Trimeris, Inc. 2007 Employee Stock Purchase Plan



 Exhibit 10.3 
 TRIMERIS, INC. 
 2007 EMPLOYEE STOCK PURCHASE PLAN 
  

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

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

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

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

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

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

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

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

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

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









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

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

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

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

		
	Fair Market Value	  	The Fair Market Value of a share of Common Stock for purposes of the Plan as of each date described in Step 2 will be determined as follows:
		
		  	 while the Common Stock trades on a national securities exchange, the closing price as reported on NASDAQ Global Market System on a given trading
day;

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

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

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


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

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









			
		  	trading ceased makes such prior day an inappropriate measure of Fair Market Value. The Committee can substitute a particular time of day or other measure of “closing sale price” or
“bid and asked prices” if appropriate because of changes in exchange or market procedures.
		
		  	The Committee has sole discretion to determine the Fair Market Value for purposes of this Plan, and all participation is conditioned on the Participant’s agreement that the Committee’s
determination is conclusive and binding even though others might make a different determination.
		
		  	No Participant can receive options:
		
		  	 if, immediately after the grant, that Participant would own shares, or hold outstanding options to purchase shares, or both, possessing 5% or more of the total
combined voting power or value of all classes of shares of the Company or any Subsidiaries (as defined below); or

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

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










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

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

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

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

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

		
		  	 complete or substantially complete dissolution or liquidation of the Company;

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

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

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

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









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









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

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