Exhibit 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of January 6, 2015 (the
“Effective Date”), is by and between CYTODYN INC., a Colorado corporation (the
“Company”) and Michael D. Mulholland (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Executive has been employed by the Company as Chief Financial
Officer, Treasurer and Corporate Secretary; and

WHEREAS, the Company desires to continue to employ the Executive as its Chief
Financial Officer, Treasurer and Corporate Secretary, and the Executive desires
to accept such continued employment, on the terms and conditions set forth in
this Agreement.

NOW, THEREFORE, in consideration of the promises and the mutual covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:

ARTICLE 1

EMPLOYMENT; TERMINATION OF PRIOR AGREEMENT; TERM OF AGREEMENT

Section 1.1. Employment and Acceptance. During the Term (as defined in
Section 1.3), the Company shall continue to employ the Executive, and the
Executive shall accept such continued employment and continue to serve the
Company, in each case, subject to the terms and conditions of this Agreement.

Section 1.2. Term. The continued employment relationship hereunder shall be for
the period (such period of the continued employment relationship shall be
referred to herein as the “Term”) commencing on the Effective Date and ending
upon the termination of this Agreement and the Executive’s continued employment
hereunder by either party hereto pursuant to the terms of Section 4.1,
Section 4.2, Section 4.3 or Section 4.4. In the event that the Executive’s
employment with the Company terminates, the Company’s obligation to continue to
pay, after the Termination Date (as defined in Section 4.3(b)), Base Salary (as
defined in Section 3.1(a)), Annual Bonus (as defined in Section 3.1(b)) and
other unaccrued benefits shall terminate except as may be provided for in
ARTICLE 4.

ARTICLE 2

TITLE; DUTIES AND OBLIGATIONS; LOCATION

Section 2.1. Title. The Company shall continue to employ the Executive to render
exclusive and full-time services to the Company. The Executive shall serve in
the capacity of Chief Financial Officer, Treasurer and Corporate Secretary.

Section 2.2. Duties. Subject to the direction and authority of the Board of
Directors of the Company (the “Board”), the Executive shall have direct
responsibility for the day to day operations of the Company. The Executive shall
report to, and be subject to, the lawful direction

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of, the Chief Executive Officer of the Company (the “CEO”). The Executive agrees
to perform to the best of his ability, experience and talent those acts and
duties, consistent with the position of Chief Financial Officer, Treasurer and
Corporate Secretary of the Company, as the CEO shall from time to time direct.
During the Term, the Executive also shall serve in such other executive-level
positions or capacities as may, from time to time, be reasonably requested by
the Board, including, without limitation (subject to election, appointment,
re-election or re-appointment, as applicable) as (a) a member of the Board
and/or as a member of the board of directors or similar governing body of any of
the Company’s subsidiaries or other Affiliates (as defined below), (b) an
officer of any of the Company’s subsidiaries or other Affiliates, and/or (c) a
member of any committee of the Company and/or any of its subsidiaries or other
Affiliates, in each case, for no additional compensation. As used in this
Agreement, “Affiliate” of any individual or entity means any other individual or
entity that directly or individual controls, is controlled by, or is under
common control with, the individual or entity.

Section 2.3. Compliance with Policies, etc. During the Term, the Executive shall
be bound by, and comply fully with, all of the Company’s policies and procedures
for officers, directors and/or employees in place from time to time, including,
but not limited to, all terms and conditions set forth in the Company’s employee
handbook, compliance manual, codes of conduct and any other memoranda and
communications applicable to the Executive pertaining to the policies,
procedures, rules and regulations, as currently in effect and as may be amended
from time to time. These policies and procedures include, among other things and
without limitation, the Executive’s obligations to comply with the Company’s
rules regarding confidential and proprietary information and trade secrets.

Section 2.4. Time Commitment. During the Term, the Executive shall use his best
efforts to promote the interests of the Company (including its subsidiaries and
other Affiliates) and shall devote all of his business time, ability and
attention to the performance of his duties for the Company and shall not,
directly or indirectly, render any services to any other person or organization,
whether for compensation or otherwise, except with the Board’s prior written
consent, provided that the foregoing shall not prevent the Executive from
(i) participating in charitable, civic, educational, professional, community or
industry affairs, (ii) managing the Executive’s passive personal investments, or
(iii) serving on the board of directors (or similar governing bodies) of not
more than two (2) other corporations (or other business entities) that are not
competitors of the Company, its subsidiaries or any of its other Affiliates (as
determined by the Board), so long as, in each case, such activities individually
or in the aggregate do not materially interfere or conflict with the Executive’s
duties hereunder or create a potential business or fiduciary conflict (in each
case, as determined by the Board).

Section 2.5. Location. The Executive’s principal place of business for the
performance of his duties under this Agreement shall be at the principal
executive office of the Company (currently located in Vancouver, Washington).
Notwithstanding, the foregoing, the Executive shall be required to travel as
necessary to perform his duties hereunder.

 

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ARTICLE 3

COMPENSATION AND BENEFITS; EXPENSES

Section 3.1. Compensation and Benefits. For all services rendered by the
Executive in any capacity during the Term (including, without limitation,
serving as an officer, director or member of any committee of the Company or any
of its subsidiaries or other Affiliates), the Executive shall be compensated as
follows (subject, in each case, to the provisions of ARTICLE 4 below):

(a) Base Salary. During the Term, the Company shall pay the Executive a base
salary (the “Base Salary”) at the annualized rate of $250,000, which shall be
subject to customary withholdings and authorized deductions and be payable in
equal installments in accordance with the Company’s customary payroll practices
in place from time to time. The Executive’s Base Salary shall be subject to
periodic adjustments as the Board and/or the Compensation Committee of the Board
(the “Compensation Committee”) shall in its/their discretion deem appropriate.
As used in this Agreement, the term “Base Salary” shall refer to Base Salary as
may be adjusted from time to time.

(b) Annual Bonus. For each fiscal year ending during the Term (beginning with
the fiscal year ending May 31, 2015), the Executive shall be eligible to receive
an annual bonus (the “Annual Bonus”) with a target amount equal to fifty percent
(50%) of the Base Salary earned by the Executive for such fiscal year (the
“Target Annual Bonus”). The actual amount of each Annual Bonus will be based
upon the level of achievement of the Company’s corporate objectives and the
Executive’s individual objectives, in each case, as established by the Board or
the Compensation Committee (taking into account the input of the Executive with
respect to the establishment of the Executive’s individual objectives) for the
fiscal year with respect to which such Annual Bonus relates. The determination
of the level of achievement of the corporate objectives and the Executive’s
individual performance objectives for a year shall be made by the Board or the
Compensation Committee, in its reasonable discretion. Each Annual Bonus for a
fiscal year, to the extent earned, will be paid in a lump sum no later than
March 15 of the calendar year immediately following the year in which such
Annual Bonus was earned. Each Annual Bonus shall be payable in cash or, in the
discretion of the Board and/or Compensation Committee, fifty percent (50%) in
cash and (50%) in unrestricted Shares under (and as defined in) the Company’s
2012 Equity Incentive Plan (the “2012 Plan”), or any successor equity
compensation plan as may be in place from time to time (collectively with the
2012 Plan, the “Plan”), subject to the availability of shares under the Plan.
The Annual Bonus shall not be deemed earned until the date that it is paid.
Accordingly, in order for the Executive to receive an Annual Bonus, the
Executive must be actively employed by the Company at the time of such payment.

(c) Equity Compensation. Subject to the terms of the 2012 Plan, the Executive
was granted options to purchase shares of the Company’s common stock (the “Prior
Grants”) pursuant to the terms of stock option agreements between the parties
hereto entered into as of December 13, 2012, May 31, 2013 and May 29, 2014
(collectively, the “Prior Grant Agreements”). For purposes of clarification,
except as otherwise provided in Section 4.2(d)(ii)(C) hereof, nothing in this
Agreement shall be deemed to alter, limit or abrogate the terms of the Prior
Grant Agreements or the Executive’s rights with respect to the Prior Grants.

 

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During the Term, subject to the terms and conditions established within the Plan
and separate Award Agreements (as defined in the Plan), the Executive also shall
be eligible to receive from time to time additional Options, Stock Appreciation
Rights, Restricted Awards or Other Stock-Based Awards (as such capitalized terms
are defined in the Plan), in amounts, if any, to be approved by the Board or the
Compensation Committee in its discretion.

(d) Benefit Plans. The Executive shall be entitled to participate in all
employee benefit plans and programs (excluding severance plans, if any)
generally made available by the Company to senior executives of the Company, to
the extent permissible under the general terms and provisions of such plans or
programs and in accordance with the provisions thereof. The Company may amend,
modify or rescind any employee benefit plan or program and/or change employee
contribution amounts to benefit costs without notice in its discretion.

(e) Paid Vacation. The Executive shall be entitled to paid vacation days in
accordance with the Company’s vacation policies in effect from time to time for
its executive team.

Section 3.2. Expense Reimbursement. The Company shall reimburse the Executive
during the Term, in accordance with the Company’s expense reimbursement policies
in place from time, for all reasonable out-of-pocket business expenses incurred
by the Executive in the performance of his duties hereunder. In order to receive
such reimbursement, the Executive shall furnish to the Company documentary
evidence of each such expense in the form required to comply with the Company’s
policies in place from time to time.

ARTICLE 4

TERMINATION OF EMPLOYMENT

Section 4.1. Termination Without Cause.

(a) The Company may terminate the Executive’s employment hereunder at any time
without Cause (other than by reason of death or Disability) upon written notice
to the Executive.

(b) As used in this Agreement, “Cause” means: (i) a material act, or act of
fraud, committed by the Executive that is intended to result in the Executive’s
personal enrichment to the detriment or at the expense of the Company or any of
its Affiliates; (ii) the Executive is convicted of a felony; (iii) willful and
continued failure by the Executive to perform the duties or obligations
reasonably assigned to the Executive by the Board from time to time, which
failure is not cured upon ten (10) days prior written notice (unless such
failure is not susceptible to cure, as determined in the reasonable discretion
of the Board); or (iv) the Executive violates the Covenants Agreement (as
defined in Section 5.1 below).

 

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(c) If the Executive’s employment is terminated pursuant to Section 4.1(a), the
Executive shall, in full discharge of all of the Company’s obligations to the
Executive, be entitled to receive, and the Company’s sole obligation to the
Executive under this Agreement or otherwise shall be to pay or provide to the
Executive, the following:

(i) the Accrued Obligations (as defined in Section 4.3(b)); and

(ii) subject to Section 4.5 and Section 4.6:

(A) payments equal to twelve (12) months of the Executive’s Base Salary at the
rate in effect immediately prior to the Termination Date (less applicable
withholdings and authorized deductions), to be paid in accordance with the
Company’s customary payroll practices, commencing on the first regular payroll
date on or following the date that is sixty (60) days following such termination
of employment (the “Severance Payments”); and

(B) all stock options and other awards that the Executive may have under the
Plan shall vest and, in the case of stock options or like awards, become
exercisable, to the extent not already vested and (if applicable) exercisable,
on the Termination Date.

(d) Notwithstanding anything in Section 4.1(c) to the contrary, in no event
shall the Severance Payments be payable if, as of the effective time of the
Executive’s termination, the Board determines that the (x) Company has less than
$4.0 million in cash-on-hand, or (y) net worth of the Company is less than $5.0
million. For purposes of this paragraph, “net worth” shall mean the total assets
of the Company less the total liabilities of the Company.

Section 4.2. Termination without Cause or for Good Reason within 12 Months
following a Change in Control.

(a) Notwithstanding the provisions of Section 4.1, if the Company terminates the
Executive’s employment hereunder without Cause (other than by reason of death or
Disability) within twelve (12) months following a Change in Control of the
Company, or the Executive resigns for Good Reason within twelve (12) months
following a Change in Control of the Company, the provisions of this Section 4.2
shall control.

(b) As used in this Agreement, “Change in Control” means (x) a change in
ownership of the Company under clause (i) below or (y) a change in the ownership
of a substantial portion of the assets of the Company under clause (ii) below:

(i) Change in the Ownership of the Company. A change in the ownership of the
Company shall occur on the date that any one person, or more than one person
acting as a group (as defined in clause (iii) below), acquires ownership of
capital stock of the Company that, together with capital stock held by such
person or group, constitutes more than 50 percent of the total fair market value
or total voting power of the capital stock of the Company. However, if any one
person or more than one person acting as a group, is considered to own more than
50 percent of the total fair market value or total voting power of the capital
stock of the Company, the acquisition of additional capital stock by the same
person or persons shall not be considered to be a change in the ownership of the
Company. An increase in the percentage of capital stock owned by any one person,
or persons acting as a group, as a result of a transaction in which the Company
acquires capital stock in the Company in exchange for property will be treated
as an acquisition of stock for purposes of this paragraph.

 

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(ii) Change in the Ownership of a Substantial Portion of the Company’s Assets. A
change in the ownership of a substantial portion of the Company’s assets shall
occur on the date that any one person, or more than one person acting as a group
(as defined in clause (iii) below), acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company that have a total gross fair market value
equal to or more than 80 percent of the total gross fair market value of all of
the assets of the Company immediately prior to such acquisition or acquisitions.
For this purpose, gross fair market value means the value of the assets of the
Company, or the value of the assets being disposed of, determined without regard
to any liabilities associated with such assets. There is no Change in Control
under this clause (ii) when there is a transfer to an entity that is controlled
by the shareholders of the Company immediately after the transfer, as provided
below in this clause (ii). A transfer of assets by the Company is not treated as
a change in the ownership of such assets if the assets are transferred to (a) a
shareholder of the Company (immediately before the asset transfer) in exchange
for or with respect to its capital stock, (b) an entity, 50 percent or more of
the total value or voting power of which is owned, directly or indirectly, by
the Company, (c) a person, or more than one person acting as a group, that owns,
directly or indirectly, 50 percent or more of the total value or voting power of
all the outstanding capital stock of the Company, or (d) an entity, at least 50
percent of the total value or voting power of which is owned, directly or
indirectly, by a person described in clause (ii)(c) of this paragraph. For
purposes of this clause (ii), a person’s status is determined immediately after
the transfer of the assets. Notwithstanding anything in this clause (ii) to the
contrary, in no event shall a license of (or other similar transfer of rights
in) PRO 140 be a change in the ownership of a substantial portion of the
Company’s assets.

(iii) Persons Acting as a Group. For purposes of clauses (i) and (ii) above,
persons will not be considered to be acting as a group solely because they
purchase or own capital stock or purchase assets of the Company at the same
time. However, persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of assets or capital stock, or similar business transaction with the
Company. If a person, including an entity, owns stock in both corporations that
enter into a merger, consolidation, purchase or acquisition of assets or capital
stock, or similar transaction, such shareholder is considered to be acting as a
group with other shareholders in a corporation only with respect to the
ownership in that corporation before the transaction giving rise to the change
and not with respect to the ownership interest in the other corporation. For
purposes of this paragraph, the term “corporation” shall have the meaning
assigned such term under Treasury Regulation section 1.280G-1, Q&A-45.

(iv) Each of clauses (i) through (iii) above shall be construed and interpreted
consistent with the requirements of Section 409A and any Treasury Regulations or
other guidance issued thereunder.

 

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(c) As used in this Agreement, “Good Reason” means the occurrence of any of the
following: (1) a material breach by the Company of the terms of this Agreement;
(2) a material reduction in the Executive’s Base Salary; (3) a material
diminution in the Executive’s authority, duties or responsibilities; or (4) a
relocation by the Company of the Executive’s principal place of business for the
performance of his duties under this Agreement to a location that is anywhere
outside of a 50 mile radius of Vancouver, Washington; provided, however, that
the Executive must notify the Company within ninety (90) days of the occurrence
of any of the foregoing conditions that he considers it to be a “Good Reason”
condition and provide the Company with at least thirty (30) days in which to
cure the condition. If the Executive fails to provide this notice and cure
period prior to his resignation, or resigns more than six (6) months after the
initial existence of the condition, his resignation will not be deemed to be for
“Good Reason.”

(d) If the Executive’s employment is terminated pursuant to Section 4.2(a)
(i.e., the Company terminates the Executive’s employment hereunder without Cause
(other than by reason of death or Disability) within twelve (12) months
following a Change in Control of the Company, or the Executive resigns for Good
Reason within twelve (12) months following a Change in Control of the Company),
the Executive shall, in full discharge of all of the Company’s obligations to
the Executive, be entitled to receive, and the Company’s sole obligation to the
Executive under this Agreement or otherwise shall be to pay or provide to the
Executive, the following:

(i) the Accrued Obligations; and

(ii) subject to Section 4.5 and Section 4.6:

(A) payments equal to the sum of eighteen (18) months of the Executive’s Base
Salary at the rate in effect immediately prior to Termination Date (less
applicable withholdings and authorized deductions), to be paid in accordance
with the Company’s customary payroll practices, commencing on the first regular
payroll date on or following the date that is sixty (60) days following such
termination of employment (the “Enhanced Severance Payments”); and

(B) all stock options and other awards that the Executive may have under the
Plan shall vest and, in the case of stock options or like awards, become
exercisable, to the extent not already vested and (if applicable) exercisable,
on the Termination Date.

For purposes of clarity, it is understood and agreed that the Enhanced Severance
Payments set forth in this Section 4.2 shall be in lieu of (and not in addition
to) the Severance Payments set forth in Section 4.1.

Section 4.3. Termination for Cause; Voluntary Termination.

(a) The Company may terminate the Executive’s employment hereunder at any time
for Cause upon written notice to the Executive. The Executive may voluntarily
terminate his employment hereunder at any time for any reason or no reason upon
ninety (90) days prior written notice to the Company; provided, however, the
Company reserves the right, upon written notice to the Executive, to accept the
Executive’s notice of resignation and to accelerate such notice and make the
Executive’s resignation effective immediately, or on such other date prior to

 

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Executive’s intended last day of work as the Company deems appropriate. It is
understood and agreed that the Company’s election to accelerate Executive’s
notice of resignation shall not be deemed a termination by the Company without
Cause for purposes of Section 4.1 or 4.2 of this Agreement or otherwise or
constitute Good Reason for purposes of Section 4.2 of this Agreement or
otherwise.

(b) If the Executive’s employment is terminated pursuant to Section 4.3(a), the
Executive shall, in full discharge of all of the Company’s obligations to the
Executive, be entitled to receive, and the Company’s sole obligation under this
Agreement or otherwise shall be to pay or provide to the Executive, the
following (collectively, the “Accrued Obligations”):

(i) the Executive’s accrued but unpaid Base Salary through the final date of the
Executive’s employment by the Company (the “Termination Date”), payable in
accordance with the Company’s standard payroll practices;

(ii) the Executive’s accrued, but unused, vacation (in accordance with the
Company’s policies);

(iii) expenses reimbursable under Section 3.2 above incurred on or prior to the
Termination Date but not yet reimbursed; and

(iv) any amounts or benefits that are vested amounts or vested benefits or that
the Executive is otherwise entitled to receive under any plan, program, policy
or practice (with the exception of those, if any, relating to severance) on the
Termination Date, in accordance with such plan, program, policy, or practice.

Section 4.4. Termination Resulting from Death or Disability.

(a) As the result of any Disability suffered by the Executive, the Company may,
upon five (5) days prior notice to the Executive, terminate the Executive’s
employment under this Agreement. The Executive’s employment shall automatically
terminate upon his death.

(b) “Disability” means a determination by the Company in accordance with
applicable law that as a result of a physical or mental injury or illness, the
Executive is unable to perform the essential functions of his job with or
without reasonable accommodation for a period of (i) ninety (90) consecutive
days; or (ii) one hundred twenty (120) days during any twelve (12) month period.

(c) If the Executive’s employment is terminated pursuant to Section 4.4(a), the
Executive or the Executive’s estate, as the case may be, shall be entitled to
receive, and the Company’s sole obligation under this Agreement or otherwise
shall be to pay or provide to the Executive or the Executive’s estate, as the
case may be, the Accrued Obligations.

Section 4.5 Release Agreement. In order to receive the Severance Payments set
forth in Section 4.1 or to receive the Enhanced Severance Payments set forth in
Section 4.3 (as applicable, and, in each case, if eligible), the Executive must
timely execute (and not revoke) a separation agreement and general release (the
“Release Agreement”) in a customary form as is determined to be reasonably
necessary by the Company in its good faith and reasonable

 

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discretion; provided, that the Company provides the Executive with the form of
Release Agreement within 3 days following the Termination Date. The Severance
Payments or the Enhanced Severance Payments, as applicable, are subject to the
Executive’s execution of such Release Agreement within 45 days of the
Executive’s receipt of the Release Agreement and the Executive’s non-revocation
of such Release Agreement.

Section 4.6 Post-Termination Breach. Notwithstanding anything to the contrary
contained in this Agreement, the Company’s obligations to provide the Severance
Payments or the Enhanced Severance Payments, as applicable, will immediately
cease if the Executive breaches any of the provisions of the Covenants
Agreement, the Release Agreement or any other agreement the Executive has with
the Company, or if any provision of those agreements is determined to be
unenforceable, to any extent, by a court or arbitration panel, whether by
preliminary or final adjudication.

Section 4.7. Removal from any Boards and Position. If the Executive’s employment
is terminated for any reason under this Agreement, he shall be deemed (without
further action, deed or notice) to resign (i) if a member, from the Board or
board of directors (or similar governing body) of any Affiliate of the Company
or any other board to which he has been appointed or nominated by or on behalf
of the Company and (ii) from all other positions with the Company or any
subsidiary or other Affiliate of the Company, including, but not limited to, as
an officer of the Company and any of its subsidiaries or other Affiliates.

ARTICLE 5

GENERAL PROVISIONS

Section 5.1. Employee Inventions Assignment and Non-Disclosure Agreement. The
Executive acknowledges and confirms that the Employee Inventions Assignment and
Non-Disclosure Agreement executed by the Executive in favor of the Company on
December 13, 2012 (the “Covenants Agreement”), the terms of which are
incorporated herein by reference, remains in full force and effect and binding
on the Executive. The Covenants Agreement shall survive the termination of this
Agreement and the Executive’s employment by the Company for the applicable
period(s) set forth therein.

Section 5.2. Expenses. Each of the Company and the Executive shall bear its/his
own costs, fees and expenses in connection with the negotiation, preparation and
execution of this Agreement.

Section 5.3. Key-Man Insurance. Upon the Company’s request, the Executive shall
cooperate (including, without limitation, taking any required physical
examinations) in all respects in obtaining a key-man life insurance policy on
the life of the Executive in which the Company is named as the beneficiary.

Section 5.4. Entire Agreement. This Agreement, the Indemnification Agreement
between the Executive and the Company effective January 8, 2013, as it may be
amended from time to time (the “Indemnification Agreement”), the Covenants
Agreement and the Prior Grant Agreements contain the entire agreement of the
parties hereto with respect to the terms and conditions of the Executive’s
employment during the Term and activities following termination

 

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of this Agreement and the Executive’s employment with the Company and supersede
any and all prior agreements and understandings, whether written or oral,
between the parties hereto with respect to the subject matter of this Agreement,
the Indemnification Agreement, the Covenants Agreement or the Prior Grant
Agreements. Each party hereto acknowledges that no representations, inducements,
promises or agreements, whether oral or in writing, have been made by any party,
or on behalf of any party, which are not embodied herein, in the Covenants
Agreement or in the Prior Grant Agreements. The Executive acknowledges and
agrees that the Company has fully satisfied, and has no further, obligations to
the Executive arising under, or relating to, any prior employment or consulting
arrangement or understanding (including, without limitation, any claims for
compensation or benefits of any kind) or otherwise. No agreement, promise or
statement not contained in this Agreement, the Indemnification Agreement, the
Covenants Agreement or the Prior Grant Agreements shall be valid and binding,
unless agreed to in writing and signed by the parties sought to be bound
thereby.

Section 5.5. No Other Contracts. The Executive represents and warrants to the
Company that neither the execution and delivery of this Agreement by the
Executive nor the performance by the Executive of the Executive’s obligations
hereunder, shall constitute a default under or a breach of the terms of any
other agreement, contract or other arrangement, whether written or oral, to
which the Executive is a party or by which the Executive is bound, nor shall the
execution and delivery of this Agreement by the Executive nor the performance by
the Executive of his duties and obligations hereunder give rise to any claim or
charge against either the Executive, the Company or any Affiliate, based upon
any other contract or other arrangement, whether written or oral, to which the
Executive is a party or by which the Executive is bound. The Executive further
represents and warrants to the Company that he is not a party to or subject to
any restrictive covenants, legal restrictions or other agreement, contract or
arrangement, whether written or oral, in favor of any entity or person which
would in any way preclude, inhibit, impair or limit the Executive’s ability to
perform his obligations under this Agreement, including, but not limited to,
non-competition agreements, non-solicitation agreements or confidentiality
agreements. The Executive shall defend, indemnify and hold the Company harmless
from and against all claims, actions, losses, liabilities, damages, costs and
expenses (including reasonable attorney’s fees and amounts paid in settlement in
good faith) arising from or relating to any breach of the representations and
warranties made by the Executive in this Section 5.5.

Section 5.6. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally or sent by
nationally recognized overnight courier service (with next business day delivery
requested). Any such notice or communication shall be deemed given and
effective, in the case of personal delivery, upon receipt by the other party,
and in the case of a courier service, upon the next business day, after dispatch
of the notice or communication. Any such notice or communication shall be
addressed as follows:

If to the Company, to:

CytoDyn Inc.

1111 Main Street, Suite 660

Vancouver, WA 98660

Attn: Board of Directors

 

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With a copy to:

Lowenstein Sandler LLP

1251 Avenue of the Americas

New York, New York 10020

Attn: Michael J. Lerner, Esq.

If to the Executive, to:

Michael D. Mulholland

5401 SE Scenic Lane, Unit 301

Vancouver, WA 98661

Any person named above may designate another address by giving notice in
accordance with this Section to the other persons named above.

Section 5.7. Governing Law; Jurisdiction. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Washington, without
regard to principles of conflicts of law. Any and all actions arising out of
this Agreement or Employee’s employment by Company or termination therefrom
shall be brought and heard in the state and federal courts of the State of
Washington and the parties hereto hereby irrevocably submit to the exclusive
jurisdiction of any such courts. THE COMPANY AND THE EXECUTIVE HEREBY WAIVE
THEIR RESPECTIVE RIGHT TO TRIAL BY JURY IN ANY ACTION CONCERNING THIS AGREEMENT
OR ANY AND ALL MATTERS ARISING DIRECTLY OR INDIRECTLY HEREFROM AND REPRESENT
THAT THEY HAVE CONSULTED WITH COUNSEL OF THEIR CHOICE OR HAVE CHOSEN VOLUNTARILY
NOT TO DO SO SPECIFICALLY WITH RESPECT TO THIS WAIVER.

Section 5.8. Waiver. Either party hereto may waive compliance by the other party
with any provision of this Agreement. The failure of a party to insist on strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. No waiver of any
provision shall be construed as a waiver of any other provision. Any waiver must
be in writing.

Section 5.9. Severability. If any one or more of the terms, provisions,
covenants and restrictions of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated and the parties will attempt to agree upon a valid and enforceable
provision which shall be a reasonable substitute for such invalid and
unenforceable provision in light of the tenor of this Agreement, and, upon so
agreeing, shall incorporate such substitute provision in this Agreement. In
addition, if any one or more of the provisions contained in this Agreement shall
for any reason be determined by a court of competent jurisdiction to be
excessively broad as to duration, geographical scope, activity or subject, it
shall be construed, by limiting or reducing it, so as to be enforceable to the
extent compatible with then applicable law.

 

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Section 5.10. Counterparts. This Agreement may be executed in any number of
counterparts and each such duplicate counterpart shall constitute an original,
any one of which may be introduced in evidence or used for any other purpose
without the production of its duplicate counterpart. Moreover, notwithstanding
that any of the parties did not execute the same counterpart, each counterpart
shall be deemed for all purposes to be an original, and all such counterparts
shall constitute one and the same instrument, binding on all of the parties
hereto.

Section 5.11. Advice of Counsel. Both parties hereto acknowledge that they have
had the opportunity to seek and obtain the advice of counsel before entering
into this Agreement and have done so to the extent desired, and have fully read
the Agreement and understand the meaning and import of all the terms hereof.

Section 5.12. Assignment. This Agreement shall inure to the benefit of the
Company and its successors and assigns (including, without limitation, the
purchaser of all or substantially all of its assets) and shall be binding upon
the Company and its successors and assigns. This Agreement is personal to the
Executive, and the Executive shall not assign or delegate his rights or duties
under this Agreement, and any such assignment or delegation shall be null and
void.

Section 5.13. Agreement to Take Actions. Each party to this Agreement shall
execute and deliver such documents, certificates, agreements and other
instruments, and shall take all other actions, as may be reasonably necessary or
desirable in order to perform his or its obligations under this Agreement.

Section 5.14. No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this
Section 5.14 shall preclude the assumption of such rights by executors,
administrators or other legal representatives of the Executive or the
Executive’s estate and their assigning any rights hereunder to the person or
persons entitled thereto.

Section 5.15. Source of Payment. Except as otherwise provided under the terms of
any applicable employee benefit plan, all payments provided for under this
Agreement shall be paid in cash from the general funds of Company. The Company
shall not be required to establish a special or separate fund or other
segregation of assets to assure such payments, and, if the Company shall make
any investments to aid it in meeting its obligations hereunder, the Executive
shall have no right, title or interest whatever in or to any such investments
except as may otherwise be expressly provided in a separate written instrument
relating to such investments. Nothing contained in this Agreement, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
of any kind, or a fiduciary relationship, between Company and the Executive or
any other person. To the extent that any person acquires a right to receive
payments from Company hereunder, such right, without prejudice to rights which
employees may have, shall be no greater than the right of an unsecured creditor
of Company. The Executive shall not look to the owners of the Company for the
satisfaction of any obligations of the Company under this Agreement.

 

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Section 5.16. Tax Withholding. The Company or other payor is authorized to
withhold from any benefit provided or payment due hereunder, the amount of
withholding taxes due any federal, state or local authority in respect of such
benefit or payment and to take such other action as may be necessary in the
opinion of the Board to satisfy all obligations for the payment of such
withholding taxes. The Executive will be solely responsible for all taxes
assessed against him with respect to the compensation and benefits described in
this Agreement, other than typical employer-paid taxes such as FICA, and the
Company makes no representations as to the tax treatment of such compensation
and benefits.

Section 5.17. 409A Compliance. All payments under this Agreement are intended to
comply with or be exempt from the requirements of Section 409A of the Code and
regulations promulgated thereunder (“Section 409A”). As used in this Agreement,
the “Code” means the Internal Revenue Code of 1986, as amended. To the extent
permitted under applicable regulations and/or other guidance of general
applicability issued pursuant to Section 409A, the Company reserves the right to
modify this Agreement to conform with any or all relevant provisions regarding
compensation and/or benefits so that such compensation and benefits are exempt
from the provisions of 409A and/or otherwise comply with such provisions so as
to avoid the tax consequences set forth in Section 409A and to assure that no
payment or benefit shall be subject to an “additional tax” under Section 409A.
To the extent that any provision in this Agreement is ambiguous as to its
compliance with Section 409A, or to the extent any provision in this Agreement
must be modified to comply with Section 409A, such provision shall be read in
such a manner so that no payment due to the Executive shall be subject to an
“additional tax” within the meaning of Section 409A(a)(1)(B) of the Code. If
necessary to comply with the restriction in Section 409A(a)(2)(B) of the Code
concerning payments to “specified employees,” any payment on account of the
Executive’s separation from service that would otherwise be due hereunder within
six (6) months after such separation shall be delayed until the first business
day of the seventh month following the Termination Date and the first such
payment shall include the cumulative amount of any payments (without interest)
that would have been paid prior to such date if not for such restriction. Each
payment in a series of payments hereunder shall be deemed to be a separate
payment for purposes of Section 409A. In no event may the Executive, directly or
indirectly, designate the calendar year of payment. All reimbursements provided
under this Agreement shall be made or provided in accordance with the
requirements of Section 409A, including, where applicable, the requirement that
(i) any reimbursement is for expenses incurred during the Executive’s lifetime
(or during a shorter period of time specified in this Agreement), (ii) the
amount of expenses eligible for reimbursement during a calendar year may not
affect the expenses eligible for reimbursement in any other calendar year,
(iii) the reimbursement of an eligible expense will be made on or before the
last day of the calendar year following the year in which the expense is
incurred, and (iv) the right to reimbursement is not subject to liquidation or
exchange for another benefit. Notwithstanding anything contained herein to the
contrary, the Executive shall not be considered to have terminated employment
with the Company for purposes of Section 4.1 or 4.2 unless the Executive would
be considered to have incurred a “termination of employment” from the Company
within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii). In no event
whatsoever shall the Company be liable for any additional tax, interest or
penalty that may be imposed on the Executive by Section 409A or damages for
failing to comply with Section 409A.

 

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Section 5.18. 280G Modified Cutback.

(a) If any payment, benefit or distribution of any type to or for the benefit of
the Executive, whether paid or payable, provided or to be provided, or
distributed or distributable pursuant to the terms of this Agreement or
otherwise (collectively, the “Parachute Payments”) would subject the Executive
to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), the
Parachute Payments shall be reduced so that the maximum amount of the Parachute
Payments (after reduction) shall be one dollar ($1.00) less than the amount
which would cause the Parachute Payments to be subject to the Excise Tax;
provided that the Parachute Payments shall only be reduced to the extent the
after-tax value of amounts received by the Executive after application of the
above reduction would exceed the after-tax value of the amounts received without
application of such reduction. For this purpose, the after-tax value of an
amount shall be determined taking into account all federal, state, and local
income, employment and excise taxes applicable to such amount. Unless the
Executive shall have given prior written notice to the Company to effectuate a
reduction in the Parachute Payments if such a reduction is required, which
notice shall be consistent with the requirements of Section 409A to avoid the
imputation of any tax, penalty or interest thereunder, then the Company shall
reduce or eliminate the Parachute Payments by first reducing or eliminating any
cash payments (with the payments to be made furthest in the future being reduced
first), then reducing or eliminating accelerated vesting of stock options or
similar awards, then by reducing or eliminating any other remaining Parachute
Payments; provided, that no such reduction or elimination shall apply to any
non-qualified deferred compensation amounts (within the meaning of Section 409A)
to the extent such reduction or elimination would accelerate or defer the timing
of such payment in manner that does not comply with Section 409A.

(b) An initial determination as to whether (x) any of the Parachute Payments
received by the Executive in connection with the occurrence of a change in the
ownership or control of the Company or in the ownership of a substantial portion
of the assets of the Company shall be subject to the Excise Tax, and (y) the
amount of any reduction, if any, that may be required pursuant to the previous
paragraph, shall be made by an independent accounting firm selected by the
Company (the “Accounting Firm”) prior to the consummation of such change in the
ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company. The Executive shall be
furnished with notice of all determinations made as to the Excise Tax payable
with respect to the Executive’s Parachute Payments, together with the related
calculations of the Accounting Firm, promptly after such determinations and
calculations have been received by the Company.

(c) For purposes of this Section 5.18, (i) no portion of the Parachute Payments
the receipt or enjoyment of which the Executive shall have effectively waived in
writing prior to the date of payment of the Parachute Payments shall be taken
into account; (ii) no portion of the Parachute Payments shall be taken into
account which in the opinion of the Accounting Firm does not constitute a
“parachute payment” within the meaning of Section 280G(b)(2) of the Code;
(iii) the Parachute Payments shall be reduced only to the extent necessary so
that the Parachute Payments (other than those referred to in the immediately
preceding clause (i) or (ii)) in their entirety constitute reasonable
compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code or are otherwise not subject to disallowance as
deductions, in the opinion of the auditor or tax counsel referred to in such
clause (ii); and (iv) the value of any non-cash benefit or any deferred payment
or benefit included in the Parachute Payments shall be determined by the
Company’s independent auditors based on Sections 280G and 4999 of the Code and
the regulations for applying those sections of the Code, or on substantial
authority within the meaning of Section 6662 of the Code.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

COMPANY CytoDyn Inc. By:  

/s/ Nader Z. Pouhassan

Name:   Nader Z. Pourhassan Title:   President and CEO EXECUTIVE

/s/ Michael D. Mulholland

Michael D. Mulholland

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]