Exhibit 10.1

 

ARGOS THERAPEUTICS, INC.

4233 TECHNOLOGY DRIVE

DURHAM, NC 27704

 

 

December 2, 2015

 

VIA email

 

Lee F. Allen

3 Paniolo Road

Ladera Ranch, CA 92656

 

Dear Lee:

 

I am pleased to extend to you this offer of employment with Argos Therapeutics,
Inc. (“Argos Therapeutics”) by way of this offer letter (the “Offer Letter”). We
at Argos Therapeutics are excited about the challenges and opportunities that
lie ahead for us collectively and are enthusiastic about the prospect of you
joining the Argos Therapeutics team. We look forward to your favorable response
to this. If you choose to accept the Company’s offer, your employment at Argos
Therapeutics shall commence no later than January 18, 2016.

 

The details of this offer are as follows:

 

1.Position and Duties.  You shall serve, on a full-time basis, as the Company’s
Chief Medical Officer reporting to the Company’s Chief Executive Officer.  You
agree to continue to perform the duties of your position and such other duties
as reasonably may be assigned to you from time to time.  You also agree that
while employed by the Company, you will continue to devote your full business
time and your best efforts, business judgment, skill and knowledge exclusively
to the advancement of the business and interests of the Company and to the
discharge of your duties and responsibilities for it, except as approved by the
Company.

 

2.Compensation and Benefits.  During your employment, as compensation for all
services performed by you for the Company and subject to your performance of
your duties and responsibilities for the Company, pursuant to this Agreement or
otherwise, the Company will provide you the following pay and benefits:

 

(a)Base Salary. Your base salary in this position will be at the rate of
$425,000 per year, less all applicable taxes and deductions, and shall be paid
semi-monthly in accordance with the Company’s standard payroll schedule. First
and last payments will be adjusted to reflect partial periods worked.

 

(b)Bonus Compensation. During your employment and subject to the approval of the
Company’s Board of Directors (the “Board”), you will be eligible for an annual
performance bonus of up to 40% of your annualized base salary (the “Target
Bonus”), based upon your personal performance and the Company’s performance
during the applicable calendar year, as determined by the Company in its sole
discretion. Any bonus due to you hereunder will be paid not later than the 15th
of March following the year to which the bonus relates, subject to your
continuous employment through the date the bonus is paid.  The foregoing shall
be construed and applied so that any bonus payable to you is paid to you so as
to qualify as a “short-term deferral” under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”) (Section 409A of the Code, together with
the regulations thereunder, “Section 409A”).

 

(c)Starting Bonus. You will be eligible for a starting bonus in the aggregate
amount of $230,000, less all applicable taxes and deductions. This bonus shall
be paid in three installments, with the first installment of $75,000 payable
with your first semi-monthly salary payment. The second installment of $75,000
will be payable with your first salary payment after completing three months of
service with the Company. The final installment of $80,000 will be payable with
your first salary payment after completing six months of service with the
Company. If you voluntarily terminate your employment with the Company prior to
the one-year anniversary of your start date, you will be required to reimburse
the Company for the full amount of the starting bonus paid to you.

 

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(d)Equity. Subject to the approval of the Board of Directors or the Compensation
Committee and in accordance with the terms and conditions of the Company’s 2014
Stock Incentive Plan and the terms of the Company’s standard Incentive Stock
Option Agreement, you will be granted stock options to purchase 300,000 of Argos
Therapeutics common stock at an exercise price equal to the closing share price
on the date of grant, which will generally be within ninety days of the start of
your employment. The options will vest over four years from your start date
while you are employed in accordance with the applicable plan and stock option
agreement. 300,000 shares is equal to approximately 1.45% of Argos’ total shares
outstanding as of the date of this letter agreement. As you know, Argos
anticipates undertaking an equity financing during early 2016 which will have
the effect of reducing the percentage interest in Argos represented by these
stock options. To mitigate the dilutive effect of the planned financing on your
interest in Argos, Argos agrees to grant you additional stock options within
sixty days following Argos’ next equity financing such that you will hold stock
options for a number of shares equal to no less than 1.25% of Argos’ total
shares outstanding at the time the grant is made. These supplemental stock
options will have an exercise price equal to the closing share price on the date
of grant, will vest over four years from your start date and will be subject to
the Company’s 2014 Stock Incentive Plan and the terms of the Company’s standard
Incentive Stock Option Agreement.

 

(e)Participation in Employee Benefit Plans.  You will be entitled to participate
in all employee benefit plans from time to time in effect for employees of the
Company generally, except to the extent such plans are duplicative of benefits
otherwise provided to you under this Agreement (e.g., severance pay) or under
any other agreement.  Your participation will be subject to eligibility and the
terms of the applicable plan documents and applicable Company policies. Argos
Therapeutics provides the following benefits to regular, full-time employees
includes the following:

·Medical Insurance

·Dental Insurance

·Vision Insurance

·Life and AD&D Insurance

·Short Term Disability

·Long Term Disability

·Long Term Care

·Eleven paid holidays per year

·401(k) Savings and Investment Plan

·Flexible Spending Account

·Paid Time Off (PTO) eligibility based on service with the Company and initially
prorated at 16.67 hours per month (equivalent to 25 days per year)

Notes:

oArgos Therapeutics pays 100% of all individual benefit premiums and 50% of
dependent premiums.

oIf your employment terminates for any reason whatsoever, you may not be
entitled to receive any cash payment for unused paid time off accrued to the
date of your termination.

 

Argos Therapeutics will regularly review all its benefit plans and reserves the
right to change or terminate such plans at any time at its sole discretion, with
or without prior notice to you.

 

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(f)Relocation Expenses. To help ease the burdens resulting from your relocation
from California to the Raleigh-Durham area of North Carolina, Argos Therapeutics
has agreed to provide you with certain temporary living and relocation expenses
provided that you sign and return the enclosed Relocation Expense Letter
Agreement prior to commencing your employment at the Company. All moving related
expenses must be documented and requests for reimbursement be made in accordance
with the Company’s standard reimbursement policy. By signing this Offer Letter
and the enclosed Relocation Expense Letter Agreement, you acknowledge and agree
that if you voluntarily terminate your employment with the Company, without Good
Reason (defined below), prior to the one-year anniversary of your start date,
you will be required to reimburse the Company for the full amount of any moving
and temporary living expenses for which the Company has reimbursed you.

 

(g)Business Expenses.  The Company will pay or reimburse you for all reasonable
business expenses incurred or paid by you in the performance of your duties and
responsibilities for the Company, subject to any maximum annual limit and other
restrictions on such expenses set by the Company and to such reasonable
substantiation and documentation as the Company may specify from time to time. 
Any reimbursement that constitutes nonqualified deferred compensation subject to
Section 409A shall be subject to the following additional rules: (i) no
reimbursement of any such expense shall affect your right to reimbursement of
any other such expense in any other taxable year; (ii) reimbursement of the
expense shall be made, if at all, not later than the end of the calendar year
following the calendar year in which the expense was incurred; and (iii) the
right to reimbursement shall not be subject to liquidation or exchange for any
other benefit.

 

3.Severance. The Company will provide you with the following severance payments
as a condition of your employment:

 

(a)Termination Without Cause or for Good Reason. If your employment is
terminated by the Company Without Cause or by you for Good Reason, then (subject
to your executing and not revoking the Separation Agreement and Release of All
Claims (the “Release,” attached hereto as Exhibit A), the Company will: (i) pay
you an amount equal to 9 months of your then-current base salary, less standard
employment-related withholdings and deductions, with such payments to be made in
9 equal monthly installments in accordance with the Company’s usual payroll
practices beginning on the first regular pay date following the termination
date; and (ii) provide for continued coverage, at the Company’s expense, under
the Company’s medical plan to the extent permitted under such plans for a period
of 9 months immediately following the date of termination of your employment;
provided, however, that if health insurance coverage is not available to
non-employees under the Company sponsored plan, the Company shall reimburse you
in an amount equal to the cost of the premium for coverage under a medical plan
at the same average level and on the same terms and conditions which applied
immediately prior to the date of your termination.

 

(b)Termination Without Cause or for Good Reason Following a Change in Control.
Notwithstanding the foregoing, if your employment is terminated by the Company
or its successor in interest Without Cause or by you for Good Reason within
ninety (90) days before or within six months after a Change in Control Event (as
defined in the Company’s 2014 Stock Incentive Plan) that also qualifies as a
“change in control event” within the meaning of Treasury Regulation Section
1.409A-3(i)(5)(i) (a “Company Change in Control”) then (subject to your
executing and not revoking the Release) the Company will (i) pay you an amount
equal to 15 months of your then-current base salary, less standard
employment-related withholdings and deductions, with such payments to be made in
15 equal monthly installments in accordance with the Company’s usual payroll
practices beginning on the first regular pay date following the termination
date; (ii) pay you an amount equal to 15 months of the Target Bonus, less
standard employment-related withholdings and deductions, with such payments to
be made in 15 equal monthly installments in accordance with the Company’s usual
payroll practices beginning on the first regular pay date following the
termination date; and (iii) provide for continued coverage, at the Company’s
expense, under the Company’s medical plan to the extent permitted under such
plans for a period of 15 months immediately following the date of termination of
your employment; provided, however, that if health insurance coverage is not
available to non-employees under the Company sponsored plan, the Company shall
reimburse you in an amount equal to the cost of the premium for coverage under a
medical plan at the same average level and on the same terms and conditions
which applied immediately prior to the date of your termination.

 

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(c)Definition of “Cause.” For purposes hereof, “Cause” shall mean that: (i) you
failed to attempt in good faith, refused or willfully neglected to perform and
discharge your material duties and responsibilities; (ii) you have been
convicted of, or pled nolo contendere to, a felony or other crime involving
fraud or moral turpitude; (iii) you breached your fiduciary duty or loyalty to
the Company, or acted fraudulently or with material dishonesty in discharging
your duties to the Company; (iv) you undertook an intentional act or omission of
misconduct that materially harmed or was reasonably likely to materially harm
the business, interests, or reputation of the Company; (v) you materially
breached any material provision hereof; or (vi) you materially breached any
material provision of any Company code of conduct or ethics policy.
Notwithstanding the foregoing, “Cause” shall not be deemed to have occurred
unless: (A) the Company provides you with written notice that it intends to
terminate your employment hereunder for one of the grounds set forth in
subsections (i), (v) or (vi) within sixty (60) days of such reason(s) occurring,
(B) if such ground is capable of being cured, you have failed to cure such
ground within a period of thirty (30) days from the date of such written notice,
and (C) the Company terminates your employment within six (6) months from the
date that Cause first occurs.

 

(d)Definition of “Good Reason.” For purposes hereof, “Good Reason” shall mean,
without your written consent: (i) any change in your position, title or
reporting relationship with the Company that diminishes in any material respect
your authority, duties or responsibilities; provided, however, that a change in
your authority, duties or responsibilities solely due to the Company becoming a
division, subsidiary or other similar part of a larger organization, shall not
by itself constitute Good Reason; (ii) any material reduction in your base
compensation; (iii) a material change in the geographic location at which
services are to be performed by you; or (iv) a material breach of any provision
hereof by the Company or any successor or assign. Notwithstanding the foregoing,
“Good Reason” shall not be deemed to have occurred unless: (A) you provide the
Company with written notice that you intend to terminate your employment
hereunder for one of the grounds set forth in subsections (i), (ii), (iii) or
(iv) within sixty (60) days of such reason(s) occurring, (B) if such ground is
capable of being cured, the Company has failed to cure such ground within a
period of thirty (30) days from the date of such written notice, and (C) you
terminate your employment within six (6) months from the date that Good Reason
first occurs. For purposes of clarification, the above-listed conditions shall
apply separately to each occurrence of Good Reason and failure to adhere to such
conditions in the event of Good Reason shall not disqualify you from asserting
Good Reason for any subsequent occurrence of Good Reason.

 

(e)Release of Claims. The Company shall not be obligated to pay you the
severance payments provided for herein unless you have timely executed (and not
revoked) a separation agreement in substantially the form attached hereto as
Exhibit A. Such separation agreement must be executed and become binding and
enforceable within sixty (60) calendar days after the effective date of your
termination of employment (such 60th day, the “Payment Commencement Date,”).
Subject to the preceding sentence, payment of any severance payments due
hereunder shall commence on the Payment Commencement Date.

 

4.Parachute Payment.

    (a)In the event of a consummation of a change in ownership or control
(within the meaning of Section 280G of the Code and the regulations thereunder
(“Section 280G”) (a “280G Change in Control”) (as defined herein) payments and
benefits under this Agreement, together with other payments and benefits
provided to you by the Company (including, without limitation, any accelerated
vesting of stock options, shares of restricted stock or other equity-based
awards) (the “Total Payments”), shall be made with regard to whether the
deductibility of the Total Payments would be limited or precluded by Section
280G and without regard to whether the Total Payments would subject you to the
federal excise tax levied on certain “excess parachute payments” under Section
4999 of the Code (the “Excise Tax”). If any portion of the Total Payments
constitutes an “excess parachute payment” within the meaning of Section 280G
(the aggregate of such payments (or portions thereof) being hereinafter referred
to as the “Excess Parachute Payments”), You will be entitled to receive: (i) an
amount limited so that no portion thereof shall fail to be tax deductible under
Section 280G of the Code (the “Limited Amount”), or (ii) if the amount otherwise
payable hereunder or otherwise (without regarding to clause (i)) reduced by all
taxes applicable thereto (including, for the avoidance of doubt, the Excise Tax)
would be greater than the Limited Amount reduced by all taxes applicable
thereto, the amount otherwise payable hereunder.    

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(b)The determination as to whether the Total Payments include Excess Parachute
Payments and, if so, the amount of such Excess Parachute Payments, the amount of
any Excise Tax with respect thereto, the amount of any Gross-up Payment, if
applicable, and the amount of any reduction in Total Payments shall be made at
the Company’s expense by the independent public accounting firm most recently
serving as the Company’s outside auditors or such other accounting or benefits
consulting group or firm as the Company may designate (the “Accountants”). In
the event that any payments under this Agreement or otherwise are required to be
reduced as described in Section 4(b), the adjustment will be made, first, by
reducing the amount of base salary and bonus payable pursuant to Sections
3(a)(i) or the amount of base salary and bonus payable pursuant to Section
3(b)(i)-(ii), as applicable; second, if additional reductions are necessary, by
reducing the payment of or reimbursement for COBRA premiums due to you pursuant
to Section 3(a)(ii) or Section 3(b)(iii), as applicable; and third, if
additional reductions are still necessary, by eliminating the accelerated
vesting of time-based equity-based awards or the vesting of performance-based
equity-based awards, if any, starting with those awards for which the amount
required to be taken into account under Section 280G is the greatest.    

(c)In the event that there has been an underpayment or overpayment under this
Agreement or otherwise as determined by the Accountants, the amount of such
underpayment or overpayment shall forthwith be paid to you or refunded to the
Company, as the case may be, with interest at the applicable federal rate
provided for in Section 7872(f) (2) of the Code.

 

5.Prohibited Competition and Solicitation. You acknowledge the competitive and
proprietary aspects of the business of Company and are aware that the Company
furnishes, discloses and makes available to you confidential and Proprietary
Information (as defined in the Confidentiality Agreement referenced in Section 8
below) related to Company’s business and that Company may provide you with
unique and specialized knowledge and training. You also acknowledge that the
Confidential Information and specialized knowledge and training have been
developed and will be developed by Company through the expenditure of
substantial time, effort and money and that the Confidential Information could
be used by you to compete with Company. A business will be deemed to be
“Competitive” with the Company if it performs research, development or
commercialization of individualized cell-based therapy for the treatment of
metastatic renal cell carcinoma, HIV or another indication in which the Company
has conducted a clinical trial within twelve months before the end of your
employment with the Company. Because of the competitive and proprietary aspects
of the business of the Company, you agree as follows:

 

(a) Covenant Not to Compete or Solicit. During your employment with the Company
and for one (1) year after the termination of your employment with Company for
any reason, you will not, directly or indirectly, on your behalf or on behalf of
another person, entity or third party anywhere in the United States, engage in
the following conduct without the prior written consent of Company: (i) as
officer, director, principal, agent, stockholder, employee, consultant,
representative or in any other capacity, own, manage, operate or control, or be
employed by, provide services to, or engage in or have a financial interest in
any business which is Competitive with Company (other than as specifically
permitted by the Company in writing upon written request); (ii) solicit, divert
or appropriate or attempt to solicit, divert or appropriate, the business or
patronage of any customers, business partners, or patrons of Company, or any
prospective customers, business partners, or patrons to whom the Company has
made a sales presentation (or similar offering of services or business) within
the one (1) year period preceding the date of your termination of employment
with Company; (iii) solicit, entice or persuade or attempt to solicit, entice or
persuade any employees of or consultants to Company or any present or future
parent, subsidiary or affiliate of Company to terminate their employment or
other engagement with Company or any such parent, subsidiary or affiliate for
any reason; or (iv) interfere with, or attempt to interfere with, the relations
between Company and any customer, vendor or supplier to Company.

 

(b) Reasonableness of Restrictions. You acknowledges that: (i) the types of
employment which are prohibited by this Section 5 are narrow and reasonable in
relation to the skills which represent your principal salable asset both to
Company and other prospective employers; and (ii) the temporal and geographical
scope of Section 5 is reasonable, legitimate and fair to you in light of
Company’s need to market its services and sell its products in order to have a
sufficient customer base to make Company’s business profitable and in light of
the limited restrictions on the type of employment prohibited herein compared to
the types of employment for which you are qualified to earn your livelihood.

 

6.Section 409A.

 

(a)You and the Company agree that this Agreement shall be interpreted to comply
with or be exempt from Section 409A, and the regulations and guidance
promulgated thereunder to the extent applicable, and all provisions of this
Agreement shall be construed in a manner consistent with the requirements for
avoiding taxes or penalties under Section 409A.

 

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(b)A termination of employment shall not be deemed to have occurred for purposes
of any provision of this Agreement providing for the payment of any amounts or
benefits considered “nonqualified deferred compensation” under Section 409A upon
or following a termination of employment unless such termination is also a
“separation from service” within the meaning of Section 409A and, for purposes
of any such provision of this Agreement, references to a “termination,”
“termination of employment” or like terms shall mean “separation from service.” 
If you are deemed on the date of termination to be a “specified employee” within
the meaning of that term under Section 409A(a)(2)(B), then with regard to any
payment or the provision of any benefit that is considered nonqualified deferred
compensation under Section 409A payable on account of a “separation from
service,” such payment or benefit shall be made or provided at the date which is
the earlier of (a) the expiration of the six-month period measured from the date
of such “separation from service,” and (b) the date of your death (the “Delay
Period”).  Upon the expiration of the Delay Period, all payments and benefits
delayed pursuant to this Section 11(b) (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) shall
be paid or reimbursed on the first business day following the expiration of the
Delay Period to you in a lump sum, and any remaining payments and benefits due
under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein.

 

(c)For purposes of Section 409A, your right to receive any installment payments
pursuant to this Agreement shall be treated as a right to receive a series of
separate and distinct payments.

 

(d)In no event shall the Company or any of its affiliates have any liability
relating to the failure or alleged failure of any payment or benefit under this
Agreement to comply with, or be exempt from, the requirements of Section 409A

 

7.At Will Employment. This Offer Letter is not intended to, nor does it, create
any employment contract for any specified term or duration between you and the
Company. In accordance with the laws of the State of North Carolina, your
employment with the Company is considered “at will”. This means that, just as
you may resign your employment at any time, Argos Therapeutics may, in its sole
discretion, with or without cause, terminate your employment at any time for any
reason.

 

8.Contingencies. This offer of employment includes a 90 day introductory period
which is outlined in the Company’s Employee Handbook, and is also contingent
upon the following: satisfactory completion of the Argos Therapeutics employment
application; your ability to begin work on the date indicated below; proof of
your authorization to work in the United States (I-9 Employment Eligibility
Verification); execution of a Confidentiality, Inventions and Non-Solicitation
Agreement (the “Confidentiality Agreement”); execution of the Argos Therapeutics
Company’s Code of Ethics; execution of the Argos Therapeutics Certification
Regarding Insider Trading and Public Disclosure Policies; and passing a
pre-employment drug screening and background screening to Management’s
satisfaction. It is understood and agreed that breach by you of the
Confidentiality Agreement shall constitute a material breach of this Agreement

 

9.No Conflicting Agreements. You represent and warrant that you are not bound by
any employment contract, restrictive covenant or other restriction preventing
you from continuing employment with or carrying out your responsibilities for
the Company. You agree that you will not disclose or use on behalf of the
Company any proprietary information of any third party without that party’s
consent.

 

10.General.

 

(a)Notices.  Any notices provided for in this Agreement shall be in writing and
shall be effective when delivered in person, consigned to a reputable national
courier service for overnight delivery or deposited in the United States mail,
postage prepaid, and addressed to you at your last known address on the books of
the Company or, in the case of the Company, to it by notice to the Chairman of
the Board of Directors, c/o Argos Therapeutics, Inc., at its principal place of
business, or to such other address(es) as either party may specify by notice to
the other actually received.

 

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(b)Entire Agreement. This Offer Letter, together with the Confidentiality
Agreement and other agreements specifically referred to herein, sets forth the
entire agreement between you and the Company and replaces all prior
communications, agreements and understandings, whether oral or written, with
respect to your and understandings relating to your employment with the Company.
The terms and conditions of this Agreement may only be modified or amended by a
written agreement executed by and the Company.

(c)Successors and Assigns. The Company may assign its rights and obligations
hereunder to any person or entity that succeeds to all or substantially all of
Company’s business or that aspect of Company’s business in which you are
principally involved. You may not assign your rights and obligations under this
Agreement without the prior written consent of Company.

 

(d)Severability.  If any portion or provision of this letter Agreement is deemed
to any extent illegal or unenforceable by a court of competent jurisdiction,
then the remainder of this Agreement will not be affected and each portion and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law

 

(e)Governing Law and Venue. This letter shall be governed by and construed in
accordance with the laws of the State of North Carolina (without reference to
the conflicts of law provisions thereof). Any action, suit, or other legal
proceeding which is commenced to resolve any matter arising under or relating to
any provision of this letter shall be commenced only in a court in Durham
County, North Carolina (or, if appropriate, a federal court located within North
Carolina).

(f)Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original and all of which together shall
constitute one and the same instrument. A signature by fax shall be treated as
an original.

 

By your signature below, you represent and warrant to the Company that you: (i)
are not subject to any employment, noncompetition or other similar agreement
that would prevent or interfere with the Company’s employment of you on the
terms set forth herein; and (ii) have not brought and will not bring with you to
the Company, any materials or documents of a former employer which are not
generally available to the public or which did not belong to you prior to your
employment with the Company, unless you have obtained written authorization from
the former employer or other owner for their possession and use and provided the
Company with a copy thereof.

 

If our employment offer is satisfactory, please sign and date a copy of this
letter in the space provided below as well as the accompanying documents,
including the Confidentiality Agreement, Code of Ethics, and Certification
Regarding Insider Trading and Public Disclosure Policies and return them Joan
Winterbottom, VP and Chief Human Resources Officer, no later than Thursday,
December 3, 2015. If the offer is not accepted by this date, it shall expire. At
the time you sign and return it, this Offer Letter will take effect as a binding
agreement between you and the Company on the basis set forth above.  We are
looking forward to working with you in contributing to the growth of Argos
Therapeutics.

 

 

Sincerely,

 

 

 

Jeffrey D. Abbey

President & CEO

 

Enclosures (as stated)

 

I accept the Company’s employment offer for the position of Chief Medical
Officer subject to the terms and conditions outlined above.

 

Signed:                 Printed Name:                 Date Signed:     Start
Date:     

 

 

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EXHIBIT A

 

SEPARATION AGREEMENT AND RELEASE OF CLAIMS

 

Argos Therapeutics, Inc., a Delaware corporation (the “Company”), and Lee F.
Allen (the “Employee”) (together, the “Parties”) accepted an offer of employment
with the Company pursuant to the terms of the offer letter dated December 2,
2015 (the “Offer Letter”). Any capitalized terms not defined herein shall have
the meanings ascribed to them in the Offer Letter. This is the release by
Employee of all claims against the Releasees (as defined below) arising out of
the Employee’s employment with or separation from the Company (the “Release”).
The consideration for the Employee’s agreement to this Release consists of the
severance payments and benefits set forth in Section 3 of the Offer Letter,
which are conditioned on, among other things, termination of the Employee’s
employment by the Company without Cause or by the Employee for Good Reason and
effectiveness of this Release based on the Employee’s timely execution and
non-revocation hereof.

 

1. Tender of Release. This Release is automatically tendered to the Employee
upon the termination of the Employee’s employment by the Company without Cause
or by the Employee with Good Reason.

 

2. Release of Claims. The Employee voluntarily, fully, forever, irrevocably and
unconditionally releases and discharges the Company, its affiliates,
subsidiaries and parent companies and each of their predecessors, successors,
assigns, and their current and former members, partners, directors, managers,
officers, employees, representatives, attorneys, agents, and all persons acting
by, through, under or in concert with any of the foregoing (any and all of whom
or which are hereinafter referred to as the “Releasees”), from any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorney’s fees and costs actually
incurred), of any nature whatsoever, known or unknown that the Employee now has,
owns or holds, or claims to have, own, or hold, or that he at any time had,
owned, or held, or claimed to have had, owned, or held against any Releasee
arising out of the Employee’s employment with or separation from the Company
(collectively, “Claims”). This release of Claims includes, without implication
of limitation, the release of all Claims:

 

  •   of breach of contract;

 

  •   of retaliation or discrimination under federal, state or local law
(including, without limitation, Claims of age discrimination or retaliation
under the Age Discrimination in Employment Act, Claims of disability
discrimination or retaliation under the Americans with Disabilities Act, Claims
of discrimination or retaliation under Title VII of the Civil Rights Act of 1964
and Claims of discrimination or retaliation under state law);

 

  •   under any other federal or state statute, to the fullest extent that
Claims may be released;

 

  •   of defamation or other torts;

 

  •   of violation of public policy;

 

  •   for wages, salary, bonuses, vacation pay or any other compensation or
benefits; and

 

  •   for damages or other remedies of any sort, including, without limitation,
compensatory damages, punitive damages, injunctive relief and attorney’s fees.

 

Notwithstanding anything to the contrary contained herein, this Release does not
apply to or affect (i) the Employee’s right to receive the severance payments
set forth in Section 3 of Offer Letter , (ii) the Employee’s right to be
reimbursed for reasonable business expenses incurred prior to termination of the
Employee’s employment according to the terms of Section 2(e) of the Offer
Letter; (iii) the Employee’s ownership of, and the Employee’s rights by virtue
of his ownership of, any capital stock or other securities of the Company,
(iv) any rights of indemnification or exculpation of which the Employee is the
beneficiary under any separate contractual indemnification agreement with the
Company in connection with his service as a director or officer of the Company,
the corporate charter, bylaws or other charter or organizational instruments or
benefit or equity plans of the Company or any other Releasee or at law and
rights of coverage to which the Employee may be entitled under any director and
officer liability insurance policy of the Company or any other Releasee or
(v) for purposes of clarity, any Claim arising out of any matters or events
occurring after the effective date of the Release.

 

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4. Ongoing Obligations of the Employee; Enforcement Rights. The Employee
reaffirms his ongoing obligations as well as the Company’s enforcement rights
provided for in Sections 6, 7 and 8 of the Offer Letter.

 

5. No Assignment; Representation on Action. The Employee represents that he has
not assigned to any other person or entity any Claims against any Releasee. The
Employee further represents that he has not filed or reported any Claims against
any Releasee with any state, federal or local agency or court.

 

6. Right to Consider and Revoke Release. The Employee acknowledges that he has
been given the opportunity to consider this Release for a period ending
forty-five (45) days after the tender of the Release. In the event the Employee
executed this Release within less than forty-five (45) days after the tender of
the Release, he acknowledges that such decision was entirely voluntary and that
he had the opportunity to consider this Release until the end of the forty-five
(45) day period. To accept this Release, the Employee shall deliver a signed
Release to the Chairman of the Compensation Committee of the Board (the “Chair”)
within such forty-five (45) period. For a period of seven (7) days from the date
when the Employee executes this Release (the “Revocation Period”), he shall
retain the right to revoke this Release by written notice that is received by
the Chair on or before the last day of the Revocation Period. This Release shall
take effect only if it is executed within the forty-five (45) day period as set
forth above and if it is not revoked pursuant to the preceding sentence. If
those conditions are satisfied, this Release shall become effective and
enforceable on the date immediately following the last day of the Revocation
Period.

 

7. Other Terms.

 

(a) Legal Representation; Review of Release. The Employee acknowledges that he
has been advised to discuss all aspects of this Release with his attorney, that
he has carefully read and fully understands all of the provisions of this
Release and that he is voluntarily entering into this Release.

 

(b) Binding Nature of Release. This Release shall be binding upon the Employee
and upon his heirs, administrators, representatives and executors.

 

(c) Modification of Release; Waiver. This Release may be amended, only upon a
written agreement executed by the Employee and the Company.

 

(d) Severability. In the event that at any future time it is determined by an
arbitrator or court of competent jurisdiction that any covenant, clause,
provision or term of this Release is illegal, invalid or unenforceable, the
remaining provisions and terms of this Release shall not be affected thereby and
the illegal, invalid or unenforceable term or provision shall be severed from
the remainder of this Release. In the event of such severance, the remaining
covenants shall be binding and enforceable.

 

(e) Governing Law and Venue. This Release shall be deemed to be made and entered
into in the State of North Carolina and shall in all respects be interpreted,
enforced and governed under the laws of the State of North Carolina without
giving effect to the conflict of law provisions of North Carolina law that would
require the application of law of any other jurisdiction. The language of all
parts of this Release shall in all cases be construed as a whole, according to
its fair meaning, and not strictly for or against either of the Parties. Any
action, suit or other legal proceeding which is commenced to resolve any matter
arising under or relating to any provision hereunder shall be commenced only in
a court in Durham County, North Carolina (or, if appropriate, a federal court
located within North Carolina).

 

(f) Absence of Reliance. The Employee acknowledges that he is not relying on any
promises or representations by the Company or its agents, representatives or
attorneys of either of them regarding any subject matter addressed in this
Release.

 

 

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So agreed by the Employee:

 

      Lee F. Allen   Date                  

 

 

 

 

 

 

 

 

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