Zura Bio Separation Agreement, Eric Hyllengren, April 20

EX-10.1 2 tm2612540d1_ex10-1.htm EXHIBIT 10.1

Exhibit 10.1

April 17, 2026

Eric Hyllengren

Via Email

Dear Eric:

This letter sets forth the terms of the separation
agreement (the “ Agreement ”) that Zura Bio Inc. (the “ Company ”) is offering to you to aid in your
employment transition.

1. Separation. Your last day of work with the Company and your employment termination
date will be April 20, 2026 (the “ Separation Date ”). Between April 17, 2026, and the Separation Date, you will not
be expected, permitted, or required to report to work or perform any services for the Company, except upon reasonable request of the Company.

2. Accrued Salary and Paid Time Off. On the Separation Date, the Company will pay
you all accrued salary and all accrued and unused paid time off earned through the Separation Date, subject to standard payroll deductions
and withholdings. You are entitled to this payment by law.

3. Severance Benefits. Although the Company has no obligation to do so, if you
timely sign this Agreement and comply with your obligations under it (collectively, the “ Severance Preconditions ”),
then the Company will provide you with the following “ Severance Benefits ”:

(a)       Severance
Payment. Company will pay you, as severance, up to the equivalent of three (3) months of your base salary in effect as of the Separation
Date, subject to standard payroll deductions and withholdings. This amount will be paid in the form of salary continuation starting on
the Company’s first regularly scheduled payroll date that is within fifteen (15) calendar days after the Effective Date (as defined
in Section 8(c) of this Agreement); provided, however, that such salary continuation payments shall immediately cease upon
the date you commence employment or self-employment with any other person or entity. You agree to promptly notify the Company in writing
if you obtain such employment or self-employment during the salary continuation period.

(b)       COBRA
Premiums. As an additional Severance Benefit under this Agreement, provided that you satisfy the Severance Preconditions set forth
in this agreement and timely elect continued coverage under COBRA, then the Company shall reimburse you for the COBRA premiums to continue
your health insurance coverage (including coverage for eligible dependents, if applicable) through the period (the “ COBRA Premium
Period ”) starting on the Separation Date and ending on the earliest to occur of: (i) October 31, 2026; (ii) the date you become
eligible for group health insurance coverage through a new employer or a family member’s employer; or (iii) the date you cease to
be eligible for COBRA coverage for any reason (the “ COBRA Severance Benefit ”). You must timely pay your COBRA premiums,
and then provide documentation to the Company, to obtain reimbursement for your COBRA premiums under this Section 3. In the event you
become covered under another group health plan or otherwise cease to be eligible for COBRA during the COBRA Premium Period, you must immediately
notify the Company in writing. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that the
payment of the COBRA Severance Benefit would result in a violation of applicable law (including, but not limited to, Section 105(h) of
the Internal Revenue Code of 1986, as amended, Section 2716 of the Public Health Service Act, or any statute or regulation of similar
effect), then, provided you remain eligible for reimbursement in accordance with this section, in lieu of providing the COBRA Severance
Benefit, the Company will instead pay you on the last day of each remaining month of the COBRA Premium Period, a fully taxable cash payment
equal to the COBRA Severance Benefit for that month, subject to applicable tax withholdings for the remainder of the COBRA Premium Period.
You may, but are not obligated to, use this taxable payment to pay for medical expenses, including COBRA premiums.

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(c)       Travel
Credit Waiver. As an additional Severance Benefit under this Agreement, provided that you satisfy the Severance Preconditions set
forth in this Agreement, the Company agrees to waive its right to require you to return or transfer approximately $15,000 in airline travel
credits currently held in your name that were accrued in connection with Company business travel.

4. Health Insurance. Your participation in the Company’s group health insurance
plan will end on the last day of the month in which the Separation Date occurs. To the extent provided by the federal COBRA law or, if
applicable, state insurance laws, and by the Company’s current group health insurance policies, you will be eligible to continue
your group health insurance benefits at your own expense following the Separation Date, subject to Section 3(b). Later, you may be able
to convert to an individual policy through the provider of the Company’s health insurance, if you wish. You will be provided with
a separate notice describing your rights and obligations under COBRA and a form for electing COBRA coverage.

5. Stock Options. Under the terms of your stock option agreement and the applicable
plan documents, vesting of your stock options will cease as of the Separation Date. As of the Separation Date, you do not have any vested
stock options under any Company stock option agreement and all stock options awarded to you will be forfeited on the Separation Date.

6. Other Compensation or Benefits. You acknowledge that, except as expressly provided
in this Agreement, you have not earned and will not receive from the Company any additional compensation (including base salary, bonus,
incentive compensation, or equity), severance, or benefits before or after the Separation Date, with the exception of any vested right
you may have under the express terms of a written ERISA-qualified benefit plan (e.g., 401(k) account).

7. Expense Reimbursements. You agree that, within thirty (30) days after the Separation
Date, you will submit your final documented expense reimbursement statement reflecting all business expenses you incurred on your Company
credit card through the Separation Date, if any, to allow Company to complete internal documentation. Other than the airline travel credits
specified in Section 3(c), any expenses charged to a Company credit card that were not approvable pursuant to a Company policy shall be
reimbursed by you within thirty (30) days of Company notifying you that such expense was not made pursuant to a Company policy.

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8. Release of Claims.

(a) General Release of Claims. In exchange for the consideration provided to you under this Agreement to which you would not otherwise
be entitled, you hereby generally and completely release the Company, and its affiliated, related, parent and subsidiary entities, and
its and their current and former directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors,
insurers, affiliates, and assigns from any and all claims, liabilities, demands, causes of action, and obligations, both known and unknown,
arising from or in any way related to events, acts, conduct, or omissions occurring at any time prior to and including the date you sign
this Agreement.

(b) Scope of Release. This general release includes, but is not limited to: (i) all claims arising from or in any way related to
your employment with the Company or the termination of that employment; (ii) all claims related to your 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, equity, or profits interests in the Company; (iii) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (iv) all tort claims, including claims for fraud, defamation,
emotional distress, and discharge in violation of public policy; and (v) all federal, state, and local statutory claims, including claims
for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964,
the federal Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act (“ ADEA ”), the California
Labor Code, the California Family Rights Act, and the California Fair Employment and Housing Act, all as amended. You acknowledge that
you have been advised, consistent with California Government Code Section 12964.5(b)(4), that you have the right to consult an attorney
regarding this Agreement and that you were given a reasonable time period of not less than five business days in which to do so. You
further acknowledge and agree that, in the event you sign this Agreement prior to the end of the reasonable time period provided by the
Company, your decision to accept such shortening of time is knowing and voluntary and is not induced by the Company through fraud, misrepresentation,
or a threat to withdraw or alter the offer prior to the expiration of the reasonable time period, or by providing different terms to employees
who sign such an agreement prior to the expiration of the time period.

(c) ADEA Release. You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you have under the ADEA,
and that the consideration given for the waiver and releases you have given in this Agreement is in addition to anything of value to which
you were already entitled. You further acknowledge that you have been advised, as required by the ADEA, that: (i) your waiver and release
does not apply to any rights or claims arising after the date you sign this Agreement; (ii) you should consult with an attorney prior
to signing this Agreement (although you may choose voluntarily not to do so); (iii) you have twenty-one (21) days to consider this Agreement
(although you may choose voluntarily to sign it sooner); (iv) you have seven (7) days following the date you sign this Agreement to revoke
this Agreement (in a written revocation sent to the Company); and (v) this Agreement will not be effective until the date upon which
the revocation period has expired, which will be the eighth day after you sign this Agreement provided that you do not revoke it (the
“ Effective Date ”).

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(d) Section 1542 Waiver. In giving the release herein, which includes claims which may be unknown to you at present, you acknowledge
that you have read and understand Section 1542 of the California Civil Code, which reads as follows:

“A general release does not extend
to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release
and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

You hereby expressly waive and relinquish all
rights and benefits under that section and any law of any other jurisdiction of similar effect with respect to your release of claims
herein, including but not limited to your release of unknown claims.

(e) Exceptions. Notwithstanding the foregoing, you are not releasing the Company hereby from: (i) any obligation to indemnify
you pursuant to the Articles and Bylaws of the Company, any valid fully executed indemnification agreement with the Company, applicable
law, or applicable directors and officers liability insurance; (ii) any claims that cannot be waived by law; or (iii) any claims for breach
of this Agreement.

(f) Protected Rights. You understand that nothing in this Agreement limits your ability to file a charge or complaint with the
Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health
Administration, the Department of Justice, the California Civil Rights Department, the Securities and Exchange Commission or any other
federal, state or local governmental agency or commission (“ Government Agencies ”). You further understand this Agreement
does not limit your ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that
may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. While this
Agreement does not limit your right to receive a government-issued award for information provided to any Government Agency in connection
with a government whistleblower program or protected whistleblower activity, you understand and agree that, to the maximum extent permitted
by law, you are otherwise waiving any and all rights you may have to individual relief based on any claims that you have released and
any rights you have waived by signing this Agreement. Nothing in this Agreement (i) prevents you from discussing or disclosing information
about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful;
or (ii) waives any rights you may have under Section 7 of the National Labor Relations Act (subject to the release of claims set forth
herein).

9. Return of Company Property. You agree that, within five (5) days of the Separation
Date, you will return to the Company all Company documents (and all copies thereof) and other Company property in your possession or control,
including, but not limited to, Company files, notes, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements,
drafts, financial and operational information, research and development information, sales and marketing information, customer lists,
prospect information, pipeline reports, sales reports, personnel information, specifications, code, software, databases, computer-recorded
information, tangible property and equipment (including, but not limited to, computing and electronic devices, mobile telephones, servers)
including those listed in Exhibit A, credit cards, entry cards, identification badges and keys, Company account and device login
and password information; and any materials of any kind which contain or embody any proprietary or confidential information of the Company
(and all reproductions or embodiments thereof in whole or in part). You agree that you will make a diligent search to locate any such
documents, property and information by the close of business on the Separation Date or as soon as possible thereafter. If you have used
any personally owned computer or other electronic device, server, or e-mail system to receive, store, review, prepare or transmit any
Company confidential or proprietary data, materials or information, within five (5) days after the Separation Date, you shall provide
the Company with a computer-useable copy of such information and then permanently delete and expunge such Company confidential or proprietary
information from those systems; and you agree to provide the Company access to your system as requested to verify that the necessary copying
and/or deletion is completed. Your timely compliance with this paragraph is a condition to your receipt of the Severance Benefits provided
under this Agreement.

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10. Confidential Information Obligations. You acknowledge and reaffirm your continuing
obligations under your Employee Confidential Information and Inventions Assignment Agreement, a copy of which is attached hereto as Exhibit B and incorporated herein by reference.

11. Non-disparagement. Except to the extent permitted by the “Protected Rights”
Section above, you agree not to disparage the Company, its officers, directors, employees, shareholders, parents, subsidiaries, affiliates,
and agents, in any manner likely to be harmful to its or their business, business reputation, or personal reputation; provided that you
may respond accurately and fully to any request for information if required by legal process or in connection with a government investigation. Your continued compliance with this paragraph is a condition to your receipt of the Severance Benefits provided under this Agreement. In addition, nothing in this provision or this Agreement prohibits or restrains you from making disclosures protected under the whistleblower
provisions of federal or state law or from exercising your rights to engage in protected speech under Section 7 of the National Labor
Relations Act, if applicable.

12. No Voluntary Adverse Action. You agree that you will not voluntarily (except in response to legal compulsion or as permitted under the section of this Agreement entitled
“Protected Rights”) assist any person in bringing or pursuing any proposed or pending litigation, arbitration, administrative
claim or other formal proceeding against the Company, its parent or subsidiary entities, affiliates, officers, directors, employees or
agents.

13. C ooperation. You agree to cooperate fully with the Company in connection with its actual or contemplated defense, prosecution, or investigation of
any claims or demands by or against third parties, or other matters arising from events, acts, or failures to act that occurred during
the period of your employment by the Company. Such cooperation includes, without limitation, making yourself available to the Company
upon reasonable notice, without subpoena, to provide complete, truthful and accurate information in witness interviews, depositions, and
trial testimony. The Company will reimburse you for reasonable out-of-pocket expenses you incur in connection with any such cooperation
(excluding foregone wages) and will make reasonable efforts to accommodate your scheduling needs. In addition, you agree to cooperate
fully with the Company in all matters relating to the transition of your work and responsibilities on behalf of the Company, including,
but not limited to, any present, prior or subsequent relationships and the orderly transfer of any such work and institutional knowledge
to such other persons as may be designated by the Company, by making yourself reasonably available during regular business hours.

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14. No Admissions. You understand and agree that the promises and payments in consideration
of this Agreement shall not be construed to be an admission of any liability or obligation by the Company to you or to any other person,
and that the Company makes no such admission.

15. Representations. You hereby represent that you have: been paid all compensation
owed and for all hours worked; received all leave and leave benefits and protections for which you are eligible pursuant to the Family
and Medical Leave Act, the California Family Rights Act, or otherwise; and not suffered any on-the-job injury for which you have not already
filed a workers’ compensation claim. You further acknowledge and agree that this Agreement, and any payments or benefits provided
hereunder, are subject to any applicable recoupment, clawback, or reimbursement policy of the Company, and to any applicable law, including
in the event that the Company is required to prepare an accounting restatement or similar adjustment as a result of misconduct, noncompliance,
or facts that, if known at the time, would have constituted a breach of the foregoing representations.

16. Tax Provisions. All payments and
benefits under this Agreement (including, without limitation, the Severance Benefits) will be subject to applicable withholding for federal,
state, foreign, provincial and local taxes. It is intended that all of the benefits and other payments payable under this Agreement satisfy,
to the greatest extent possible, an exemption from the application of Section 409A of the Internal Revenue Code of 1986, as amended, including
any applicable regulations and guidance thereunder (“ Section 409A ”) and this Agreement will be construed
to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement will be construed
in a manner that complies with Section 409A, and any ambiguities herein shall be interpreted accordingly. Specifically, the severance
benefits under this Agreement are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations
Sections 1.409A-1(b)(4) and 1.409A-1(b)(9) and each installment of severance benefits, if any, is a separate “payment” for
purposes of Treasury Regulations Section 1.409A-2(b)(2)(i).

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17. Dispute Resolution. You and the Company agree that any and all disputes, claims,
or controversies of any nature whatsoever arising from, or relating to, this Agreement or its interpretation, enforcement, breach, performance
or execution, your employment or the termination of such employment (including, but not limited to, any statutory claims), shall be resolved,
pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law, by final, binding and confidential
arbitration in San Diego, California (or another mutually acceptable location) conducted before a single neutral arbitrator by JAMS,
Inc. (“ JAMS ”) or its successor, under the then applicable JAMS Arbitration Rules and Procedures for Employment
Disputes (available at http://www.jamsadr.com/rules-employment-arbitration/). By agreeing to this arbitration procedure, both
you and the Company waive the right to have any claim resolved through a trial by jury or judge. You will have the right to be represented
by legal counsel at any arbitration proceeding, at your own expense. This paragraph shall not apply to any action or claim that cannot
be subject to mandatory arbitration as a matter of law, to the extent such claims are not permitted by applicable law to be submitted
to mandatory arbitration and the applicable law(s) are not preempted by the Federal Arbitration Act or otherwise invalid (collectively,
the “ Excluded Claims ”). In the event you intend to bring multiple claims, including one of the Excluded Claims
listed above, the Excluded Claims may be publicly filed with a court, while any other claims will remain subject to mandatory arbitration.
The arbitrator shall have sole authority for determining if a claim is subject to arbitration, and any other procedural questions related
to the dispute and bearing on the final disposition. In addition, the arbitrator shall: (a) have the authority to compel adequate discovery
for the resolution of the dispute and to award such relief as would otherwise be available under applicable law in a court proceeding;
and (b) issue a written statement signed by the arbitrator regarding the disposition of each claim and the relief, if any, awarded as
to each claim, the reasons for the award, and the arbitrator’s essential findings and conclusions on which the award is based.
The Company shall pay all JAMS arbitration fees. Nothing in this Agreement shall prevent you or the Company from obtaining injunctive
relief in court to prevent irreparable harm pending the conclusion of any arbitration. Any awards or orders in such arbitrations may
be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

18. Miscellaneous. This Agreement, including Exhibit B, constitutes the complete,
final and exclusive embodiment of the entire agreement between you and the Company with regard to its subject matter. It is entered into
without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any
other such promises, warranties or representations. This Agreement may not be modified or amended except in a writing signed by both you
and a duly authorized officer of the Company. This Agreement will bind the heirs, personal representatives, successors and assigns of
both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns. If any provision
of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision
of this Agreement and the provision in question will be modified by the court so as to be rendered enforceable to the fullest extent permitted
by law, consistent with the intent of the parties. This Agreement will be deemed to have been entered into and will be construed and enforced
in accordance with the laws of the State of California without regard to conflict of laws principles. Any ambiguity in this Agreement
shall not be construed against either party as the drafter. Any waiver of a breach of this Agreement shall be in writing and shall not
be deemed to be a waiver of any successive breach. This Agreement may be executed in counterparts and electronic or facsimile signatures
will suffice as original signatures.

[Signatures to follow on next
page]

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If this Agreement is acceptable to you, please
sign below and return the original to me. You have twenty-one (21) calendar days to decide whether to accept this Agreement, and the Company’s
offer contained herein will automatically expire if you do not sign and return it within that timeframe.

We wish you the best in your future endeavors.

Sincerely,

| By: | /s/
Lindsey McClelland | |
| | Lindsey McClelland | |
| | VP, Head of People and Culture | |

---

I have
read, understand and agree fully to the foregoing Agreement:

| /s/ Eric Hyllengren | |
| Eric Hyllengren | |

| April 21, 2026 | |
| Date | |