Document:

Exhibit 10.18

 

TREVENA, INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Agreement is entered into as of September 3, 2013 (the “Effective Date”) by and between Trevena, Inc. (the “Company”), a Delaware corporation, and Roberto Cuca (“Executive”).

 

1.              Duties and Scope of Employment.

 

(a)                                 Positions and Duties.  As of the Effective Date, Executive will serve as Senior Vice President and Chief Financial Officer of the Company.  Executive will render such business and professional services in the performance of Executive’s duties, consistent with Executive’s position within the Company, as will reasonably be assigned to Executive by the Company’s Chief Executive Officer, to whom Executive will report.  The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”

 

(b)                                 Obligations.  During the Employment Term, Executive will perform Executive’s duties faithfully and to the best of Executive’s ability and will devote Executive’s full business efforts and time to the Company.  For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Company’s Board of Directors (the “Board”).  Nothing in this Agreement or elsewhere shall prevent Executive from managing his personal investment and affairs, or from engaging in charitable and community affairs, so long as such activities do not either individually or in the aggregate interfere with the performance of his duties for the Company.

 

2.              At-Will Employment.  The parties agree that Executive’s employment with the Company will be “at-will” employment and may be terminated at any time with or without cause or notice.  Executive’s at-will employment status may not be changed except by way of written agreement signed by Executive and an authorized officer of the Company.

 

3.              Compensation.

 

(a)                                 Base Salary.  During the Employment Term, the Company will pay Executive an initial annualized salary of $275,000 as compensation for services (the “Base Salary”).  The Base Salary shall be paid in equal installments in accordance with the Company’s normal payroll practices and subject to required withholding and deductions.  The Base Salary will be subject to review and adjustments will be made based upon the Company’s normal performance review practices.

 

(b)                                 Bonus.  For each calendar year ending during the Employment Term, Executive will be eligible to receive an annual bonus in a target amount of thirty percent (30%) of the Base Salary upon achievement of performance objectives, which shall be determined by the Company.  For 2013, such objectives will be established within the first thirty (30) days after the Effective Date.  For each subsequent calendar year, these objectives will be established within 90

 

 

days after the start of such calendar year.  For 2013, Executive shall be eligible for a pro rated bonus based on the Effective Date.  The Company reserves the right to modify the terms of bonus eligibility and other components of bonus compensation and criteria from year to year.

 

(c)                                  Equity Award.

 

(i)             Stock Option.  As soon as practicable after the Effective Date, subject to approval by the Board and pursuant to the Company’s 2008 Equity Incentive Plan (the “Plan”), the Company shall grant Executive an option to purchase 1,224,188 shares of the Company’s common stock at the fair market value as determined by the Board as of the date of grant (the “Option”).  The Option will be subject to the terms and conditions of the Plan and Executive’s grant agreement.  The grant agreement will include a four year vesting schedule, under which 25 percent of Executive’s shares will vest after twelve months of employment, with the remaining shares vesting monthly thereafter, until either the Option is fully vested or Executive’s employment ends, whichever occurs first.

 

(ii)          Other Equity Awards.   Executive will be eligible to receive additional awards of stock options, restricted stock or other equity awards based upon Executive’s performance, as determined by the Board from time to time.   The Board or its committee will determine in its discretion whether and when Executive will be granted any such equity awards.

 

4.              Company Policies and Employee Benefits.  During the Employment Term, Executive will be eligible to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, any such group medical, dental, vision, disability, life insurance, and flexible-spending account plans.  All matters of eligibility for coverage and benefits under any benefit plan shall be determined in accordance with the provisions of such plan.  The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

 

5.              Vacation.  While employed pursuant to this Agreement, Executive shall be eligible to take vacation subject to the Company’s vacation policy.

 

6.              Expenses.  The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy.

 

7.              Termination of Employment.  The provisions of this Section 7 govern the amount of compensation or benefit, if any, to be provided to Executive upon termination of employment and do not affect the right of either party to terminate the employment relationship at any time for any reason.

 

(a)                     Termination for other than Cause, Death or Disability.  If at any time (x) the Company terminates Executive’s employment with the Company other than for Cause (as defined below), death or disability, or (y) Executive terminates his employment under this Agreement for Good Reason, then, subject to Section 8, Executive will be entitled to receive:

 

 

(i)  an amount equal to nine (9) months of his annualized Base Salary in effect at the time of termination.  This amount shall be paid to Executive in equal installments on the Company’s regularly scheduled payroll dates beginning with the first payroll date following the effective date of the Release and Waiver and said amount shall be less applicable withholdings and deductions.

 

and

 

(ii)  accelerated vesting as to that number of unvested shares subject to the Option that would have otherwise vested if Executive had remained a Company employee for nine (9) months following the termination date.

 

(b)                                 Termination In Connection With or Following a Change of Control.    In the event that either (x) the Company terminates Executive’s employment with the Company other than for Cause, death or disability (A) within the thirty (30) day period prior to a Change of Control, or (B) within the period between the Company’s execution of a letter of intent for a proposed Change of Control which proposed Change of Control is later consummated (a “Designated Change of Control”) and the consummation of such Designated Change of Control, or (C) within the twelve (12) month period after a Change of Control, or (y) Executive resigns for Good Reason within twelve (12) months after a Change of Control, then, in addition to the payments set forth in Section 7(a) above, and subject to Section 8 below, Executive shall also be entitled to:

 

(i) immediate and full accelerated vesting of all unvested shares subject to the Option;

 

and

 

(ii) a pro-rata bonus for the calendar year of termination, determined by multiplying Executive’s target bonus for such year (assuming employment for the entire year) by a fraction whose numerator is the number of days that Executive was employed during such year and whose denominator is the total number of days in such year, payable within 30 days following the date of Executive’s termination of employment.

 

In the event that this Section 7(b) is triggered and the Company has not executed an IPO, the payments set forth in Sections 7(a)(i) and 7(a)(ii) above shall be calculated by replacing “nine (9) months” with “twelve (12) months.”

 

(c)                                  Termination for Cause, Death or Disability; Voluntary Termination.  If Executive’s employment with the Company terminates voluntarily by Executive (other than for Good Reason as set forth in the preceding subsection (b)), for Cause by the Company or due to Executive’s death or disability, then (i) all vesting will terminate immediately with respect to Executive’s outstanding equity awards, (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned).

 

 

(d)                                 Termination by Mutual Consent.  If at any time during the course of this Agreement the parties by mutual consent decide to terminate this Agreement, they shall do so by separate agreement setting forth the terms and condition of such termination.

 

8.              Conditions to Receipt of Benefits under Section 7.

 

(a)                                 Release of Claims.  The receipt of any payment or benefit pursuant to Section 7 will be subject to Executive signing and not revoking a release and waiver of all claims in the form attached hereto as Exhibit B (or in such other form as may be specified by the Company in order to comply with then-existing legal requirements to effect a valid release of claims) (the “Release and Waiver”) within the applicable time period set forth therein, but in no event later than forty-five days following termination of employment.  No payment or benefit pursuant to Section 7 will be paid or provided until the Release and Waiver becomes effective.

 

(b)                                 Other Conditions.  The receipt of any payment or benefits pursuant to Section 7 will be subject to Executive not violating the PIIA (as defined below), returning all Company property, and complying with the Release and Waiver; provided, however, that Company must provide written notice to Executive of the condition under this Section 8(b) that could prevent the disbursement of any payment or benefits under Section (7) within thirty (30) days of the initial existence of such condition and such condition must not have been remedied by Executive within thirty (30) days of such written notice.  Executive understands and agrees that payment or benefits received pursuant to Section 7 are in lieu of and not in addition to any severance or similar benefits that may be provided to other employees of the Company pursuant to a Company policy or plan.

 

(c)                                  Section 409A.  Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under Section 7 above that constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with Executive’s termination of employment unless and until Executive has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”), unless the Company reasonably determines that such amounts may be provided to Executive without causing Executive to incur the additional 20% tax under Section 409A.  Pay pursuant to Section 7 above, to the extent of payments made from the date of termination of Executive’s employment through March 15 of the calendar year following such termination, are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; to the extent such payments are made following said March 15, they are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary termination of service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by said provision, with any excess amount being regarded as subject to the distribution requirements of Section 409A(a)(2)(A) of the Internal Revenue Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that, if  Executive is a “specified employee” within the meaning of the aforesaid Section of

 

 

the Code at the time of such termination from employment, payments be delayed until the earlier of six months after termination of employment or Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”).  Notwithstanding any other payment schedule set forth in herein, none of the payments under Section 7 will be paid or otherwise delivered prior to the effective date of the Release and Waiver.  Except to the extent that payments may be delayed until the Specified Employee Initial Payment Date pursuant to the preceding sentence, on the first regular payroll pay day following the effective date of the Release and Waiver, the Company will pay Executive the payments Executive would otherwise have received under Section 7 on or prior to such date but for the delay in payment related to the effectiveness of the Release and Waiver, with the balance of the payments being paid as originally scheduled.

 

(d)                                 Cooperation With the Company After Termination of Employment. Following termination of the Executive’s employment for any reason, upon request by the Company, Executive will fully cooperate with the Company (at the Company’s reasonable expense) in all matters reasonably relating to the winding up of pending work including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to such other employees as may be designated by the Company.

 

9.              Definitions.

 

(a)                                 Cause.  For purposes of this Agreement, “Cause” is defined as (i) an act of dishonesty by Executive in connection with Executive’s responsibilities as an employee, (ii) Executive’s conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude, (iii) Executive’s gross misconduct, (iv) Executive’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom Executive owes an obligation of nondisclosure as a result of Executive’s relationship with the Company, or (v) Executive’s willful breach of any obligations under any written agreement or covenant with the Company.

 

(b)                                 Change of Control.  For purposes of this Agreement, “Change of Control” of the Company is defined as:

 

(i)             any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; provided, however; that sales of equity or debt securities to investors primarily for capital raising purposes shall in no event be deemed a Change of Control; or

 

(ii)          a change in the composition of the Board occurring within a two-year period, as a result of which less than a majority of the directors are Incumbent Directors.  “Incumbent Directors” will mean directors who either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not

 

 

include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company); provided, however; that no change in the composition of the Board in connection with the sale of equity or debt securities to investors primarily for capital raising purposes shall be deemed a Change of Control; or

 

(iii)       the date of the consummation of a merger or consolidation of the Company with any other corporation that has been approved by the stockholders of the Company, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or the stockholders of the Company approve a plan of complete liquidation of the Company; or

 

(iv)      the date of the consummation of the sale or disposition by the Company of all or substantially all the Company’s assets.

 

(c)                                  Good Reason.  For purposes of this Agreement, a resignation for “Good Reason” is defined as the resignation by Executive within thirty (30) days following the end of the Cure Period (defined below), if any of the following events occur without Executive’s express written consent following a Change of Control:  (i) the Company reduces the amount of the Base Salary, other than pursuant to a reduction that also is applied to substantially all other executives of the Company, (ii) the Company fails to pay the Base Salary or other benefits required to be provided by the Company hereunder, (iii) the Company materially reduces Executive’s core functions, duties or responsibilities in a manner that constitutes a demotion, or (iv) any change of Executive’s principal office location to a location more than thirty (30) miles from the Company’s office at 1018 West 8th Avenue, King of Prussia, PA; provided, however, that Executive must provide written notice to the Company of the condition that could constitute “Good Reason” within thirty (30) days of the initial existence of such condition and such condition must not have been remedied by the Company within thirty (30) days of such written notice (the “Cure Period”).

 

10.       Confidential Information.  Executive agrees to enter into the Company’s standard Employee Proprietary Information, Inventions and Non-Solicitation Agreement (the “PIIA”), in substantially the form attached hereto as EXHIBIT A, upon commencing employment hereunder.

 

11.       No Conflict with Existing Obligations.  Executive represents that his performance of all the terms of this Agreement and, as an executive officer of the Company, do not and will not breach any agreement or obligation of any kind made prior to Executive’s employment by the Company, including agreements or obligations Executive may have with prior employers or entities for which Executive has provided services.  Executive has not entered into, and Executive agrees that Executive will not enter into, any agreement or obligation, either written or oral, in conflict herewith.

 

 

12.       Parachute Payments.

 

(a)                                 If any payment or benefit Executive would receive pursuant to a Change of Control from the Company or otherwise (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless Executive elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date on which the event that triggers the Payment occurs):  reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits.  In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Executive’s stock awards unless Executive elects in writing a different order for cancellation.

 

(b)                                 The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control shall perform the foregoing calculations.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group affecting the Change of Control, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

 

(c)                                  The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and Executive within fifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive.  If the accounting firm determines that no Excise Tax is payable with respect to a Payment, it shall furnish the Company and Executive with an opinion reasonably acceptable to Executive that no Excise Tax will be imposed with respect to such Payment.  Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive.

 

13.       Assignment.  This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person,

 

 

firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.  None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution.  Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

 

14.       Notices.  All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a nationally recognized commercial overnight service, specifying next day delivery, with written verification of receipt, or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

 

If to the Company:

 

1018 West 8th Avenue, Suite A, King of Prussia, PA 19406

 

If to Executive:

 

at the last residential address known by the Company.

 

15.       Severability.  In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

 

16.       Arbitration.

 

(a)                                 Arbitration.  In consideration of Executive’s employment with the Company, the Company and Executive agree that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from Executive’s employment with the Company or the termination of Executive’s employment with the Company, including any breach of this Agreement, but not including those arising out of, relating to, or resulting from the PIAA, will  be subject to binding arbitration.  Disputes which Executive agrees to arbitrate, and thereby agrees to waive any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, discrimination or wrongful termination and any statutory claims.  Executive further understands that this Agreement to arbitrate also applies to any disputes that the Company may have with Executive.

 

 

(b)                                 Procedure.  Executive agrees that any arbitration will be administered by the American Arbitration Association (“AAA”) and that the neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes (“the Rules”).  Executive agrees that the arbitrator will administer and conduct any arbitration in a manner consistent with the Rules.

 

(c)                                  Remedy.  Except as provided by this Agreement and by the Rules, including any provisional relief offered therein, arbitration will be the sole, exclusive and final remedy for any dispute between Executive and the Company.  Accordingly, except as provided for by the Rules and this Agreement, neither Executive nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration.

 

(d)                                 Administrative Relief.  Executive understands that this Agreement does not prohibit Executive from pursuing an administrative claim with a local, state or federal administrative body such as the Equal Employment Opportunity Commission or the workers’ compensation board.  This Agreement does, however, preclude Executive from pursuing court action regarding any such claim.

 

(e)                                  Voluntary Nature of Agreement.  Executive acknowledges and agrees that Executive is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else.  Executive further acknowledges and agrees that Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of this Agreement and fully understands it, including that  Executive is waiving Executive’s right to a jury trial.  Finally, Executive agrees that Executive has been provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this Agreement.

 

17.       Integration.  This Agreement, together with the PIIA and the other documents referred to in this Agreement, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral.  This Agreement may be modified only by agreement of the parties by a written instrument executed by the parties that is designated as an amendment to this Agreement.

 

18.       Waiver of Breach.  The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

 

19.       Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

 

20.       Governing Law.  This Agreement will be governed by the laws of the Commonwealth of Pennsylvania.

 

21.       Acknowledgment.  Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from Executive’s private attorney, has had sufficient time to, and

 

 

has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

 

22.       Counterparts.  This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by their duly authorized officers, as of the day and year first above written.

 

 

	
COMPANY:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TREVENA, INC.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Maxine Gowen
    	
 
    	
Date:
    	
8/15/2013
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTIVE:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   Roberto Cuca
    	
 
    	
Date:
    	
8/15/2013
    
	
ROBERTO   CUCA
    	
 
    	
 
    

 

 

EXHIBIT A

 

PIIA

 

 

EXHIBIT B

Release and Waiver

 

TO BE SIGNED ON OR FOLLOWING THE SEPARATION DATE ONLY

 

In consideration of the payments and other benefits set forth in the Employment Agreement of September 3, 2013, to which this form is attached, I, Roberto Cuca, hereby furnish TREVENA, INC. (the “Company”), with the following release and waiver of claims (“Release and Waiver”).

 

In exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its current and former directors, officers, employees, stockholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date that I sign this Agreement (collectively, the “Released Claims”).  The Released Claims include, but are not limited to:  (a) all claims arising out of or in any way related to my employment with the Company, or the termination of that employment; (b) all claims related to my compensation or benefits from the Company including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, misclassification, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (the “ADEA”), any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance, including, but not limited to, the State of Pennsylvania or any subdivision thereof; and any public policy, contract, tort, or common law.  I hereby represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

 

In granting the release herein, which includes claims that may be unknown to me at present, I acknowledge that I expressly waive and relinquish any and all rights and benefits under any applicable law or statute providing, in substance, that a general release does not extend to claims which a party does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her would have materially affected the terms of such release.

 

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company.  If I am 40 years of age or older upon execution of this Release and

 

 

Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that:  (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; and (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired without my having previously revoked this Release and Waiver.

 

I acknowledge my continuing obligations under my Employee Proprietary Information, Inventions and Non-Solicitation Agreement (the “PIIA”).  Pursuant to the PIIA I understand that among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control.  I understand and agree that my right to the severance benefits I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my PIIA.

 

This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company that is not expressly stated herein.  This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.

 

 

	
Date:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
Roberto CucaConverted by EDGARwiz

Exhibit 10.1

Eaton Vance Corp.

2013 EMPLOYEE STOCK PURCHASE PLAN

 October 4, 2013

The purpose of this 2013 Employee Stock Purchase Plan (the “Qualified ESPP”) is to provide eligible employees of Eaton Vance Corp. (the “Company”) and certain of its subsidiaries with opportunities to purchase shares of the Company’s non-voting common stock (the “Non-Voting Common Stock”), commencing on November 1, 2013.  Four hundred thousand (400,000) shares of Non-Voting Common Stock in the aggregate have been approved for this purpose, subject to any adjustment pursuant to Section 15 hereof.  Either authorized and unissued shares of Non-Voting Common Stock or issued shares of Non-Voting Common Stock heretofore or hereafter reacquired by the Company may be issued under the Qualified ESPP.  This Qualified ESPP is intended to qualify as an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations issued thereunder, and shall be interpreted consistent therewith.

1.

Administration.  The Qualified ESPP will be administered by the Company’s Board of Directors (the “Board”) or by a Committee appointed by the Board (the “Committee”) (See Exhibit A).  The Board or the Committee has authority to make rules and regulations for the administration of the Qualified ESPP and its interpretation and decisions with regard thereto shall be final and conclusive.

2.

Eligibility.  All employees of the Company and all employees of any subsidiary of the Company (as defined in Section 424(f) of the Code) or any other entity the employees of which are eligible to participate in an employee stock purchase plan pursuant to Section 423 of the Code, in each case designated by the Board or the Committee from time to time (a “Designated Subsidiary”), are eligible to participate in any one or more of the offerings of Options (as defined in Section 9) to purchase Non-Voting Common Stock under the Qualified ESPP provided that they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and for more than five months in a calendar year.  See Exhibit A for a list of Designated Subsidiaries.

No employee may be granted an Option hereunder if such employee, immediately after the Option is granted, owns 5% or more of the total combined voting power or value of the stock of the Company or any subsidiary.  For purposes of the preceding sentence, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of an employee, and all stock that the employee has a contractual right to purchase shall be treated as stock owned by the employee.

The Company retains the discretion to determine which eligible employees may participate in an offering pursuant to and consistent with Treasury Regulation Sections 1.423-2(e) and (f).

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3.

Offerings.  The Company will make one or more offerings (“Offerings”) to employees to purchase stock under this Qualified ESPP.  Offerings will begin on or around each November 1 and May 1, or the first business day thereafter (the “Offering Commencement Dates”).  Each Offering Commencement Date will begin a period (a “Plan Period”) that ends on the business day closest to the 6 month anniversary of such Offering Commencement Date during which payroll deductions will be made and held for the purchase of Non-Voting Common Stock at the end of the Plan Period.  The Board or the Committee may, at its discretion, choose a different Plan Period of twelve (12) months or less for subsequent Offerings and/or choose a different commencement date for Offerings under the Qualified ESPP. 

4.

Participation.  An eligible employee may participate in any Offering by completing and submitting an online election form with the Company’s authorized agent or otherwise completing and forwarding such other written or electronic payroll deduction authorization form approved by the Company to the employee’s appropriate payroll office, in either case, at least 10 days prior to the applicable Offering Commencement Date.  The form will authorize a regular payroll deduction from the Compensation received by the employee during the Plan Period.  Unless an employee withdraws from the Qualified ESPP, the employee’s deductions and purchases will continue at the same rate for future Offerings under the Qualified ESPP as long as the Qualified ESPP remains in effect.  The term “Compensation” means: base compensation, overtime (including shift differentials), retroactive base compensation and vacation payouts and will exclude all other earnings, including, but not limited to, incentive or bonus awards, allowances and reimbursements for expenses such as relocation allowances for travel expenses, income or gains associated with the grant or vesting of restricted stock, dividends on unvested restricted stock, income or gains on the exercise of Company stock options or stock appreciation rights, and similar items.

5.

Deductions.  The Company will maintain payroll deduction accounts for all participating employees.  All deductions shall be taken out of regular payroll payments and no participant shall be eligible to make any lump sum contributions to the Plan.  With respect to any Offering made under this Qualified ESPP, an employee may authorize a payroll deduction in any dollar amount up to a maximum of $961.00 per two-week period during any Plan Period or such shorter period during which deductions from payroll are made.  The Board or the Committee may, at its discretion, designate a higher or lower maximum contribution rate. 

6.

Deduction Changes.  Other than to withdraw from participation in an Offering in accordance with Section 8 hereof, an employee may not change his payroll deduction election during any Plan Period.

7.

Interest.  Interest will not be paid on any employee accounts, except to the extent that the Board or the Committee, in its sole discretion, elects to credit employee accounts with interest at such rate as it may from time to time determine.

8.

Withdrawal of Funds.  An employee may at any time prior to the close of business on the 10th day prior to the applicable Exercise Date (as defined below) and for any reason permanently draw out the balance accumulated in the employee’s account and thereby withdraw from participation in an Offering.  Partial withdrawals are not permitted.  The employee may not begin participation again during the remainder of the Plan Period during which the employee 

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withdrew his or her balance.  The employee may participate in any subsequent Offering in accordance with terms and conditions established by the Board or the Committee.

9.

Purchase of Shares.  

(a)

Number of Shares.

On the Offering Commencement Date of each Plan Period, the Company will grant to each eligible employee who is then a participant in the Qualified ESPP an option (an “Option”) to purchase on the last business day of such Plan Period (the “Exercise Date”) at the applicable purchase price (the “Option Price”) up to a whole number of shares of Non-Voting Common Stock determined by multiplying $2,083 by the number of full months in the Plan Period (for the avoidance of doubt, such product not to exceed $12,500 per Plan Period if the period is six months in duration) and dividing the result by the closing price (as determined below) on the Offering Commencement Date; provided, however, that no employee may be granted an Option which permits his rights to purchase Non-Voting Common Stock under this Qualified ESPP and any other employee stock purchase plan (as defined in Section 423(b) of the Code) of the Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such Non-Voting Common Stock (determined at the date such Option is granted) for each calendar year in which the Option is outstanding at any time.

(b)

Option Price.

The Board or the Committee shall determine the Option Price for each Plan Period, including whether such Option Price shall be determined based on the lesser of the closing price of the Non-Voting Common Stock on (i) the Offering Commencement Date or (ii) the Exercise Date, or shall be based solely on the closing price of the Non-Voting Common Stock on the Exercise Date; provided, however, that such Option Price shall be at least 85% of the applicable closing price.  In the absence of a determination by the Board or the Committee, the Option Price will be 90% of the lesser of the closing price of the Non-Voting Common Stock on (i) the Offering Commencement Date or (ii) the Exercise Date.  The closing price shall be the closing price (for the primary trading session) on any national securities exchange on which the Non-Voting Common Stock is listed.  If no sales of Non-Voting Common Stock were made on such a day, the price of the Non-Voting Common Stock shall be the reported price for the most recent previous day on which sales were made.  

(c)

Exercise of Option.

Each employee who continues to be a participant in the Qualified ESPP on the Exercise Date shall be deemed to have exercised his Option at the Option Price on such date and shall be deemed to have purchased from the Company the number of whole shares of Non-Voting Common Stock reserved for the purpose of the Qualified ESPP that his accumulated payroll deductions on such date will pay for, but not in excess of the maximum numbers determined in the manner set forth above.

(d)

Return of Unused Payroll Deductions.  Any balance remaining in an employee’s payroll deduction account at the end of a Plan Period will be automatically refunded to the employee, except that any balance that is less than the purchase price of one share of Non-Voting Common Stock will be carried forward into the employee’s payroll deduction account for the following Offering, unless the employee elects not to participate in the following Offering under the Qualified ESPP, in which case the balance in the employee’s account shall be refunded.

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10.

Issuance of Shares.  Shares of Non-Voting Common Stock purchased under the Qualified ESPP will held in book entry in an account at the brokerage firm designated by the Company, which account may be in the name of the employee or in the name of the employee and another person of legal age as joint tenants with rights of survivorship.    

11.

Rights on Termination of Employment.  If a participating employee's employment ends before the last business day of a Plan Period, no payroll deduction shall be taken from any pay then due and owing to the employee and the balance in the employee’s account shall be paid to the employee.  In the event of the employee’s death before the last business day of a Plan Period, the Company shall, upon notification of such death, pay the balance of the employee’s account (a) to such beneficiary or beneficiaries as the employee has designated in writing during his or her lifetime to the Company (each a “Designated Beneficiary”); (b) if there is no such Designated Beneficiary, to his or her surviving spouse; (c) if none, to the executor or administrator of the employee’s estate; or (d) if no such executor or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate.  If, before the last business day of the Plan Period, the Designated Subsidiary by which an employee is employed ceases to be a subsidiary of the Company, or if the employee is transferred to a subsidiary of the Company that is not a Designated Subsidiary, the employee shall be deemed to have terminated employment for the purposes of this Qualified ESPP.

12.

Optionees Not Stockholders.  Neither the granting of an Option to an employee nor the deductions from his or her pay shall make such employee a stockholder of the shares of Non-Voting Common Stock covered by an Option under this Qualified ESPP until he or she has purchased and received such shares.

13.

Options Not Transferable.  Options under this Qualified ESPP are not transferable by a participating employee other than by will or the laws of descent and distribution, and are exercisable during the employee’s lifetime only by the employee.

14.

Application of Funds.  All funds received or held by the Company under this Qualified ESPP may be combined with other corporate funds and may be used for any corporate purpose.

15.

Adjustment for Changes in Non-Voting Common Stock and Certain Other Events.   

(a)

Changes in Capitalization.  In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Non-Voting Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under this Qualified ESPP, (ii) the share limitations set forth in Section 9, and (iii) the Option Price shall be equitably adjusted to the extent determined by the Board or the Committee.

(b)

Reorganization Events.

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(1)

Definition.  A “Reorganization Event” shall mean:  (a) any merger or consolidation of the Company with or into another entity as a result of which all of the Non-Voting Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (b) any transfer or disposition of all of the Non-Voting Common Stock of the Company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the Company.

(2)

Consequences of a Reorganization Event on Options.  In connection with a Reorganization Event, the Board or the Committee may take any one or more of the following actions as to outstanding Options on such terms as the Board or the Committee determines:  (i) provide that Options shall be assumed, or substantially equivalent Options shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to employees, provide that all outstanding Options will be terminated immediately prior to the consummation of such Reorganization Event and that all such outstanding Options will become exercisable to the extent of accumulated payroll deductions as of a date specified by the Board or the Committee in such notice, which date shall not be less than ten (10) days preceding the effective date of the Reorganization Event, (iii) upon written notice to employees, provide that all outstanding Options will be cancelled as of a date prior to the effective date of the Reorganization Event and that all accumulated payroll deductions will be returned to participating employees on such date, (iv) in the event of a Reorganization Event under the terms of which holders of Non-Voting Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Reorganization Event (the “Acquisition Price”), change the last day of the Plan Period to be the date of the consummation of the Reorganization Event and make or provide for a cash payment to each employee equal to (A) (i) the Acquisition Price times (ii) the number of shares of Non-Voting Common Stock that the employee’s accumulated payroll deductions as of immediately prior to the Reorganization Event could purchase at the Option Price, where the Acquisition Price is treated as the fair market value of the Non-Voting Common Stock on the last day of the applicable Plan Period for purposes of determining the Option Price under Section 9(b) hereof, and where the number of shares that could be purchased is subject to the limitations set forth in Section 9(a), minus (B) the result of multiplying such number of shares by such Option Price, (v) provide that, in connection with a liquidation or dissolution of the Company, Options shall convert into the right to receive liquidation proceeds (net of the Option Price thereof) and (vi) any combination of the foregoing. 

For purposes of clause (i) above, an Option shall be considered assumed if, following consummation of the Reorganization Event, the Option confers the right to purchase, for each share of Non-Voting Common Stock subject to the Option immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Non-Voting Common Stock for each share of Non-Voting Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Non-Voting Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist 

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solely of such number of shares of common stock of the acquiring or succeeding corporation (or an affiliate thereof) that the Board determines to be equivalent in value (as of the date of such determination or another date specified by the Board) to the per share consideration received by holders of outstanding shares of Non-Voting Common Stock as a result of the Reorganization Event. 

16.

Amendment of the Qualified ESPP.  The Board may at any time, and from time to time, amend or suspend this Qualified ESPP or any portion thereof, except that (a) if the approval of any such amendment by the shareholders of the Company is required by Section 423 of the Code, such amendment shall not be effected without such approval, and (b) in no event may any amendment be made that would cause the Qualified ESPP to fail to comply with Section 423 of the Code.

17.

Insufficient Shares.  If the total number of shares of Non-Voting Common Stock specified in elections to be purchased under any Offering plus the number of shares purchased under previous Offerings under this Qualified ESPP exceeds the maximum number of shares issuable under this Qualified ESPP, the Board or the Committee will allot the shares then available on a pro-rata basis.

18.

Termination of the Qualified ESPP.  This Qualified ESPP may be terminated at any time by the Board.  Upon termination of this Qualified ESPP all amounts in the accounts of participating employees shall be promptly refunded.

19.

Governmental Regulations.  The Company’s obligation to sell and deliver Non-Voting Common Stock under this Qualified ESPP is subject to listing on a national stock exchange (to the extent the Non-Voting Common Stock is then so listed or quoted) and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such stock.

20.

Governing Law.  The Qualified ESPP shall be governed by Maryland law except to the extent that such law is preempted by federal law.

21.

Issuance of Shares.  Shares may be issued upon exercise of an Option from authorized but unissued Non-Voting Common Stock, from shares held in the treasury of the Company, or from any other proper source.  

22.

Restriction on Sale of Shares / Notification upon Sale of Shares.

(a)

No participating employee shall be permitted to sell any shares of Non-Voting Common Stock purchased under the Qualified ESPP until the earliest of (i) the first anniversary of the Exercise Date on which the shares were purchased; (ii) the participating employee’s death; and (iii) the date on which the participating employee presents proof satisfactory to the Company that he or she has either become disabled within the meaning of Section 22(e)(3) of the Code or needs such shares on account of Hardship.  For purposes of the Qualified ESPP, “Hardship” shall mean the occurrence of one or more of the following events (a) a death within the participating employee’s immediately family; (b) extraordinary medical expenses for one or more members of the participating employee’s immediately family which are not covered by insurance programs sponsored by the Company; (c) the education costs of one 

- 6 -

or more of the participating employee’s family; (d) the purchase or renovation of a principal place of residence of the participating employee; or (e) such other financing emergency needs as may be approved by the Company on a uniform and nondiscriminatory basis.  The Company, in its discretion, shall either issue (either in certificated form or in book entry) shares of Non-Voting Common Stock purchased under the Qualified ESPP with a legend indicating that they are non-transferable except as indicated in this Section 22(a) (and then shall reissue such shares without the restrictive legend once any of the events listed at (i), (ii) or (iii) has occurred) or hold such shares in escrow pending their release to the participating employee (or, if the participating employee has died, (a) to his or her Designated Beneficiary, (b) if there is no such Designated Beneficiary, to his or her surviving spouse; (c) if none, to the executor or administrator of the employee’s estate; or (d) if no such executor or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate).

(b)

Each employee agrees, by entering the Qualified ESPP, to promptly give the Company notice of any disposition of shares purchased under the Qualified ESPP where such disposition occurs within two years after the date of grant of the Option pursuant to which such shares were purchased.

23.

Grants to Employees in Foreign Jurisdictions.  The Company may, to comply with the laws of a foreign jurisdiction, grant Options to employees of the Company or a Designated Subsidiary who are citizens or residents of such foreign jurisdiction (without regard to whether they are also citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) with terms that are less favorable (but not more favorable) than the terms of Options granted under the Qualified ESPP to employees of the Company or a Designated Subsidiary who are resident in the United States.  Notwithstanding the preceding provisions of this Qualified ESPP, employees of the Company or a Designated Subsidiary who are citizens or residents of a foreign jurisdiction (without regard to whether they are also citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from eligibility under the Qualified ESPP if (a) the grant of an Option under the Qualified ESPP to a citizen or resident of the foreign jurisdiction is prohibited under the laws of such jurisdiction or (b) compliance with the laws of the foreign jurisdiction would cause the Qualified ESPP to violate the requirements of Section 423 of the Code.  The Company may add one or more appendices to this Qualified ESPP describing the operation of the Qualified ESPP in those foreign jurisdictions in which employees are excluded from participation or granted less favorable Options.

24.

Authorization of Sub-Plans.  The Board may from time to time establish one or more sub-plans under the Qualified ESPP with respect to one or more Designated Subsidiaries, provided that such sub-plan complies with Section 423 of the Code.

25.

Withholding.  If applicable tax laws impose a tax withholding obligation, each affected employee shall, no later than the date of the event creating the tax liability, make provision satisfactory to the Board for payment of any taxes required by law to be withheld in connection with any transaction related to Options granted to or shares acquired by such employee pursuant to the Qualified ESPP.  The Company may, to the extent permitted by law, deduct any such taxes from any payment of any kind otherwise due to an employee.

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27.

Effective Date and Approval of Shareholders.  The Qualified ESPP shall take effect on October 4, 2013 subject to approval by the shareholders of the Company as required by Section 423 of the Code, which approval must occur within twelve months of the adoption of the Qualified ESPP by the Board.

Adopted by the Board of Directors

on October 3, 2013

Approved by the stockholders on 

October 4, 2013

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EXHIBIT A

Initial actions taken by the Board and approved by the Voting Stockholders on October 4, 2013.

Pursuant to Section 1 of the Qualified ESPP, the Board appoints the Management Committee to administer the Qualified ESPP.

Designated Subsidiaries are as follows:

Eaton Vance Management

Eaton Vance Distributors, Inc.

Eaton Vance Investment Counsel

Eaton Vance Acquisitions (sole owner of Fox Asset Management)

Fox Asset Management LLC (disregarded single-member LLC)

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