Document:

EX-10.1

 Exhibit 10.1 
  

 
 Synlogic, Inc. 

200 Sidney Street, Suite 320 

Cambridge, MA 02139 
 September 1, 2017 

Andrew Gengos 
  

	 	Re:	Employment Letter Agreement 

 Dear Andrew 

I am pleased to provide you with the terms and conditions of your employment by Synlogic, Inc. a Delaware corporation, Inc. (the “Company”). 

 

	 	1.	Position. Your position will be Chief Operating Officer (COO) and Head of Corporate Development, reporting to the Company’s Chief Executive Officer. In addition to performing duties and responsibilities associated
with the position of COO and Head of Corporate Development, from time to time the Company may assign you other related duties and responsibilities consistent with such position. 

 

	 	2.	Start Date. It is expected that your employment will start on October 9, 2017, but no later than October 30, 2017 (the “Start Date”). 

 

	 	3.	Nature of Relationship; Status. 

 (a) No provision of this Agreement shall be construed to
create an express or implied employment contract for a specific period of time. Either you or the Company may terminate the employment relationship at any time and for any reason upon written notice to the other party as set forth herein. 

(b) You will be expected to devote the necessary full-time business time and energies to the business and affairs of the Company in order to
perform your duties and you shall perform the foregoing services at the principal office of the Company, or at any other location mutually agreed upon by you and the Company. Notwithstanding the foregoing,

  
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you may devote reasonable business time and efforts to not-for-profit services, civic activities, and one (1) board position in a non-competing, for-profit company during the first two year
period following the Start Date and up to two (2) board positions in non-competing, for-profit companies thereafter, subject in all cases to advanced approval by the CEO and provided that the activities do not contravene your Related Agreements
(defined below), and so long as such time and efforts do not interfere with your obligations to the Company under this letter or the Related Agreements. 
  

	 	4.	Compensation 

 (a) Base Salary. Your initial salary during will be at the rate of $33,166 per
month, annualized at $398,000, which shall be prorated for any partial year, month or week. You will be eligible for an increase at the same time of salary increases of other executives, and any increase made in 2018 shall be adjusted to take into
account the Start Date. 
 (b) Sign-on Bonus. In addition, you will be entitled to a one-time sign-on bonus of $100,000, subject to
applicable withholdings, included with your first regular payroll payment following your Start Date. This amount shall be reimbursed net of applicable company withholdings in its entirety should you leave the Company within 12-months of the Start
Date or are terminated by the Company for Cause. 
 (c) Bonus Opportunity. You will have the opportunity to earn a bonus of up to thirty five
percent (35%) of your annual base salary per year, based on the achievement of or progress toward individual departmental and/or corporate objectives and goals, as reasonably determined by the Board of Directors (the “Board”),
provided that to be eligible for any such bonus, you must be employed by the Company in good standing at the time such bonus is awarded. The bonus, if any, for fiscal 2017 shall be pro-rated from the Start Date. 

(d) Equity. Subject to the terms of the Company’s then applicable equity incentive plan (“Incentive Plan”) and form of option
agreement, and subject to approval by the Board of Directors of the Company at the first regularly scheduled meeting following the Start Date, you will be granted an option to purchase an aggregate of one hundred fifty four thousand
(154,000) shares of common stock, at an exercise price per share equal to the Fair Market Value (as defined in the Incentive Plan) of the Common Stock on the date of the grant, intended to qualify as an “incentive stock option” to the
maximum extent allowed under Section 422 of the Internal Revenue Code. The option will vest as to one-fourth (1/4th) of the shares, on the first anniversary of the Start Date, and the remainder will vest at one-forty-eighth
(1/48th) per month thereafter. All tax consequences resulting from the grant, vesting, or exercise of the option to or by you, or from the disposition by 

  
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you of such shares of Common Stock, will be your responsibility. You also will be eligible for annual equity grants at the same time when other executives receive these grants. Any annual grant
made for 2017 fiscal year performance shall be adjusted to take into account to the Start Date. 
 (e) Expenses. You will be entitled to
reimbursement for all ordinary and reasonable out-of-pocket business expenses that are reasonably incurred by you in furtherance of the Company’s business, following submission of reasonably detailed receipts. 

 

	 	5.	Benefits. 

 (a) Vacation. You will be eligible for four (4) weeks paid vacation on top of
the standard Massachusetts vacation days. Vacation eligibility will accrue at a rate of five (5) days per fiscal quarter of service, and up to five (5) unused vacation days may be carried over from one year to the next year. 

(b) Benefits. You will be eligible to participate in the benefits provided by the Company to its employees. Where any particular benefit is
governed by a formal plan document, your eligibility and coverage will be determined by such document, and the Company may change its benefit offerings from time to time in its discretion to meet its business needs. The Company retains the right to
change, add or cease any particular benefit. 
  

	 	6.	Confidentiality, Inventions and Non-Competition. The Company considers the protection of its confidential information and proprietary materials to be very important. Therefore, as a condition of your employment, you and
the Company will become parties to an Invention and Non-Disclosure Agreement substantially in the form of Attachment A-1 to this letter (the “‘Non-Disclosure Agreement”) and a Non-Competition and Non-Solicitation Agreement
substantially in the form of Attachment A-2 to this letter (the “Non-Compete Agreement”, and together with the Non-Disclosure Agreement, the “Related Agreements”). 

 

	 	7.	Termination and Severance. Your employment may be terminated by you or the Company as follows: 

(a) the Company may terminate your employment for “Cause” (as defined below) upon written notice to you effectively immediately, in
which case you will not be entitled to receive any form of payment other than your earned compensation through your date of separation and reimbursable expenses; 

  
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 (b) you may terminate your employment voluntarily other than for “Good Reason” (as
defined below) upon at least thirty (30) days’ prior written notice to the Company, in which case you will not be entitled to receive any form of payment other than your earned compensation through your date of separation and reimbursable
expenses; and 
 (c) (i) the Company may terminate your employment other than for “Cause” upon at least thirty
(30) days’ prior written notice to you and (ii) you may you terminate your employment voluntarily for “Good Reason” upon at least thirty (30) days’ prior written notice to the Company, whereupon, in each case
subject to and conditioned upon your execution and delivery to the Company of a formal separation agreement (which will contain, among other obligations, your release of all claims against the Company and confidentiality/non-disparagement
provisions), the Company will: (A) pay you salary continuation payments at your then Base Salary rate for a period of six (6) months (the “Severance Period’’) following the termination of your employment, in accordance with
the Company’s regularly established payroll procedure (the “Severance Payments”), and (B) provided you are eligible for and timely elect to continue receiving group medical insurance pursuant to the “COBRA” law,
continue to pay the share of the premium for health coverage that is paid by the Company for active and similarly-situated employees who receive the same type of coverage until the earlier of (i) the last day of the Severance Period, or
(ii) the date on which you become eligible for healthcare insurance with a subsequent employer, unless the Company’s provision of such COBRA payments will violate the nondiscrimination requirements of applicable law, in which case this
benefit will not apply. In addition, within sixty (60) days following such resignation or termination, as applicable, the Company will pay you a lump-sum payment equal to the prorated portion of your current target bonus for the fiscal year in
which you are terminated (with such prorated portion determined by the number of days you were employed during such fiscal year). To the extent applicable, the Severance Payments, “COBRA” payments and lump-sum payment will commence (or, in
the case of the lump-sum payment, be paid) within sixty (60) days after your termination, and once they commence, will include any unpaid amounts accrued from the date of your termination; provided, that, if such 60-day period spans two
calendar years, then such payments in any event will commence, or if applicable, be paid in the second calendar year. 
 (d) For purposes of
this letter, “Cause” means (i) your conviction of a felony, your plea of guilty or “no contest” to a felony, or your confession of guilt to a felony, in each case whether or not in connection with the performance of your
duties to the Company, (ii) any act or omission by you which constitutes willful misconduct or negligence that results in loss, damage or injury to the Company or its prospects, including, but not limited to (A) disloyalty, dishonesty or a
breach of fiduciary duty to the Company or its shareholders, (B) theft, fraud, embezzlement or other illegal conduct, or (C) deliberate 

  
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disregard of a rule or policy of the Company, (iii) your failure, refusal or unwillingness to perform, to the reasonable satisfaction of the Board determined in good faith, any duty or
responsibility assigned to you in connection with the performance of your duties hereunder, which failure of performance continues for a period of more than two weeks after written notice thereof has been provided to you by the Board, such notice to
set forth in reasonable detail the nature of such failure of performance, or (iv) the material breach by you of any of the provisions of this letter or the Related Agreements. 

(e) For purposes of this letter, “Good Reason” means, in the context of your resignation from your employment position with the
Company, a resignation that occurs within thirty (30) days following: (i) a change in the principal location at which you provide services to the Company beyond fifty (50) miles from Cambridge, MA; (ii) a reduction in your
compensation or a material reduction in your benefits, except such a reduction in connection with a general reduction in compensation or other benefits of all senior executives of the Company; (iii) a material breach of this letter by the
Company that has not been cured within ten (10) days after written notice thereof by you to the Company; or (iv) a failure by the Company to obtain the assumption of this letter by any successor to the Company. 

(f) In the event of your death or permanent disability (as defined below) while you are employed by the Company, your employment hereunder
shall immediately and automatically terminate and the Company shall pay to you or your personal representative or designated beneficiary or, if no beneficiary has been designated by you, to your estate, any earned and unpaid base salary, pro-rated
through the date of your death or permanent disability. For purposes of this letter, “permanent disability” shall mean your inability, due to physical or mental illness or disease, to perform the functions then performed by you for one
hundred eighty (180) consecutive days, accompanied by the likelihood, in the opinion of a physician chosen by the Company and reasonably acceptable to you, that you will be unable to perform such functions within the reasonably foreseeable future;
provided that the foregoing definition shall not include a disability for which the Company is required to provide reasonable accommodation pursuant to the Americans with Disabilities Act or other similar statute or regulation. 

(g) The time for payment, or schedule for payment, of any severance payments due hereunder may not be accelerated, except as provided for in
the Treasury Regulations promulgated under Section 409A of the Internal Revenue Code of 1986 (the “Code”), or any law replacing or superseding such Section or regulations. Notwithstanding the preceding provisions of this
Section 6(d), in the case that you are deemed a “specified employee” (as defined in Section 409A(2)(B)(i) of the Code), no severance payment may 

  
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be made earlier than the date which is six (6) months after the termination of employment hereunder (or, if earlier, the date of the death of the Executive) if and to the extent required by
applicable law or other rules of any stock exchange upon which any of shares of the Company’s capital stock are then traded. 
  

	 	8.	Change of Control. 

 (a) In the event that, within the twelve (12) month period that
immediately follows or the 30 day period immediately prior to a Change in Control (as defined below), your employment with the Company is terminated: (i) on account of your death or Permanent Disability, (ii) by the Company without Cause,
or (iii) as a result of your resignation for Good Reason, then all of your then unvested Incentive Units (or outstanding unvested restricted stock and/or options to purchase shares of the Company’s Common Stock) shall accelerate and become
fully vested. As used herein, “Change in Control” shall mean the (i) the sale of the Company or LLC by merger in which the shareholders of the Company in their capacity as such no longer own a majority of the outstanding equity
securities of the Company (or its successor); (ii) any sale of all or substantially all of the assets or capital stock of the Company (other than in a spin-off or similar transaction); or (iii)) any other acquisition of the business of the
Company or LLC, as determined by the Company’s Board of Directors in their sole discretion. For the avoidance of doubt, in no event shall a bona fide equity or debt financing of the Company, including a financing in which greater than 50% of
the Company’s outstanding equity securities are acquired by a third-party, or a reorganization required to effect an initial public offering, be deemed a “Change in Control” for purposes of this letter. 

(b) In connection with a Change of Control, the Company agrees to give due consideration to obtaining such vote by disinterested shareholders
(and/or members) as may be necessary such that Section 280G of the Code and the applicable IRS regulations thereunder, will not apply to any compensation, payment or distribution by the Company to you in connection with such Change of Control.

  

	 	9.	General. 

 (a) Entire Agreement. This letter, together with the Related Agreements, will
constitute our entire agreement as to your employment by or consultancy for the Company and will supersede any prior agreements or understandings, whether in writing or oral. 

(b) Notices. All notices, requests, consents and other communications hereunder will be in writing, will be addressed to the receiving
party’s address set forth above or to such other address as a party may designate by notice hereunder, and will be either (i) delivered 

  
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by hand, (ii) sent by overnight courier, (iii) sent by registered mail, return receipt requested, postage prepaid (iv) sent by facsimile, electronic mail or electronic PDF
transmission, in each case with confirmation retained. All notices, requests, consents and other communications hereunder will be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the
address of such party set forth above, (ii) if sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, (iii) if sent by registered mail, on the fifth business day following the
day such mailing is made or (iv) when confirmation is received, if sent by facsimile or electronic transmission. 
 (c) Modifications
and Amendments. The terms and provisions of this letter may be modified or amended only by written agreement executed by the parties hereto. 

(d) Waivers and Consents. The terms and provisions of this letter may be waived, or consent for the departure therefrom granted, only by
written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent will be deemed to be or will constitute a waiver or consent with respect to any other terms or provisions of this letter, whether
or not similar. Each such waiver or consent will be effective only in the specific instance and for the purpose for which it was given, and will not constitute a continuing waiver or consent. 

(e) Assignment. The Company may assign its rights and obligations hereunder to any person or entity that succeeds to all or substantially all
of the Company’s business or that aspect of the Company’s business in which you are principally involved. You may not assign your rights and obligations under this letter without the prior written consent of the Company and any such
attempted assignment by you without the prior written consent of the Company will be void. 
 (f) Benefit. All statements, representations,
warranties, covenants and agreements in this letter will be binding on the parties hereto and will inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this letter will be construed to create any
rights or obligations except between the Company and you, and no person or entity other than the Company will be regarded as a third party beneficiary of this letter. 

(g) Governing Law. This letter and the rights and obligations of the parties hereunder will be construed in accordance with and governed by the
law of The Commonwealth of Massachusetts, without giving effect to the conflict of law principles thereof. 

  
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 (h) Jurisdiction, Venue and Service of Process. Any legal action or proceeding with respect to
this letter will be brought in the courts of The Commonwealth of Massachusetts (or, if appropriate, a federal court located within The Commonwealth of Massachusetts). By execution and delivery of this letter, each of the parties hereto accepts for
itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts. 
 (i) WAIVER OF
JURY TRIAL. ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT WILL BE RESOLVED BY A JUDGE ALONE AND EACH OF THE COMPANY AND YOU WAIVE ANY RIGHT TO A JURY TRIAL THEREOF. 

(j) Counterparts. This letter may be executed in two or more counterparts, and by different parties hereto on separate counterparts, each of
which will be deemed an original, but all of which together will constitute one and the same instrument. 
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left blank] 

  
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 You may accept this offer of employment and the terms and conditions thereof by signing the enclosed additional
copy of this letter and each of the Related Agreements, which execution will evidence your agreement with the terms and conditions set forth herein and therein, and returning them to the Company; provided that the provisions of this offer of
employment are contingent upon completion of a background check and receipt of appropriate documentation of your work status. 
  

			
	Sincerely,
	
	SYNLOGIC, INC.
		
	By:	 	 /s/ Adam J. Thomas

		 	Name: Adam J. Thomas
		 	Title:   Chief Human Resources Officer

  

	
	Accepted and Approved:
	
	 /s/ Andrew Gengos

	Name: Andrew Gengos
	
	Date: Sept 4, 2017

  
 9ex_96273.htm

EXHIBIT 10.1

 

REVOLVING LINE OF CREDIT NOTE

 

	
			$5,000,000.00

				
			Denver, Colorado

			
	 	
			September 1, 2017

			

     

 

FOR VALUE RECEIVED, the undersigned ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. ("Borrower") promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its office at C7300-081, 1700 Lincoln Street, 8th Floor, Suite 800, Denver, CO 80203, or at such other place as the holder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of Five Million Dollars ($5,000,000.00), or so much thereof as may be advanced and be outstanding pursuant to the terms of the Credit Agreement, as defined herein, with interest thereon, to be computed on each advance from the date of its disbursement as set forth herein.

 

DEFINITIONS:

 

As used herein, the following terms shall have the meanings set forth after each, and any other term defined in this Note shall have the meaning set forth at the place defined:

 

(a)     "Daily One Month LIBOR" means, for any day, the rate of interest equal to LIBOR then in effect for delivery for a one (1) month period.

 

(b)     "LIBOR" means the rate of interest per annum determined by Bank based on the rate for United States dollar deposits for delivery of funds for one (1) month as published by the ICE Benchmark Administration Limited, a United Kingdom company, at approximately 11:00 a.m., London time, or, for any day not a London Business Day, the immediately preceding London Business Day (or if not so published, then as determined by Bank from another recognized source or interbank quotation); provided, however, that if LIBOR determined as provided above would be less than zero percent (0.0%), then LIBOR shall be deemed to be zero percent (0.0%).

 

(c)     "London Business Day" means any day that is a day for trading by and between banks in dollar deposits in the London interbank market.

 

INTEREST:

 

(a)     Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a 360-day year, actual days elapsed) at a fluctuating rate per annum determined by Bank to be two and twenty five hundredths percent (2.25%) above Daily One Month LIBOR in effect from time to time. Bank is hereby authorized to note the date and interest rate applicable to this Note and any payments made thereon on Bank's books and records (either manually or by electronic entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of the information noted.

 

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(b)     Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in addition to any other amounts due or to become due hereunder, any and all (i) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign governmental authority and related in any manner to LIBOR, and (ii) costs, expenses and liabilities arising from or in connection with reserve percentages prescribed by the Board of Governors of the Federal Reserve System (or any successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the Federal Reserve Board, as amended), assessment rates imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or foreign governmental authority or resulting from compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority and related in any manner to LIBOR. In determining which of the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be conclusive and binding upon Borrower.

 

(c)     Default Interest. From and after the maturity date of this Note, or such earlier

date as all principal owing hereunder becomes due and payable by acceleration or otherwise, or upon the occurrence and during the continuance of an Event of Default, then at the option of Bank, in its sole and absolute discretion, the outstanding principal balance of this Note shall bear interest at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to four percent (4%) above the rate of interest from time to time applicable to this Note.

 

BORROWING AND REPAYMENT:

 

(a)     Borrowing and Repayment of Principal. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Note and of any document executed in connection with or governing this Note; provided however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount stated above. The unpaid principal balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for Borrower, which balance may be endorsed hereon from time to time by the holder. The outstanding principal balance of this Note shall be due and payable in full on September 30, 2019.

 

(b)     Payment of Interest. Interest accrued on this Note shall be payable on the last day of each month, commencing September 30, 2017, and on the maturity date set forth above.

 

(c)     Advances. Advances hereunder, to the total amount of the principal sum stated above, may be made by the holder at the oral or written request of (i) BRYAN MERRYMAN or JEREMY KINNEY, any one acting alone, who are authorized to request advances and direct the disposition of any advances until written notice of the revocation of such authority is received by the holder at the office designated above, or (ii) any person, with respect to advances deposited to the credit of any deposit account of Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of Borrower regardless of the fact that persons other than those authorized to request advances may have authority to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been authorized by Borrower.

 

(d)     Application of Payments. Each payment made on this Note shall be credited first, to any interest then due and second, to the outstanding principal balance hereof.

 

-2-

 

 

PREPAYMENT:

 

Borrower may prepay principal on this Note at any time, in any amount and without penalty. If principal under this Note is payable in more than one installment, then any prepayments of principal shall be applied to the most remote principal installment or installments then unpaid.

 

EVENTS OF DEFAULT:

 

This Note is made pursuant to and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of October 30, 2015, as amended from time to time (the "Credit Agreement"). Any default in the payment or performance of any obligation under this Note, or any defined event of default under the Credit Agreement, shall constitute an "Event of Default" under this Note.

 

MISCELLANEOUS:

 

(a)     Remedies. Upon the sale, transfer, hypothecation, assignment or other encumbrance, whether voluntary, involuntary or by operation of law, of all or any interest in any real property securing this Note, if any, or upon the occurrence of any Event of Default, the holder of this Note, at the holder's option, may declare all sums of principal and interest outstanding hereunder to be immediately due and payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of which are expressly waived by Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall immediately cease and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys' fees (to include outside counsel fees and all allocated costs of the holder's in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder's rights and/or the collection of any amounts which become due to the holder under this Note whether or not suit is brought, and the prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Borrower or any other person or entity.

 

(b)     Obligations Joint and Several. Should more than one person or entity sign this Note as a Borrower, the obligations of each such Borrower shall be joint and several.

 

(c)     Governing Law. This Note shall be governed by and construed in accordance with the laws of Colorado, but giving effect to federal laws applicable to national banks, without reference to the conflicts of law or choice of law principles thereof.

 

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IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.

 

 

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.

 

By:  /s/ Bryan J. Merryman                           

BRYAN MERRYMAN, COO, CFO

 

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