Exhibit 10.4

 

Execution Version

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made as of July 1, 2020, between
180 Life Sciences Corp. (the “Company”), and James N. Woody (“Executive”)
(collectively, the Company and Executive are the “Parties”).

 

WHEREAS, this Agreement is being entered into in connection with that certain
proposed business agreement (“Business Combination Agreement”) between KBL
Merger Corp. IV (“KBL”), and the Company. The effectiveness of this Agreement is
conditioned upon the closing of the Business Combination Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties agree as follows:

 

1. Start Date; Employment Term. Executive’s employment with the Company pursuant
to this Agreement will commence on the closing of the transactions contemplated
by the Business Combination Agreement (the “Start Date”) and end on the first
(1st anniversary of the Start Date (the “initial term”), provided, however, that
on such anniversary and on each anniversary thereafter (each, an “ Extension
Date” the term of Executive’s employment under this Agreement shall be
automatically extended for an additional one (1) year period (each, a “Renewal
Term”), unless the Company or the Executive provides the other at least 60
(sixty ) days’ prior written notice before the next Extension Date that the
Initial Tern or Renewal Term, as applicable, shall not be so extended. This
Agreement shall automatically terminate without any action on the part of any
person and be void ab initio if the Combination Agreement is terminated in
accordance with its terms, and neither the Company nor any other person shall
have any liability to Executive under this Agreement if the Closing does not
occur. The period of time from the Start Date through the termination of this
Agreement and Executive’s employment hereunder pursuant to its terms is
hereafter referred to as the “Employment Term”.

 

2. Position; Duties. During the Employment Term, Executive shall serve as the
Chief Executive Officer, reporting to Board of Directors (the “Board”).
Executive shall also serve as a Director on the Company’ s Board. During the
Employment Term, Executive shall perform such duties and responsibilities on
behalf of the Company and its affiliates consistent with Executive’s position
and titles, including, without limitation: (a) overall responsibility for
creating, planning and integrating the strategic direction of the Company (b)
the engagement and retention of advisors and all other key employees and
consultants of the Company; (c) the review and approval of the Company’s
budgets; (d) review and approval of the Company’s annual strategic plan and (e)
review and approval of all mergers and acquisitions of other companies and
assets including disposition and licensing of all intellectual property and
patents.

 

3. Compensation.

 

(a) Base Salary: Executive’s annual base salary will initially be $250,000 per
year, payable in accordance with the Company’s normal payroll procedures, less
all applicable withholdings and deductions. With the completion of the next
qualified financing, of over $20M, the terms will be renegotiated.

 

 

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(b) Equity Award: The Company shall establish, as of immediately following the
closing of the financing transaction contemplated by the Combination Agreement,
an equity incentive pool in an amount equal to 15% of the Company’s outstanding
common stock, on a fully-diluted basis, for purposes of granting equity awards
to directors, executive officers, employees and consultants of the Company. The
Board will consider the appropriate equity stock option amounts to award the
Chief Executive Officer. as of the closing. The remainder of such equity
incentive pool shall be allocated by the Board to other directors, executive
officers, employees and consultants of the Company based on recommendations of
Executive. The equity awards granted to Executive by the Board as of the closing
date will vest ratably on a monthly basis over 36 months, beginning on the last
day of the month of the date of grant; provided however, that the equity awards
will vest immediately upon Executive’s death or disability (as defined in
section 4(b)), termination without Cause or a termination by Executive for Good
Reason, a change in control of the Company (as defined in the Company’s equity
incentive plan or agreement) or upon a sale of the Company. Such equity awards
shall be subject to such other provisions to be set forth in Company’s equity
incentive plan and the applicable grant agreement(s) to be entered into between
Executive and the Company, which grant agreement shall be no less favorable than
that for other senior executives and directors of the Company.

 

(c) Benefits. Executive will be eligible to participate in the benefits offered
by the Company, including, without limitation, any health insurance, retirement,
and fringe benefits offered by the Company, in accordance with the applicable
terms of the benefit program, plan, or arrangement.

 

(d) Vacation: The executive is entitled to up to 20 days’ of vacation per year.
If not taken, unused vacation is paid out in cash at the end of each year of the
Agreement.

 

(e) Expenses: All expenses associated with Company’s business will be 100%
reimbursed on submission of receipts for payment. Payment shall be made within
30 days of receipt of documentation. Executive shall receive prior authorization
for expenses exceeding $5,000.

 

(f) Office. The Company shall provide the Executive and his executive team with
office space located in Palo Alto, California with sufficient staff and
equipment to operate an office.

 

(g) Other Activities: Nothing in this agreement shall prevent the Executive from
undertaking any other business activities while this agreement is in force,
provided that:

 

(i) such activity does not cause a breach of any of the Executive’s obligations
under this agreement; and

 

(ii) the Executive shall not engage in any such activity if it relates to a
business which is similar to or in any way competitive with the business of the
Company (or any Group Company) without the prior written consent of the Company;
and

 

 

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(iii) Any activities that were initiated prior to the signing of this Agreement,
that were non competing, and disclosed in writing to the Company.

 

(i) Termination of Employment. The Company or the Executive may terminate the
Executive’s employment pursuant to this Section 4. Upon any termination of the
Executive’s employment, the Company shall have no further obligations to the
Executive under this Agreement other than for payment of any accrued but unpaid
base salary, properly incurred but unreimbursed business expenses, accrued but
unused vacation, and severance payments, if any, required under Section 5.
Rights and benefits of the Executive under the benefit plans and programs of the
Company shall be determined in accordance with the provisions of such plans and
programs.

 

a. Death. The Executive’s employment will terminate upon the Executive’s death.
If such an event should occur all compensation due, and equity shall be awarded
to the Executive’s spouse, Suzanne Mann Moore within 90 days.

 

b. Disability. The Company may terminate the Executive’s employment by reason of
the Executive’s becoming subject to a Disability (as defined in the following
sentence) upon the Company providing thirty (30) days’ prior notice to Executive
of its intention to terminate Executive’s employment due to his or her
Disability. For purposes of this Agreement, “Disability”means the Executive is
unable to perform the essential functions of his or her position, with or
without a reasonable accommodation, for a period of ninety (90) consecutive
calendar days or one-hundred and eighty (180) non-consecutive calendar days
within any rolling twelve (12) month period.

 

c. Cause. The Company may terminate the Executive’s employment under this
Agreement for “Cause.” For purposes of this Agreement, “Cause” means any of the
following: (i) Executive’s engaging in any acts of fraud, theft, or embezzlement
involving the Company; (ii) Executive’s conviction, including any plea of guilty
or nolo contendere, of any felony crime which is relevant to the Executive’s
position with the Company; and (iii) Executive’s material violation of this
Agreement which is materially damaging to the reputation or business of the
Company, provided that prior to terminating Executive for Cause, the Board must
first (A) provide notice to Executive specifying in reasonable detail the
condition giving rise to Cause for termination no later than the sixtieth (60th)
day following the occurrence of that condition; (B) provide the Executive a
period of thirty (30) days to remedy the condition, if subject to remedy, and so
specify in the notice; and (C) terminate his employment for Cause within thirty
(30) days following the expiration of the period to remedy if the Executive
fails to remedy the condition.

 

d. Without Cause. The Company may terminate the Executive’s employment without
Cause on sixty (60) days’ prior written notice to the Executive.

 

 

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e. By the Executive for Good Reason. The Executive may terminate his employment
for Good Reason by (A) providing notice to the Company specifying in reasonable
detail the condition giving rise to the Good Reason no later than the sixtieth
(60th) day following the occurrence of that condition; (B) providing the Company
a pe1iod of thirty (30) days to remedy the condition if subject to remedy, and
so specifying in the notice; and (C) terminating his employment for Good Reason
within thirty (30) days following the expiration of the period to remedy if the
Company fails to remedy the condition. The following, if occurring without the
Executive’s consent, shall constitute “Good Reason” for termination by the
Executive: (i) a material diminution in the nature or scope of the Executive’s
title, authority or responsibilities; (ii) a material adverse change in the
Executive’s duties, including, without limitation, such duties set forth in
Section 2; (iii) a requirement that the Executive report to any person other
than the Board; (iv) a material reduction in Base Salary or target bonus
opportunity; or (v) the Company’s breach of a material provision of this
Agreement.

 

f. By the Executive without Good Reason. The Executive may terminate his
employment hereunder at any time upon thirty (30) days’ prior written notice to
the Company.

 

g. Expiration. Executive’s employment will terminate automatically upon the
expiration of the Initial Term or Renewal Term, as applicable, if either party
has elected not to extend the Initial Term or Renewal Term in accordance with
Section 1.

 

(j) Payments on Termination.

 

a. Termination Without Cause; For Good Reason. Subject to Section 5(b), in the
event the Company terminates the employment of Executive without Cause pursuant
to Section 4(d), Executive resigns for Good Reason pursuant to Section 4(e), or
the Executive’s employment terminates clue to expiration of the Employment Term
in accordance with Section 4(g) following the Company’s delivery to Executive of
a notice of intent not to renew pursuant to Section 1, then the Compa11y shall
pay to the Executive, in addition to any amounts payable under Section 4, (i)
severance payments in the form of continued Base Salary, at Executive’s Base
Salary as then in effect, for the twelve (12) month period following the
effective date of the Executive’s termination if such termination happens during
the first year, or successive years, of the Executive’s employment, (ii) payment
by the Company of Executive’s monthly health insurance premiums for a period
matching the period that Executive is entitled to severance payments pursuant to
section 5(a)(i) hereof. The severance in 5(a)(i) and (iv) will be paid pursuant
to the Company’s payroll schedule then in effect commencing on the sixtieth
(60th) day following the last day of employment and the payments in S(a)(ii) and
(iii) will be paid on the sixtieth (60th) day following the last day of
employment.

 

b. Requirement of Release. As a condition precedent to receiving any of the
severance payments pursuant to Section 5(a), Executive must execute (without
revocation) a general release of claims in a form mutually agreed to by the
Company and the Executive (the “Release”). The Release must be effective and
revocable prior to the sixtieth (60th) day following the Executive’ s last day
of employment. If the Executive fails to execute the Release pursuant to this
Section 5(b), the Executive shall forfeit and not be entitled to any severance
payments under Sections 5(a).

 

 

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(k) Section 409A Compliance. This Agreement and any payments or benefits
provided hereunder shall be interpreted, operated and administered in a manner
intended to avoid the imposition of additional taxes under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”). Further, the Company and
Executive hereto acknowledge and agree that the form and timing of the payments
and benefits to be provided pursuant to this Agreement are intended to be exempt
from, or to comply with, one or more exceptions to the requirements of Section
409A of the Code. Notwithstanding anything contained herein to the contrary, to
the extent required to avoid accelerated taxation or tax penalties under Section
409A of the Code, Executive shall not be considered to have terminated
employment for purposes of this Agreement and no payments shall be due to
Executive under this Agreement that are payable upon Executive’s tem1ination of
employment until Executive would be considered to have incurred a “separation
from service” from the Company within the meaning of Section 409A of the Code.
In addition, for purposes of this Agreement, each amount to be paid or benefit
to be provided to Executive pursuant to this Agreement shall be construed as a
separate identified payment for purposes of Section 409A of the Code. If the
Executive is deemed on the date of termination to be a “specified employee”
within the meaning of that term under Section 409A(a)(2)(B), then with regard to
any payment or the provision of any benefit that is considered defined
compensation under Section 409A payable on account of a “separation from
service,” such payment or benefit shall not be made or provided until the date
which is the earlier of (i) the expiration of the six (6)-month period measured
from the date of such “separation from service” of the Executive, and (ii) the
date of the Executive’s death, to the extent required under Section 409A. Upon
the expiration of the foregoing delay period, all payments and benefits delayed
pursuant to this Section 6 (whether they would have otherwise been payable in a
single sum or in installments in the absence of such delay) shall be paid or
reimbursed to the Executive in a lump sum, and any remaining payments and
benefits due under this Agreement shall be paid or provided in accordance with
the normal payment dates specified for them herein. With respect to expenses
eligible for reimbursement under the terms of this Agreement: (i) the amount of
such expenses eligible for reimbursement in any taxable year shall not affect
the expenses eligible for reimbursement in another taxable year; and (ii) any
reimbursements of such expenses shall be made no later than the end of the
calendar year following the calendar year in which the related expenses were
incurred, except, in each case, to the extent that the right to reimbursement
does not provide for a “deferral of compensation”within the meaning of Section
409A of the Code.

 

(l) Representations. Executive represents and warrants to the Company that (a)
the execution, delivery and performance of this Agreement by Executive does not
and will not conflict with, breach, violate or cause a default under any
contract, agreement, instrument, order, judgment or decree to which Executive is
a party or by which Executive is bound, (b) Executive is not a party to or bound
by any employment agreement , noncompetition agreement or confidentiality
agreement with any other person or entity (other than any such agreement with
any subsidiary or predecessor of the Company) and (c) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the valid and
binding obligation of Executive, enforceable in accordance with its terms.

 

(m) Survival. Executive acknowledges and agrees that Sections 5-10 of this
Agreement shall survive the separation of Executive’s employment for any reason.

 

 

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(n) Severability. The Parties intend for this Agreement to be enforced as
written. However, if any section or portion of a section of this Agreement shall
to any extent be declared illegal or unenforceable by a duly authorized court
having jurisdiction , (a) then the remainder of this Agreement, or the
application of such section or portions of such section in circumstances other
than those as to which it is so declared illegal or unenforceable, shall not be
affected thereby, and each section or portion of such section of this Agreement
shall be valid and enforceable to the fullest extent permitted by law; and/or
(b) because of the scope of a section or portion of such section is found to be
unreasonable, the Company and Executive agree that the court making such
determination shall have the power to “blue-pencil” the Agreement as necessary
to make it reasonable in scope; and in its reduced or blue-penciled fo1m such
section or portion of such section shall then be enforceable and shall be
enforced.

 

(o) Miscellaneous.

 

a. Deductions and Withholding. Executive agrees that the Company and/or its
subsidiaries or affiliates shall withhold from any and all compensation paid to
or required to be paid to Executive pursuant to this Agreement all federal,
state, local and/or other taxes which the Company determines are required to be
withheld in accordance with applicable statutes and/or regulations from time to
time in effect and all amounts required to be deducted in respect of Executive’s
coverage under applicable employee benefit plans.

 

b. Integration. This Agreement embodies the entire agreement and understanding
between the Parties with respect to the subject matter hereof and supersedes all
prior oral or written agreements and understandings relating to the subject
matter hereof. No statement, representation, warranty, covenant or agreement of
any kind not expressly set forth in this Agreement shall affect, or be used to
interpret, change or restrict, the express terms and provisions of this
Agreement.

 

c. Successors. This Agreement shall inure to the benefit of and be enforceable
by Executive’s personal representatives, executors, administrators, heirs,
distibutees, devisees and legatees. The Company shall take commercially
reasonable effo1ts to require any successor to the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. Executive’s rights and obligations under this Agreement may not be
assigned by Executive without the prior written consent of the Company.

 

d. Waiver. No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving party. The failure of any party to require the
performance of any term or obligation of this Agreement, or the waiver by any
patty of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

 

e. Amendment. This Agreement may be amended or modified only by a written
instrument signed by Executive and by a duly authorized representative of the
Company.

 

f. Governing Law. This Agreement shall be governed by and enforced in accordance
with the internal laws of the State of Delaware without regard to principles of
conflict of laws.

 

 

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g. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original;
but such counterparts shall together constitute one and the same document.

 

(p) Indemnification. The Company agrees to indemnify and hold the Executive
harmless from and against any and all loss, damage, cost and expense of every
kind, including reasonable attorneys’ fees (each, a “Loss”) resulting from any
claim by a third party relating to the services rendered in connection with this
Agreement, or prior statements, obligations, commitments, verbal or written or
otherwise communicated, made by the Company before the date of this Agreement,
and to any injury or death alleged to have been caused by or attributable to any
drug, device or biologic relating to services rendered pursuant to this
Agreement, unless such Loss arises out of the gross negligence, willful
misconduct or breach of this Agreement by the Executive. The Company agrees to
acquire sufficient D&O insurance to cover the Executive under usual conditions.

 

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the
date and year first above written

 

180 Life Sciences Corp.   James N. Woody MD, PhD       By: /s/ MARC FELDMANN  
By: /s/ James N. Woody Name  MARC FELDMANN   Name:  James N. Woody Print Name:
MARC FELDMANN           Title: Chairman Board of Directors,
180 Life Sciences Corp.           Date: 07-06-2020   Date: 7-6-2020