Exhibit 10.14

 

 

EMPLOYMENT AGREEMENT

 

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by and between
SpectraScience, Inc., a Minnesota corporation (the “Company”), and Michael
Oliver (“Executive”), effective January 1, 2013 (the “Effective Date”).

 

RECITALS

 

WHEREAS, Executive currently is employed by SpectraScience as its President and
Chief Executive Officer.

 

WHEREAS, the Company wishes to provide Executive with certain severance payments
and benefits, as described below, to which Executive is not otherwise entitled,
in exchange for the promises and restrictions described in this Agreement.

 

AGREEMENTS

 

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:

 

1. Position. The Company will employ Executive as its President & Chief
Executive Officer. In this position, Executive will serve the Company faithfully
and to the best of Executive’s ability. Executive will devote his full business
and professional time, attention and energies to the performance of Executive’s
duties with the Company, and Executive agrees to comply with the Company’s
policies, procedures, rules, regulations and programs. Executive may devote time
to outside board or advisory positions as pre-approved by the Company’s Board of
Directors (the “Board”). Executive will render such business and professional
services in the performance of such duties, consistent with Executive’s position
within the Company, as will be reasonably assigned to Executive by the Board of
Directors. Executive will be based in San Diego, California and will travel as
needed, including to collaborator and partner locations, academic medical
centers, banking and other conferences, and other locations as necessary or
advisable in performance of Executive’s duties.

 

2. Term of Employment. Executive and the Company agree that Executive will be
employed at-will and that Executive’s employment with the Company will continue
until terminated pursuant to Section 5 of this Agreement.

 

3. Compensation. During Executive’s employment with the Company, the Company
will provide Executive with the following compensation:

 

a. Base Salary. The Company will pay Executive a base salary of $325,000 per
year, to be reviewed approximately annually by the Board and adjusted from time
to time as determined by the Board in its discretion, and payable in accordance
with the Company’s standard payroll policies, but no less frequently than
monthly. Notwithstanding the foregoing, from the Effective Date of this
Agreement until the closing of a round (or multiple rounds) of equity (or debt
convertible into equity) financing resulting in gross proceeds to the Company in
excess of $2,000,000 in any one transaction or $3,000,000 in the aggregate (a
“Qualified Financing”), Executive will be paid a base salary of $225,000 per
year, payable in accordance with the Company’s standard payroll policies, but no
less frequently than monthly. Upon closing of the Qualified Financing,
Executive’s rate of compensation will be increased to the $325,000 annualized
rate described above and Executive will be paid a bonus equal to the difference
between the base salary actually paid to Executive from the Effective Date of
this Agreement until the closing of the Qualified Financing and the amount
Executive would otherwise have been paid during such period at the $325,000
annualized rate, such bonus to be paid within 30 days of the closing of the
Qualified Financing.

 

 

 

b. Annual Bonus. During Executive’s employment with the Company, Executive will
be eligible to earn an annual bonus of up to fifty percent (50%) of Executive’s
then-current base salary (prorated for partial years) for achievement of
reasonable Company and individual performance-related goals to be defined by the
Board. The exact payment terms of a bonus, if any, are to be set by the
Compensation Committee of the Board of Directors (the “Compensation Committee”),
as authorized by the Company’s Board of Directors in its sole discretion. To
earn a bonus under this Section 3.b., Executive must be employed by the Company
on the last day of the Company’s fiscal year. The bonus, if earned, will be paid
within thirty (30) days after receipt by the Compensation Committee of the
Company’s final year-end financial statements.

 

c. Taxes. All compensation and benefits provided by the Company to Executive
(including but not limited to Executive’s base salary and annual bonus), will be
subject to required and authorized deductions and withholdings.

 

4. Employee Benefits. During Executive’s employment with the Company, Executive
will be entitled to participate in any employee benefit plans, health insurance
plans, life insurance plans, disability income plans, retirement plans, expense
reimbursement plans and other benefit plans that the Company may from time to
time have in effect for its executive-level employees. Executive’s participation
will be subject to the terms of the applicable plan documents and applicable
policies of the Company. Nothing in this Agreement will require the Company to
adopt group insurance, employee benefit, and/or retirement plans or restrict the
Company’s right to amend, modify, or terminate such plans at any time, including
during Executive’s employment. Executive will be eligible for twenty (20) days
of paid time off per full calendar year (prorated for partial years), in
addition to standard holidays, in accordance with the Company’s policies in
effect from time to time.

 

5. Termination. Executive’s employment by the Company will terminate as follows:

 

a. By mutual written agreement of the parties.

 

b. Automatically upon the death of Executive or the insolvency or bankruptcy of
the Company.

 

c. By Executive without Good Reason or by the Company without Cause upon ninety
(90) days’ written notice of termination.

 

d. By the Company with Cause immediately upon written notice of termination. For
purposes of this Agreement, “Cause” will mean:

 

 

 

 

i.Executive’s material breach of any material term of this Agreement or any
other Agreement between the parties, failure to carry out his duties or good
faith directives from the Company, or violation of the Company’s policies or
procedures;

 

ii.Any willful or deliberate misconduct;

 

iii.Any act of fraud, embezzlement, dishonesty, misappropriation or breach of
fiduciary duty by Executive relating to the Company or its agents, business
partners, or stockholders; and

 

iv.Executive’s commission of (A) a felony, or (B) a misdemeanor involving moral
turpitude, whether or not against the Company and whether or not committed in
the scope of Executive’s employment.

 

e. By Executive for Good Reason upon written notice to the Company, with a copy
to the Board, within thirty (30) calendar days of the event constituting Good
Reason. Upon receipt of such notice, the Company will have thirty (30) calendar
days to cure such event. If the Company does not cure such event to the
reasonable satisfaction of Executive within such thirty-day period, Executive
must terminate within thirty (30) calendar days thereafter in order for
Executive’s termination to be for Good Reason. For purposes of this Agreement,
“Good Reason” will mean:

 

i.The assignment of Executive to a position other than President & CEO without
Executive’s consent and which results in a material diminution of Executive’s
authority, duties, or responsibilities;

 

ii.A material reduction by the Company of Executive’s Salary at any time without
Executive’s consent;

 

iii.Executive being required to relocate to an office location more than fifty
(50) miles from Executive’s current office in San Diego, California. Should
Executive be required and agree to relocate to an office location more than 50
miles from Executive’s current office in San Diego, California, all reasonable
moving expenses to relocate Executive’s office and private residence will be
paid for and billed directly to Company, with all reimbursements being requested
and made within one (1) year after being incurred; or

 

iv.Any other material breach by the Company of any material provision of this
Agreement.

 

f. Except as provided in Section 7, after the effective date of termination,
Executive will not be entitled to any compensation, bonuses, benefits, or
payments whatsoever except for base salary earned through his last day of
employment and any accrued benefits.

 

6. Pay in Lieu of Notice. If either the Company or Executive terminates
Executive’s employment, the Company, in its discretion, may treat Executive’s
termination as effective at any earlier date during any required notice period
if Company continues to pay Executive’s then-current base salary for the
unexpired portion of the applicable notice period.

 

 

 

 

7. Severance Pay and Benefits. If (1) Executive is involuntarily terminated by
the Company without Cause or Executive terminates his employment for Good
Reason, and (2) Executive executes (and does not rescind) a release of claims in
a form supplied by the Company (the “Release”), then the Company will provide
Executive the following severance pay and benefits:

 

a. Severance pay in an amount equal to twelve (12) months’ of Executive’s then
current base salary, subject to required and authorized deductions and
withholdings, which will be paid at regular payroll intervals over the course of
the 12-month period immediately following the effective date of Executive’s
termination and commencing upon the first scheduled payroll cycle immediately
following the date the Release is executed and no longer subject to revocation
(the “Separation Effective Date”). The first such cash payment will include
payment of all amounts that otherwise would have been due prior to the
Separation Effective Date had such payments commenced immediately upon the
termination of Executive’s employment.

 

b. Provided Executive elects pursuant to COBRA to continue to participate in the
Company’s group health and dental insurance plans, to pay COBRA premiums for
health and dental insurance coverage under the plans for the 12-month period
immediately following the effective date of the termination . The Company will
discontinue payments under this Section 7.b if and at such time as Executive is
eligible to enroll in a new employer’s group health and/or dental programs, as
applicable, and Executive agrees to promptly provide the Company notice if he
becomes eligible to enroll in the group health and/or dental programs of a new
employer. If the Company determines, in its sole discretion, that payment of the
COBRA premiums under this Section 7.b would result in a violation of the
nondiscrimination rules of Section 105(h)(2) of the Internal Revenue Code or any
statute or regulation of similar effect (including but not limited to the 2010
Patient Protection and Affordable Care Act, as amended by the 2010 Health Care
and Education Reconciliation Act), then in lieu of paying the COBRA premiums,
the Company may instead elect to pay Executive on the first day of each month, a
fully taxable cash payment equal to the COBRA premiums for that month, subject
to applicable tax withholdings (the “Special Severance Payment”), for each
remaining month during which Executive is entitled to receive payment of the
COBRA premiums under this Section 7.b. Executive may, but is not obligated to,
use the Special Severance Payment toward the cost of COBRA premiums. The Company
has the right to modify or terminate its group insurance plans at any time and
Executive will have the same right to participate in the Company’s group
insurance plans only as is provided on an equivalent basis to the Company’s
employees.

 

8. Change of Control.

 

a. If, within the 12-month period following a Change of Control, Executive’s
employment is terminated by the Company without Cause or by Executive for Good
Reason, then, in addition to the severance obligations due to Executive under
Section 7 above, an additional one hundred percent (100%) of the Executive’s
then current salary less withholding taxes shall be paid on the date of
termination and one hundred percent (100%) of any then-unvested shares under
Company stock options then held by Executive will vest upon the date of such
termination and the period of time for their exercise will be at the discretion
of the Company, provided that no option will be exercisable after expiration of
its original term. It may be necessary for Executive to exercise such shares on
the day of Change in Control, and the Company will use its best efforts to
provide Executive with a reasonable period of advance written notice in such
event.

 

 

 

 

b. For purposes of this Agreement, “Change of Control” means:

 

i.after the date hereof, any “person” (as such term is used in Sections 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
Exchange Act), directly or indirectly, of securities of the Company representing
fifty percent (50%) or more of the total voting power represented by the
Company’s then outstanding voting securities; or

 

ii.the date of the consummation of a merger or consolidation of the Company with
any other corporation or entity that has been approved by the stockholders of
the Company, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or

 

iii.the date of the consummation of the sale or disposition of all or
substantially all of the Company’s assets.

 

9. Confidentiality and Assignment of Inventions Agreement. In further
consideration of the severance payments and benefits described in this
Agreement, and as term and condition of Executive’s continued employment with
the Company, Executive agrees to execute and abide by the terms of the
Confidentiality and Assignment of Inventions Agreement attached hereto as
Exhibit A.

 

10. Code Section 409A. Notwithstanding any other provision of this Agreement to
the contrary, the parties to this Agreement intend that this Agreement will
satisfy the applicable requirements, if any, of Section 409A of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder (collectively
hereinafter referred to as “409A”) in a manner that will preclude the imposition
of additional taxes and interest imposed under 409A. The parties agree that the
Agreement will be amended (as determined by the Company in consultation with
Executive) to the extent necessary to comply with 409A, as amended from time to
time, and the notices and other guidance of general applicability issued
thereunder. Notwithstanding anything in this Agreement to the contrary, if any
amounts that become due under this Agreement on account of Executive’s
termination of employment constitute “nonqualified deferred compensation” within
the meaning of 409A, payment of such amounts will not commence until Executive
incurs a Separation from Service, as defined under 409A). If, at the time of
Executive’s termination of employment under this Agreement, Executive is a
“specified employee” (within the meaning of 409A), any amounts that constitute
“nonqualified deferred compensation” within the meaning of 409A that become
payable to Executive on account of Executive’s Separation from Service
(including any amounts payable pursuant to the preceding sentence) will not be
paid or commence earlier than the first day of the seventh month following the
date of Executive’s termination of employment (the “409A Suspension Period”).
Within fourteen (14) calendar days after the end of the 409A Suspension Period,
Executive will be paid a lump sum equal to any payments delayed because of the
preceding sentence. Thereafter, Executive will receive any remaining benefits as
if there had not been an earlier delay. Each payment due under this Agreement is
treated as a separate payment for purposes of Treasury Regulations Sections
1.409A-1(b)(4)(F) and 1.409A-2(b)(2).

 

 

 

 

11. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the state of Minnesota.

 

12. Assignment. This Agreement will be assignable by the Company and the terms
of this Agreement automatically will inure to the benefit of the Company and its
successors and assigns.

 

13. Captions. The captions set forth in this Agreement are for convenience only
and will not be considered as part of this Agreement or as in any way limiting
or amplifying the terms and conditions hereof.

 

14. Entire Agreement. This Agreement incorporates the entire understanding
between the parties as to its subject matter and supersedes all prior agreements
and understandings relating to such subject matter. This Agreement may not be
canceled, modified, or otherwise changed except by another written agreement
signed by Executive and the Chairman of the Board.

 

15. Waivers. The Company’s action in not enforcing a breach of any part of this
Agreement will not prevent the Company from enforcing it as to the breach or any
other breach of this Agreement. No waiver of this Agreement will be binding upon
the Company unless agreed to in writing signed by the Chairman of the Board.

 

16. Severability. If any provision of this Agreement is held invalid or
unenforceable by a court, the Company and Executive agree that that part should
be modified by the court to make it enforceable to the maximum extent possible.
If the part cannot be modified, then that part should be severed and the other
parts of this Agreement will remain enforceable.

 

17. Notices. Any and all notices referred to herein will be deemed properly
given only if in writing and delivered personally to the intended recipient, or
the recipient’s home address in the case of Executive, or sent postage prepaid,
by certified mail, to the party to whom notice is being given, as follows:

 

a.To the Company, to the attention of the Board of Directors of the Company, at
the Company’s administrative office or at such other address as the Company will
specify in writing to Executive; or

 

b.To Executive at his home address as it then appears on the records of the
Company, it being the duty of Executive to keep the Company informed of a
current home address at all times.

 

18. Counterparts. More than one counterpart of this Agreement may be executed by
the parties hereto, and each fully executed counterpart will be deemed an
original.

 

 

 

 

With the intention of being bound hereby, the parties have executed this
Agreement as of the date set forth above.

 

 

    EXECUTIVE         Dated: 10 Jan 2014 By:  /s/ Michael Oliver        

 

 

    SPECTRASCIENCE, INC.         Dated: 10 Jan 2014 By:  /s/ M McWilliams      
Its: Chairman of the Board