Indaptus Therapeutics, Inc 8-K, filed Aug 6, 2021
Indaptus Therapeutics, Inc. (INDP)
About this 8-K
Indaptus Therapeutics, Inc filed this 8-K on August 6, 2021, reporting on events of August 3, 2021.
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 3.01: Delisting notice or listing transfer
- Item 3.02: Unregistered sale of equity
- Item 4.01: Change of auditor
- Item 5.02: Director or officer change, or executive pay
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
(formerly Intec Parent, Inc.)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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(Former name or former address, if changed since last report) | ||
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 (see General Instruction A.2. below):
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
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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 2.01 | Completion of Acquisition or Disposition of Assets. |
Completion of the Decoy Merger
On August 3, 2021, Indaptus Therapeutics, Inc. (formerly Intec Parent, Inc.), a Delaware corporation (the “Company”), completed its business combination with Decoy Biosystems, Inc., a Delaware corporation (“Decoy”) following the satisfaction or waiver of the conditions set forth in the Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 15, 2021 among the Company, Intec Pharma Ltd., an Israeli company and wholly owned subsidiary of the Company (“Intec Israel”), and Dillon Merger Subsidiary Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”) pursuant to which Merger Sub merged with and into Decoy, with Decoy surviving as a wholly owned subsidiary of the Company (the “Merger”).
Also, in connection with the Merger, the Company changed its name from “Intec Parent, Inc.” to “Indaptus Therapeutics, Inc.” and the business conducted by Decoy became the business conducted by the Company, which is a pre-clinical stage biotech company developing a novel and patented systemically-administered anti-cancer and anti-viral immunotherapy. For a further description of Decoy’s business, see the section “Business of Decoy” in the registration statement on Form S-4, as amended (File No. 333-255389), filed with the Securities and Exchange Commission (“SEC”) on May 12, 2021 (the “Registration Statement”).
At the effective time of the Merger, each outstanding share of Decoy common stock, par value $0.001 per share (the “Decoy Common Stock”) (including shares issuable upon the conversion of Decoy SAFEs (Simple Agreements for Future Equity) and Decoy preferred stock, par value $0.001 per share, into Decoy Common Stock)) converted into 2.654353395 shares of Company common stock, par value $0.01 per share (the “Company Common Stock”). In addition, at the effective time of the Merger, each outstanding and unexercised Decoy stock option converted into a stock option exercisable for that number of shares of common stock of the Company subject to such option and the exercise price being appropriately adjusted to reflect the exchange ratio. Immediately following closing of the Merger there are 5,405,963 shares of Company common stock outstanding, with pre-merger Decoy shareholders owning approximately 65.6% and pre-merger Intec Israel shareholders owning approximately 34.4% of the Company. The figures above do not give effect to shares issuable upon the exercise of outstanding Indaptus warrants or options. Assuming the exercise in full of the pre-funded warrants sold in the Private Placement (as described below), there would be 8,133,236 shares of Indaptus common stock outstanding.
The Company’s shares of common stock commenced trading at market open on August 4, 2021 on the Nasdaq Capital Market under the name “Indaptus Therapeutics, Inc.” and ticker symbol “INDP” and under the new CUSIP 45339J 105.
The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Annex A to the Registration Statement, and as Exhibit 2.1 to Intec Israel’s Current Report on Form 8-K filed on March 15, 2021.
| Item 3.01 | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
In connection with the Merger and the previously announced domestication merger (which was consummated on July 27, 2021 and was one of the closing conditions of the Merger), after which Intec Israel became a wholly owned subsidiary of the Company, a request was made for the Nasdaq Stock Market LLC to file with the Securities and Exchange Commission an application on Form 25 to delist and deregister the ordinary shares of Intec Israel under Section 12(b) of the Securities Exchange Act of 1934, as amended. The Form 25 was filed on August 3, 2021 and will become effective 10 days following its filing.
| Item 3.02. | Unregistered Sales of Equity Securities. |
To the extent required by Item 3.02 of this Current Report on Form 8-K, the information under Item 8.01 of this Current Report on Form 8-K regarding the closing of the Private Placement is incorporated herein by reference.
| Item 4.01 | Changes in Registrant’s Certifying Accountant. |
For accounting purposes, the Merger is treated as a reverse acquisition and, as such, the December 31, 2020 and 2019 financial statements of the accounting acquirer, Decoy, which have been audited by Haskell & White LLP (“H&W”), an independent registered public accounting firm, will become the historical financial statements of the Company. In a reverse acquisition, a change of accountants is presumed to have occurred unless the same accountant audited the pre-transaction financial statements of both the legal acquirer and the accounting acquirer, and such change is generally presumed to occur on the date the reverse acquisition is completed.
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The Company expects the Audit Committee of the Company’s board of directors to approve the dismissal of Kesselman & Kesselman, Certified Public Accountant (Isr.), a member firm of PricewaterhouseCoopers International Limited, an independent registered public accounting firm (“PWC”), as the Company’s independent registered public accounting firm, to be effective upon filing with the SEC of the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2021, and to engage H&W as the independent registered public accounting firm to audit the Company’s financial statements for the fiscal year ending December 31, 2021, which will reflect Decoy as the accounting acquirer. As of the date hereof, no decision has been made as to a change in the independent registered public accounting firm and the Company will file a Current Report on 8-K within four business days of such decision.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Directors
Following the closing of the Merger, each of Michael Newman, Ph.D., Hoonmo Lee and Brian O’Callaghan were appointed as directors of the Company. As a result, the Company’s board of directors consists of a total of eight directors, with Hila Karah and Hoonmo Lee serving as Class I directors, with a term expiring at the Company’s annual meeting of stockholders to be held in 2022, Anthony J. Maddaluna, Brian O’Callaghan and William B. Hayes serving as Class II directors, with a term expiring at the Company’s annual meeting of stockholders to be held in 2023, and Jeffrey A. Meckler, Michael Newman, Ph.D. and Dr. Roger Pomerantz serving as Class III directors, with a term expiring at the Company’s annual meeting of stockholders to be held in 2024. Dr. Roger Pomerantz serves as the Company’s Chairman of the Board.
In addition, Brian O’Callaghan was appointed to the Audit Committee replacing Dr. Roger Pomerantz, such that the Audit Committee is comprised of William B. Hayes (Chair), Hila Karah and Brian O’Callaghan; Hoonmo Lee was appointed to the Compensation Committee such that the Compensation Committee is comprised of Anthony J. Maddaluna (Chair), William B. Hayes and Hoonmo Lee; Brian O’Callaghan was appointed to the Nominating Committee as Chair replacing Dr. Roger Pomerantz such that the Nominating Committee is comprised of Brian O’Callaghan (Chair), Anthony J. Maddaluna and Hila Karah.
Officers
Following the closing of the Merger, Michael Newman, Ph.D. was appointed as Chief Scientific Officer. Jeffrey A. Meckler, Nir Sassi and Walt Linscott continue to serve in their roles as Chief Executive Officer, Chief Financial Officer and Chief Business Officer, respectively. There are no family relationships among any of the Company’s directors and executive officers.
Biographical information regarding each of the newly appointed directors and executive officer is included in “Directors and Officers of Combined Company following the Merger” in the Registration Statement and is incorporated herein by reference.
Employment Agreements
Following the closing of the Merger, the Company entered into employment agreements with each of Jeffrey A. Meckler, Michael J. Newman, Ph.D., and Walt Linscott and entered into a services agreement with Nir Sassi.
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Meckler Employment Agreement
Jeffrey Meckler entered into an employment agreement with the Company (the “Meckler Employment Agreement”), which supersedes and replaces his employment agreement dated December 11, 2017 with Intec Pharma, Inc., a subsidiary of Intec Israel, to serve as Chief Executive Officer of the Company following completion of the Merger. The Meckler Employment Agreement provides for an annual base salary of $540,000, subject to review for an upward adjustment on at least an annual basis. Mr. Meckler is eligible to participate in an annual executive bonus plan, pursuant to which he may earn an annual target bonus of up to 50% of his base salary, based on the achievement of certain individual and company-wide objectives, which shall be established by the Company’s board of directors on an annual basis.
On August 4, 2021, the Company granted to Mr. Meckler options to purchase 375,000 shares of the Company’s common stock under the Company’s 2021 Stock Incentive Plan (the “2021 Plan”). The foregoing options have an exercise price of $8.87 per share, have a 10-year term and, subject to Mr. Meckler’s continued employment with the Company on the vesting date, one-third vest in 12 months from the grant date and the remaining options vest in equal amounts quarterly over the following 24 months.
Mr. Meckler’s employment is on an at-will basis and both the Company and Mr. Meckler have the right to terminate the agreement and his employment at any time, subject to certain notice requirements described therein. The Meckler Employment Agreement may terminate upon the earliest to occur of (i) termination by the Company without cause, subject to 30 days’ written notice, (ii) immediate termination by the Company for cause (in some cases subject to a reasonable cure period, if susceptible to cure), (iii) termination by Mr. Meckler for good reason (subject to Mr. Meckler providing written notice within 90 days after he becomes aware of the event or circumstance which he believes constitutes good reason, the Company’s failure to cure within 30 days after such notice, and Mr. Meckler’s resignation within 30 days of the expiration of such cure period), (iv) termination by Mr. Meckler without good reason, subject to 30 days’ written notice, (v) Mr. Meckler’s death, or (vi) termination by reason of Mr. Meckler’s disability.
In the event that Mr. Meckler’s employment terminates by reason of his death or disability, and Mr. Meckler is entitled to receive a bonus for the year of termination based on the achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), Mr. Meckler (or his representatives) shall be entitled to receive such bonus on the same basis as the other participants in the bonus plan, except that the bonus amount shall be prorated based on the percentage of days Mr. Meckler was employed relative to the total number of days in the bonus earning period.
Upon termination of Mr. Meckler’s employment by the Company without cause or Mr. Meckler’s resignation for good reason, Mr. Meckler will be entitled to a severance benefit equal to (i) twelve months of his base salary as in effect prior to the termination date, payable in bi-monthly installments and (ii) an amount equal to Mr. Meckler’s cost of continued health insurance coverage for twelve months. In addition, if Mr. Meckler is entitled to receive a bonus for the year of termination based on the achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), Mr. Meckler (or his representatives) shall be entitled to receive such bonus on the same basis as the other participants in the bonus plan, except that the bonus amount shall be prorated based on the percentage of days Mr. Meckler was employed relative to the total number of days in the bonus earning period.
If Mr. Meckler’s employment is terminated by the Company without cause or by Mr. Meckler for good reason during the one year period immediately following a change in control or six months before a change in control, then Mr. Meckler will be entitled to receive, (i) eighteen months of his base salary as in effect prior to the termination date, payable in bi-monthly installments, (ii) an amount equal to Mr. Meckler’s cost of continued health insurance coverage for eighteen months the current year bonus at the target level, which shall be paid within 30 days of termination, (iii) the current year bonus at the target level, which shall be paid within 30 days of termination, and (iv) full accelerated vesting of all of outstanding equity incentive awards upon the later of the change in control or Mr. Meckler’s termination of employment.
Mr. Meckler’s employment agreement also includes provisions regarding confidentiality, the assignment of intellectual property to the Company, participation in the Company’s medical and similar insurance plans and reimbursement of expenses.
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Newman Employment Agreement
Michael Newman, Ph.D., entered into an employment agreement with the Company (the “Newman Employment Agreement”) to serve as Chief Science Officer of the Company following completion of the Merger. The Newman Employment Agreement provides for an annual base salary of $425,000, subject to review for an upward adjustment on at least an annual basis. Dr. Newman is eligible to participate in an annual executive bonus plan, pursuant to which he may earn an annual target bonus of up to 50% of his base salary, based on the achievement of certain individual and company-wide objectives, which shall be established by the Company’s board of directors on an annual basis.
On August 4, 2021, the Company granted to Dr. Newman options to purchase 290,000 shares of the Company’s common stock under the 2021 Plan. The foregoing options have an exercise price of $8.87 per share, have a 10-year term and, subject to Dr. Newman’s continued employment with the Company on the vesting date, one-third vest in 12 months from the grant date and the remaining options vest in equal amounts quarterly over the following 24 months.
Dr. Newman’s employment under the Newman Employment Agreement is on an at-will basis and both the Company and Dr. Newman have the right to terminate the agreement and his employment at any time, subject to certain notice requirements described therein. The Newman Employment Agreement may terminate upon the earliest to occur of (i) termination by the Company without cause, subject to 30 days’ written notice, (ii) immediate termination by the Company for cause (in some cases subject to a reasonable cure period, if susceptible to cure), (iii) termination by Dr. Newman for good reason (subject to Dr. Newman providing written notice within 90 days after he becomes aware of the event or circumstance which he believes constitutes good reason, the Company’s failure to cure within 30 days after such notice, and Dr. Newman’s resignation within 30 days of the expiration of such cure period), (iv) termination by Dr. Newman without good reason, subject to 30 days’ written notice, (v) Dr. Newman’s death, or (vi) termination by reason of Dr. Newman’s disability.
In the event that Dr. Newman’s employment terminates by reason of his death or disability, and Dr. Newman is entitled to receive a bonus for the year of termination based on the achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), Dr. Newman (or his representatives) shall be entitled to receive such bonus on the same basis as the other participants in the bonus plan, except that the bonus amount shall be prorated based on the percentage of days Dr. Newman was employed relative to the total number of days in the bonus earning period.
Upon termination of Dr. Newman’s employment by the Company without cause or Dr. Newman’s resignation for good reason, Dr. Newman will be entitled to a severance benefit equal to (i) twelve months of his base salary as in effect prior to the termination date, payable in bi-monthly installments and (ii) an amount equal to Dr. Newman’s cost of continued health insurance coverage for twelve months. In addition, if Dr. Newman is entitled to receive a bonus for the year of termination based on the achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), Dr. Newman (or his representatives) shall be entitled to receive such bonus on the same basis as the other participants in the bonus plan, except that the bonus amount shall be prorated based on the percentage of days Dr. Newman was employed relative to the total number of days in the bonus earning period.
If Dr. Newman’s employment is terminated by the Company without cause or by Dr. Newman for good reason during the one year period immediately following a change in control or six months before a change in control, then Dr. Newman will be entitled to receive, (i) eighteen months of his base salary as in effect prior to the termination date, payable in bi-monthly installments, (ii) an amount equal to Dr. Newman’s cost of continued health insurance coverage for eighteen months the current year bonus at the target level, which shall be paid within 30 days of termination, (iii) the current year bonus at the target level, which shall be paid within 30 days of termination, and (iv) full accelerated vesting of all of outstanding equity incentive awards upon the later of the change in control or Dr. Newman’s termination of employment.
Dr. Newman’s employment agreement also includes provisions regarding confidentiality, the assignment of intellectual property to the Company, participation in the Company’s medical and similar insurance plans and reimbursement of expenses.
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Linscott Employment Agreement
Walt Linscott entered into an employment agreement with the Company (the “Linscott Employment Agreement”), which supersedes and replaces his employment agreement dated October 23, 2017 with Intec Pharma, Inc., a subsidiary of Intec Israel, to serve as Chief Business Officer of the Company following completion of the Merger. The Linscott Employment Agreement provides for an annual base salary of $405,000, subject to review for an upward adjustment on at least an annual basis. Mr. Linscott is eligible to participate in an annual executive bonus plan, pursuant to which he may earn an annual target bonus of up to 40% of his base salary, based on the achievement of certain individual and company-wide objectives, which shall be established by the Company’s board of directors on an annual basis.
On August 4, 2021, the Company granted to Mr. Linscott options to purchase 210,000 shares of the Company’s common stock under the 2021 Plan. The foregoing options have an exercise price of $8.87 per share, have a 10-year term and, subject to Mr. Linscott’s continued employment with the Company on the vesting date, one-third vest in 12 months from the grant date and the remaining options vest in equal amounts quarterly over the following 24 months.
Mr. Linscott’s employment under the Linscott Employment Agreement is on an at-will basis and both the Company and Mr. Linscott have the right to terminate the agreement and his employment at any time, subject to certain notice requirements described therein. The Linscott Employment Agreement may terminate upon the earliest to occur of (i) termination by the Company without cause, subject to 30 days’ written notice, (ii) immediate termination by the Company for cause (in some cases subject to a reasonable cure period, if susceptible to cure), (iii) termination by Mr. Linscott for good reason (subject to Mr. Linscott providing written notice within 90 days after he becomes aware of the event or circumstance which he believes constitutes good reason, the Company’s failure to cure within 30 days after such notice, and Mr. Linscott’s resignation within 30 days of the expiration of such cure period), (iv) termination by Mr. Linscott without good reason, subject to 30 days’ written notice, (v) Mr. Linscott’s death, or (vi) termination by reason of Mr. Linscott’s disability.
In the event that Mr. Linscott’s employment terminates by reason of his death or disability, and Mr. Linscott is entitled to receive a bonus for the year of termination based on the achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), Mr. Linscott (or his representatives) shall be entitled to receive such bonus on the same basis as the other participants in the bonus plan, except that the bonus amount shall be prorated based on the percentage of days Mr. Linscott was employed relative to the total number of days in the bonus earning period.
Upon termination of Mr. Linscott’s employment by the Company without cause or Mr. Linscott’s resignation for good reason, Mr. Linscott will be entitled to a severance benefit equal to (i) twelve months of his base salary as in effect prior to the termination date, payable in bi-monthly installments and (ii) an amount equal to Mr. Linscott’s cost of continued health insurance coverage for twelve months. In addition, if Mr. Linscott is entitled to receive a bonus for the year of termination based on the achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), Mr. Linscott (or his representatives) shall be entitled to receive such bonus on the same basis as the other participants in the bonus plan, except that the bonus amount shall be prorated based on the percentage of days Mr. Linscott was employed relative to the total number of days in the bonus earning period.
If Mr. Linscott’s employment is terminated by the Company without cause or by Mr. Linscott for good reason during the one year period immediately following a change in control or six months before a change in control, then Mr. Linscott will be entitled to receive, (i) eighteen months of his base salary as in effect prior to the termination date, payable in bi-monthly installments, (ii) an amount equal to Mr. Linscott’s cost of continued health insurance coverage for eighteen months the current year bonus at the target level, which shall be paid within 30 days of termination, (iii) the current year bonus at the target level, which shall be paid within 30 days of termination, and (iv) full accelerated vesting of all of outstanding equity incentive awards upon the later of the change in control or Mr. Linscott’s termination of employment.
Mr. Linscott’s employment agreement also includes provisions regarding confidentiality, the assignment of intellectual property to the Company, participation in the Company’s medical and similar insurance plans and reimbursement of expenses.
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Sassi Consulting Agreement
Nir Sassi entered into a consulting agreement with the Company (the “Sassi Consulting Agreement”) to serve as Chief Financial Officer of the Company following completion of the Merger. The Sassi Consulting Agreement provides for a monthly payment of $31,500, eligibility for an annual bonus of up to 30% of the total annual monthly payment provided he has provided services in 2021 for at least three months, and a grant of options described further below. The Sassi Consulting Agreement may be terminated by either party upon 30 days’ prior written notice.
On August 4, 2021, the Company granted to Mr. Sassi options to purchase 35,000 shares of the Company’s common stock under the 2021 Plan. The foregoing options have an exercise price of $8.87 per share, have a 5-year term and vest over a period of 12 months in four equal quarterly installments and shall accelerate upon termination of the Sassi Consulting Agreement.
Upon termination of Mr. Sassi’s relationship by the Company without cause or Mr. Sassi’s resignation for good reason, Mr. Sassi will be entitled to severance pay of $378,000, 50% of which shall be paid upon termination, 25% of which shall be paid within three months of termination and 25% of which shall be paid within six months of termination. Mr. Sassi will be covered by the Company’s D&O insurance policy.
The foregoing summaries of the Newman Employment Agreement, the Meckler Employment Agreement, the Linscott Employment Agreement and the Sassi Consulting Agreement do not purport to be complete and are qualified in their entirety by reference to the Newman Employment Agreement, the Meckler Employment Agreement, the Linscott Employment Agreement and the Sassi Consulting Agreement, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
Indemnification Agreement
Following the closing of the Merger, the Company’s board of directors (the “Board”) approved a customary form of indemnification agreement to be entered into with each of its directors and executive officers. A copy of the Company’s form indemnification agreement is attached as Exhibit 10.5 hereto and is incorporated herein by reference.
Indaptus Therapeutics, Inc. 2021 Stock Incentive Plan
As previously disclosed, on June 21, 2021, at a special meeting of Intec Israel’s shareholders Intec Israel shareholders approved the 2021 Plan to be effective upon completion of the Merger. The 2021 Plan provides for the issuance of up to 1,864,963 shares of the Company’s common stock (after giving effect to the 1 for 4 reverse share split of Intec Israel’s ordinary shares that was effected on July 26, 2021), with an annual increase beginning on January 1, 2022 and ending on and including January 1, 2024, equal to the lesser of (A) 3% of the aggregate number of shares of the Company’s shares of common stock outstanding on the final day of the immediately preceding calendar year or (B) such smaller number of shares as is determined by the Company’s board of directors.
The terms and conditions of the 2021 Plan are described in the section entitled “Proposal No. 5 – The Option Plan Proposal: Approval of the Intec Parent, Inc. 2021 Stock Incentive Plan” in the Registration. Statement and are incorporated herein by reference. The Company’s directors and executive officers are eligible to participate in the 2021 Plan. The complete text of the 2021 Plan is attached hereto as Exhibit 10.6 and incorporated herein by reference.
In addition, on August 4, 2021, the Board approved an amendment to the name of the 2021 Plan to “Indaptus Therapeutics, Inc. 2021 Stock Incentive Plan” and made certain amendments to the definition of Merger/Sale of the Plan to conform to the employment agreements described above. A copy of the amendment to the 2021 Plan is attached hereto as Exhibit 10.7 and incorporated herein by reference.
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Director Compensation Policy
Following the closing of the Merger, the Company adopted a director compensation policy. Pursuant to the policy, the annual retainer for non-employee directors is $50,000 and the annual retainer for the chair of the board of directors is $100,000. Annual retainers for committee membership are as follows:
| Audit committee chairperson | $ | 15,000 | ||
| Audit committee member | $ | 7,500 | ||
| Compensation committee chairperson | $ | 10,000 | ||
| Compensation committee member | $ | 6,000 | ||
| Nominating committee chairperson | $ | 8,000 | ||
| Nominating committee member | $ | 5,000 |
These fees are payable in advance in four equal quarterly installments on the first day of each quarter, provided that the amount of such payment will be prorated for any portion of such quarter that a director is not serving on the Company’s board of directors, on such committee or in such position. Non-employee directors are also reimbursed for reasonable out-of-pocket business expenses incurred in connection with attending meetings of the board of directors and any committee of the board of directors on which they serve and in connection with other business related to the board of directors. Directors may also be reimbursed for reasonable out-of-pocket business expenses authorized by the board of directors or a committee that are incurred in connection with attending conferences or meetings with management in accordance with a travel policy, as may be in effect from time to time.
In addition, each non-employee director (other than the Board chair) shall be granted initial stock options for such number of shares of common stock of the Company equal to a Black-Scholes value of $165,000 on the grant date, as determined by the Company’s Compensation Committee, and on the date of each board meeting coincident with or immediately following the annual meeting, beginning with the annual meeting of stockholders for 2022, a grant of stock options for such number of shares of common stock of the Company equal to a Black-Scholes value of $75,000 on the grant date, as determined by the Company’s Compensation Committee. The stock options shall vest in full on the first anniversary of the grant date, subject to continued service on the board and the options shall also vest in full immediately upon a change of control.
In addition, Dr. Roger Pomerantz as the Board chair, shall also be granted initial stock options with a grant date value of $600,000 based on the Black-Scholes value as determined by the Company’s Compensation Committee and stock options with a grant date value of $600,000 based on the Black-Scholes value as determined by the Company’s Compensation Committee on the date of each board meeting coincident with or immediately following the annual meeting of stockholders for both calendar year 2022 and 2023, provided he is then serving as Board chair. These options shall vest one-third on the first, second and third anniversary of the grant date provided Dr. Pomerantz is then serving as Board chair.
| Item 7.01 | Regulation FD Disclosure. |
On August 3, 2021, the Company issued a press release announcing the completion of the Private Placement and Merger. The full text of the press release is attached hereto as Exhibit 99.1.
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| Item 8.01 | Other Events. |
As previously disclosed, on July 23, 2021, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with a certain institutional investor (the “Purchaser”), pursuant to which the Company agreed to sell and issue, in a private placement (the “Private Placement”) a pre-funded warrant to purchase up to 2,727,273 shares of the Company’s common stock (the “Pre-funded Warrant”) and a warrant to purchase up to 2,727,273 of the Company’s common stock (the “Warrant”) at a purchase price of $10.99 per Pre-funded Warrant and associated Warrant, for aggregate gross proceeds to Intec Parent of approximately $29.9 million (or approximately $30.0 million assuming the full exercise of the Pre-funded Warrant), before deducting the placement agent’s fees and other estimated offering expenses payable by the Company. On August 3, 2021, the Private Placement closed.
Investors and others should note that the Company may announce material information about its finances, product candidates, clinical trials and other matters to its investors using its investor relations website (www.indaptusrx.com) in addition to SEC filings, press releases, public conference calls and webcasts. The Company uses these channels to communicate with the Company’s shareholders and the public about the Company and other issues. It is possible that the information the Company posts on these channels could be deemed to be material information. Therefore, the Company encourages investors, the media, and others interested in the Company to review the information it posts on the Company’s investor relations website (referenced above) in addition to following its press releases, SEC filings, public conference calls, and webcasts.
| Item 9.01 | Financial Statement and Exhibits. |
(a) Exhibits.
| # | Indicates a management contract or any compensatory plan, contract or arrangement. |
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SIGNATURES
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.
Date: August 6, 2021
| INDAPTUS THERAPEUTICS, INC. | ||
| By: | /s/ Nir Sassi | |
| Nir Sassi | ||
| Chief Financial Officer | ||
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Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”), effective as of August 4, 2021 (the “Effective Date”), is between Indaptus Therapeutics, Inc. (the “Company”) and Jeffrey A. Meckler (the “Executive”).
WITNESSETH
WHEREAS, Intec Pharma Inc., a subsidiary of Intec Pharma Ltd., an Israeli corporation (“Intec”), entered into an employment agreement with the Executive on December 11, 2017 (the “Prior Agreement”);
WHEREAS, Intec Pharma Ltd. merged with Decoy Biosystems, Inc., a Delaware corporation, on August 3, 2021; and
WHEREAS, the Company desires to employ the Executive as its Chief Executive Officer following the merger, and the Executive desires to accept such employment, on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
| 1. | EMPLOYMENT. Subject to the terms and conditions set forth herein, the Company hereby employs the Executive, and the Executive hereby accepts such employment by the Company commencing on the Effective Date. | |
| 2. | SCOPE OF EMPLOYMENT. During the term of this Agreement, Executive shall hold the position of Chief Executive Officer and shall have those duties and responsibilities customarily associated with the title of Chief Executive Officer plus any additional duties as may reasonably be assigned to him from time to time by the Company. The Company shall at all times during the term of this Agreement take all steps necessary to nominate Executive as a nominee for director for the purposes of any meeting or consent of the shareholders conducted or taken during the term of this Agreement. The Executive shall report directly to the Board. The Executive will devote his full time and best efforts to the business and affairs of the Company. Notwithstanding the foregoing or any other provision of this Agreement, it shall not be a breach or violation of this Agreement for the Executive to (i) serve on civic or charitable boards or committees or, with prior approval of the Board, on corporate boards or committees, (ii) deliver lectures, fulfill speaking engagements, teach at educational institutions or provide consulting services, provided, in each case, that such activities do not (a) materially interfere, individually or in the aggregate with the performance of your duties hereunder or (b) violate any restrictive covenants. The Executive shall be subject to and comply with the Company’s policies, procedures and approval practices as generally in effect at any time and from time to time. | |
| 3. | PREVIOUS OBLIGATIONS. To the best of Executive’s knowledge, the Executive represents that his employment by the Company and the performance of his duties on behalf of the Company does not, and shall not, breach any agreement that obligates the Executive to keep in confidence any trade secrets or confidential or proprietary information of any other party or to refrain from competing, directly or indirectly, with the business of any other party. |
| 4. | COMPENSATION. As full compensation for all services to be rendered by Executive during the term of this Agreement, the Company will compensate the Executive as follows. | ||
| A. | Base Salary. The Company shall pay the Executive a base salary (the “Base Salary”) at the annualized rate of $540,000, which shall be subject to customary withholdings and authorized deductions and shall be payable in equal installments in accordance with the Company’s customary payroll practices in place from time to time. The Executive’s Base Salary shall be subject to review for an upward adjustment on at least an annual basis. The Executive’s Base Salary may not be adjusted downward without the Executive’s prior written consent. The foregoing annualized rate will be effective for fiscal year 2021 and may be reevaluated by the Company’s Board of Directors for fiscal year 2022. | ||
| B. | Annual Bonus. | ||
| The Executive will be eligible to participate in an annual executive bonus plan pursuant to which he may earn a bonus (“Bonus”) equal to up to 50% of his Base Salary (such maximum bonus may be referred to as the “Target Bonus”). | |||
| Prior to the commencement of each calendar year, the Board will establish and approve the Target Bonus for such calendar year, provided that such Target Bonus shall not be less than 50% of the Executive’s Base Salary. Achievement of the Target Bonus will be based on the Executive meeting individual objectives and the Company meeting company-wide objectives (collectively, the “Performance Criteria”). | |||
| The Board may, in its discretion, grant the Executive a Bonus in excess of the Target Bonus if the Performance Criteria are exceeded or for such additional contributions that the Board may choose to recognize. | |||
| Following the close of each calendar year but in no event after the later of January 30th of the year following the year for which the Bonus is payable or ten business days after completion of the Company’s audited financial statements, the Board will meet and determine in its reasonable discretion the extent to which the Performance Criteria have been achieved for such year and the amount of the Bonus. Based on that determination, payment of the Bonus (if any) shall be made at the same time annual Bonuses are generally paid to other senior executives of the Company (generally the first regular payroll date following the Board’s certification of the achievement of applicable Performance Criteria) (the “Bonus Payment Date”). If the Executive is eligible to receive a Bonus, such Bonus will not be deemed to be fully earned unless Executive is employed by the Company and in good standing on the last day of the fiscal year to which the Bonus relates. The Bonus shall be paid to the Executive no later than March 15th of the year following the year for which the bonus is payable. | |||
| C. | Stock Option Grants. During the Term, subject to the terms of the Company’s 2021 Stock Incentive Plan or any successor equity compensation plan as may be in place from time to time and separate award agreements, the Executive shall be eligible to receive from time to time stock options or other equity awards in amounts, if any, to be approved by the Board or the Compensation Committee in its discretion. Executive agrees that any equity grants awarded to him as compensation for services as Chief Executive Officer shall be subject to any clawback policy that the Company established from time to time that is applicable to the Company’s executive officers. | ||
| 5. | BENEFITS. During his employment and subject to any contribution therefore generally required of employees of the Company, the Executive shall be entitled to participate in any and all employee benefit plans from time to time in effect for executive employees of the Company generally. Such participation shall be subject to (i) the terms of the applicable plan documents, (ii) generally applicable policies of the Company and (iii) the discretion of the Board or any administrative or other committee provided for in or contemplated by such plan. The Company may alter, modify, add to or delete its employee benefit plans at any time as it, in its sole judgment, deems appropriate. During the term of his employment, the Executive shall be entitled to 20 paid days off (none of which may be carried over from one year to the next) as well as those paid public holidays provided for in the Company’s standard policies, as they may be amended from time to time. | ||
| 6. | EXPENSES. The Executive shall be entitled to reimbursement by the Company for all necessary and reasonable travel, entertainment and other business expenses incurred by him in connection with his duties hereunder. The Company shall reimburse the Executive for all such expenses upon presentation of an itemized account and appropriate supporting documentation, all in accordance with the Company’s generally applicable policies as in effect from time to time. | ||
| 7. | CONFIDENTIALITY AND NONSOLICITATION. | ||
| A. | Confidential Information. During the term of his employment, the Executive will have access to the Company’s confidential business information (the “Confidential Information”). The definition of Confidential Information includes any information regarding the Company or its affiliates that is not generally available to the public. By way of example not limitation, Confidential Information includes inventions, designs, data, computer code, works of authorship, know-how, trade secrets, formulas, compounds, indications, techniques, ideas, discoveries, products and services under development, employee, investor, customer and vendor information of any kind, marketing and business plans and financial information of any kind including pricing and profit margins. | ||
| B. | Ownership of Confidential Information. The Confidential Information (and all documents containing Confidential Information) is and will, as between the Executive and the Company, be the sole property of the Company. | ||
| C. | Protection and Use of Confidential Information. The Executive shall preserve and protect the confidentiality and security of the Confidential Information. At all times during his employment by the Company and thereafter, the Executive will protect and not disclose to any third party any Confidential Information. The Executive shall not use the Confidential Information or make any use of, the Confidential Information, except (i) in connection with the performance of his duties for the Company or as otherwise required in connection with court process or requested by a governmental or regulatory body; (ii) as may be required by law (with advance notice to the Company prior to any such disclosure to the extent legally permitted); or (iii) to Executive’s personal legal advisors for the purposes of enforcing or interpreting this Agreement (or in the case of any other litigation between the Executive and the Company), or to a court or arbitrator for the purpose of enforcing or interpreting this Agreement (or in the case of any other litigation between the Executive and the Company), and who in each case have been informed as to the confidential nature of such Confidential Information and, as to advisors, their obligation to keep such Confidential Information confidential. “Confidential Information” will not include any information which is in the public or industry domain during the Executive’s employment, provided that such information is not in the public or industry domain as a consequence of any action or inaction by the Executive in violation of this Agreement. | ||
| D. | Return of Confidential Information. Upon request of the Company, the Executive will promptly (i) deliver to the Company all documents and other tangible media in the Executive’s possession or control that evidence, contain or reflect Confidential Information (including all copies, reproductions, digests, abstracts, analyses, and notes) and (ii) destroy any intangible materials that evidence, contain or reflect Confidential Information on equipment or media not owned by the Company, provided Executive may retain personal financial, insurance, identification and health records or documents and the contact information of your personal contacts and any portion of your personal correspondence to the extent such retained portion does not contain Confidential Information. | ||
| E. | Nonsolicitation of Employees and Certain Other Third Parties. At all times during the twelve (12) months period immediately following termination of employment, the Executive shall not, directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity (i) employ or attempt to employ or enter into any contractual arrangement with any employee performing services for the Company or any of its affiliates and/or (ii) persuade or encourage or attempt to persuade or encourage any persons or entities with whom the Company or any of its affiliates does business or has some business relationship to cease doing business or terminate its business relationship with the Company or any of its affiliates. |
Notwithstanding any provisions of this Agreement or otherwise, nothing contained in this Agreement limits the Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or prevents the Executive from providing truthful testimony in response to a lawfully issued subpoena or court order. Further, nothing in this Agreement shall (1) prohibit the Executive from making reports of possible violations of federal law or regulation to any Government Agencies, including but not limited to the Securities and Exchange Commission, in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, or (2) require notification or prior approval by the Company of any such report; provided that the Executive is not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. Further, this Agreement does not limit my ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit the Executive’s right to seek an award pursuant to Section 21F of the Securities Exchange Act of 1934. In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, the Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) 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 (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
| 8. | ASSIGNMENT OF WORK PRODUCT. | ||
| A. | Definitions. The following capitalized terms shall have the meanings assigned to them below: | ||
“Intellectual Property” means collectively all Work Product and all Intellectual Property Rights relating to all Work Product.
“Intellectual Property Rights” means all copyrights, copyright registrations and copyright applications, trademarks, service marks, trade dress, trade names, trademark registrations and trademark applications, patents and patent applications, trade secret rights, and all other rights and interests existing, created or protectable under any intellectual property or other law of any nation.
“Work Product” means any and all inventions, discoveries, original works of authorship, developments, improvements, formulas, compounds, indications, techniques, concepts, data and ideas (whether or not patentable or registerable under patent, copyright, or similar statute) made, conceived, prepared, created, discovered, or reduced to practice by the Executive, either alone or jointly with others during the period of his employment, that (i) result from work performed by the Executive for the Company, (ii) are made by use of the Company’s equipment, supplies, facilities or Confidential Information, or are made, conceived or completed, wholly or in part, within the scope of the Executive’s services or duties to the Company, or (iii) are related to the business of the Company or the actual or demonstrably anticipated business of the Company.
| B. | Property of the Company. All Intellectual Property is and will be the sole property of the Company. | ||
| C. | Copyrights; Assignment. The Executive agrees that all copyrightable materials that fall within the definition of Work Product, will be, to the maximum extent permitted by law, works-made-for-hire for the Company under copyright law, and to the extent not works-made-for-hire, the Executive hereby assigns to the Company, without royalty or further consideration to the Executive, all right, title, and interest he may have, or may acquire, in and to all Intellectual Property. | ||
| D. | Disclosure. The Executive will promptly disclose in writing all Work Product to the Company. The Executive agrees to keep adequate and current written records of all such Work Product, in the form of notes, sketches, drawings, electronic records and/or other reports, which records are, and will remain, the sole property of the Company and will be available to the Company at all times. | ||
| E. | Execution of Documents. Whenever requested by the Company, both during the period of the Executive’s employment and thereafter, the Executive will promptly sign and deliver to the Company any and all applications, assignments and other documents that the Company considers necessary or desirable in order to: (a) assign, apply for, obtain, and maintain any Intellectual Property Rights in the United States and for other countries relating to any Work Product, (b) assign and convey to the Company or its designee the sole and exclusive right, title, and interest in and to all Intellectual Property, (c) provide evidence regarding the Intellectual Property that the Company considers necessary or desirable, and (d) confirm the Company’s ownership of the Intellectual Property, all without royalty or any other further consideration to the Executive. |
| F. | Assistance to the Company. Whenever requested by the Company, both during the period of the Executive’s employment and thereafter, the Executive will, at the Company’s expense, assist the Company in assigning, obtaining, maintaining, defending, registering and from time to time enforcing, in any and all countries, the Company’s right to the Intellectual Property. This assistance may include, without limitation, testifying in a suit or other proceeding. If the Company requires assistance from the Executive after termination of his employment, the Executive will be compensated for time actually spent in providing assistance at an hourly rate equivalent to his compensation at the time his employment was terminated together with his reasonable, actual out-of-pocket expenses incurred in providing such assistance. | ||
| G. | Power of Attorney. For use in the case that the Company cannot obtain the Executive’s signature on any document that the Company considers necessary or desirable in order to assign, apply for, prosecute, obtain, or enforce any Intellectual Property, whether due to the Executive’s non-cooperation, unavailability, or any other reason, the Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as his agent and attorney-in-fact to act for, and on the Executive’s behalf, to execute and file any such document and to do all other lawfully permitted acts to further the assignment, transfer to the Company, application, registration, prosecution, issuance, and enforcement of all Intellectual Property, with the same force and effect as if executed and delivered by the Executive. | ||
| H. | Prior Inventions. The Executive represents that any inventions, original works of authorship, discoveries, concepts or ideas, if any, to which the Executive presently has any right, title or interest, and which were previously conceived either wholly or in part by the Executive, and that the Executive desires to exclude from the operation of this Agreement are identified on Schedule A of this Agreement (each a “Prior Invention”). The Executive represents that the list contained in Schedule A is complete to the best of his knowledge and to the extent any such Prior Invention is not listed, it is agreed that Company has and is hereby granted a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, display, perform sell and otherwise use such Prior Invention as part of or in connection with any Company product, process or service. If during the Executive’s retention with the Company, the Executive incorporates a Prior Invention into a Company product, process or service or its use, the Executive shall be deemed to have automatically granted to the Company a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, display, perform sell and otherwise use such Prior Invention as part of or in connection with any Company product, process or service. | ||
| 9. | TERM; TERMINATION. | ||
| A. | Term. Employment is on an AT-WILL basis and both the Company and the Executive shall have the right to terminate this Agreement and the Executive’s employment at any time subject to the notice provisions set forth below. | ||
| B. | Death. Upon the death of the Executive, the Executive’s employment with the Company shall terminate. | ||
| C. | Disability. If the Executive is unable to perform the essential functions of Employee’s employment with the Company for more than eighteen weeks (unless a longer period is required by state or federal law), the Company shall have the right to terminate the Executive’s employment upon prior written notice. | ||
| D. | Termination by the Executive. The Executive may terminate this Agreement and his employment hereunder (i) without Good Reason (as defined below) upon thirty (30) days written notice to the Executive or (ii) immediately for Good Reason. | ||
| E. | Termination by Company. The Company may terminate this Agreement and the Executive’s employment hereunder (i) without Cause (as defined below) upon thirty (30) days written notice to the Executive or (ii) immediately for Cause. | ||
| F. | Certain Definitions. The following capitalized terms shall have the meanings assigned to them below: |
“Cause” means: (i) the Executive’s chronic failure to perform those material duties assigned to him pursuant to Section 2 above after written notice thereof and a reasonable opportunity to respond and/or cure of not less than 30 days; (ii) the Executive’s material and repeated gross negligence or willful misconduct (including but not limited to acts of fraud or theft or the violation of applicable laws) in connection with the performance of his duties after written notice thereof and a reasonable opportunity to respond and/or cure of not less than 30 days; (iii) the Executive’s material breach of Section 7 or 8 above after written notice thereof and a reasonable opportunity to respond and/or cure of not less than 30 days; (iv) the Executive’s conviction of, or entry of a plea of guilty or nolo contendere to a felony or any other crime that involves fraud, dishonesty, or serious moral turpitude under the laws of the United States or any state thereof; or (v) the Executive’s alcohol abuse or use of controlled substances (other than prescription drugs taken in accordance with a physician’s prescription), in each case, to the extent such activities under this clause (v) materially interfere with Executive’s duties.
“Good Reason” means the voluntary termination by the Executive within thirty (30) days following: (i) a requirement that the Executive physically relocates to another office that is more than 30 miles from the office location that the Executive reported to at the commencement of his employment with the Company; (ii) a reduction in the Executive’s Salary or Target Bonus in violation of this Agreement; (iii) a material adverse change in the Executive’s title or job description or a significant reduction of the scope of the Executive’s authority or responsibilities as Chief Executive Officer, but not including any Board related duties, or (iv) or any other material breach of this Agreement by the Company, including but not limited to no longer reporting to the Board, provided that no act or omission in (i) through (iv) of this definition shall constitute Good Reason unless (x) Executive provides the Company with written notice within ninety (90) days after Executive first become aware of, or reasonably should have become aware of, the occurrence or existence of such event or circumstance, which notice identifies the event or circumstance that Executive believes constitutes Good Reason, (y) the Company fails to cure such act or omission within thirty (30) days after delivery of such notice to the Company and (z) Executive terminates Executive’s employment with the Company within thirty (30) days after the expiration of the cure period referred to in the preceding clause (y).
| 10. | EFFECT OF TERMINATION | ||
| A. | Payments Upon Termination. In the event that the Executive’s employment with the Company is terminated for any reason, the Executive shall have the right to receive (i) the compensation and reimbursable expenses then accrued and/or earned and unpaid under Sections 4 and 5 of this Agreement through the date of termination (including, if the Executive is entitled to a Bonus for the year immediately preceding the year of such termination but for not being employed on the Bonus Payment Date, the Company shall pay the Bonus based on achievement of pre-determined performance goals on the same basis as other participants in the plan who are employed on the Bonus Payment Date), (ii) payment for unused vacation days accrued through the date of termination and (iii) any benefits required by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). In addition, in the event that the Executive’s employment with the Company is terminated due to Executive’s death or disability (as described in Section 9(B) and 9(C), above), if the Executive is entitled to a Bonus for the year of termination based on achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), the Company shall pay such Bonus on the same basis as other participants in the plan except that the Bonus amount shall be prorated (based on the percentage of days the Executive was employed relative to the total number of days in the bonus earning period). | ||
| B. | Additional Payments. (a) Subject to Sections 10 D and 10 E, in the event that the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason during the term of this Agreement other than during the Change in Control Period (as defined below), (A) the Company shall (i) pay to the Executive an amount equal to twelve (12) months of his then current Base Salary under Section 4 A above (less applicable withholdings and authorized deductions), to be paid in equal installments bimonthly in accordance with the Company’s customary payroll practices, and (ii) if the Executive then participates in the Company’s medical and/or dental plans and the Executive timely elects to continue and maintain group health plan coverage pursuant to COBRA, reimburse the Executive for the cost of health insurance under COBRA for the Executive and Executive’s dependents for a period of twelve (12) months; provided, however, that if and to the extent that the Company may not provide such COBRA reimbursement without incurring tax penalties or violating any requirement of the law, the Company shall use its commercially reasonable best efforts to provide substantially similar assistance in an alternative manner, provided that the cost of doing so does not exceed the cost that the Company would have incurred had the COBRA reimbursement been provided in the manner described above or cause a violation of Section 409A (as defined below), and (B) if the Executive is entitled to a Bonus for the year of termination based on achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), the Company shall pay such Bonus on the same basis as other participants in the plan except that the Bonus amount shall be prorated (based on the percentage of days the Executive was employed relative to the total number of days in the bonus earning period). | ||
| C. | Subject to Sections 10 D and 10 E, in the event that the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason during the term of this Agreement and within 6 months immediately preceding and 12 months immediately following a Change in Control (as defined below) (the “Change in Control Period”), then in lieu of the payments set forth in subsection 10 B above, the Company shall (i) pay to the Executive an amount equal to eighteen (18) months of his then current Base Salary under Section 4 A above (less applicable withholdings and authorized deductions), to be paid in equal installments bimonthly in accordance with the Company’s customary payroll practices, (ii) if the Executive then participates in the Company’s medical and/or dental plans and the Executive timely elects to continue and maintain group health plan coverage pursuant to COBRA, reimburse the Executive for the cost of health insurance under COBRA for the Executive and Executive’s dependents for a period of eighteen (18) months; provided, however, that if and to the extent that the Company may not provide such COBRA reimbursement without incurring tax penalties or violating any requirement of the law, the Company shall use its commercially reasonable best efforts to provide substantially similar assistance in an alternative manner, provided that the cost of doing so does not exceed the cost that the Company would have incurred had the COBRA reimbursement been provided in the manner described above or cause a violation of Section 409A (as defined below), (iii) pay the current year Bonus at the Target Bonus level, which payment shall be made within 30 days of termination, and (iv) fully accelerate vesting of all of the Executive’s outstanding stock options, restricted stock and other equity incentive awards upon the later of (x) the Change in Control or (y) the Executive’s termination of employment with the Company. For the avoidance of doubt, any equity incentive awards with performance vesting conditions shall be deemed achieved at the greater of target performance or the actual or projected actual level of Company performance on the applicable performance measures as determined in the Board’s sole discretion. | ||
As used in this Agreement, “Change in Control” means (x) a change in ownership of the Company under clause (i) below or (y) a change in the ownership of a substantial portion of the assets of the Company under clause (ii) below:
| i. | Change in the Ownership of the Company. A change in the ownership of the Company shall occur on the date that any one person, or more than one person acting as a group (as defined in clause (iii) below), acquires ownership of capital stock of the Company that, together with capital stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the capital stock of the Company. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the capital stock of the Company, the acquisition of additional capital stock by the same person or persons shall not be considered to be a change in the ownership of the Company. An increase in the percentage of capital stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires capital stock in the Company in exchange for property will be treated as an acquisition of stock for purposes of this paragraph. | ||
| ii. | Change in the Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets shall occur on the date that any one person, or more than one person acting as a group (as defined in clause (iii) below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 80 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in Control under this clause (ii) when there is a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer, as provided below in this clause (ii). A transfer of assets by the Company is not treated as a change in the ownership of such assets if the assets are transferred to (a) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its capital stock, (b) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (c) a person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding capital stock of the Company, or (d) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in clause (ii)(c) of this paragraph. For purposes of this clause (ii), a person’s status is determined immediately after the transfer of the assets. |
| iii. | Persons Acting as a Group. For purposes of clauses (i) and (ii) above, persons will not be considered to be acting as a group solely because they purchase or own capital stock or purchase assets of the Company at the same time. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar business transaction with the Company. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. For purposes of this paragraph, the term “corporation” shall have the meaning assigned such term under Treasury Regulation section 1.280G-1, Q&A-45. |
Each of clauses (i) through (iii) above shall be construed and interpreted consistent with the requirements of Section 409A and any Treasury Regulations or other guidance issued thereunder.
| D. | Release Agreement. In order to receive the payments and benefits set forth in Sections 10(B) or (C), as applicable (collectively referred to herein as the “Severance Payments”), the Executive must timely execute (and not revoke) a separation agreement and general release (the “Release Agreement”) in a customary form as is determined to be reasonably necessary by the Company in its good faith and reasonable discretion. If the Executive is eligible for Severance Payments pursuant to Section 10, the Company will deliver the Release Agreement to the Executive (which Release Agreement will not contain any new restrictive covenants (i.e., it may restate covenants contained herein, but will not include additional covenants) within seven (7) calendar days following the date of termination of employment. The Severance Payments are subject to the Executive’s execution and delivery of such Release Agreement and such Release Agreement becoming irrevocable within thirty (30) days following the date of termination of employment (such 30-day period, the “Release Period”). If the Release Period spans two calendar years, Severance Payments shall not commence earlier than January 1st of the second calendar year (with the first payment containing all amounts which should have been paid, but were not paid, prior to such date). | ||
| E. | Post-Termination Breach. Notwithstanding anything to the contrary contained in this Agreement, the Company’s obligation to provide the Severance Payments will immediately cease if the Executive breaches any of the provisions of Sections 7 or 8, the Release Agreement or any other Agreement the Executive has with the Company. | ||
| 11. | NO OTHER PAYMENTS OR BENEFITS. The Executive acknowledges and agrees that upon the termination of his employment, no other benefits, compensation or remuneration of any kind is owed by the Company to the Executive other than as set forth in this Section 10 or as set forth in any Option Agreements. | ||
| 12. | SURVIVAL. Notwithstanding anything to the contrary set forth herein, Sections 7, 8, 9, 10 and 11 of this Agreement and any remedies for the breach thereof, shall survive the termination of this Agreement under the terms hereof. Termination of this Agreement shall not relieve or release either party from any rights, liabilities or obligations which it/he has accrued prior the effective date of such termination. | ||
| 13. | RETURN OF COMPANY PROPERTY; EXIT INTERVIEW. Upon termination of the Executive’s employment with the Company for any reason, the Executive will promptly: | ||
Deliver to the Company all documents and other tangible media in the Executive’s possession or control that evidence, contain or reflect (A) Confidential Information or (B) Work Product, in each case whether prepared by the Executive or otherwise coming into the Executive’s possession or control;
Destroy any intangible materials that evidence, contain or reflect Confidential Information or Work Product on equipment or media not owned by the Company; and
Return to the Company all equipment, files, software programs and other personal property belonging to the Company.
Upon termination of the Executive’s employment with the Company for any reason, the Executive will attend an exit interview with a representative of the Company to review the Executive’s continuing obligations under this Agreement.
Notwithstanding the foregoing, Executive may retain personal financial, insurance, identification and health records or documents and the contact information of your personal contacts and any portion of your personal correspondence to the extent such retained portion does not contain Confidential Information
| 14. | ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all contemporaneous and prior agreements and understandings between the Company, its predecessors and any subsidiary, as to such subject matter, including but not limited to the Prior Agreement. For the avoidance of doubt, the Prior Agreement shall be of no further force or effect. Except as otherwise expressly provided herein, this Agreement may not be amended except by an instrument in writing executed by the Company and the Executive. | |
| 15. | ASSIGNMENT. The Executive shall not be permitted to assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company. | |
| 16. | GOVERNING LAW; JURISDICTION. This Agreement shall be construed and enforced in accordance with and governed by the laws of New York. The parties hereby consent and submit to the exclusive jurisdiction and venue of the courts located in New York, New York in connection with any actions or proceedings brought against either of them (or each of them) arising out of or relating to this Agreement. | |
| 17. | MISCELLANEOUS. No waiver by either party of any term or condition of this Agreement, whether by conduct or otherwise, in any one or more instance, shall be deemed a continuing waiver of any such term or condition, or a waiver of any other term or condition of this Agreement. Headings set forth in this Agreement are solely for the convenience of the parties and have no legal effect. If any provision of this Agreement shall be found to be invalid by any court having competent jurisdiction, the invalidity of such provision shall not affect the validity of the remaining provisions hereof. This Agreement shall be (i) binding upon, and will inure to the benefit of, the parties and their permitted respective successors and assigns, (ii) construed without presumption of any rule requiring construction to be made against the party causing it to be drafted and (iii) executed in any number of counterparts, each of which will for all purposes be deemed to be an original, and all of which are identical. |
| 18. | TAX WITHHOLDING. The Company or other payor is authorized to withhold from any benefit provided or payment due hereunder, the amount of withholding taxes due any federal, state or local authority in respect of such benefit or payment and to take such other action as may be necessary in the opinion of the Board to satisfy all obligations for the payment of such withholding taxes. The Executive will be solely responsible for all taxes assessed against him with respect to the compensation and benefits described in this Agreement, other than typical employer-paid taxes such as FICA, and the Company makes no representations as to the tax treatment of such compensation and benefits. | |
| 19. | SECTION 409A COMPLIANCE. All payments under this Agreement are intended to comply with or be exempt from the requirements of Section 409A of the Code and regulations promulgated thereunder (“Section 409A”). As used in this Agreement, the “Code” means the Internal Revenue Code of 1986, as amended. To the extent permitted under applicable regulations and/or other guidance of general applicability issued pursuant to Section 409A, the Company reserves the right to modify this Agreement to conform with any or all relevant provisions regarding compensation and/or benefits so that such compensation and benefits are exempt from the provisions of 409A and/or otherwise comply with such provisions so as to avoid the tax consequences set forth in Section 409A and to assure that no payment or benefit shall be subject to an “additional tax” under Section 409A. To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A, or to the extent any provision in this Agreement must be modified to comply with Section 409A, such provision shall be read in such a manner so that no payment due to the Executive shall be subject to an “additional tax” within the meaning of Section 409A(a)(1)(B) of the Code. If necessary to comply with the restriction in Section 409A(a)(2)(B) of the Code concerning payments to “specified employees,” any payment on account of the Executive’s separation from service that would otherwise be due hereunder within six (6) months after such separation shall be delayed until the first business day of the seventh month following the date of termination of employment and the first such payment shall include the cumulative amount of any payments (without interest) that would have been paid prior to such date if not for such restriction. Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A. In no event may the Executive, directly or indirectly, designate the calendar year of payment. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. Notwithstanding anything contained herein to the contrary, the Executive shall not be considered to have terminated employment with the Company for purposes of Section 10 unless the Executive would be considered to have incurred a “termination of employment” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii). In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Executive by Section 409A or damages for failing to comply with Section 409A. |
| 20. | 280G MODIFIED CUTBACK. If any payment, benefit or distribution of any type to or for the benefit of the Executive, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Parachute Payments”) would subject the Executive to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax; provided that the Parachute Payments shall only be reduced to the extent the after-tax value of amounts received by the Executive after application of the above reduction would exceed the after-tax value of the amounts received without application of such reduction. For this purpose, the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment and excise taxes applicable to such amount. Unless the Executive shall have given prior written notice to the Company to effectuate a reduction in the Parachute Payments if such a reduction is required, which notice shall be consistent with the requirements of Section 409A to avoid the imputation of any tax, penalty or interest thereunder, then the Company shall reduce or eliminate the Parachute Payments by first reducing or eliminating accelerated vesting of stock options or similar awards, then reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any other remaining Parachute Payments; provided, that no such reduction or elimination shall apply to any non-qualified deferred compensation amounts (within the meaning of Section 409A) to the extent such reduction or elimination would accelerate or defer the timing of such payment in manner that does not comply with Section 409A. |
An initial determination as to whether (x) any of the Parachute Payments received by the Executive in connection with the occurrence of a change in the ownership or control of the Company or in the ownership of a substantial portion of the assets of the Company shall be subject to the Excise Tax, and (y) the amount of any reduction, if any, that may be required pursuant to the previous paragraph, shall be made by an independent accounting firm selected by the Company (the “Accounting Firm”) prior to the consummation of such change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company. The Executive shall be furnished with notice of all determinations made as to the Excise Tax payable with respect to the Executive’s Parachute Payments, together with the related calculations of the Accounting Firm, promptly after such determinations and calculations have been received by the Company.
For purposes of this Section 20, (i) no portion of the Parachute Payments the receipt or enjoyment of which the Executive shall have effectively waived in writing prior to the date of payment of the Parachute Payments shall be taken into account; (ii) no portion of the Parachute Payments shall be taken into account which in the opinion of the Accounting Firm does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code; (iii) the Parachute Payments shall be reduced only to the extent necessary so that the Parachute Payments (other than those referred to in the immediately preceding clause (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code or are otherwise not subject to disallowance as deductions, in the opinion of the auditor or tax counsel referred to in such clause (ii); and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Parachute Payments shall be determined by the Company’s independent auditors based on Sections 280G and 4999 of the Code and the regulations for applying those sections of the Code, or on substantial authority within the meaning of Section 6662 of the Code.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Effective Date.
Indaptus Therapeutics, Inc.
| By: | /s/ Nir Sassi | |
| Title: | Chief Financial Officer | |
| By: | /s/ Jeffrey Meckler | |
| Jeffrey A. Meckler | ||
| Address: | ||
Schedule A
Prior Inventions
LIST IF ANY
| Jeffrey A. Meckler |
Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”), effective as of August 4, 2021 (the “Effective Date”), is between Indaptus Therapeutics, Inc. (the “Company”) and Michael J. Newman (the “Executive”).
WITNESSETH
WHEREAS, the Company desires to employ the Executive as its Chief Science Officer, and the Executive desires to accept such employment, on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
| 1. | EMPLOYMENT. Subject to the terms and conditions set forth herein, the Company hereby employs the Executive, and the Executive hereby accepts such employment by the Company commencing on the Effective Date. |
| 2. | SCOPE OF EMPLOYMENT. During the term of this Agreement, Executive shall hold the position of Chief Science Officer and Founder and shall have those duties and responsibilities customarily associated with the title of Chief Science Officer plus any additional duties as may reasonably be assigned to him from time to time by the Company. The Company shall at all times during the term of this Agreement take all steps necessary to nominate Executive as a nominee for director for the purposes of any meeting or consent of the shareholders conducted or taken during the term of this Agreement, and shall use reasonable efforts to have Executive appointed to the Science Committee. The Executive shall report directly to the Chief Executive Officer. The Executive will devote his full time and best efforts to the business and affairs of the Company; provided, however, that the Executive may (i) serve as a director or advisor of nonprofit organizations without the approval of the Company; (ii) serve as a director or advisor of one (1) for-profit organization with the Company’s permission (which shall not be unreasonably withheld or delayed); provided, however, that such service shall not create a conflict of interest with Executive’s service to the Company; (iii) perform and participate in charitable, civic, educational, professional, community and industry affairs and other related activities; and (iv) manage Executive’s personal investments, provided, in each case, that such activities do not (a) materially interfere, individually or in the aggregate with the performance of your duties hereunder or (b) violate any restrictive covenants. The Executive shall be subject to and comply with the Company’s policies, procedures and approval practices as generally in effect at any time and from time to time. |
| 3. | PREVIOUS OBLIGATIONS. To the best of Executive’s knowledge, the Executive represents that his employment by the Company and the performance of his duties on behalf of the Company does not, and shall not, breach any agreement that obligates the Executive to keep in confidence any trade secrets or confidential or proprietary information of any other party or to refrain from competing, directly or indirectly, with the business of any other party. |
| 4. | COMPENSATION. As full compensation for all services to be rendered by Executive during the term of this Agreement, the Company will compensate the Executive as follows. |
| A. | Base Salary. The Company shall pay the Executive a base salary (the “Base Salary”) at the annualized rate of $425,000, which shall be subject to customary withholdings and authorized deductions and shall be payable in equal installments in accordance with the Company’s customary payroll practices in place from time to time. The Executive’s Base Salary shall be subject to review for an upward adjustment on at least an annual basis. The Executive’s Base Salary may not be adjusted downward without the Executive’s prior written consent. The foregoing annualized rate will be effective for fiscal year 2021 and may be reevaluated by the Company’s Board of Directors for fiscal year 2022. |
| B. | Annual Bonus. The Executive will be eligible to participate in an annual executive bonus plan pursuant to which he may earn a bonus (“Bonus”) equal to up to 50% of his Base Salary (such maximum bonus may be referred to as the “Target Bonus”). |
Prior to the commencement of each calendar year, the Board will establish and approve the Target Bonus for such calendar year, provided that such Target Bonus shall not be less than 40% of the Executive’s Base Salary. Achievement of the Target Bonus will be based on the Executive meeting individual objectives and the Company meeting company-wide objectives (collectively, the “Performance Criteria”).
The Board may, in its discretion, grant the Executive a Bonus in excess of the Target Bonus if the Performance Criteria are exceeded or for such additional contributions that the Board may choose to recognize.
Following the close of each calendar year but in no event after the later of January 30th of the year following the year for which the Bonus is payable or ten business days after completion of the Company’s audited financial statements, the Board will meet and determine in its reasonable discretion the extent to which the Performance Criteria have been achieved for such year and the amount of the Bonus. Based on that determination, payment of the Bonus (if any) shall be made at the same time annual Bonuses are generally paid to other senior executives of the Company (generally the first regular payroll date following the Board’s certification of the achievement of applicable Performance Criteria) (the “Bonus Payment Date”). If the Executive is eligible to receive a Bonus, such Bonus will not be deemed to be fully earned unless Executive is employed by the Company and in good standing on the last day of the fiscal year to which the Bonus relates. The Bonus shall be paid to the Executive no later than March 15th of the year following the year for which the bonus is payable.
| C. | Stock Option Grants. Subject to the Board’s approval, the Company shall grant to you as soon as reasonably practicable an option to acquire 290,000 shares of common stock (the “Option”) under the Indaptus Therapeutics, Inc. 2021 Stock Incentive Plan (the “Stock Incentive Plan”). The Option grant shall have a price per share exercise price equal to the fair market value of an underlying share of the Company common as determined by the Board on the date of grant. The Option will be evidenced in writing by, and subject to the terms of, the Stock Incentive Plan and a stock option agreement attached to this Agreement. The Option will vest one-third of the shares after one year, with monthly vesting in equal amounts over the next two years so that it vests 100% over three years after the date of grant. During the Term, subject to the terms of the Stock Incentive Plan Plan or any successor equity compensation plan as may be in place from time to time and separate award agreements, the Executive shall be eligible to receive from time to time stock options or other equity awards in amounts, if any, to be approved by the Board or the Compensation Committee in its discretion. |
Executive agrees that any equity grants awarded to him as compensation for services as Chief Science Officer shall be subject to any clawback policy that the Company established from time to time that is applicable to the Company’s executive officers.
| 5. | BENEFITS. During his employment and subject to any contribution therefore generally required of employees of the Company, the Executive shall be entitled to participate in any and all employee benefit plans from time to time in effect for executive employees of the Company generally. Such participation shall be subject to (i) the terms of the applicable plan documents, (ii) generally applicable policies of the Company and (iii) the discretion of the Board or any administrative or other committee provided for in or contemplated by such plan. The Company may alter, modify, add to or delete its employee benefit plans at any time as it, in its sole judgment, deems appropriate. |
| A. | Vacations and Holidays. During the term of his employment, the Executive shall be entitled to 20 paid days off (none of which may be carried over from one year to the next) as well as those paid public holidays provided for in the Company’s standard policies, as they may be amended from time to time. |
| 6. | EXPENSES. The Executive shall be entitled to reimbursement by the Company for all necessary and reasonable travel, entertainment and other business expenses incurred by him in connection with his duties hereunder. The Company shall reimburse the Executive for all such expenses upon presentation of an itemized account and appropriate supporting documentation, all in accordance with the Company’s generally applicable policies as in effect from time to time. |
| 7. | CONFIDENTIALITY. |
| A. | Definition. During the term of his employment, the Executive will have access to the Company’s confidential business information (the “Confidential Information”). The definition of Confidential Information includes any information regarding the Company or its affiliates that is not generally available to the public. By way of example not limitation, Confidential Information includes inventions, designs, data, computer code, works of authorship, know-how, trade secrets, formulas, compounds, indications, techniques, ideas, discoveries, products and services under development, employee, investor, customer and vendor information of any kind, marketing and business plans and financial information of any kind including pricing and profit margins. |
| B. | Ownership of Confidential Information. The Confidential Information (and all documents containing Confidential Information) is and will, as between the Executive and the Company, be the sole property of the Company. |
| C. |
Protection and Use of Confidential Information. The Executive shall preserve and protect the confidentiality and security of the Confidential Information. At all times during his employment by the Company and thereafter, the Executive will protect and not disclose to any third party any Confidential Information. The Executive shall not use the Confidential Information or make any use of, the Confidential Information, except (i) in connection with the performance of his duties for the Company or as otherwise required in connection with court process or requested by a governmental or regulatory body; (ii) as may be required by law (with advance notice to the Company prior to any such disclosure to the extent legally permitted); or (iii) to Executive’s personal legal advisors for the purposes of enforcing or interpreting this Agreement (or in the case of any other litigation between the Executive and the Company), or to a court or arbitrator for the purpose of enforcing or interpreting this Agreement (or in the case of any other litigation between the Executive and the Company), and who in each case have been informed as to the confidential nature of such Confidential Information and, as to advisors, their obligation to keep such Confidential Information confidential. “Confidential Information” will not include any information which is in the public or industry domain during the Executive’s employment, provided that such information is not in the public or industry domain as a consequence of any action or inaction by the Executive in violation of this Agreement. |
|
| D. | Return of Confidential Information. Upon request of the Company, the Executive will promptly (i) deliver to the Company all documents and other tangible media in the Executive’s possession or control that evidence, contain or reflect Confidential Information (including all copies, reproductions, digests, abstracts, analyses, and notes) and (ii) destroy any intangible materials that evidence, contain or reflect Confidential Information on equipment or media not owned by the Company, provided Executive may retain personal financial, insurance, identification and health records or documents and the contact information of your personal contacts and any portion of your personal correspondence to the extent such retained portion does not contain Confidential Information. |
Notwithstanding any provisions of this Agreement or Company policy applicable to the unauthorized use or disclosure of trade secrets, the Executive is hereby notified that, pursuant to Section 7 of the Defend Trade Secrets Act, the Executive cannot be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that 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. The Executive also may not be held so liable for such disclosures made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, individuals who file a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.
Notwithstanding any provisions of this Agreement or otherwise, nothing contained in this Agreement limits the Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or prevents the Executive from providing truthful testimony in response to a lawfully issued subpoena or court order. Further, nothing in this Agreement shall (1) prohibit the Executive from making reports of possible violations of federal law or regulation to any Government Agencies, including but not limited to the Securities and Exchange Commission, in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, or (2) require notification or prior approval by the Company of any such report; provided that the Executive is not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. Further, this Agreement does not limit the Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit the Executive’s right to seek an award pursuant to Section 21F of the Securities Exchange Act of 1934.
| 8. | ASSIGNMENT OF WORK PRODUCT. |
| A. | Definitions. The following capitalized terms shall have the meanings assigned to them below: |
“Intellectual Property” means collectively all Work Product and all Intellectual Property Rights relating to all Work Product.
“Intellectual Property Rights” means all copyrights, copyright registrations and copyright applications, trademarks, service marks, trade dress, trade names, trademark registrations and trademark applications, patents and patent applications, trade secret rights, and all other rights and interests existing, created or protectable under any intellectual property or other law of any nation.
“Work Product” means any and all inventions, discoveries, original works of authorship, developments, improvements, formulas, compounds, indications, techniques, concepts, data and ideas (whether or not patentable or registerable under patent, copyright, or similar statute) made, conceived, prepared, created, discovered, or reduced to practice by the Executive, either alone or jointly with others during the period of his employment, that (i) result from work performed by the Executive for the Company, (ii) are made by use of the Company’s equipment, supplies, facilities or Confidential Information, or are made, conceived or completed, wholly or in part, within the scope of the Executive’s services or duties to the Company, or (iii) are related to the business of the Company or the actual or demonstrably anticipated business of the Company.
| B. | Property of the Company. All Intellectual Property is and will be the sole property of the Company. |
| C. | Copyrights; Assignment. The Executive agrees that all copyrightable materials that fall within the definition of Work Product, will be, to the maximum extent permitted by law, works-made-for-hire for the Company under copyright law, and to the extent not works-made-for-hire, the Executive hereby assigns to the Company, without royalty or further consideration to the Executive, all right, title, and interest he may have, or may acquire, in and to all Intellectual Property. |
| D. | Disclosure. The Executive will promptly disclose in writing all Work Product to the Company. The Executive agrees to keep adequate and current written records of all such Work Product, in the form of notes, sketches, drawings, electronic records and/or other reports, which records are, and will remain, the sole property of the Company and will be available to the Company at all times. |
| E. | Execution of Documents. Whenever requested by the Company, both during the period of the Executive’s employment and thereafter, the Executive will promptly sign and deliver to the Company any and all applications, assignments and other documents that the Company considers necessary or desirable in order to: (a) assign, apply for, obtain, and maintain any Intellectual Property Rights in the United States and for other countries relating to any Work Product, (b) assign and convey to the Company or its designee the sole and exclusive right, title, and interest in and to all Intellectual Property, (c) provide evidence regarding the Intellectual Property that the Company considers necessary or desirable, and (d) confirm the Company’s ownership of the Intellectual Property, all without royalty or any other further consideration to the Executive. |
| F. | Assistance to the Company. Whenever requested by the Company, both during the period of the Executive’s employment and thereafter, the Executive will, at the Company’s expense, assist the Company in assigning, obtaining, maintaining, defending, registering and from time to time enforcing, in any and all countries, the Company’s right to the Intellectual Property. This assistance may include, without limitation, testifying in a suit or other proceeding. If the Company requires assistance from the Executive after termination of his employment, the Executive will be compensated for time actually spent in providing assistance at an hourly rate equivalent to his compensation at the time his employment was terminated together with his reasonable, actual out-of-pocket expenses incurred in providing such assistance. |
| G. | Power of Attorney. For use in the case that the Company cannot obtain the Executive’s signature on any document that the Company considers necessary or desirable in order to assign, apply for, prosecute, obtain, or enforce any Intellectual Property, whether due to the Executive’s non-cooperation, unavailability, or any other reason, the Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as his agent and attorney-in-fact to act for, and on the Executive’s behalf, to execute and file any such document and to do all other lawfully permitted acts to further the assignment, transfer to the Company, application, registration, prosecution, issuance, and enforcement of all Intellectual Property, with the same force and effect as if executed and delivered by the Executive. |
| H. | Prior Inventions. The Executive represents that any inventions, original works of authorship, discoveries, concepts or ideas, if any, to which the Executive presently has any right, title or interest, and which were previously conceived either wholly or in part by the Executive, and that the Executive desires to exclude from the operation of this Agreement are identified on Schedule A of this Agreement (each a “Prior Invention”). The Executive represents that the list contained in Schedule A is complete to the best of his knowledge and to the extent any such Prior Invention is not listed, it is agreed that Company has and is hereby granted a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, display, perform sell and otherwise use such Prior Invention as part of or in connection with any Company product, process or service. If during the Executive’s retention with the Company, the Executive incorporates a Prior Invention into a Company product, process or service or its use, the Executive shall be deemed to have automatically granted to the Company a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, display, perform sell and otherwise use such Prior Invention as part of or in connection with any Company product, process or service. |
| 9. | TERM; TERMINATION. |
| A. | Term. Employment is on an AT-WILL basis and both the Company and the Executive shall have the right to terminate this Agreement and the Executive’s employment at any time subject to the notice provisions set forth below. |
| B. | Death. Upon the death of the Executive, the Executive’s employment with the Company shall terminate. |
| C. | Disability. If the Executive is unable to perform the essential functions of Employee’s employment with the Company for more than eighteen weeks (unless a longer period is required by state or federal law), the Company shall have the right to terminate the Executive’s employment upon prior written notice. |
| D. | Termination by the Executive. The Executive may terminate this Agreement and his employment hereunder (i) without Good Reason (as defined below) upon thirty (30) days written notice to the Executive or (ii) immediately for Good Reason. |
| E. | Termination by Company. The Company may terminate this Agreement and the Executive’s employment hereunder (i) without Cause (as defined below) upon thirty (30) days written notice to the Executive or (ii) immediately for Cause. |
| F. | Certain Definitions. The following capitalized terms shall have the meanings assigned to them below: |
“Cause” means: (i) the Executive’s chronic failure to perform those material duties assigned to him pursuant to Section 2 above after written notice thereof and a reasonable opportunity to respond and/or cure of not less than 30 days; (ii) the Executive’s material and repeated gross negligence or willful misconduct (including but not limited to acts of fraud or theft or the violation of applicable laws) in connection with the performance of his duties after written notice thereof and a reasonable opportunity to respond and/or cure of not less than 30 days; (iii) the Executive’s material breach of Section 7 or 8 above after written notice thereof and a reasonable opportunity to respond and/or cure of not less than 30 days; (iv) the Executive’s conviction of, or entry of a plea of guilty or nolo contendere to a felony or any other crime that involves fraud, dishonesty, or serious moral turpitude under the laws of the United States or any state thereof; or (v) the Executive’s alcohol abuse or use of controlled substances (other than prescription drugs taken in accordance with a physician’s prescription), in each case, to the extent such activities under this clause (v) materially interfere with Executive’s duties.
“Good Reason” means the voluntary termination by the Executive within thirty (30) days following: (i) a requirement that the Executive physically relocates to another office that is more than 30 miles from the office location that the Executive reported to at the commencement of his employment with the Company; (ii) a reduction in the Executive’s Salary or Target Bonus in violation of this agreement; (iii) a material adverse change in the Executive’s title or job description or a significant reduction of the scope of the Executive’s authority or responsibilities as Chief Science Officer, but not including any Board related duties, or (iv) or any other material breach of this Agreement by the Company, provided that no act or omission in (i) through (iv) of this definition shall constitute Good Reason unless (x) Executives provides the Company with written notice within ninety (90) days after Executive first become aware of, or reasonably should have become aware of, the occurrence or existence of such event or circumstance, which notice identifies the event or circumstance that you believe constitutes Good Reason, (y) the Company fails to cure such act or omission within thirty (30) days after delivery of such notice to the Company and (z) Executive terminates Executive’s employment with the Company within thirty (30) days after the expiration of the cure period referred to in the preceding clause (y).
| 10. | EFFECT OF TERMINATION |
| A. | Payments Upon Termination. In the event that the Executive’s employment with the Company is terminated for any reason, the Executive shall have the right to receive (i) the compensation and reimbursable expenses then accrued and/or earned and unpaid under Sections 4 and 5 of this Agreement through the date of termination (including, if the Executive is entitled to a Bonus for the year immediately preceding the year of such termination but for not being employed on the Bonus Payment Date, the Company shall pay the Bonus based on achievement of pre-determined performance goals on the same basis as other participants in the plan who are employed on the Bonus Payment Date), (ii) payment for unused vacation days accrued through the date of termination and (iii) any benefits required by the Consolidated Omnibus Budget Reconciliation Act of 1985. In addition, in the event that the Executive’s employment with the Company is terminated due to Executive’s death or disability (as described in Section 9(B) and 9(C), above), if the Executive is entitled to a Bonus for the year of termination based on achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), the Company shall pay such Bonus on the same basis as other participants in the plan except that the Bonus amount shall be prorated (based on the percentage of days the Executive was employed relative to the total number of days in the bonus earning period). |
| B. | Additional Payments. (a) Subject to Sections 10 D and 10 E, in the event that the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason during the Term other than during the Change in Control Period (as defined below), (A) the Company shall (i) pay to the Executive an amount equal to twelve (12) months of his then current Base Salary under Section 4 A above (less applicable withholdings and authorized deductions), to be paid in equal installments bimonthly in accordance with the Company’s customary payroll practices, and (ii) if the Executive then participates in the Company’s medical and/or dental plans and the Executive timely elects to continue and maintain group health plan coverage pursuant to COBRA, reimburse the Executive for the cost of health insurance under COBRA for the Executive and Executive’s dependents for a period of twelve (12) months; provided, however, that if and to the extent that the Company may not provide such COBRA reimbursement without incurring tax penalties or violating any requirement of the law, the Company shall use its commercially reasonable best efforts to provide substantially similar assistance in an alternative manner, provided that the cost of doing so does not exceed the cost that the Company would have incurred had the COBRA reimbursement been provided in the manner described above or cause a violation of Section 409A (as defined below), and (B) if the Executive is entitled to a Bonus for the year of termination based on achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), the Company shall pay such Bonus on the same basis as other participants in the plan except that the Bonus amount shall be prorated (based on the percentage of days the Executive was employed relative to the total number of days in the bonus earning period). |
| C. | Subject to Sections 10 D and 10 E, in the event that the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason during the Term and within 6 months immediately preceding and 12 months immediately following a Change in Control (as defined below) (the “Change in Control Period”), then in lieu of the payments set forth in subsection 10 B above, the Company shall (i) pay to the Executive an amount equal to 1.5 times the sum of the Executive’s Base Salary under Section 4 A above and Target Bonus under Section 4 B above (less applicable withholdings and authorized deductions), to be paid in equal installments bimonthly in accordance with the Company’s customary payroll practices, (ii) if the Executive then participates in the Company’s medical and/or dental plans and the Executive timely elects to continue and maintain group health plan coverage pursuant to COBRA, reimburse the Executive for the cost of health insurance under COBRA for the Executive and Executive’s dependents for a period of eighteen (18) months; provided, however, that if and to the extent that the Company may not provide such COBRA reimbursement without incurring tax penalties or violating any requirement of the law, the Company shall use its commercially reasonable best efforts to provide substantially similar assistance in an alternative manner, provided that the cost of doing so does not exceed the cost that the Company would have incurred had the COBRA reimbursement been provided in the manner described above or cause a violation of Section 409A (as defined below), (iii) pay the current year Bonus at the Target Bonus level on a prorated basis (using the percentage of days the Executive was employed relative to the total number of days in the bonus earning period). which payment shall be made within 30 days of termination, and (iv) fully accelerate vesting of all of the Executive’s outstanding stock options, restricted stock and other equity incentive awards upon the later of (x) the Change in Control or (y) the Executive’s termination of employment with the Company. |
As used in this Agreement, “Change in Control” means (x) a change in ownership of the Company under clause (i) below or (y) a change in the ownership of a substantial portion of the assets of the Company under clause (ii) below:
| i. | Change in the Ownership of the Company. A change in the ownership of the Company shall occur on the date that any one person, or more than one person acting as a group (as defined in clause (iii) below), acquires ownership of capital stock of the Company that, together with capital stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the capital stock of the Company. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the capital stock of the Company, the acquisition of additional capital stock by the same person or persons shall not be considered to be a change in the ownership of the Company. An increase in the percentage of capital stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires capital stock in the Company in exchange for property will be treated as an acquisition of stock for purposes of this paragraph. |
| ii. | Change in the Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets shall occur on the date that any one person, or more than one person acting as a group (as defined in clause (iii) below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 80 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in Control under this clause (ii) when there is a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer, as provided below in this clause (ii). A transfer of assets by the Company is not treated as a change in the ownership of such assets if the assets are transferred to (a) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its capital stock, (b) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (c) a person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding capital stock of the Company, or (d) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in clause (ii)(c) of this paragraph. For purposes of this clause (ii), a person’s status is determined immediately after the transfer of the assets. |
| iii. | Persons Acting as a Group. For purposes of clauses (i) and (ii) above, persons will not be considered to be acting as a group solely because they purchase or own capital stock or purchase assets of the Company at the same time. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar business transaction with the Company. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. For purposes of this paragraph, the term “corporation” shall have the meaning assigned such term under Treasury Regulation section 1.280G-1, Q&A-45. |
Each of clauses (i) through (iii) above shall be construed and interpreted consistent with the requirements of Section 409A and any Treasury Regulations or other guidance issued thereunder.
| D. | Release Agreement. In order to receive the payments and benefits set forth in Sections 10(B) or (C), as applicable (collectively referred to herein as the “Severance Payments”), the Executive must timely execute (and not revoke) a separation agreement and general release (the “Release Agreement”) in a customary form as is determined to be reasonably necessary by the Company in its good faith and reasonable discretion. If the Executive is eligible for Severance Payments pursuant to Section 10, the Company will deliver the Release Agreement to the Executive (which Release Agreement will not contain any new restrictive covenants (i.e., it may restate covenants contained herein, but will not include additional covenants) within seven (7) calendar days following the date of termination of employment. The Severance Payments are subject to the Executive’s execution and delivery of such Release Agreement and such Release Agreement becoming irrevocable within thirty (30) days following the date of termination of employment (such 30-day period, the “Release Period”). If the Release Period spans two calendar years, Severance Payments shall not commence earlier than January 1 of the second calendar year (with the first payment containing all amounts which should have been paid, but were not paid, prior to such date). |
| E. | Post-Termination Breach. Notwithstanding anything to the contrary contained in this Agreement, the Company’s obligation to provide the Severance Payments will immediately cease if the Executive breaches any of the provisions of Sections 7 or 8, the Release Agreement or any other Agreement the Executive has with the Company. |
| 11. | NO OTHER PAYMENTS OR BENEFITS. The Executive acknowledges and agrees that upon the termination of his employment, no other benefits, compensation or remuneration of any kind is owed by the Company to the Executive other than as set forth in this Section 10 or as set forth in any Option Agreements. |
| 12. | SURVIVAL. Notwithstanding anything to the contrary set forth herein, Sections 7, 8, 9, 10 and 11 of this Agreement and any remedies for the breach thereof, shall survive the termination of this Agreement under the terms hereof. Termination of this Agreement shall not relieve or release either party from any rights, liabilities or obligations which it/he has accrued prior the effective date of such termination. |
| 13. | RETURN OF COMPANY PROPERTY; EXIT INTERVIEW. Upon termination of the Executive’s employment with the Company for any reason, the Executive will promptly: |
Deliver to the Company all documents and other tangible media in the Executive’s possession or control that evidence, contain or reflect (A) Confidential Information or (B) Work Product, in each case whether prepared by the Executive or otherwise coming into the Executive’s possession or control;
Destroy any intangible materials that evidence, contain or reflect Confidential Information or Work Product on equipment or media not owned by the Company; and
Return to the Company all equipment, files, software programs and other personal property belonging to the Company.
Upon termination of the Executive’s employment with the Company for any reason, the Executive will attend an exit interview with a representative of the Company to review the Executive’s continuing obligations under this Agreement.
Notwithstanding the foregoing, Executive may retain personal financial, insurance, identification and health records or documents and the contact information of your personal contacts and any portion of your personal correspondence to the extent such retained portion does not contain Confidential Information
| 14. | ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all contemporaneous and prior agreements and understandings between them as to such subject matter. Except as otherwise expressly provided herein, this Agreement may not be amended except by an instrument in writing executed by the Company and the Executive. |
| 15. | ASSIGNMENT. The Executive shall not be permitted to assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company. |
| 16. | GOVERNING LAW; JURISDICTION. This Agreement shall be construed and enforced in accordance with and governed by the laws of New York. The parties hereby consent and submit to the exclusive jurisdiction and venue of the courts located in New York, New York in connection with any actions or proceedings brought against either of them (or each of them) arising out of or relating to this Agreement. |
| 17. | MISCELLANEOUS. No waiver by either party of any term or condition of this Agreement, whether by conduct or otherwise, in any one or more instance, shall be deemed a continuing waiver of any such term or condition, or a waiver of any other term or condition of this Agreement. Headings set forth in this Agreement are solely for the convenience of the parties and have no legal effect. If any provision of this Agreement shall be found to be invalid by any court having competent jurisdiction, the invalidity of such provision shall not affect the validity of the remaining provisions hereof. This Agreement shall be (i) binding upon, and will inure to the benefit of, the parties and their permitted respective successors and assigns, (ii) construed without presumption of any rule requiring construction to be made against the party causing it to be drafted and (iii) executed in any number of counterparts, each of which will for all purposes be deemed to be an original, and all of which are identical. |
| 18. | TAX WITHHOLDING. The Company or other payor is authorized to withhold from any benefit provided or payment due hereunder, the amount of withholding taxes due any federal, state or local authority in respect of such benefit or payment and to take such other action as may be necessary in the opinion of the Board to satisfy all obligations for the payment of such withholding taxes. The Executive will be solely responsible for all taxes assessed against him with respect to the compensation and benefits described in this Agreement, other than typical employer-paid taxes such as FICA, and the Company makes no representations as to the tax treatment of such compensation and benefits. |
| 19. | SECTION 409A COMPLIANCE. All payments under this Agreement are intended to comply with or be exempt from the requirements of Section 409A of the Code and regulations promulgated thereunder (“Section 409A”). As used in this Agreement, the “Code” means the Internal Revenue Code of 1986, as amended. To the extent permitted under applicable regulations and/or other guidance of general applicability issued pursuant to Section 409A, the Company reserves the right to modify this Agreement to conform with any or all relevant provisions regarding compensation and/or benefits so that such compensation and benefits are exempt from the provisions of 409A and/or otherwise comply with such provisions so as to avoid the tax consequences set forth in Section 409A and to assure that no payment or benefit shall be subject to an “additional tax” under Section 409A. To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A, or to the extent any provision in this Agreement must be modified to comply with Section 409A, such provision shall be read in such a manner so that no payment due to the Executive shall be subject to an “additional tax” within the meaning of Section 409A(a)(1)(B) of the Code. If necessary to comply with the restriction in Section 409A(a)(2)(B) of the Code concerning payments to “specified employees,” any payment on account of the Executive’s separation from service that would otherwise be due hereunder within six (6) months after such separation shall be delayed until the first business day of the seventh month following the date of termination of employment and the first such payment shall include the cumulative amount of any payments (without interest) that would have been paid prior to such date if not for such restriction. Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A. In no event may the Executive, directly or indirectly, designate the calendar year of payment. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. Notwithstanding anything contained herein to the contrary, the Executive shall not be considered to have terminated employment with the Company for purposes of Section 10 unless the Executive would be considered to have incurred a “termination of employment” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii). In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Executive by Section 409A or damages for failing to comply with Section 409A. |
| 20. | 280G MODIFIED CUTBACK. |
If any payment, benefit or distribution of any type to or for the benefit of the Executive, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Parachute Payments”) would subject the Executive to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax; provided that the Parachute Payments shall only be reduced to the extent the after-tax value of amounts received by the Executive after application of the above reduction would exceed the after-tax value of the amounts received without application of such reduction. For this purpose, the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment and excise taxes applicable to such amount. Unless the Executive shall have given prior written notice to the Company to effectuate a reduction in the Parachute Payments if such a reduction is required, which notice shall be consistent with the requirements of Section 409A to avoid the imputation of any tax, penalty or interest thereunder, then the Company shall reduce or eliminate the Parachute Payments by first reducing or eliminating accelerated vesting of stock options or similar awards, then reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any other remaining Parachute Payments; provided, that no such reduction or elimination shall apply to any non-qualified deferred compensation amounts (within the meaning of Section 409A) to the extent such reduction or elimination would accelerate or defer the timing of such payment in manner that does not comply with Section 409A.
An initial determination as to whether (x) any of the Parachute Payments received by the Executive in connection with the occurrence of a change in the ownership or control of the Company or in the ownership of a substantial portion of the assets of the Company shall be subject to the Excise Tax, and (y) the amount of any reduction, if any, that may be required pursuant to the previous paragraph, shall be made by an independent accounting firm selected by the Company (the “Accounting Firm”) prior to the consummation of such change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company. The Executive shall be furnished with notice of all determinations made as to the Excise Tax payable with respect to the Executive’s Parachute Payments, together with the related calculations of the Accounting Firm, promptly after such determinations and calculations have been received by the Company.
For purposes of this Section 20, (i) no portion of the Parachute Payments the receipt or enjoyment of which the Executive shall have effectively waived in writing prior to the date of payment of the Parachute Payments shall be taken into account; (ii) no portion of the Parachute Payments shall be taken into account which in the opinion of the Accounting Firm does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code; (iii) the Parachute Payments shall be reduced only to the extent necessary so that the Parachute Payments (other than those referred to in the immediately preceding clause (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code or are otherwise not subject to disallowance as deductions, in the opinion of the auditor or tax counsel referred to in such clause (ii); and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Parachute Payments shall be determined by the Company’s independent auditors based on Sections 280G and 4999 of the Code and the regulations for applying those sections of the Code, or on substantial authority within the meaning of Section 6662 of the Code.
IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as of the Effective Date.
Indaptus Therapuetics, Inc.
| By: | /s/ Jeffrey Meckler | |
| Title: | Chief Executive Officer | |
| By: | /s/ Michael J. Newman, Ph.D. | |
| Michael J. Newman, Ph.D. | ||
| Address: |
Schedule A
Prior Inventions
LIST IF ANY
___________________________________________
Michael J. Newman
Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”), effective as of August 4, 2021 (the “Effective Date”), is between Indaptus Therapeutics, Inc. (the “Company”) and Walt A Linscott (the “Executive”).
WITNESSETH
WHEREAS, Intec Pharma Inc., a subsidiary of Intec Pharma Ltd., an Israeli corporation (“Intec”), entered into an employment agreement with the Executive on October 23, 2017 (the “Prior Agreement”);
WHEREAS, Intec Pharma Ltd. merged with Decoy Biosystems, Inc., a Delaware corporation, on August 3, 2021; and
WHEREAS, the Company desires to employ the Executive as its Chief Business Officer following the merger, and the Executive desires to accept such employment, on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
| 1. | EMPLOYMENT. Subject to the terms and conditions set forth herein, the Company hereby employs the Executive, and the Executive hereby accepts such employment by the Company commencing on the Effective Date. | |
| 2. | SCOPE OF EMPLOYMENT. During the term of this Agreement, Executive shall hold the position of Chief Business Officer and shall have those duties and responsibilities customarily associated with the title of Chief Business Officer plus any additional duties as may reasonably be assigned to him from time to time by the Company. The Company shall at all times during the term of this Agreement take all steps necessary to nominate Executive as a nominee for director for the purposes of any meeting or consent of the shareholders conducted or taken during the term of this Agreement. The Executive shall report directly to the Chief Executive Officer. The Executive will devote his full time and best efforts to the business and affairs of the Company. Notwithstanding the foregoing or any other provision of this Agreement, it shall not be a breach or violation of this Agreement for the Executive to (i) serve on civic or charitable boards or committees or, with prior approval of the Board, on corporate boards or committees, (ii) deliver lectures, fulfill speaking engagements, teach at educational institutions or provide consulting services, provided, in each case, that such activities do not (a) materially interfere, individually or in the aggregate with the performance of your duties hereunder or (b) violate any restrictive covenants. The Executive shall be subject to and comply with the Company’s policies, procedures and approval practices as generally in effect at any time and from time to time. | |
| 3. | PREVIOUS OBLIGATIONS. To the best of Executive’s knowledge, the Executive represents that his employment by the Company and the performance of his duties on behalf of the Company does not, and shall not, breach any agreement that obligates the Executive to keep in confidence any trade secrets or confidential or proprietary information of any other party or to refrain from competing, directly or indirectly, with the business of any other party. |
| 4. | COMPENSATION. As full compensation for all services to be rendered by Executive during the term of this Agreement, the Company will compensate the Executive as follows. | ||
| A. | Base Salary. The Company shall pay the Executive a base salary (the “Base Salary”) at the annualized rate of $405,000, which shall be subject to customary withholdings and authorized deductions and shall be payable in equal installments in accordance with the Company’s customary payroll practices in place from time to time. The Executive’s Base Salary shall be subject to review for an upward adjustment on at least an annual basis. The Executive’s Base Salary may not be adjusted downward without the Executive’s prior written consent. The foregoing annualized rate will be effective for fiscal year 2021 and may be reevaluated by the Company’s Board of Directors for fiscal year 2022. | ||
| B. | Annual Bonus. | ||
| The Executive will be eligible to participate in an annual executive bonus plan pursuant to which he may earn a bonus (“Bonus”) equal to up to 50% of his Base Salary (such maximum bonus may be referred to as the “Target Bonus”). | |||
| Prior to the commencement of each calendar year, the Board will establish and approve the Target Bonus for such calendar year, provided that such Target Bonus shall not be less than 50% of the Executive’s Base Salary. Achievement of the Target Bonus will be based on the Executive meeting individual objectives and the Company meeting company-wide objectives (collectively, the “Performance Criteria”). | |||
| The Board may, in its discretion, grant the Executive a Bonus in excess of the Target Bonus if the Performance Criteria are exceeded or for such additional contributions that the Board may choose to recognize. | |||
| Following the close of each calendar year but in no event after the later of January 30th of the year following the year for which the Bonus is payable or ten business days after completion of the Company’s audited financial statements, the Board will meet and determine in its reasonable discretion the extent to which the Performance Criteria have been achieved for such year and the amount of the Bonus. Based on that determination, payment of the Bonus (if any) shall be made at the same time annual Bonuses are generally paid to other senior executives of the Company (generally the first regular payroll date following the Board’s certification of the achievement of applicable Performance Criteria) (the “Bonus Payment Date”). If the Executive is eligible to receive a Bonus, such Bonus will not be deemed to be fully earned unless Executive is employed by the Company and in good standing on the last day of the fiscal year to which the Bonus relates. The Bonus shall be paid to the Executive no later than March 15th of the year following the year for which the bonus is payable. | |||
| C. | Stock Option Grants. During the Term, subject to the terms of the Company’s 2021 Stock Incentive Plan or any successor equity compensation plan as may be in place from time to time and separate award agreements, the Executive shall be eligible to receive from time to time stock options or other equity awards in amounts, if any, to be approved by the Board or the Compensation Committee in its discretion. Executive agrees that any equity grants awarded to him as compensation for services as Chief Business Officer shall be subject to any clawback policy that the Company established from time to time that is applicable to the Company’s executive officers. | ||
| 5. | BENEFITS. During his employment and subject to any contribution therefore generally required of employees of the Company, the Executive shall be entitled to participate in any and all employee benefit plans from time to time in effect for executive employees of the Company generally. Such participation shall be subject to (i) the terms of the applicable plan documents, (ii) generally applicable policies of the Company and (iii) the discretion of the Board or any administrative or other committee provided for in or contemplated by such plan. The Company may alter, modify, add to or delete its employee benefit plans at any time as it, in its sole judgment, deems appropriate. During the term of his employment, the Executive shall be entitled to 20 paid days off (none of which may be carried over from one year to the next) as well as those paid public holidays provided for in the Company’s standard policies, as they may be amended from time to time. | ||
| 6. | EXPENSES. The Executive shall be entitled to reimbursement by the Company for all necessary and reasonable travel, entertainment and other business expenses incurred by him in connection with his duties hereunder. The Company shall reimburse the Executive for all such expenses upon presentation of an itemized account and appropriate supporting documentation, all in accordance with the Company’s generally applicable policies as in effect from time to time. | ||
| 7. | CONFIDENTIALITY AND NONSOLICITATION. | ||
| A. | Confidential Information. During the term of his employment, the Executive will have access to the Company’s confidential business information (the “Confidential Information”). The definition of Confidential Information includes any information regarding the Company or its affiliates that is not generally available to the public. By way of example not limitation, Confidential Information includes inventions, designs, data, computer code, works of authorship, know-how, trade secrets, formulas, compounds, indications, techniques, ideas, discoveries, products and services under development, employee, investor, customer and vendor information of any kind, marketing and business plans and financial information of any kind including pricing and profit margins. | ||
| B. | Ownership of Confidential Information. The Confidential Information (and all documents containing Confidential Information) is and will, as between the Executive and the Company, be the sole property of the Company. | ||
| C. | Protection and Use of Confidential Information. The Executive shall preserve and protect the confidentiality and security of the Confidential Information. At all times during his employment by the Company and thereafter, the Executive will protect and not disclose to any third party any Confidential Information. The Executive shall not use the Confidential Information or make any use of, the Confidential Information, except (i) in connection with the performance of his duties for the Company or as otherwise required in connection with court process or requested by a governmental or regulatory body; (ii) as may be required by law (with advance notice to the Company prior to any such disclosure to the extent legally permitted); or (iii) to Executive’s personal legal advisors for the purposes of enforcing or interpreting this Agreement (or in the case of any other litigation between the Executive and the Company), or to a court or arbitrator for the purpose of enforcing or interpreting this Agreement (or in the case of any other litigation between the Executive and the Company), and who in each case have been informed as to the confidential nature of such Confidential Information and, as to advisors, their obligation to keep such Confidential Information confidential. “Confidential Information” will not include any information which is in the public or industry domain during the Executive’s employment, provided that such information is not in the public or industry domain as a consequence of any action or inaction by the Executive in violation of this Agreement. | ||
| D. | Return of Confidential Information. Upon request of the Company, the Executive will promptly (i) deliver to the Company all documents and other tangible media in the Executive’s possession or control that evidence, contain or reflect Confidential Information (including all copies, reproductions, digests, abstracts, analyses, and notes) and (ii) destroy any intangible materials that evidence, contain or reflect Confidential Information on equipment or media not owned by the Company, provided Executive may retain personal financial, insurance, identification and health records or documents and the contact information of your personal contacts and any portion of your personal correspondence to the extent such retained portion does not contain Confidential Information. | ||
| E. | Nonsolicitation of Employees and Certain Other Third Parties. At all times during the twelve (12) months period immediately following termination of employment, the Executive shall not, directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity (i) employ or attempt to employ or enter into any contractual arrangement with any employee performing services for the Company or any of its affiliates and/or (ii) persuade or encourage or attempt to persuade or encourage any persons or entities with whom the Company or any of its affiliates does business or has some business relationship to cease doing business or terminate its business relationship with the Company or any of its affiliates. |
Notwithstanding any provisions of this Agreement or otherwise, nothing contained in this Agreement limits the Executive’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, “Government Agencies”), or prevents the Executive from providing truthful testimony in response to a lawfully issued subpoena or court order. Further, nothing in this Agreement shall (1) prohibit the Executive from making reports of possible violations of federal law or regulation to any Government Agencies, including but not limited to the Securities and Exchange Commission, in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934, as amended, or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of federal law or regulation, or (2) require notification or prior approval by the Company of any such report; provided that the Executive is not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. Further, this Agreement does not limit my ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit the Executive’s right to seek an award pursuant to Section 21F of the Securities Exchange Act of 1934. In addition, for the avoidance of doubt, pursuant to the federal Defend Trade Secrets Act of 2016, the Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) 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 (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
| 8. | ASSIGNMENT OF WORK PRODUCT. | ||
| A. | Definitions. The following capitalized terms shall have the meanings assigned to them below: | ||
“Intellectual Property” means collectively all Work Product and all Intellectual Property Rights relating to all Work Product.
“Intellectual Property Rights” means all copyrights, copyright registrations and copyright applications, trademarks, service marks, trade dress, trade names, trademark registrations and trademark applications, patents and patent applications, trade secret rights, and all other rights and interests existing, created or protectable under any intellectual property or other law of any nation.
“Work Product” means any and all inventions, discoveries, original works of authorship, developments, improvements, formulas, compounds, indications, techniques, concepts, data and ideas (whether or not patentable or registerable under patent, copyright, or similar statute) made, conceived, prepared, created, discovered, or reduced to practice by the Executive, either alone or jointly with others during the period of his employment, that (i) result from work performed by the Executive for the Company, (ii) are made by use of the Company’s equipment, supplies, facilities or Confidential Information, or are made, conceived or completed, wholly or in part, within the scope of the Executive’s services or duties to the Company, or (iii) are related to the business of the Company or the actual or demonstrably anticipated business of the Company.
| B. | Property of the Company. All Intellectual Property is and will be the sole property of the Company. | ||
| C. | Copyrights; Assignment. The Executive agrees that all copyrightable materials that fall within the definition of Work Product, will be, to the maximum extent permitted by law, works-made-for-hire for the Company under copyright law, and to the extent not works-made-for-hire, the Executive hereby assigns to the Company, without royalty or further consideration to the Executive, all right, title, and interest he may have, or may acquire, in and to all Intellectual Property. | ||
| D. | Disclosure. The Executive will promptly disclose in writing all Work Product to the Company. The Executive agrees to keep adequate and current written records of all such Work Product, in the form of notes, sketches, drawings, electronic records and/or other reports, which records are, and will remain, the sole property of the Company and will be available to the Company at all times. | ||
| E. | Execution of Documents. Whenever requested by the Company, both during the period of the Executive’s employment and thereafter, the Executive will promptly sign and deliver to the Company any and all applications, assignments and other documents that the Company considers necessary or desirable in order to: (a) assign, apply for, obtain, and maintain any Intellectual Property Rights in the United States and for other countries relating to any Work Product, (b) assign and convey to the Company or its designee the sole and exclusive right, title, and interest in and to all Intellectual Property, (c) provide evidence regarding the Intellectual Property that the Company considers necessary or desirable, and (d) confirm the Company’s ownership of the Intellectual Property, all without royalty or any other further consideration to the Executive. |
| F. | Assistance to the Company. Whenever requested by the Company, both during the period of the Executive’s employment and thereafter, the Executive will, at the Company’s expense, assist the Company in assigning, obtaining, maintaining, defending, registering and from time to time enforcing, in any and all countries, the Company’s right to the Intellectual Property. This assistance may include, without limitation, testifying in a suit or other proceeding. If the Company requires assistance from the Executive after termination of his employment, the Executive will be compensated for time actually spent in providing assistance at an hourly rate equivalent to his compensation at the time his employment was terminated together with his reasonable, actual out-of-pocket expenses incurred in providing such assistance. | ||
| G. | Power of Attorney. For use in the case that the Company cannot obtain the Executive’s signature on any document that the Company considers necessary or desirable in order to assign, apply for, prosecute, obtain, or enforce any Intellectual Property, whether due to the Executive’s non-cooperation, unavailability, or any other reason, the Executive hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as his agent and attorney-in-fact to act for, and on the Executive’s behalf, to execute and file any such document and to do all other lawfully permitted acts to further the assignment, transfer to the Company, application, registration, prosecution, issuance, and enforcement of all Intellectual Property, with the same force and effect as if executed and delivered by the Executive. | ||
| H. | Prior Inventions. The Executive represents that any inventions, original works of authorship, discoveries, concepts or ideas, if any, to which the Executive presently has any right, title or interest, and which were previously conceived either wholly or in part by the Executive, and that the Executive desires to exclude from the operation of this Agreement are identified on Schedule A of this Agreement (each a “Prior Invention”). The Executive represents that the list contained in Schedule A is complete to the best of his knowledge and to the extent any such Prior Invention is not listed, it is agreed that Company has and is hereby granted a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, display, perform sell and otherwise use such Prior Invention as part of or in connection with any Company product, process or service. If during the Executive’s retention with the Company, the Executive incorporates a Prior Invention into a Company product, process or service or its use, the Executive shall be deemed to have automatically granted to the Company a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, display, perform sell and otherwise use such Prior Invention as part of or in connection with any Company product, process or service. | ||
| 9. | TERM; TERMINATION. | ||
| A. | Term. Employment is on an AT-WILL basis and both the Company and the Executive shall have the right to terminate this Agreement and the Executive’s employment at any time subject to the notice provisions set forth below. | ||
| B. | Death. Upon the death of the Executive, the Executive’s employment with the Company shall terminate. | ||
| C. | Disability. If the Executive is unable to perform the essential functions of Employee’s employment with the Company for more than eighteen weeks (unless a longer period is required by state or federal law), the Company shall have the right to terminate the Executive’s employment upon prior written notice. | ||
| D. | Termination by the Executive. The Executive may terminate this Agreement and his employment hereunder (i) without Good Reason (as defined below) upon thirty (30) days written notice to the Executive or (ii) immediately for Good Reason. | ||
| E. | Termination by Company. The Company may terminate this Agreement and the Executive’s employment hereunder (i) without Cause (as defined below) upon thirty (30) days written notice to the Executive or (ii) immediately for Cause. | ||
| F. | Certain Definitions. The following capitalized terms shall have the meanings assigned to them below: |
“Cause” means: (i) the Executive’s chronic failure to perform those material duties assigned to him pursuant to Section 2 above after written notice thereof and a reasonable opportunity to respond and/or cure of not less than 30 days; (ii) the Executive’s material and repeated gross negligence or willful misconduct (including but not limited to acts of fraud or theft or the violation of applicable laws) in connection with the performance of his duties after written notice thereof and a reasonable opportunity to respond and/or cure of not less than 30 days; (iii) the Executive’s material breach of Section 7 or 8 above after written notice thereof and a reasonable opportunity to respond and/or cure of not less than 30 days; (iv) the Executive’s conviction of, or entry of a plea of guilty or nolo contendere to a felony or any other crime that involves fraud, dishonesty, or serious moral turpitude under the laws of the United States or any state thereof; or (v) the Executive’s alcohol abuse or use of controlled substances (other than prescription drugs taken in accordance with a physician’s prescription), in each case, to the extent such activities under this clause (v) materially interfere with Executive’s duties.
“Good Reason” means the voluntary termination by the Executive within thirty (30) days following: (i) a requirement that the Executive physically relocates to another office that is more than 30 miles from the office location that the Executive reported to at the commencement of his employment with the Company; (ii) a reduction in the Executive’s Salary or Target Bonus in violation of this Agreement; (iii) a material adverse change in the Executive’s title or job description or a significant reduction of the scope of the Executive’s authority or responsibilities as Chief Business Officer, or (iv) or any other material breach of this Agreement by the Company, provided that no act or omission in (i) through (iv) of this definition shall constitute Good Reason unless (x) Executive provides the Company with written notice within ninety (90) days after Executive first become aware of, or reasonably should have become aware of, the occurrence or existence of such event or circumstance, which notice identifies the event or circumstance that Executive believes constitutes Good Reason, (y) the Company fails to cure such act or omission within thirty (30) days after delivery of such notice to the Company and (z) Executive terminates Executive’s employment with the Company within thirty (30) days after the expiration of the cure period referred to in the preceding clause (y).
| 10. | EFFECT OF TERMINATION | ||
| A. | Payments Upon Termination. In the event that the Executive’s employment with the Company is terminated for any reason, the Executive shall have the right to receive (i) the compensation and reimbursable expenses then accrued and/or earned and unpaid under Sections 4 and 5 of this Agreement through the date of termination (including, if the Executive is entitled to a Bonus for the year immediately preceding the year of such termination but for not being employed on the Bonus Payment Date, the Company shall pay the Bonus based on achievement of pre-determined performance goals on the same basis as other participants in the plan who are employed on the Bonus Payment Date), (ii) payment for unused vacation days accrued through the date of termination and (iii) any benefits required by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). In addition, in the event that the Executive’s employment with the Company is terminated due to Executive’s death or disability (as described in Section 9(B) and 9(C), above), if the Executive is entitled to a Bonus for the year of termination based on achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), the Company shall pay such Bonus on the same basis as other participants in the plan except that the Bonus amount shall be prorated (based on the percentage of days the Executive was employed relative to the total number of days in the bonus earning period). | ||
| B. | Additional Payments. (a) Subject to Sections 10 D and 10 E, in the event that the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason during the term of this Agreement other than during the Change in Control Period (as defined below), (A) the Company shall (i) pay to the Executive an amount equal to twelve (12) months of his then current Base Salary under Section 4 A above (less applicable withholdings and authorized deductions), to be paid in equal installments bimonthly in accordance with the Company’s customary payroll practices, and (ii) if the Executive then participates in the Company’s medical and/or dental plans and the Executive timely elects to continue and maintain group health plan coverage pursuant to COBRA, reimburse the Executive for the cost of health insurance under COBRA for the Executive and Executive’s dependents for a period of twelve (12) months; provided, however, that if and to the extent that the Company may not provide such COBRA reimbursement without incurring tax penalties or violating any requirement of the law, the Company shall use its commercially reasonable best efforts to provide substantially similar assistance in an alternative manner, provided that the cost of doing so does not exceed the cost that the Company would have incurred had the COBRA reimbursement been provided in the manner described above or cause a violation of Section 409A (as defined below), and (B) if the Executive is entitled to a Bonus for the year of termination based on achievement of pre-determined performance goals (and ignoring any continuation of employment requirements), the Company shall pay such Bonus on the same basis as other participants in the plan except that the Bonus amount shall be prorated (based on the percentage of days the Executive was employed relative to the total number of days in the bonus earning period). | ||
| C. | Subject to Sections 10 D and 10 E, in the event that the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason during the term of this Agreement and within 6 months immediately preceding and 12 months immediately following a Change in Control (as defined below) (the “Change in Control Period”), then in lieu of the payments set forth in subsection 10 B above, the Company shall (i) pay to the Executive an amount equal to eighteen (18) months of his then current Base Salary under Section 4 A above (less applicable withholdings and authorized deductions), to be paid in equal installments bimonthly in accordance with the Company’s customary payroll practices, (ii) if the Executive then participates in the Company’s medical and/or dental plans and the Executive timely elects to continue and maintain group health plan coverage pursuant to COBRA, reimburse the Executive for the cost of health insurance under COBRA for the Executive and Executive’s dependents for a period of eighteen (18) months; provided, however, that if and to the extent that the Company may not provide such COBRA reimbursement without incurring tax penalties or violating any requirement of the law, the Company shall use its commercially reasonable best efforts to provide substantially similar assistance in an alternative manner, provided that the cost of doing so does not exceed the cost that the Company would have incurred had the COBRA reimbursement been provided in the manner described above or cause a violation of Section 409A (as defined below), (iii) pay the current year Bonus at the Target Bonus level, which payment shall be made within 30 days of termination, and (iv) fully accelerate vesting of all of the Executive’s outstanding stock options, restricted stock and other equity incentive awards upon the later of (x) the Change in Control or (y) the Executive’s termination of employment with the Company. For the avoidance of doubt, any equity incentive awards with performance vesting conditions shall be deemed achieved at the greater of target performance or the actual or projected actual level of Company performance on the applicable performance measures as determined in the Board’s sole discretion. | ||
As used in this Agreement, “Change in Control” means (x) a change in ownership of the Company under clause (i) below or (y) a change in the ownership of a substantial portion of the assets of the Company under clause (ii) below:
| i. | Change in the Ownership of the Company. A change in the ownership of the Company shall occur on the date that any one person, or more than one person acting as a group (as defined in clause (iii) below), acquires ownership of capital stock of the Company that, together with capital stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the capital stock of the Company. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the capital stock of the Company, the acquisition of additional capital stock by the same person or persons shall not be considered to be a change in the ownership of the Company. An increase in the percentage of capital stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires capital stock in the Company in exchange for property will be treated as an acquisition of stock for purposes of this paragraph. | ||
| ii. | Change in the Ownership of a Substantial Portion of the Company’s Assets. A change in the ownership of a substantial portion of the Company’s assets shall occur on the date that any one person, or more than one person acting as a group (as defined in clause (iii) below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 80 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no Change in Control under this clause (ii) when there is a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer, as provided below in this clause (ii). A transfer of assets by the Company is not treated as a change in the ownership of such assets if the assets are transferred to (a) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its capital stock, (b) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (c) a person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding capital stock of the Company, or (d) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in clause (ii)(c) of this paragraph. For purposes of this clause (ii), a person’s status is determined immediately after the transfer of the assets. |
| iii. | Persons Acting as a Group. For purposes of clauses (i) and (ii) above, persons will not be considered to be acting as a group solely because they purchase or own capital stock or purchase assets of the Company at the same time. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar business transaction with the Company. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. For purposes of this paragraph, the term “corporation” shall have the meaning assigned such term under Treasury Regulation section 1.280G-1, Q&A-45. |
Each of clauses (i) through (iii) above shall be construed and interpreted consistent with the requirements of Section 409A and any Treasury Regulations or other guidance issued thereunder.
| D. | Release Agreement. In order to receive the payments and benefits set forth in Sections 10(B) or (C), as applicable (collectively referred to herein as the “Severance Payments”), the Executive must timely execute (and not revoke) a separation agreement and general release (the “Release Agreement”) in a customary form as is determined to be reasonably necessary by the Company in its good faith and reasonable discretion. If the Executive is eligible for Severance Payments pursuant to Section 10, the Company will deliver the Release Agreement to the Executive (which Release Agreement will not contain any new restrictive covenants (i.e., it may restate covenants contained herein, but will not include additional covenants) within seven (7) calendar days following the date of termination of employment. The Severance Payments are subject to the Executive’s execution and delivery of such Release Agreement and such Release Agreement becoming irrevocable within thirty (30) days following the date of termination of employment (such 30-day period, the “Release Period”). If the Release Period spans two calendar years, Severance Payments shall not commence earlier than January 1st of the second calendar year (with the first payment containing all amounts which should have been paid, but were not paid, prior to such date). | ||
| E. | Post-Termination Breach. Notwithstanding anything to the contrary contained in this Agreement, the Company’s obligation to provide the Severance Payments will immediately cease if the Executive breaches any of the provisions of Sections 7 or 8, the Release Agreement or any other Agreement the Executive has with the Company. | ||
| 11. | NO OTHER PAYMENTS OR BENEFITS. The Executive acknowledges and agrees that upon the termination of his employment, no other benefits, compensation or remuneration of any kind is owed by the Company to the Executive other than as set forth in this Section 10 or as set forth in any Option Agreements. | ||
| 12. | SURVIVAL. Notwithstanding anything to the contrary set forth herein, Sections 7, 8, 9, 10 and 11 of this Agreement and any remedies for the breach thereof, shall survive the termination of this Agreement under the terms hereof. Termination of this Agreement shall not relieve or release either party from any rights, liabilities or obligations which it/he has accrued prior the effective date of such termination. | ||
| 13. | RETURN OF COMPANY PROPERTY; EXIT INTERVIEW. Upon termination of the Executive’s employment with the Company for any reason, the Executive will promptly: | ||
Deliver to the Company all documents and other tangible media in the Executive’s possession or control that evidence, contain or reflect (A) Confidential Information or (B) Work Product, in each case whether prepared by the Executive or otherwise coming into the Executive’s possession or control;
Destroy any intangible materials that evidence, contain or reflect Confidential Information or Work Product on equipment or media not owned by the Company; and
Return to the Company all equipment, files, software programs and other personal property belonging to the Company.
Upon termination of the Executive’s employment with the Company for any reason, the Executive will attend an exit interview with a representative of the Company to review the Executive’s continuing obligations under this Agreement.
Notwithstanding the foregoing, Executive may retain personal financial, insurance, identification and health records or documents and the contact information of your personal contacts and any portion of your personal correspondence to the extent such retained portion does not contain Confidential Information
| 14. | ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all contemporaneous and prior agreements and understandings between the Company, its predecessors and any subsidiary, as to such subject matter, including but not limited to the Prior Agreement. For the avoidance of doubt, the Prior Agreement shall be of no further force or effect. Except as otherwise expressly provided herein, this Agreement may not be amended except by an instrument in writing executed by the Company and the Executive. | |
| 15. | ASSIGNMENT. The Executive shall not be permitted to assign this Agreement or any rights or obligations hereunder without the prior written consent of the Company. | |
| 16. | GOVERNING LAW; JURISDICTION. This Agreement shall be construed and enforced in accordance with and governed by the laws of New York. The parties hereby consent and submit to the exclusive jurisdiction and venue of the courts located in New York, New York in connection with any actions or proceedings brought against either of them (or each of them) arising out of or relating to this Agreement. | |
| 17. | MISCELLANEOUS. No waiver by either party of any term or condition of this Agreement, whether by conduct or otherwise, in any one or more instance, shall be deemed a continuing waiver of any such term or condition, or a waiver of any other term or condition of this Agreement. Headings set forth in this Agreement are solely for the convenience of the parties and have no legal effect. If any provision of this Agreement shall be found to be invalid by any court having competent jurisdiction, the invalidity of such provision shall not affect the validity of the remaining provisions hereof. This Agreement shall be (i) binding upon, and will inure to the benefit of, the parties and their permitted respective successors and assigns, (ii) construed without presumption of any rule requiring construction to be made against the party causing it to be drafted and (iii) executed in any number of counterparts, each of which will for all purposes be deemed to be an original, and all of which are identical. |
| 18. | TAX WITHHOLDING. The Company or other payor is authorized to withhold from any benefit provided or payment due hereunder, the amount of withholding taxes due any federal, state or local authority in respect of such benefit or payment and to take such other action as may be necessary in the opinion of the Board to satisfy all obligations for the payment of such withholding taxes. The Executive will be solely responsible for all taxes assessed against him with respect to the compensation and benefits described in this Agreement, other than typical employer-paid taxes such as FICA, and the Company makes no representations as to the tax treatment of such compensation and benefits. | |
| 19. | SECTION 409A COMPLIANCE. All payments under this Agreement are intended to comply with or be exempt from the requirements of Section 409A of the Code and regulations promulgated thereunder (“Section 409A”). As used in this Agreement, the “Code” means the Internal Revenue Code of 1986, as amended. To the extent permitted under applicable regulations and/or other guidance of general applicability issued pursuant to Section 409A, the Company reserves the right to modify this Agreement to conform with any or all relevant provisions regarding compensation and/or benefits so that such compensation and benefits are exempt from the provisions of 409A and/or otherwise comply with such provisions so as to avoid the tax consequences set forth in Section 409A and to assure that no payment or benefit shall be subject to an “additional tax” under Section 409A. To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A, or to the extent any provision in this Agreement must be modified to comply with Section 409A, such provision shall be read in such a manner so that no payment due to the Executive shall be subject to an “additional tax” within the meaning of Section 409A(a)(1)(B) of the Code. If necessary to comply with the restriction in Section 409A(a)(2)(B) of the Code concerning payments to “specified employees,” any payment on account of the Executive’s separation from service that would otherwise be due hereunder within six (6) months after such separation shall be delayed until the first business day of the seventh month following the date of termination of employment and the first such payment shall include the cumulative amount of any payments (without interest) that would have been paid prior to such date if not for such restriction. Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A. In no event may the Executive, directly or indirectly, designate the calendar year of payment. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. Notwithstanding anything contained herein to the contrary, the Executive shall not be considered to have terminated employment with the Company for purposes of Section 10 unless the Executive would be considered to have incurred a “termination of employment” from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii). In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Executive by Section 409A or damages for failing to comply with Section 409A. |
| 20. | 280G MODIFIED CUTBACK. If any payment, benefit or distribution of any type to or for the benefit of the Executive, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Parachute Payments”) would subject the Executive to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), the Parachute Payments shall be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Parachute Payments to be subject to the Excise Tax; provided that the Parachute Payments shall only be reduced to the extent the after-tax value of amounts received by the Executive after application of the above reduction would exceed the after-tax value of the amounts received without application of such reduction. For this purpose, the after-tax value of an amount shall be determined taking into account all federal, state, and local income, employment and excise taxes applicable to such amount. Unless the Executive shall have given prior written notice to the Company to effectuate a reduction in the Parachute Payments if such a reduction is required, which notice shall be consistent with the requirements of Section 409A to avoid the imputation of any tax, penalty or interest thereunder, then the Company shall reduce or eliminate the Parachute Payments by first reducing or eliminating accelerated vesting of stock options or similar awards, then reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any other remaining Parachute Payments; provided, that no such reduction or elimination shall apply to any non-qualified deferred compensation amounts (within the meaning of Section 409A) to the extent such reduction or elimination would accelerate or defer the timing of such payment in manner that does not comply with Section 409A. |
An initial determination as to whether (x) any of the Parachute Payments received by the Executive in connection with the occurrence of a change in the ownership or control of the Company or in the ownership of a substantial portion of the assets of the Company shall be subject to the Excise Tax, and (y) the amount of any reduction, if any, that may be required pursuant to the previous paragraph, shall be made by an independent accounting firm selected by the Company (the “Accounting Firm”) prior to the consummation of such change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company. The Executive shall be furnished with notice of all determinations made as to the Excise Tax payable with respect to the Executive’s Parachute Payments, together with the related calculations of the Accounting Firm, promptly after such determinations and calculations have been received by the Company.
For purposes of this Section 20, (i) no portion of the Parachute Payments the receipt or enjoyment of which the Executive shall have effectively waived in writing prior to the date of payment of the Parachute Payments shall be taken into account; (ii) no portion of the Parachute Payments shall be taken into account which in the opinion of the Accounting Firm does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code; (iii) the Parachute Payments shall be reduced only to the extent necessary so that the Parachute Payments (other than those referred to in the immediately preceding clause (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code or are otherwise not subject to disallowance as deductions, in the opinion of the auditor or tax counsel referred to in such clause (ii); and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Parachute Payments shall be determined by the Company’s independent auditors based on Sections 280G and 4999 of the Code and the regulations for applying those sections of the Code, or on substantial authority within the meaning of Section 6662 of the Code.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Effective Date.
Indaptus Therapeutics, Inc.
| By: | /s/ Jeffrey Meckler | |
| Name: | Jeffrey Meckler | |
| Title: | Chief Executive Officer | |
| By: | /s/ Walt A. Linscott | |
| Walt A. Linscott | ||
| Address: | ||
Schedule A
Prior Inventions
LIST IF ANY
| Walt A. Linscott |
Exhibit 10.4
SERVICES AGREEMENT
This SERVICES AGREEMENT (this “Agreement”) is made and entered as of August 4, 2021, by and between Indaptus Therapeutics, Inc., a Delaware corporation (the “Company”) and Nir Sassi of Rothschild 69b Kadima, Israel (the “Service Provider”) (The Company and the Service Provider shall additionally be referred as each, a “Party” and collectively, the “Parties”).
1. SERVICES; TERM AND TERMINATION.
1.1 Services. The services and deliverables to be provided by the Service Provider, on a non-exclusive basis, shall be as indicated in Exhibit A attached hereto and incorporated herein by reference (the “Services”, or “Deliverables”). The Services will be provided solely by the Service Provider, in a scope set forth in Exhibit A (the “Scope”), which shall not subcontract any Services and/or Service Provider’s duties, without the Company’s prior written approval.
1.3 Term; Termination. This Agreement shall commence as of the August 4, 2021 (the “Effective Date”), and shall be in effect until terminated by either Party upon sixty (60) days’ prior written notice (the “Term”).
2. COMPENSATION.
2.1 In full consideration for all Services under this Agreement, the Company shall pay the Service Provider the fee set forth in Exhibit A, in accordance with the Scope (the “Compensation”).
2.2 The Compensation shall be paid against an invoice issued in accordance with applicable law, to be issued at the beginning of each month for the preceding month, and to be paid by the Company within fifteen (15) days of the Company’s receipt of such invoice. The Service Provider agrees to pay any and all taxes, fees, duties and/or other impositions that may be levied on Service Provider pursuant to applicable law in connection herewith, including but not limited to, VAT, Income Tax and any other payment imposed upon Service Provider, including but not limited to, payment for pension insurance, disability insurance and any social benefits, and shall be solely responsible in respect thereof, and to indemnify the Company in the event the Company is required to pay any such taxes on behalf of the Service Provider and/or anyone on the Service Provider’s behalf. All sums payable under this Agreement shall be made in the currency set forth in Exhibit A and are inclusive of withholding tax and all other taxes, duties, levies and like matters imposed by any governmental authority which, if applicable, shall be paid by the Service Provider in accordance with applicable law, and shall be deemed for all intents and purposes as part of the Compensation paid to the Service Provider. In the event that pursuant to any law or regulation, tax is required to be withheld at source from any payment made to the Service Provider, the Company shall withhold said tax at the rate set forth in the certification issued by applicable tax authority or if there is no such certification, at the rate determined by said law, regulation or tax treaty provisions, unless the Service Provider has presented to the Company with a valid tax withholding exemption certificate issued by the applicable tax authority, in which case the reduced withholding tax will apply.
2.3 The Compensation under Section 2 shall constitute the total and exclusive compensation payable to Service Provider for the Services rendered hereunder. Service Provider shall not be entitled to any other form of compensation, commission, fee, bonus or any other form of payment in connection with the Services, provided that the Services Provider shall be entitled to reimbursement of expenses incurred by the Service Provider in connection with the Services, but solely to the extent such expenses were approved by the Company in writing in advance.
3. CONFIDENTIALITY; PROPRIETARY RIGHTS; NON-SOLICITATION; REPRESENTATIONS AND WARRANTIES. For the purposes of this Section 3, unless the context otherwise requires (e.g., in connection with assignment of inventions), the term “engagement with the Company” shall also include the engagement with the Company, prior to the execution of this Agreement, and any engagement with any and all of the Company’s direct and indirect existing and future affiliates, subsidiaries, parent or related corporations.
3.1. Confidentiality.
3.1.1. Nondisclosure; Recognition of Company’s Rights. At all times during Service Provider’s engagement and thereafter, the Service Provider will hold in strict confidence and trust and will not disclose, use, lecture upon, or publish any of the Company’s Confidential Information (as defined below), nor use for the benefit of any party other than the Company, any Confidential Information, unless the Company authorizes such disclosure or publication. The Service Provider will obtain the Company’s written approval before publishing or submitting for publication any material (written, oral, or otherwise) that relates to its engagement with the Company and/or incorporates any Confidential Information. The Service Provider hereby unconditionally and irrevocably assigns to the Company any rights it has or acquires in any and all Confidential Information and recognizes that all Confidential Information shall be the sole and exclusive property of the Company and its assigns.
3.1.2. Confidential Information. The term “Confidential Information” means any and all confidential knowledge, data or information related to the Company’s business as conducted and/or as proposed to be conducted or its actual or demonstrably anticipated research or development, including without limitation: (a) trade secrets, inventions, ideas, processes, computer source and object code, data, formulae, programs, other works of authorship, graphics, creative works, data, methods, drawings, models, text, photos, audio works, translation works, broadcasting works, animation works, algorithms, icons, symphonies, tunes, melodies, sound effects, know-how, improvements, discoveries, developments, designs, and techniques; (b) information regarding products, plans for research and development, marketing and business plans, budgets, financial statements, contracts, prices, suppliers, and customers; (c) information regarding the skills and compensation of the Company’s consultants, contractors, and any other service providers of the Company; and (d) the existence of any business discussions, negotiations, or agreements between the Company and any third party. Confidential Information shall not include information or matter that the Service Provider can document that (a) was already known to the Service Provider prior to disclosure as can be demonstrated by Service Provider’s dated written records; (b) is independently developed by the Service Provider without reference to or use of the Confidential Information as can be demonstrated by Service Provider’s dated written records; or (c) which at the time of disclosure by the Company is generally available to the public or thereafter becomes generally available to the public other than through a breach of any obligation under this Agreement caused by an act or omission on the part of the Service Provider.
3.1.3. Third Party Information. The Service Provider understands, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information (the “Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of Service Provider’s engagement and thereafter, it will hold Third Party Information in strict confidence and will not disclose to anyone or use, except in connection with its work for the Company, Third Party Information, unless expressly authorized by an officer of the Company in writing.
3.1.4. All right, title and interest in and to Confidential Information are and shall remain the sole and exclusive property of the Company or of the third party providing such Confidential Information to the Company, as the case may be. Without limitation of the foregoing, Service Provider agrees and acknowledges that all memoranda, books, notes, records, email transmissions, charts, formulae, specifications, lists and other documents (contained on any media whatsoever) made, reproduced, compiled, received, held or used by Service Provider in connection with the engagement with the Company or that otherwise relates to any Confidential Information (the “Confidential Material”), shall be the Company’s sole and exclusive property and shall be deemed to be Confidential Information. All originals, copies, reproductions and summaries of the Confidential Material shall be delivered by Service Provider to the Company upon termination or expiration of Service Provider’s engagement for any reason, or at any earlier time at the request of the Company, without the Service Provider retaining any copies thereof.
3.1.5. During the term of Service Provider’s engagement with the Company, Service Provider shall not remove from the Company’s offices or premises any Confidential Material unless and to the extent necessary in connection with the duties and responsibilities of Service Provider and permitted pursuant to the then applicable policies and regulations of the Company. In the event that such Confidential Material is duly removed from the Company’s offices or premises, Service Provider shall take all actions necessary in order to secure the safekeeping and confidentiality of such Confidential Material and return the Confidential Material to their proper files or location as promptly as possible after such use.
3.2. New Improvements. The Service Provider will notify and disclose in writing to the Company, or any persons designated by the Company from time to time, all Inventions (as defined below) made, conceived, reduced to practice or learned by Service Provider, either alone or jointly with others, immediately upon discovery, receipt or invention thereof, as applicable. The Service Provider agrees and declares that all Inventions which the Service Provider has developed or may develop, made, conceived, reduced to practice, or learned, either alone or with others, that (i) relate to the Company’s business as currently being conducted and/or as proposed to be conducted; (ii) are developed in whole or in part on the Company’s time or using Company’s equipment, supplies, facilities, intellectual property or Confidential Information, or (iii) result from or are suggested by any task assigned to the Service Provider or any work performed by the Service Provider for or on behalf of the Company, or by the scope of the Service Provider’s duties and responsibilities with the Company under this Agreement; all including, for avoidance of doubt, during the period prior to the date hereof (collectively, the “Company Inventions”), shall be the sole property of the Company and its assignees, and the Service Provider agrees and declares that it does not have any proprietary right and shall have no suit and/or claim of any kind against the Company in any matter relating, whether directly or indirectly, to any Company Inventions and the Intellectual Property Rights thereto. The Service Provider shall provide the Company with any and all information and documents relating to the Company Inventions in its possession, including but not limited to, any know how, technical drawings, procedures, experiments, analysis, processes, specifications and techniques of any modification, improvement, or development that Service Provider has developed conceived, reduced to practice, during the Term of this Agreement or in the course of, and due to, Service Provider’s activities and services under this Agreement. Without derogating from the aforementioned, the Service Provider hereby explicitly waives (i) any interest, claim or demand that it may have for, or may be entitled to, with respect to any consideration, compensation or royalty in connection with the Company Inventions, including but not limited to, any claims for consideration, compensation or royalty pursuant to any applicable law; and (ii) any moral rights, artists’ rights, or any other similar rights worldwide (the “Moral Rights”) that Service Provider had, have or may have in the future in or with respect to the Company Inventions. Service Provider hereby acknowledges and declares that the Compensation and any other benefits provided under this Agreement, constitutes the entire compensation to which the Service Provider is entitled and includes any and all consideration with respect to the Company Inventions developed by or on behalf of Service Provider. Notwithstanding the above, in the event that despite the parties’ agreement under this Section 3 and the aforementioned waiver, it is nonetheless determined by any competent authority that for any reason whatsoever Service Provider is or will be entitled to consideration, compensation or royalty in connection with one or more Company Inventions, Service Provider hereby agrees and acknowledges that the Special Compensation described in Section 4.3 below will be deemed the sole and final consideration, compensation or royalty payments to which Service Provider is, and will be, entitled in connection with such Company Inventions. The Service Provider further waives the right to bring any claims, demands or allegations to receive compensation, consideration or royalty with respect to the Moral Rights and the Company Inventions. “Intellectual Property Rights” means all rights patents, copyrights, trade secrets, trademarks, service marks, trade names, applications and other proprietary rights in any jurisdiction, arising from any Inventions. “Inventions” means any patent applications, patents, know-how, technical information, work product, designs, ideas concepts, information, materials, processes, data, programs, improvements, innovations, discoveries, developments, artwork, works of authorship, concepts, drawings, algorithms, techniques, methods, systems, processes, compositions of matter, computer software programs, databases and mask works formulae, other copyrightable works, and technique, whether or not patentable, copyrightable or protectable as trade secrets, irrespective of whether registered as a patent, copyright, trademark or in another form.
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3.3. Intellectual Property Assignment. Service Provider hereby assigns and agrees to assign in the future (when any such Company Inventions or Intellectual Property Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to the Company, all Service Provider’s right, title, and interest in and to any and all Company Inventions (and all Intellectual Property Rights with respect thereto) and shall sign, execute and acknowledge, at the Company’s expense, any and all documents as may be necessary for the purpose of securing to the Company the Company Inventions. During the Term and thereafter, Service Provider agrees to reasonably assist Company at Company’s cost in every proper way to obtain and enforce United States and any other foreign intellectual property rights relating to the Company Inventions in all countries. In the event the Company is unable to secure Service Provider’s signature on any document needed in connection with such purposes, after Company provided a notice to Service Provider and Service Provider has failed to execute such documents, within 14 days thereof, Service Provider hereby irrevocably designates and appoints Company and its officers and agents as Service Provider’s agent and attorney in fact, which appointment is coupled with an interest, to act on Service Provider’s behalf to execute and file any such documents and to do all other lawfully permitted acts to further such purposes with the same legal force and effect as if executed by Service Provider.
3.4. Non-Solicitation. During the Term and for a period of one (1) year thereafter, Service Provider shall not, directly or indirectly: (i) solicit or request any employee of or service provider to the Company to leave the employ of or cease consulting for the Company; (ii) solicit or request any employee of or service provider to the Company to join the employ of, or begin consulting for, any individual or entity that researches, develops, markets or sells products that compete with those of the Company; (iii) solicit or request any individual or entity that researches, develops, markets or sells products that compete with those of the Company, to employ or retain as a service provider any employee or service provider of the Company; or (iv) induce or attempt to induce any supplier or vendor of the Company to terminate or breach any written or oral agreement or understanding with the Company.
3.5. Representations and Warranties. Service Provider represents, warrants, agrees and undertakes that (A) the execution and delivery of this Agreement and the fulfillment of its terms (i) will not constitute a default under or conflict with any agreement or other instrument to which Service Provider is a party or by which Service Provider is bound, and (ii) do not require the consent of any person or entity; (B) with respect to any past engagement of Service Provider with third parties and with respect to any permitted engagement of Service Provider with any third party during the term of Service Provider’s engagement with the Company (for purposes hereof, such third parties, other than Intec Pharma Ltd. shall be referred to as “Other Engagements”), (i) Service Provider’s engagement with the Company is not and/or will not be in breach of any of Service Provider’s undertakings toward Other Engagements, and (ii) Service Provider will not disclose to the Company, nor use, in the provision of any services to the Company, any proprietary or confidential information belonging to any Other Engagements, (C) Service Provider will inform the Company, immediately after becoming aware of any matter that may in any way raise a conflict of interest between Service Provider and the Company, (D) during the term of this Agreement, Service Provider shall not receive any payment, compensation or benefit from any third party in connection, directly or indirectly, with its engagement with the Company; (E) Service Provider has received from the Company all the information that Service Provider has requested regarding the performance of the Services to date; (F) Service Provider has the requisite technical and professional knowledge, know-how, expertise, skills, talent and experience required in order to perform the Services in a professional and efficient manner; and (G) the performance of the Services and the result thereof shall not infringe any third party intellectual property or privacy rights.
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4. RELATIONSHIP.
4.1. Service Provider shall at all times act as an independent contractor, and shall not be, and/or claim to be, an employee of the Company. Service Provider warrants that it is aware that this Agreement is only an agreement for the provision of services on a strictly contractual basis, and does not create employer-employee relations between Service Provider and the Company and does not confer upon either any rights, except for those set forth herein explicitly. Without limitation of the foregoing, Service Provider will (a) not enter into any contract, agreement or other commitment, or incur any obligation or liability, in the name or otherwise on behalf of the Company; (b) not be entitled to any worker’s compensation, pension, retirement, insurance or other benefits afforded to employees of the Company; (c) provide for all applicable income tax and other withholding relating to Service Provider’s compensation; (d) pay all social security, unemployment and other employer taxes relating to Service Provider’s compensation; (e) provide all worker’s compensation and other insurance relating to Service Provider’s engagement; and (f) perform all reporting, recordkeeping, administrative and similar functions relating to Service Provider’s compensation. The Company is not restricted in otherwise contracting or engaging any partner by itself or through any third party.
4.2. The Company will be entitled to deduct from and set off against amounts due to the Service Provider pursuant to this Agreement and/or pursuant to any other agreement, law, or otherwise, any amounts, which the Service Provider is required to pay the Company pursuant to this Agreement, any other agreement, any law, or otherwise.
4.3. In addition to all other provisions of this Section 4, should it be held by any competent judicial authority that the relationship between the Service Provider Person, and the Company in respect of the Services rendered by the Service Provider pursuant to this Agreement is one of employer and employee, an amount equal to ten percent (10%) of the Service Provider’s Compensation shall be considered as a special compensation for Service Provider’s obligations set forth in Section 3 hereof, including without limitation in connection with the assignment of intellectual property (the “Special Compensation”). If Service Provider breaches any of its obligations under Section 3, Service Provider shall be obligated to return the Special Compensation to the Company immediately. The Company shall be entitled to set off such Special Compensation against all amounts the Service Provider shall be entitled to under this Agreement and/or pursuant to any other agreement, law, or otherwise which shall not derogate from any other right of the Company to receive from the Service Provider the rest of the amounts to which it is entitled.
4.4. The Service Provider shall indemnify and hold harmless the Company, its affiliates, directors, officers, employees, agents and consultants, from and against any and all liabilities, claims, damages, costs and expenses (including attorneys’ fees) arising out of or resulting from any claim, action, or other proceeding in connection with: (i) the performance of the Services, and/or (ii) any misrepresentation and/or any breach by the Service Provider of any warranties or covenants under this Agreement, and/or (iii) any obligation, future or past, imposed upon the Company to pay any social benefits or similar terms in connection with compensation received by Service Provider, or which are based upon a stipulation by a competent judicial authority that an employer - employee relationship was created between the Company and the Service Provider.
5. MISCELLANEOUS. Service Provider agrees that any breach of Section 3 above by it would cause irreparable damage to the Company and that, in the event of such breach, the Company shall have, in addition to any and all remedies of law, the right to an injunction, specific performance or other equitable relief to prevent the violation or threatened violation of the Service Provider’s obligations hereunder. Service Provider shall at all times act as an independent contractor, and shall not be, and/or claim to be, employees of the Company. This Agreement is only an agreement for the provision of consulting services on a strictly contractual basis, and does not create employer-employee relations between the Service Provider and the Company and does not confer upon the Service Provider any rights, except for those set forth herein. This Agreement represents the only Agreement relating to this subject matter between the Service Provider and the Company. Service Provider will not (by contract, operation of law or otherwise) assign this Agreement or any right or interest in this Agreement without the prior written consent of the Company. Subject to the foregoing, this Agreement will be fully binding upon, inure to the benefit of, and be enforceable by the parties and their respective successors, assigns and legal representatives. This Agreement shall be construed and interpreted under and in accordance with the laws of the State of New York, without reference to principles and laws relating to the conflict of laws. The competent state and federal courts located in New York County, New York shall have exclusive jurisdiction with respect to any dispute and action arising under or in relation to this Agreement, except that each Party may seek interim relief in any jurisdiction worldwide. The Parties expressly waive any right to a jury trial regarding disputes related to this Agreement. No modifications to this Agreement can be made except in writing, signed by the Service Provider and Company. Sections 3-5 shall survive termination or expiration of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered on and as of the Effective Date. This Agreement may be executed in two or more counterparts, each of which shall constitute an original and all of which shall be deemed a single agreement.
| Company: Indaptus Therapeutics, Inc. | Nir Sassi | |||
| By: | /s/ Jeffrey Meckler | |||
| Name: | Jeffrey Meckler | |||
| Title: | CEO | /s/ Nir Sassi | ||
[Signature Page - Services Agreement]
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Exhibit A
Services and Compensation
| 1. | Services - The Service Provider shall provide the Company with CFO and Israel branch manager services and Deliverables, including the following: | ||
| a. | CFO services of a publicly traded company, to include but not limited to: public filings, oversight of financial service providers, budgeting, accounts receivable and accounts payable activities, coordinate and provide materials to external auditors, facilitate audit committee meetings, tax filings, etc. | ||
| b. | Israeli Branch Manager – Oversight on all activities for Israeli business including but not limited to: transition of business, employee matters, financial and reporting, all local filings, site and landlord matters, etc. Any incidental services to the Services listed above. | ||
| 2. | Compensation - In full consideration of the provision of the Services, the Company shall pay the Service Provider: | ||
| a. | Monthly payment of $31,500, to be paid on a monthly. | ||
| b. | A severance pay of $378,000: 50% of which to be paid upon termination of the Agreement; 25% of which within 3 months of termination; and 25% of which within 6 months of termination. | ||
| c. | An annual bonus of up to 30% of the total annual payment under Section 2.a above, to be paid no later than March 31, 2022, provided the Service Provider has provided services in 2021 for at least 3-months and whether or not the Agreement is in effect at the time of payment. | ||
| d. | The Service Provider shall be covered by the Company’s D&O insurance policy. | ||
In addition, the Company shall award the Service Provider at the Effective Date options to purchase 35,000 shares of Common Stock of the Company (subject to adjustment in the event of reverse split, split or other capitalization of the Company’s Common Stock) (the “Options”). The Options shall be awarded under the Company’s 2021 Stock Incentive Plan with an exercise price of $8.87 per share. The Options shall vest over a period of 12 months in four equal quarterly installments and shall accelerate upon termination of the Agreement. Each Option may be exercised, including following the termination of the Agreement, for a total period of 5 years.
| 3. | Scope – 40 hours per week, or as otherwise mutually agreed upon between the parties from time to time. |
| 4. | “Deliverables” means all documentation and other materials produced as a result of the Services (as defined hereunder) and delivered to Company by Service Provider in the course of providing the Services pursuant to this Agreement. |
By their signature below, the parties acknowledge that the foregoing schedule reflects the parties’ agreement on the services and compensation:
| Company: | Service Provider | ||
Indaptus Therapeutics, Inc. |
Nir Sassi | ||
| By: | /s/ Jeffrey Meckler | ||
| Name: | Jeffrey Meckler | ||
| Title: | CEO | /s/ Nir Sassi | |
[Signature Page - Exhibit A - Services and Compensation]
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Exhibit 10.5
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (the “Agreement”) is made and entered into as of this ___ day of _______________ between Indaptus Therapeutics, Inc., a Delaware corporation (“the Company”, which term shall include where appropriate any Enterprise (as hereafter defined) controlled directly or indirectly by the Company and any successor to the Company), and [__________] (“Indemnitee”).
WITNESSETH THAT:
WHEREAS, Indemnitee performs a valuable service for the Company; and
WHEREAS, the Company’s Bylaws (the “Bylaws”) provide for the indemnification of the officers and directors of the Company to the maximum extent authorized by Section 145 of the Delaware General Corporation Law, as amended from time to time (the “Law”); and
WHEREAS, the Bylaws and the Law, by their nonexclusive nature, permit contracts between the Company and the officers or directors of the Company with respect to indemnification of such officers or directors; and
WHEREAS, in accordance with the authorization as provided by the Law, the Company may purchase and maintain a policy or policies of directors’ and officers’ liability insurance (“D & O Insurance”), covering certain liabilities which may be incurred by its officers or directors in the performance of their obligations to the Company; and
WHEREAS, in order to induce Indemnitee to continue to serve as an officer or director of the Company, the Company has determined and agreed to enter into this contract with Indemnitee;
NOW, THEREFORE, in consideration of Indemnitee’s service as an officer or director after the date hereof, the parties hereto agree as follows:
1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the full extent authorized or permitted by the provisions of the Law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), he is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), and Liabilities (as hereafter defined) actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful.
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(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.
(c) Indemnification for Expenses of Indemnitee Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been successful, on the merits or otherwise, in whole or in part, in defense of any Proceeding, or in defense of any claim, issue, or matter therein, including, without limitation, the dismissal of any action without prejudice, or if it is ultimately determined, by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal, that the Indemnitee is otherwise entitled to be indemnified against Expenses, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee in connection therewith. For purposes of this Section 1(c) and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses and Liabilities actually and reasonably incurred in connection with any Proceeding, or in connection with any judicial proceeding pursuant to Section 7 to enforce rights under this Agreement, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such expense, liability, and loss actually and reasonably incurred to which the Indemnitee is entitled.
2. Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses and Liabilities actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful under Delaware law.
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3. Contribution in the Event of Joint Liability.
(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of Proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.
(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses (including attorneys’ fees) and Liabilities actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such Expenses and Liabilities, as well as any other equitable considerations which the Law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.
(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.
(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
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4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
5. Advancement of Expenses. The Company shall advance all Expenses incurred by or on behalf of Indemnitee in the defense of any Proceeding to which the Indemnitee was made a party by reason of Indemnitee’s Corporate Status at the request of the Indemnitee. The Indemnitee’s right to advancement shall not be subject to the satisfaction of any standard of conduct and advances shall be made without regard to the Indemnitee’s ultimate entitlement to indemnification under the provisions of this Agreement or otherwise. To receive an advancement of expenses, the Indemnitee shall submit a written statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free. Each such advancement of Expenses shall be made within 20 calendar days after the receipt by the Secretary of the Company of such written request.
6. Procedures and Presumptions for Determination of Entitlement to Indemnification. It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the Law and public policy of the State of Delaware. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification (including, but not limited to, the advancement of Expenses and contribution by the Company) under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.
(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following three methods, which shall be at the election of Indemnitee: (1) by a majority vote of the disinterested directors, even though less than a quorum, (2) by Independent Counsel (as hereafter defined) in a written opinion or (3) by the stockholders. The determination of entitlement to indemnification shall be made within 60 calendar days after receipt by the Secretary of the Company of a written request for indemnification and, unless a contrary determination is made, such indemnification shall be paid in full by the Company not later than 10 calendar days after determination has been made that the Indemnitee is entitled to indemnification pursuant to Section 6 of this Agreement. If the person making such determination shall determine that the Indemnitee is entitled to indemnification as to part (but not all) of the application for indemnification, such person shall reasonably prorate such partial indemnification among the claims, issues, or matters at issue at the time of the determination.
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(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected by the Board of Directors. Indemnitee may, within 10 days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware for resolution of any objection which shall have been made by Indemnitee to the Company’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) hereof. The Company shall (i) pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, (ii) fully indemnify such Independent Counsel against any and all Expenses and Liabilities arising out of or relating to this Agreement or its engagement pursuant hereto and (iii) pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed.
(d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
| -5- |
(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board of Directors or the Disinterested Directors (as hereafter defined), if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.
(g) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, Disinterested Director or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
| -6- |
(h) The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such Proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
7. Remedies of Indemnitee.
(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within twenty (20) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within twenty (20) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in the Court of Chancery of the State of Delaware, unless, if the Indemnitee is an employee of the Company, otherwise required by the law of the state in which the Indemnitee primarily resides and works. The Company shall not oppose the Indemnitee’s right to seek any such adjudication.. The Company shall not oppose Indemnitee’s right to seek any such adjudication.
(b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).
(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent a prohibition of such indemnification under applicable law.
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(d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover Liabilities for breach of, this Agreement, or to recover under any D&O Insurance maintained by the Company, the Company shall pay on his behalf, in advance, any and all Expenses actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery.
(e) The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance, to the extent not prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
(f) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
8. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Restated Certificate of Incorporation of the Company, as amended, (the “Restated Certificate”), the Bylaws, any agreement, a vote of stockholders, a resolution of directors or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal unless such amendment is in accordance with the provisions of Section 15 below. To the extent that a change in the Law, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Restated Certificate, the Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
| -8- |
(b) To the extent that the Company maintains an insurance policy or D&O Insurance for directors, officers, employees, agents or fiduciaries of the Enterprise, by reason of their Corporate Status, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
(c) Except as set forth in Section 1(d) of this Agreement, in the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(d) Subject to Section 1(d) of this Agreement, the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
9. Exception to Right of Indemnification. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advancement (as the case may be) under this Agreement in respect of Expenses:
(a) to the extent expressly prohibited by the Delaware General Corporation Law or applicable laws;
(b) to the extent expressly prohibited by the Company’s Restate Certificate or Bylaws;
(c) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision;
(d) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law;
(e) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board of Directors of the Company authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law; or
| -9- |
(f) with respect to remuneration paid to Indemnitee if it is determined by final judgment or other final adjudication that such remuneration was in violation of law (and, in this respect, both the Company and Indemnitee have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication, as indicated in the last paragraph of this Section 9 below);
For purposes of this Section 9, a final judgment or other adjudication may be reached in either the underlying proceeding or action in connection with which indemnification is sought or a separate proceeding or action to establish rights and liabilities under this Agreement.
Any provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement to indemnify indemnitee or otherwise act in violation of any undertaking appearing in and required by the rules and regulations promulgated under the Securities Act of 1933, as amended (the “Act”), or in any registration statement filed with the SEC under the Act. Indemnitee acknowledges that paragraph (h) of Item 512 of Regulation S-K currently generally requires the Company to undertake in connection with any registration statement filed under the Act to submit the issue of the enforceability of indemnitee’s rights under this Agreement in connection with any liability under the Act on public policy grounds to a court of appropriate jurisdiction and to be governed by any final adjudication of such issue. indemnitee specifically agrees that any such undertaking shall supersede the provisions of this Agreement and to be bound by any such undertaking.
10. Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Enterprise and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or Expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the shares, business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.
11. Security. To the extent requested by Indemnitee and approved by the Board of Directors of the Company, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.
12. Enforcement.
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director of the Company.
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(b) This Agreement cancels any previous Indemnity Agreement provided to you by the Company and represents the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c) The Company shall not seek from a court, or agree to, a “bar order” which would have the effect of prohibiting or limiting the Indemnitee’s rights to receive advancement of expenses under this Agreement.
13. Definitions. For purposes of this Agreement:
(a) “Corporate Status” describes the status of a person who is serving or has served (i) as a director of the Company, (ii) in any capacity with respect to employee benefit plan of the Company, or (iii) as a director, officer, employee, agent or fiduciary of any other Enterprise at the request of the Company.
(b) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(c) “Enterprise” shall mean the Company, any subsidiary of the Company, and any other corporation, partnership, limited liability company, joint venture, trust, foundation, employee benefit plan, association or other legal entity.
(d) “Expenses” shall include all reasonable fees, costs and expenses incurred in connection with any Proceeding, including, without limitation, attorneys’ fees, disbursement and retainers, court costs, transcript costs, fees and disbursements of experts, witness and professional advisors, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(e) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.
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(f) “Liabilities” means judgments, damages, liabilities, penalties, fines, losses, excise taxes and amounts paid in settlement.
(g) “Proceeding” includes any threatened, pending or completed claim, action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing, appeal or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, whether formal or informal, in which Indemnitee was, is or will be involved as a party or otherwise, due to any action taken by him or of any inaction on his part by reason of his Corporate Status in the Enterprise; including a proceeding pending on or before the date of this Agreement, but excluding a proceeding initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.
14. Severability. If any provision or provisions of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, illegal or otherwise unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.
15. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No amendment, alteration or repeal of this Agreement or of any provision of this Agreement shall limit or restrict any right of the Indemnitee under this Agreement in respect of any action taken or omitted by the Indemnitee in his or her Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the Delaware General Corporation Law, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Certificate of Incorporation, Bylaws and this Agreement, it is the intent of the parties hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
16. Notice By Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.
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17. Notices. All notices, requests, demands and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:
| (a) | If to Indemnitee, to the address set forth below Indemnitee signature hereto. | |
| (b) | If to the Company, to: | |
| Indaptus Therapeutics, Inc. | ||
| 12 Hartom St. | ||
| Har Hotzvim | ||
| Jerusalem 9777512 | ||
| Israel | ||
| Attention: Chief Executive Officer |
or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
18. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. Delivery of a signed Agreement by reliable electronic means, including facsimile, email, or any electronic signature complying with the U.S. federal ESIGN Act of 2000 (including DocuSign) shall be an effective method of delivering the executed Agreement. This Agreement may be stored by electronic means and either an original or an electronically stored copy of this Agreement can be used for all purposes, including in any proceeding to enforce the rights and/or obligations of the parties to this Agreement..
19. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
20. Governing Law; Venue. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without application of the conflict of laws principles thereof. Venue in any legal proceedings arising under, or in connection with, this Agreement shall be exclusively in the Chancery Court of the State of Delaware. Service of process may be effected by certified or registered mail. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT.
21. Gender. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.
| COMPANY: | ||
| Indaptus Therapeutics, Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
| INDEMNITEE: | ||
| Name: | ||
| Address: | ||
| -14- |
Exhibit 10.7
FIRST
AMENDMENT TO THE
Indaptus Therapeutics, InC.
2021 STOCK INCENTIVE PLAN
This Amendment to the Indaptus Therapeutics, Inc. 2021 Stock Incentive Plan (this “Amendment”) is made and entered into effective as of this 4th day of August, 2021 by Indaptus Therapeutics, Inc.
RECITALS
WHEREAS, stockholders approved the Intec Parent, Inc. 2021 Stock Incentive Plan on June 21, 2021;
WHEREAS, Intec Parent, Inc. was renamed Indaptus Therapeutics, Inc. (the “Company”) in connection with the reverse merger of Intec Pharma Ltd. and Decoy Biosystems, Inc.;
WHEREAS, the Company’s board of directors (the “Board”) desires to rename the Intec Parent, Inc. 2021 Stock Incentive Plan to reflect the Company’s name change as the Indaptus Therapeutics, Inc. 2021 Stock Incentive Plan (the “Plan”);
WHEREAS, the Board further desires to amend the definition of Merger/Sale in the Plan to be consistent with the employment agreements the Company entered into with its senior executives on August 4, 2021; and
WHEREAS, Section 23.1 of the Plan authorizes the Board to amend the Plan.
NOW, THEREFORE, BE IT RESOLVED, that the Plan is hereby amended as follows effective as of August 4, 2021:
| 1. | References to the “Intec Parent, Inc. 2021 Stock Incentive Plan” are hereby changed to the “Indaptus Therapeutics, Inc. 2021 Stock Incentive Plan”, and references to “Intec Parent, Inc.” are hereby changed to “Indaptus Therapeutics, Inc.” |
| 2. | The reference to Section 14.2 with respect to a Merger/Sale shall be changed from Section 14.2 to Section 14.2.9. |
| 3. | The text of Section 14.2 prior to Section 14.2.1 shall be replaced in its entirety with the following: |
| “In the event a Merger/Sale (as defined in Section 14.2.9), then, without derogating from the general authority and power of the Board or the Committee under this Plan, without the Grantee’s consent and action and without any prior notice requirement:” | |
| 4. | A new Section 14.2.9 shall be added to the Plan as follows: |
| “14.2.9. A “Merger/Sale” means (x) a change in ownership of the Company under Section 14.2.9.1 below or (y) a change in the ownership of a substantial portion of the assets of the Company under Section 14.2.9.2 below: |
| 1 |
14.2.9.1 A change in the ownership of the Company shall occur on the date that any one person, or more than one person acting as a group, acquires ownership of capital stock of the Company that, together with capital stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the capital stock of the Company. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the capital stock of the Company, the acquisition of additional capital stock by the same person or persons shall not be considered to be a change in the ownership of the Company. An increase in the percentage of capital stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires capital stock in the Company in exchange for property will be treated as an acquisition of stock for purposes of this paragraph.
14.2.9.2 A change in the ownership of a substantial portion of the Company’s assets shall occur on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 80 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. There is no change in the ownership of a substantial portion of the Company’s assets when there is a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer, as provided below in this Section 14.2.9.2. A transfer of assets by the Company is not treated as a change in the ownership of such assets if the assets are transferred to (a) a shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its capital stock, (b) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (c) a person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding capital stock of the Company, or (d) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in Section 14.2.9.2(c) above. For purposes of this Section 14.2.9.2, a person’s status is determined immediately after the transfer of the assets.
Section 14.2.9.3 For purposes of this Section 14.2.9, persons will not be considered to be acting as a group solely because they purchase or own capital stock or purchase assets of the Company at the same time. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar business transaction with the Company. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets or capital stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. For purposes of this paragraph, the term “corporation” shall have the meaning assigned such term under Treasury Regulation section 1.280G-1, Q&A-45.
| 2 |
Section 14.2.9.4 This Section 14.2.9 and what is considered a “Merger/Sale” under the Plan shall be construed and interpreted consistent with Treasury Regulation Section 1.409A-3(i)(5)(v) and (vii) or other guidance issued thereunder.”
| 5. | Except as expressly modified by this Amendment, the Plan remains in full force and effect pursuant to its terms. All references to the Plan in other documentation shall be deemed to be a reference to the Plan as amended by this Amendment. |
| 6. | This Amendment shall be governed by and construed in accordance with the laws of the State of Delaware without reference to the conflict of laws provisions thereof. |
The foregoing is hereby acknowledged as being the First Amendment to the Indaptus Therapeutics, Inc. 2021 Stock Incentive Plan as adopted by the Board on August 4, 2021.
| Indaptus Therapeutics, Inc. | ||
| By: | ||
| Name: | Jeffrey A. Meckler | |
| Title: | Chief Executive Officer | |
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Exhibit 99.1
Intec Closes Merger with Decoy Biosystems
Completes $30 Million Private Placement
Changes Corporate Name to Indaptus Therapeutics to Reflect Clinical Focus
NEW YORK, Aug. 3, 2021 /PRNewswire/ —Indaptus Therapeutics, Inc. (Nasdaq: INDP) (“Indaptus” or the “Company,” and formerly, Intec Parent, Inc.) today announced the closing of its previously announced merger with Decoy Biosystems, Inc. (“Decoy”) and the completion of a $30 million private placement in accordance with the merger agreement. In addition, the Company announced a corporate name change to Indaptus Therapeutics, as it better reflects the Company’s therapeutic focus.
Indaptus is expected to begin trading on the Nasdaq Capital Market at the open of trading on August 4, 2021, under the ticker symbol “INDP” and a new CUSIP number (45339J 105). The previous ticker symbol was “NTEC” (Nasdaq: NTEC). The Company will have a new website address: www.indaptusrx.com.
“Today’s collective events serve to launch us forward and support the advancement of a new modality that activates both the innate and adaptive immune systems to battle a variety of tumor types and chronic viral infections,” said Jeffrey A. Meckler, Chief Executive Officer of Indaptus. “We look forward to leveraging the powerful potential of our dual acting platform and to moving our first program in immunotherapy into the clinic next year.”
“We are delighted to merge Decoy to form Indaptus, bringing together two teams of seasoned biopharmaceutical executives to drive our programs to deliver meaningful medicines for patients with unmet medical need. This transition into a publicly traded company marks a significant milestone, providing the opportunity for greater financial resources and enhanced corporate structure to better advance our immunotherapy platform,” said Michael J. Newman, Ph.D., Founder and Chief Executive Officer of Decoy.
“The completion of this merger, combined with the recent fundraise, allows Indaptus to potentially transform the way we treat tumors with a novel, multipronged approach to leveraging the body’s own immune system to fight cancers of unmet medical need,” said Roger Pomerantz, M.D., F.A.C.P., Chairman of the Board of Directors of Indaptus. “We expect these important advances will make a meaningful difference in the lives of patients battling cancer, while also building shareholder value over time.”
Prior to the closing of the merger, Indaptus closed its previously announced private placement financing with a single, healthcare-focused institutional investor to raise gross proceeds of approximately $30 million. Indaptus issued pre-funded warrants to purchase 2,727,273 shares of its common stock and warrants to purchase up to 2,727,273 shares of its common stock, at an effective purchase price of $11.00 per pre-funded warrant and associated warrant. The warrants have a term of five and one-half years, are exercisable immediately and have an exercise price of $11.00 per share. The Company intends to use the net proceeds from the private placement for working capital purposes.
H.C. Wainwright & Co. acted as the exclusive placement agent for the private placement.
About the Merger
As previously announced, on July 26, 2021, Intec Pharma Ltd. (“Intec Pharma”) effected a domestication merger, one of the closing conditions to the merger, whereby an Israeli wholly-owned subsidiary of Indaptus, merged with and into Intec Pharma with Intec Pharma being the surviving entity and a wholly-owned subsidiary of Indaptus. Immediately prior to the domestication merger, Intec Pharma effected a 1 for 4 reverse share split.
In connection with the Decoy merger, each outstanding share of Decoy common stock, after giving effect to the conversion of Decoy SAFEs and Decoy preferred stock converted into approximately 2.65 shares of Indaptus common stock. In addition, at the effective time of the merger, each outstanding and unexercised Decoy stock option converted into a stock option exercisable for that number of shares of common stock of Indaptus subject to such option and the exercise price being appropriately adjusted to reflect the exchange ratio.
Immediately following closing of the Decoy merger there are approximately 5,405,963 shares of Indaptus common stock outstanding, with pre-merger Decoy shareholders owning approximately 65.6% and pre-merger Intec Pharma shareholders owning approximately 34.4% of Indaptus. Assuming the exercise in full of the pre-funded warrants sold in the private placement, there would be 8,133,236 shares of Indaptus common stock outstanding. The figures above do not give effect to shares issuable upon the exercise of outstanding Indaptus warrants or options, other than the pre-funded warrants.
In connection with the previously announced domestication merger of Intec Pharma, the predecessor of Indaptus, after which Intec Pharma became a wholly owned subsidiary of Indaptus (formerly Intec Parent, Inc.), a request was made for the Nasdaq Stock Market LLC to file with the Securities and Exchange Commission an application on Form 25 to delist and deregister the ordinary shares of Intec Pharma under Section 12(b) of the Securities Exchange Act of 1934, as amended.
The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, and may not be resold in the U.S. except pursuant to an effective registration statement or an applicable exemption from the registration requirements. Indaptus has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the shares of common stock underlying the securities sold in this private placement.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
Board of Directors and Management of Indaptus Therapeutics
Dr. Roger Pomerantz serves as Indaptus’s Chairman with Jeffrey Meckler serving as Chief Executive Officer and director, Michael Newman to serve as Chief Scientific Officer and director, Nir Sassi serving as Chief Financial Officer and Walt Linscott serving as Chief Business Officer. Other board members include William B. Hayes, Hila Karah, and Anthony J. Maddaluna and will also include Brian O’Callaghan and Hoonmo Lee. Additional information regarding the business experience of the Indaptus board of directors and management can be found in Indaptus’s proxy statement/prospectus included in the registration statement on Form S-4 filed with the Securities and Exchange Commission on May 12, 2021.
About Indaptus Therapeutics
Indaptus Therapeutics has evolved from more than a century of immunotherapy advances. The Company’s approach is based on the hypothesis that efficient activation of both innate and adaptive immune cells and associated anti-tumor and anti-viral immune responses will require a multi-targeted package of immune system activating signals that can be administered safely intravenously. Indaptus’ patented technology is composed of single strains of attenuated and killed, non-pathogenic, Gram-negative bacteria, with reduced i.v. toxicity, but largely uncompromised ability to prime or activate many of the cellular components of innate and adaptive immunity. This approach has led to broad anti-tumor and anti-viral activity, including safe, durable anti-tumor response synergy with each of five different classes of existing agents, including checkpoint therapy, targeted antibody therapy and low-dose chemotherapy in pre-clinical models. Tumor eradication by Indaptus technology has demonstrated activation of both innate and adaptive immunological memory and, importantly, does not require provision of or targeting a tumor antigen in pre-clinical models. Indaptus has carried out successful GMP manufacturing of its lead clinical candidate, Decoy20, and is currently completing other IND-enabling studies.
Forward-Looking Statements
This press release contains forward-looking statements with the meaning of the Private Securities Litigation Reform Act. These include statements regarding management’s expectations, beliefs and intentions regarding, among other things, our product development efforts, business, financial condition, results of operations, strategies, plans and prospects. Forward-looking statements can be identified by the use of forward-looking words such as “believe”, “expect”, “intend”, “plan”, “may”, “should”, “could”, “might”, “seek”, “target”, “will”, “project”, “forecast”, “continue” or “anticipate” or their negatives or variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical matters. For example, forward-looking statements are used in this press release when we discuss our expected timeline of our development pipeline. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, the following: Indaptus’ plans to develop and potentially commercialize its technology, the timing and cost of Indaptus’ planned investigational new drug application and any clinical trials, the completion and receiving favorable results in any clinical trials, Indaptus’ ability to obtain and maintain regulatory approval of any product candidate, Indaptus’ ability to protect and maintain its intellectual property and licensing arrangements, Indaptus’ ability to develop, manufacture and commercialize its product candidates, the risk of product liability claims, the availability of reimbursement, the influence of extensive and costly government regulation, and Indaptus’ estimates regarding future revenue, expenses capital requirements and the need for additional financing following the merger. These risks, as well as other risks are discussed in the proxy statement/prospectus that was included in the registration statement on Form S-4 filed with the SEC in connection with the merger. All forward-looking statements speak only as of the date of this press release and are expressly qualified in their entirety by the cautionary statements included in this press release. We undertake no obligation to update or revise forward-looking statements to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as required by applicable law.
Investor Contact:
Will
O’Connor
Stern IR
+1 212-362-1200
will@sternir.com