Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made as of July 23, 2019,
between KBL Merger Corp. IV (the “Company”), and Marlene Krauss (“Executive”)
(collectively, the Company and Executive are the “Parties”).

 

WHEREAS, this Agreement is being entered into in connection with that certain
proposed Business Combination Agreement between the Company, CannBioRx Life
Sciences Corp., Katexco Pharmaceuticals Corp., CannBioRex Pharmaceuticals Corp.,
180 Therapeutics L.P., and certain other parties (the “Combination Agreement”).
The effectiveness of this Agreement is conditioned upon the closing of the
transactions contemplated by the 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 Combination Agreement (the “Start Date”) and end on the third (3rd)
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 ninety (90) days’ prior
written notice before the next Extension Date that the Initial Term 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
President and 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 $500,000 per
year, payable in accordance with the Company’s normal payroll procedures, less
all applicable withholdings and deductions. On the first anniversary of the
Effective Date and on each anniversary thereafter, the then-current base salary
shall be increased by ten-percent (10%). The base salary, as increased in
accordance with this Section 3(a), will thereinafter be referred to as the “Base
Salary.”

 

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(b) Bonus. Executive will be eligible to receive an annual bonus, with a target
bonus opportunity equal to fifty-percent (50%) of Executive’s then-current base
salary, based upon the Company’s achievement of performance and management
objectives as set and approved by the Board in consultation with the Executive.
The annual bonus shall be paid on or before February 15th of the year following
the year in which the bonus is earned. Executive must be employed by the Company
on the date of payment in order to earn and receive any annual bonus, unless
Executive is terminated without Cause or resigns with Good Reason.

 

(c) Equity Award. The Company shall establish, as of immediately following the
closing of the transactions 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. A
minimum of one quarter of such equity incentive pool will be granted to
Executive 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 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.

 

(d) 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.

 

(e) Office. The Company shall provide the Executive and her executive team with
office space located in New York City.

 

4. 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.

 

(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.

 

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(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.

 

(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 period 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.

 

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5. 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 due 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 Company 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 thirty-six (36) month period following the
effective date of the Executive’s termination if such termination happens during
the first year of the Executive’s employment, twenty four months (24) if
termination happens in the second year of the Executive’s employment, and twelve
(12) months if the termination happens in the third year of the Executive’s
employment or thereafter; (ii) payment of any accrued and unpaid annual bonus
for any year preceding the year in which Executive’s employment terminates;
(iii) payment of a pro rata annual bonus for the year in which Executive’s
employment terminates calculated by multiplying the target bonus amount by a
fraction, the numerator of which is the number of calendar days elapsed in the
year as of the effective date of Executive’s termination of employment and the
denominator of which is 365; and (iv) 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 5(a)(ii) and (iii) will be paid on the
sixtieth (60th) day following the last day of empoyment.

 

(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
irrevocable 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).

 

6. 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 termination 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 deferred
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.

 

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7. 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.

 

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

 

9. 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 portion 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 form such
section or portion of such section shall then be enforceable and shall be
enforced.

 

10. 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,
distributees, devisees and legatees. The Company shall take commercially
reasonable efforts 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
party 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 construed and
enforced in accordance with the internal laws of the State of Delaware without
regard to principles of conflict of laws.

 

(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.

 

[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.

 

  KBL Merger Corp. IV         By: /s/ Sherrill Neff    Name: Sherrill Neff  
Title: Independent Director         By: /s/ Andrew Sherman    Name: Andrew
Sherman   Title: Independent Director         By: /s/ Joseph Williamson    Name:
Joseph Williamson   Title: Independent Director         EMPLOYEE     /s/ Marlene
Krauss      Marlene Krauss

 

 

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