Exhibit 10.1
METASTAT, INC.
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”) is made and entered into on June
17, 2015 (the “Effective Date”) by and between MetaStat, Inc. (the “Company”)
and Douglas Hamilton (“Executive”).  The Company and Executive are hereinafter
collectively referred to as the “Parties”, and individually referred to as a
“Party”.
 
Recitals
 
A.           The Company desires assurance of the association and services of
Executive in order to retain Executive’s experience, skills, abilities,
background and knowledge, and is willing to engage Executive’s services on the
terms and conditions set forth in this Agreement.
 
B.           Executive desires to be in the employ of the Company, and is
willing to accept such employment on the terms and conditions set forth in this
Agreement.
 
Agreement
 
In consideration of the foregoing Recitals and the mutual promises and covenants
herein contained, and for other good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:
 
1. Employment.
 
1.1 Title.  Effective as of the Effective Date, Executive’s position shall be
President and Chief Executive Officer, subject to the terms and conditions set
forth in this Agreement.
 
1.2 Term.  The term of this Agreement shall begin on the Effective Date and
shall continue for a period of two (2) years or until it is terminated pursuant
to Section 4 herein (the “Term”).
 
1.3 Duties.  Executive shall have the customary powers, responsibilities and
authorities of President and Chief Executive Officer of corporations of the
size, type and nature of the Company, as it exists from time to time.  Executive
shall report to the Company’s Board of Directors.
 
1.4 Governing Agreement.  The employment relationship between the Parties shall
be governed by this Agreement
 
1.5 Location.  As promptly as practicable following the Company’s underwritten
public offering, the Executive shall relocate to any of the States of
Massachusetts, Connecticut, New Jersey or New York. Until such relocation
occurs, Executive shall perform the services that he is required to perform
pursuant to this Agreement from his home office in the San Francisco Bay Area or
from the Company’s offices in Boston, MA, provided, however, that the Company
may from time to time require him to travel temporarily to other locations in
connection with the Company’s business.  For the avoidance of doubt, it is not
expected that the Executive relocate his family mid-school year. 
 
2. Loyalty; Noncompetition; Nonsolicitation.
 
2.1 Loyalty.  During Executive’s employment by the Company, Executive shall
devote substantially all his business time to the performance of Executive’s
duties under this Agreement. Notwithstanding the foregoing, except as otherwise
agreed to in writing, Executive shall have the right to perform such incidental
services as are necessary in connection with (a) his private passive
investments, (b) his charitable or community activities, (c) his participation
in trade or professional organizations, and (d) his service on the board of
directors (or comparable body) of any third-party corporate entity that is not a
Competitive Entity (as defined in Section 2.3), so long as these activities do
not materially interfere with Executive’s duties hereunder and, with respect to
(d), Executive obtains prior Company consent, which consent will not be
unreasonably withheld.  Executive may also provide limited services to other
parties provided such services are without remuneration.

 
   

 
 

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

 
 
2.2 Agreement not to Participate in Company’s Competitors.  During the Term,
Executive agrees not to acquire, assume or participate in, directly or
indirectly, any position, investment or interest known by Executive to be
adverse or antagonistic to the Company, its business, or prospects, financial or
otherwise, or in any company, person, or entity that is, directly or indirectly,
in competition with the business of the Company or any of its Affiliates (as
defined below).  Ownership by Executive, in professionally managed funds over
which the Executive does not have control or discretion in investment decisions,
or as a passive investment, of less than five percent (5%) of the outstanding
shares of capital stock of any corporation with one or more classes of its
capital stock listed on a national securities exchange or publicly traded on a
national securities exchange or in the over-the-counter market shall not
constitute a breach of this Section. For purposes of this Agreement,
“Affiliate,” means, with respect to any specific entity, any other entity that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such specified entity.
 
2.3 Covenant not to Compete.  During the Term and for a period of twelve  (12)
months thereafter (the “Restricted Period”), Executive shall not engage in
competition with the Company and/or any of its Affiliates, either directly or
indirectly, in any manner or capacity, as adviser, principal, agent, affiliate,
promoter, partner, officer, director, employee, stockholder, owner, co-owner,
consultant, or member of any association or otherwise, in any phase of the
business of developing, manufacturing and marketing of cancer diagnostic tests
(a “Competitive Entity”), except with the prior written consent of the Board.
 
2.4 Nonsolicitation.  During the Restricted Period, Executive shall
not:  (i) solicit or induce, or attempt to solicit or induce, any employee of
the Company or its Affiliates to leave the employ of the Company or such
Affiliate; or (ii) solicit or attempt to solicit the business of any client or
customer of the Company or its Affiliates with respect to products, services, or
investments similar to those provided or supplied by the Company or its
Affiliates.
 
2.5 Acknowledgements.  Executive acknowledges and agrees that his services to
the Company pursuant to this Agreement are unique and extraordinary and that in
the course of performing such services Executive shall have access to and
knowledge of significant confidential, proprietary, and trade secret information
belonging to the Company.  Executive agrees that the covenant not to compete and
the nonsolicitation obligations imposed by this Section 2 are reasonable in
duration, geographic area, and scope and are necessary to protect the Company’s
legitimate business interests in its goodwill, its confidential, proprietary,
and trade secret information, and its investment in the unique and extraordinary
services to be provided by Executive pursuant to this Agreement.  If, at the
time of enforcement of this Section 2, a court holds that the covenant not to
compete and/or the nonsolicitation obligations described herein are unreasonable
or unenforceable under the circumstances then existing, then the Parties agree
that the maximum duration, scope, and/or geographic area legally permissible
under such circumstances will be substituted for the duration, scope and/or area
stated herein.
 
3. Compensation of the Executive.
 
3.1 Base Salary.  The Company shall pay Executive a base salary (the “Base
Salary”) at the annualized rate of Two Hundred Sixty Thousand Dollars
($260,000), less payroll deductions and all required withholdings, payable in
regular periodic payments in accordance with the Company’s normal payroll
practices.  The Base Salary shall be prorated for any partial year of employment
on the basis of a 365-day fiscal year.  The Company may increase, but not
decrease (except in connection with a Company-wide decrease in executive
compensation), Executive’s Base Salary from time to time, and if so increased,
“Base Salary” shall include such increases for purposes of this Agreement.
 
3.2 Bonuses.  At the sole discretion of the Board or the compensation committee
of the Board (the “Compensation Committee”), following each calendar year of
employment, Executive shall be eligible to receive an additional cash bonus up
to one hundred fifty percent (150%) of Executive’s compensation hereunder (the
“Annual Milestone Bonus”), based (in whole or in part) on Executive’s attainment
of certain financial, clinical development, and/or business milestones (the
“Milestones”) to be established annually by the Board or the Compensation
Committee. The determination of whether Executive has met the Milestones, and if
so, the bonus amount (if any) that will be paid, shall be determined by the
Board or the Compensation Committee in its sole and absolute discretion. Any
Annual Milestone Bonuses shall be paid in cash as either single lump-sum
payments or in installments, as determined by the Board or the Compensation
Committee.  Executive shall also be entitled to a discretionary bonus as
determined by the Board or the Compensation Committee in the event of a sale or
merger transaction in which Executive introduces the acquiring company or target
and facilitates the transaction.

 
 
 

 
 

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

 
 
3.3 Stock Options.  Subject to the terms of the Company’s 2012 Amended and
Restated Omnibus Securities and Incentive Plan (the “Plan”), Executive shall be
issued promptly following the Effective Date 900,000 stock options pursuant to
the Plan, which options shall vest as follows: (i) 150,000 shares shall vest
immediately; (ii) 150,000 shares shall vest upon an up-listing to a national
securities exchange; (iii) 150,000 shares shall vest upon CLIA certification;
(iv) 150,000 shares shall vest upon commercial sales of the Company’s  first
product from at least ten different institutions or oncologists; (v) 150,000
shares shall vest upon maintaining a market capitalization of $100M for 30
consecutive days; and (vi) 150,000 shares shall vest upon the Company achieving
$25,000,000 of revenue for any consecutive 12 month period. In addition, the
Board or the Compensation Committee shall grant additional stock options (such
number to be determined in the sole discretion of the Board or the Compensation
Committee) to Executive in January 2016 based on the achievement of the 2015
corporate goals as approved by Board and set forth on Exhibit B hereto. Any
options issued hereunder will be governed by the Plan and the exercise price per
share of any stock options will be equal to the greater of $0.55 or the fair
market value of a single share of the Company’s common stock on the issuance
date in accordance with the Plan.  Notwithstanding the foregoing to the
contrary, it is acknowledged and agreed that such options, if necessary, may be
issued outside the Plan so long as the terms and provisions of the Plan as if
such options were actually issued pursuant to the Plan.  Notwithstanding the
above, all stock options issued by the Company to the Executive, including, but
not limited to the 900,000 stock options granted upon employment and any
additional options granted in January 2016 (as described above) shall: (i)
immediately vest upon the termination of Executive’s employment without Cause or
Executive’s resignation for Good Reason in connection with a Change of Control;
and (ii) remain exercisable for the later of ninety (90) days following (A) the
Company’s up-listing to a national securities exchange; (B) the end of any
lock-ups; and (C) the registration of such underlying shares. In the event of
any conflict between this Agreement and the terms of the Plan and/or any award
agreement, the terms of this Agreement shall control. In addition, the Executive
may elect to exercise some or all of the stock options by making a net exercise,
in which case the Company shall issue to the Executive a number of shares of
unencumbered common stock of the Company equal to: (x) the total number of
shares underlying the portion of the stock option being exercised less (y) the
number of shares whose fair market value is equal to the sum of (A) the exercise
price of the stock options being exercised, plus (B) any required tax
withholding amounts in respect of such exercise.
 
3.4 Expense Reimbursements. The Company will reimburse Executive for all
reasonable business expenses Executive incurs in conducting his duties
hereunder, pursuant to the Company’s usual expense reimbursement policies, but
in no event later than ninety days after the end of the calendar month following
the month in which such expenses were incurred by Executive; provided that
Executive supplies the appropriate substantiation for such expenses no later
than the end of the calendar month following the month in which such expenses
were incurred by Executive.
 
3.5 Relocation Expense Reimbursement.  Subject to the Company raising gross
proceeds of at least $5,000,000 in a financing, the Executive shall use his
reasonable best efforts to relocate to the Company’s offices in Boston, MA
promptly following such financing. Promptly following such relocation, if any,
the Company shall reimburse Executive’s relocation expenses up to a maximum of
$25,000.
 
3.6 Changes to Compensation.  As described above, Executive’s compensation will
be reviewed at least on an annual basis and the Base Salary may be increased,
but not decreased (except in connection with a Company-wide decrease in
executive compensation), from time to time in the Company’s sole discretion.
 
3.7 Employment Taxes.  All of Executive’s compensation shall be subject to
customary withholding taxes and any other employment taxes as are commonly
required to be collected or withheld by the Company.
 
3.8 Benefits. The Executive shall, in accordance with Company policy and the
applicable plan documents, be eligible to participate in benefits under any
benefit plan or arrangement, including medical, dental, vision, disability and
life insurance programs, that may be in effect from time to time and made
available to the Company’s senior management employees, subject to the terms and
conditions of those benefit plans.

 
 
 

 
 

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

 
 
3.9 Holidays and Vacation.  Executive shall receive twenty (20) days of paid
vacation per year, which cannot be taken in one increment, but which shall
accrue if not used in any year but only up to a maximum of twenty days, and be
paid to Executive or carried forward to subsequent years consistent with Company
policy. In addition to such paid vacation, Executive shall receive all paid
Company holidays in accordance with Company policy.
 
4. Termination.
 
4.1 Termination by the Company.  Executive’s employment with the Company is at
will and may be terminated by the Company at any time and for any reason, or for
no reason, including, but not limited to, under the following conditions:
 
4.1.1 Termination by the Company for Cause.  The Company may terminate
Executive’s employment under this Agreement for “Cause” by delivery of written
notice to Executive.  Any notice of termination given pursuant to this Section
4.1.1 shall effect termination as of the date of the notice, or as of such other
date as specified in the notice.
 
4.1.2 Termination by the Company without Cause.  The Company may terminate
Executive’s employment under this Agreement without Cause at any time and for
any reason, or for no reason.  Such termination shall be effective on the date
Executive is so informed, or as otherwise specified by the Company.
 
4.2 Termination by Resignation of Executive.  Executive’s employment with the
Company is at will and may be terminated by Executive at any time and for any
reason, or for no reason, including via a resignation for Good Reason in
accordance with the procedures set forth in Section 4.6.3 below.
 
4.3 Termination for Death or Complete Disability.  Executive’s employment with
the Company shall automatically terminate effective upon the date of Executive’s
death or Complete Disability (as defined below).
 
4.4 Termination by Mutual Agreement of the Parties.  Executive’s employment with
the Company may be terminated at any time upon a mutual agreement in writing of
the Parties.  Any such termination of employment shall have the consequences
specified in such agreement.
 
4.5 Compensation Upon Termination.
 
4.5.1 Death or Complete Disability.  If, during the Term of this Agreement,
Executive’s employment shall be terminated by death or Complete Disability, the
Company shall pay to Executive, his estate, or his heirs, as applicable, (i) any
Base Salary owed to Executive through the date of termination; (ii) expenses
reimbursement amounts owed to Executive; (iii) all unpaid amounts of any Annual
Milestone Bonus(es) Executive earned prior to the termination date; (iv) a cash
lump sum in respect to accrued and unused vacation benefits earned through the
date of termination at the rate in effect at the time of termination; (v) any
payments and benefits to which Executive (or his estate) is entitled pursuant to
the terms of any employee benefit or compensation plan or program in which he
participates (or participated); and (vi) any amount to which Executive is
entitled pursuant to any other written agreements between the Company or any of
its affiliates and Executive (the amounts in (i) through (vi) above being the
“Termination Amounts”). The Company shall pay Executive: (A) the amounts
contained in items (i) through (iv) within ten (10) days following such
termination; (B) any payments associated with (v) in accordance to the terms of
such plans or programs; and (C) any such amounts in (vi) in accordance with the
terms of such agreements, with the Termination Amounts being subject to the
standard deductions and withholdings (as applicable).  In addition, subject to
Executive (or his estate or heirs, as applicable) furnishing to the Company an
executed waiver and release of claims in the form attached hereto as Exhibit A
(the “Release”) within the time period specified therein, and allowing the
Release to become effective in accordance with its terms, then Executive, his
estate, or his heirs, as applicable, shall also be entitled to: (1) continuation
of Executive’s salary (at the Base Salary rate in effect at the time of
termination) for a period of ninety (90) days following the termination date;
and (2) a prorated annual bonus equal to the Annual Milestone Bonus, if any, for
the year of termination multiplied by a fraction, the numerator of which shall
be the number of full and partial months Executive worked for the Company and
the denominator of which shall be 12. The Base Salary payments will be subject
to standard payroll deductions and withholdings and will be made on the
Company’s regular payroll cycle, provided, however, that any payments otherwise
scheduled to be made prior to the effective date of the Release shall accrue and
be paid in the first payroll period that follows such effective date. The
prorated annual bonus payment will be subject to standard payroll deductions and
withholdings and will paid at the same time as the Annual Milestone Bonus, if
any, would have been paid to Executive under Section 3.2 above, had Executive
remained employed with the Company.

 
 
 

 
 

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

 
 
4.5.2 Termination For Cause or Resignation without Good Reason.  If, during the
Term of this Agreement, Executive’s employment is terminated by the Company for
Cause, or Executive resigns his employment hereunder without Good Reason, the
Company shall pay Executive the Termination Amounts, less standard deductions
and withholdings. The Company shall thereafter have no further obligations to
Executive under this Agreement, except as otherwise provided by law.
 
4.5.3 Termination Without Cause or Resignation For Good Reason Not In Connection
with a Change of Control.  If the Company terminates Executive’s employment
without Cause, or if Executive resigns for Good Reason, at any time other than
upon the occurrence of, or within thirty (30) days prior to, or six (6) months
following, the effective date of a Change of Control (as defined below), the
Company shall pay Executive the Termination Amounts, less standard deductions
and withholdings. In addition, subject to Executive furnishing to the Company an
executed Release within the time period specified therein, and allowing the
Release to become effective in accordance with its terms, Executive shall be
entitled to: (1) severance in the form of continuation of his salary (at the
Base Salary rate in effect at the time of termination, but prior to any
reduction triggering Good Reason) for the greater of a period of six (6) months
following the termination date or the remaining term; (2) payment of Executive’s
premiums to cover COBRA for a period of twelve (12) months following the
termination date; and (3) a prorated annual bonus equal to the target Annual
Milestone Bonus, if any, for the year of termination (150% of Executive’s
compensation) multiplied by a fraction, the numerator of which shall be the
number of full and partial months Executive worked for the Company and the
denominator of which shall be 12, and (4) with respect to any unvested stock
options at the time of termination, in the event such unvested stock options
vest within six (6) months following the termination date, Executive shall be
entitled to receive the full benefit of such options and have the right to
exercise such options for a period of six (6) months following the vesting
date.  In addition, all stock options that have vested in connection with
Executive’s termination under this Section 4.5.3 shall remain exercisable for
six (6) months following such termination.   These payments under (1), (2), (3)
and (4) above will be subject to standard payroll deductions and withholdings
and will be made on the Company’s regular payroll cycle, provided, however, that
any payments otherwise scheduled to be made prior to the effective date of the
Release shall accrue and be paid in the first payroll period that follows such
effective date.
 
4.5.4 Termination Without Cause or Resignation For Good Reason In Connection
with a Change of Control.  If the Company terminates Executive’s employment
without Cause, or if Executive resigns for Good Reason, upon the occurrence of,
or within thirty (30) days prior to, or within six (6) months following, the
effective date of a Change of Control, the Company shall pay Executive the
Termination Amounts, less standard deductions and withholdings.  In addition,
subject to Executive furnishing to the Company an executed Release within the
time period specified therein, and allowing the Release to become effective in
accordance with its terms, then Executive shall be entitled to: (1) severance in
the form of a lump sum payment equivalent to the greater of one (1) year of his
Base Salary (at the Base Salary rate in effect at the time of termination, but
prior to any reduction triggering Good Reason) or the remaining Term; (2)
payment of Executive’s premiums to cover COBRA for a period of twelve (12)
months following the termination date; (3) a prorated annual bonus equal to the
target Annual Milestone Bonus, if any, for the year of termination (150% of
Executive’s compensation) multiplied by a fraction, the numerator of which shall
be the number of full and partial months Executive worked for the Company and
the denominator of which shall be 12, and (4) immediate accelerated vesting of
any unvested shares subject to any outstanding stock option(s), such that, on
the effective date of the Release, the Executive shall be vested in one hundred
percent (100%) of the shares subject to such option(s). Executive shall provide
transition services for a period of up to six months, if requested.  These
payments under (1), (2), and (3) above, will be subject to standard payroll
deductions and withholdings and will be made on the Company’s regular payroll
cycle, provided, however, that any payments otherwise scheduled to be made prior
to the effective date of the Release shall accrue and be paid in the first
payroll period that follows such effective date.
 
4.6 Definitions.  For purposes of this Agreement, the following terms shall have
the following meanings:
 
4.6.1 Complete Disability.  “Complete Disability” means that Executive is
determined to be permanently disabled pursuant to the Company’s long term
disability plan and is receiving disability benefits under such plan.
 
4.6.2 Cause.  “Cause” for the Company to terminate Executive’s employment
hereunder shall mean the occurrence of any of the following events, as
determined by the Company and/or the Board in its and/or their sole and absolute
discretion:

 
 
 

 
 

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

 
 
(i) The willful failure, disregard or refusal by Executive to perform his
material duties or obligations under this Agreement;
 
(ii) Any grossly negligent act by Executive having the effect of materially
injuring (whether financially or otherwise) the business or reputation of the
Company or any of its Affiliates, including but not limited to, any senior
officer, director or executive of the Company or any of its Affiliates or any
willful act by Executive intended to cause such material injury, except any acts
(A) made by Executive in connection with the enforcement of his rights, whether
under this Agreement, any other agreement between the Company or any affiliate
and Executive, or pursuant to applicable law (e.g. disparagement, etc.) or (B)
which are required by law or pursuant to a subpoena or demand by a governmental
or regulatory body;
 
(iii) Willful misconduct by Executive with respect to any of the material duties
or obligations of Executive under this Agreement, including, without limitation,
willful refusal to follow the directions received by Executive from the Board;
 
(iv) Executive’s indictment of any felony involving moral turpitude (including
entry of a nolo contendere plea);
 
(v) The determination, after a reasonable and good-faith investigation by the
Company, that the Executive engaged in discrimination prohibited by law
(including, without limitation, age, sex or race  discrimination);
 
(vi) Executive’s material misappropriation or embezzlement of the property of
the Company or its Affiliates (whether or not a misdemeanor or felony); or
 
(vii) Material breach by Executive of this Agreement and/or of his Proprietary
Information and Inventions Agreement; provided, however, that, any such
termination of Executive shall only be deemed for Cause pursuant to this
definition if: (1) the Company gives the Executive written notice of the
condition(s) alleged to constitute Cause, which notice shall describe such
condition(s); and (2) the Executive fails to remedy such condition(s) (if
curable) within thirty (30) days following receipt of the written notice.
 
For purposes of this definition, the Parties agree that (1) a change in
Executive’s role and/or title to no less than President shall not constitute
Cause under this Agreement; and (2) any breach of Sections 2 or 5 of this
Agreement shall be deemed a material breach that is not capable of cure by
Executive.
 
4.6.3 Good Reason.  For purposes of this Agreement, and subject to the caveat at
the end of this Section, “Good Reason” for Executive to terminate his employment
hereunder shall mean the occurrence of any of the following events without
Executive’s prior written consent:
 
(i) any reduction by the Company of Executive’s Base Salary as initially set
forth herein or as the same may be increased from time to time, provided,
however, that if such reduction occurs in connection with a Company-wide
decrease in executive compensation, such reduction shall not constitute Good
Reason for Executive to terminate his employment;
 
(ii) a material breach by the Company (or any of its affiliates) of this
Agreement or any other written agreement between the Company or any of its
affiliates and Executive; or
 
(iii) a material adverse change in Executive’s duties, titles, authority,
responsibilities or reporting relationships, with such determination being made
with reference to the greatest extent of your duties, titles, authority,
responsibilities or reporting relationships, etc. as increased (but not
decreased) from time to time; provided, however, a change in Executive’s role
and/or title to no less than President shall not constitute Good Reason under
this Agreement;
 
(iv) any failure of the Company or any affiliate to pay Executive any amount
owed to Executive under this Agreement or any other written agreement plan or
program between the Company, any affiliates and Executive;
 
(v) any reduction in Executive’s bonus eligibility; or
 
(vi) the assignment to Executive of duties materially inconsistent with his
position with the Company.

 
 
 

 
 

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

 
 
Provided, however, that, any such termination by the Executive shall only be
deemed for Good Reason pursuant to this definition if: (1) the Executive gives
the Company written notice of his intent to terminate for Good Reason; which
notice shall describe such condition(s); (2) the Company fails to remedy such
condition(s) within thirty (30) days following receipt of the written notice the
“Cure Period”); and (3) Executive voluntarily terminates his employment within
thirty (30) days following the end of the Cure Period.
 
4.6.4 Change of Control.  For purposes of this Agreement, “Change of Control”
shall mean the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events (excluding in any case
transactions in which the Company or its successors issues securities to
investors primarily for capital raising purposes):
 
(i) the acquisition by a third party (or more than one party acting as a group)
of securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding securities other than by
virtue of a merger, consolidation or similar transaction;
 
(ii) a merger, consolidation or similar transaction following which the
stockholders of the Company immediately prior thereto do not own at least fifty
percent (50%) of the combined outstanding voting power of the surviving entity
(or that entity’s parent) in such merger, consolidation or similar transaction;
 
(iii) the dissolution or liquidation of the Company; or
 
(iv) the sale, lease, exclusive license or other disposition of all or
substantially all of the assets of the Company.
 
4.7 Survival of Certain Sections.  Sections 3, 4, 5, 6, 7, 8, 9, 12, 13, 16, 17,
19 and 21 of this Agreement will survive the termination of this Agreement.
 
4.8 Parachute Payment.  If any payment or benefit the Executive would receive
pursuant to this Agreement (“Payment”) would (i) constitute a “Parachute
Payment” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and (ii) be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then the Executive shall be
entitled to receive an additional payment from the Company (the “Gross-Up
Payment”) in an amount such that the net amount of such additional payment
retained by the Executive, after payment of all federal, state and local income
and employment and Excise Taxes imposed on the Gross-Up Payment, shall be equal
to the Excise Tax imposed on the Payment. The Company shall pay Executive the
Gross-Up Payment as soon as practicable following the date Executive’s right to
the applicable Payment is triggered, but in no event will the Company make such
Gross-Up Payment later than the time required by the rules governing Section
409A, including, but not limited to, Treasury Regulation 1.409A-3(i)(1)(v).
 
Unless Executive and the Company agree on an alternative accounting, law or
consulting firm, the accounting firm then engaged by the Company for general tax
compliance purposes shall perform the Gross-Up Payment calculations.  If the
accounting firm so engaged by the Company is serving as accountant or auditor
for the individual, entity or group effecting the Change in Control, the Company
shall appoint a nationally recognized accounting, law or consulting firm to make
the determinations required hereunder.  The Company shall bear all expenses with
respect to the determinations by such accounting, law or consulting firm
required to be made hereunder.
 
The Company shall use commercially reasonable efforts such that the accounting,
law or consulting firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to
Executive and the Company within fifteen (15) calendar days after the date on
which Executive’s right to a Payment is triggered (if requested at that time by
the Executive or the Company) or such other time as requested by the Executive
or the Company.
 
4.9 Application of Internal Revenue Code Section 409A.  Notwithstanding anything
to the contrary set forth herein, any payments and benefits provided under this
Agreement (the “Severance Benefits”) that constitute “deferred compensation”
within the meaning of Section 409A of the Code and the regulations and other
guidance thereunder and any state law of similar effect (collectively “Section
409A”) shall not commence in connection with Executive’s termination of
employment unless and until Executive has also incurred a “separation from
service” (as such term is defined in Treasury Regulation Section 1.409A-1(h)
(“Separation From Service”), unless the Company reasonably determines that such
amounts may be provided to Executive without causing Executive to incur the
additional 20% tax under Section 409A.

 
 
 

 
 

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

 
 
It is intended that each installment of the Severance Benefits payments provided
for in this Agreement is a separate “payment” for purposes of Treasury
Regulation Section 1.409A-2(b)(2)(i).  For the avoidance of doubt, it is
intended that payments of the Severance Benefits set forth in this Agreement
satisfy, to the greatest extent possible, the exemptions from the application of
Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4),
1.409A-1(b)(5) and 1.409A-1(b)(9).  However, if the Company (or, if applicable,
the successor entity thereto) determines that the Severance Benefits constitute
“deferred compensation” under Section 409A and Executive is, on the termination
of service, a “specified employee” of the Company or any successor entity
thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then,
solely to the extent necessary to avoid the incurrence of the adverse personal
tax consequences under Section 409A, the timing of the Severance Benefit
payments shall be delayed until the earlier to occur of: (i) the date that is
six months and one day after Executive’s Separation From Service, or (ii) the
date of Executive’s death (such applicable date, the “Specified Employee Initial
Payment Date”), the Company (or the successor entity thereto, as applicable)
shall (A) pay to Executive a lump sum amount equal to the sum of the Severance
Benefit payments that Executive would otherwise have received through the
Specified Employee Initial Payment Date if the commencement of the payment of
the Severance Benefits had not been so delayed pursuant to this Section and (B)
commence paying the balance of the Severance Benefits in accordance with the
applicable payment schedules set forth in this Agreement.
 
Notwithstanding anything to the contrary set forth herein, Executive shall
receive the Severance Benefits described above, if and only if Executive duly
executes and returns to the Company within the applicable time period set forth
therein, but in no event more than forty-five days following Separation From
Service, the Release and permits the release of claims contained therein to
become effective in accordance with its terms.  Notwithstanding any other
payment schedule set forth in this Agreement, none of the Severance Benefits
will be paid or otherwise delivered prior to the effective date of the
Release.  Except to the extent that payments may be delayed until the Specified
Employee Initial Payment Date pursuant to the preceding paragraph, on the first
regular payroll pay day following the effective date of the Release, the Company
will pay Executive the Severance Benefits Executive would otherwise have
received under the Agreement on or prior to such date but for the delay in
payment related to the effectiveness of the Release, with the balance of the
Severance Benefits being paid as originally scheduled.  All amounts payable
under the Agreement will be subject to standard payroll taxes and deductions.
 
All reimbursements and in-kind benefits provided under this Agreement shall be
made or provided in accordance with the requirements of Section 409A to the
extent that such reimbursements or in-kind benefits are subject to Section 409A.
All reimbursements for expenses paid pursuant hereto that constitute taxable
income to Executive shall in no event be paid later than the end of the calendar
year next following the calendar year in which Executive incurs such expense or
pays such related tax. Unless otherwise permitted by Section 409A, the right to
reimbursement or in-kind benefits under this Agreement shall not be subject to
liquidation or exchange for another benefit and the amount of expenses eligible
for reimbursement, or in-kind benefits, provided during any taxable year shall
not affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, respectively, in any other taxable year.
 
5. Confidential And Proprietary Information.
 
As a condition of employment Executive agrees to execute and abide by the
Company’s Proprietary Information and Inventions Agreement (“PIIA”).
 
6. Assignment and Binding Effect.
 
This Agreement shall be binding upon and inure to the benefit of Executive and
Executive’s heirs, executors, personal representatives, assigns, administrators
and legal representatives.  Because of the unique and personal nature of
Executive’s duties under this Agreement, neither this Agreement nor any rights
or obligations under this Agreement shall be assignable by Executive.  This
Agreement shall be binding upon and inure to the benefit of the Company and its
successors, assigns and legal representatives.  Any such successor of the
Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes.  For this purpose, “successor” means any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company.

 
 
 

 
 

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

 
 
7. Notices.
 
All notices or demands of any kind required or permitted to be given by the
Company or Executive under this Agreement shall be given in writing and shall be
personally delivered (and receipted for) or faxed during normal business hours
or mailed by certified mail, return receipt requested, postage prepaid,
addressed as follows:
 
If to the Company:

MetaStat, Inc.
27 DryDock Ave, 2nd Floor
Boston, MA 02210
Attn: CFO
 
If to Executive:

Douglas Hamilton
[_________________]

with a copy to:
Jeffery C. Johnson, Esq.
Pryor Cashman LLP
7 Times Square
New York, NY 10036-6569
 
Any such written notice shall be deemed given on the earlier of the date on
which such notice is personally delivered or three (3) days after its deposit in
the United States mail as specified above.  Either Party may change its address
for notices by giving notice to the other Party in the manner specified in this
Section.
 
8. Choice of Law.
 
This Agreement shall be construed and interpreted in accordance with the
internal laws of the State of New York without regard to its conflict of laws
principles.
 
9. Integration.
 
This Agreement, including Exhibit A and the PIIA, contains the complete, final
and exclusive agreement of the Parties relating to the terms and conditions of
Executive’s employment and the termination of Executive’s employment, and
supersedes all prior and contemporaneous oral and written employment agreements
or arrangements between the Parties.
 
10. Amendment.
 
This Agreement cannot be amended or modified except by a written agreement
signed by Executive and the Company.
 
11. Waiver.
 
No term, covenant or condition of this Agreement or any breach thereof shall be
deemed waived, except with the written consent of the Party against whom the
wavier is claimed, and any waiver or any such term, covenant, condition or
breach shall not be deemed to be a waiver of any preceding or succeeding breach
of the same or any other term, covenant, condition or breach.
 
12. Severability.
 
The finding by a court of competent jurisdiction of the unenforceability,
invalidity or illegality of any provision of this Agreement shall not render any
other provision of this Agreement unenforceable, invalid or illegal.  Such court
shall have the authority to modify or replace the invalid or unenforceable term
or provision with a valid and enforceable term or provision, which most
accurately represents the Parties’ intention with respect to the invalid or
unenforceable term, or provision.
 
13. Interpretation; Construction.
 
The headings set forth in this Agreement are for convenience of reference only
and shall not be used in interpreting this Agreement.  This Agreement has been
drafted by legal counsel representing the Company, but the Executive has been
encouraged to consult with, and has consulted with, Executive’s own independent
counsel and tax advisors with respect to the terms of this Agreement.  The
Parties acknowledge that each Party and its counsel has reviewed and revised, or
had an opportunity to review and revise, this Agreement, and any 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.

 
 
 

 
 

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

 
 
14. Representations and Warranties.
 
Executive represents and warrants that Executive is not restricted or
prohibited, contractually or otherwise, from entering into and performing each
of the terms and covenants contained in this Agreement, and that Executive’s
execution and performance of this Agreement will not violate or breach any other
agreements between the Executive and any other person or entity.
 
15. Counterparts.
 
This Agreement may be executed in two counterparts, each of which shall be
deemed an original, all of which together shall contribute one and the same
instrument. Signatures to this Agreement transmitted by fax, by email in
“portable document format” (“.pdf”) or by any other electronic means intended to
preserve the original graphic and pictorial appearance of this Agreement shall
have the same effect as physical delivery of the paper document bearing original
signature.
 
16. Arbitration.
 
To ensure the rapid and economical resolution of disputes that may arise in
connection with the Executive’s employment with the Company, Executive and the
Company agree that any and all disputes, claims, or causes of action, in law or
equity, arising from or relating to Executive’s employment, or the termination
of that employment, will be resolved, to the fullest extent permitted by law, by
final, binding and confidential arbitration pursuant to the Federal Arbitration
Act in New York, New York conducted by the Judicial Arbitration and Mediation
Services/Endispute, Inc. (“JAMS”), or its successors, under the then current
rules of JAMS for employment disputes; provided that the arbitrator shall:  (a)
have the authority to compel adequate discovery for the resolution of the
dispute and to award such relief as would otherwise be permitted by law; and (b)
issue a written arbitration decision including the arbitrator’s essential
findings and conclusions and a statement of the award.  Accordingly, Executive
and the Company hereby waive any right to a jury trial.  Both Executive and the
Company shall be entitled to all rights and remedies that either Executive or
the Company would be entitled to pursue in a court of law.  The Company shall
pay any JAMS filing fee and shall pay the arbitrator’s fee.  The arbitrator
shall have the discretion to award attorneys fees to the party the arbitrator
determines is the prevailing party in the arbitration.  Nothing in this
Agreement is intended to prevent either Executive or the Company from obtaining
injunctive relief in court to prevent irreparable harm pending the conclusion of
any such arbitration.  Notwithstanding the foregoing, Executive and the Company
each have the right to resolve any issue or dispute involving confidential,
proprietary or trade secret information, or intellectual property rights, by
Court action instead of arbitration.
 
17. Indemnification.
 
The Company shall defend and indemnify Executive in his capacity as President
and Chief Executive Officer of the Company to the fullest extent permitted under
the Nevada Private Corporations Law.  The Company shall also maintain a policy
for indemnifying its officers and directors, including but not limited to the
Executive, for all actions permitted under the Nevada Private  Corporations Law
taken in good faith pursuit of their duties for the Company, including but not
limited to maintaining an appropriate level of Directors and Officers Liability
coverage and maintaining the inclusion of such provisions in the Company’s
by-laws or articles of incorporation, as applicable and customary.  The rights
to indemnification shall survive any termination of this Agreement.
 
18. Trade Secrets Of Others.
 
It is the understanding of both the Company and Executive that Executive shall
not divulge to the Company and/or its subsidiaries any confidential information
or trade secrets belonging to others, including Executive’s former employers,
nor shall the Company and/or its Affiliates seek to elicit from Executive any
such information.  Consistent with the foregoing, Executive shall not provide to
the Company and/or its Affiliates, and the Company and/or its Affiliates shall
not request, any documents or copies of documents containing such information.
 
19. Advertising Waiver.
 
Executive agrees to permit the Company, and persons or other organizations
authorized by the Company, to use, publish and distribute advertising or sales
promotional literature concerning the products and/or services of the Company,
or the machinery and equipment used in the provision thereof, in which
Executive’s name and/or pictures of Executive taken in the course of Executive’s
provision of services to the Company appear.  Executive hereby waives and
releases any claim or right Executive may otherwise have arising out of such
use, publication or distribution.
 
20. NO MITIGATION.
 
Executive shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or otherwise after
the termination of his employment hereunder, and any amounts earned by
Executive, whether from self-employment, as a common-law employee or otherwise,
shall not reduce the amount of any payment otherwise payable to him.
 
21. LEGAL FEES.
 
The Company shall promptly pay or reimburse Executive for all legal fees and
expenses up to a maximum of $5,000 (upon the submission of appropriate invoices
related thereto) he incurs in the negotiation, review, and preparation of this
Agreement and any other documents contemplated herein.

 
 [signature page follows] 

 
 
 

 
 

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

 
 
In Witness Whereof, the Parties have executed this Agreement as of the date
first above written.
 

MetaStat, Inc.       By: /s/ Daniel Schneiderman     Name: Daniel Schneiderman  
  Its:  VP, Finance         Dated: 6/17/15         Executive:     /s/ Douglas
Hamilton   Douglas Hamilton       Dated: 6/17/15  

            

 
 
 

 
 

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

 
 
EXHIBIT A
 
RELEASE AND WAIVER OF CLAIMS
 
TO BE SIGNED ON OR FOLLOWING THE SEPARATION DATE ONLY
 
In consideration of the payments and other benefits set forth in the Employment
Agreement effective as of June 17, 2015, to which this form is attached, I,
Douglas Hamilton, hereby furnish MetaStat, Inc. (the “Company”), with the
following release and waiver (“Release and Waiver”).
 
In exchange for the consideration provided to me by the Employment Agreement
that I am not otherwise entitled to receive, I hereby generally and completely
release the Company and its current and former directors, officers, employees,
stockholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, affiliates, and assigns (collectively, the
“Released Parties”) from any and all claims, liabilities and obligations, both
known and unknown, that arise out of or are in any way related to events, acts,
conduct, or omissions occurring prior to or on the date that I sign this
Agreement (collectively, the “Released Claims”).  Except as provided below, the
Released Claims include, but are not limited to:  (a) all claims arising out of
or in any way related to my employment with the Company, or the termination of
that employment; (b) all claims related to my compensation or benefits from the
Company including salary, bonuses, commissions, vacation pay, expense
reimbursements, severance pay, fringe benefits, stock, stock options, or any
other ownership interests in the Company; (c) all claims for breach of contract,
wrongful termination, and breach of the implied covenant of good faith and fair
dealing; (d) all tort claims, including claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (e) all federal,
state, and local statutory claims, including claims for discrimination,
harassment, retaliation, misclassification, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) (the “ADEA”), the fair employment practices
statutes of the state or states in which I have provided services to the Company
and/or any other federal, state or local law, regulation or other
requirement.  Notwithstanding the foregoing, the following are not included in
the Released Claims (the “Excluded Claims”): (a) any rights or claims under the
Agreement or any other written agreement between the Company and me, including
any stock option award agreement or plan, (b) any rights or claims that may
arise as a result of events occurring after the date this Release and Waiver is
executed or which otherwise cannot lawfully be waived, (c) any indemnification
rights I may have as a former officer or director of the Company or its
subsidiaries or affiliated companies, including any rights or claims for
indemnification I may have pursuant to any written indemnification agreement
with the Company to which I am a party, the charter, bylaws, or operating
agreements of the Company, or under applicable law; (d) any claims for benefits
under any directors’ and officers’ liability policy maintained by the Company or
its subsidiaries or affiliated companies in accordance with the terms of such
policy, (e) any rights or claims under any employee benefit or compensation plan
or program in which I participate or participated (or was eligible to
participate), (f) any rights or claims to unemployment compensation, and (g)
reimbursement for business expenses which are consistent with the Company’s
reimbursement policy.  I hereby represent and warrant that, other than the
Excluded Claims, I am not aware of any claims I have or might have against any
of the Released Parties that are not included in the Released Claims.
 
I expressly waive and relinquish any and all rights and benefits under any
applicable law or statute providing, in substance, that a general release does
not extend to claims which a party does not know or suspect to exist in his or
his favor at the time of executing the release, which if known by him or his
would have materially affected the terms of such release.
 
I acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this Release and Waiver is knowing and voluntary, and
that the consideration given for this Release and Waiver is in addition to
anything of value to which I was already entitled as an executive of the
Company.  If I am 40 years of age or older upon execution of this Release and
Waiver, I further acknowledge that I have been advised, as required by the Older
Workers Benefit Protection Act, that: (a) the release and waiver granted herein
does not relate to claims under the ADEA which may arise after this Release and
Waiver is executed; (b) I should consult with an attorney prior to executing
this Release and Waiver; and (c) I have twenty-one (21) days from the date of
termination of my employment with the Company in which to consider this Release
and Waiver (although I may choose voluntarily to execute this Release and Waiver
earlier); (d) I have seven (7) days following the execution of this Release and
Waiver to revoke my consent to this Release and Waiver; and (e) this Release and
Waiver shall not be effective until the seven (7) day revocation period has
expired without my having previously revoked this Release and Waiver.
 
I acknowledge my continuing obligations under my Proprietary Information and
Inventions Agreement.  Pursuant to the Proprietary Information and Inventions
Agreement I understand that among other things, I must not use or disclose any
confidential or proprietary information of the Company and I must immediately
return all Company property and documents (including all embodiments of
proprietary information) and all copies thereof in my possession or control.  I
understand and agree that my right to the severance pay I am receiving in
exchange for my agreement to the terms of this Release and Waiver is contingent
upon my continued compliance with my Proprietary Information and Inventions
Agreement.
 
This Release and Waiver constitutes the complete, final and exclusive embodiment
of the entire agreement between the Company and me with regard to the subject
matter hereof.  I am not relying on any promise or representation by the Company
that is not expressly stated herein.  This Release and Waiver may only be
modified by a writing signed by both me and a duly authorized officer of the
Company.
 

Date: __________________  By: _______________________________   Douglas Hamilton