EXHIBIT 10.1
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”) is entered into as of the date set
forth on the signature page below, and is effective as of August 4, 2014 (the
“Effective Date”) between Signal Genetics, Inc., a Delaware corporation (the
“Company” or “SG”), and Tamara A. Seymour (“Executive”) (Executive and the
Company are referenced collectively herein as the “Parties”; each of the Parties
is referred to individually as a “Party”).
 
RECITALS
 
WHEREAS, SG desires to employ Executive as Chief Financial Officer, Secretary
and Treasurer of the Company to manage and oversee certain business, financial
and administrative aspects of the Company, and Executive desires to be employed
by SG, in accordance with the terms and conditions of this Agreement.
 
NOW, THEREFORE, in consideration of the above recitals and the mutual promises
contained in this Agreement, the Parties agree as follows:
 
ARTICLE I.
 
EMPLOYMENT AND DUTIES OF EXECUTIVE
 
1.1 Employment.  SG hereby employs Executive as Chief Financial Officer,
Secretary and Treasurer of the Company (collectively, “CFO”) and Executive
accepts employment as CFO of SG in accordance with the terms and conditions, and
for the consideration, provided in this Agreement. 
 
1.2 Employment Period.  The term of this Agreement shall commence on the
Effective Date and shall continue until the first anniversary thereof (the
“Initial Term”), subject to the termination provisions set forth in this
Agreement.  On each anniversary of the Effective Date after the expiration of
the Initial Term, this Agreement and Executive’s employment shall be deemed to
have been automatically extended for an additional one (1) year term, or such
other period as mutually agreed to between the Parties, unless either Party
shall give written notice of non-extension to the other Party at least thirty
(30) days before such anniversary date, or unless sooner terminated as provided
in this Agreement.  Executive’s total term of employment with the Company under
this Agreement during the Initial Term and any extended term is collectively
defined and referred to as the “Employment Period.”  To the extent that
Executive remains employed by SG following the expiration of the Employment
Period and/or the termination of this Agreement, Executive shall be considered,
at all relevant times thereafter, an “at will” employee of SG and may be
terminated at any time, for any reason, with or without cause or prior notice.
 
1.3 Duties of CFO.
 
1.3.1 During the Employment Period, Executive (i) shall have the title of CFO,
(ii) shall devote her full business time and attention and expend her best
efforts, energies and skills on a full-time basis to the business of the
Company, and shall not engage in any other activity that would materially
interfere with the performance of her duties under this Agreement (provided that
Executive is permitted to serve on the board of directors of any entity or
organization to the extent that doing so does not create a conflict of interest
with Executive’s obligations or duties under this Agreement, subject to approval
of the Board of Directors of the Company (the “Board of Directors”), which
approval not to be unreasonably withheld, or to engage in endeavors related to
the community, her faith, personal finances and effects and other charitable
functions that do not materially interfere with the performance of her duties
hereunder), and (iii) shall perform such duties, and comply with all reasonable
directions and instructions of the Chief Executive Officer and the Board of
Directors.
 
 
 

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1.3.2 During the Employment Period, Executive will report to the Chief Executive
Officer of the Company.
 
1.3.3 In performing Executive’s duties hereunder, Executive shall in all
material respects (i) abide by and comply with all applicable laws, statutes,
orders, rules, regulations, policies or guidelines promulgated, or judgments,
decisions or orders entered, by any court, arbitrator tribunal, administrative
agency, or commission or other governmental or regulatory body, agency or
instrumentality or authority having appropriate jurisdiction and relating to the
Company, (ii) abide by and adhere to the Company’s general policies and
procedures as may be adopted from time to time, and (iii) conduct herself with
respect to the Company with the prudence, care, dedication and skill as would be
manifested by one in the operation and management of her own assets and
properties and in this regard shall owe a fiduciary duty of prudence and
dedication and care to the Company.
 
1.4 Principal Employment.
 
1.4.1 Executive agrees that, during her employment with the Company, she will
not engage in any matter whatsoever in a business or other endeavor that would
or might create a conflict of interest with Executive’s obligations or duties
under this Agreement, or that is competitive with or similar in nature to the
business of the Company.  Nonetheless, Executive shall have the right to own up
to 3% of the outstanding shares of a publicly held company if such shares are
actively traded on a national stock exchange and she is not involved in the
management of such company.  Specifically excluded from the restrictions set
forth in this Section, and other provisions of this Agreement, is Executive’s
ability (as expressly permitted by the Company hereby) to serve on the board of
directors of certain entities and organizations in accordance with Section 1.3.1
of this Agreement.
 
ARTICLE II.
 
COMPENSATION AND BENEFITS
 
2.1 Compensation.  For all services rendered and required to be rendered by,
covenants of and restrictions in respect to, Executive under this Agreement, SG
shall compensate Executive as follows:
 
 
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A. CFO Base Salary.  The Company shall pay to Executive during and with respect
to the Employment Period, and Executive agrees to accept, an annual base salary
(“Base Salary”) equal to $350,000.00, payable on a semi-monthly basis in
accordance with the standard payroll practices of the Company.  Executive’s Base
Salary will be re-evaluated on an annual basis and subject to a merit increase,
pursuant to the normal practices of the Company.
 
B. Incentive Compensation.  At the end of each fiscal year of the Company, in
addition to the Base Salary then in effect, Executive shall be eligible to
receive a bonus payment (the “Bonus Payment”) of up to 30% of the Base Salary
then in effect.  The Bonus Payment, if any, will be paid in accordance with the
Company’s bonus payment practices in effect from time to time for senior
executives of the Company.  Such Bonus Payment will be awarded in the sole
discretion of the Compensation Committee of the Company (the “Compensation
Committee”) based upon performance goals established by the Compensation
Committee during the first ninety (90) days of each fiscal year, which goals
shall be set after consultation with the Executive.  Determinations as to
whether Executive has met such performance goals will be determined in the sole
discretion of the Compensation Committee (or, at its discretion, the Board of
Directors).  In order to earn and receive the Bonus Payment, Executive must be
employed by the Company, without having received from or tendered to the Company
notice of an anticipated termination (for any reason), at the time that the
Bonus Payment is to be paid to Executive.
 
C. Equity-Based Compensation.  Effective as soon as practicable after the
Effective Date and the filing of a Form S-8 Registration Statement, and subject
to approval by the Compensation Committee, Executive shall receive grants of
equity-based incentive awards (the “Awards”) pursuant to Grant Agreements under
the Signal Genetics, Inc. 2014 Stock Incentive Plan (the “Plan”).  Vesting
commencement date shall be August 4, 2014.  92,000 shares of common stock of the
Company shall be subject to the Awards, all of which shall be issuable pursuant
to a restricted stock unit award.  The Awards shall vest 25% on August 4, 2015,
and thereafter shall vest in thirty-six (36) equal monthly installments, subject
to Executive’s continued employment on the applicable vesting dates, with 25%
becoming payable upon August 4 in each of the calendar years 2016, 2017 and
2018; provided, however, that each outstanding Award shall become fully vested
and payable if Executive is terminated by the Company for any reason other than
Cause (as defined in Section 3.1(A)), or if Executive resigns with Good Reason
(as defined in Section 3.1(D)), in either case only if such termination or
resignation occurs within the period beginning three (3) months before and
ending twelve (12) months after a Change in Control (as such term is defined in
the Plan).  Notwithstanding the general description of the Awards in this
Section, no Awards shall be issued, or shall be deemed to be issued, under the
Plan unless and until the Compensation Committee has approved and issued the
Awards.  The Plan and Grant Agreement shall be the exclusive documents governing
any such Awards.
 
2.2 Benefits.
 
A. Paid Time Off.  For each calendar year during the Employment Period,
Executive shall be entitled to paid time off (“PTO”) at the rate consistent with
the SG accrual rate for paid time off for SG senior executives.  As such,
Executive shall be entitled to 4 weeks of paid vacation time (which equates to
20 days / 160 hours per year).  In addition, Executive shall be entitled to sick
leave and personal leave pursuant to the SG policies applicable to senior
executives.  Such PTO will be accrued on a pro-rata basis during the initial
calendar year of the Employment Period and will otherwise be subject to the
Company’s policies and procedures, as in effect from time to time.
 
 
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B. General Benefits.  Executive shall be entitled to participate in the same
group benefit plans and programs as are provided by the Company to other senior
executives, subject to the terms and conditions of such plans and programs as
are in effect from time to time.  Such benefits currently include group health
insurance, group life insurance, and disability insurance coverage and a 401(k)
retirement plan.
 
C. Civic Affairs, Service Clubs and Social Functions.  The Parties agree that
Executive’s participation in civic affairs, service clubs, professional
organizations, and social functions is appropriate for the proper professional
administration of the Company.  Executive may participate in such affairs,
professional organizations, clubs, and functions as Executive determines are
appropriate to enhance the operations and professional stature of the
Company.  SG shall, upon presentation by Executive of the documentation, expense
statements, vouchers, and such other supporting information as SG may request or
as may be consistent with SG practices, reimburse Executive for reasonable
expenses incurred while representing the Company pursuant to this Agreement.
 
2.3 Reimbursement of Expenses.  During the Employment Period, Executive will be
reimbursed for all reasonable business expenses, including travel and
entertainment expenses, incurred in the performance of her duties,
responsibilities, or services performed for the Company, upon presentation by
Executive of the documentation, expense statements, vouchers, and such other
supporting information as SG may request or as may be consistent with SG
practices.  Executive will comply with the Company’s policies in incurring and
seeking reimbursement for such expenses.
 
ARTICLE III.
 
TERMINATION
 
3.1 Termination.  This Agreement may be terminated in the following
circumstances:
 
A. Termination For Cause.  SG may, at any time during the Employment Period by
written notice to Executive (the “Termination Notice”), terminate this Agreement
for “Cause” effective immediately.  The Termination Notice shall specify the
reason for termination.  In such an event, Executive shall only be entitled to
receive any earned but unpaid Base Salary, accrued unused PTO, and unreimbursed
expenses payable for all periods through the effective date of termination, as
well as any vested amount arising from Executive’s participation in, or benefits
under, any employee benefit plan, program or arrangement, payable in accordance
with the terms of such SG employee benefit plans, programs or arrangements
(collectively, “the Accrued Benefits”).  Executive shall not be entitled to
earn, accrue, or receive any additional compensation or other amount, other than
as set forth in this Section 3.1(A) of this Agreement, from the Company after
the effective date of termination.
 
 
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For purposes hereof, “Cause” shall mean:
 
(i) A material breach by Executive of her fiduciary duty to SG;
 
(ii) A material breach or violation by Executive of the terms of this Agreement
or any other material agreement between Executive and SG, or of any of the
Company’s policies, or any of SG’s material practices or procedures, which
remains uncured for a period of 30 days following Executive’s receipt of written
notice specifying the nature of the breach or violation, or, where such breach
or violation is not subject to or capable of cure, effective immediately;
 
(iii) The commission by Executive of any act of embezzlement, fraud, larceny or
theft on or from SG;
 
(iv) Substantial and continuing willful neglect or inattention by Executive of
the duties of her employment, refusal to perform the lawful and reasonable
directives of the Chief Executive Officer or the Board of Directors, or the
willful misconduct or gross negligence of Executive in connection with the
performance of such duties which remain uncured for a period of 30 days
following Executive’s receipt of written notice specifying the nature of the
misconduct, or, where such misconduct is not subject to or capable of cure,
effective immediately;
 
(v) The commission by Executive of any crime involving moral turpitude or a
felony; and
 
(vi) Executive’s performance or omission of any act which, in the reasonable
judgment of the Company, if known to the customers, clients, stockholders or any
regulators of SG, would have a material adverse impact on the business of SG.
 
B. Termination Without Cause.  Subject to Sections 3.1(A) and 3.1(F), the
Company may terminate this Agreement at any time for any reason, by delivering a
written notice to Executive, effective thirty (30) days after Executive receives
such notice in accordance with the terms hereof.  In such an event, Executive
shall only be entitled to receive:
 
(i) the Accrued Benefits; plus
 
(ii) in addition to the amounts specified above, and subject to the
effectiveness of Executive’s execution of a general release of claims against
the Company and its affiliates no later than 54 days after Executive’s
employment termination date (as described in Section 3.1(G)):  (A) the severance
payments outlined below (the “Severance Payments”); and (B) accelerated vesting
of all time-based equity compensation awards then held by Executive to the
extent that such awards would have vested during the Severance Period, as that
term is defined below (the “Accelerated Vesting”).  Executive shall not be
required to mitigate the amount of any Severance Payments received by seeking
other employment during any period in which she is eligible or entitled to
receive any Severance Payments (the “Severance Period”).  However, should
Executive obtain other employment during the term of the Severance Period, SG
shall pay Executive, for the remaining length of the Severance Period, only the
difference between her new salary and her Base Salary (as in effect at the time
of termination), if the new salary is less than her Base Salary.  For the
avoidance of doubt, the Company shall not be obligated to make any Severance
Payments thereafter if the new salary is greater than her applicable Base
Salary.  Executive agrees to promptly notify the Company in the event that she
obtains new employment during the term of the Severance Period and of her salary
and/or rate of pay thereunder.
 
 
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The Severance Payments shall be calculated as follows:
 
(1) should Executive’s termination pursuant to this Section 3.1(B) occur during
or upon the expiration of the Initial Term, Executive shall, subject to Section
3.1(G) of this Agreement, become entitled to receive an amount equal to the
greater of:  (a) the Base Salary that would otherwise have been paid during the
remainder of the Initial Term, payable over the number of calendar months
remaining in the Initial Term; or (b) six (6) months of the Base Salary, payable
over six (6) months; or
 
(2) should Executive’s termination pursuant to this Section 3.1(B) occur at any
time following the Initial Term, Executive shall, subject to Section 3.1(G) of
this Agreement, become entitled to receive an amount equal to twelve (12) months
of her then-current monthly Base Salary, payable over a period of twelve (12)
months.
 
The Severance Payments (less all applicable withholdings) will be paid in
substantially equal monthly installments over the applicable period in
accordance with the Company’s normal payroll practices, commencing with the
first regular payroll following the date on which the general release of claims
becomes effective and irrevocable as described in Section 3.1(G) below (and, if
at all, not later than 90 days after Executive’s employment termination
date).  In addition, if Executive meets the requirements of Section 3.1(G)
below, the Company shall reimburse Executive for the full cost of premiums for
continuation coverage under the Company’s group health plan pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for Executive
(and to the extent she has family coverage as of her termination date, her
family) (the “COBRA Subsidies”), provided that Executive elects and remains
eligible for such coverage, during the Severance Period.  Notwithstanding
anything to the contrary set forth herein, if the Company determines, in its
sole discretion, that its provision of the COBRA Subsidies could reasonably be
expected to result in taxes to the Company under Section 4980D of the Internal
Revenue Code , then Company shall in lieu thereof, to the extent that doing so
would not subject the Company to such taxes, pay to Executive a taxable monthly
amount to continue Executive’s group health insurance coverage in effect on the
date of separation from service (which amount shall be equal to 150% of the
premium for the COBRA coverage), which payments shall (i) be made regardless of
whether Executive elects COBRA continuation coverage, (ii) commence in the month
following the month in which Executive’s termination of employment occurs and
(iii) continue for such period of time as shall equal the period of Severance
Payments.
 
 
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Should Executive obtain other employment during such period of COBRA coverage,
and Executive is provided the opportunity to obtain from a subsequent employer
comparable health insurance benefits to those benefits provided by SG, then the
Company shall no longer reimburse Executive for premiums for COBRA coverage for
Executive (and to the extent she has family coverage, her family), from the date
Executive may obtain such health insurance benefits, whether or not Executive
elects such coverage.  Executive agrees to promptly notify the Company in the
event that she obtains new employment during such period of COBRA coverage
and/or becomes eligible for comparable health insurance benefits through another
employer.  Executive agrees and acknowledges that for so long as Executive is
covered by COBRA and receiving Severance Payments at a time when Executive is
not eligible for the COBRA Subsidies, then the amount of the full cost of COBRA
premiums under the Company’s group health plan shall be deducted from such
Severance Payments.  Coverage under the Company’s group health plan, including
coverage pursuant to the COBRA Subsidies  shall run concurrently with such
plan’s obligation to provide continuation coverage pursuant to COBRA and does
not limit such plan’s obligation to provide continuation coverage under
COBRA.  The Company shall be entitled to discontinue the Severance Payments in
the event that Executive violates any of the provisions of Sections 4.9, 4.10 or
4.11, or any other restrictive covenants with the Company or any affiliate of
the Company to which Executive has agreed.
 
C. Termination After Disability or Death.
 
(i) In the event Executive becomes totally disabled or disabled such that she is
rendered unable to perform the essential functions of her position for the
Company, with or without the provision of a reasonable accommodation, and if
such disability shall persist for a continuous period of one hundred eighty
(180) days or more, or an aggregate period in excess of one hundred eighty (180)
days in any one fiscal year, the Company shall have the right at any time after
the end of such period, during the continuance of Executive’s disability, by the
delivery of not less than thirty (30) days’ prior written notice to Executive,
to terminate Executive’s employment under this Agreement whereupon the
applicable provisions of this Section below shall apply.
 
(ii) For purposes of this Agreement, if Executive and the Company disagree as to
whether Executive is totally disabled, or disabled such that she is rendered
unable to perform the essential functions of her position for the Company as set
forth above, or as to the date at which time such total disability began, the
decision of a licensed medical practitioner, mutually agreed upon by the
Parties, shall be binding as to both questions.  If the Parties cannot agree as
to the identity of the licensed medical practitioner, Executive shall select a
licensed medical practitioner of her choice and the Company shall select a
licensed medical practitioner of its choice.  The two licensed medical
practitioners so selected shall select a third licensed medical practitioner,
which third individual shall resolve either or both of the questions referred to
above and which resolution shall be binding upon the Parties.  The costs of such
a third licensed medical practitioner shall be borne by the Company.
 
 
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(iii) If Executive’s employment with the Company is terminated on account of
Executive’s disability as provided for in this Section above, or on account of
Executive’s death, then Executive (or Executive’s estate or personal
representative, as applicable) shall only be entitled to receive, and the
Company shall pay to Executive (or Executive’s estate or personal
representative, as applicable), the following amounts:
 
(1) the Accrued Benefits; plus
 
(2) in the case of termination due to disability only, Executive shall receive,
subject to the effectiveness of Executive’s execution of a general release of
claims against the Company and its affiliates no later than 54 days after
Executive’s employment termination date (as described in Section 3.1(G)), a
series of substantially equal monthly installment payments cumulatively equal to
six (6) months of the then-current monthly Base Salary (the “Continuation
Payments”), payable over a period of six (6) months (the “Continuation
Period”).  The Continuation Payments (less all applicable withholdings) will be
paid in substantially equal monthly installments over the 6-month Continuation
Period in accordance with the Company’s normal payroll practices, commencing
with the first regular payroll following the date on which the general release
of claims becomes effective and irrevocable as described in Section 3.1(G) below
(and in any event, if at all, no later than ninety (90) days after Executive’s
employment termination date).  Executive shall be entitled to the full amount of
the Continuation Payments if and only if she does not receive any payments under
short-term or long-term disability insurance benefit programs established,
sponsored or maintained by the Company (“Insurance Payments”).  If Executive is
provided with any such Insurance Payments, then SG shall pay Executive, during
the Continuation Period, only the difference between the Insurance Payments
provided to Executive and her Continuation Payments, if the Insurance Payments
are less than her Continuation Payments.  In any event, Executive shall not be
entitled to receive more than the full amount of her Base Salary with SG for the
time period covered by the Continuation Period, considering the aggregate amount
of Continuation Payments and Insurance Payments.  Accordingly, if Executive
becomes entitled to any Insurance Payments for any portion of the Continuation
Period, then Executive shall immediately inform SG of the amounts of such
Insurance Payments and any future Continuation Payments shall be reduced, as
appropriate.  Moreover, if Executive obtains such Insurance Payments
attributable to any portion of the Continuation Period, at any time after SG
pays Continuation Payments to Executive, Executive shall make payment to SG of
an amount equal to the amount of received Insurance Payments to reimburse SG for
such Continuation Payments it previously made or otherwise inform SG of such
Insurance Payments so that any future Continuation Payments may be reduced.
 
 
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D. Termination by Executive for “Good Reason”.  Executive shall have the right
to terminate her employment for “Good Reason” under this Agreement by the
delivery of written notice to the Company within sixty (60) days after the
initial existence of any of the events herein below defined as “Good Reason,” in
which event she shall only be entitled to the Accrued Benefits; plus, subject to
the effectiveness of Executive’s execution of a general release of claims
against the Company and its affiliates no later than 54 days after Executive’s
employment termination date (as described in Section 3.1(G)), the Severance
Payments, the Accelerated Vesting, and the COBRA Subsidies, in the same amounts
and at the same times and subject to the same terms and conditions as set forth
in Section 3.1(B)(ii) above.
 
For purposes hereof, “Good Reason” shall mean:
 
(i) A material breach by the Company of this Agreement and the Company’s failure
to cure or remedy such breach within 30 days of its receipt of written notice
thereof from Executive;
 
(ii) A material and substantial diminution or reduction in Executive’s duties,
Base Salary, or authority or responsibilities (which includes, but is not
limited to, a change in position such that Executive is not the Chief Financial
Officer or the equivalent thereof of the surviving entity, or an affiliate of
the surviving entity, following a Change in Control (as that term is defined in
Section 2(e) of the Company’s 2014 Stock Incentive Plan)), and the Company’s
failure to cure or remedy such diminution or reduction within 30 days of its
receipt of written notice thereof from Executive;
 
(iii) relocation by the Company of the principal place of Executive’s employment
outside a 50-mile radius from San Diego County, California, and the Company’s
failure to cure or remedy such relocation within 30 days of its receipt of
written notice thereof from Executive;
 
(iv) The Company’s request or demand that Executive perform an act, or refrain
from performing an act, that would be in violation of applicable law, and the
Company’s failure to rescind or revoke such request or demand within 30 days of
its receipt of written notice thereof from Executive.
 
Notwithstanding anything to the contrary herein, Executive must resign within
 sixty (60) days after expiration of the applicable 30-day notice period as set
forth, respectively, in Sections 3(D)(i)-(iv), without cure, remedy, rescission,
or revocation by the Company, as applicable, for such resignation to constitute
a Termination for Good Reason.
 
E. Termination by Executive Without “Good Reason.”  Executive shall have the
right to terminate her employment under this Agreement, at any time and for any
reason, by delivering a written notice to the Company effective no less than
thirty (30) days after the Company receives such notice in accordance with the
terms hereof.  However, should Executive terminate her employment with the
Company for any reason (other than for Good Reason in accordance with the
requirements of Section 3.1(D) above), Executive shall only be entitled to
receive from the Company the Accrued Benefits.  Executive shall not be entitled
to earn, accrue, or receive any additional compensation or other amount, other
than as set forth in this Section 3.1(E) of this Agreement, from the Company
after the effective date of termination.
 
 
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F. Termination by Executive upon Notice of Non-Extension.  Either Party may
terminate this Agreement, effective upon the expiration of the Initial Term or
applicable extended term of this Agreement, as applicable, by providing written
notice of non-extension to the other Party in accordance with Section 1.2 of
this Agreement.
 
(i) In the event that Executive terminates this Agreement by providing such
written notice of non-extension, Executive shall only be entitled to receive
from the Company the Accrued Benefits, and she shall not be entitled to earn,
accrue, or receive any additional compensation or other amount from the Company
after the effective date of termination.
 
(ii) In the event that the Company terminates this Agreement by providing such
written notice of non-extension, Executive shall only be entitled to the Accrued
Benefits; plus, subject to the effectiveness of Executive’s execution of a
general release of claims against the Company and its affiliates no later than
54 days after Executive’s employment termination date (as described in Section
3.1(G)), the Severance Payments, the Accelerated Vesting, and the COBRA
Subsidies, in the same amounts and at the same times and subject to the same
terms and conditions as set forth in Section 3.1(B)(ii) above.
 
G. Release of All Claims Against the Company.  Notwithstanding any other
provision of this Section 3.1 of this Agreement, no payment shall be made or
benefit provided to Executive or Executive’s estate or personal representative,
as applicable, pursuant to this Section 3.1 of this Agreement, other than those
required by law, unless Executive or a representative or agent of Executive’s
estate, as applicable, signs and returns to the Company and, if applicable, does
not revoke, a general release of all claims against the Company, and any
related, affiliated, or associated persons and/or entities as the Company may
designate or determine in its sole discretion, in such form as the Company may
require (the “Release”), and, on or prior to the 54th day following Executive’s
employment termination date, such Release becomes effective and irrevocable in
accordance with the terms thereof.
 
ARTICLE IV.
 
MISCELLANEOUS PROVISIONS
 
4.1 Notice.  All notices, requests, demands, consents, and other communications
required or permitted to be given or made hereunder shall be in writing and
shall be deemed to have been duly given and received, (i) if delivered by hand,
the day it is so delivered, (ii) if mailed via the United States mail, certified
or registered first class mail, postage prepaid, return receipt requested, five
business days after it is mailed, or (iii) if sent by a nationally recognized
overnight courier for next business day delivery, the business day after it is
sent, to the Party to whom the same is so given or made, as follows:  (a) to the
Company, at its administrative offices and (b) to Executive, at the address
maintained on the personnel records of the Company.  Either Party may change the
address to which notice is required to be sent by providing notice of the change
of address in accordance with this Agreement.
 
 
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4.2 Headings.  All descriptive headings in this Agreement are inserted for
convenience only and shall be disregarded in construing or applying any
provision of this Agreement.
 
4.3 Counterparts.  This Agreement may be executed in counterparts (including via
e-mail with scan attachment or by facsimile transmission), and when each Party
has signed and delivered at least one such counterpart, each counterpart shall
be deemed an original, and, when taken together with other signed counterparts,
shall constitute one Agreement, which shall be binding upon and effective as to
all Parties.
 
4.4 Severability.  In the event that any term or provision of this Agreement, or
part thereof, is held to be invalid, such invalidation shall not affect the
validity of the remainder of this Agreement.  Further, the invalid provision
shall be modified by the minimum amount legally required to make the provision
valid and enforceable and to carry out the purposes of this
Agreement.  Moreover, the remainder of such provision and this Agreement, as the
case may be, shall nevertheless remain in full force and effect.
 
4.5 Entire Agreement.  This Agreement, together with the Indemnification
Agreement (as that term is defined below) that has been, or will be, executed by
and between the Parties, contains the entire agreement and understanding among
and between the Parties with respect to the subject matter hereof, and
supersedes any prior agreement and understanding among them with respect to the
subject matter of this Agreement.  Except as otherwise provided herein, this
Agreement cannot be changed or terminated except by an instrument in writing
signed by the Parties hereto.  Any oral representations, modifications or
amendments concerning this Agreement shall be of no force or effect unless
contained in a subsequent written modification signed by Executive and a duly
authorized representative of the Company.
 
4.6 Personal Services Contract.  This contract is a personal services contract
and shall not be assignable by Executive, but shall be binding upon her and upon
her heirs, administrators, representatives, executors, and
successors.  Notwithstanding the foregoing, Executive shall have the right,
after consultation with the Chief Executive Officer or the Board of Directors,
to reasonably delegate appropriate administrative duties to any person who is an
employee of the Company.  This Agreement shall be freely assignable by the
Company without restriction and shall be deemed automatically assigned by the
Company with Executive’s consent in the event of any sale, merger, share
exchange, consolidation, or other business reorganization.
 
 
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4.7 Successors.  This Agreement shall inure to the benefit of the Company and
its successors and assigns.
 
4.8 Indemnification.Upon presentment by the Company to Executive, the Parties
agree to promptly execute an agreement specifying their respective obligations
or promises, if any, to each other regarding indemnification of claims, in such
form as the Company may reasonably require or provide (the “Indemnification
Agreement”), which, upon execution by the Parties, shall automatically be
incorporated herein by reference.
 
4.9 Confidentiality; Disclosure of Information.
 
(a) Executive recognizes and acknowledges that she will have access to
Confidential Information (as defined below) relating to the business or
interests of the Company or of persons with whom the Company may have business
relationships.  Except as permitted herein or as may be approved by the Company
from time to time, Executive will not during the Employment Period or for a
period of 12 months thereafter, use or disclose to any other person or entity,
any Confidential Information of the Company (except as required by applicable
law or in connection with performance of Executive’s duties and responsibilities
hereunder or to Executive’s legal and financial advisors so long as such
advisors agree to be bound by the terms and conditions of this Paragraph
4.9(a)).  Executive may disclose the existence of the obligations under this
Paragraph 4.9(a) to future employers.  If Executive is requested or becomes
legally compelled to disclose any of the Confidential Information, she, if
permitted by applicable law, will give prompt notice of such request or legal
compulsion to the Company.  The Company may waive compliance with this Paragraph
4.9(a) or will provide Executive with legal counsel at no cost to Executive to
seek an appropriate remedy; provided however Executive may disclose any
Confidential Information in the event notwithstanding all such efforts of the
Company and such legal counsel if compelled by court order to do so.
 
The term “Confidential Information” shall mean information relating to the
Company’s business affairs, proprietary technology, trade secrets, patented
processes, research and development data, know-how, market studies and
forecasts, competitive analyses, pricing policies, executive lists, the
substance of agreements with patients, customers, suppliers, and others,
marketing arrangements, patient lists, customer lists, commercial arrangements,
or any other information relating to the Company’s business which is treated as
confidential or proprietary by the Company in accordance with its
policies.  Notwithstanding the immediately preceding sentence, the provisions of
this Paragraph 4.9(a) shall not apply to any information that:  (1) is in the
public domain; (2) is or becomes available to the public other than as a result
of a disclosure by Executive in violation of this Paragraph 4.9(a); (3) was
available to Executive on a non-confidential basis prior to the date of this
Agreement; or (4) becomes available to Executive on a non-confidential basis
from a source other than the Company (other than through a known breach of a
confidentiality obligation).  This obligation shall continue until such
Confidential Information becomes publicly available, other than pursuant to a
breach of this Paragraph 4.9(a) by Executive, regardless of whether Executive
continues to be employed by the Company.
 
 
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(b) It is further agreed and understood by and between the Parties to this
Agreement that all “Company Materials,” which include, but are not limited to,
computers, computer software, computer disks, tapes, printouts, source, HTML and
other codes, flowcharts, schematics, designs, graphics, drawings, photographs,
charts, graphs, notebooks, patient lists, customer lists, sound recordings,
other tangible or intangible manifestation of content, and all other documents
whether printed, typewritten, handwritten, electronic, or stored on computer
disks, tapes, hard drives, or any other tangible medium, as well as samples,
prototypes, models, products and the like shall be the exclusive property of the
Company and, upon termination of Executive’s employment with the Company, and/or
upon the written request of the Company, all Company Materials, including copies
thereof, as well as all other property of the Company then in Executive’s
possession or control, shall be returned to and left with the Company.
 
(c) Notwithstanding the foregoing, nothing in this Agreement shall be construed
as, or shall interfere with, abridge, limit, restrain, or restrict Executive’s
right:  (i) to engage in any activity or conduct protected by Section 7 or any
other provision of the National Labor Relations Act; or (ii) to communicate with
any federal, state, or local government agency charged with the enforcement
and/or investigation of claims of discrimination, harassment, retaliation,
improper wage payments, or any other unlawful employment practices under
federal, state, or local law, or to file a charge, claim, or complaint with, or
participate in or cooperate with any investigation or proceeding conducted by,
any such agency.
 
4.10 Intellectual Property:  “Intellectual Property” means any of the following
that are conceived of, developed, reduced to practice, created, modified, or
improved by Executive, either solely or with others, in whole or in part, in the
course of, or as a result of, Executive’s employment by the Company in any
capacity, whether at the Company’s place of business or otherwise, and whether
on the Company’s time or on Executive’s own time:  (i) writings (including
notes, reports, manuals and instructions), software, source code, algorithms,
works and copyrightable subject matter and rights, title and interest in
copyrights and copyright registrations, (ii) rights, title and interest in
know-how, technical information, processes, practices and systems, whether or
not protectable by patent, copyright or trade secret law, (iii) trademarks,
trade names, service marks, emblems, logos, symbols and insignia and rights with
respect thereto, including registrations and registration rights, (iv) all
developments, including trade secrets of any kind, discoveries, improvements,
and ideas directly relating to or useable in the Company business, and (v)
licenses granted by third parties of rights to use any of the foregoing.
 
(a) Intellectual Property shall be the exclusive property of the Company, and
Executive shall have no right, title, or interest in, or to, the Intellectual
Property.  The Company shall have the sole and exclusive right, title, and
interest in, and to, the Intellectual Property, which right shall continue
notwithstanding the cessation of Executive’s employment.  Executive also hereby
irrevocably waives any “moral rights” that Executive may have in the
Intellectual Property, and confirms that the Company shall have the right, in
addition to the other rights granted hereunder and notwithstanding the
termination of Executive’s employment for any reason, to make or have made, and
own, enhancements, derivative works, and other modifications to any part of the
Intellectual Property.
 
 
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(b) Executive hereby assigns to the Company any right, title, and interest that
Executive may have in, and to, the Intellectual Property in any patent,
copyright, industrial design, trademark registration, and any other similar
right pertaining to the Intellectual Property which Executive may have.
 
(c) Executive acknowledges that the assignments in Section 4.10(b) above are
undertaken in part as a contingency against the possibility that any
Intellectual Property, by operation of law, may not be considered a work made
for hire by Executive for the Company.  The Company and its successors and
assigns, shall have the right to obtain and hold in their own name all copyright
registrations, patents, and other evidence of rights that may be available for
the Intellectual Property and/or any portion thereof.  Executive further
acknowledges that all United States copyrights and all other intellectual
property rights in the Intellectual Property (including any and all patents that
may issue with respect thereto) shall be exclusively owned by the Company and
shall be considered “works made for hire,” as such term is defined in the United
States Copyright Act, by Executive for the Company.
 
(d) Executive hereby covenants and binds Executive and Executive’s successors,
assigns and legal representatives to cooperate fully and promptly with the
Company and its designees, successors, and assigns, at the Company’s reasonable
expense, and to do all acts necessary or requested by the Company and its
designee, successors, and assigns, to secure, maintain, enforce, and defend the
Company’s rights in the Intellectual Property.  Without limitation to the
foregoing, Executive shall execute on demand, and bind Executive and Executive’s
successors, assigns and legal representatives, whether during Executive’s
employment or at any time following the cessation of Executive’s employment, to
any applications, transfers, assignments, and other documents as the Company may
consider necessary for the purpose of:  (i) vesting in, or assigning to, the
Company absolute title to, (ii) applying for, prosecuting, obtaining,
maintaining, or protecting, or (iii) maintaining, enforcing, and/or defending
the Company’s rights in, any patent, copyright, industrial design, trademark
registration, or any other right pertaining to the Intellectual Property in any
countries in the world.  Executive further agrees, and binds Executive and
Executive’s successors, assigns and legal representatives, to cooperate fully
and assist the Company in every way possible in the application for, or
prosecution of, such rights pertaining to the Intellectual Property and not
developed during Executive’s employment with the Company.
 
(e) Executive shall promptly disclose to the Company any patent application
filed within one (1) year after termination of Executive’s employment with the
Company.  Executive shall have the burden of proving that any invention that
relates, or pertains, to the Company’s business, and which is conceived less
than one (1) year after the effective date of the termination of Executive’s
employment relationship, was in fact made after such termination and not
developed during Executive’s employment with the Company.  Executive agrees
that, during her employment with the Company, she will disclose to the Company
all ideas, proposals, and plans, invented or developed by her, which relate to
the business of the Company and its subsidiaries.
 
 
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4.11 Non-Solicitation.  Executive acknowledges that the Company has invested
substantial time, money and resources in the development and retention of its
Confidential Information (including trade secrets), customers, patients,
accounts and business partners, and further acknowledges that, during the course
of Executive’s employment with the Company, Executive will have access to the
Company’s Confidential Information (including trade secrets), and will be
introduced to existing and prospective customers and patients that are being
targeted, vendors, accounts and business partners of the Company.  Executive
acknowledges and agrees that any and all “goodwill” associated with any existing
or prospective customer or patient that is being targeted, vendor, account or
business partner belongs exclusively to the Company, including, but not limited
to, any goodwill created as a result of direct or indirect contacts or
relationships between Executive and any existing or prospective customers or
patients that are being targeted, vendors, accounts or business
partners.  Additionally, the Parties acknowledge and agree that Executive
possesses skills that are special, unique or extraordinary and that the value of
the Company depends upon her use of such skills on its behalf.  Executive
acknowledges that as a result of the foregoing the restrictions contained herein
and elsewhere in this Agreement are reasonably necessary to protect the Company
from unfair competition by Executive.
 
In recognition of this, Executive covenants and agrees that:
 
(a) During Executive’s employment with the Company and for one year thereafter,
Executive may not directly or indirectly induce, attempt to induce, solicit,
attempt to solicit or encourage any employee, consultant, or contractor to leave
the employment or engagement with the Company or any affiliate of the Company.
 
(b) During Executive’s employment with the Company, Executive may not divert or
take advantage of any actual or potential business opportunities of the Company
in which it has a current interest or is actively pursuing.
 
4.12 Non-Disparagement; Non-Disclosure.  Executive and the Company hereby agree
that during the Employment Period and at all times thereafter, neither Executive
nor the Company will make any public statement, or engage in any conduct, that
is disparaging, derogatory, or otherwise is a negative or false statement about
the other Party or, with respect to the Company, about any of its executives,
officers, directors, or shareholders, including, but not limited to, any
statement that disparages the products, services, finances, financial condition,
capabilities or any other aspect of the business of the Company and the
capabilities of Executive.  Notwithstanding any term to the contrary herein,
neither Executive nor the Company shall be in breach of this Paragraph 4.12 for
the making of any truthful statements under oath or in a judicial or other
proceeding.
 
4.13 Representation.  Executive represents and warrants to the Company that (i)
Executive is able to enter into this Agreement with the Company, and Executive’s
ability to enter into this Agreement and to fully perform Executive’s
anticipated duties for the Company is not limited or restricted by any
agreements, understandings, instruments, orders, judgments or decrees to which
Executive is a party or by which Executive is bound and (ii) Executive’s
performance of such duties for the Company will not directly or indirectly
violate any contractual or common law obligations she has or had to other
employers or entities.  Executive agrees that she will not improperly use,
disclose, or induce the Company to use any proprietary information or trade
secrets of any former or concurrent employer or other person or
entity.  Executive agrees that she will not bring onto the premises of the
Company or transfer onto the Company’s technology systems any unpublished
document, proprietary information or trade secrets belonging to any such
employer, person or entity unless consented to in writing by both the Company
and such employer, person or entity.
 
 
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4.14 Applicable Law.  This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive and procedural laws of the State of
California.  Each Party hereto hereby irrevocably submits to the jurisdiction of
the state and federal courts located in San Diego County, California and waives
any claim based upon forum non-conveniens or lack of jurisdiction.
 
4.15 Survival.  Upon the termination or expiration of this Agreement, Article IV
hereof shall survive such termination or expiration, and shall continue, with
full force and effect, in accordance with its respective terms and conditions.
 
4.16 Legal Representation.  Executive acknowledges that she was advised to
consult with, and has had ample opportunity to receive the advice of,
independent legal counsel before executing this Agreement – and the Company
hereby advises Executive to do so – and that Executive has fully exercised that
opportunity to the extent she desired.  Executive acknowledges that she had
ample opportunity to consider this Agreement and to receive an explanation from
such legal counsel of the legal nature, effect, ramifications, and consequences
of this Agreement.  Executive warrants that she has carefully read this
Agreement, that she understands completely its contents, that she understands
the significance, nature, effect, and consequences of signing it, and that she
has agreed to and signed this Agreement knowingly and voluntarily of her own
free will, act, and deed, and for full and sufficient consideration.
 
4.17 Section 409A of the Code.
 
4.17.1 It is intended that the provisions of this Agreement qualify for
exemption from, or comply with, Section 409A of the Internal Revenue Code of
1986, as amended, and the regulations thereunder as in effect from time to time
(collectively, hereinafter, “Section 409A”), and all provisions of this
Agreement shall be construed and interpreted in a manner consistent with such
intent.  For purposes of Section 409A, each payment made pursuant to this
Agreement will be deemed to be a “separate payment” as permitted under Treasury
Regulation Section 1.409A-2(b)(2)(iii).  In addition, to the extent any payment
under this Agreement is nonqualified deferred compensation (within the meaning
of Section 409A) and subject to Section 409A, and the period measured from the
effective date of Executive’s termination through the first regular payroll date
following the 54-day Release consideration period commences in one taxable year
and ends in another, then no such payment shall be made until the second taxable
year.
 
 
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4.17.2 Neither Executive nor any of Executive’s creditors or beneficiaries shall
have the right to subject any deferred compensation (within the meaning of
Section 409A) payable under this Agreement or under any other plan, policy,
arrangement or agreement of or with the Company or any of its affiliates (this
Agreement and such other plans, policies, arrangements and agreements, the
“Employer Plans”) to any anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment.  Except as permitted under
Section 409A, any deferred compensation (within the meaning of Section 409A)
payable to Executive or for Executive’s benefit under any Employer Plan may not
be reduced by, or offset against, any amount owing by Executive to the Company
or any of its affiliates.
 
4.17.3 To the extent required by Section 409A, any payment or benefit that would
be considered deferred compensation subject to, and not exempt from, Section
409A, payable or provided upon a termination of Executive’s employment, shall
only be paid or provided to Executive upon her “separation from service” (within
the meaning of Section 409A) and, for purposes of any such provision of this
Agreement, references to a “resignation,” “termination,” “termination of
employment” or like terms shall mean “separation from service”.  If, at the time
of Executive’s “separation from service” (within the meaning of Section 409A),
(i) Executive is a “specified employee” (within the meaning of Section 409A and
using the identification methodology selected by the Company from time to time)
and (ii) the Company shall make a good faith determination that an amount
payable under this Agreement or under any Employer Plans constitutes deferred
compensation (within the meaning of Section 409A) the payment of which is
required to be delayed pursuant to the six-month delay rule set forth in Section
409A in order to avoid any accelerated or additional taxes or penalties under
Section 409A, then the Company shall not pay such amount on the
otherwise-scheduled payment date, but shall instead accumulate such amount and
pay it, without interest, on the first business day after such six-month period
(or, if earlier, upon the Executive’s death).
 
4.17.4 Except as specifically permitted by Section 409A or as otherwise
specifically set forth in this Agreement, the reimbursements and in-kind
benefits provided to Executive under this Agreement and any Employer Plan during
any calendar year shall not affect the reimbursements or in-kind benefits to be
provided to Executive under the relevant section of this Agreement or any
Employer Plan in any other calendar year, and the right to such reimbursements
and in-kind benefits cannot be liquidated or exchanged for any other benefit and
shall be provided in accordance with Treas. Reg. Section 1.409A-3(i)(1)(iv) or
any successor thereto. Further, in the case of reimbursement payments, such
payments shall be made to Executive on or before the last day of the calendar
year following the calendar year in which the underlying fee, cost or expense is
incurred.
 
 
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4.17.5 Notwithstanding any provision of this Agreement or any Employer Plan to
the contrary, in light of the uncertainty with respect to the proper application
of Section 409A, the Company reserves the right to make amendments to any
Employer Plan as the Company deems necessary or desirable to avoid the
imposition of taxes or penalties under Section 409A. In any case, except as
specifically provided in this Agreement, Executive shall be solely responsible
and liable for the satisfaction of all taxes and penalties that may be imposed
on Executive or for her account in connection with any Employer Plan or this
Agreement (including any taxes and penalties under Section 409A), and neither
the Company nor any of its subsidiaries and affiliates shall have any obligation
to indemnify or otherwise hold Executive harmless from any or all of such taxes
or penalties.  The Company makes no representations concerning the tax
consequences of Executive’s participation in the Employer Plans or this
Agreement under Section 409A of the Code or any other Federal, state or local
tax law.  Executive’s tax consequences shall depend, in part, upon the
application of relevant tax law, including Section 409A, to the relevant facts
and circumstances.
 

 

 
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IN WITNESS WHEREOF, the Parties have executed this Employment Agreement
effective as of the date first written above.
 
EXECUTIVE:
  EMPLOYER            
Tamara A. Seymour
  Signal Genetics, Inc.             /s/ Tamara A. Seymour   By: /s/ Samuel D.
Riccitelli       Name: Samuel D. Riccitelli   7/18/2014   Title:
Chief Executive Officer and President
 
Date
            July 21, 2014      
Date
 

 
 
 
 
 
 
 

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