Exhibit 10.1

Employment Term Sheet

Set forth below is an outline of the management compensation terms by which the
undersigned parties agree to abide.

 

Name:   

David Green (the “Executive”).

 

Position:   

Chief Financial Officer for Q Therapeutics, Inc. (the “Company”).

 

Effective Date:   

Beginning November 18, 2015 (the “Effective Date”), Executive shall begin
serving as the Company’s Chief Financial Officer, initially on a part time
basis.

 

Base Salary:   

$210,000, pro-rated initially until full time status is achieved. The base
salary shall be reviewed no less frequently than annually. Should Base Salary
compensation be deferred due to cash shortages, Base Salary shall accrue and be
paid when sufficient cash is available. Stock options at then fair market value
shall be awarded in an amount equal to the value of the Base Salary deferred and
shall vest immediately.

 

Performance Bonus:   

Mutually agreeable performance-based bonus plan shall initially include:

 

Annual Bonus: Cash bonus target of 25% of Base Salary with a range of 75-125%
based on performance. Stock bonus of options on 150,000 – 250,000 shares of the
Company’s common stock based on performance vesting per Company policy. Annual
Bonus shall be prorated for partial years of employment service.

 

Special Bonus: $20,000 upon closing of an equity and/or debt financing in the
cumulative amount of $15 million on or prior to June 30, 2016. Should such
financing close on or prior to January 8, 2016, the Special Bonus shall be
increased to $40,000.

 

The Executive shall participate in the Company’s “Executive Bonus Plan” (or any
successor plan), as such plan is implemented on an annual basis as approved by
the Board of Directors, it being understood that the Executive’s actual annual
bonus, if any, shall be determined at the discretion of the Company and the
Board of Directors.

 

Equity Award and
Vesting:   

On the Effective Date, Executive shall be awarded an option grant under the
Company’s 2011 Equity Incentive Compensation Plan as follows:

 

•    400,000 shall vest at the rate of 28% on the one year anniversary of the
grant date and 2% per month thereafter.

 

•    100,000 which would vest immediately upon closing an equity and/or debt
financing in the cumulative amount of $15 million on or prior to June 30, 2016.

 

Executive shall also be eligible for additional option awards at the discretion
of the Board of Directors.

 

1

--------------------------------------------------------------------------------

Employee Benefits:   

Participation in the employee benefit plans made available to senior executives
of the Company generally.

 

20 days of paid time off each year in addition to 5 fixed and 4 floating
Company-paid holidays, any portion of which can be carried over to subsequent
years as long as no more than 40 days in total are accrued at any time. Company
customarily is closed between Christmas and New Years.

 

Executive shall be provided with participation in the Company’s Directors and
Officers Insurance, Health Insurance for him and his family, Dental Insurance,
FSA/Cafeteria pre-tax health benefits plan, Group Life Insurance, Short-Term
Disability Insurance, and 401k plan.

 

Company will reimburse up to $2,000 of documented mobile phone and home internet
expense per year.

 

Employment Term:   

The period beginning from the day on which the Executive begins employment with
the Company (the “Start Date”) and shall continue through the date on which it
is terminated by the Executive or the Company as provided for in this Employment
Term Sheet or any subsequent employment agreement. The Executive’s obligations
hereunder shall survive expiration of the employment term.

 

Outside Activities:   

Executive may continue to serve on outside company Boards of Directors as long
as such service does not impede Executive’s ability to carry out his duties
hereunder.

 

Severance/Change in
Control Benefits:   

Once the Executive has achieved full time employment, he shall be eligible for
Severance/Change in Control Benefits as follows:

 

(a) After the Executive has completed 6 months of full time employment, in the
event that the Executive’s employment is terminated by the Company without Cause
or the Executive resigns employment for Good Reason, subject to the Executive’s
execution and non-revocation of a release in a form satisfactory to the Company,
the Company shall pay the Executive severance in an amount equal to the
Executive’s then current base salary for a period of 12 months (the “Severance
Term”). The Executive will not be entitled to any severance in the event that
the Executive’s employment with the Company is terminated for Cause or the
Executive resigns without Good Reason. Payment dates will be modified to comply
with Section 409A of the Internal Revenue Code as necessary.

 

(1) any unpaid bonus through the date of Executive’s termination that had been
earned but not yet paid for the prior year plus a prorata portion of the
Performance Bonus as set forth above, and (2) provided that Executive

 

2

--------------------------------------------------------------------------------

  

properly elects COBRA continuation coverage, the Company shall pay the COBRA
premium for health care coverage for Executive and his spouse and covered
dependents, as applicable and to the extent eligible (the “COBRA Benefits”), for
the Severance Term immediately following the date of termination of employment.

 

(b) At any time after the Executive has achieved full time employment status, in
the event a Change in Control occurs during the Term and (a) Executive is not
offered continued employment by the acquiring company and in connection
therewith Executive’s employment with the Company is terminated by the Company
without Cause or by Executive for Good Reason, or (b) Executive is offered
continuing employment, but Executive’s employment with the acquiring company is
terminated by the acquiring company without Cause or by Executive for Good
Reason, in either event, within twelve (12) months following such Change in
Control event, then, in addition to any other accrued amounts payable to
Executive through the date of termination of Executive’s employment, (1) the
Executive shall receive a lump-sum severance payment (the “CIC Severance
Payment”) in an amount equal to the sum of (x) 1.0 times the Executive’s annual
base salary as in effect on the date of termination, (y) any unpaid bonus
through the date of Executive’s termination for the prior year that had been
earned but not yet paid plus a prorata portion of the Performance Bonus as set
forth above; and (2) provided that Executive properly elects COBRA continuation
coverage, the COBRA premium for health care coverage for Executive and his
spouse and covered dependents, as applicable and to the extent eligible (the
“CIC COBRA Benefits”), for the Severance Term immediately following the date of
termination of Executive’s employment. Except as set forth above, Executive
shall not be entitled to any CIC Severance Payment or CIC COBRA Benefits in the
event Executive is offered continued employment by the acquiring company
following such Change in Control event with the acquiring company assuming this
Agreement, or entering into an agreement substantially similar to this
Agreement. If Executive is eligible for and entitled to the CIC Severance
Payment or CIC COBRA Benefits, then Executive shall not be eligible for or
entitled to the Severance Payment and COBRA Benefits.

 

(c) Any Severance Payment, CIC Severance Payment, COBRA Benefits, or CIC COBRA
Benefits vesting and/or any other benefits contemplated by this Section are
conditional on Executive signing and returning to the Company a non-revocable
general release of claims providing for a release of all claims relating to
Executive’s employment and/or this letter against the Company or its successors,
its subsidiaries and parent company and its and their respective directors,
officers and stockholders, in a form satisfactory to the Company (the
“Release”); provided that such Release becomes effective and irrevocable no
later than sixty (60) days following Executive’s termination of employment date
or such earlier date required by the Release (such deadline, the “Release
Deadline”) and such payments to be paid in a lump sum shall be paid on the date
of the Release Deadline. If the Release does not become effective by the Release
Deadline, Executive shall forfeit any rights to any Severance Payment, CIC
Severance Payment, COBRA Benefits, CIC COBRA Benefits, vesting and/or any other
benefits.

 

3

--------------------------------------------------------------------------------

  

(d) In no event shall Executive be entitled to any benefits in the event of a
termination of Executive’s employment by the Company with Cause or by Executive
without Good Reason, and Executive shall be entitled solely to Executive’s
compensation and other benefits accrued as of the date of Executive’s
termination other than payment of the Performance Bonus as set forth above.

 

Severance Term:   

12 months.

 

Cause:   

“Cause” shall mean (i) Executive’s willful, knowing or grossly negligent failure
or refusal to perform Executive’s duties under this Employment Term Sheet or any
subsequent employment agreement; (ii) Executive’s breach of any fiduciary duty
to the Company; (iii) Executive’s commission of an act which is a fraud or
embezzlement against the Company; and, (iv) the conviction of Executive for, or
a plea of guilty or nolo contendere by Executive to a criminal act which is a
felony or a misdemeanor involving an act of moral turpitude.

 

Good Reason:   

“Good Reason” shall mean the occurrence of any one or more of the following
events without Executive’s prior written consent, subject to the notification
and cure provisions below: (i) a material diminution of Executive’s authority,
functions, duties or responsibilities; (ii) a relocation of Executive’s
principal workplace more than 50 miles outside the workplace Executive had been
assigned to work over the prior six (6) month period; (iii) the Company’s
material diminution of Executive’s annual base salary in effect on the date
hereof or as the same may be increased from time to time; or (iv) a material
breach by the Company of this Agreement; provided that “Good Reason” shall not
be deemed to have occurred unless: (1) Executive provides the Company with
written notice that he intends to terminate his employment for one of the
grounds set forth in (i)-(iv) within thirty (30) days of such ground occurring,
(2) if such ground is capable of being cured, the Company has failed to cure
such ground within a period of thirty (30) days from the date of such written
notice, and (3) Executive terminates his employment within sixty one (61) days
from the date that Good Reason first occurs.

 

Change in Control:    For purposes hereof, Change in Control shall mean (i) any
person (as such term is used in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 50% or more of the total voting power
represented by the Company’s then outstanding voting securities (excluding for
this purpose the Company or its Affiliates or any employee benefit plan of the
Company) pursuant to a transaction or a series of related transactions of which
the Board does not approve; (ii) a merger or consolidation of the Company,
whether or not approved by the Board, other than a merger or consolidation which
would

 

4

--------------------------------------------------------------------------------

  

result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or the parent of such
corporation) at least 50% of the total voting power represented by the voting
securities of the Company or such surviving entity or parent of such corporation
outstanding immediately after such merger or consolidation; or (iii) the
stockholders of the Company approve an agreement for the sale or disposition by
the Company of all or substantially all of the Company’s assets. For purposes of
this Employment Term Sheet, “Change in Control” shall be interpreted in a
manner, and limited to the extent necessary, so that it will not cause adverse
tax consequences for either party with respect to Section 409A.

 

Code Section 280G:   

In the event that Executive becomes entitled to receive or receives any payment
or benefit under this Employment Term Sheet or under any other plan, agreement
or arrangement with the Company, or any person whose actions result in a Change
in Control or any other person affiliated with the Company or such person (all
such payments and benefits being referred to herein as the “Total Payments”) and
it is determined that any of the Total Payments shall be subject to any excise
tax pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended,
or any similar or successor provision (the “Excise Tax”) then the Company shall
make an additional “gross up” payment to Executive in order to pay the Excise
Tax.

 

Section 409A:   

If any payments or benefits under this Employment Term Sheet or any subsequent
employment agreement that would be considered deferred compensation under
Section 409A , then the following rules shall apply:

 

(i)     Any termination of Executive’s employment triggering payments or
benefits must constitute a “separation from service” under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of
such benefits can commence. To the extent that the termination of Executive’s
employment does not constitute a separation of service under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of
further services that are reasonably anticipated to be provided by Executive to
the Company at the time Executive’s employment terminates), any payments or
benefits that constitute non-qualified deferred compensation under Section 409A
shall be delayed until after the date of a subsequent event constituting a
separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg.
§1.409A-1(h).

 

(ii)    The above-described payments and benefits shall be paid on, or, in the
case of installments, shall not commence until, the sixtieth (60th) day
following Executive’s termination of employment; provided that if Executive is
deemed at the time of Executive’s separation from service to be a “specified
employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent
delayed commencement of any portion of the benefits to which Executive is
entitled under this Employment Term Sheet or any

 

5

--------------------------------------------------------------------------------

  

subsequent employment agreement is required in order to avoid an additional tax
under Section 409A(a)(1)(B) of the Code, such portion of Executive’s benefits
shall not be provided to Executive prior to the earlier of (a) the first
business day following the expiration of the six-month period measured from the
date of Executive’s separation from service, (b) the date of Executive’s death,
or (c) such earlier date that shall avoid the imposition of the additional tax
under Section 409A(a)(1)(B). Upon the expiration of the applicable six-month
period pursuant to Code Section 409A(a)(2)(B)(i), all payments deferred shall be
paid in a lump sum to Executive. It is intended that each installment of the
above-described payments and benefits shall be treated as a separate “payment”
for purposes of Section 409A.

 

(iii)  To the extent that any of the above-described payments or benefits are
deemed to be subject to Section 409A, this Employment Term Sheet or any
subsequent employment agreement shall be interpreted in accordance with Section
409A and Department of Treasury regulations and other interpretive guidance
issued thereunder in order to (a) preserve the intended tax treatment of the
benefits provided with respect to such payments and benefits, and (b) comply
with the requirements of Section 409A. Nothing in this Employment Term Sheet or
any subsequent employment agreement shall be construed as a guarantee by the
Company of any particular tax effect. The Company shall not be liable to
Executive for any tax, penalty, or interest imposed on any amount paid or
payable hereunder by reason of Section 409A, or for reporting in good faith any
payment made under this Employment Term Sheet or any subsequent employment
agreement as an amount includible in gross income under Section 409A. Neither
the Company nor Executive shall have the right to accelerate or defer the
delivery of any such payments or benefits except to the extent specifically
permitted or required by Section 409A.

 

Confidentiality; Work Product:   

Executive shall enter into the Company’s standard Employee Invention Assignment
and Confidentiality Agreement.

 

Governing Law    This term sheet shall be governed by the laws of Utah, without
regard to principles of conflict of laws.

By signing below, the parties agree that this term sheet will be binding upon
the parties, will take effect on the Effective Date, and will as of such date
supersede any other employment, severance, change of control or related
agreements between the undersigned executive and the Company and its affiliates.

Date: November 10, 2015

 

Q Therapeutics, Inc.      Executive – David Green

 

    

 

By: Steven J. Borst

Its: Chief Executive Officer and Board Chairman

 

6