.

 

May 6, 2019

Uri A. Lopatin, M.D.

 

Date

 

 

 

 

EXHIBIT A – EQUITY AWARDS 

 

[***]