Document:

Exhibit 10.1

 

FRANCESCA’S SERVICES CORPORATION

 

March 23, 2016

 

		Re:	Employment Letter Agreement

 

Dear Kelly:

 

Subject to the terms
and conditions of this letter agreement (this “Agreement”), Francesca’s Services Corporation, a Delaware
corporation (“FSC”), Francesca’s Holdings Corporation, a Delaware corporation (“Parent”)
and Francesca’s Collections, Inc., a Texas corporation (“FCI” and, collectively with FSC and Parent, the
“Company”) desires to employ you on the terms and conditions of this Agreement. This Agreement is subject to
the Company completing a satisfactory background check and shall be effective as of the Effective Date.

 

1.Employment; Compensation and Benefits.

 

(a)Position
and Duties. You shall serve as the Company’s Executive Vice President and Chief Financial Officer, reporting to the Company’s
Chief Executive Officer. During your Period of Employment (as defined below) with the Company, you agree to (i) devote substantially
all of your business time, energy and skill to the performance of your duties for the Company, (ii) perform such duties in
a faithful, effective and efficient manner and (iii) hold no other employment.

 

(b)Period of Employment. Your
start date will be April 18, 2016 (the “Effective Date”). Your “Period of Employment” begins
on the Effective Date and is for an indefinite term, until terminated as provided in Section 2(a).

 

(c)Base Salary.
Your base salary (the “Base Salary”) shall be at an annualized rate of Three Hundred Fifty Thousand Dollars
($350,000.00) and shall be paid in accordance with the Company’s regular payroll practices in effect from time to time.

 

(d)Annual Bonus.
You may be eligible for an annual incentive bonus based on the Company’s annual bonus plan that may exist from time to time.
Your target annual incentive bonus amount for a particular fiscal year of the Company during the Period of Employment shall equal
Fifty Percent (50%) of your Base Salary for that fiscal year.

 

(e)Retirement,
Welfare and Fringe Benefits. During the Period of Employment you shall be entitled to participate in all employee savings and
welfare benefit plans and programs, and fringe benefit plans and programs, made available by the Company to the Company’s
employees generally, in accordance with the eligibility and participation provisions of such plans and as such plans or programs
may be in effect from time to time. You will be eligible for 21-days of paid-time-off.

 

(f)Hiring RSA
Grant. In connection with your actual commencement of employment with the Company as of the Effective Date but not otherwise,
you will be granted an award (“Hiring Grant”) of restricted shares of common stock of Francesca’s Holdings
Corporation (the “Parent”) in accordance with the Francesca’s Holdings Corporation 2015 Equity Incentive
Plan (the “Plan”). The target number of shares of Parent common stock subject to the Hiring Grant will equal
$350,000.00 divided by the closing price of a share of Parent’s common stock on The Nasdaq Stock Market on the last trading
day prior to the Effective Date. The Hiring Grant will be evidenced by a Restricted Stock Award Agreement to be effective as of
the Effective Date, be subject to the approval of the Compensation Committee of the Parent’s Board of Directors, and in accordance
with the terms and conditions of the Plan.

 

     

     

    

 

2.Termination and Severance.

 

(a)Termination.
Your employment by the Company may be terminated by the Company: (i) immediately upon notice, with Cause (as defined below),
or (ii) with no less than thirty (30) days’ advance written notice to you, without Cause, or (iii) immediately
in the event of your Disability (as defined below) or your death. In the event that you are provided with notice of termination
without Cause pursuant to clause (ii) above, the Company will have the option to place you on administrative leave during
the notice period. You may terminate your employment by the Company for any reason with no less than thirty (30) days’
advance written notice to the Company. Any termination of your employment (by you or by the Company) must be communicated by written
notice from the terminating party to the other party. Such notice of termination must be hand delivered (if to the Company, to
the Company’s Chief Executive Officer) and must indicate the specific provision(s) of this Agreement relied upon in effecting
the termination. The date your employment by the Company terminates is referred to herein as your “Severance Date.”

 

(b)Benefits
upon Termination. Regardless of the reason for the termination of your employment with the Company, in connection with such
termination the Company will pay you (on or within 30 days following your Severance Date) your accrued and unused vacation (if
any) and you will be entitled to any benefits that are due to you under the Company’s 401(k) plan in accordance with the
terms of that plan. If you hold any stock options or other equity or equity-based awards granted by the Company, the terms and
conditions applicable to those awards will control as to the consequences of a termination of your employment on those awards.
In addition to the foregoing, if your employment with the Company terminates as a result of a termination by the Company of your
employment without Cause (as defined below), you will (subject to the other conditions set forth in Section 2(c) below) be
entitled to the following benefits: the Company will pay you, subject to tax withholding and other authorized deductions, an aggregate
amount equal to one (1) times your Base Salary as in effect on the Severance Date (the “Severance Benefit”).
Subject to Section 5, the Company will pay this benefit to you in substantially equal installments (each in the applicable
fraction of the aggregate benefit) in accordance with the Company’s standard payroll practices over a period of twelve (12)
months, with the first installment payable in the month following the month in which your Separation from Service (as such term
is defined below) occurs.

 

(c)Conditions for Receipt of Severance
Benefit. Notwithstanding anything to the contrary herein, if the Severance Benefit is otherwise due to you and, at any time,
you breach any obligation under Section 6 of this Agreement, from and after the date of such breach and not in any way in
limitation of any right or remedy otherwise available to the Company, you will no longer be entitled to, and the Company will no
longer be obligated to pay, any remaining unpaid portion of the Severance Benefit. In addition, in order to receive any Severance
Benefit, you must, upon or promptly following (and in all events, within twenty-one (21) days of, unless a longer period of
time is required by applicable law) your Severance Date, provide the Company with a separation agreement which shall contain a
valid, executed general release agreement in a form acceptable to the Company, and such release shall have not been revoked. In
the event a period longer than twenty-one (21) days is required by applicable law, then the first installment of the Severance
Benefit shall remain payable in the month following the month in which your Separation from Service (as such term is defined below)
occurs, provided that if you fail to provide the Company with the executed general release agreement described above (or have otherwise
revoked the release), any further instalments of the Severance Benefit shall cease at such time and shall no longer be payable
to you. You agree and acknowledge that such separation agreement may contain additional restrictive covenants, including, without
limitation, non-solicitation covenants and non-disparagement covenants.

 

    	 	 2	 

     

    

 

(d)Exclusive
Remedy. You agree that should your employment by the Company terminate for any reason, the payments and benefits contemplated
by this Agreement with respect to the circumstances of such termination shall constitute the exclusive and sole remedy for any
such termination of your employment and you agree not to assert or pursue any other remedies, at law or in equity, with respect
to any termination of employment. You agree that, in the event of a termination of your employment, you are not and will not be
entitled to severance benefits under any other agreement, plan, program, or policy of the Company.

 

3.Certain Defined
Terms. As used in this Agreement, the following terms shall be defined as follows:

 

(a)“Cause”
shall mean that one or more of the following has occurred: (i) you have committed a felony (under the laws of the United States
or any relevant state, or a similar crime or offense under the applicable laws of any relevant foreign jurisdiction); (ii) you
have engaged in acts of fraud, dishonesty or other acts of material misconduct in the course of your duties; (iii) your abuse
of narcotics or alcohol that has or may reasonably harm the Company; (iv) any violation by you of the Company’s written
policies; (v) your failure to perform or uphold your duties and/or you fail to comply with reasonable directives of the Company’s
Chief Executive Officer or Board of Directors, as applicable; or (vi) any breach by you of any provision of Section 6,
or any material breach by you of this Agreement or any other contract you are a party to with the Company.

 

(b)“Disability”
shall mean a physical or mental impairment which renders you unable to perform the essential functions of your employment with
the Company, even with reasonable accommodation that does not impose an undue hardship on the Company, for more than 180 days in
any 12-month period, unless a longer period is required by federal or state law, in which case that longer period would apply.

 

(c)“Separation
from Service” occurs when you die, retire, or otherwise have a termination of employment with the Company that constitutes
a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to
the optional alternative definitions available thereunder.

 

4.Limitation
on Benefits. Notwithstanding anything contained in this Agreement to the contrary, to the extent that any payment, benefit
or distribution of any type to you or for your benefit by the Company or any of its affiliates, whether paid or payable, provided
or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Total
Payments”) would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”), then the Total Payments shall be reduced (but not below zero) so that the maximum amount
of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to
be subject to the excise tax imposed by Section 4999 of the Code. Unless you shall have given prior written notice to the
Company to effectuate a reduction in the Total Payments if such a reduction is required, any such notice consistent with the requirements
of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or
eliminate the Total Payments by first reducing or eliminating any cash severance benefits (with the payments to be made furthest
in the future being reduced first), then by reducing or eliminating any accelerated vesting of stock options or similar awards,
then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating
any other remaining Total Payments. The preceding provisions of this Section 4 shall take precedence over the provisions of
any other plan, arrangement or agreement governing your rights and entitlements to any benefits or compensation.

 

    	 	 3	 

     

    

 

5.Section 409A.
It is intended that any amounts payable under this Agreement and the Company’s and your exercise of authority or discretion
hereunder shall comply with and avoid the imputation of any tax, penalty or interest under Section 409A of the Code. This
Agreement shall be construed and interpreted consistent with that intent. If you are a “specified employee” within
the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of your Separation from Service and you are entitled
to the Severance Benefit, you shall not be entitled to any payment or benefit pursuant to Section 2(b) until the earlier of
(i) the date which is six (6) months after your Separation from Service for any reason other than your death, or (ii) the
date of your death. The provisions of the preceding sentence shall only apply if, and to the extent, required to avoid the imputation
of any tax, penalty or interest pursuant to Section 409A of the Code. Any amounts otherwise payable to you upon or in the
six (6) month period following your Separation from Service that are not so paid by reason of such 6-month delay provision
shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is
six (6) months after your Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30)
days, after the date of your death).

 

6.Protective Covenants.

 

(a)Confidential Information.

 

(i)You
shall not disclose or use at any time, either during the Period of Employment or thereafter, any Trade Secrets and Confidential
Information (as defined below) of which you become aware, whether or not such information is developed by you, except to the extent
that such disclosure or use is directly related to and required by your performance in good faith of duties for the Company. You
will take all appropriate steps to safeguard Trade Secrets and Confidential Information in your possession and to protect it against
disclosure, misuse, espionage, loss and theft. You shall deliver to the Company at the termination of your employment, or at any
time the Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and
data (and copies thereof) relating to the Trade Secrets and Confidential Information or the Work Product (as hereinafter defined)
of the business of the Company or any of its affiliates which you may then possess or have under your control. Notwithstanding
the foregoing, you may truthfully respond to a lawful and valid subpoena or other legal process, but shall give the Company the
earliest possible notice thereof.

 

    	 	 4	 

     

    

 

(ii)For
purposes of this Agreement, “Trade Secrets and Confidential Information” means information that is not generally
known to the public and that is used, developed or obtained by the Company in connection with its business, including, but not
limited to, information, observations and data obtained by you while employed by the Company or any predecessors thereof concerning
(i) the business or affairs of the Company (or such predecessors), (ii) products or services, (iii) fees, costs
and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer
software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data
bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether
patentable or unpatentable and whether or not reduced to practice, (xii) customers and clients and customer or client lists,
(xiii) other copyrightable works, (xiv) all production methods, processes, technology and trade secrets, and (xv) all
similar and related information in whatever form. Trade Secrets and Confidential Information will not include any information that
has been published (other than a disclosure by you in breach of this Agreement) in a form generally available to the public prior
to the date you propose to disclose or use such information. Trade Secrets and Confidential Information will not be deemed to have
been published merely because individual portions of the information have been separately published, but only if all material features
comprising such information have been published in combination.

 

 

(iii)
For purposes of this Agreement, “Work Product” means all inventions, innovations, improvements, technical information,
systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and
all similar or related information (whether patentable or unpatentable, copyrightable, registerable as a trademark, reduced to
writing, or otherwise) which relates to the Company’s or any of its affiliates’ actual or anticipated business, research
and development or existing or future products or services and which are conceived, developed or made by you (whether or not during
usual business hours, whether or not by the use of the facilities of the Company or any of its affiliates, and whether or not alone
or in conjunction with any other person) while employed by the Company (including those conceived, developed or made prior to the
Effective Date) together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations,
copyrights and reissues thereof that may be granted for or upon any of the foregoing. All Work Product that you may have discovered,
invented or originated during your employment by the Company or any of its affiliates prior to the date hereof, that you may discover,
invent or originate during your employment or at any time following the termination of your employment with the Company, shall
be the exclusive property of the Company and its affiliates, as applicable, and you hereby assign all of your right, title and
interest in and to such Work Product to the Company or its applicable affiliate, including all intellectual property rights therein.
You shall promptly disclose all Work Product to the Company, shall execute at the request of the Company any assignments or other
documents the Company may deem necessary to protect or perfect its (or any of its affiliates’, as applicable) rights therein,
and shall assist the Company, at the Company’s expense, in obtaining, defending and enforcing the Company’s (or any
of its affiliates’, as applicable) rights therein. You hereby appoint the Company as your attorney-in-fact to execute on
your behalf any assignments or other documents deemed necessary by the Company to protect or perfect the Company, the Company’s
(and any of its affiliates’, as applicable) rights to any Work Product.

 

    	 	 5	 

     

    

  

(b)Restriction
on Competition. During your employment with the Company and twelve (12) months following the termination of your
employment with the Company (regardless of the reason for such termination and regardless of whether or not you are entitled to
the Severance Benefit) (the “Restricted Period”), you shall not directly or indirectly, individually or on behalf
of any other person or entity, manage, participate in, work for, consult with, render services for, or take an interest in (as
an owner, stockholder, partner or lender) any Competitor. For purposes of this Agreement, “Competitor” means
a Person anywhere in North America (the “Restricted Area”) that at any time during the period of time during
which you are employed by the Company, or any time during the Restricted Period engages in the business of operating retail stores
and/or websites for the sale of women’s apparel, jewelry, accessories, gifts, greeting cards, picture frames and related
items or any other business that the Company is engaged in, or reasonably anticipates becoming engaged in. The parties hereto agree
that the Company intends to engage in business throughout the Restricted Area, even if it does not currently do so, and therefore
its scope is reasonable. Nothing herein shall prohibit you from being a passive owner of not more than 2% of the outstanding stock
of any class of a corporation which is publicly traded, so long as you have no active participation in the business of such corporation.
The term “Person” as used in this Agreement shall be construed broadly and shall include, without limitation,
an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

(c)Non-Solicitation
of Employees and Consultants. During your employment with the Company and during the Restricted Period, you will not, and should
be enjoined (if necessary) from being able to directly or indirectly through any other Person: (i) induce or attempt to induce
any employee or independent contractor of the Company or any affiliate of the Company to leave the employ or service, as applicable,
of the Company or such affiliate, or in any way interfere with the relationship between the Company or any such affiliate, on the
one hand, and any employee or independent contractor thereof, on the other hand, or (ii) hire any person who was an employee
of the Company or any affiliate of the Company until twelve (12) months after such individual’s employment relationship
with the Company or such affiliate has been terminated.

 

(d)Non-Solicitation
of Customers; Non-Disparagement. During your employment with the Company and during the Restricted Period, you will not, and
should be enjoined (if necessary) from being able to directly or indirectly through any other Person: (i) influence or attempt
to influence customers, vendors, suppliers, licensors, lessors, joint venturers, associates, consultants, agents, or partners of
the Company or any affiliate of the Company to divert their business away from the Company or such affiliate; and (ii) interfere
with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between the Company or any affiliate
of the Company, on the one hand, and any of its or their customers, suppliers, vendors, lessors, licensors, joint venturers, associates,
officers, employees, consultants, managers, partners, members or investors, on the other hand.

 

You agree that you will
not disparage, ridicule or criticize the Company or its affiliates and its and their present and former employees, directors and
officers, or make any remarks or statements that could reasonably be construed as disparaging, ridiculing or criticizing any of
them; provided, however, the foregoing shall not prohibit you from giving truthful testimony in any legal proceeding
pending before any agency or court of the United States or state government or in any arbitration proceeding relating to this Agreement.

 

    	 	 6	 

     

    

 

(e)Understanding
of Covenants. You acknowledge and agree that the Company would not have entered into this Agreement, providing for severance
protections to you on the terms and conditions set forth herein, but for your agreements herein. You agree that the foregoing covenants
set forth in this Section 6 (the “Restrictive Covenants”) are reasonable, including in temporal and geographical
scope, and in all other respects, and necessary to protect the Company’s and its affiliates’ Trade Secrets and Confidential
Information, good will, stable workforce, and customer relations. The parties hereto intend that Restrictive Covenants shall be
deemed to be a series of separate covenants, one for each county or province of each and every state or jurisdiction within the
Restricted Area and one for each month of the Restricted Period. You understand that the Restrictive Covenants may limit your ability
to earn a livelihood in a business similar to the business of the Company and any of its affiliates, but you nevertheless believe
that you have received and will receive sufficient consideration and other benefits as an employee of the Company and as otherwise
provided hereunder or as described in the recitals hereto to clearly justify such restrictions which, in any event (given your
education, skills and ability), you do not believe would prevent you from otherwise earning a living. You agree that the Restrictive
Covenants do not confer a benefit upon the Company disproportionate to your detriment.

 

(f)Enforcement.
You agree that a breach by you of any of the covenants in this Section 6 would cause immediate and irreparable harm to the
Company that would be difficult or impossible to measure, and that damages to the Company for any such injury would therefore be
an inadequate remedy for any such breach. Therefore, you agree that in the event of any breach or threatened breach of any provision
of this Section 6, the Company shall be entitled, in addition to and without limitation upon all other remedies the Company
may have under this Agreement, at law or otherwise, to obtain specific performance, injunctive relief and/or other appropriate
relief (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions of this Section 6,
or require you to account for and pay over to the Company all compensation, profits, moneys, accruals, increments or other benefits
derived from or received as a result of any transactions constituting a breach of this Section 6, if and when final judgment
of a court of competent jurisdiction is so entered against you.

 

7.Withholding
Taxes. Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as
the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income,
employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

8.Successors
and Assigns. This Agreement is personal to you and without the prior written consent of the Company shall not be assignable
by you otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors
and assigns.

 

9.Governing
Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF TEXAS OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS TO BE APPLIED.

 

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10.Severability.
If any provision of this Agreement is found by any court of competent jurisdiction to be invalid or unenforceable for any reason,
such finding shall not affect, impair or invalidate the remainder of this Agreement. If any aspect of any restriction herein is
too broad or restrictive to permit enforcement to its fullest extent, you and the Company agree that any court of competent jurisdiction
shall modify such restriction to the minimum extent necessary to make it enforceable and then enforce the provision as modified.

 

11.Entire Agreement,
Amendment and Waiver. This Agreement constitutes the entire agreement between you and the Company with respect to the subject
matter hereof and supersedes any and all prior or contemporaneous oral or written communications respecting such subject matter.
This Agreement shall not be modified, amended or in any way altered except by written instrument signed by you and the Company’s
Chief Executive Officer. A waiver by either party hereto of any rights or remedies hereunder on any occasion shall not be a bar
to the exercise of the same right or remedy on any subsequent occasion or of any other right or remedy at any time.

 

12.Waiver of
Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

13.Remedies.
Each of the parties to this Agreement and any such person or entity granted rights hereunder whether or not such person or entity
is a signatory hereto shall be entitled to enforce its rights under this Agreement specifically to recover damages and costs for
any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that each
party may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance, injunctive
relief and/or other appropriate equitable relief (without posting any bond or deposit) in order to enforce or prevent any violations
of the provisions of this Agreement. Each party shall be responsible for paying its own attorneys’ fees, costs and other
expenses pertaining to any such legal proceeding and enforcement regardless of whether an award or finding or any judgment or verdict
thereon is entered against either party.

 

14.Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose
signature appears thereon, and all of which together shall constitute one and the same instrument.

 

[Signature page follows]

 

    	 	 8	 

     

    

 

IN WITNESS WHEREOF,
you and the Company have executed this Agreement as of March 23, 2016.

 

 

	 	Francesca’s Services Corporation	 
	 	a Delaware corporation	 
	 	Francesca’s Collections, Inc.	 
	 	a Texas corporation	 
	 	Francesca’s Holdings Corporation	 
	 	a Delaware corporation	 
	 	 	 	 
		By:	/s/ Mike Barnes	 
	 	 	Mike Barnes	 
	 	 	Chairman President & CEO	
	 	 	 	 
	 	 	 	 
	 	AGREED BY:	 
	 	 	 
	 	/s/ Kelly M. Dilts	 
	 		Kelly M. Dilts	 

 

    	 	 9Exhibit

August 28,, 2015

Personal & Confidential 
Mr. John McCabe 
17 Brookside Farm Lane
Sudbury, MA  01776 

Dear John:

It is my pleasure to confirm that, as of August 12, 2015, you have been promoted to the position of Senior Vice President, Finance for Eleven Biotherapeutics, Inc. (“the Company” or “Eleven Bio”) initially reporting to Abbie Celniker, PhD, Chief Executive Officer (“CEO”).  This letter summarizes important details about your employment and constitutes an amendment and restatement of the letter agreement between you and the Company dated April 26, 2012.  This letter agreement shall be effective as of August 28, 2015 (the “Effective Date”).
1.Full-Time and Best Efforts: As Eleven Bio’s Senior Vice President, Finance, which is a full-time position, we expect that you will devote substantially all of your working time to the performance of your Company duties in a satisfactory manner and to the best of your abilities at all times. You shall not engage in any other business or occupation during your employment here, including, without limitation, any activity that conflicts with the interests of the Company, interferes with the proper and efficient performance of your duties for the Company, or interferes with your exercise of judgment in the Company’s best interests. Notwithstanding the foregoing, nothing herein shall preclude you from serving, with the prior written consent of the CEO and/or Board of Directors (the “Board”), as a member of the boards of directors or advisory boards of non-competing businesses and charitable organizations; provided, however, that such activities shall be limited by you so as not to interfere, individually or in the aggregate, with your performing your job
2.    Compensation: You currently receive a bi-weekly salary of $10,192.31 (equivalent to $265,000 when annualized) effective as of August 1, 2015, which will be subject to all applicable tax reporting and withholding. You will be considered for a merit review in conjunction with your performance review (which generally are conducted annually) and consistent with the Company’s compensation practices, as determined by the Board.
3.    Annual Bonus: For the 2015 fiscal year, you will be eligible for an annual target bonus of up to 20% of your base salary (after giving effect to payment of the one-time retention bonus previously approved by the Compensation Committee of the Board) contingent upon your individual and our Company performance. For the 2016 fiscal year and subsequent fiscal years, 

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215 First Street, Suite 400, Cambridge, MA 02142        PHONE: 617-871-9911
FAX: 617-858-0911
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you will be eligible for an annual target bonus of up to 25% of your base salary contingent upon your individual and our Company performance. The determination of whether a bonus will be granted, and the amount of any such bonus, will be determined by the Company in its reasonable good faith discretion. All annual bonuses, if any, will be payable no later than March 15 of the year following the year in which they were earned. Please note that you must be employed on the date bonuses, if any, are paid, in order to be eligible for such a payment.
4.    Restricted Stock; Options: The Board will review annually the allocation of stock among employees and you will be eligible to be considered for additional annual grants of restricted stock or stock options.
5.    Employee Benefits; Expenses: The Company offers a comprehensive benefit package that includes group health, dental and vision plans as well as life and disability and time-off benefits. Your eligibility to participate in these plans and receive benefits thereunder is subject to the plan documents governing such benefits. Notwithstanding the foregoing, you understand and agree that nothing contained herein will require the Company to establish or maintain any fringe benefits and any such benefits may be modified, amended, terminated or cancelled at any time by the Company in its sole and absolute discretion.
During your employment, the Company shall pay (or promptly reimburse you) for documented, out-of-pocket expenses reasonably incurred by you in performing your job, which are consistent with the Company’s policies in effect from time to time with respect to business expenses, subject to the Company’s requirements with respect to reporting of such expenses.
Please also note that all in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by you during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year. Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
6.    Vacation Time: As a full time employee of the Company, you are eligible for up to fifteen (15) paid vacation days that are accrued on a monthly basis at a rate of 1.25 days (10 hours) per month of full time employment. The use of vacation is governed by the Company’s vacation pay policy.
7.    Term of Employment: It is important for you to understand that you are an employee “at will”. This means that you have the right to terminate your employment relationship with Eleven Bio at any time for any or no reason. Similarly, the Company has the right to terminate its 

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215 First Street, Suite 400, Cambridge, MA 02142        PHONE: 617-871-9911
FAX: 617-858-0911
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employment relationship with you at any time for any or no reason.  Your employment and this letter will be governed by the laws of Massachusetts.
8.    Severance Benefits: Notwithstanding the foregoing, in the event that Eleven Bio terminates your employment without Cause or you resign with Good Reason (in either case a “Qualifying Termination”), you will be eligible for the benefits outlined in sub-paragraphs A or B (the “Severance Benefits”), subject to the terms set forth in this letter:
		
	A.
	If a Qualifying Termination occurs: (i) Eleven Bio will pay you severance in the form of continuation of your base salary for a total of twelve (12) months, such amount to be paid in accordance with the Company’s then current payroll practices, except as otherwise specified in this letter, beginning on the Company’s first regular payroll date that occurs after the Payment Date (as defined below); and (ii) subject to the terms and conditions provided for in COBRA, and subject to your timely election of COBRA and copayment of premium amounts at the active employee’s rate, the Company shall pay its then current share of premium payments for group health and dental program after the termination date through (1) your severance period as outlined above, or (2) the date you become employed with benefits substantially comparable to the benefits provided under the corresponding Company plan, or (3) the date you become ineligible for COBRA benefits; provided, however, that such Company-paid premiums may be recorded as additional income pursuant to Section 6041 of the Internal Revenue Code of 1986, as amended (the “Code”) and not entitled to any tax qualified treatment to the extent necessary to comply with or avoid the discriminatory treatment prohibited by the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010 or Section 105(h) of the Code. You shall be responsible for the entire COBRA premium should you elect to maintain this coverage after the earlier of the dates specified in sections 8.A.(ii)(1)-(3) above.

		
	B.
	If a Qualifying Termination occurs within twelve (12) months after a Change in Control Transaction (as defined below), then: (i) you will be eligible for the same severance payments and COBRA premium assistance as set forth in sections 8.A.(i)-A.(ii) above, subject to the same terms, conditions, and limitations as described therein; and (ii) the vesting of 100% of your then outstanding unvested equity grants shall be accelerated, such that all unvested equity grants vest and become fully exercisable or non-forfeitable as of the termination date.

For the sake of clarity, it shall not be a “Qualifying Termination” if your employment terminates because of your death or due to your suffering a Disability (as defined below).

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	C.
	The Severance Benefits will be subject to the following terms:

i.    Solely for purposes of Section 409A of the Code, each salary continuation payment is considered a separate payment.
ii.    Any severance or other benefits under this offer letter will begin only upon the date of your “separation from service” (as defined under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h)) which occurs on or after the date of termination of the employment. To the extent that the termination of your employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by you to the Company, or any of its parents, subsidiaries or affiliates, at the time your employment terminates), any severance benefits payable that constitute deferred compensation under Section 409A of the Code shall be delayed until after the date of a subsequent event constituting a separation from service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this section shall not cause any forfeiture of benefits on your part, but shall only act as a delay until such time as a “separation from service” occurs.
Further, if you are a “specified employee” (as that term is used in Section 409A of the Code and regulations and other guidance issued thereunder) on the date your separation from service becomes effective, any severance benefits payable hereunder that constitute non-qualified deferred compensation under Section 409A of the Code shall be delayed until the earlier of (i) the business day following the six-month anniversary of the date your separation from service becomes effective, and (ii) the date of your death, but only to the extent necessary to avoid such penalties under Section 409A of the Code. On the earlier of (A) the business day following the six-month anniversary of the date your separation from service becomes effective, and (B) your death, the Company shall pay you in a lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid you prior to that date as described above. Neither the Company nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A of the Code. The Company makes no representation or warranty and shall have no liability to you or any other person if any provision of this Agreement is determined to constitute deferred compensation subject to Section 409A of the Code, but do not satisfy an exemption from, or the conditions of, Section 409A of the Code.
iii.    Eleven Bio’s obligations to make the above payments and provide the above benefits will be contingent upon your execution of and compliance with a comprehensive severance agreement and release of claims (the “Release”), which Release must be signed and any applicable revocation period with respect thereto must have expired by the thirtieth (30th ) day following your termination of employment (such 30th day, the 

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“Payment Date”). In addition, you must comply with all post-employment obligations, including those in the Employee Non-Competition, Non- Solicitation, Confidentiality and Assignment Agreement that you signed as a condition of employment.
iv.    You agree to give prompt written notice of any reemployment during the Severance Period which results in eligibility for comparable medical and dental benefits. If the Company makes any overpayment of COBRA Benefits, you agree to promptly return any such overpayment to the Company. The foregoing shall not create any obligation on your part to seek reemployment after the date of termination of your employment.
9.    Definitions: For purposes of this letter agreement, “for Cause” shall mean the Company has complied with the “Cause Process”, as defined below, following your committing one or more of the following (each a “Cause Condition”): (i) an act of material dishonesty involving the Company, embezzlement, or misappropriation of assets or property of the Company; (ii) gross negligence or willful misconduct in connection with the performance of your duties, theft, fraud or breach of fiduciary duty to the Company; (iii) your willful, sustained, or repeated failure to substantially perform the duties or obligations of your position (other than due to illness or injury); (iv) a violation of federal or state securities law; (v) the conviction of a felony or any crime involving moral turpitude, including a plea of nolo contendre; (vi) a material breach of any of the Company’s written policies related to conduct or ethics; or (vii) a material breach of the Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement (copy attached) executed in accordance with your initial letter agreement.
“Cause Process” shall mean that (i) the Company reasonably determines, in good faith, that one of the Cause Conditions has occurred; (ii) the Company notifies you in writing of the first occurrence of the Cause Condition within thirty (30) days of becoming aware of such condition; (iii) the Company cooperates in good faith with your efforts, for a period not less than thirty (30) days following such notice (the “Cause Cure Period”), to remedy the Cause Condition; (iv) notwithstanding such efforts, the Cause Condition continues to exist; and (v) the Company terminates your employment within thirty (30) days after the end of the Cause Cure Period, provided that the Company will not be required to provide a Cause Cure Period in the event that a Cause Condition (x) is of the type described in clauses (i), (ii), (iv), (v) or (vii) of the first sentence of this paragraph; (y) is incapable of being cured; or (z) is required to be publicly disclosed under applicable securities law.
If you cure to the Company’s satisfaction any Cause Condition during the applicable Cause Cure Period, Cause shall be deemed not to have occurred. If the Company is not required to provide a Cause Cure Period, the Cause Process will be satisfied if the Company notifies you in writing of the first occurrence of the Cause Condition within thirty (30) days of the CEO becoming aware of such condition and terminates your employment within thirty (30) days of such notice. You are eligible for no more than two “cure” opportunities during your employment.

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“Change in Control Transaction” shall mean (i) a merger or consolidation of the Company with or into another corporation under circumstances where the stockholders of the Company immediately prior to such merger or consolidation do not own after such merger or consolidation shares representing at least fifty percent (50%) of the voting power of the Company or the surviving, resulting or parent corporation, as the case may be, (ii) a transfer of shares representing fifty percent (50%) or more of the voting power of the Company to any person who was not, on the Effective Date, a holder of stock of any class or preference or any stock option of the Company, (iii) a liquidation of the Company, or (iv) a sale or other disposition of all or substantially all of the Company’s assets.
“Good Reason” shall mean you have complied with the “Good Reason Process” as defined below, following the occurrence of one or more of the following events: (i) any material adverse change in your compensation, title, or material responsibilities, (ii) the relocation of your primary place of work more than thirty (30) miles from your residence on the Effective Date of this Agreement, or (iii) the material breach by the Company of any provision of this letter agreement or any other employment-related agreement between the Company and you (as defined below).
“Good Reason Process” shall mean that (i) you reasonably determine in good faith that one of the foregoing “Good Reason” conditions has occurred; (ii) you notify the Company in writing of the first occurrence of the Good Reason condition within thirty (30) days of the first occurrence of such condition; (iii) you cooperate in good faith with the Company’s efforts, for a period not less than thirty (30) days following such notice (the “Cure Period”) to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) you terminate your employment within thirty (30) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred. Notwithstanding the foregoing, should you be suspended pending any investigation, such suspension shall not be grounds for “Good Reason.”
“Disability” shall mean your inability (as determined by the Company in good faith) to perform the essential functions of your position due to physical or mental disability (after taking into account the Company’s obligation to provide reasonable accommodations in accordance with the Americans with Disabilities Act of 1990 or analogous state law), which continues for a period of 90 days (whether or not consecutive) during any 12-month period.  In connection with any determination regarding your possible Disability, you shall have the right to provide to the Company, and the Company shall consider in good faith, any physical or mental evaluation performed by a competent physician of your selection. 
10.    Modified Section 280G Cutback:  Notwithstanding any other provision of this Agreement, except as set forth in Section 10.B, in the event that the Company undergoes a “Change in Ownership or Control” (as defined below), the following provisions shall apply:
		
	A.
	The Company shall not be obligated to provide to you any portion of any “Contingent Compensation Payments” (as defined below) that you would otherwise be entitled to receive to the extent necessary to eliminate any “excess 

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parachute payments” (as defined in Section 280G(b)(1) of the Code) for you.  For purposes of this Section 10, the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Payments” and the aggregate amount (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the Contingent Compensation Payments so eliminated shall be referred to as the “Eliminated Amount.”
		
	B.
	Notwithstanding the provisions of Section 10.A, no such reduction in Contingent Compensation Payments shall be made if (1) the Eliminated Amount (computed without regard to this sentence) exceeds (2) 100% of the aggregate present value (determined in accordance with Treasury Regulation Section 1.280G-1, Q/A-31 and Q/A-32 or any successor provisions) of the amount of any additional taxes that would be incurred by you if the Eliminated Payments (determined without regard to this sentence) were paid to you (including state and federal income taxes on the Eliminated Payments, the excise tax imposed by Section 4999 of the Code payable with respect to all of the Contingent Compensation Payments in excess of your “base amount” (as defined in Section 280G(b)(3) of the Code), and any withholding taxes).  The override of such reduction in Contingent Compensation Payments pursuant to this Section 10.B shall be referred to as a “Section 10.B Override.”  For purpose of this paragraph, if any federal or state income taxes would be attributable to the receipt of any Eliminated Payment, the amount of such taxes shall be computed by multiplying the amount of the Eliminated Payment by the maximum combined federal and state income tax rate provided by law.

		
	C.
	For purposes of this Section 10 the following terms shall have the following respective meanings:

i.    “Change in Ownership or Control” shall mean a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company determined in accordance with Section 280G(b)(2) of the Code.
ii.    “Contingent Compensation Payment” shall mean any payment (or benefit) in the nature of compensation that is made or made available (under this Agreement or otherwise) to a “disqualified individual” (as defined in Section 280G(c) of the Code) and that is contingent (within the meaning of Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the Company.
		
	D.
	Any payments or other benefits otherwise due to you following a Change in Ownership or Control that could reasonably be characterized (as determined by 

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the Company) as Contingent Compensation Payments (the “Potential Payments”) shall not be made until the dates provided for in this Section 10.D.  Within 30 days after each date on which you first become entitled to receive (whether or not then due) a Contingent Compensation Payment relating to such Change in Ownership or Control, the Company shall determine and notify you (with reasonable detail regarding the basis for its determinations) (1) which Potential Payments constitute Contingent Compensation Payments, (2) the Eliminated Amount and (3) whether the Section 10.B Override is applicable.  Within 30 days after delivery of such notice to you, you shall deliver a response to the Company (the “Executive Response”) stating either (A) that you agree with the Company’s determination pursuant to the preceding sentence or (B) that you disagrees with such determination, in which case you shall set forth (x) which Potential Payments should be characterized as Contingent Compensation Payments, (y) the Eliminated Amount, and (z) whether the Section 10.B Override is applicable.  In the event that you fail to deliver an Executive Response on or before the required date, the Company’s initial determination shall be final.  If you state in the Executive Response that you agree with the Company’s determination, the Company shall make the Potential Payments to you within three (3) business days following delivery to the Company of the Executive Response (except for any Potential Payments which are not due to be made until after such date, which Potential Payments shall be made on the date on which they are due).  If you state in the Executive Response that you disagree with the Company’s determination, then, for a period of sixty (60) days following delivery of the Executive Response, you and the Company shall use good faith efforts to resolve such dispute.  If such dispute is not resolved within such 60-day period, such dispute shall be settled exclusively by arbitration in Cambridge, Massachusetts, in accordance with the rules of the American Arbitration Association then in effect.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.  The Company shall, within three (3) business days following delivery to the Company of the Executive Response, make to you those Potential Payments as to which there is no dispute between the Company and you regarding whether they should be made (except for any such Potential Payments which are not due to be made until after such date, which Potential Payments shall be made on the date on which they are due).  The balance of the Potential Payments shall be made within three (3) business days following the resolution of such dispute.  
		
	E.
	The Contingent Compensation Payments to be treated as Eliminated Payments shall be determined by the Company by determining the “Contingent 

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Compensation Payment Ratio” (as defined below) for each Contingent Compensation Payment and then reducing the Contingent Compensation Payments in order beginning with the Contingent Compensation Payment with the highest Contingent Compensation Payment Ratio.  For Contingent Compensation Payments with the same Contingent Compensation Payment Ratio, such Contingent Compensation Payment shall be reduced based on the time of payment of such Contingent Compensation Payments with amounts having later payment dates being reduced first.  For Contingent Compensation Payments with the same Contingent Compensation Payment Ratio and the same time of payment, such Contingent Compensation Payments shall be reduced on a pro rata basis (but not below zero) prior to reducing Contingent Compensation Payment with a lower Contingent Compensation Payment Ratio.  The term “Contingent Compensation Payment Ratio” shall mean a fraction the numerator of which is the value of the applicable Contingent Compensation Payment that must be taken into account by you for purposes of Section 4999(a) of the Code, and the denominator of which is the actual amount to be received by you in respect of the applicable Contingent Compensation Payment.  For example, in the case of an equity grant that is treated as contingent on the Change in Ownership or Control because the time at which the payment is made or the payment vests is accelerated, the denominator shall be determined by reference to the fair market value of the equity at the acceleration date, and not in accordance with the methodology for determining the value of accelerated payments set forth in Treasury Regulation Section 1.280G-1Q/A-24(b) or (c)). 
		
	F.
	The provisions of this Section 10 are intended to apply to any and all payments or benefits available to you under this Agreement or any other agreement or plan of the Company under which you receive Contingent Compensation Payments.

11.    General: By signing below, you represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing or limiting you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter. You also agree that you will not disclose to anyone at the Company, bring onto Company premises, or use in the course of your employment at the Company, any confidential information or trade secrets belonging to any former employer or to any other entity.
After the Effective Date, this letter (and the plans, documents, and policies referenced herein) shall constitute our entire agreement regarding the terms and conditions of your employment with the Company and shall supersede any prior agreements or other promises or statements (whether oral or written) regarding the terms of employment. Notwithstanding the foregoing, the 

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Employee Non-Competition, Non-Solicitation, Confidentiality and Assignment Agreement dated April 23, 2012 and your obligations thereunder remain in full force and effect.  
The terms described herein cannot be modified except in writing by you and the Company. 
We are thrilled you are continuing as part of the leadership team at Eleven. Please contact me or Barbara if you have any questions or need more information.
Sincerely,
/s/Abbie Celniker
Abbie Celniker, PhD 
President and CEO

I accept the above terms of employment as stated:
/s/ John J. McCabe            August 31, 2015 
John McCabe            Date

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