Exhibit 10.1
 
EXECUTIVE EMPLOYMENT AGREEMENT
 
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) dated effective August 21,
2014 (the “Effective Date”), by and between Lion Biotechnologies, Inc., a Nevada
corporation (the “Company”), and  Dr. Elma Hawkins (“Executive”) (either party
individually, a “Party”; collectively, the “Parties”).
 
WHEREAS, under that certain Independent Contractor Services Agreement (the
“Services Agreement”) entered into by the Parties as of February 21, 2014, the
Company engaged Executive as its Head of Clinical Development;
 
WHEREAS, under the Services Agreement, the Company issued to Executive (i) a
non-qualified stock option to purchase an aggregate of 200,000 shares of
Company’s common stock (the “Outstanding Option”), and (ii) 200,000 shares of
restricted common stock (the “Restricted Stock”);
 
WHEREAS, the Company desires to engage Executive as the Company’s new President
and Chief Operating Officer;
 
WHEREAS, in connection with Executive’s engagement as the Company’s new
President and Chief Operating Officer, the Parties desire to terminate the
Services Agreement and desire to enter into this Agreement to set forth the
terms and conditions of Executive’s employment by the Company and to address
certain matters related to Executive’s employment with the Company;
 
WHEREAS, both the Company and the Executive have read and understood the terms
and provisions set forth in this Agreement, and Executive acknowledges that
Executive has been afforded a reasonable opportunity to review this Agreement
with Executive’s legal counsel to the extent desired;
 
NOW, THEREFORE, in consideration of the foregoing and the mutual provisions
contained herein, and for other good and valuable consideration, the Parties
hereto agree as follows:
 
1. Employment; Termination of Services Agreement.  Effective as of the Effective
Date, the Company hereby employs Executive, and Executive hereby accepts such
employment, upon the terms and conditions set forth herein.  The Parties hereby
agreed that, immediately following the effectiveness of this Agreement, the
Services Agreement is terminated and replaced by this Agreement and, except as
set forth herein or in the Services Agreement, all of the rights and obligations
of the Parties arising under the Services Agreement after the Effective Date
have are terminated.
 
2. Duties.
 
2.1 Position.  Executive shall be employed by the Company in the position of
President and Chief Operating Officer.  Executive shall have the duties and
responsibilities assigned by the Company’s Chief Executive Officer and the Board
of Directors (the “Board”) of the Company.  Executive shall perform faithfully
and diligently such duties as are reasonable and customary for Executive’s
position, as well as such other duties as the Chief Executive Officer and Board
shall reasonably assign from time to time.  The Parties understand that
Executive shall provide her duties and services hereunder primarily from her
offices in New York.  However, Executive also agrees to perform her duties from
time to time at the Company’s corporate headquarters in the Woodland Hills,
California, as the Chief Executive Officer or the Board may reasonably request.
 
2.2 Best Efforts/Full-Time.
 
2.2(a) Executive understands and agrees that Executive will faithfully devote
Executive’s best efforts and substantially all of her time during normal
business hours to advance the interests of the Company.  Executive will abide by
all policies and decisions made by the Company, as well as all applicable
federal, state and local laws, regulations or ordinances.  Executive will act in
the best interest of the Company at all times. Executive further understands and
agrees that Executive has a fiduciary duty of loyalty to the Company and that
Executive will take no action which in any way harms the business, business
interests, or reputation of the Company.
 
2.2(b) Executive agrees that Executive will not directly engage in competition
with the Company at any time during the existence of the employment relationship
between the Company and Executive.
 
2.2(c) Executive agrees that, during the term of this Agreement, Executive shall
work exclusively for the Company.  Consequently, Executive agrees to not accept
employment, of any kind, from any person or entity other than the Company, and
to not perform duties or render services to any person or entity other than the
Company, provided, however, that Executive may, subject to prior approval of the
Board of the Company, provide non-executive services, including serving on a
board of directors, to any person or entity so long as such person or entity
does not compete with the Company or otherwise compete, directly with the
Company’s business of developing and marketing therapies based on T-cells (such
as CARs, TCRs and TILs) and T-cell engineering based immunotherapy.
 
 
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2.2(d) Executive understands and agrees that any information, funds, or property
received or developed by Executive during Executive’s employment with the
Company that is related to the Company’s business is or shall become the sole
property of the Company. Accordingly, Executive understands and agrees that
Executive shall immediately turn over all of the foregoing information, funds,
or property that comes into Executive’s possession during Executive’s employment
with the Company, upon the Company’s request.
 
3. Term of Employment.  Subject to the termination provision set forth in this
Section 3, the term of this Agreement (the “Term”) shall be from the Effective
Date through August 21, 2017.  However, either Party may terminate this
Agreement at any time with or without cause for convenience, effective upon
thirty (30) days notice to the other Party. Executive’s and the Company’s
respective rights and obligations at the time of termination are outlined below
in Section 6 of this Agreement.
 
4. Compensation.
 
4.1 Base Salary.  As compensation for the proper and satisfactory performance of
all duties to be performed by Executive hereunder, the Company shall pay to
Executive a base salary of $325,000 per year (the “Base Salary”), less required
deductions for state and federal withholding tax, social security and all other
employment taxes and authorized payroll deductions, payable on a prorated basis
as it is earned, in accordance with the normal payroll practices of the Company.
 
4.2 Outstanding Option/Restricted Stock.  Executive shall retain the Outstanding
Option and the Restricted Stock on the same terms and conditions as in effect
immediately prior to the Effective Date, which terms and conditions are as
follow: The Outstanding Option was granted under Company’s 2011 Equity Incentive
Plan (the “Plan”), has a term of five (5) years from February 21, 2014, has an
exercise price of $5.60 (which price is equal to the fair market value of the
common stock on the effective date of the Services Agreement), and has such
other terms and conditions as are included in Company’s standard stock option
agreement under the Plan.  Provided that Executive is still providing services
to Company under this Agreement on the following dates, the shares under the
Outstanding Option will vest in installments as follows: (i) The option to the
purchase of 66,666 shares shall vest on February 21, 2015; and (ii) the
remaining shares under the Outstanding Option shall vest in eight equal
quarterly (three month) installments over the next two years after February 21,
2015.  Provided that Executive is still providing services to Company under this
Agreement on the following dates, the 200,000 shares of Restricted Stock will
vest in three installments as follows: (i) 40,000 shares shall vest on February
28, 2015; (ii) 60,000 shares shall vest on February 28, 2016, and (iii) 100,000
shares shall vest on February 28, 2017.
 
4.3 Sign-Up Bonus Options.  As of the Effective Date, as a signing bonus,
Executive shall receive stock options to purchase an aggregate of 125,000 shares
of the Company’s common stock.  The stock options will have an exercise price
equal to the fair market value of the common stock on the Effective
Date.  Provided that Executive is still employed with the Company on the
following dates, the foregoing stock options will vest in three installments as
follows: (i) Options for the purchase of 41,667 shares shall vest on the one
year anniversary of the Effective Date; and (ii) the remaining options shall
vest quarterly over the next two years after the anniversary.
 
4.4 Incentive Compensation. Commencing on February 28, 2015, Executive will be
eligible to participate in the Company’s annual incentive compensation program
(“Incentive Plan”) applicable to Executive’s position, as approved by the Board
(the year in which the program is implemented, the “Plan Year”).  The target
potential amount payable to Executive under the Incentive Plan, if earned, shall
be 20% of Executive’s Base Salary earned during the applicable calendar
year.  Compensation under the Incentive Plan (“Incentive Compensation”) will be
conditioned on the satisfaction of individual and Company objectives, as
established in writing by the Company, and on the condition that Executive is
employed by Company on the Incentive Compensation payment date, which shall be
on or before March 15th of the year following the Plan Year.  The payment of any
Incentive Compensation pursuant to this Section 4.4 shall be made in accordance
with the normal payroll practices of the Company, less required deductions for
state and federal withholding tax, social security and all other employment
taxes and authorized payroll deductions, and provided Executive satisfies the
conditions for earning the Incentive Compensation.
 
4.5 Performance Review.  The Company will periodically review Executive’s
performance on no less than an annual basis and will make adjustments to salary
or other compensation, as they deem appropriate in their sole and absolute
discretion.
 
4.6 Customary Fringe Benefits.  Executive understands and agrees that certain
employee benefits may be provided to the Executive by the Company incident to
the Executive's employment.  Executive will be eligible for all customary and
usual fringe benefits generally available to employees of the Company subject to
the terms and conditions of the Company’s benefit plan documents.  Executive
understands and agrees that any employee benefits provided to the Executive by
the Company incident to the Executive's employment are provided solely at the
discretion of the Company and may be modified, suspended or revoked at any time,
without notice or the consent of the Executive, unless otherwise provided by
law.  Moreover, to the extent that these benefits are provided pursuant to
policies or plan documents adopted by the Company, Executive acknowledges and
agrees that these benefits shall be governed by the applicable employment
policies or plan documents.  The benefits to be provided to Executive shall
include group health and dental insurance and participation in a 401-K plan once
such plans have been established and implemented.
 
4.7 Personal Time Off (“PTO”).  Executive will be eligible to receive 20 PTO
days per year.  PTO is an accrued benefit and will be paid out at termination in
accordance with the Company’s standard PTO policies.
 
4.8 Business Expenses; Office Sublease.  Executive will be reimbursed for all
reasonable, out-of-pocket business expenses incurred in the performance of
Executive’s duties on behalf of the Company, including travel-related
expenses.  To obtain reimbursement, expenses must be submitted promptly with
appropriate supporting documentation in accordance with the Company’s
policies.  The Company shall also reimburse Executive for the actual lease
payments and other related costs paid by Executive to lease and maintain
Executive’s office space in New York.
 
 
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5. Confidentiality and Proprietary Agreement.  Executive agrees to abide by the
Company’s Employee Proprietary Information and Inventions Agreement (the
“Non-Disclosure Agreement”), which Executive has signed and is incorporated
herein by reference.
 
6. Termination of Executive’s Employment.
 
6.1 Termination for Cause by the Company. The Company may terminate Executive’s
employment immediately at any time and without notice for “Cause.”  For purposes
of this Agreement, “Cause” shall mean (i) a failure by Executive to perform any
of her material obligations under this Agreement or to execute and perform in a
timely and cooperative manner any directions of the Board; (ii) the death of
Executive or her disability resulting in her inability to perform her reasonable
duties assigned hereunder for a period of 90 days; (iii) Executive’s theft,
dishonesty, or falsification of any Company documents or records; (iv)
Executive’s improper use or disclosure of the Company’s confidential or
proprietary information; or (v) Executive’s conviction (including any plea of
guilty or nolo contendere) of any criminal act which impairs Executive’s ability
to perform his or her duties hereunder or which in the Board’s judgment may
materially damage the business or reputation of the Company; provided, however,
that prior to termination for cause arising under clause (i), Executive shall
have a period of ten days after written notice from the Company to cure the
event or grounds constituting such cause. Any notice of termination provided by
Company to Executive under this Section 6.1 shall identify the events or conduct
constituting the grounds for termination with sufficient specificity so as to
enable Executive to take steps to cure the same if such default is a failure by
Executive to perform any of her material obligations under this Agreement.  In
the event Executive’s employment is terminated in accordance with this
subsection 6.1, Executive shall be entitled to receive only the Base Salary and
any earned Incentive Compensation (as defined in Section 4.4 above) then in
effect, prorated to the date of termination. All other obligations of the
Company to Executive pursuant to this Agreement will be automatically terminated
and completely extinguished.
 
6.2 Termination Without Cause By The Company/Separation Package.  The Company
may terminate Executive’s employment under this Agreement without Cause (as
defined in Section 6.1 above) at any time on thirty (30) days’ advance written
notice to Executive.  In the event of such termination, Executive will receive
Executive’s Base Salary through the date of termination and a prorated portion
of any Incentive Compensation that was earned under Section 4.4 through the date
of termination.  Upon such termination without cause, any then unvested stock
options granted to Executive by the Company and any unvested shares of
restricted stock that vest with the passage of time will become fully vested and
Executive shall have twelve months from the date of termination within which to
exercise her vested options.  In addition, Executive will be eligible to receive
a “Severance Payment” equivalent to six months of Executive’s then Base Salary,
payable in full within thirty (30) days after termination, provided that
Executive first satisfies the Severance Conditions.  For purposes of this
Agreement, the “Severance Conditions” are defined as (1) Executive’s execution
and non-revocation of a full general release, in a form acceptable to the
Company, releasing all claims, known or unknown, that Executive may have against
the Company arising out of or in any way related to Executive’s employment or
termination of employment with the Company, and such release has become
effective in accordance with its terms prior to the 30th day following the
termination date; and (2) Executive’s reaffirmation of Executive’s commitment to
comply, and actual compliance, with all surviving provisions of this
Agreement.  Following payment of the Severance Payment, Base Salary and any
Incentive Compensation through the date of termination, all other obligations of
the Company to Executive pursuant to this Agreement will be automatically
terminated and completely extinguished.
 
6.3 Termination Upon a Change of Control.  For purposes of this Agreement,
“Change of Control” shall mean: (1) a merger or consolidation or the sale or
exchange by the stockholders of the Company of all or substantially all of the
capital stock of the Company, where the stockholders of the Company immediately
before such transaction do not obtain or retain, directly or indirectly, at
least a majority of the beneficial interest in the voting stock or other voting
equity of the surviving or acquiring corporation or other surviving or acquiring
entity, in substantially the same proportion as before such transaction; (2) any
transaction or series of related transactions to which the Company is a party in
which in excess of fifty percent (50%) of the Company’s voting power is
transferred; or (3) the sale or exchange of all or substantially all of the
Company’s assets (other than a sale or transfer to a subsidiary of the Company
as defined in section 424(f) of the Internal Revenue Code of 1986, as amended
(the “Code”)), where the stockholders of the Company immediately before such
sale or exchange do not obtain or retain, directly or indirectly, at least a
majority of the beneficial interest in the voting stock or other voting equity
of the corporation or other entity acquiring the Company’s assets, in
substantially the same proportion as before such transaction; provided, however,
that a Change of Control shall not be deemed to have occurred pursuant to any
transaction or series of transactions relating to a public or private financing
or re-financing, the principal purpose of which is to raise money for the
Company’s working capital or capital expenditures and which does not result in a
change in a majority of the members of the Board.  If, within six (6) months
immediately preceding a Change of Control or within twelve (12) months
immediately following a Change of Control, the Executive’s employment is
terminated by the Company for any reason other than Cause, then the Executive
shall be entitled to receive the Severance Payment and stock option and
restricted stock vesting and exercisability set forth in Section 6.2, provided
that Executive first satisfies the Severance Conditions.  Following payment of
the Severance Payment, Base Salary and any Incentive Compensation through the
date of termination, all other obligations of the Company to Executive pursuant
to this Agreement will be automatically terminated and completely extinguished.
 
6.4 Resignation.  Executive shall have the right to terminate this Agreement at
any time, for any reason, by providing the Company with thirty (30) days written
notice, provided, however, that subsequent to Executive’s resignation, Executive
shall be required to comply with all surviving provisions of this
Agreement.  Executive shall not be entitled to any Severance Pay.  Executive
will only be entitled to receive Executive’s Base Salary earned up to the date
of termination.  Notwithstanding the foregoing, Executive has the right upon
thirty (30) days written notice to the Company to terminate Executive’s
employment for “Good Reason” due to occurrence of any of the following:  (i) the
Company’s requirement that Executive’s principal place of work relocate more
than thirty (30) miles from the location initially designated hereunder by
Executive as her New York office without the written consent of Executive, (ii)
a material adverse change in Executive’s duties and responsibilities; (iii) any
failure by the Company to pay, or any material reduction by Company of, the base
salary or any failure by Company to pay any Incentive Compensation to which
Executive is entitled pursuant to Section 4; (iv) the Company creates a work
environment designed to constructively terminate Executive or to unlawfully
harass or retaliate against Executive; or (v) a Change of Control occurs in
which the Company is not the surviving entity and the surviving entity fails to
offer Executive an executive position at a compensation level at least equal to
Executive’s then compensation level under this Agreement.  In the event that
Executive terminates her employment for Good Reason, then Executive shall be
entitled to receive the Base Salary, any earned Incentive Compensation,
Severance Payment and stock option and restricted stock vesting and
exercisability as if Executive were terminated by the Company without Cause
under Section 6.2, subject to Executive’s compliance with all of the Severance
Conditions.
 
 
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6.5 Application of Section 409A.
 
6.5(a)  Notwithstanding anything set forth in this Agreement to the contrary, no
amount payable pursuant to this Agreement which constitutes a “deferral of
compensation” within the meaning of the Treasury Regulations issued pursuant to
Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless
and until Executive has incurred a “separation from service” within the meaning
of the Section 409A Regulations.
 
6.5(b) Company intends that income provided to Executive pursuant to this
Agreement will not be subject to taxation under Section 409A of the Code.  The
provisions of this Agreement shall be interpreted and construed in favor of
satisfying any applicable requirements of Section 409A of the Code.  However,
Company does not guarantee any particular tax effect for income provided to
Executive pursuant to this Agreement.  In any event, except for Company’s
responsibility to withhold applicable income and employment taxes from
compensation paid or provided to Executive, Company shall not be responsible for
the payment of any applicable taxes on compensation paid or provided to
Executive pursuant to this Agreement.
 
6.5(c) Furthermore, to the extent that Executive is a “specified employee”
within the meaning of the Section 409A Regulations as of the date of Executive’s
separation from service, no amount that constitutes a deferral of compensation
which is payable on account of Executive’s separation from service shall be paid
to Executive before the date (the “Delayed Payment Date”) which is first day of
the seventh month after the date of Executive’s separation from service or, if
earlier, the date of Executive’s death following such separation from
service.  All such amounts that would, but for this Section, become payable
prior to the Delayed Payment Date will be accumulated and paid on the Delayed
Payment Date.
 
6.5(d) Notwithstanding anything herein to the contrary, the reimbursement of
expenses or in-kind benefits provided pursuant to this Agreement shall be
subject to the following conditions: (i) the expenses eligible for reimbursement
or in-kind benefits in one taxable year shall not affect the expenses eligible
for reimbursement or in-kind benefits in any other taxable year; (ii) the
reimbursement of eligible expenses or in-kind benefits shall be made promptly,
subject to Company’s applicable policies, but in no event later than the end of
the year after the year in which such expense was incurred; and (iii) the right
to reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.
 
6.5(e) For purposes of Section 409A of the Code, the right to a series of
installment payments under this Agreement shall be treated as a right to a
series of separate payments.
 
7. General Provisions.
 
7.1 Successors and Assigns.  The rights and obligations of the Company under
this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company.  Executive shall not be entitled to
assign any of Executive’s rights or obligations under this Agreement.
 
7.2 Waiver.  Either party's failure to enforce any provision of this Agreement
shall not in any way be construed as a waiver of any such provision, or prevent
that party thereafter from enforcing each and every other provision of this
Agreement.
 
7.3 Attorney’s Fees.  In the event of any dispute or claim relating to or
arising out of Executive’s employment relationship with Company, this Agreement,
or the termination of Executive’s employment with Company for any reason, the
prevailing party in any such dispute or claim shall be entitled to recover its
reasonable attorney’s fees and costs.
 
7.4 Severability.  In the event any provision of this Agreement is found to be
unenforceable by an arbitrator or court of competent jurisdiction, such
provision shall be deemed modified to the extent necessary to allow
enforceability of the provision as so limited, it being intended that the
parties shall receive the benefit contemplated herein to the fullest extent
permitted by law.  If a deemed modification is not satisfactory in the judgment
of such arbitrator or court, the unenforceable provision shall be deemed
deleted, and the validity and enforceability of the remaining provisions shall
not be affected thereby.
 
7.5 Interpretation; Construction.  The headings set forth in this Agreement are
for convenience only and shall not be used in interpreting this Agreement.
Executive has participated in the negotiation of the terms of this
Agreement.  Furthermore, Executive acknowledges that Executive has had an
opportunity to review and revise the Agreement and have it reviewed by legal
counsel, if desired, and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement.
 
7.6 Governing Law.  This Agreement will be governed by and construed in
accordance with the laws of the United States and the internal laws of the State
of California.
 
7.7 Notices.  Any notice required or permitted by this Agreement shall be in
writing and shall be delivered as follows with notice deemed given as
indicated:  (a) by personal delivery when delivered personally; (b) by overnight
courier upon written verification of receipt; (c) by telecopy, facsimile
transmission, or electronic transmission such as e-mail, upon acknowledgment of
receipt of electronic transmission; or (d) by certified or registered mail,
return receipt requested, upon verification of receipt.  Notice shall be sent to
the addresses set forth below, or such other address as either party may specify
in writing.
 
7.8 Entire Agreement.  This Agreement constitutes the entire agreement between
the Parties relating to this subject matter and supersedes all prior or
simultaneous representations, discussions, negotiations, and agreements, whether
written or oral.  This Agreement may be amended or modified only with the
written consent of Executive and the Company.  No oral waiver, amendment or
modification will be effective under any circumstances whatsoever.
 
 
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THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES
HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.
 

     
EXECUTIVE:
        Dated: August 21, 2014  
Elma Hawkins
                /s/ Elma Hawkins                     Address:                  
                                       
COMPANY:
            Dated: August 21, 2014  
Lion Biotechnologies, Inc.
                  By: /s/ Manish Singh           Name: Manish Singh          
Title:   Chief Executive Officer
 

 
 
 
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