exv10w19



 





			
	 	 	 
		 	 






October 19, 2006




Ronald Eric McAllister

95 Bridle Path

Sudbury, MA 01776



Dear Ronald:



I am very pleased to offer you the position of Vice President, Clinical Development & Chief Medical
Officer with PolyMedix. In this capacity you will function in a leadership role, setting the
strategic direction of and carrying out our clinical and drug development functions, as well as
managing development and registration of our antimicrobial polymeric materials, and securing grants
and other funding sources with a particular emphasis on BioDefense opportunities. We look forward
to you joining our senior management team.



The principle elements of your offer are as follows:





	1.	 	Commencement Date: Your position will be effective as of November 13, 2006, or as
otherwise may be mutually agreed.
	 
	2.	 	Duties and Responsibilities: You will be employed by PolyMedix (the “Company”) as our
Vice President Clinical Development & Chief Medical Officer. You will report to the President
& C.E.O. This position is key to the future success of PolyMedix and it is expected that you
agree to use your best efforts to perform such duties faithfully, and while you remain
employed, not to engage in any other business activity that is in conflict with your duties
and obligations to the Company.
	 
	3.	 	Stock Options: Subject to Stockholder and Board of Director’s approval, you will be
granted four hundred thousand (400,000) incentive stock options for shares. These stock
options will vest at 50% on your second anniversary date, and monthly (or as otherwise may be
provided for by the Company’s Equity Compensation Plan) for the next two years (years three
and four). These shares will have an exercise price per Share equal to market value of our
common stock on the date granted as determined by the Compensation Committee of the Board of
Directors. You may be qualified for additional options during the time of your employment.
These options are considered performance options and will be awarded and determined by the
Board of Directors.
	 
	4.	 	Compensation: You will receive an initial annual salary of $280,000 per year.
Within the first 90 days of employment, you and I will finalize measurable goals and
objectives. You and I will review these goals and objectives on an on-going basis as
necessary. Your compensation may be adjusted based on your performance and the Company’s
performance, as may be determined and granted by the Compensation Committee and the Board of
Directors.





 









 











			
	 	 	 
		 	 







	 	 	Bonus: You will be eligible to receive a discretionary cash bonus, calculated as a percentage
(%) of your base salary. This bonus will be paid out dependant upon both your individual goal
achievement and the performance of the Company, on the recommendation of the Compensation
Committee and the approval of the Board of Directors. As with most executive positions there
are many variables that may affect a potential bonus. PolyMedix may award bonus amounts, at its
discretion, for accomplishments and achievements in lieu of or in addition to those stated
below, not to exceed 15% of base salary. Any potential cash bonus will be based on the specific
goals and milestones which will be developed over the first 90 days of your employment. For
2007, your anticipated individual goal achievement is outlined below (or as otherwise may be
determined):






	 	•	 	For IND’s or similar regulatory applications for polymeric biomaterials filed:





	 	 	 
	1st one:

	 	 5% of base salary
	 
	 	 
	2nd one:

	 	 10% of base salary
	 
	 	 
	3rd and each subsequent:

	 	 15% of base salary







	 	•	 	Grant applications (e.g., SBIR or BioDefense funding sources) submitted, authored by
you:






	 	 	 	2% of base salary for each $1 million of grant income received






	 	 	The maximum potential cash bonus for calendar year 2007 will not exceed 100% of your base salary
amount. Your ability to earn a potential bonus payment is contingent on you remaining employed
with the Company on the payment date.
	 
	5.	 	Relocation: PolyMedix will provide a relocation company that will organize and
coordinate your move. We recognize that there may be specific needs and adjustments for your
particular situation; please feel free to discuss issues and questions. We will reimburse
relocation expenses up to a maximum of $45,000. This program will permit reimbursement for the
following expense to the extend they are incurred and supported with written receipts:





- House hunting trips



- Transportation, hotels, meals for family



- House sale assistance — Relocation Company will help manage sale of home
closing costs



- Temporary Housing for up to six (6) months and reasonable meal expenses



- Reasonable costs of moving household goods.



- Cost of insurance for household goods, not to exceed the full replacement value.



- Packing of household goods and appliances; appliance disconnect and hookups.



- Moving 2 cars



- Purchase of new home:


Attorney fees to $1000

Mortgage App fee

Recording fees




 









 








			
	 	 	 
		 	 





Inspections

Mortgage Origination fee

Title fees

Appraisals

State & local transfer taxes





	 	 	This relocation amount shall be available for and must be used within one year of your
commencement of employment; any unused relocation allowance will expire after one year. If you
leave PolyMedix because of either voluntary resignation or dismissal for “Cause” within two
years of commencement of your employment, you must and shall repay to the Company any amounts
provided for relocation, such repayment to be made within 30 days of your last day of
employment.
	 
	6.	 	Benefits: You will be eligible to participate in our employee benefits program;
which currently includes: medical, dental, prescription, retirement, short term disability,
long term disability benefits and any other benefits that the company implements for similarly
situated positions.
	 
	7.	 	Time Off: PolyMedix currently recognizes ten (10) annual paid holidays including New
Year’s Day, Memorial Day, July 4th, Labor Day, Thanksgiving Day, the day following
Thanksgiving Day, Christmas Day and three (3) floating days per year to be used at your
discretion. In addition, beginning January 1, 2007 PolyMedix will permit you to use up to
twenty (20) annual discretionary days of paid vacation. Vacation days will accrue upon
commencement of employment (at a rate of 1.66 days per month). PolyMedix reserves the right
to request deferral of discretionary vacation time within the annual period to meet business
demands of the Company. Vacation days must be used in the calendar year in which they are
accrued and may not be carried over from year to year. Vacation days have no monetary value
and are not payable upon separation from the Company. PolyMedix reserves the right to change
this vacation policy at any time.
	 
	8.	 	Separation: You will be free to resign from the Company at any time, and the Company
will be free to terminate your employment at any time. In keeping with standard practices,
the Board of Directors acknowledges that if your employment should be involuntarily terminated
by the Company for a reason other than “Cause”, or insolvency or bankruptcy of the Company
(“Qualified Termination”), you will be entitled to severance benefits consisting of: (a)
continuation of your base salary for one (1) year; and (b) the Company will pay the cost of
your COBRA premiums for up to twelve (12) months after such termination; provided, however,
that the severance benefits set forth in subparagraphs (a) and (b) above are contingent on
your execution and non-revocation of a General Release Agreement in a form acceptable to the
Company. These severance benefits are not payable in the event of bankruptcy or insolvency of
the Company, or if you would be entitled to severance benefits under a Change of Control
Agreement. If a Qualified Termination occurs within 24 months of commencement of your
employment, 200,000 options for shares of your initial grant of 400,000 options shall vest;
and if such Qualified Termination occurs after 24 months of





 









 











			
	 	 	 
		 	 







	 	 	commencement of your employment, the full 400,000 options for share of your initial grant of
400,000 options shall vest, in either case such acceleration of vesting shall supersede the
vesting schedule provided in (3) above. Your right to such payments, vesting and/or grants and
benefits pursuant to the preceding sentences shall be conditional upon your execution of a
customary release of all claims against the Company and its affiliates and representatives in a
form satisfactory to the Company.
	 
	 	 	“Cause” means your (a) failure, refusal, or neglect to timely perform any reasonable and
lawful duty of your position or the lawful directives of the President & Chief Executive
Officer; (b) commission of an act that constitutes misconduct, including fraud, and is injurious
to the Company (c) conviction of, or pleading “guilty” or “no contest” to, a felony under the
laws of the United States or any state thereof; (d) committing an act of fraud against, or the
misappropriation of property belonging to, the Company ; (e) commission of an act of dishonesty
in connection with your responsibilities as an employee and affecting the business or affairs of
the Company; (f) breach of this Letter Agreement, any confidentiality, proprietary information
or other agreement between you and the Company or any subsidiary; or (g) you commit an act
involving moral turpitude, dishonesty, fraud or breach of the Company’s Code of Professional
Ethics or Operating Guidelines in the course of your employment with the Company.
	 
	 	 	In the event of a Change in Control, where another entity acquires ownership or control of more
than 50% of PolyMedix equity, and your employment is subsequently involuntarily terminated for
other than Cause, the Company’s Equity Compensation Plan provides for acceleration and full
vesting of all unvested stock options.
	 
	9.	 	Confidential Information: You acknowledge and agree that confidential information,
obtained by you while employed by the Company, or any of its subsidiaries concerning the
business affairs of the Company or any subsidiary of the Company are the property of the
Company or such subsidiary (hereinafter, “Confidential Information”). You agree to sign and
abide by Confidentiality and Inventorship, Securities Trading Policy, Trading Lock-up, and
Code of Ethics and Business Conduct agreements as will be required by the Company.
Consequently, you agree that, except to the extent required by applicable law, statute,
ordinance, rule, regulation or orders of courts or regulatory authorities, you shall not at
any time (whether during or after the your employment) disclose to any unauthorized person or
use for your own account any Confidential Information without the prior written consent of the
Company, unless and to the extent that the aforementioned matters are or become generally
known to and available for use by the public other than as a result of your acts or omissions
to act or as required by law. You shall deliver to the Company at the termination of your
employment, or at any other time the Company may request, all memoranda, notes, plans,
records, reports, computer tapes and software and other documents and data (and copies
thereof) containing or constituting Confidential Information which you may then possess or
have under your control.





 









 











			
	 	 	 
		 	 







	10.	 	Future Cooperation: You agree that upon the Company’s reasonable request following
your
termination of employment, you will use reasonable efforts to assist and cooperate with the
Company in connection with the defense or prosecution of any claim that may be made against or
by the Company or its affiliates arising out of or relating to events occurring
during your employment, or in connection with any ongoing or future investigation or dispute or
claim of any kind involving the Company or its affiliates, including any proceeding before any
arbitral, administrative, regulatory, judicial, legislative, or other body or agency. You will
be reimbursed for reasonable out-of-pocket expenses (including travel expenses) incurred in
connection with providing such assistance as permitted by law.
	 
	11.	 	Withholding: The Company shall have the right to withhold from any amount payable to
you, hereunder an amount necessary in order for the Company to satisfy any withholding tax
obligation it may have under applicable law, and may condition the grant, vesting or exercise
of any stock-based award on your making arrangements satisfactory to the Company to enable it
to satisfy any withholding obligation arising in connection with such grant, vesting or
exercise.
	 
	12.	 	Governing Law: The terms of this Letter Agreement, and any action arising
thereunder, shall be governed by and construed in accordance with the domestic laws of the
Commonwealth of Pennsylvania, without giving effect to any choice of law or conflict of law
provision or rule (whether of the Commonwealth of Pennsylvania or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the Commonwealth of
Pennsylvania.
	 
	13.	 	Waiver: This Letter Agreement may not be released, changed or modified in any
manner,
except by an instrument in writing signed by you and the Company. The failure of either party
to enforce any of the provisions of this Letter Agreement shall in no way be construed to be a
waiver of any such provision. No waiver of any breach of this Letter Agreement shall be held to
be a waiver of any other or subsequent breach.
	 
	14.	 	Assignment: This Letter Agreement is personal to you. You shall not assign this
Letter
of Agreement or any of your rights and/or obligations under this Letter Agreement to any other
person. The Company may, without your consent, assign this Letter Agreement to any successor to
its business.
	 
	15.	 	Dispute Resolution: To benefit mutually from the time and cost savings of arbitration
over the delay and expense of the use of the federal and state court systems, all disputes
involving your employment or this Letter Agreement, including, but not limited to, claims
under Title VII of the Civil Rights Act of 1964, the Equal Pay Act of 1963, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act of 1990,
The Americans With Disabilities Act of 1990, the Civil Rights Act of 1866, the Employee
Retirement Income Security Act of 1974, the Family and Medical Leave Act of 1993, the Civil
Rights Act of 1991, and any other federal, state or local laws, rules or regulations, will be
resolved by binding arbitration before the American Arbitration Association., JAMS/ENDISPUTE,
or any other similar association mutually agreed to by the Company and you Any such
arbitration shall be held in Philadelphia or other mutually agreeable location. The award of





 









 











			
	 	 	 
		 	 







	 	 	the arbitrators shall be final and binding and judgment upon the award may be entered in any
court having jurisdiction thereof. Except as otherwise provided above, this procedure shall be
the exclusive means of settling any disputes that may arise under this Letter Agreement. All
fees and expenses of the arbitrators and all other expenses of the arbitration, shall be paid
in accordance with the applicable rules of arbitration regarding employment disputes. Each
party shall bear its own witness expenses and attorneys’ fees.
	 
	16.	 	Survival: Notwithstanding anything contained herein to the contrary, the provisions
of paragraphs 9, 11 and 14 shall survive termination of your employment with the Company and
its affiliates.
	 
	17.	 	Entire Agreement; No Conflicts: This Letter Agreement
supersedes all previous and
contemporaneous communications, agreements and understandings, whether oral or written, between
you, on the one hand, and the Company or any of its affiliates, on the other hand, and
constitutes the sole and entire agreement between you and the Company pertaining to the subject
matter hereof. You represent and warrant to the Company that your acceptance of employment and
the performance of your duties for the Company will not conflict with or result in a violation
or breach of, or constitute a default under any contract, agreement or understanding to which
you are or were a party or of which you are aware and that there are no restrictions, covenants,
agreements or limitations on your right or ability to enter into and perform the terms of this
Letter Agreement.
	 
	18.	 	Counterparts: This Letter Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, and shall become a binding agreement
when one or more counterparts have been signed by each party and delivered to the other party.




Please indicate your acceptance of our offer of employment on the terms and conditions outlined
above by signing and returning to us one copy of this letter.



Ronald, I am looking forward to working together with you to make PolyMedix a tremendous success.




Sincerely yours,






Nicholas Landekic

President & C.E.O.




AGREED TO AND ACCEPTED BY:




	 	 	 	 	 
	/s/ R. Eric McAllister

	 	 	 	Date: 10/19/06
	 
	 	 	 	 
	Ronald Eric McAllister