Ernexa Therapeutics Inc DEFA14A, filed May 31, 2022
Ernexa Therapeutics Inc. (ERNA)
DEFA14A
2022-05-31
View Original
Added on
October 15, 2026
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant ☑
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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Brooklyn ImmunoTherapeutics, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
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No fee required
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
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| Item 5.02 |
Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Appointment of Interim President and Chief Executive Officer
On May 24, 2022, the Board of Directors (the “Board”) of Brooklyn ImmunoTherapeutics, Inc., a Delaware corporation (the “Company”), appointed Matthew Angel as the interim President and Chief Executive Officer (principal executive officer) of the Company, which appointment became effective on May 26, 2022, upon
the effectiveness of the resignation from the Company of Howard J. Federoff, M.D., Ph.D., as described below.
Dr. Angel, 41 years old, is the co-founder of
Factor Bioscience Inc. (“Factor”), a biotechnology company focused on developing mRNA and cell-engineering technologies, and has served as its President, Chief Executive Officer and Chairman of its Board of Directors since 2011. In
2020, Dr. Angel co-founded, Exacis Biotherapeutics Inc., an immuno-oncology company, for which he serves as the Scientific Advisory Board Chair. Dr. Angel previously served as the Chief Science Officer, Secretary, Treasurer and as a
director of Exacis Biotherapeutics Inc., and as the Chief Science Officer, Secretary and as a director of Novellus, Inc. (“Novellus”), a pre-clinical stage biotechnology company focused on developing engineered cellular medicines
using its licensed, patented non-immunogenic mRNA, from 2014 until the sale of Novellus to the Company in July 2021 (the “Novellus Acquisition”). Dr. Angel received a Ph.D from the Massachusetts Institute of Technology in 2012 and a
B.S. in Engineering from Princeton University in 2003.
As previously reported, the Company paid
consideration totaling approximately $124.0 million in respect of the Novellus Acquisition, which consisted of (a) $22.8 million in cash and (b) approximately 7,022,000 shares of the Company’s common stock, par value $0.005 per share (“common
stock”), which under the terms of the agreement and plan of acquisition, dated as of July 16, 2021, by and between the Company, Novellus and the other parties thereto (the “Novellus Acquisition Agreement”), were valued at a
total of $102.0 million, based on a price of $14.5253 per share of common stock. In connection with the Novellus Acquisition, (i) Factor, of which Dr. Angel beneficially owns approximately 64% of its outstanding equity, received
approximately $1.7 million in cash consideration from the Company and approximately 2,581,000 shares of common stock, and (ii) Dr. Angel received approximately $2.0 million in cash consideration from the Company and approximately 623,000
shares of common stock. In addition, Dr. Angel is also entitled to receive up to approximately 286,000 shares of common stock, which the Company placed in escrow for a period ending on July 16, 2022 to secure indemnification obligations to
the Company under the Novellus Acquisition Agreement.
Also as previously reported, on April 26, 2021,
Brooklyn ImmunoTherapeutics LLC (“Brooklyn LLC”), a subsidiary of the Company, entered into an exclusive license agreement (the “License Agreement”), with Novellus, Ltd., a subsidiary of Novellus, and Factor (the “Licensors”),
to license the Licensors’ intellectual property and mRNA cell reprogramming and gene editing technology for use in the development of certain cell-based therapies to be evaluated and developed for treating human diseases, including certain
types of cancer, sickle cell disease, and beta thalassemia. Pursuant to the License Agreement, Brooklyn LLC paid the Licensors a total of $4.0 million in connection with the execution of the License Agreement. The completion of the Novellus
Acquisition relieved the Company of potential obligations to pay Novellus, Ltd. certain upfront fees, clinical development milestone fees and post-registration royalties under the License Agreement. The agreements with Factor under the
License Agreement remain unchanged. Pursuant to the License Agreement, Brooklyn LLC paid Factor an additional $2.5 million in October 2021, and is obligated to pay Factor $3.5 million in October 2022.
There are no family relationships between Dr. Angel and any director or executive officer of the Company, and, except as
set forth above, Dr. Angel does not have any other direct or indirect material interest in any transaction or proposed transaction required to be reported under Item 404(a) of Regulation S-K. There are no arrangements or understandings
between Dr. Angel and any other persons pursuant to which he was selected as interim Chief Executive Officer and President.
Appointment of New Chief Financial Officer and Principal Financial Officer
On May 9, 2022, the Board appointed Andrew Jackson as the Chief Financial Officer (principal financial officer) of the Company, with such appointment becoming effective upon
Mr. Jackson’s employment with the Company, which commenced May 31, 2022. Sandra Gurrola, the Company’s Vice President, Finance, who had been serving as principal financial officer, will remain
the Company’s principal accounting officer. In reliance on the instructions to paragraph (c) of Item 5.02 of Form 8-K, the Company elected to delay the
filing of the disclosure regarding Mr. Jackson’s appointment until the issuance of the press release describing his appointment, discussed in Item 7.01 below.
Mr. Jackson, 53 years old, served as the Chief
Financial Officer of Ra Medical Systems, Inc. from April 2018 until May 2022, and as its Secretary from August 2021 to May 2022. From October 2016 to April 2018, he was Chief Financial Officer for AltheaDx, Inc, a molecular diagnostics
company specializing in precision medicine. From March 2014 to March 2016, Mr. Jackson held senior financial positions, including Chief Financial Officer, at Celladon Corporation, a publicly-traded, clinical stage biotechnology company.
From April 2013 to March 2014, he held senior financial positions at Sapphire Energy, an industrial biotechnology company. Mr. Jackson received a MSBA in Finance in December 2006 from San Diego State University and a BSB in Accounting in
June 1992 from the University of Minnesota. Mr. Jackson is also a certified public accountant (inactive).
In connection with his appointment as Chief
Financial Officer, the Company entered into an employment agreement with Mr. Jackson, dated as of May 10, 2022 (the “Jackson Employment Agreement”). The Jackson Employment Agreement provides for Mr. Jackson’s at-will employment as the
Chief Financial Officer for a term commencing on May 31, 2022 and continuing until terminated by either the Company or Mr. Jackson.
Under the terms of the Jackson Employment Agreement, the Company will pay Mr. Jackson an annual base salary of $415,000, which amount is subject to periodic review by the Board or its compensation committee (the “Compensation Committee”).
Mr. Jackson is eligible to receive an annual cash bonus award in an amount up to 40% of his base salary upon achievement of agreed upon performance targets. The bonus will be determined by the Board or the Compensation Committee and paid
annually by March 15 in the year following the performance year on which such bonus is based.
In accordance with the terms of the Jackson Employment Agreement, Mr. Jackson is entitled to receive equity awards,
consisting of a time-based nonqualified stock option (the “Option Grant”) covering 664,800 shares of common stock, 25% of which will vest on the first anniversary of the Jackson Employment Agreement’s effective date, and the remainder
will vest ratably on a monthly basis over the three-year period thereafter. Vesting generally requires Mr. Jackson’s continued employment through the relevant vesting date.
If Mr. Jackson’s employment is terminated by the Company without Cause or by Mr. Jackson for Good Reason (each such
capitalized term as defined in the Jackson Employment Agreement), then the Company will pay Mr. Jackson all amounts accrued but unpaid as of the effective date of such termination, as well as continuation of his salary and benefits for the
following nine month period (such period, the “Severance Period”). Notwithstanding the foregoing, if a termination without Cause or for Good Reason occurs within three months before or twelve months after a Change in Control (as
defined in the Jackson Employment Agreement), Mr. Jackson will receive the benefits described in the preceding sentence, but the Severance Period shall run for a period of twelve months, and, in addition, Mr. Jackson will receive a lump-sum
payment of his target bonus and the Option Grant shall become fully vested. Any such severance benefits under the executive employment agreement are contingent on Mr. Jackson entering into and not revoking a general release of claims in favor
of the Company.
The Jackson Employment Agreement provides for (a) reimbursement of reasonable business expenses, (b) participation in the
Company’s benefit plans and (c) paid vacation days in accordance with the Company’s policies, as in effect from time to time, and up to an additional seven floating paid vacation days a year.
The Jackson Employment Agreement contains customary covenants related to non-solicitation for one year following
termination of employment, as well as customary covenants related to non-competition, confidentiality, inventions and intellectual property rights.
There are no family relationships between Mr. Jackson and any director or executive officer of the Company, and, except
for the Jackson Employment Agreement, Mr. Jackson does not have any other direct or indirect material interest in any transaction or proposed transaction required to be reported under Item 404(a) of Regulation S-K. There are no arrangements
or understandings between Mr. Jackson and any other persons pursuant to which he was selected as the Chief Financial Officer.
Separation of Dr. Howard Federoff
On May 24, 2022, Dr. Howard J. Federoff, a
director and the Company’s Chief Executive Officer and President tendered his resignation to the Board, with such resignation becoming effective on May 26, 2022 (the “Separation Date”). In connection with Dr. Federoff’s resignation,
on May 25, 2022, the Company entered into a Separation Agreement and General Release with Dr. Federoff (the “Separation Agreement”),
pursuant to which Dr. Federoff resigned from his positions as Chief Executive Officer and as an officer, director and employee of the Company and all subsidiaries. Dr. Federoff’s resignation from the Board was not due to any disagreement
with the Company on any matter relating to the Company’s operations, policies or practices. In consideration for Dr. Federoff’s execution of the Separation Agreement and non-revocation of a waiver and release of claims relating thereto,
Dr. Federoff will be entitled to the following benefits under the Separation Agreement:
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a lump sum cash severance benefit in the amount of $225,000, representing Dr. Federoff’s target bonus for 2022;
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payment of Dr. Federoff’s annual base salary for a period of twelve (12) months after the expiration of the applicable revocation period (the “Separation Period”), for a total gross amount equal to $450,000;
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payment of Dr. Federoff’s premiums for continued health benefits provided under COBRA for the Separation Period;
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full acceleration of the vesting of all outstanding options (with the
exception of the Milestone Options, as defined below) that would have vested during the Separation Period, and such options, together with outstanding options that vested prior to the Separation Date, representing collectively
1,420,095 shares of common stock, may be exercised for a period of thirty-six (36) months after the Separation Date;
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acceleration and vesting of 25/36th of a performance-based stock option grant covering 597,253 shares of common stock,
eligible to vest upon the occurrence of the first approval (clearance) by the Food and Drug Administration of an investigational new drug application in connection with the Company’s license with Factor Biosciences Therapeutics
Limited and Novellus Therapeutics Limited (the “Milestone Options”), and such accelerated options, representing collectively 414,759 shares of common stock, may be exercised for a period of thirty-six (36) months
after the Separation Date; and
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a lump sum cash severance benefit in the amount of $130,347, representing the value Dr. Federoff would have received if he was entitled to receive a settlement of a pro rata portion of
his performance restricted stock units through the expiration of the Separation Period, assuming the performance metrics were waived and assuming a per share value of $0.81.
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Under the Separation Agreement, Dr. Federoff has agreed to cooperate with and assist the Company regarding certain
matters and transitioning his employment duties and responsibilities. Subject to certain exceptions and limitations, the Separation Agreement includes a general release of claims by Dr. Federoff in favor of the Company and certain related
persons and parties, and customary confidentiality and mutual non-disparagement provisions. The Separation Agreement also includes certain other customary representations, warranties and covenants of Dr. Federoff, and provides for
reimbursement of certain expenses incurred by Dr Federoff. The Separation Agreement supersedes all other agreements or arrangements between Dr. Federoff and the Company regarding the subject matter of the agreement, including those with
respect to severance payments and benefits.
The foregoing description of the Jackson
Employment Agreement and the Separation Agreement is only a summary and is qualified in its entirety by reference to the full text of such agreements, which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form
8-K and are incorporated by reference in this Item 5.02.
Departures of Certain Directors
On May 24, 2022, Heather Redman, Erich Mohr and Erin Enright delivered notices to the Board of their respective decisions
not to stand for reelection at the Company’s 2022 annual meeting of stockholders (the “Annual Meeting”), currently scheduled for June 7, 2022. On May 26, 2022, Dennis Langer similarly delivered notice to the Board of his decision not
to stand for reelection at the Annual Meeting. As described in Item 8.01 of this Current Report on Form 8-K, the Annual Meeting will be postponed to a date to be determined by the Board.
Ms. Redman, Ms. Enright, Dr. Mohr and Dr. Langer currently remain directors, and none of them has yet provided a specific
date on which his or her Board service will cease, as the current Board actively interviews and seeks new candidates with appropriate qualifications to serve on the Board. The decisions of the foregoing directors not to stand for reelection
were not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
| Item 7.01 |
Regulation FD Disclosure
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On May 31, 2022, the Company issued a press release relating to the matters described in Item 5.02 and Item 8.01 of this
Current Report on Form 8-K. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and incorporated by reference in this Item 7.01. The information contained in this Item 7.01, including Exhibit 99.1, is
furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated
by reference into any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly incorporated by
specific reference in such filing.
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Other Events
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In connection with the events disclosed in Item 5.02 of this Current Report on Form 8-K, the Board determined to postpone
the Annual Meeting to a date to be determined. The Board will both determine the date for the Annual Meeting and establish a new record date for the Annual Meeting, and, based on this record date, the Company will deliver a new notice of the
Annual Meeting to stockholders entitled to receive notice of the Annual Meeting. Additionally, the Company expects to file a new proxy statement on Schedule 14A in respect of the Annual Meeting.
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Financial Statements and Exhibits.
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(d) Exhibits.
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Exhibit
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Description
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Amended and Restated Executive Employment Agreement, dated as of May 10, 2022, by and between Brooklyn ImmunoTherapeutics, Inc. and Andrew Jackson.
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Separation Agreement and General Release, dated May 25, 2022, by and between Brooklyn ImmunoTherapeutics, Inc. and Howard J. Federoff.
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Press Release dated May 31, 2022
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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**
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Management contract or compensation plan or arrangement.
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# Pursuant to Item 601(a)(5) of Regulation S-K, schedules and similar attachments to this exhibit have been omitted because they do not contain information material to
an investment or voting decision and such information is not otherwise disclosed in such exhibit. The Company will supplementally provide a copy of any omitted schedule or similar attachment to the U.S. Securities and Exchange Commission or its staff upon request.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
hereunto duly authorized.
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Brooklyn ImmunoTherapeutics, Inc.
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Dated: May 31, 2022
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By:
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/s/ Dr. Matt Angel
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Interim Chief Executive Officer and President
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Exhibit 10.1
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
BROOKLYN IMMUNOTHERAPEUTICS, INC.
This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) dated as of
May 10, 2022, is entered by and between Brooklyn ImmunoTherapeutics, Inc., a Delaware corporation (the “Company”), and Andrew Jackson, an individual residing in Cardiff, California 92007 (“Executive”) and, except with respect to the amendment and restatement hereof contained in the Recitals (which are incorporated by reference and made an operative part of this Agreement), will
become effective as of the date on which Executive commences his employment with the Company (the “Effective Date”). Each of the Company and Executive is a “Party,” and collectively, they are the “Parties.”
WHEREAS, the Company wishes to employ Executive as of the Effective Date; and
WHEREAS, Executive wishes to be employed by the Company as of the Effective Date;
WHEREAS, a copy of this Agreement, intended for discussion and not for execution, was in fact executed by Executive and the Company on May
4, 2022 (the “Original Agreement”), and, in accordance with Section 13 of the Original Agreement, the Company and Executive hereby agree that the Original Agreement is hereby amended and restated in its entirety as set forth in this Agreement.
NOW THEREFORE, in consideration of the above recitals, which are incorporated herein, the mutual covenants and mutual benefits set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the Company and Executive agree as follows:
1. Representations
and Warranties. Executive represents and warrants to the Company that Executive is not bound by any restrictive covenants or other obligations or commitments of any kind that would in any way prevent, restrict, hinder or interfere with
Executive’s acceptance of employment under the terms and conditions set forth herein or the performance of all duties and services hereunder to the fullest extent of Executive’s ability and knowledge. Executive understands and acknowledges that
Executive is not expected or permitted to use or disclose confidential information belonging to any prior employer in the course of performing Executive’s duties for the Company.
2. Term
of Employment. As of the Effective Date, the Company will employ Executive and Executive accepts employment by the Company on the terms and conditions herein that shall commence on the Effective Date and shall continue until terminated
pursuant to Section 5 (the “Employment Period”). Notwithstanding anything set forth in Section 5 and for the avoidance of doubt, Executive’s employment is on an at-will basis, meaning that
Executive or the Company can terminate Executive’s employment at any time for any reason or no reason, with or without notice. The at-will nature of Executive’s employment cannot be changed except by written agreement signed by Executive and the
Company.
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3. Duties and Functions.
(a) Executive shall be employed as the Chief Financial Officer (“CFO”)
and shall report to the Chief Executive Officer/President (the “Supervisor”). Executive’s primary place of employment shall be located at 10355 Science Center Drive, Suite 150, San Diego,
California 92121 (“Primary Place of Employment”). Notwithstanding the foregoing, (i) Executive must obtain advance written approval from Executive’s Supervisor if Executive desires to move
Executive’s Primary Place of Employment to a different state, (ii) the Company and Executive shall periodically reevaluate Executive’s Primary Place of Employment, and (iii) the Company and Executive shall reevaluate Executive’s Primary Place of
Employment if circumstances change, including if the COVID-19 pandemic materially changes or ends. Notwithstanding the foregoing,
Executive agrees that, as a result of these periodic evaluations or changes in circumstance, the Company may request that Executive consent to work primarily or
partially from the Company’s facilities, which consent may not be unreasonably withheld.
(b) Executive agrees to undertake the duties and responsibilities inherent in the positions of CFO, which may encompass
different or additional duties as may, from time to time, be assigned by Executive’s Supervisor, or the Supervisor’s designee, and the duties and responsibilities undertaken by Executive may be altered or modified from time to time by Supervisor,
or by the Supervisor’s designee. Executive’s duties shall include but not be limited to those duties set forth on Addendum A. Executive agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company
and any change thereof which may be adopted at any time by the Company. Notwithstanding the foregoing, during the COVID-19 pandemic, business related travel will be subject to the Supervisor’s and Executive’s good faith determination that business
related travel is necessary. All applicable COVID-19 travel restrictions, state, local and federal health and safety guidelines, and Company policies should be considered in connection with any travel activities.
(c) During the Employment Period, Executive will devote Executive’s full time and efforts to the business of the Company and
will not, without the consent of the Company, engage in consulting work or any trade or business for Executive’s own account or for or on behalf of any other person, firm or corporation that competes, conflicts or interferes with the performance of
Executive’s duties hereunder in any way.
4. Compensation.
(a) Base Salary: As compensation for Executive’s services hereunder, the Company agrees to pay Executive a base salary
at an annual rate of Four-Hundred fifteen thousand dollars ($415,000), payable in accordance with the Company’s normal payroll schedule, but in no event less frequently than monthly. Executive’s base salary shall be reviewed periodically by the
Board or the Compensation Committee thereof and subject to increase in the Board’s and/or the Compensation Committee’s sole discretion.
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(b) Bonus: Beginning with calendar year 2022, Executive shall be eligible to receive an annual cash bonus award in an
amount up to a target of forty percent (40%) of Executive’s base salary upon achievement of agreed to reasonable performance targets. Such performance targets shall be based in part upon performance of the Company, and in part on Executive’s
individual performance. The bonus shall be determined by the Board or the Compensation Committee thereof in its sole discretion and paid annually by March 15 of the year following the performance year on which such bonus is based. Except as
contemplated by Section 5(c)(i) below, Executive’s receipt of the bonus, if any, is conditioned on Executive’s continued employment in good standing as of the date on which such bonus is paid, and any such bonus will not be considered earned until
such payment date. Executive’s bonus opportunity shall be reviewed annually by the Board or the Compensation Committee thereof and subject to adjustment to reflect Executive’s performance in the Board’s and/or the Compensation Committee’s sole
discretion. Executive’s bonus for 2022 shall be prorated for the number of days of employment in calendar year 2022 from the Effective Date.
(c) Equity Compensation:
(i) On the Effective Date, in accordance with the employment inducement grant rules set forth in NASDAQ Stock Market Rule
5635(c)(4), Executive shall be granted an equity award covering the Company’s common stock (collectively, the “Grant”).
(ii) The Company shall grant Executive a time-based nonqualified stock option grant (the “Option Grant”) covering 664,800 shares of the Company’s common stock. The per share exercise price of the Option Grant shall equal the closing price of a share of the Company’s common stock on the grant date. The
Option Grant shall vest as to twenty-five percent of the shares covered thereby on the first anniversary of the Effective Date, and 1/36 of the remaining shares covered thereby on each monthly anniversary of the Effective Date thereafter, in each
case subject to Executive’s continued employment with the Company through the relevant vesting date.
(iii) All other terms and conditions of the Option Grant shall be the same as the Company’s standard forms of grant agreements.
The Option Grant is intended to constitute an “employment inducement grant” in accordance with the employment inducement grant rules set forth in NASDAQ Stock Market Rule 5635(c)(4), and are offered as an inducement material to Executive in
connection with the Company’s hiring of Executive.
(iv) Executive shall be eligible to receive an equity award under the applicable equity incentive plan of the Company as then in
effect, as determined by the Compensation Committee based on Executive’s performance.
(d) Other Expenses: In addition to the compensation provided for above, the Company agrees to pay or to reimburse
Executive during Executive’s employment for all reasonable, ordinary and necessary, properly documented, business expenses incurred in the performance of Executive’s services hereunder in accordance with Company policy in effect from time to time;
provided, however, that the amount available to Executive for such travel, entertainment and other expenses may require advance approval from his Supervisor. Executive shall submit vouchers and receipts for all expenses for which reimbursement is
sought. Notwithstanding any expense reimbursement policy of the Company that may then be in effect, Executive shall be entitled to reimbursement without advance approval by Executive’s Supervisor of the costs of (i) up to 2 professional conferences
up to a total amount of $5,000 annually and (ii) all flights, which, when possible, shall be business class or better for all flights for Company travel over four hours in length. Executive shall also receive $50/month for costs associated with
using Executive’s mobile device and home internet for business purposes pursuant to the Company’s Mobile Phone and Home Internet Policy.
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(e) Paid Time Off and Paid Holidays: Executive shall be entitled to paid time off in accordance with the Company’s
policies, as in effect from time to time. Executive is eligible for flexible paid time off under the Company’s current policies.
In addition to the enumerated paid Company holidays, Executive shall also be entitled to up to seven (7) paid floating holidays per calendar year.
Unused floating holidays can carry over from calendar year to calendar year up to a maximum of ten (10) floating holidays and shall be paid out upon separation of employment as required under applicable law. Once the 10-day floating holiday cap is
reached, the Employee shall not be given any paid floating holidays until some are used.
Executive may also be entitled to additional paid or unpaid leave under Company policy and applicable law.
(f) Fringe Benefits. In addition to Executive’s compensation provided by the foregoing, Executive shall be entitled to
all benefits available generally to Company employees pursuant to Company programs which may now or, if not terminated, shall hereafter be in effect, or that may be established by the Company, as and to the extent any such programs are or may from
time to time be in effect, as determined by the Company and the terms hereof, subject to the applicable terms and conditions of the benefit plans in effect at that time. Nothing herein shall affect the Company’s ability to modify, alter, terminate
or otherwise change any benefit plan it has in effect at any given time, to the extent permitted by law.
(g) Reimbursements. With respect to any reimbursement of expenses of Executive, such reimbursement of expenses shall be
subject to the following conditions: (i) the expenses eligible for reimbursement in one taxable year shall not affect the expenses eligible for reimbursement in any other taxable year; (ii) the reimbursement of an eligible expense shall be made no
later than the end of the year after the year in which such expense was incurred; and (iii) the right to reimbursement shall not be subject to liquidation or exchange for another benefit.
5. Termination.
(a) Termination by Executive. Executive may terminate the employment relationship at any time by giving the Company
written notice, with such termination taking effect upon written notice of the termination being provided to the Company. If Executive chooses to terminate the employment relationship other than for Good Reason (defined below), Executive will not
be entitled to and shall not receive any compensation or benefits of any type following the effective date of termination, other than (i) payment of base salary through the last day of employment, (ii) payment for any accrued but unused PTO and
floating holidays consistent with this agreement and applicable law, (iii) reimbursement for unreimbursed business expenses properly incurred by Executive, which shall be subject to and paid in accordance with the Company’s expense reimbursement
policy, and (iv) any right to continued benefits required by law or under the Company’s employee benefit plans and vested as of the termination date (the “Accrued Obligations”). If
Executive terminates the employment relationship for Good Reason (defined below), Executive will be entitled to the Accrued Obligations and the Non-CIC Termination Compensation or CIC Termination Compensation, as applicable and described below,
subject to the terms, conditions and restrictions set forth in Section 5(c)(ii).
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(i) “Good Reason” means the occurrence of any of the following
without Executive’s express written consent: (A) a material reduction in Executive’s base salary or target annual bonus (in other words, a reduction of more than ten percent (10%) of Executive’s base salary or target annual bonus in any one year),
in each case set forth in Section 4; (B) a relocation of Executive to a facility or location that is more than fifty (50) miles from Executive’s Primary Place of Employment as of the Effective Date and represents a material increase in Executive’s
commuting distance; (C) a material diminution in Executive’s authority, position, duties, or responsibilities individually or taken as a whole and including any such diminution that takes place following a Change in Control; or (D) a material
breach by the Company of the terms of this Agreement or any other agreement between the Company and Executive; provided, that no such event described above will constitute Good Reason unless: (x) Executive gives notice to the Company specifying the
condition or event relied upon for such termination within sixty (60) days of the initial existence of such event; and (y) the Company fails to cure the condition or event constituting Good Reason within thirty (30) days following receipt of such
notice (the “Cure Period”). If the Company fails to remedy the condition constituting Good Reason during the applicable Cure Period, Executive’s termination of employment must occur, if at
all, within ninety (90) days following the last day of such Cure Period in order for such termination as a result of such condition to constitute a termination for Good Reason. For purposes of this Agreement, “Change in Control” means as defined in
the Company’s 2021 Inducement Stock Incentive Plan.
(b) Termination by Company for Cause.
(i) At any time during the Employment Period, the Company may terminate Executive’s employment for Cause (defined below), with
such termination taking effect upon the later of written notice of the termination for Cause being provided to Executive or the expiration of any applicable cure period related thereto (provided that Executive may be relieved from his duties
hereunder during such cure period in the reasonable direction of the Board). If Executive’s employment is terminated for Cause, Executive will not be entitled to and shall not receive any compensation or benefits of any type following the effective
date of termination, other than the Accrued Obligations, and shall forfeit the Option Grant, whether vested or unvested.
(ii) “Cause” shall be defined as: (A) in connection with Executive’s
services hereunder, Executive commits a material act of fraud or material act of dishonesty with respect to the Company, which act causes (or could reasonably be expected to cause) material economic or material reputational harm to the Company; (B)
Executive is convicted of (or pleads guilty or nolo contendere to) a felony or a crime involving moral turpitude, which demonstrably causes material economic or material reputational harm to the Company; (C) Executive engages in negligence or
willful misconduct in the performance of his duties hereunder that materially violates the Company’s policies and which misconduct causes (or could reasonably be expected to cause) material economic or material reputational harm to the Company; (D)
Executive willfully refuses to follow the lawful written directions of his Supervisor, the Supervisor’s designee, or the Board; (E) Executive materially breaches any material provision of any proprietary information and inventions agreement with
the Company; or (F) Executive breaches any Restrictive Covenant as defined in Section 5(c)(ii). Notwithstanding Section 5(b)(ii)(D), if Executive refuses to follow the Company’s request that Executive work primarily or partially from the Company’s
facilities or another location, such refusal will only give the Company Cause to terminate the Executive if the facilities are located 50 miles or less from Executive’s Primary Place of Employment as of the Effective Date and represents a
material increase in Executive’s commuting distance. Notwithstanding anything in this Agreement or elsewhere to the contrary, if an event or occurrence that is alleged to constitute Cause is curable (as determined by the Board in good faith), the
Company may terminate Executive’s employment for Cause only if (x) the Company gives Executive notice of termination prior to the termination and within thirty (30) days after the Board learns of the event or occurrence that is alleged to
constitute Cause, specifying the grounds upon which Cause is alleged, (y) Executive fails to cure such grounds for Cause within thirty (30) days after Executive receives such notice, and (z) the termination occurs within sixty (60) days after such
event or occurrence. For purposes of this Agreement, no act or failure to act, on Executive’s part, will be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s
action or omission was in the best interests of the Company.
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(c) Termination by Company Without Cause.
(i) The Company may terminate Executive without Cause immediately by giving Executive written notice of such termination. Subject to the
conditions set forth in Section 5(c)(ii), if Executive’s employment is terminated by the Company without Cause, in addition to the Accrued Obligations, Executive shall be entitled to (i) continued base salary for nine (9) months following date of
such termination (the “Severance Period”) paid pursuant to the Company's normal payroll practices; and (ii) if Executive and/or Executive’s covered dependents timely elect(s) to receive
health care continuation coverage pursuant to COBRA, the total monthly cost of coverage for Executive (and such covered dependents) during the Severance Period, provided, for the avoidance of doubt, that such covered dependents participated in the
Company’s health plans prior to such termination, and provided, further, that if at any time the Company determines that its payment of Executive’s (or Executive’s eligible dependents’) premiums would result in a violation of law, then in lieu of
providing the premiums described above, the Company will instead pay Executive a fully taxable monthly cash payment in an amount equal to the applicable premiums for such month, with such monthly payment being made on the last day of each month for
the remainder of the Severance Period (together, the “Non-CIC Termination Compensation”). Notwithstanding the foregoing, if Executive’s employment is terminated by the Company without Cause
or by Executive for Good Reason, in each case during the ninety (90) days prior to or twelve (12) month period following a Change in Control, (i) the Executive shall receive the Non-CIC Termination Compensation as described above except that the
Severance Period shall equal twelve (12) months in lieu of nine (9) months, (ii) Executive shall receive a lump-sum payment of Executive’s target annual bonus and (iii) Executive shall become fully vested in the Option Grant (together, the “CIC Termination Compensation”). The Non-CIC Termination Compensation and the CIC Termination Compensation shall, as applicable and in each case, be subject to the terms, conditions and
restrictions set forth below in Section 5(c)(ii).
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(ii) Executive shall not be entitled to any Non-CIC Termination Compensation or CIC Termination Compensation unless (A) Executive
complies with all surviving provisions of any non-competition agreement, non-solicitation agreement, or confidentiality agreement or invention assignment agreement signed by Executive, including those contained in this Agreement (the “Restrictive Covenants”) and (B) Executive executes and delivers to the Company, and does not revoke a separation agreement and general release in form and substance reasonably acceptable to
the Company within thirty (30) days after Executive’s separation date, by which Executive releases the Company from any obligations and liabilities of any type whatsoever, except for the Company’s obligations with respect to, as applicable, the
Non- CIC Termination Compensation or the CIC Termination Compensation (the “Release”). Such Release shall not affect Executive’s right to indemnification, if any, for actions taken within
the scope of Executive’s employment. The Non-CIC Termination Compensation or the CIC Termination Compensation, as applicable, shall begin, or if lump-sum, be paid on the first payroll following the Release becoming irrevocable; provided, however,
if the thirty (30) day period during which Executive has discretion to execute or revoke the Release straddles two taxable years of Executive, then the Company shall pay the Non-CIC Termination Compensation or the CIC Termination Compensation, as
applicable, starting in the second of such taxable years, regardless of which taxable year Executive actually delivers the executed Release to the Company. The Parties hereto acknowledge that the Non-CIC Termination Compensation and the CIC
Termination Compensation, as applicable, to be provided under Section 5(c)(i) is to be provided in consideration for the above-specified Release. If Executive breaches any of the Restrictive Covenants at any time during the Severance Period, (1)
the Company will have no further obligation to pay Executive any unpaid Non-CIC Termination Compensation or CIC Termination Compensation, as applicable, (2) Executive must repay any portion of the Non-CIC Termination Compensation or the CIC
Termination Compensation, as applicable, already paid to him, to the extent permitted by law, and (3) the Company may take any additional action to enforce its rights under the Restrictive Covenants. Finally, if Executive becomes employed during
the Severance Period, Executive will only be entitled to receive an amount equal to the difference between his new base salary and his continued base salary from the Company. He will not be entitled to his continued base salary from the Company if
his new base salary is equal to or exceeds his continued base salary from the Company.
(iii) Disqualification for Other Severance. The Non-CIC Termination Compensation and the CIC Termination Compensation
described in this Section 5(c) is intended to supersede any other similar compensation provided by any Company policy, plan or practice. Therefore, Executive shall be disqualified from receiving any similar compensation under any other Company
severance policy, plan or practice, if any. Notwithstanding the foregoing, Executive shall continue to be eligible for any benefits pursuant to the terms of any health or retirement plan sponsored by the Company, subject to and in accordance with
the terms of the applicable plan.
(d) Termination for Executive’s Permanent Disability. To the extent permissible under applicable law, in the event
Executive becomes permanently disabled during employment with the Company, the Company may terminate this Agreement by giving thirty (30) days' notice to Executive of its intent to terminate, and unless Executive resumes performance of the duties
set forth in Section 3 within five (5) days of the date of the notice and continues performance for the remainder of the notice period, this Agreement shall terminate at the end of the thirty (30) day period. For purposes of this Agreement,
“permanently disabled” shall mean if Executive is considered totally disabled under any group disability plan maintained by the Company and in effect at that time, or in the absence of any such plan, under applicable Social Security regulations, to
the extent not inconsistent with applicable law. In the event of any dispute under this Section 5(d), Executive shall submit to a physical examination by a licensed physician mutually satisfactory to the Company and Executive, the cost of such
examination to be paid by the Company, and the determination of such physician shall be determinative. In the event the Executive is terminated pursuant to this Section 5(d), Executive will be entitled to the Accrued Obligations and the Non-CIC
Termination Compensation, subject to the terms, conditions and restrictions set forth in Section 5(c)(ii).
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(e) Termination Due to Executive’s Death. This Agreement will terminate immediately upon Executive’s death and the
Company shall not have any further liability or obligation to Executive, Executive’s executors, heirs, assigns or any other person claiming under or through Executive’s estate, except that Executive’s estate shall receive any Accrued Obligations.
In addition, Executive’s estate shall be entitled to accelerated vesting of the portion of the Option Grant that would have otherwise vested during the nine (9) month period following such termination.
(f) Continuing Obligations. The obligations imposed on Executive with respect to the surviving non-competition,
non-solicitation, confidentiality, non-disclosure and assignment of rights to inventions or developments in this Agreement or any other agreement executed by the Parties shall continue, notwithstanding the termination of the employment relationship
between the Parties and regardless of the reason for such termination.
6. Company
Property. All correspondence, records, documents, software, promotional materials, and other Company property, including all copies, which come into Executive’s possession by, through or in the course of Executive’s employment, regardless
of the source and whether created by Executive, are the sole and exclusive property of the Company, and immediately upon the termination of Executive’s employment, or at any time the Company shall request, Executive shall return to the Company all
such property of the Company, without retaining any copies, summaries or excerpts of any kind or in any format whatsoever. Executive shall not destroy any Company property, such as by deleting electronic mail or other files, other than in the
normal course of Executive’s employment. Executive further agrees that should Executive discover any Company property or Confidential Information in Executive’s possession after the return of such property has been requested, Executive agrees to
return it promptly to Company without retaining copies, summaries or excerpts of any kind or in any format whatsoever.
7. Non-Competition and Non-Solicitation.
(a) Executive agrees and acknowledges that, in connection with Executive’s employment with the Company, Executive will be
provided with access to and become familiar with confidential and proprietary information and trade secrets belonging to the Company and its affiliates. Accordingly, in consideration of Executive’s employment with the Company pursuant to this
Agreement, and other good and valuable consideration, the receipt of which is hereby acknowledged, Executive agrees that, while Executive is in the employ of the Company and/or any of its affiliates, Executive shall not, either on Executive’s own
behalf or on behalf of any third party, except on behalf of the Company or one of its affiliates, directly or indirectly:
(i) engage directly or indirectly in the Business (as defined below) anywhere in the Restricted
Territory (as defined below) or directly or indirectly be or become an officer, director, stockholder, owner, affiliate, partner, member, investor, joint venture, employee, agent, representative, consultant, lender, advisor, manager of, for or to,
or otherwise be or become associated with or acquire or hold (of record, beneficially or otherwise) any direct or indirect interest in, any business or enterprise engaged directly or indirectly in the Business (as defined below) anywhere in the
Restricted Territory (as defined below). As used herein, (A) the term “Business” shall mean the business of development and manufacturing of a cytokine immunotherapy (related to or derived
from human source material) for cancer treatment and RNA based gene therapy and editing of MSC, HSC, TILs, T-Cells, and in vivo and (B) the term “Restricted Territory” shall mean
worldwide. The foregoing restriction shall not be construed to prohibit the ownership by Executive as a passive investment of shares of capital stock of a publicly- held corporation that engages in the Business
if (x) such shares are actively traded on an established national securities market in the United States or any other foreign securities exchange, (y) the number of shares of such corporation’s capital stock that are owned beneficially (directly or
indirectly) by Executive and the number of shares of such corporation’s capital stock that are owned beneficially (directly or indirectly) by Executive’s affiliates collectively represent less than one percent (1%) of the total number of shares of
such corporation’s capital stock outstanding, and (z) neither Executive nor any affiliate of Executive is otherwise associated directly or indirectly with such corporation or with any affiliate of such
corporation; or
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(ii) attempt in any manner to solicit, induce or attempt to induce any business, enterprise, or individual who has a business
relationship with the Company (including any customer, licensee, supplier, manufacturer or vendor) (x) to cease doing business with the Company or any of its affiliates, (y) to diminish or materially alter in a manner harmful to the Company or any
of its affiliates, or any of their affiliates such business, enterprise, or individual’s relationship with the Company or any of its affiliates, or (z) to purchase, contract for or receive any products or services from any business or enterprise
(other than the Company or any of its affiliates) that engages in the Business anywhere within the Restricted Territory.
(b) Executive agrees and acknowledges that for one (1) year period following the end of Executive’s employment for any reason,
Executive shall not, either on Executive’s own behalf or on behalf of any third party (A) directly or indirectly hire any employee, independent contractor, or consultant or any person who was an employee, independent contractor, or consultant of
the Company within the preceding six (6) months, or (B) directly or indirectly encourage, induce, attempt to induce, solicit or attempt to solicit (on Executive’s own behalf or on behalf of any other business, enterprise, or individual) any
employee, independent contractor, or consultant to leave or curtail his or her employment or engagement with the Company or any of its affiliates; provided, however, that notwithstanding the foregoing, this Section 7(b) shall not prevent Executive
from undertaking general solicitations of employment not targeted at employees, independent contractors, or consultants of the Company or any of its affiliates (so long as Executive does not, directly or indirectly, hire any such employee,
independent contractor, or consultant). If, during the one (1) year period following the end of Executive’s employment for any reason, Executive wishes to directly or indirectly hire a consultant or any person who was a consultant of the Company
within the preceding six (6) months, Executive must seek written permission from the Company’s CEO, which permission will not be unreasonably withheld.
(c) The Parties agree that the relevant public policy aspects of post-employment restrictive covenants have been discussed, and
that every effort has been made to limit the restrictions placed upon Executive to those that are reasonable and necessary to protect the Company’s legitimate interests. Executive acknowledges that, based upon Executive’s education, experience, and
training, the restrictions set forth in this Section 7 will not prevent Executive from earning a livelihood and supporting Executive and Executive’s family during the relevant time period. Executive further acknowledges that, because the Company
markets its products and services throughout the Restricted Territory, a more narrow geographic limitation on the restrictive covenants set forth above would not adequately protect the Company’s legitimate business interests.
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(d) If any restriction set forth in this Section 7 is found by any court of competent jurisdiction or arbitrator to be
unenforceable because it extends for too long a period of time or over too great a range of activities or geographic area, it shall be interpreted to extend over the maximum period of time, range of activities or geographic area as to which it may
be enforceable.
(e) The restrictions contained in Section 7 are necessary for the protection of the business and goodwill of the Company and/or
its affiliates and are considered by Executive to be reasonable for such purposes. Executive agrees that any material breach of Section 7 will result in irreparable harm and damage to the Company and/or its affiliates that cannot be adequately
compensated by a monetary award. Accordingly, it is expressly agreed that in addition to all other remedies available at law or in equity (including, without limitation, money damages from Executive), the Company and/or such affiliate may be
entitled to a temporary restraining order, preliminary injunction or such other form of injunctive or equitable relief as may be issued by any court of competent jurisdiction or arbitrator, based on the discretion of the judge or arbitrator, to
restrain or enjoin Executive from breaching any such covenant or provision or to specifically enforce the provisions hereof, without the need to post any bond or other security.
(f) The existence of a claim, charge, or cause of action by Executive against the Company shall not constitute a defense to the
enforcement by the Company of the foregoing restrictive covenants.
(g) The provisions of this Section 7 shall apply regardless of the reason for the termination of Executive’s employment.
8. Non-Circumvention/Non-Interference.
Executive acknowledges and agrees that during the Employment Period, other than acting on behalf of the Company in his capacity as an employee of the Company, Executive shall not, and shall not authorize or permit any of Executive’s
Representatives to, directly or indirectly, interfere, discuss, contact, initiate, or engage, encourage, solicit, initiate, facilitate or continue inquiries to any third parties concerning any business opportunities related to the Company. It is
understood that, during the Employment Period, without previous written consent from the Company, the Executive will not enter, either directly or indirectly, into any discussions, solicit or accept offers, enter into any agreements, conduct
negotiations with or otherwise engage in any other independent communications unrelated to the Company’s business with: any third party to whom Executive was introduced to by any member, shareholder, officer, director, employee, agent, customer,
supplier, vendor, or other representative of the Company, Factor Bioscience, or Novellus, Inc.; any third party to whom Executive was informed of by any member, shareholder, officer, director, employee, agent, customer, supplier, vendor, or other
representative of Company, Factor Bioscience, or Novellus, Inc. or any employee, financial partner, investor, contractor of the Company. For purposes of this Agreement, "Representatives" means, as to Company, its affiliates, and respective
consultants (including attorneys, financial advisors and accountants). Further, after termination of Executive’s employment with the Company, Executive will not take any action or omit to take an action intended to interfere with existing
contractual and or business relationships with the Company in a manner prohibited by law.
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9. Protection of Confidential Information.
(a) Executive agrees that all information, whether or not in writing, relating to the business, technical or financial affairs
of the Company and that is generally understood in the industry as being confidential and/or proprietary information, is the exclusive property of the Company. Executive agrees to hold in a fiduciary capacity for the sole benefit of the Company all
secret, confidential and/or proprietary information, knowledge, and data, including trade secrets, relating to the Company or any of its affiliates obtained during Executive’s employment with the Company or any of its predecessors or affiliates,
including but not limited to any trade secrets, confidential or secret designs, website technologies, content, processes, formulae, plans, manuals, devices, machines, know-how (including without limitation the manufacturing of IRX-2), methods,
compositions, ideas, improvements, financial and marketing information, costs, pricing, sales, sales volume, salaries, methods and proposals, customer and prospective customer lists, customer identities, customer volume, or customer contact
information, identity of key personnel in the employ of customers and prospective customers, amount or kind of customer’s purchases from the Companies or their affiliates, manufacturer lists, manufacturer identities, manufacturer volume, or
manufacturer contact information, identity of key personnel in the employ of manufacturers, amount or kind of the Companies’ or their affiliates’ purchases from manufacturers, system documentation, hardware, engineering and configuration
information, computer programs, source and object codes (whether or not patented, patentable, copyrighted or copyrightable), related software development information, inventions or other confidential or proprietary information (including without
limitation information relating to IRX-2 and its intellectual property that has not yet issued) belonging to the Companies or their affiliates or directly or indirectly relating to the Companies’ or their affiliates’ business and affairs (“Confidential Information”). Executive agrees that Executive will not at any time, either during the Employment Period or the Confidentiality Period (as defined below), disclose to anyone any
Confidential Information, or utilize such Confidential Information for Executive’s own benefit, or for the benefit of third parties without written approval by an officer of the Company. For purposes of this section, the “Confidentiality Period” means so long as such information, data, or material remains confidential. Executive further agrees that all memoranda, notes, records, data, schematics, sketches, computer programs,
prototypes, or written, photographic, magnetic or other documents or tangible objects compiled by Executive or made available to Executive during the Employment Period concerning the business of the Company and/or its clients, including any copies
of such materials, shall be the property of the Company and shall be delivered to the Company on the termination of Executive’s employment, or at any other time upon request of the Company.
(b) In the event Executive is questioned by anyone not employed by the Company or by an employee of or a consultant to the
Company not authorized to receive such information, in regard to any Confidential Information or any other secret or confidential work of the Company, or concerning any fact or circumstance relating thereto, or in the event that Executive becomes
aware of the unauthorized use of Confidential Information by any party, whether competitive with the Company or not, Executive will promptly notify an executive officer of the Company.
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(c) Court-Ordered Disclosure. In the event that, at any time during Executive’s employment with the Company or at any
time thereafter, Executive receives a request to disclose any Confidential Information under the terms of a subpoena or order issued by a court or by a governmental body, Executive agrees to notify the Company immediately of the existence, terms,
and circumstances surrounding such request, to consult with the Company on the advisability of taking legally available steps to resist or narrow such request; and, if disclosure of such Confidential Information is required to prevent Executive
from being held in contempt or subject to other penalty, to furnish only such portion of the Confidential Information as, in the written opinion of counsel satisfactory to the Company, Executive is legally compelled to disclose, and to exercise
Executive’s best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to the disclosed Confidential Information.
(d) Defend Trade Secrets Act. Pursuant to the Defend Trade Secrets Act of 2016, Executive acknowledges that Executive
shall not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to
an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition,
if Executive files a demand for arbitration alleging retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and may use the trade secret information in the arbitration
proceeding, if Executive (X) files any document containing the trade secret under seal and (Y) does not disclose the trade secret, except pursuant to an order of the arbitrator.
10. Intellectual Property.
(a) Disclosure of Inventions. Executive will promptly disclose in confidence to the Company all inventions, improvements,
processes, products, designs, original works of authorship, formulas, processes, compositions of matter, computer software programs, Internet products and services, e-commerce products and services, e-entertainment products and services, databases,
mask works, trade secrets, product improvements, product ideas, new products, discoveries, methods, software, uniform resource locators or proposed uniform resource locators (“URLs”),
domain names or proposed domain names, any trade names, trademarks or slogans, which may or may not be subject to or able to be patented, copyrighted, registered, or otherwise protected by law (the “Inventions”) that Executive makes, conceives or first reduces to practice or creates, either alone or jointly with others, during the Employment Period, whether or not in the course of Executive’s employment (i) that result from
any work performed by the Executive for the Company; (ii) that are developed from using the Company's equipment, supplies, facilities or trade secret information; or (iii) that relate at the time of conception or reduction to practice of the
invention to the Company's business, or actual or demonstrably anticipated research or development of the Company. The requirements of this Section 10(a) shall not apply to any Inventions that qualify fully under the provisions of California Labor
Code section 2870 (the terms of which are set forth on Addendum B to this Agreement), specifically, any Invention that Executive developed entirely on Executive’s own time without using the Employer’s equipment, supplies, facilities, or
trade secret information except for those Inventions that either (i) relate at the time of conception or reduction to practice of the Invention to the Employer’s business, or Employer’s actual or demonstrably anticipated research or development; or
(ii) result from any work performed by Executive for Employer. Executive shall bear the full burden of proving to the Employer that an Invention qualifies fully under California Labor Code section 2870. The foregoing requirements of Section 10(a)
apply, and whether or not such Inventions are patentable, copyrightable or able to be protected as trade secrets, or otherwise able to be registered or protected by law. Executive has provided a list of prior Inventions as Addendum C, which
will not be subject to the provisions of this Section 10.
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(b) Assignment of Company Inventions; Work for Hire. Executive agrees that all Inventions that (i) are developed using
equipment, supplies, facilities or trade secrets of the Company, (ii) result from work performed by Executive for the Company, or (iii) relate to the Company’s business or current or anticipated research and development (the “Company Inventions”), will be the sole and exclusive property of the Company and the Executive hereby agrees to irrevocably assign to the Company any such Company Inventions. Executive further
acknowledges and agrees that any copyrightable works prepared by Executive within the scope of Executive’s employment are “works for hire” under the Copyright Act and that the Company will be considered the author and owner of such copyrightable
works from the moment of their creation and fixation in tangible media.
(c) Assignment of Other Rights. In addition to the foregoing assignment of Company Inventions to the Company, Executive
hereby irrevocably transfers and assigns to the Company: (i) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights in any Company Invention; and (ii) any and all “Moral Rights” (as
defined below) that Executive may have in or with respect to any Company Invention. Executive also hereby forever waives and agrees never to assert any and all Moral Rights Executive may have in or with respect to any Company Invention, even after
termination of Executive’s work on behalf of the Company. “Moral Rights” means any rights to claim authorship of an Company Invention, to object to or prevent the modification of any
Company Invention, or to withdraw from circulation or control the publication or distribution of any Company Invention, and any similar right, existing under judicial or statutory law of any country in the world, or under any treaty, regardless of
whether or not such right is denominated or generally referred to as a “moral right.”
(d) Assistance. Executive agrees to assist the Company in every proper way to obtain for the Company and enforce
patents, copyrights, mask work rights, trade secret rights and other legal protections for the Company Inventions in any and all countries. Executive will execute any documents that the Company may reasonably request for use in obtaining or
enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. Executive’s obligations under this section will continue beyond the termination of Executive’s employment with the Company, provided that the Company
will compensate Executive at a reasonable rate after such termination for time or expenses actually spent by Executive at the Company’s request on such assistance. Executive appoints the Secretary of the Company as Executive’s attorney-in- fact to
execute documents on Executive’s behalf for this purpose.
11. Publicity; Non-disparagement. Neither Party shall issue, without consent of the other Party, any press release or make any public announcement with respect to this Agreement or the employment relationship between them, or the ending of
such relationship. Following the date of this Agreement and regardless of any dispute that may arise in the future, Executive agrees that Executive will not disparage, criticize or make statements which are negative, detrimental or injurious to
Company or any of its affiliates, or any of their affiliates to any individual, company or client, including within the Company, and the Company agrees that Company employees at the Vice President level or above will not make statements on the
Company’s behalf that disparage, criticize or make statements which are negative, detrimental or injurious to Executive. This Section 11 does not, in any way, restrict or impede the parties hereto from exercising protected rights to the
extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed
that required by the law, regulation, or order. Nothing contained herein shall prevent anyone bound by this Section 11 from providing true testimony to the extent required within any legal proceeding (or in any discovery in connection therewith) or
investigation by a governmental authority.
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12. Binding
Agreement. This Agreement shall be binding upon and inure to the benefit of the Parties hereto, their heirs, personal representatives, successors and assigns. Executive acknowledges and agrees that the Company may, in its sole discretion,
assign this Agreement (i) to an affiliate of the Company at any time, or (ii) in the event the Company is acquired, is a non-surviving party in a merger, or transfers substantially all of its assets, to the transferee or surviving company, in each
case without being required to obtain Executive’s consent. The Parties understand that the obligations of Executive are personal and may not be assigned by him.
13. Entire
Agreement. This Agreement contains the entire understanding of Executive and the Company with respect to employment of Executive. This Agreement may not be amended, waived, discharged or terminated orally, but only by an instrument in
writing, specifically identified as an amendment to this Agreement, and signed by all Parties. By entering into this Agreement, Executive certifies and acknowledges that Executive has carefully read all of the provisions of this Agreement and that
Executive voluntarily and knowingly enters into said Agreement.
14. Severability.
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall
be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement.
15. Tax
Consequences. If any payment or benefit the Executive would receive pursuant to this Agreement (“Payment”) would (a) constitute a “Parachute Payment” within the meaning of Section 280G of the Code, and (b) 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 equal to the Reduced Amount. The “Reduced Amount” shall be either (i) the largest portion of the Payment that would result in no portion of the
Payment being subject to the Excise Tax or (ii) 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 the Executive’s receipt, on an after- tax basis, of the greatest economic benefit 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 manner that results in the greatest economic benefit for Executive to the extent permitted by
Section 409A of the Code, to the extent applicable, and Section 280G of the Code. Except as otherwise specifically provided in this Agreement, the Company will have no obligation to any person entitled to the benefits of this Agreement with respect
to any tax obligation any such person incurs as a result of or attributable to this Agreement, including all supplemental agreements and employee benefits plans incorporated by reference therein, or arising from any payments made or to be made
under this Agreement or thereunder. All determinations under this Section 15 will be made by an actuarial firm, accounting firm, law firm, or consulting firm experienced and generally recognized in 280G
matters (the “280G Firm”) that is chosen by the Company prior to a change in ownership or control of a corporation (within the meaning of Treasury regulations under Section 280G of the Code). The 280G Firm
shall be required to evaluate the extent to which payments are exempt from Section 280G as reasonable compensation for services rendered before or after the Change in Control. All fees and expenses of the 280G Firm shall be paid solely by the
Company or its successor. The Company and Executive shall furnish the tax firm such information and documents as the tax firm may reasonably request in order to make its required determination. The 280G Firm will provide its calculations, together
with detailed supporting documentation, to the Company and Executive as soon as practicable following its engagement. Any good faith determinations of the 280G Firm made hereunder will be final, binding and conclusive upon the Company and
Executive.
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16. Withholding.
The Company shall have the right to withhold from any amount payable hereunder any federal, state, local and foreign taxes in order for the Company to satisfy any withholding tax obligation it may have under any applicable law or regulation.
Notwithstanding any other provision of this Agreement, the Company does not guarantee any particular tax result for Executive with respect to any payment provided to Executive hereunder, and Executive shall be solely responsible for any taxes
imposed on Executive with respect to any such payment.
17. Section 409A.
(a) This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Code and any regulations and
Treasury guidance promulgated thereunder (“Section 409A of the Code”) and shall be construed and administered in accordance with such intent. Notwithstanding any other provision of this
Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A of the Code or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A of the
Code either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A of the Code to the maximum extent possible. Notwithstanding the foregoing, the Company makes no
representations that the payments and benefits provided under this Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be
incurred by the Executive on account of non-compliance with Section 409A of the Code.
(b) For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be
treated as a right to a series of separate payments. In no event may Executive, directly or indirectly, designate the calendar year of payment.
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(c) With respect to any reimbursement of expenses of, or any provision of in- kind benefits to, Executive, as specified under
this Agreement, such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (1) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not
affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Section 105(b) of the
Code; (2) the reimbursement of an eligible expense shall be made no later than the end of the year after the year in which such expense was incurred; and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.
(d) “Termination of employment,” “resignation,” or words of similar import, as used in this Agreement means, for purposes of
any payments under this Agreement that are payments of deferred compensation subject to Section 409A of the Code, Executive’s “separation from service” as defined in Section 409A of the Code.
(e) If a payment obligation under this Agreement arises on account of Executive’s separation from service while Executive is a
“specified employee” (as defined under Section 409A of the Code and determined in good faith by the Company), any payment of “deferred compensation” (as defined under Treasury Regulation Section 1.409A-1(b)(1), after giving effect to the exemptions
in Treasury Regulation Sections 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid within six (6) months after such separation from service shall accrue without interest and shall be paid within fifteen (15) days after the end of the
six-month period beginning on the date of such separation from service or, if earlier, within fifteen (15) days after the appointment of the personal representative or executor of Executive’s estate following Executive’s death.
18. Governing
Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to the principles of conflicts of law thereof that would result in the application of the
laws of any jurisdiction other than the State of Delaware.
19. Notices.
Any notice provided for in this Agreement shall be provided in writing. Notices shall be effective from the date of service, if served personally on the Party to whom notice is to be given, or on the second day after mailing, if mailed by
first class mail, postage prepaid. Notices shall be properly addressed to the Parties at their respective addresses or to such other address as either Party may later specify by notice to the other.
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20. Dispute Resolution.
(a) Executive and the Company mutually agree that any controversy or claim arising out of or relating to this Agreement or the
employment relationship between Executive and the Company, including any dispute regarding the scope or enforceability of this arbitration provision, shall be settled by individual arbitration administered by Judicial Arbitration and Mediation
Services (JAMS) in accordance with the JAMS Employment Arbitration Rules and Procedures in effect as of the date of this Agreement (“JAMS Rules”), to the extent the JAMS Rules are consistent with the terms of this provision. Judgment on the
award may be entered in any court having jurisdiction thereof. The parties also mutually agree that, except as otherwise required by enforceable law, arbitration shall be the sole and exclusive forum for resolving such disputes (including any
dispute with the Company, any related parties, and any of their respective employees, officers, owners or agents, who shall be third-party beneficiaries of this provision), and both parties agree that they are hereby waiving any right to have their
disputes resolved in civil litigation by a court or jury trial, including but not limited to any disputes arising under statutes such as Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, or the California Fair Employment
and Housing Act. The arbitrator’s decisions on such matters shall be final and binding on the parties to the fullest extent permitted by law. The JAMS Rules are incorporated herein by reference, to the extent they are consistent with the terms of
this provision, and may be found at available at https://www.jamsadr.com/rules-employment-arbitration/. The place of arbitration shall be San Diego County, California or an alternate location selected by the parties. Any arbitration hereunder shall
be conducted only on an individual basis and not in a class, consolidated, or representative action. The Company shall pay the administrative costs and fees directly related to the arbitration, including the fees of the arbitrator. Each party shall
otherwise bear its own respective attorneys’ fees and costs, including the costs of any depositions or for expert witnesses, unless any applicable law provides otherwise to the prevailing party, in which case the arbitrator shall have the authority
to award costs and attorneys’ fees to the prevailing party in accordance with the applicable law. Neither a party nor the arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of
both parties, unless otherwise provided by law. The parties’ agreement to arbitrate does not apply to claims that, pursuant to applicable law, cannot be subject to mandatory arbitration, including claims under the Private Attorney General Act;
provided that, in the event of a dispute regarding whether, or the extent to which, any dispute is subject to arbitration, the parties agree that no underlying dispute or any facts regarding such dispute shall be submitted to a court until and
unless a declaratory judgment is issued by the duly appointed arbitrator that allows a dispute to proceed in court based on a claim by a party that this arbitration provision is unenforceable as a matter of law as to an asserted claim. Moreover,
nothing in this Agreement prevents Executive from filing or prosecuting a charge with any government agency (such as the Equal Employment Opportunity Commission, or the California Department of Fair Employment and Housing) over which such agency
has jurisdiction, or from participating in an investigation or proceeding conducted by any such agency. Any matter required to be arbitrated under this Section 20 shall be submitted to mediation in a manner agreed to by Executive and the Company.
Executive and the Company agree to use mediation to attempt to resolve any such matter prior to filing for arbitration. Executive and the Company will select a mediator agreeable to both parties. The costs of the mediation and fees of the mediator
will be borne entirely by the Company.
BY AGREEING TO ARBITRATION, THE PARTIES ACKNOWLEDGE THAT THEY WAIVE THE RIGHT TO BRING AND/OR PARTICIPATE IN ANY CLASS OR
COLLECTIVE ACTION. THE ARBITRATOR SHALL HAVE NO POWER TO ARBITRATE ANY CLASS AND/OR COLLECTIVE CLAIMS. BY AGREEING TO ARBITRATION, THE PARTIES ACKNOWLEDGE THAT THEY ARE WAIVING THEIR STATUTORY AND COMMON LAW RIGHTS TO SEEK RELIEF IN A COURT OF LAW
AND ARE WAIVING THEIR RIGHTS TO A TRIAL BY JURY.
(b) Notwithstanding the provisions of Section 20(a), the Parties further acknowledge and agree that, due to the nature of the
confidential information, trade secrets, and intellectual property belonging to the Company to which Executive has or will be given access, and the likelihood of significant harm that the Company would suffer in the event that such information was
disclosed to third parties, the Company shall have the right to file suit in a court of competent jurisdiction to seek injunctive relief to prevent Executive from violating the obligations established in Sections 7, 8, 9 or 10 of this Agreement
without first submitting the claim, controversy, or dispute to JAMS mediation or arbitration.
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21. Indemnification.
The Company shall indemnify and hold harmless Executive for any liability to any third-party incurred by reason of any act or omission performed by Executive while acting in good faith on behalf of the Company and within the scope of the
authority of Executive pursuant to this Agreement and under the rules and policies of the Company, except that Executive must have in good faith believed that such action was in the best interest of the Company and such course of action or inaction
must not have constituted gross negligence, fraud, willful misconduct, or breach of a fiduciary duty.
22. Miscellaneous.
(a) Compensation Recovery Policy. Executive acknowledges and agrees that, to the extent the Company adopts any claw-back
or similar policy pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, and any rules and regulations promulgated thereunder, he or she shall take all action necessary or appropriate to comply with such policy
(including, without limitation, entering into any further agreements, amendments or policies necessary or appropriate to implement and/or enforce such policy with respect to past, present and future compensation, as appropriate).
(b) No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any
other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.
(c) The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect
the scope or substance of any section of this Agreement.
(d) The language in all parts of this Agreement will be construed, in all cases, according to its fair meaning, and not for or
against either Party hereto. The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party
will not be employed in the interpretation of this Agreement.
(e) The obligations of Company under this Agreement, including its obligation to pay the compensation provided for in this
Agreement, are contingent upon Executive’s performance of Executive’s obligations under this Agreement.
(f) This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which shall
constitute one agreement.
[Signatures on following page]
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IN WITNESS WHEREOF, Executive and the undersigned duly authorized representative of the Company have executed this Agreement as of the date first set forth above.
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EXECUTIVE | |
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/s/ Andrew Jackson
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Andrew Jackson
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BROOKLYN IMMUNOTHERAPEUTICS, INC
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By: |
/s/ Howard J. Federoff
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Howard J. Federoff, MD, PhD
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Title: Chief Executive Officer/President
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[Signature Page to Executive Employment Agreement]
ADDENDUM A
Job Duties
Overall: The Chief
Financial Officer partners with the Chief Executive Officer/President to set goals for performance and growth, frame strategic trade-offs, and facilitate decision-making; ensure alignment across the C-suite and with the Board of Directors as it
relates to financial matters and implications for operations and programs.
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Capital Raising, Strategic Finance and SEC matters: In partnership with the CEO, the CFO should drive the Company’s financing efforts. He/she will evaluate capital raising activities with existing and new investors as the Company will continue to raise money to
build the clinical pipeline. He/she should partner with the CEO and the board of directors to build a long-term capital strategy and execute on the different levers that can be pulled to capitalize the Company. The CFO should also be able
to sell the Company story to all external financial constituents – current and new investors, analysts, the financial community and other partners/vendors. Oversee the Treasury function, manage the Company’s investments. The CFO is
responsible for SEC compliance and filings.
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Financial Oversight: Direct
and oversee Company’s financial administration including the preparation of monthly financial statements, balance sheets, cash flow statements and report operational results to management, the board of directors, shareholders and any
current or future regulatory oversight agencies. Responsible for providing analysis and forecasting, including multi-year outlooks based on alternative scenarios, including M&A activities. Such information will be used to guide business
development, financing and strategic planning. Develop budgets and forecasts for current and proposed future operations and acquisitions. Manage quarterly and annual earnings process and preparation, schedule and external resources.
Establish appropriate internal control systems, including Sarbanes Oxley compliance.
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Strategic Leadership: Serve
as a strategic advisor to the CEO, to the broader executive leadership team and to the board of directors, in both strategic and tactical areas of the Company, especially as they intersect with Finance.
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Business Leadership: Lead or
participate in business development and expansion activities, including investments, acquisitions, alliances, joint ventures, and similar activities as related to drug products. Play a broader strategic role inside of the Company. Help the
Company’s team drive and execute the Company’s strategic vision across other functional areas as they intersect with Finance including pipeline prioritization, business development and partnership opportunities.
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Organizational Leadership:
Assist Chief Executive Officer/President with fundraising, Board of Directors presentations and interactions, and similar tasks. In collaboration with the broader executive team, set the tone and develop infrastructure to support a culture
of cross-functional partnership. Enable and motivate a high-performing team; mentor, oversee, manage, and coach colleagues, as appropriate.
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ADDENDUM B
CALIFORNIA LABOR CODE SECTION 2870
Section 2870 of the California Labor Code provides as follows:
(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her
rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or
demonstrably anticipated research or development of the employer; or
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded
from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.
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ADDENDUM C
LIST OF INVENTIONS
ADDENDUM D
Contingencies
I, Andrew Jackson, understand and agree that my employment with the Company is contingent upon the following:
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Demonstrating satisfactory proof of identity and legal authority to work in the United States and maintaining appropriate work authorization; and
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Satisfactory completion of a background check in the Company’s sole discretion.
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Date:
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May 10, 2022
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Signature:
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/s/ Andrew Jackson
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Exhibit 10.2
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May 25, 2022
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Howard Federoff, M.D., Ph.D
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3156 SW 27th Ave, unit 203
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Miami, FL 33133
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Separation Agreement and General Release
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Dear Howard:
The purpose of this separation agreement (the “Separation Agreement”) is to memorialize the terms and conditions of the termination of your
employment with Brooklyn ImmunoTherapeutics, Inc. (the “Company”) and its subsidiaries and affiliates (together with the Company collectively, the “Company Group”), as well as that certain Executive Employment Agreement, dated April
1, 2021, by and between you and the Company (the “Employment Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Employment Agreement.
Although the termination of your employment with the Company is by mutual agreement between you and the Company, the Company has agreed to provide
you with, among others, all of the rights and benefits you would have otherwise been entitled to receive under your Employment Agreement had the termination of your employment been due to the termination by the Company without Cause, subject to the
terms and conditions set forth herein.
To ensure that your separation from the Company occurs on mutually acceptable terms, this Separation Agreement, along with the General Release of
Claims on Exhibit A attached hereto and made a part hereof (the “General Release”), will summarize the terms and conditions surrounding your separation including, without limitation, the compensation and benefits that will be
provided to you.
Termination Date
The effective date of the termination of your employment, and the Employment Agreement, is May 25, 2022
(“Termination Date”).
Resignation as Officer and Director of the Company Group
You acknowledge and agree that, effective as of the Termination Date, you will be deemed to have resigned from all positions then held as an
officer as well as a member of any board of directors, and any committee thereto, throughout the Company Group.
Accrued Obligations
Whether or not you choose to sign this Separation Agreement and the General Release, the Company will pay to you any (a) accrued but unpaid base salary you have earned
through the Termination Date, (b) accrued but unused paid time off through the Termination Date and (c) any accrued but unpaid benefits provided under the Company’s employee benefit plans, subject to and in accordance with the terms of those plans,
in each case, less applicable withholding and employment taxes, all of which shall be paid to you within thirty (30) days after the Termination Date or such other date as required under the applicable employee benefit plan.
10355 Science Center Drive, Suite 150, San Diego, CA 92121 | tel: (212) 582-1199 | brooklynitx.com
Mailing address: 10531 4S Commons Drive, Suite 160-550, San Diego, CA 92127
For purposes of this Separation Agreement and the General Release, the amounts described above in this section shall be referred to as the “Accrued Obligations”.
Separation Benefits
In the event that you execute and deliver to the Company both the Separation Agreement and the General Release, and you do not revoke the General Release within the
time period permitted by law (such period, the “Revocation Period” as defined below), the following shall apply (subject to any timing restrictions as may be applicable under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”)):
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Commencing on the first regular payroll date immediately following the end of the Revocation Period, the Company shall continue to pay to you your annual base salary for a period of twelve (12) months thereafter (the “Severance Period”)
in accordance with the Company’s normal payroll processing, for a total gross amount equal to $450,000 (less applicable income and employment tax withholdings).
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The Company shall pay you an amount equal to your target bonus for 2022, specifically $225,000, to be payable in a lump sum (less applicable withholding and employment taxes) as and when
such bonus would have otherwise been paid had your employment not terminated (in 2023 but no later than March 15, 2023).
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If you (or you and your eligible dependents) timely and properly elects health insurance continuation rights under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company will pay the cost of the COBRA
premiums until the earlier of (i) the last day of the Severance Period or (ii) the termination of your rights under COBRA; provided, for the avoidance of doubt, that such covered dependents
participated in the Company’s health plans prior to such termination, and provided, further, that if at any time the Company determines that its payment of your (or your eligible dependents’) premiums would result in a violation of law,
then in lieu of providing the premiums described above, the Company will instead pay you a fully taxable monthly cash payment in an amount equal to the applicable premiums for such month, with such monthly payment being made on the last day
of each month for the remainder of the Severance Period.
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With respect to your Time-Based Option, that portion of such option that would have vested during the Severance Period had your employment not terminated, specifically with respect to 656,976
shares (the “Accelerated Time-Based Option Portion”), shall become immediately vested as of the Termination Date. In addition, the vested portion of the Time-Based Option (which, as of the Termination Date, is 711,727 shares), including the Accelerated Time-Based Option Portion described herein (collectively, 1,259,212 shares) shall be eligible to be
exercised for a period of thirty-six (36) months after the Termination Date. For the avoidance of doubt, any portion of the Time-Based Option that is unvested as of the Termination Date, after taking into account the Accelerated
Time-Based Option Portion, shall be immediately forfeited as of the Termination Date, which is specifically with respect to 1,368,703 shares.
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With respect to your Milestone Option, 25/36th of such option, specifically with respect to 414,759 shares
(the “Accelerated Milestone Option Portion”), shall become immediately vested as of the Termination Date. In addition, the vested portion of the Milestone Option, including the Accelerated Milestone Option Portion described herein
(collectively, 414,759 shares) shall be eligible to be exercised for a period of thirty-six (36) months after the Termination Date. For the avoidance of doubt, any portion of the Milestone
Option that is unvested as of the Termination Date, after taking into account the Accelerated Time-Based Option Portion, shall be immediately forfeited as of the Termination Date, which is specifically with respect to 182,494 shares.
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With respect to your stock options granted to you on March 11, 2022 (the “2022 Option”), that portion of such option that would have vested during the Severance Period had your employment not terminated, specifically with respect
to 137,900 shares (the “Accelerated 2022 Option Portion”), shall become immediately vested as of the Termination Date. In addition, the vested portion of the 2022 Option (which, as of
the Termination Date, is 22,983 shares), including the Accelerated 2022 Option Portion described herein (collectively, 160,883 shares) shall be
eligible to be exercised for a period of thirty-six (36) months after the Termination Date. For the avoidance of doubt, any portion of the 2022 Option that is unvested as of the Termination Date, after taking into account the Accelerated
2022 Option Portion, shall be immediately forfeited as of the Termination Date, which is specifically with respect to 252,817 shares.
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With respect to your performance-based restricted stock units granted to you on March 11, 2022 (the “2022 PSUs”), all of the performance RSUs thereunder shall immediately be forfeited back to the Company effective as of the
Terminate Date. In connection with this forfeiture, the Company will pay you a one-time cash payment of $130,347 (the “Special Bonus”), which represents the value you would have
received if you were entitled to receive a settlement of a pro rata portion of the performance RSUs (based on the number of full months from the date of grant to the end of the Severance Period, or 14 months and, therefore, 160,922 shares)
assuming the performance metrics were waived and assuming the current per share value is $.81. The Special Bonus will be paid to you in a lump sum, less applicable income and employment tax withholdings, within thirty (30) days of the
Termination Date.
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For purposes of this Separation Agreement and the General Release, the benefits described above in this section shall be referred to as the “Separation Benefits”.
You acknowledge and agree that as of the Termination Date, this Separation Agreement and General Release shall supersede and replace all benefits, rights and
obligations in connection with your employment with the Company Group. Accordingly, you further acknowledge and agree that this Separation Agreement and the General Release sets forth all compensation and benefits to which you are entitled and
shall be paid to you in full satisfaction thereof, in connection with your employment with the Company Group.
You also acknowledge and agree that the Separation Benefits to be paid under this Agreement is due solely from the Company and that Insperity PEO Services, L.P. (“Insperity”),
the professional employer organization retained by the Company, has no obligation to pay the Severance benefits, even though its payment may be processed through Insperity.
Integration of Employment Agreement; Survival of Certain Provisions
As of the Termination Date, you acknowledge and agree that this Separation Agreement shall supersede and replace the Employment Agreement other than the
following provisions under the Employment Agreement (collectively, the “Survival Provisions”): Section 6 (Company Property) provided you will be entitled to keep and not obligated to return to the Company your work laptop so long as all of
the Company property, documents and/or confidential information are removed from such laptop, Sections 7(a)(ii) and (iii) (Non-Solicitation) provided that those individuals listed on Appendix 1 attached hereto shall be exempt from such non-solicit
prohibition, Section 8 (Non-Circumvention/Non-Interference), Section 9 (Protection of Confidential Information), Section 10 (Intellectual Property), Section 11 (Publicity; Non-disparagement) and Section 20 (Dispute Resolution), which shall
remain in full force and effect. Accordingly, you further acknowledge and agree that (i) this Separation Agreement sets forth all compensation and benefits to which you are entitled under your Employment Agreement; and (ii) in the event that
you breach any of the Survival Provisions, the Separation Benefits shall cease immediately and you will no longer be entitled to such benefits.
Release Of Claims Against The Company Group
In exchange for and as a condition to receiving the Separation Benefits, you shall knowingly and willingly release the Company Group from any kind of claim you have
arising out of or related to your employment, the Employment Agreement and/or the termination of your employment with the Company Group by executing the General Release attached hereto as Exhibit A.
You will be required to execute the General Release, and therefore agree to be bound
by the terms and conditions thereof, no earlier than the Termination Date but no later than thirty (30) days after such Termination Date.
Non-Disparagement; Cooperation/Assistance; Public Announcement
Mutual Non-Disparagement: Each party hereto agrees that, except as permitted or required by
applicable law, it or you will not directly or indirectly: (i) disparage or say or write negative things about the other party or their officers, directors, agents, or employees; or (ii) initiate or participate in any discussion or communication
that reflects negatively on the other party and their officers, directors, agents, or employees. A disparaging or negative statement is any communication, oral or written, which would tend to cause the recipient of the communication to question
the business condition, integrity, competence, fairness, or good character of the person or entity to whom the communication relates.
The foregoing provision and all other provisions herein do not restrict any party hereto from cooperating with any government investigation or testifying if so
required by subpoena or as otherwise required by law. Each party hereby represents and agrees that it or you shall not now or ever in the future authorize, verbally, in writing or electronically, any formal public statement that is disparaging,
derogatory or otherwise inflammatory about the other party to any third party, and that it or you have not and will not make or solicit any formal public comments, statements or the like that may be considered derogatory or detrimental to the other
party’s good name and business reputation.
Cooperation and Assistance: Upon reasonable notice and at reasonable times, you agree to assist
and cooperate with the Company, by telephone or video conference or otherwise, concerning business or legal related matters about which you possess relevant knowledge or information. Such cooperation shall only be provided at the Company's
specific request and will include, but not be limited to, assisting or advising the Company with respect to any business-related matters or any actual or threatened legal action (including testifying in depositions, hearings, and/or trials) about
which you possess relevant knowledge or information. In addition, you agree to promptly inform the Company if any person or entity contacts you in an effort to obtain information about the Company. The Company agrees to reimburse you for all
reasonable and necessary costs and expenses incurred in connection with such cooperation.
Public Announcement: Prior to the Company making any written public announcements or filings
announcing your departure from the Company, you will be afforded the opportunity to review such public announcements or filings and the Company shall consider, in good faith, any comments you may have thereto and incorporate therein those the
Company, within its discretion, determines reasonable and appropriate.
Agreement Preparation and Negotiation Fees
Upon submission of invoices and other applicable documentation reasonably requested by the Company, the Company shall reimburse you for reasonable attorneys’ fees and
costs incurred by you in connection with the preparation and negotiation of this Separation Agreement and General Release, up to a maximum amount of $5,000.
Severability; Entire Agreement; No Oral Modifications; No Waivers
If a court of competent jurisdiction determines that any of the provisions of this Agreement are invalid or legally unenforceable, all other provisions of this
Agreement shall not be affected and are still enforceable. This Separation Agreement and the General Release are intended to be a single integrated contract expressing our entire understanding regarding the subjects it addresses. As such, it
supersedes all oral and written agreements and discussions that occurred before the time you sign each of them except as to any obligations you may owe to the Company Group as described in the “Integration of
Employment Agreement; Survival of Certain Provisions” section above that remain in effect. This Separation Agreement and the General Release may be amended or modified only by an agreement in writing signed by you and countersigned by an
executive officer of the Company. The failure by the Company or you (i) to declare a breach, or (ii) to otherwise assert rights under this Agreement shall not be construed as a waiver of any of rights under this Separation Agreement and the
General Release. This Separation Agreement and the General Release may be executed and delivered (including by facsimile or other electronic transmission) in one or more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument.
Governing Law; Venue; Waiver of Jury Trial
This Separation Agreement and the General Release shall be governed by the laws of the State of New York applicable to contracts
executed and performed within that State and without respect to conflict of laws principles. The parties hereto irrevocably and unconditionally (i) agree that any suit, action or legal proceeding arising out of or relating to this
Agreement shall be brought in the courts of record of the State of New York or the court of the United States, District of New York; and (ii) consent to the jurisdiction of each such court in any suit, action or
proceeding. THE PARTIES HEREBY IRREVOCABLY WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS SEPARATION AGREEMENT AND GENERAL RELEASE.
Acknowledgements and Certifications
You acknowledge and certify that:
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you have read and you understand all of the terms of this Separation Agreement and the General Release on Exhibit A, and are not relying on any representation or statement, written or oral,
not set forth in this Separation Agreement and the General Release;
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you are signing this Separation Agreement, and shall sign the General Release, knowingly and voluntarily;
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you have been advised to consult with an attorney before signing this Separation Agreement and the General Release;
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you have the right to consider the terms of this Separation Agreement and the General Release for 21 days; however, you do not have to take all 21 days to consider it, and if you take fewer than 21 days to review this Separation
Agreement and the General Release, you expressly waive any and all rights to consider this Separation Agreement and the General Release for the balance of the 21-day review period; and
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the General Release includes a release of any claim you might have under the ADEA (the “ADEA Claims”). For seven (7) days after signing the General Release, you have the right to revoke your release of ADEA Claims (the “Revocation
Period”). To revoke your release of ADEA Claims, the revocation or rescission must be in writing and must be delivered by hand or sent by certified mail, return receipt requested, postmarked within the seven (7) day period, and
properly addressed to the Chairman of the Company at 10355 Science Center Drive, Suite 150, San Diego, CA 92121. Revoking your release of ADEA Claims shall result in the invalidation of this Separation Agreement, in its entirety, as of such
revocation date; and
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you and the Company and Parent each agree that any changes that have been made to this Separation Agreement and the General Release from the versions originally presented to you do not extend the 21-day period you have been given to
consider this Separation Agreement and the General Release, whether those changes are deemed material or non-material.
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IF YOU SIGN THIS DOCUMENT AND EXHIBIT A ATTACHED HERETO, IT BECOMES A LEGALLY ENFORCEABLE AGREEMENT EFFECTIVE ON THE DATE SIGNED BY THE COMPANY.
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Dated:
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May 25, 2022
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/s/ Howard Federoff
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HOWARD FEDEROFF
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Dated:
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May 25, 2022
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BROOKLYN IMMUNOTHERAPEUTICS, INC.
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By: /s/ Sandra Gurrola
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Name: Sandra Gurrola
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Title: Vice President of Finance
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Exhibit 99.1
Brooklyn ImmunoTherapeutics Announces Changes to Executive Management:
Matt Angel, Ph.D. Appointed Interim Chief Executive Officer and President,
Andrew Jackson Appointed Chief Financial Officer
Postpones 2022 Annual Meeting
SAN DIEGO, MAY 31, 2022 (GLOBE NEWSWIRE) -- Brooklyn ImmunoTherapeutics, Inc. (Nasdaq:BTX) (“Brooklyn” or the “Company”), a biopharmaceutical company focused on exploring the role that cytokine,
gene editing, and cell therapy can have on the immune system for treating patients with cancer, blood disorders, and monogenic diseases, today announced the appointment of Matt Angel, Ph.D., Co-Founder, Chairman, and CEO of Factor Bioscience
Inc., as Interim Chief Executive Officer and President. He will replace Howard J. Federoff, M.D., Ph.D., Chief Executive Officer and President, who departs to focus on building a new venture. The Company also announces the appointment of
Andrew Jackson as Chief Financial Officer.
“Matt’s deep experience in cell therapy product development was an important consideration in Brooklyn’s choice to license Factor’s RNA
development platform, which is the foundation of our current development programs. Therefore, it is only fitting that he take on the mantel to lead Brooklyn,” said Charles Cherington, Brooklyn’s Chairman of the Board. “On behalf of the Board of
Directors, I would like to thank Howard for his service and many contributions to the Company. I am also delighted that Andrew Jackson has joined our team as Chief Financial Officer at such an exciting time for the company. His impressive track
record in financing both commercial and clinical-stage biotech companies will be critical as the company enters its next phase of growth.”
“I am excited for this opportunity to lead Brooklyn ImmunoTherapeutics and to help realize the full potential of the company,” said Dr. Matt
Angel, Brooklyn’s Interim Chief Executive Officer and President. “I look forward to leveraging my experience as CEO of an mRNA-focused biotechnology company to help advance Brooklyn’s therapeutic platform.”
Dr. Angel is an experienced biotechnology entrepreneur and executive, having led Factor Bioscience Inc. as CEO since its founding in 2011. Dr.
Angel is Co-Founder of the immuno-oncology company, Exacis Biotherapeutics, where he serves as Scientific Advisory Board Chair, and the cell therapy company, Novellus Therapeutics, which was acquired by Brooklyn in 2021. Dr. Angel has deep
experience in cell therapy product development, intellectual property protection and licensing, contract negotiation, including collaboration and licensing agreements, and has raised more than $150 million through grants, equity financings, and
M&A. A pioneer in mRNA technology, Dr. Angel is a prolific inventor with more than 100 patents covering mRNA, nucleic acid delivery, gene editing, and cell reprogramming technologies. Dr. Angel received his Ph.D. from the Massachusetts
Institute of Technology, where he studied immunology and synthetic RNA.
Mr. Jackson joins the Company from Ra Medical Systems, a medical device company focused on vascular diseases where he served as its Chief
Financial Officer and Secretary and for a period, its Interim Chief Executive Officer. Mr. Jackson has held several senior financial positions, including Chief Financial Officer, at AltheaDx, Inc, a commercial stage molecular diagnostics company
specializing in precision medicine and Celladon Corporation, a publicly-traded, clinical stage gene therapy company, as well as senior financial positions at Sapphire Energy, an industrial biotechnology company. Mr. Jackson received a MSBA in
Finance in December 2006 from San Diego State University and a BSB in Accounting in June 1992 from the University of Minnesota. Mr. Jackson is also a certified public accountant (inactive).
Postponement of 2022 Annual Meeting
In connection with Dr. Angel’s and Mr. Jackson’s appointments, together with the other events disclosed by the Company in its Current Report on
Form 8-K filed today with the Securities and Exchange Commission, the Board determined to postpone the Company’s 2022 Annual Meeting, currently scheduled for June 7, 2022, to a date to be determined. The Board will both determine the date for the
Annual Meeting and establish a new record date for the Annual Meeting, and, based on this record date, the Company will deliver a new notice of the Annual Meeting to stockholders entitled to receive notice of the Annual Meeting. Additionally, the
Company expects to file a new proxy statement on Schedule 14A in respect of the Annual Meeting.
About Brooklyn ImmunoTherapeutics
Brooklyn is focused on exploring the role that cytokine, gene editing, and cell therapy can have in treating patients with cancer, blood
disorders, and monogenic diseases.
Brooklyn has multiple next-generation cell and gene-editing therapies
in preclinical development for various indications including acute respiratory distress syndrome, solid tumor indications, as well as in vivo gene-editing therapies for rare genetic diseases. For more information about Brooklyn and its clinical
programs, please visit www.BrooklynITx.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are any statements that are not statements of
historical fact and may be identified by terminology such as “believe,” “could,” “estimate,” “expect,” “plan,” “possible,” “potential,” “project,” “will” or other similar words and the negatives of such words. Forward-looking statements are based
on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those stated or implied in any forward-looking statement as a result of various
factors, including, but not limited to, uncertainties related to: (i) the evolution of Brooklyn’s business model into a platform company focused on cellular, gene editing and cytokine programs; (ii) Brooklyn’s ability to successfully,
cost-effectively and efficiently develop its technology and products; (iii) Brooklyn’s ability to successfully commence clinical trials of any products on a timely basis or at all; (iv) Brooklyn’s ability to successfully fund and manage the growth
of its development activities; (v) Brooklyn’s ability to obtain regulatory approvals of its products for commercialization; and (vi) uncertainties related to the impact of the COVID-19 pandemic on the business and financial condition of Brooklyn,
including on the timing and cost of its clinical trials. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this communication speak only as of the date on which they were
made, and Brooklyn does not undertake any obligation to update the forward-looking statements contained herein to reflect events that occur or circumstances that exist after the date hereof, except as required by applicable law. Factors that may
cause Brooklyn's actual results from those expressed or implied in forward-looking statements contained in this press release are more fully disclosed in Brooklyn’s periodic public filings with the U.S. Securities and Exchange Commission,
particularly under the heading “Risk Factors” in Brooklyn’s Annual Report on Form 10-K for the year ended December 31, 2021.
Investor Relations Contact:
Solebury Trout
917-936-8430
investors@brooklynitx.com
Media Contact:
Michael V. Morabito, Ph.D.
Solebury Trout
917-936-8430
btx@soleburytrout.com