Ernexa Therapeutics Inc 8-K, filed Jul 19, 2021
Ernexa Therapeutics Inc. (ERNA)
8-K
2021-07-19
For: 2021-07-13
View Original
Added on
April 06, 2026
About this 8-K
Ernexa Therapeutics Inc filed this 8-K on July 19, 2021, reporting on events of July 13, 2021.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 13, 2021
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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(Address of Principal Executive Offices)
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Registrant’s telephone number, including area code: (212 ) 582-1199
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading symbol
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule
12b-2 of the Securities Exchange Act of 1934:
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use
the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| 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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On July 13, 2021, we announced that Jay Sial, had been appointed as our Chief Administrative Officer, effective July 15, 2021.
Employment Agreement with Jay Sial
We entered into an employment agreement, dated July 6, 2021 and effective as of July 15, 2021, with Jay Sial with respect to terms of
his employment as our Chief Administrative Officer. The compensatory terms of the employment agreement, including equity awards, were approved by the compensation committee of the board of directors, which consists of two disinterested members of
the board. Mr. Sial’s hiring, and his employment agreement, were approved by the board.
The employment agreement provides for our at-will employment of Mr. Sial as our Chief Scientific Officer for a term commencing on July
15, 2021 and continuing until terminated by us or Mr. Sial.
Under the terms of the employment agreement, we will pay Mr. Sial an annual base salary of $350,000, which amount is subject to annual
review by the board or the compensation committee and subject to adjustment to reflect market practices among our peers in the sole discretion of the board or the compensation committee.
Mr. Sial will be eligible to receive an annual cash bonus award in an amount up to 35% of his base salary upon achievement of reasonable
performance targets set by the board or the compensation committee, each in its sole discretion. The bonus will be determined by the board or the compensation committee and paid annually in March in the year following the performance year on which
such bonus is based.
In accordance with the terms of the employment agreement, we will grant to Mr. Sial, effective as of July 15, 2021, a time-based
nonqualified stock option, which we refer to as the Option Grant, and a time-based restricted stock unit grant, which we refer to as the RSU Grant. The Option Grant will cover 71,000 shares of common stock, and the RSU Grant will cover 35,700
shares of common stock The Option Grant and the RSU Grant each will vest over four years, with vesting generally subject to Mr. Sial’s continued employment through the relevant vesting date. Consistent with the employment inducement grant rules set
forth in Section 711(a) of the NYSE American LLC Company Guide, the equity award to Mr. Sial was made as an inducement material to his entering into employment with us and was approved by the compensation committee without need for stockholder
approval.
If Mr. Sial’s employment is terminated by us without Cause or by Mr. Sial for Good Reason (each such capitalized term as defined in the
employment agreement), he will be entitled to, among other things, continued base salary for nine months following the termination date and the total monthly cost of health care continuation coverage pursuant to COBRA for such period.
Notwithstanding the foregoing, if a termination without Cause or for Good Reason occurs within ninety days before or twelve months after a Change in Control (as defined in the employment agreement), Mr. Sial would become entitled to (a) receive the
continued-based salary and total monthly cost of health care continuation coverage described in the preceding sentence for a period of twelve months rather than nine months, (b) receive a lump sum payment of his target annual bonus and (c)
accelerated vesting in full of the Option Grant and the RSU Grant. Any of such severance benefits under the employment agreement are contingent on Mr. Sial entering into and not revoking a general release of claims in favor of our company.
The employment agreement provides for (a) reimbursement of reasonable business expenses, (b) participation in our benefit plans and (c)
twenty paid vacation days per year.
The employment agreement contains customary covenants related to non-competition and non-solicitation for one year following termination
of employment, as well as customary covenants related to confidentiality, inventions and intellectual property rights.
The foregoing description of Mr. Sial’s employment agreement with us does not purport to be complete and is subject
to, and qualified in its entirety by, the full text of the agreement, which is included as Exhibit 10.1 to this report and is incorporated into this Item 5.02 by reference.
Background of Jay Sial
Mr. Sial previously served as the Chief Financial Officer at Aspen Neurosciences, a biotechnology company, from October 2019 to July
2021. He was the Chief Financial Officer at University of California Irvine Health from June 2016 to October 2019. Mr. Sial served as Executive Vice President and Chief Financial Officer at Trinity Health/Loyola University Health System from 2012
to 2016. He holds a Master’s of Business Administration (Finance) from Virginia Tech and a Bachelor of Arts degree in Economics and Accounting from University of Delhi, India. Mr. Sial is 57 years old.
| Item 9.01. |
Financial Statements and Exhibits.
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Exhibit
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Exhibit Description
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Executive Employment Agreement, dated as of July 6, 2021 and effective as of July 15, 2021, between Brooklyn ImmunoTherapeutics, Inc. and Jay Sial.
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Press release of Brooklyn ImmunoTherapeutics, Inc. dated July 13, 2021.
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Indicates management contract or compensatory plan.
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An addendum has been omitted pursuant to Item 601(a)(5) of Regulation S-K. We hereby undertake to furnish copies of the omitted addendum upon request by the Securities and Exchange Commission, provided that
we may request confidential treatment pursuant to Rule 24b‑2 of the Securities Exchange Act of 1934 for the addendum so furnished.
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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: July 19, 2021
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By:
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/s/ Howard J. Federoff
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Howard J. Federoff
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Chief Executive Officer and President
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Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
BROOKLYN IMMUNOTHERAPEUTICS, INC.
This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) dated as of the first
date set forth on the signature page hereof, is entered by and between Brooklyn ImmunoTherapeutics, Inc., a Delaware corporation (the “Company”), and Jay Sial, an individual residing in
Coto De Caza, California 92679 (“Executive”) and will be effective as of July 15, 2021 (the “Effective Date”). Each of the
Company and Executive are 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.
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.
3. Duties and Functions.
(a) Executive shall be employed as
the Chief Administrative Officer (“CAO”) and shall report to the Chief Executive Officer/President (the “Supervisor”).
(b) Executive agrees to undertake the
duties and responsibilities inherent in the positions of CAO, which may encompass different or additional duties as may, from time to time, be assigned by his 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 $350,000, 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 annually by the Board or the Compensation Committee thereof and subject to increase from time to time in the Board’s and/or the Compensation Committee’s sole discretion.
(b) Bonus: Beginning with
calendar year 2021, Executive shall be eligible to receive an annual cash bonus award in an amount up to a target of 35% of his 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 2021 shall be prorated for the number of days of employment in calendar year 2021 from the Effective Date.
(c) Equity Compensation:
(i) On the Effective Date, in
accordance with the employment inducement grant rules set forth in Section 711(a) of the NYSE American LLC Company Guide, Executive shall be granted two equity awards 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 71,000 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.
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(iii) The Company shall grant
Executive a time-based restricted stock unit grant (the “RSU Grant”) covering 35,700 shares of the Company’s common stock. The RSU Grant shall vest in four equal annual installments
beginning on the first anniversary of the Effective Date, subject to Executive’s continued employment with the Company through the relevant vesting date, and shall be settled by March 15 of the year following the relevant vesting date.
(iv) All other terms and conditions
of the Option Grant and the RSU Grant shall be the same as the Company’s standard forms of grant agreements. The Option Grant and the RSU Grant are each intended to constitute an “employment inducement grant” in accordance with the employment
inducement grant rules set forth in Section 711(a) of the NYSE American LLC Company Guide, and are offered as an inducement material to Executive in connection with the Company’s hiring of Executive.
(v) Commencing in 2022, 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 his 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 his mobile device and home internet for business purposes pursuant to the Company’s Mobile
Phone and Home Internet Policy.
(e) Paid Time Off and Paid
Holidays: Executive shall accrue up to 20 days of paid time off (“PTO”) annually for every year of employment, which shall accrue pro rata in the Company’s regular payroll (up to
a maximum of 42 days). PTO shall accrue pro rata in the Company’s regular payroll on a calendar basis and shall be subject to the Company’s PTO policies in place from time to time and all applicable state and local law.
Any accrued, unused PTO can be carried over to the following calendar year up to a maximum of 60 days (the “Cap”). Once the Cap is
reached, no further PTO will accrue until some accrued time is used. When some PTO is used, PTO will begin to accrue again. Accrued, unused PTO shall be paid upon separation of employment consistent with
applicable law.
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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 paid floating holidays shall expire on December 31 each year and shall not be paid upon separation.
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 consistent with this agreement and the Company’s policies then in effect, (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 maximum annual bonus, 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 2020 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 and the RSU Grant, in each case 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 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 and the RSU 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).
(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, 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 no longer be entitled to receive his continued base salary from the Company.
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(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).
(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 and the RSU Grant that would have
otherwise vested during the nine (9) month period following such termination.
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(f) Continuing Obligations.
The obligations imposed on Executive with respect to 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 and T-Cells, 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
8
(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(a)(iii) 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).
(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 himself 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.
(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.
9
(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 shall 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 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 his 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, he 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.
10
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.
(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.
11
(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.
12
(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. 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 Executive 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.
13
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.
14
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.
(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.
15
(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 New York, without giving effect to the principles of conflicts of law thereof.
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.
16
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 New
York County, New York. 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) 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.
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.
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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 written below.
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EXECUTIVE
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/s/Jay Sial
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Jay Sial
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Date:
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July, 6, 2021 | ||
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BROOKLYN IMMUNOTHERAPEUTICS, INC
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By:
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/s/Howard J. Federoff
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Howard J. Federoff, MD, PhD
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Title:
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Chief Executive Officer/President
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||
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Date:
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July, 6, 2021
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||
[Signature Page to Employment Agreement]
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ADDENDUM A
Job Duties
| • |
Update Human Resources (“HR)”
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| o |
Review Professional Employment Organizations: Insperity vs TriNet to recommend approach
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| o |
Update employee handbook
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| o |
Lead effort to recruit Sr. Director of HR
|
| o |
Oversee HR functions, searches, building culture that is inclusive, equitable and diverse
|
| • |
Information Technology (“IT”)
|
| o |
Cybersecurity review
|
| o |
Implement recommendations
|
| o |
Bring part-time IT expertise that is compatible with publicly traded entity
|
| o |
Assume responsibility for web design, function and branding
|
| • |
Facilities
|
| o |
Review the Company’s Brooklyn, New York site with Quality Assurance support
|
| o |
Review Cambridge, Massachusetts location, assist with buildout and coordinate with Chief Scientific Officer (“CSO”) and Factor/Novellus (Matt Angel and Chris Rohde)
|
| o |
Lead effort with CSO and Chief Medical Officer input to assess cellular manufacturing option
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| o |
Manage all aspects of facilities
|
| • |
Investor Relations (“IR”)
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| o |
Intros to CORE IR (Scott Gordon, Pete Serra, Jules Abraham)
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| o |
Develop understanding of algorithms to chart trader types from New York Stock Exchange
|
| o |
Develop a portal that can be managed by CORE IR or internally
|
| o |
Review other IR firms and prepare Request for Proposal
|
| o |
Connect website for “investors” to IR firm
|
| • |
Headquarters Geographic Assessment
|
| o |
Consult with Ernst & Young (Salman Shah) on post-COVID business practices and organizations
|
| o |
Scope of work ahead
|
| ◾ |
review cost of business, including but not limited to from a tax perspective, in different venues (e.g., TX, FL, NV, etc.);
|
| ◾ |
review access to talent in locations;
|
| ◾ |
review state support/incentives for small cap public companies; and
|
| ◾ |
prepare matrix for discussion with President/Chief Executive Officer and Board of Directors
|
| • |
Budget development, forecasting and modeling
|
| o |
Develop operational unit budget in conjunction with the Vice President of Finance (Sandra Gurrola)
|
| o |
Allocate resources for remainder of FY21
|
| o |
Develop Budget for FY22 with unit leaders
|
| • |
Strategic Planning
|
| o |
Develop approach
|
| o |
Commence planning with stakeholders
|
| o |
Publish plan internally for review and periodic updating
|
| • |
Compliance and risk management
|
| o |
Retain compliance and risk management consultant to review gaps and make recommendations
|
| o |
Implement recommendations
|
| o |
Hire a director to oversee compliance/risk management
|
20
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.
21
ADDENDUM C
LIST OF INVENTIONS
22
Exhibit 99.1
Brooklyn ImmunoTherapeutics Welcomes
Jay Sial as Chief Administrative Officer
Brooklyn, NY – July 13, 2021 – Brooklyn ImmunoTherapeutics,
Inc. (NYSE American: BTX) (“Brooklyn” or “the Company”), a biopharmaceutical company focused on exploring the role that cytokine and gene editing/cell therapy can have in treating patients with cancer, blood disorders, and monogenic diseases, today
announced the appointment of Jay Sial as its Chief Administrative Officer, effective July 15, 2021.
“Jay has a long and impressive history managing the finances of multiple health systems and hospitals and leading the financial
transformation of complex organizations through prudent management and strategic activities, including fundraising, business development and facilities management. We are truly fortunate to have him join the team at Brooklyn ImmunoTherapeutics,”
commented Howard J. Federoff, M.D., Ph.D., Brooklyn’s Chief Executive Officer and President.
“I am honored to be joining Brooklyn ImmunoTherapeutics which is using cutting edge mRNA based gene editing and cellular reprogramming
tools and look forward to helping the team bring these therapies to cancer patients,” said Mr. Sial regarding his new role with Brooklyn.
Prior to joining Brooklyn, Mr. Sial served as Chief Financial Officer at Aspen Neurosciences, a privately-held emerging biotechnology
company. Before that he served as Chief Financial Officer at multiple complex organizations, including University of California Irvine Health, Trinity Health/Loyola University Health System and University of Kentucky Healthcare. He also served in
key financial and management roles at Thomas Jefferson University Hospital and FHP, Inc., a health maintenance organization (HMO) based in Fountain Valley, California. He holds a Master’s of Business Administration (Finance) from Virginia Tech and
a Bachelor of Arts degree in Economics and Accounting from University of Delhi, India.
About Brooklyn ImmunoTherapeutics
Brooklyn is focused on exploring the role that cytokine-based therapy can have in treating patients with cancer,
both as a single agent and in combination with other anti-cancer therapies. The company is also exploring opportunities to advance therapies using leading edge gene editing/cell therapy technology through its option agreement with Factor
Bioscience/Novellus Therapeutics.
Brooklyn’s most advanced program is studying the safety and efficacy of IRX-2 in patients with head and neck cancer. In a Phase 2A clinical
trial in head and neck cancer, IRX-2 demonstrated an overall survival benefit. Additional studies are either underway or planned in other solid tumor cancer indications.
CORE IR
516-222-2560
investors@brooklynitx.com
Media Contact:
CORE IR
Jules Abraham
julesa@coreir.com
917-885-7378