Exhibit 10.1 Employment Agreement dated August 23, 2019 between the Company and
Dr. Vuong Trieu

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is entered into as of August 23, 2019,
between Mateon Therapeutics, Inc., a Delaware corporation (“Mateon” or the
“Company”), and Vuong Trieu, Ph.D. (“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, Mateon and Executive desire to enter into an employment agreement
relating to the position of Mateon’s Chief Executive Officer & President
(“CEO”), pursuant to which position Executive shall report to the Board of
Directors of Mateon (“Board”). The Executive’s initial responsibilities include
providing leadership and direction for Mateon and Oncotelic’s operations,
working on financing for the Company, any strategic transactions and any other
responsibilities that Mateon and CEO mutually agree to.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby mutually acknowledged, Mateon and Executive hereby agree as
follows:

 

1. Employment

 

1.1 Executive shall serve in the capacity of CEO, and shall have the duties,
responsibilities and authority assigned to Executive by the Board consistent
with such position. Executive shall report directly to Mateon’s Board.

 

1.2 Executive, so long as he is employed hereunder, (i) shall devote his full
professional time and attention to the services required of him as an employee
of Mateon, except as otherwise agreed and except as permitted in accordance with
paid vacation time subject to Mateon’s existing vacation policy, and subject to
Mateon’s existing policies pertaining to reasonable periods of absence due to
sickness, personal injury or other disability, (ii) shall use his best efforts
to promote the interests of Mateon, and (iii) shall discharge his
responsibilities in a diligent and faithful manner, consistent with sound
business practices.

 

2. Term

 

The term of Executive’s employment under this Agreement shall commence as of
August 1st, 2019 and shall continue until terminated by either party in
accordance with Section 6 hereof (the “Employment Term”).

 

3. Base Salary; Stock Options

 

3.1 During the Employment Term, Executive shall receive an annual base salary in
the amount of $450,000 (such amount as adjusted, from time to time, the “Base
Salary”), payable in accordance with Mateon’s payroll schedule from time to time
in effect. Executive’s salary shall be reviewed annually by the Board. Executive
shall be paid only 50% of the Base Salary with the Company’s normal payroll
policies until the occurrence of a Financing Event. For purposes of this
Amendment to this Agreement, the term “Financing Event” means: (a) the closing
of an equity or debt financing with gross proceeds equal to or greater than
$4,000,000, (b) the execution of a licensing or collaboration agreement with an
up-front payment equal to or greater than $4,000,000, or (c) any combination of
(a) and (b) whereby the gross proceeds are equal to or greater than $4,000,000.
Immediately upon the closing of a Financing Event, provided Executive remains
employed with the Company as of the date of the closing of the Financing Event,
Executive’s salary shall be increased to 100% of Base Salary. The Compensation
Committee of the Board (“Compensation Committee”) will consider whether any
additional compensation shall be paid to Executive related to the period of
Reduced Salary. Executive understands and agrees that Executive has already been
paid all wages due and owing as of the date of this Agreement.

 

3.2 Mateon shall grant to Executive, subject to approval by the either the Board
or the Compensation Committee of the Board, pursuant to the Mateon Inc.’s 2015
and/or 2017 Equity Incentive Plans (the “Stock Plan”), 209,302 restricted shares
of common stock of Mateon, $.01 par value per share. The Company will compensate
the Executive for the taxes incurred on the restricted shares upon receipt of
documentation as to the amount of taxes incurred. Such grant shall be made at a
price equal to the Fair Market Value (as defined in the Stock Plan) on the date
of the grant, and shall fully vest at the one year anniversary of employment.
Thereafter, Executive will be a participant of the Stock Plan, and will be
eligible to receive an annual grant of restricted stock as approved by the Board
or Compensation Committee and which shall contain the customary terms and
provisions of such grants generally to key executives under the Stock Plan.

 

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3.3 Mateon shall grant to Executive, subject to approval by the Board or the
Compensation Committee, pursuant to the Stock Plan, an incentive stock option to
purchase 313,953 shares of Mateon common stock, $.01 par value per share. Such
option shall have an exercise price equal to the Fair Market Value (as defined
in the Stock Plan) on the date of grant of such option, and shall vest and
become exercisable after one year of employment. Thereafter, Executive will be a
participant of the Stock Plan, and will be eligible to receive an annual grant
of an equivalent number of options, which shall contain the customary terms and
provisions of options granted generally to key executives under the Stock Plan.

 

3.4 Executive shall be entitled to a 50% Annual Bonus based upon roles and
objectives predetermined by, and at the discretion of, the Board or Compensation
Committee.

 

3.5. These restricted shares of common stock of Mateon granted under Section 3.2
and the incentive stock option granted under Section 3.3 are not in place of,
but rather are in addition to the shares of Mateon stock already owned by the
Executive. The vesting of the restricted shares of common stock of Mateon under
Section 3.2 and the incentive stock option under Section 3.3 will accelerate and
be fully vested upon a Change of Control (as defined in the Stock Plan).

 

4. Benefits

 

Executive shall be entitled to participate in or receive benefits under any
employee benefit plan, arrangement or perquisite generally made available by
Mateon during the Employment Term to its executives and key management
employees. These benefits shall consist of a minimum paid family health
insurance, including dental and vision insurance and any other benefits granted
by Mateon and four (4) weeks of Personal Time Off (“PTO”) per year, subject to a
maximum accrual of eight (8) weeks.

 

5. Business Expenses

 

Executive shall be entitled to receive prompt reimbursement for all reasonable
and customary expenses incurred by him in performing services hereunder during
the Employment term; provided that such expenses are incurred and accounted for
in accordance with the policies and procedures established by Mateon.

 

6. Termination

 

6.1 Mateon may terminate Executive’s employment by giving Executive thirty (30)
days’ written notice, subject to all provisions of this Agreement.
Notwithstanding the foregoing, Mateon may terminate Executive’s employment for
Cause (as defined in section 6.7 thereof) without prior notice.

 

6.2 (a) Executive may voluntarily resign from employment with the Company upon
written notice to the Company specifying the effective date of such resignation,
which effective date shall not be less than thirty (30) days from the date of
such notice. Upon effective date of Executive’s resignation, the Company shall
have no further obligations to perform duties as specified in Section 1 of this
Agreement.

 

(b) If Executive terminates his employment following material breach of the
Agreement by Mateon, which breach remains uncured thirty (30) days after written
notice thereof is received by Mateon (a “Termination with Good Reason”),
Executive shall be treated as if his employment was terminated by Mateon other
than for Cause.

 

6.3 If Mateon terminates Executive for Cause or the Executive resigns his
employment other than in a Termination with Good Reason, Executive shall be
entitled to receive in a lump sum payment as soon as practicable after the
Termination Date an amount equal to all accrued and unpaid Base Salary (the
“Unpaid Salary”), a lump sum payment for all accrued and unused PTO (the “Unpaid
PTO”), and reimbursement of any unreimbursed business expenses in accordance
with the Company’s reimbursement policies.

 

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6.4 If Executive’s employment is terminated by Mateon other than for Cause (as
defined below) or in the event of a Termination with Good Reason, then Mateon
shall provide to Executive as soon as practicable after the date of notice of
Executive’s termination of employment:

 

  (a) The Unpaid Salary and Unpaid PTO, as soon as practicable after the
Termination Date; plus   (b) a lump sum cash payment equal to eighteen (18)
months of Executive’s then-current Base Salary; and   (c) All stock options,
stock appreciation rights, restricted stock, and other incentive compensation
granted to the Executive by Mateon shall, to the extent vested, remain
exercisable in accordance with the terms of the Stock Plan (or prior applicable
plan) and the agreement entered pursuant thereto, and the Executive may exercise
all such vested options and rights, and shall receive payments and distributions
accordingly.   (d) All insurance benefits or COBRA coverage, fully paid by
Mateon, for a period of eighteen (18) months following the Executive’s
termination of employment.

 

6.5 If, following any Change in Control (as such term will be defined in the
Stock Plan) and prior to expiration of one (1) year from the date of such Change
in Control, (1) Executive’s employment is terminated by Mateon (other than for
Cause) or (2) in the event of a Termination with Good Reason, then

 

  (a) Mateon shall provide to the Executive:

 

  a. The Unpaid Salary and accrued unpaid PTO, as soon as practicable after the
Termination Date; plus         b. An amount equal to eighteen (18) months of
Executive’s then current Base Salary; and

 

  (b) all stock options, stock appreciation rights, restricted stock, and other
incentive compensation granted to the Executive by Mateon shall, to the extent
vested, remain exercisable in accordance with the terms of the stock Plan (or
prior applicable plan) and the agreement entered pursuant thereto, and the
Executive may exercise all such vested options and rights, and shall receive
payments and distributions accordingly. The absence of a stock plan will not be
a reason not to allow Executive to exercise all such vested options and rights,
and shall receive payments and distributions.   (c)

All insurance benefits or COBRA coverage, fully paid by Mateon, for a period of
eighteen (18) months following the Executive’s termination of employment.

 

 

6.6 The foregoing payments upon Executive’s termination shall constitute the
exclusive payments due Executive upon termination from his employment with
Mateon under this Agreement or otherwise, provided, however that except as
stated above, such payments shall have no effect on any benefits which may be
payable to Executive under any plan of Mateon which provides benefits after
termination of employment.

 

6.7 For the purposes of this Agreement, the term “Cause” shall mean any of the
following:

 

  (a) the (i) continued failure by Executive to perform his duties on behalf of
Mateon’s if Executive fails to remedy that breach within ten (10) days of
Mateon’s written notice to Executive of such breach; or (ii) material breach of
any other provision of this Agreement by the executive, if the Executive fails
to remedy that breach within ten (10) days of Mateon’s written notice to
Executive of such breach; or   (b) any act of fraud, material misrepresentation
or material omission, misappropriation, dishonesty, embezzlement or similar
conduct against Mateon or any affiliate, or conviction of Executive for a felony
or any crime involving moral turpitude.

 

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7. No Solicitation; Confidentiality; Work for Hire

 

7.1 For a period of eighteen (18) months after the Termination Date, neither the
Executive nor any Executive-Controlled Person (as defined below) will, without
the prior written consent of the Board, directly or indirectly solicit for
employment, or make an unsolicited recommendation to any other person that it
employ or solicit for employment any person who is or was, at any time during
the nine (9) month period prior to the Termination date, an officer, executive
or key employee of Mateon or any affiliate of Mateon. As used in this Agreement,
the term “Executive-Controlled Person” shall mean any company, partnership, firm
or other entity as to which Executive possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
entity, whether through the ownership of voting securities, by contract or
otherwise.

 

7.2 (a) Executive acknowledges that, through his status as CEO of Mateon, he
has, and will have, possession of important, confidential information and
knowledge as to the business of Mateon and its affiliates, including, but not
limited to, information and knowledge as to the business of Mateon and its
affiliates, including, but not limited to, information related to drugs and
compounds developed or under development by the Company, financial results and
projections, future plans, the provisions of other important contracts entered
into by Mateon and its affiliates, possible acquisitions and similar information
proprietary to Mateon and its affiliates (collectively, “Confidential
Information”). Executive agrees that he shall not, so long as the Company
remains in existence, divulge, communicate, furnish or make accessible (whether
orally or in writing or in books, articles or any other medium) to any
individual, firm, partnership or corporation, any knowledge or information with
respect to Confidential Information directly or indirectly useful in any aspect
of the business of Mateon or any of its affiliates. As used in the preceding
sentence, “Confidential Information” shall not include any knowledge of
information that: (i) is or becomes available to others, other than as a result
of breach by Executive of this Section 7.2; (ii) was available to Executive on a
nonconfidential basis prior to its disclosure to executive through his status as
an officer or employee of Mateon or any affiliate; (iii) becomes available to
Executive on a nonconfidential basis from a third party (other than Mateon, any
affiliate or any of its of their representatives) who is not bound by any
confidentiality obligation to Mateon or any affiliate; (iv) was known by the
Executive prior to his employment by Mateon as evidenced by Executive’s
pre-existing written records; (v) was not maintained as confidential information
by Mateon; (vi) is otherwise information known or available within Mateon’s
industry; or (vii) is information that is legally compelled, by applicable law,
to be disclosed by Executive, provided, however, that in such an event Executive
shall give prompt notice to Mateon of such requirement so that Mateon may seek a
protective order or other appropriate remedy.

 

(b) All memoranda, notes, lists, records and other documents or papers (and all
copies thereof), including such items stored in computer memories, on microfiche
or by any other means, made or complied by or on behalf of Executive or made
available to him relating to the business of Mateon or any of its affiliates are
and shall be and remain Mateon’s property and shall be delivered to Mateon
promptly upon the termination of Executive’s employment with Mateon or at any
other time on request and such information shall be held confidential by
Executive after the termination of his employment with Mateon.

 

7.3 Executive grants the Company and each affiliate of the Company, as
appropriate, all rights in and to the contribution made by Executive to any
projects or matters on which Executive worked during the Employment Term.
Executive acknowledges that each such matter and the contribution made by
Executive thereto shall constitute a work made for hire within the meaning of
the United States copyright law and other applicable laws. The Company reserves
all rights with respect to information relating to the Company’s products,
including, but not limited to, the right to apply for patents.

 

7.4 The provisions contained in this Section 7 as to the time periods, scope of
activities, persons or entities affected, and territories restricted shall be
deemed divisible so that, if any provision contained in this Section 7 is
determined to be invalid or unenforceable, such provisions shall be deemed
modified so as to be valid and enforceable to the full extent lawfully
permitted.

 

7.5 Executive agrees that the provisions of this Section 8 are reasonable and
necessary for the protection of Mateon and that they may not be adequately
enforced by an action for damages and that, in the event of a breach thereof by
Executive or any Executive-Controlled Person, Mateon shall be entitled to apply
for and obtain injunctive relief in any court of competent jurisdiction to
restrain the breach or threatened breach of such violation or otherwise to
enforce specifically such provisions against such violation, without the
necessity of the posting of any bond by Mateon. Executive further covenants
under this Section 8, Mateon shall be entitled to an accounting and repayment of
all profits, compensation, commissions, remuneration or other benefits that
Executive directly or indirectly has realized and/or may realize as a result of,
growing out of or in connection with any such violation. Such a remedy shall,
however, be cumulative and not exclusive and shall be in addition to any
injunctive relief or other legal equitable remedy to which Mateon is or may be
entitled.

 

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8. Taxes

 

Any amounts payable to the Executive hereunder shall be paid to the Executive
subject to all applicable taxes required to be withheld by Mateon pursuant to
federal, state or local law. Except as provided herein, Executive shall be
solely responsible for all taxes imposed on the Executive by reason of his
receipt of any amounts of compensation or benefits payable hereunder.

 

9. Indemnification

 

Mateon has entered into a separate Indemnification Agreement with Executive
which shall survive the execution and delivery of this Agreement and remain in
full force and effect.

 

10. Attorney’s Fees and Expenses

 

Mateon and the Executive agree that in the event of litigation arising out of or
relating to this Agreement, the prevailing party shall be entitled to
reimbursement from the other party to the prevailing party’s reasonable attorney
fees and expenses.

 

11. Amendments

 

This Agreement may not be altered, modified or amended except by a written
instrument signed by each of the parties hereto.

 

12. Assignments

 

Neither this Agreement not any of the rights or obligations hereunder shall be
assigned or delegated by any party hereto without the prior written consent of
the other party; provided, however, that any payments and benefits owed to
Executive under this Agreement shall insure to the benefit of his heirs and
personal representatives.

 

13. Waiver

 

Waiver by any party hereto of any breach or default by any other party of any of
the terms of this Agreement shall not operate as a waiver of any other breach or
default, whether similar to or different from the breach or default waived.

 

14. Severability

 

In the event that any one or more of the provisions of this Agreement shall be
or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.

 

15. Notices

 

All notices and other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
when mailed by registered mail, return receipt requested, postage prepaid,
addressed as follows:

 

If to Executive, as follows:

 

  Name: Vuong Trieu, Ph. D.   Address: [***]     [***], CA

 

If to Mateon, as follows:

 

  Name: Board of Directors   Address: Mateon Therapeutics, Inc.     29397 Agoura
Road, Suite 107     Agoura Hills, CA 91301

 

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Or to such other address or such other person as Executive or Mateon shall
designate in writing in accordance with this Section 15, except that notices
regarding changes in notices shall be effective only upon receipt.

 

16. Headings

 

Headings to Sections in this Agreement are for the convenience of the parties
only and are not intended to be a part of, or to affect the meaning or
interpretation of, this Agreement.

 

17. Governing Law

 

This Agreement shall be governed by the laws of the California without reference
to the principles of conflict of laws. Each of the parties hereto consents to
the jurisdiction of the federal and state courts of the California in connection
with any claim or controversy arising out of or connected with this Agreement,
and said courts shall be the exclusive forum for the resolution of any such
claim or controversy. Service of process in any such proceeding may be made upon
each of the parties hereto at the address of such party as determined in
accordance with Section 15 of this Agreement, subject to the applicable rules of
the court in which such action is brought.

 

18. Entire Agreement

 

This Agreement contains the entire agreement between Executive and Mateon with
respect to all matters relating to Executive’s employment with Mateon and, as of
the date hereof, will supersede and replace any other agreements, written or
oral, between the parties relating to the terms or conditions of Executive’s
employment with Mateon, provided, however, that nothing in this Agreement shall
amend or affect any shares of capital stock or stock options previously granted
to Executive.

 

IN WITNESS WHEREOF, Mateon and Executive have caused this Agreement to be
executed as of the date first above written.

 

    /s/ Vuong Trieu   Name: Vuong Trieu, Ph. D         MATEON THERAPEUTICS, INC.
          /s/ William Schwieterman   Name: William Schwieterman   Title: Member
of the Board of Directors

 

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