Exhibit 10.4

October 20, 2020

 

Richard Adcock

 

 

RE: Offer of Employment

 

Dear Richard:

 

I am pleased to offer you a position with NantKwest, Inc. (the “Company”) as its
Chief Executive Officer, effective October 26, 2020 (the “Effective Date”). You
will report through the Company’s offices in Culver City, CA. You will report to
the Company’s Board of Directors. In this position, your duties will include the
duties set forth in Exhibit A hereto, in addition to other duties that may be
assigned to you from time to time. The terms of our offer are as follows:

 

1.Starting Salary.  Your starting salary will be $750,000.00 if you work an
entire year, to be paid in accordance with the Company’s payroll practices in
effect from time to time. The Company may withhold from all amounts payable to
you such federal, state and local taxes as may be required to be withheld
pursuant to applicable law or regulation.

2.Bonus. You shall be eligible to participate in the annual discretionary bonus
plan for this position. The discretionary target bonus is fifty percent (50%) of
your base salary (i.e., $375,000), subject to such performance targets and other
factors, as may be determined in the sole and absolute discretion of the
Company’s Board of Directors. You will first be eligible to participate in the
bonus plan for the 2020 calendar year (payable in 2021 and prorated for the
partial year). In the first full calendar year of employment (i.e., for the 2021
calendar year), you will be paid no less than fifty (50%) of
target (e.g. $187,500.00), with an opportunity to receive payment at or above
target; in subsequent calendar years, your target bonus will be subject to such
performance targets and other factors as may be determined in the sole and
absolute discretion of the Company’s Board of Directors. As the annual bonus is
subject to the attainment of performance targets, it may be paid at, above or
below target levels. In order to receive any bonus payment, you must remain
continuously employed through, and still be employed by the Company on, the date
any such bonus is paid. An employee earns a bonus only if employed on payment
day and has not indicated an intent to resign.

3.Benefits.  During your employment with the Company, you will be eligible to
participate in any regular health insurance, retirement and other employee
benefit plans established by the Company for its employees from time to time.
Benefits, if any, will be subject to satisfaction of eligibility requirements
and the plan terms. The Company’s benefit plans are subject to amendment,
modification or termination by the Company at any time. Without limiting the
generality of the foregoing, during the term of employment hereunder, the
Company will reimburse the costs associated with Employee’s current two (2) life
insurance policies (approximately $30,000.00 annually in the aggregate). The
Company may withhold from all amounts payable to you such federal, state and
local taxes as may be required to be withheld pursuant to applicable law or
regulation. As a regular full-time exempt employee, you are eligible to
participate in an informal flexible time off program: employees have the
authority to use their judgment and discretion and take temporary periods of
time away from work as vacation, without loss of pay, as their work permits.

4.Equity. In addition, if you decide to join us, subject to the approval of the
Company’s compensation committee of the Board of Directors, you shall be granted
a stock option to purchase 1,000,000 shares of the Company’s common stock
pursuant to the Company’s Amended and Restated 2015 Equity Incentive Plan (the
“Plan”). The stock options will have an exercise price equal to the fair market
value on the date of grant (i.e., the closing price as reported on Nasdaq on the
date of grant). The options to be granted (subject to approval by the Company’s
compensation committee) shall vest over time according to the following vesting
schedule: (i) 25% of the options (i.e., 250,000 options) shall vest on
January 1, 2021; and (ii) the remaining 75% of the options shall vest in equal
annual installments over a period of three years from the Effective Date
(i.e., 25% of the shares subject to the stock option, or 250,000 stock options,
shall vest on each of November 1, 2021, November 1, 2022 and November 1, 2023).
No right to any stock is earned or accrued until such time that vesting occurs,
nor does this grant confer any right to continue vesting or employment. This
equity award shall be subject to the terms and conditions of the Plan and award
agreement governing the stock option grant.

3530 John Hopkins Ct., San Diego, CA 92121

Main: (858) 633-0300  Fax: (858) 380-1999  www.NantKwest.com

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Richard Adcock

Page 2

5.Severance. In the event that the Company terminates your employment without
Cause (as defined below) after the Effective Date, the Company shall pay you a
single cash payment equal to twelve (12) months of your then-current annual base
salary (i.e., $750,000.), less all applicable federal, state, and local
withholdings and deductions. Such payment shall be made within two and one-half
(2.5) months following the date on which the termination occurs, subject to any
required delay to satisfy the requirements of Section 409A as provided below.
Your receipt of any payment under this paragraph shall be contingent upon your
signing of a general release agreement in favor of and satisfactory to the
Company within the thirty (30) day period following your termination date and
your non-revocation of such release agreement during any statutorily-provided
revocation period. For the avoidance of doubt, if (i) you resign from or
otherwise terminate your employment with the Company at any time, (ii) the
Company terminates your employment for Cause, or (iii) your employment is
terminated by reason of death or Disability, you will not be eligible for any
severance payment.

For purposes of this offer letter, “Cause” shall mean any of the following:
(a) a material breach of any agreement you have with the Company, including, but
not limited to, a confidentiality agreement, or any policy of the Company, and
such material breach is not cured to the reasonable satisfaction of the Company
within twenty (20) days after written notice to you; (b) conviction of a felony
or any other crime involving dishonesty, breach of trust, moral turpitude, or
physical harm to any person (including, but not limited to, the Company or any
of its employees); (c) an act of fraud, misconduct, or dishonesty in connection
with the business of the Company; (d) failure to satisfactorily or adequately
perform your duties hereunder as reasonably determined by the Company,
including, but not limited to, your inability to achieve goals, inability to
work with others, insubordination or excessive tardiness, or failure to
implement or follow a lawful policy or directive of the Company, and in each
case such failure continues for a period of twenty (20) days after written
notice to you; (e) your receipt of a Final Written Warning for any reason; or
(f) insobriety or other substance abuse during work activities. For purposes of
this offer letter, “Disability” shall mean (i) you become eligible for the
Company’s long-term disability benefits or (ii) in the opinion of the Company,
you have been unable to carry out your responsibilities and functions by reason
of any physical or mental impairment for more than ninety (90) consecutive days
or more than one hundred twenty (120) days in any twelve (12) month period.

To the extent necessary to comply with Section 409A(a)(2)(B)(i) of the Internal
Revenue Code of 1986, as amended (the “Code”) (relating to payments made to
certain “key employees” of certain publicly-traded companies), any severance
payments payable to you under the terms of paragraph 6 which constitute deferred
compensation subject to Code Section 409A to which you would otherwise be
entitled during the six (6) month period immediately following your separation
from service will be paid on the earlier of (i) the first business day following
the expiration of such six (6) month period or (ii) your death. You and the
Company shall reasonably cooperate with each other to avoid the imposition of
any additional taxes, interest and/or penalty to you under Section 409A of the
Code.

6.Confidentiality.  As an employee of the Company, you will have access to
certain confidential information of the Company and you may, during the course
of your employment, develop certain information or inventions that will be the
property of the Company. As a condition of your employment, you are also
required to sign and comply with an At‑Will Employment, Confidential
Information, Invention Assignment and Arbitration Agreement which requires,
among other provisions, the assignment of patent rights to any invention made
during your employment at the Company, and non‑disclosure of Company proprietary
information. In the event of any dispute or claim relating to or arising out of
our employment relationship, you and the Company agree that (i) any and all
disputes between you and the Company shall be fully and finally resolved by
binding arbitration, (ii) you are waiving any and all rights to a jury trial but
all court remedies will be available in arbitration, (iii) all disputes shall be
resolved by a neutral arbitrator who shall issue a written opinion, (iv) the
arbitration shall provide for adequate discovery, and (v) the Company shall pay
all the arbitration fees, except an amount equal to the filing fees you would
have paid had you filed a complaint in a court of law. Please note that we must
receive your signed Agreement before your first day of employment.

 

7.At Will Employment.  While we look forward to a long and profitable
relationship, should you decide to accept our offer, you will be an at-will
employee of the Company, which means either the Company or you can terminate the
employment relationship for any reason, at any time, with or without prior
notice and with our without cause. Any statements or representations to the
contrary (and, indeed, any statements contradicting any provision in this
letter) should be regarded by you as ineffective. Further, your participation in
any benefit program is not intended to, and does not confer on you, any right to
continued employment for any particular period of time. Any modification or
change in your at will employment status may only occur by way of a written
employment agreement signed by you and a member of the Company’s board of
directors.

3530 John Hopkins Ct., San Diego, CA 92121

Main: (858) 633-0300  Fax: (858) 380-1999  www.NantKwest.com

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Richard Adcock

Page 3

8.Performance of Duties.  You shall devote your full time and attention to your
duties and the performance of the services and shall serve the Company
diligently and to your best abilities. Your services shall be exclusive to the
Company during the term hereof, and you shall not accept any other employment or
position, or engage in any other business enterprise, of any nature, without the
prior written consent of the Company. The Company acknowledges that from time to
time you may provide advisory services to certain affiliates of the Company.
Notwithstanding the foregoing, nothing in this Paragraph 8 shall restrict your
incidental engagement with or employment by any not-for-profit charities,
religious organizations or other similar enterprises.

9.Authorization to Work.  Please note that because of employer regulations
adopted in the Immigration Reform and Control Act of 1986, within three (3)
business days of starting your new position you will need to present
documentation demonstrating that you have authorization to work in the United
States. If you have questions about this requirement, which applies to U.S.
citizens and non-U.S. citizens alike, you may contact our personnel office.

10.Background Check.  This offer is contingent upon a successful employment
verification of criminal, education, employment background and a drug screening.
This offer can be rescinded based upon data received in the verification.

11.Miscellaneous.  The terms of this offer letter and the relationship of the
parties in connection with the subject matter hereof will be construed and
enforced according to the laws of the State of Delaware, without giving effect
to the conflicts of the law rules. Notwithstanding anything else herein, this
Agreement is personal to you and neither the Agreement nor any rights hereunder
may be assigned by you. The Company may assign this Agreement to any of its
affiliates or to any successor to all or substantially all of the business
and/or assets of the Company which assumes in writing or by operation of law,
the obligations of the Company hereunder.

12.Acceptance.  This offer will remain open until October 20, 2020. If you
decide to accept our offer, and I hope you will, please sign the enclosed copy
of this letter in the space indicated and return it to me. Your signature will
acknowledge that you have read and understood and agreed to the terms and
conditions of this offer letter and the attached documents, if any. Should you
have anything else that you wish to discuss, please do not hesitate to call me.

We look forward to the opportunity to welcome you to the Company.

 

 

Very truly yours,

 

 

 

/s/ Nancy V. Antoniou

 

Name: Nancy V. Antoniou

 

Title: Chief Human Resources Officer

 

 

I have read and understood this offer letter and hereby acknowledge, accept and
agree to the terms as set forth above including that I am an at-will employee
and further acknowledge that no other commitments were made to me as part of my
employment offer except as specifically set forth herein.

 

/s/ Richard Adcock

 

 

Name: Richard Adcock

 

Date signed: 10-20-2020

 

 

 

 

Enclosures

Original Letter

Exhibit A

 

3530 John Hopkins Ct., San Diego, CA 92121

Main: (858) 633-0300  Fax: (858) 380-1999  www.NantKwest.com

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EXHIBIT A

 

 

ESSENTIAL FUNCTIONS:

 

Job Duties to be determined by the Board of Directors

3530 John Hopkins Ct., San Diego, CA 92121

Main: (858) 633-0300  Fax: (858) 380-1999  www.NantKwest.com