Exhibit 10.2

oRGANOVO HOLDINGS, INC.
severance AND CHANGE IN CONTROL plan
(Effective as of November 4, 2015)

 

1.

Purpose of the Plan

The Board believes it is in the best interests of Organovo to encourage and
motivate key employees to devote their full attention to the performance of
their assigned duties without the distraction or concerns regarding their
involuntary termination of employment. Organovo believes that it is in the best
interests of its key employees and the shareholders of Organovo to provide
financial assistance through severance payments and other benefits to eligible
key employees who are involuntarily terminated. Organovo formerly entered into
individual employment contracts with certain employees providing for change of
control and severance benefits for the above purposes. This Plan is intended to
consolidate and replace (with the consent of the respective Participants where
required) such individual employment contracts in order to provide uniform
administration of change of control and severance benefits. With respect to each
Participant, the Plan supersedes all plans, agreements, or other arrangements
for severance benefits or for enhanced severance payments whether or not before,
on or after a change in control. This Plan is intended to be a “welfare plan”
under ERISA providing benefits to a select group of management or highly
compensated employees as described in DOL Regulation section 2520.104-24.  

 

2.

Definitions

“Accrued Benefits” means (i) the Participant’s Base Salary through the date of
termination of employment, (ii) any accrued but unused paid time off and
floating holiday pay, and (iii) unreimbursed business expenses.  Organovo will
pay the Accrued Benefits to the Participant in a cash lump sum within ten (10)
days after the Participant’s termination of employment with Organovo.

“Affiliate” means any other entity, whether now or hereafter existing, which
controls, is controlled by, or is under common control with, Organovo
(including, but not limited to, joint ventures, limited liability companies, and
partnerships).

“Base Salary” means the annual rate of base salary in effect as of the date of
termination of employment, determined without regard to any reduction thereof
that constitutes Good Reason.

“Board” means the Board of Directors of Organovo Holdings, Inc.

“Cash Severance” means the amount specified in Section 6(a), Section 6(b) or
Section 6(c), as applicable.

“Cause” means:

(i) the willful and continued failure of the Participant to perform
substantially the Participant’s duties with Organovo (other than any such
failure resulting from incapacity due to physical or mental illness), as
determined by the Board with respect to any Tier 1 or Tier 2 Employee, and as
determined by Organovo’s Chief Executive Officer with respect to Employees in
Tiers 3-4 no earlier than thirty (30) days after a written demand for
substantial performance is delivered to the Participant, which specifically
identifies the manner in which Organovo believes that the Participant has
willfully and continuously failed to perform substantially the Participant’s
duties with Organovo (provided, however, that with respect to any Tier 1 or Tier
2 Employee, the failure to achieve individual or Company-based performance
goals, budgets or targets shall not be deemed to be a failure of the Participant
to perform his or her duties for purposes of this definition of Cause);

(ii) the willful engaging by the Participant in illegal conduct or gross
misconduct which is materially and demonstrably injurious to Organovo or
Participant’s ability to perform his or her duties with Organovo;

(iii) conviction (including a plea of guilty or nolo contendere) of a felony;

(iv) a material violation of a material written policy of Organovo or any
Affiliate, violation of which would be grounds for immediate dismissal under
applicable Company policy;

(v) failure to comply in any material respect with the Foreign Corrupt Practices
Act, the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010, or the Truth in Negotiations Act, or
any rules or regulations thereunder;

 

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(vi) a material breach of the restrictive covenants in Section 7(b) subject to
the cure provisions provided in Section 7(b) of the Plan.

“Change in Control” means the effective date of the occurrence of any of the
following events:

(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the “beneficial owner” (as such term is defined in
Rule 13d‑3 under the Exchange Act), directly or indirectly, of securities of
Organovo representing more than thirty percent (30%) of the total Fair Market
Value or total combined voting power of Organovo’s then‑outstanding securities
entitled to vote generally in the election of Directors; provided, however, that
a Change in Control shall not be deemed to have occurred if such degree of
beneficial ownership results from any of the following: (A) an acquisition by
any person who on the Effective Date is the beneficial owner of more than thirty
percent (30%) of such voting power, (B) any acquisition directly from Organovo,
including, without limitation, pursuant to or in connection with a public
offering of securities, (C) any acquisition by Organovo, (D) any acquisition by
a trustee or other fiduciary under an employee benefit plan of a Participating
Company or (E) any acquisition by an entity owned directly or indirectly by the
shareholders of Organovo in substantially the same proportions as their
ownership of the voting securities of Organovo; or

(ii) an Ownership Change Event (as defined below) or series of related Ownership
Change Events (collectively, a “Transaction”) in which the shareholders of
Organovo immediately before the Transaction do not retain immediately after the
Transaction direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding securities entitled
to vote generally in the election of Directors or, in the case of an Ownership
Change Event described in clause (iii) of that definition, the entity to which
the assets of Organovo were transferred (the “Transferee”), as the case may be;
or

(iii) a majority of members of the Incumbent Directors (as defined below) is
replaced during any twelve (12)-month period;

provided, however, that a Change in Control shall be deemed not to include an
event described in subsection (i) until the earlier of (a) the person has two or
more representatives on the Board of Directors or (b) the person becomes the
“beneficial owner” (as such term is defined in Rule 13d‑3 under the Exchange
Act), directly or indirectly, of securities of Organovo representing more than
fifty percent (50%) of the total Fair Market Value or total combined voting
power of Organovo’s then‑outstanding securities entitled to vote generally in
the election of Directors.  

For purposes of subsections (i) and (ii), indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the voting
securities of one or more corporations or other business entities which own
Organovo or the Transferee, as the case may be, either directly or through one
or more subsidiary corporations or other business entities. 

In addition for purposes of subsections (i) and (ii), the Committee shall
determine whether multiple acquisitions of the voting securities of Organovo
and/or multiple Ownership Change Events are related and to be treated in the
aggregate as a single Change in Control, and its determination shall be final,
binding and conclusive.

For purposes of this definition of Change in Control, “Incumbent Director” means
a director who either (i) is a member of the Board as of the Effective Date or
(ii) is elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such
election or nomination (but excluding a director who was elected or nominated in
connection with an actual or threatened proxy contest relating to the election
of directors of Organovo or at the request of a person who is the “beneficial
owner” (as such term is defined in Rule 13d‑3 under the Exchange Act), directly
or indirectly, of securities of Organovo representing more than five percent
(5%) of the total Fair Market Value or total combined voting power of Organovo’s
then‑outstanding securities entitled to vote generally in the election of
Directors); and “Ownership Change Event” means the occurrence of any of the
following with respect to Organovo:  (i) the direct or indirect sale or exchange
in a single or series of related transactions by the shareholders of Organovo of
securities of Organovo representing more than fifty percent (50%) of the total
combined voting power of Organovo’s then outstanding securities entitled to vote
generally in the election of Directors; (ii) a merger or consolidation in which
Organovo is a party; or (iii) the sale, exchange, or transfer of all or
substantially all of the assets of Organovo (other than a sale, exchange or
transfer to one or more subsidiaries of Organovo).

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
and Treasury guidance promulgated under it.

“Committee” means the Compensation Committee of the Board.  Except with respect
to Tier 1 and Tier 2 Employees, the Committee may delegate some or all of its
authority under the Plan to any person, persons or subcommittee, in which event,
the term “Committee” includes such person, persons or subcommittee to the extent
of such delegation.  

“Company” means Organovo Holdings, Inc. and any of its Affiliates.

 

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“Competitive Activity” means any design, development, sale, promotion,
production, marketing, licensing, distribution or provision of any service,
technology, product or product feature that is, directly or indirectly, or is
intended to be, competitive with one or more services, technologies, products or
product features provided by Organovo.

“Competitor of Organovo” means any Person that is engaged or preparing to engage
in any Competitive Activity.  

“Disability” means incapacity due to physical or mental illness which has
rendered the Participant unable effectively to carry out his/her duties and
obligations to Organovo or unable to participate effectively and actively in the
management of Organovo for a period of ninety (90) consecutive days or for
shorter periods aggregating to one-hundred twenty (120) days (whether or not
consecutive) during any consecutive twelve (12) months.

“Effective Date” has the meaning specified in Section 3.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and guidance promulgated under it.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and guidance promulgated under it.

“Good Reason” means, without the Participant’s consent:

(i)In the case of a Tier 1, 2, 3, or 4 Employee, a material diminution in the
Participant’s Base Salary or Target Bonus Potential.  This does not apply to a
material diminution in the case of a Tier 1 or Tier 2 Employee resulting from a
determination by both the CEO and the Compensation Committee that Organovo’s
financial condition is such that a reduction in compensation is appropriate and
the reduction is applied uniformly to all Company officers;

(ii) a material diminution in the Participant’s authority, duties, or
responsibilities, which shall include (A) with respect to any Participant who is
a member of the Board, any failure of the Board to appoint or the stockholders
of Organovo to elect such Participant as a member of the Board, or any removal
of Participant from the Board for reasons other than Cause, (B) with respect to
any Participant who is a Tier 1 or Tier 2 Employee, removal from Organovo’s
Executive Team;  

(iii) with respect to any Participant who is a Tier 1, 2, 3, or 4 Employee, a
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Participant is required to report;

(iv) any requirement that the Participant relocate, by more than fifty (50)
miles, the principal location from which the Participant performs services for
Organovo immediately prior to the termination of employment or the occurrence of
the Change in Control.

It shall be a condition precedent to the Participant’s right to terminate
Participant’s employment for Good Reason (whether before or after a Change in
Control) that (i) the Participant shall have first given Organovo written notice
stating with reasonable specificity the breach on which such termination is
premised within ninety (90) days after the Participant becomes aware or should
have become aware of such breach, and (ii) if such breach is susceptible of cure
or remedy, such breach has not been cured or remedied within thirty (30) days
after receipt of such notice.  

“Health Benefit Continuation” means payment by Organovo of the premium for COBRA
coverage, if elected by the Participant and his/her eligible dependents, upon
loss of coverage under Organovo’s group health plan for active employees of
Organovo due to termination of employment, until the earlier of (i) the end of
the Health Benefit Payment Period, (ii) the date that the Participant becomes
eligible for coverage under another group health plan, or (iii) the end of the
eighteen (18)-month maximum COBRA coverage period.

“Health Benefit Payment Period” means eighteen (18) months for a Tier 1
Employee, twelve (12) months for a Tier 2 Employee, (9) months for a Tier 3
Employee and six (6) months for a Tier 4 Employee.  

“Organovo” means Organovo Holdings, Inc., and its Affiliates.

“Outplacement Assistance” means payment by Organovo of the cost of providing
outplacement services for the following periods:  

Tier 1 – 18 months

Tier 2 – 12 months

Tier 3 – 9 months

 

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Tier 4 – 6 months

“Participant” means a person who has become a participant pursuant to Section 5
of the Plan.

“Participation Agreement” means a written agreement with Organovo in such form
as the Committee may specify which obligates the Participant to comply with all
of the terms and conditions of participation in the Plan.  

“Plan” means this Organovo Holdings, Inc. Severance and Change in Control Plan.

“Restricted Period” means twenty-four (24) months for a Tier 1 Employee, twelve
(12) months for a Tier 2 Employee, (9) months for a Tier 3 Employee, and six (6)
months for a Tier 4 Employee.  

“Severance Benefits” means the benefits specified in Section 6 of this Plan.

“Target Bonus” means the Participant’s short-term incentive bonus target in
effect on the Participant’s date of termination of employment, provided,
however, that following a Change in Control, the Target Bonus shall be the
greater of (1) the Participant’s short-term incentive bonus target in effect on
the Participant’s date of termination of employment, and (2) the Participant’s
short-term incentive bonus target in effect on the date of the Change in
Control.  

“Tier 1 Employees” means Organovo’s Chief Executive Officer, Chief Financial
Officer, and such other executives as the Committee shall specify from time to
time.

“Tier 2 Employees” means all non-Tier 1 members of Organovo’s Executive Team,
and such other executives as the Committee shall specify from time to time.

“Tier 3 Employees” means all Senior Vice Presidents who are not members of
Organovo’s Executive Team, and such other executives as the Committee shall
specify from time to time.

“Tier 4 Employees” means all Vice Presidents who are not members of Organovo’s
Executive Team, and such other executives as the Committee shall specify from
time to time.

 

3.

Effective Date

The Plan shall be effective only with respect to a termination of employment
covered by the Plan that occurs on or after November 4, 2015 (the “Effective
Date”).

 

4.

Administration

 

(a)

The Committee shall act as the plan administrator and the “named fiduciary” of
the Plan for purposes of ERISA. Before a Change in Control, the Committee has
sole and absolute discretion and authority to administer the Plan, including the
sole and absolute discretion and authority to:

 

(i)

adopt such rules as it deems advisable in connection with the administration of
the Plan, and to construe, interpret, apply and enforce the Plan and any such
rules and to remedy ambiguities, errors or omissions in the Plan;

 

(ii)

determine questions of eligibility and entitlement to benefits and any other
terms of the Plan applicable to the Participants; the Committee’s determinations
are conclusive and binding on all parties affected by its determinations;

 

(iii)

act under the Plan on a case-by-case basis; the Committee’s decisions under the
Plan need not be uniform with respect to similarly situated Participants; and

 

(iv)

delegate its authority under the Plan to any director, officer, employee, or
group of directors, officers and/or employees of Organovo.

 

(b)

If any person with administrative authority becomes eligible or makes a claim
for Plan benefits, that person will have no authority with respect to any matter
specifically affecting his/her individual interest under the Plan, and the
Committee will designate another person to exercise such authority.

 

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(c)

Notwithstanding anything in the Plan to the contrary, after a Change in Control,
neither the Committee nor the Board nor any other person or entity shall have
any discretionary authority in the administration of the Plan, and any court or
tribunal that adjudicates any dispute, controversy or claim in connection with
any Severance Benefits under this Plan will apply a de novo standard of review
to any determinations made by the Committee or Board following such Change in
Control. Such de novo standard shall apply notwithstanding the grant of full
discretion hereunder to the Committee, Board, or any person or entity or
characterization of any decision by the Committee, Board, or by such person or
entity as final, binding or conclusive on any party. 

 

5.

Eligibility to Participate in Plan

(a) In order to participate in the Plan, an employee must; (i) be scheduled to
work at least 20 hours a week in the conduct of the business of Organovo, (ii)
have been on the Employer’s U.S. payroll for at least six months prior to the
Termination Date and (iii) have entered into a written Participation Agreement
with Organovo. Notwithstanding the preceding sentence, the term “Employee” shall
not include any of the following individuals:

(i) Any person classified by Organovo as a casual employee, intern, on-call
employee, seasonal employee, temporary employee, zero-hour employee or
contingent employee;

(ii) Any person whose terms and conditions of employment are governed by a
collective bargaining agreement, unless such collective bargaining agreement
provides for participation by employees in the bargaining unit in the Plan or a
program described in the appendices to the Plan;

(iii) Any person who is subject to a written agreement that provides that such
individual shall not be eligible to participate in the Plan;

(iv) Any person seconded from a jurisdiction outside the United States; and

(v) Any member of a group, division or other classification designated by the
Employer as ineligible to participate in the Plan.

(b) An individual’s eligibility shall be determined by the Committee in its sole
discretion. All such determinations shall be conclusive and binding on all
persons.  

Severance Benefits

(a) Before a Change in Control.  If a Participant’s employment with Organovo is
terminated after the Effective Date and before a Change in Control either by
Organovo for reasons other than Cause, death, or Disability, or by the
Participant for Good Reason, then the Participant will be entitled to receive
his or her Accrued Benefits and, subject to the Participant’s satisfaction of
the requirements of Section 7(a) (regarding waiver and release of claims) and
Section 7(b) (regarding restrictive covenants), Organovo shall provide the
Participant with the following Severance Benefits:

(i) payment of the Cash Severance specified in this Section 6(a)(i), which
amount shall be paid in a lump sum within the first regular payroll period
following the expiration of any period during which a Participant may revoke the
waiver and release of claims executed pursuant to Section 7(a), so long as that
waiver and release becomes effective no later than sixty (60) days after the
Participant’s termination of employment.  

 

Tier

Fixed Benefit

Variable Benefit

Maximum

Tier 1

2.0 times the Base Salary

N/A

N/A

Tier 2

1.0 times the Base Salary

N/A

N/A

Tier 3

75 times the Base Salary

N/A

N/A

Tier 4

5 times the Base Salary

N/A

N/A

 

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(ii) a pro-rated Target Bonus for Organovo’s fiscal year in which the
termination occurs, pro-rated based on the number of full and partial calendar
months during such year prior to the date of termination of employment, which
amount shall be paid at the time at which bonuses are paid to actively employed
employees for such fiscal year;

(iv) Health Benefit Continuation; and

(v) Outplacement Assistance.

(b) Termination Less Than Six Months Before a Change in Control.  If the
employment of a Participant in Tiers 1-4, is terminated after the Effective Date
either by Organovo for reasons other than Cause, death, or Disability, or by the
Participant for Good Reason, the Participant begins to receive severance in
accordance with Section 6(a), and a Change in Control occurs within six (6)
months after the effective date of such termination of employment, then (i) no
further payments shall be made pursuant to Sections 6(a)(i) and 6(a)(ii), and
the Participant shall receive a single lump sum cash payment upon such Change in
Control (or such later date as the release becomes effective as provided in
Section 6(a)) equal to the amount (if any) by which (A) the sum of the Cash
Severance determined in accordance with Section 6(c)(i) plus the prorated Target
Bonus determined in accordance with Section 6(c)(ii), exceeds (B) the amount of
any Cash Severance already paid to the Participant under Section 6(a)(i) and the
amount of any pro-rated bonus already paid to the Participant under Section
6(a)(ii) for Organovo’s fiscal year in which the termination occurs based on
actual performance, and (ii) all outstanding equity awards granted by Organovo
to such Participant shall become fully vested upon such Change in Control, and
to the extent such equity award is a stock option or stock appreciation right
which is not cashed out upon the Change in Control, shall be exercisable for a
period of one year following the effective date of such termination or until the
option expiration date, if earlier.  If a Change in Control occurs more than six
(6) months after the effective date of a Participant’s termination of
employment, all payments specified by Section 6(a) will continue to be paid as
scheduled.

(c) After a Change in Control.  If a Participant’s employment with Organovo is
terminated within 12 months after a Change in Control either by Organovo (or its
successor) for reasons other than Cause, death, or Disability, or by the
Participant for Good Reason, then the Participant will be entitled to receive
his or her Accrued Benefits and, subject to the Participant’s satisfaction of
the requirements of Section 7(a) (regarding waiver and release of claims) and
Section 7(b) (regarding restrictive covenants), Organovo shall provide the
Participant with the following Severance Benefits in lieu of those provided
under Section 6(a):

 

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(i) payment of the Cash Severance specified in this Section 6(c)(i), which
amount shall be paid in a lump sum cash amount no later than ten (10) business
days following the expiration of any period during which a Participant may
revoke the waiver and release of claims executed pursuant to Section 7(a), so
long as that waiver and release becomes effective no later than sixty (60) days
after the Participant’s termination of employment (or the Change in Control
Date, for a Participant whose termination of employment is deemed to occur on
the Change in Control Date).  Notwithstanding the foregoing, if the period
during which a Participant has discretion to execute or revoke the waiver and
release of claims straddles two taxable years of the Participant, then Organovo
shall make the payment in the second of such taxable years, regardless of which
taxable year the Participant actually delivers the executed waiver and release
to Organovo:

 

Tier

Fixed Benefit

Variable Benefit

Maximum

Tier 1

2.0 times the Base Salary

N/A

N/A

Tier 2

1.0 times the Base Salary

N/A

N/A

Tier 3

1.0 times the Base Salary

N/A

N/A

Tier 4

.75 times the Base Salary

N/A

N/A

(ii) a pro-rated Target Bonus for Organovo’s fiscal year in which the
termination occurs, pro-rated based on the number of full and partial calendar
months during such year prior to the date of termination of employment, which
amount shall be paid at the time and subject to the same conditions as the Cash
Severance;

(iii) with respect to equity awards outstanding on the effective date of
termination of employment:   all outstanding equity awards granted by Organovo
to the terminated Employees in Tiers 1-4, as applicable, shall become fully
vested, and to the extent such equity award is a stock option or stock
appreciation right which is not cashed out upon the Change in Control, shall be
exercisable for a period of one year following the effective date of such
termination or until the option expiration date, if earlier;

(iv) Health Benefit Continuation.  

(v) Outplacement Assistance.

(d) Form of Severance under Existing Agreement.  Participants who are covered by
an existing employment or severance agreement with Organovo on the Effective
Date agree that their existing rights under that agreement are terminated and
replaced with the provisions of this Plan; provided, however, that for the
duration of the original remaining term of the employment or severance agreement
only, the timing and form of severance (i.e., lump sum or installments) in the
employment or severance agreement shall supersede the timing and form of payment
provisions in this Section 6 and control the timing and form of payment of the
Cash Severance.  The Participation Agreement shall provide that, unless
otherwise agreed to in writing by the Participant and Organovo, that any defined
terms in any outstanding equity awards held by the Participant as of the
Effective Date shall be superseded and replaced in their entirety by the defined
terms in Section 2 of this Plan (including, but not limited to, “Cause”, “Change
of Control”, “Disability” and “Good Reason”).

(e) Release of Claims and Restrictive Covenants.  Notwithstanding anything in
this Plan to the contrary, the Severance Benefits are subject to and contingent
on the Participant’s satisfaction of the requirements of Section 7(a) (regarding
waiver and release of claims) and Section 7(b) (regarding restrictive
covenants).  

(f) Code Section 280G Cutback. If the Severance Benefits provided by this Plan
or other benefits otherwise payable to the Participant (a) constitute “parachute
payments” within the meaning of Code section 280G, and (b) but for this Section
6(g), would be subject to the excise tax imposed by Code section 4999 (“Excise
Tax”), then such Severance Benefits or other benefits shall be payable either in
full or in such lesser amount which would result in no portion of such Severance
Benefits or other benefits being subject to the Excise Tax, whichever of the
foregoing amounts, taking into account the applicable federal, state and local
income and employment taxes and the Excise Tax, results in the receipt by the
Participant, on an after-tax basis, of the greatest amount of such Severance
Benefits and other benefits under this Plan or otherwise, notwithstanding that
all or some portion of such Severance Benefits or other benefits may be taxable
under Code section 4999. Any reduction in the Severance Benefits and other
benefits required by this Section 6(g) shall be made in the following order: (i)
reduction of cash payments; (ii) reduction of accelerated vesting of equity
awards other than stock options; (iii) reduction of accelerated vesting of stock
options; and (iv) reduction of other benefits paid or provided to the
Participant. The calculations in this Section 6(g) will be performed by the
professional firm engaged by

 

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Organovo for general tax purposes as of the day prior to the date of the Change
in Control. If the tax firm so engaged by Organovo is serving as accountant or
auditor for the acquiring company, Organovo shall appoint a nationally
recognized tax firm to make the determinations required by this Section 6(g).
Organovo shall bear all expenses with respect to the determinations by such firm
required to be made by this Section 6(g). Organovo and the Participant shall
furnish such tax firm such information and documents as the tax firm may
reasonably request in order to make its required determination. The tax firm
will provide its calculations, together with detailed supporting documentation,
to Organovo and the Participant as soon as practicable following its engagement.
Any good faith determinations of the tax firm made hereunder shall be final,
binding and conclusive upon Organovo and the Participant.  As a result of the
uncertainty in the application of Code section 409A, 280G or 4999 at the time of
the initial determination by the professional tax firm described in this Section
6(g), it is possible that the Internal Revenue Service (the “IRS”) or other
agency will claim that an Excise Tax greater than that amount, if any,
determined by such professional firm for the purposes of Section6(g) is due (the
“Additional Excise Tax”). The Participant shall notify Organovo in writing of
any claim by the IRS or other agency that, if successful, would require payment
of Additional Excise Tax. The Participant and Organovo shall each reasonably
cooperate with the other in connection with any administrative or judicial
proceedings concerning the existence or amount of liability for Excise Tax with
respect to payments made or due to the Participant. Organovo shall pay all
reasonable fees, expenses and penalties of the Participant relating to a claim
by the IRS or other agency. In the event it is finally determined that a further
reduction would have been required under this Section 6(g) to place the
Participant in a better after-tax position, the Participant shall repay Organovo
such amount within thirty (30) days thereof in order to effect such result.

 

7.

Terms and Conditions of Participation

(a) Waiver and Release of Claims. As a condition to receiving Severance Benefits
under the Plan, each Participant shall be required to sign and deliver to
Organovo, and may not revoke or violate the terms of, a general release of all
claims against Organovo, and the directors, officers, and employees of each of
them, in the form attached as Exhibit A or such other form reasonably
satisfactory to the Committee. In no case will payments be made or begin before
the end of any revocation period required by applicable law or regulation in
connection with any release or waiver that the Participant is asked to sign.  

(b) Restrictive Covenants. By executing the Participation Agreement, the
Participant agrees to abide by the following restrictive covenants as
consideration for the Severance Benefits provided under Section 6, and
acknowledges that the provisions and covenants contained in this Section 7(b)
are ancillary and material to the terms of the Plan and that the limitations
contained herein are reasonable in geographic and temporal scope and do not
impose a greater restriction or restraint than is necessary to protect the
goodwill and other legitimate business interests of Organovo. The Participant
also acknowledges and agrees that the provisions of this Section 7(b) do not
adversely affect the Participant’s ability to earn a living in any capacity that
does not violate the covenants contained herein. Organovo acknowledges and
agrees that before Participant shall be determined to have breached any
provision or covenant contained in this Section 7(b), the Participant shall have
been given notice of any such alleged breach (including the grounds for
Organovo’s determination in reasonable detail) and been given forty-five (45)
days after receipt of such notice of such breach to (1) cure or remedy any such
breach that is reasonably susceptible of cure or remedy or (2) provide Organovo
with support that Participant did not breach this Section 7(b).  During this
forty-five (45) day notice period, a Tier 1 Employee will be afforded the
opportunity to make a presentation to the Board regarding the matters referred
to in Organovo’s notice.

(i) Confidential Information. The Participant shall hold in a fiduciary capacity
for the benefit of Organovo and all of its subsidiaries, partnerships, joint
ventures, limited liability companies, and other affiliates (collectively, the
“Company Group”), all secret or confidential information, knowledge or data
relating to Organovo and its businesses (including, without limitation, any
proprietary and not publicly available information concerning any processes,
methods, trade secrets, intellectual property, research secret data, costs,
names of users or purchasers of their respective products or services, business
methods, operating or manufacturing procedures, or programs or methods of
promotion and sale) that the Participant has obtained or obtains during the
Participant’s employment by Organovo and that is not public knowledge (other
than as a result of the Participant’s violation of this Section 7(b)(i))
(“Confidential Information”). The Participant shall not communicate, divulge or
disseminate Confidential Information at any time during or after the
Participant’s employment and/or service as a consultant with Organovo, except
with prior written consent of a corporate officer of Company, or as otherwise
required by law or legal process. All records, files, memoranda, reports,
customer lists, drawings, plans, documents and the like that the Participant
uses, prepares or comes into contact with during the course of the Participant’s
employment shall remain the sole property of Organovo and/or Organovo, as
applicable, and shall be turned over to the applicable Company Group company
upon termination of the Participant’s employment.

(ii) Non-Recruitment of Company Group Employees, Etc. During the Participant’s
employment with Organovo and for the Restricted Period, the Participant shall
not (1) solicit or participate in the solicitation of any person who was
employed by Organovo at any time during the six-month period prior to the
Participant’s termination of employment to leave the employ of Organovo; or (2)
on behalf of the Participant or any other person, hire, employ, or engage any
such person, provided that these restrictions shall only apply so long as the
person remains employed by the Organovo and for six months after they cease to
be employed by Organovo. The Participant further agrees that, during the
Participant’s employment with Organovo and for the Restricted Period, if an
employee of

 

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Organovo contacts the Participant about prospective employment, the Participant
will inform that employee that the Participant cannot discuss the matter further
without informing Organovo.

(iii) Non-Solicitation of Business. The Participant acknowledges and agrees that
the identities of Organovo’s customers and any information regarding Organovo’s
customers is confidential and constitutes trade secrets. In recognition of the
confidential and trade secret nature of information regarding Organovo’s
customers, the Participant agrees that during the Restricted Period, the
Participant shall not (either directly or indirectly or as an officer, agent,
employee, partner or director of any other company, partnership or entity)
solicit on behalf of any Competitor of Organovo the business of (1) any customer
of Organovo during the time of the Participant’s employment or as of the date of
Participant’s termination of employment, or (2) any potential customer of
Organovo which the Participant knew to be an identified, prospective purchaser
of services or products of Organovo as of the date of Participant’s termination
of employment.

(iv) Employment by Competitor. During the Restricted Period, the Participant
shall not invest in (other than in a publicly traded company with a maximum
investment of no more than one percent (1%) of outstanding shares), counsel,
advise, or be otherwise engaged or employed by, any Competitor of Organovo.

(v) No Disparagement.

(1) The Participant and Organovo shall at all times refrain from taking actions
or making statements, written or oral, that denigrate, disparage or defame the
goodwill or reputation of the Participant or Organovo, as the case may be, or
any of its trustees, officers, security holders, partners, agents or former or
current employees and directors. The Participant further agrees not to make any
negative statement to third parties relating to the Participant’s employment or
any aspect of the businesses of Organovo and not to make any statements to third
parties about the circumstances of the termination of the Participant’s
employment, or about Organovo or its trustees, directors, officer, security
holders, partners, agents or former or current employees and directors, except
as may be required by a court or government body.

(2) The Participant further agrees that, following termination of employment for
any reason, the Participant shall assist and cooperate with Organovo with regard
to any matter or project in which the Participant was involved during the
Participant’s employment with Organovo, including but not limited to any
litigation that may be pending or arise after such termination of employment
(other than any litigation in which Organovo asserts a claim against Participant
or alleges that Participant breached one of the restrictive covenants in this
Section 7(b)).  Organovo shall not unreasonably request such cooperation of the
Participant and shall cooperate with the Participant in scheduling any
assistance by the Participant taking into account the Participant’s business and
personal affairs and shall compensate the Participant for any lost wages and/or
expenses associated with such cooperation and assistance.

(vi) Inventions. All plans, discoveries and improvements, whether patentable or
unpatentable, made or devised by the Participant, whether alone or jointly with
others, from the date of the Participant’s initial employment by Organovo and
continuing until the end of any period during which the Participant is employed
by Organovo, relating or pertaining in any way to the Participant’s employment
with or the business of Organovo (each, an “Invention”), shall be promptly
disclosed in writing to the Secretary of the Board and are hereby transferred to
and shall redound to the benefit of Organovo and shall become and remain its
sole and exclusive property. The Participant agrees to execute any assignment to
Organovo or its nominee, of the Participant’s entire right, title and interest
in and to any Invention and to execute any other instruments and documents
requisite or desirable in applying for and obtaining patents, trademarks or
copyrights, at Organovo’s expense, with respect thereto in the United States and
in all foreign countries, that may be required by Organovo. The Participant
further agrees to cooperate, while employed and thereafter, to the extent and in
the manner required by Organovo, in the prosecution or defense of any patent or
copyright claims or any litigation, or other proceeding involving any trade
secrets, processes, discoveries or improvements covered by this covenant, but
all necessary expenses thereof shall be paid by Organovo. The Participant agrees
to disclose promptly in writing to Organovo all innovations (including
Inventions) conceived, reduced to practice, created, derived, developed, or made
by the Participant during the term of employment and for three months
thereafter, whether or not the Participant believes such innovations are subject
to this Section 7(b)(vi), to permit a determination by Organovo as to whether or
not the innovations should be the property of Organovo. Any such information
will be received in confidence by Organovo.

(vii) Acknowledgement and Enforcement. The Participant acknowledges and agrees
that: (1) the purpose of the foregoing covenants is to protect the goodwill,
trade secrets and other Confidential Information of Organovo; (2) because of the
nature of the business in which Organovo is engaged and because of the nature of
the Confidential Information to which the Participant has access, Organovo would
suffer irreparable harm and it would be impractical and excessively difficult to
determine the actual damages of Organovo in the event the Participant breached
any of the covenants of this Section 7(b); and (3) remedies at law (such as
monetary damages) for any breach of the Participant’s obligations under this
Section 7(b) would be inadequate. The Participant therefore agrees and consents
that (X) if the Participant commits any breach of a covenant under this Section
7(b) during the applicable period of restriction specified therein, all unpaid
Severance Benefits will be immediately forfeited, and (Y) if the Participant
commits any

 

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breach of a covenant under this Section 7(b) or threatens to commit any such
breach at any time, Organovo shall have the right (in addition to, and not in
lieu of, any other right or that may be available to it) to temporary and
permanent injunctive relief from a court of competent jurisdiction, without
posting any bond or other security and without the necessity of proof of actual
damage.

(viii) Similar Covenants in Other Agreements Unaffected. The Participant may be
or become subject to covenants contained in other agreements (including but not
limited to stock option and restricted stock unit agreements) which are similar
to those contained in this Section 7(b). Further, a breach of the covenants
contained in this Section 7(b) may have implications under the terms of such
other agreements, including but not limited to a forfeiture of equity awards and
long-term cash compensation. The Participant acknowledges the foregoing and
understands that the covenants contained in this Section 7(b) are in addition
to, and not in substitution of, the similar covenants contained in any such
other agreements.

(c) At-Will Employment. Each Participant is employed by Organovo on an “at will”
basis and nothing in this Plan shall give any Participant any right to continue
in the employ of Organovo. A Participant shall have no rights under the Plan if
the Participant’s employment is terminated by Organovo, or any successor, with
Cause or by the Participant without Good Reason, or due to the Participant’s
death or Disability.

(d) Nonduplication; No Impact on Benefits.

Payments to a Participant under the Plan shall be in lieu of any severance or
similar payments that otherwise might be payable under any Company plan,
program, policy or agreement with Organovo that provides Severance Benefits upon
termination of employment.

Benefits payable under the Plan, whether paid in a lump sum or in periodic
payments, will not increase or decrease the benefits otherwise available to a
Participant under any company-sponsored retirement plan, welfare plan or any
other employee benefit plan or program, unless otherwise expressly provided for
in any particular plan or program.

Any Severance Benefits specified under the Plan shall be reduced by the amount
of any payment required by Organovo to the Participant (A) because of
insufficient advance notice of employment loss as may be required by law; or
(B) under applicable law because of the termination of employment.

 

8.

Claims

(a) Initial Claim. Any claims concerning eligibility, participation, benefits or
other aspects of the Plan must be submitted in writing and directed to the
Committee, within thirty (30) days after the communication of the determination
that is the basis of the claim. Within thirty (30) days after receiving a claim,
the Committee will (i) either accept or deny the claim completely or partially
and (ii) notify the Participant of acceptance or denial of the claim. If a claim
is partially or wholly denied, the Committee will provide a written denial to
the Participant no later than ninety (90) days after receipt of the initial
claim request. The written denial shall include specific reasons for the denial,
specific references to the Plan provisions upon which the denial was based, a
description of any additional material or information necessary for the
Participant to perfect the claim, an explanation of why such material is
necessary, and instructions on the Plan’s claim review procedure.

(b)  Appeals. The Participant may submit a written request for review of a
denied claim within thirty (30) days after receipt of such denial. Such written
request must contain an explanation as to why the Participant is seeking a
review, and must be submitted to the Company’s Head of Human Resources. For
purposes of the review, the Participant has the right to (i) submit written
comments, documents, records and other information relating to the claim for
benefits; (ii) request, free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the claim for benefits;
and (iii) a review that takes into account all comments, documents, records, and
other information the Participant submitted relating to the claim, regardless of
whether the information was submitted or considered in the initial decision. A
decision on such review will be rendered in writing by the Board within thirty
(30) days of the Company’s receipt of a request for review. A written notice
affirming the denial of a claim will set forth the specific reasons for the
decision and make specific reference to Plan provisions upon which the decision
or appeal is based. In preparation for filing such a request for review, the
Participant or the Participant’s authorized representative may review pertinent
Plan documents, and as part of the written request for review, may submit issues
and comments concerning the claim. No claim may be brought before or submitted
to a court of law or other governmental entity unless and until the claims
process under this Section 7 has been exhausted.

 

9.

Recoupment

(a) Right of Recoupment.  If, at any time, the Board or the Committee, as the
case may be, determines that any action or omission by the Participant
constituted a violation of the restrictive covenants in Section 7(b) to the
material detriment of Organovo, then the Participant’s participation in the Plan
shall be immediately terminated and the Participant shall repay to Organovo,
upon

 

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notice to the Participant by Organovo, up to 100% of the pre-tax amount paid to
the Participant pursuant to this Plan. The Board or the Committee, as the case
may be, shall determine the date of occurrence of such violation and the
percentage of the pre-tax amount received pursuant to this Plan that must be
repaid to Organovo.

(b) Method of Recoupment. To the extent permitted by applicable law, Organovo
may enforce the recoupment of any or all amounts due under this Section 9 by
withholding future payment of any Severance Benefits, seeking reimbursement of
previously paid Severance Benefits, demanding direct cash payment, reducing any
amount of compensation owed by Organovo to the Participant, and/or such other
means determined by the Board or Committee.

(c) Nonexclusive Remedy. Organovo’s right of recoupment under this Section 98 is
in addition to any remedy available to Organovo with respect to any Participant,
including, but not limited to, the initiation of civil or criminal proceedings
and any right to repayment under the Sarbanes-Oxley Act of 2002, Dodd-Frank Wall
Street Reform and Consumer Protection Act, and any other applicable law.

 

10.

General

(a) Amendment and Termination of the Plan.  The Board or the Committee may amend
or terminate the Plan in any respect (including any change to the Severance
Benefits) only with two years notice to Participants; provided, however, that
(i) any amendment or termination will not be effective if there is a Change in
Control during the two year notice period, and (ii) the Plan cannot be amended
or terminated during the twenty-four (24) month period after a Change in
Control.  A Participant ceasing to be eligible for a benefit under the Plan
before a Change in Control, as described in Section 5, is not an amendment or
termination of the Plan.

(b) Funding. Benefits payable under the Plan will be paid only from the general
assets of Organovo. The Plan does not create any right to, or interest in, any
specific assets of Organovo.

(c) No Mitigation. The Participant shall not be obligated to seek other
employment in mitigation of the amounts payable under any provision of the Plan,
and the obtaining of such other employment shall not effect any reduction of
Organovo’s obligations to pay the Severance Benefits provided under the Plan
(unless in violation of the restrictive covenants specified under Section 7(b)).

(d) Withholding. Organovo may withhold from any payments made under the Plan all
federal, state, local or other taxes required pursuant to any law or
governmental regulation or ruling.

(e) Right to Offset. To the extent permitted by law, Organovo may offset against
any obligation to pay any portion of the severance benefit under the Plan any
outstanding amount of whatever nature that the Participant then owes to Organovo
in the capacity as an employee. However, no amount of “deferred compensation”
(as defined under Treasury Regulation section 1.409A-1(b)(1), after giving
effect to the exemptions in Treasury Regulation sections 1.409A-1(b)(3) through
(b)(12)) that is payable to a Participant under the Plan may be used to offset
any amount that the Participant then owes to Organovo.

(f) Successors. All rights under the Plan are personal to the Participant and
without the prior written consent of the Committee shall not be assignable by
the Participant. The Plan shall inure to the benefit of and be enforceable by
the Participant’s legal representative. The Plan shall inure to the benefit of,
and be binding upon, Organovo and its successors and assigns. Any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of Organovo Holdings
shall be required to assume expressly and agree to perform the obligations set
forth in the Plan in the same manner and to the same extent as Organovo would be
required to do so.

(g) Governing Law. The Plan and all determinations made and actions taken
pursuant to the Plan shall be governed by the substantive laws, but not the
choice of law rules, of the State of Delaware or by United States federal law.

(h) Severability. If any provision of the Plan is declared illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the provision
shall be reformed, if possible, to the extent necessary to render it legal,
valid and enforceable, or otherwise deleted, and the remainder of the terms of
the Plan shall not be affected except to the extent necessary to reform or
delete such illegal, invalid or unenforceable provision.

 

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(i) Notices. Notices and all other communications provided for under the Plan
shall be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States certified mail, return receipt
requested, or by overnight courier, postage prepaid, to Organovo’s corporate
headquarters address, to the attention of the Committee, or to the Participant
at the home address most recently communicated by the Participant to Organovo in
writing.

(j) 409A Compliance.

(i) The Plan is intended to comply with, or otherwise be exempt from, Code
section 409A.  The preceding provision, however, shall not be construed as a
guarantee by Organovo of any particular tax effect to a Participant under the
Plan. Organovo shall not be liable to a Participant for any payment made under
the Plan, at the direction or with the consent of the Participant, which is
determined to result in an additional tax, penalty or interest under Code
section 409A, nor for reporting in good faith any payment made under the Plan as
an amount includible in gross income under Code section 409A.

(ii) “Termination of employment,” or words of similar import, as used in this
Plan means, for purposes of any payments under this Plan that are payments of
deferred compensation subject to Code section 409A, the Participant’s
“separation from service” as defined in Code section 409A.  For purposes of Code
section 409A, the right to a series of installment payments under this Plan
shall be treated as a right to a series of separate payments.

(iii) With respect to any reimbursement of expenses of, or any provision of
in-kind benefits to, a Participant, as specified under this Plan: (1) the
expenses eligible for reimbursement or the amount of in-kind benefits provided
in one taxable year shall not affect the expenses eligible for reimbursement or
the amount of in-kind benefits provided in any other taxable year, except for
any medical reimbursement arrangement providing for the reimbursement of
expenses referred to in Code section 105(b); (2) the reimbursement of an
eligible expense shall be made no later than the end of the year after the year
in which such expense was incurred; and (3) the right to reimbursement or
in-kind benefits shall not be subject to liquidation or exchange for another
benefit.

(iv) If a payment obligation under the Plan arises on account of a Participant’s
termination of employment while a “specified employee” (as defined under Code
section 409A and the regulations thereunder and determined in good faith by the
Committee), any payment of “deferred compensation” (as defined under Treasury
Regulation section 1.409A-1(b)(1), after giving effect to the exemptions in
Treasury Regulation sections 1.409A-1(b)(3) through (b)(12)) shall be made
within  fifteen (15) days after the end of the six-month period beginning on the
date of such termination of employment or, if earlier, within fifteen (15) days
after appointment of the personal representative or executor of the
Participant’s estate following the death of the Participant.

(k) Arbitration. THE COMPANY AND PARTICIPANT AGREE THAT ANY AND ALL DISPUTES
ARISING OUT OF THE TERMS OF THIS PLAN, THEIR INTERPRETATION, AND ANY OF THE
MATTERS HEREIN, SHALL BE SUBJECT TO ARBITRATION IN SAN DIEGO COUNTY, BEFORE
JUDICIAL ARBITRATION & MEDIATION SERVICES (“JAMS”), PURSUANT TO ITS EMPLOYMENT
ARBITRATION RULES & PROCEDURES (“JAMS RULES”).  THE ARBITRATOR MAY GRANT
INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES.  THE ARBITRATOR SHALL ADMINISTER
AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE
CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE
AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY
CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION.  TO THE EXTENT THAT THE JAMS
RULES CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE.  THE
DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE
PARTIES TO THE ARBITRATION.  THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY
ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT
JURISDICTION TO ENFORCE THE ARBITRATION AWARD.  THE PARTIES TO THE ARBITRATION
SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND
EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES;
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO
THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW.  THE PARTIES HEREBY AGREE TO
WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY
A JUDGE OR JURY.  NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT
EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY)
FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF
THEIR DISPUTE RELATING TO THIS PLAN AND THE AGREEMENTS INCORPORATED HEREIN BY
REFERENCE.  SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS
PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE
PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.

 

 

 

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Exhibit A

WAIVER AND RELEASE AGREEMENT

This Waiver and Release Agreement (“Release”) is made by and between _________
(“Participant”) and Organovo Holdings, Inc. and its Affiliates (collectively,
the “Company”) in consideration of severance pay and benefits provided to the
Participant pursuant to the Organovo Holdings, Inc. Severance and Change in
Control Plan (the “Plan”).  The Participant and the Company are collectively
referred to as the “Parties” and are individually referred to as a “Party”.  All
capitalized terms used in this Release not otherwise defined herein shall have
the meanings set forth in Section 1 of the Plan, except as otherwise
specified.  

RECITALS

WHEREAS, Participant was employed by the Company as a Tier ___ Employee under
the Plan;

WHEREAS, Participant’s employment with the Company ended effective
___________________ (the “Separation Date”); and

WHEREAS, pursuant to the terms of the Plan, the Parties wish to resolve any and
all disputes, claims, complaints, grievances, charges, actions, petitions, and
demands that the Participant may have against the Company and any of the
Releasees as defined below, including, but not limited to, any and all claims
arising out of or in any way related to Participant’s employment with or
separation from the Company;

NOW, THEREFORE, in consideration of the mutual promises made herein and in the
Plan, the Company and Participant hereby agree as follows:

COVENANTS

1. Severance.

a. Salary.  The Company agrees to pay Participant the equivalent of __ months of
base salary, or ___________ dollars ($_____), in a lump sum payment within the
first regular payroll period following the expiration of any period during which
the Participant may revoke this Release.

b. Target Bonus.  The Company agrees to pay Participant a prorated bonus of
_____________ dollars ($____), in a lump sum payment to be made [at the time at
which bonuses are paid to actively employed employees for fiscal _____ or within
the first regular payroll period following the expiration of any period during
which the Participant may revoke this Release].  

c. Equity Awards.  [In the event that the Participant’s termination satisfies
the conditions set forth in Section 6(b) the Plan, all outstanding equity awards
granted by the Company to such Participant shall become fully vested upon such
Change in Control, and to the extent such equity award is a stock option or
stock appreciation right which is not cashed out upon the Change in Control,
shall be exercisable for a period of one year following the effective date of
such termination or until the option expiration date, if earlier.]  [In the
event that the Participant’s termination satisfies the conditions set forth in
Section 6(c) the Plan, all outstanding equity awards granted by the Company to
such Participant shall become fully vested, and to the extent such equity award
is a stock option or stock appreciation right which is not cashed out upon the
Change in Control, shall be exercisable for a period of one year following the
effective date of such termination or until the option expiration date, if
earlier.]

d. Health Benefit Continuation.  The Company shall provide COBRA coverage for
Participant and his/her eligible dependents for a period of _____ (__) months,
provided Participant timely elects and pays for continuation coverage pursuant
to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), within the time period prescribed pursuant to COBRA.

e. Outplacement Assistance.  The Company agrees to pay the cost of providing
outplacement services for Participant for a period of _________ (__) months
following the Separation Date.

2. Other Benefits.  Other than as provided in Section 1 above, Participant’s
participation in all benefits and incidents of employment, including, but not
limited to, vesting in stock options, and the accrual of bonuses, vacation, and
paid time off, will cease as of the Separation Date.

 

 

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3. Payment of Salary and Receipt of All Benefits.  Participant acknowledges and
represents that, other than the consideration set forth in this Release and the
Plan, the Company has paid or provided all salary, wages, bonuses, accrued
vacation/paid time off, premiums, leaves, housing allowances, relocation costs,
interest, severance, outplacement costs, fees, reimbursable expenses,
commissions, stock, stock options, vesting, and any and all other benefits and
compensation due to Participant.  

4. Release of Claims.  Participant agrees that the foregoing consideration
represents settlement in full of all outstanding obligations owed to Participant
by the Company and its current and former officers, directors, employees,
agents, investors, attorneys, shareholders, administrators, affiliates, benefit
plans, plan administrators, insurers, trustees, divisions, and subsidiaries, and
predecessor and successor corporations and assigns (collectively, the
“Releasees”).  Participant, on his/her own behalf and on behalf of his/her
respective heirs, family members, executors, agents, and assigns, hereby and
forever releases the Releasees from, and agrees not to sue concerning, or in any
manner to institute, prosecute, or pursue, any claim, complaint, charge, duty,
obligation, demand, or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, that Participant
may possess against any of the Releasees arising from any omissions, acts,
facts, or damages that have occurred up until and including the Effective Date
of this Release, including, without limitation:

a. any and all claims relating to or arising from Participant’s employment
relationship with the Company and the termination of that relationship,
including any and all claims relating to the Plan;

b. any and all claims relating to, or arising from, Participant’s right to
purchase, actual purchase or receipt of shares of stock of the Company,
including, without limitation, any claims for fraud, misrepresentation, breach
of fiduciary duty, breach of duty under applicable state corporate law, and
securities fraud under any state or federal law, with the exception of any
rights or obligations contained in any equity award agreement incorporated
herein, if applicable;

c. any and all claims for wrongful discharge of employment; termination in
violation of public policy; discrimination; harassment; retaliation; breach of
contract, both express and implied; breach of covenant of good faith and fair
dealing, both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; fraud; negligent or intentional
misrepresentation; negligent or intentional interference with contract or
prospective economic advantage; unfair business practices; defamation; libel;
slander; negligence; personal injury; assault; battery; invasion of privacy;
false imprisonment; conversion; and disability benefits;

d. any and all claims for violation of any federal, state, or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964; the
Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with
Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the
Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the
Older Workers Benefit Protection Act; the Employee Retirement Income Security
Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family
and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the Immigration Control
and Reform Act; the California Family Rights Act; the California Labor Code; the
California Workers’ Compensation Act; and the California Fair Employment and
Housing Act;

e. any and all claims for violation of the federal or any state constitution;

f. any and all claims arising out of any other laws and regulations relating to
employment or employment discrimination;

g. any claim for any loss, cost, damage, or expense arising out of any dispute
over the nonwithholding or other tax treatment of any of the proceeds received
by Participant as a result of this Release; and

h. any and all claims for attorneys’ fees and costs.

Participant agrees that the release set forth in this section shall be and
remain in effect in all respects as a complete general release as to the matters
released.  This release does not extend to any obligations incurred under this
Release.  This release does not release claims that cannot be released as a
matter of law, including, but not limited to, Participant’s right to file a
charge with or participate in a charge by the Equal Employment Opportunity
Commission, or any other local, state, or federal administrative body or
government agency that is authorized to enforce or administer laws related to
employment, against the Company (with the understanding that any such filing or
participation does not give Participant the right to recover any monetary
damages against the Company; Participant’s release of claims herein bars
Participant from recovering such monetary relief from the Company.  
Notwithstanding the foregoing, Participant acknowledges that any and all
disputed wage claims that are released herein shall be subject to binding
arbitration, except as required by applicable law.  Participant represents that
he/she has made no assignment or transfer of any right, claim, complaint,
charge, duty, obligation, demand, cause of action, or other matter waived or
released by this Section.

 

 

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5. Acknowledgment of Waiver of Claims under ADEA.  Participant acknowledges that
he/she is waiving and releasing any rights he/she may have under the Age
Discrimination in Employment Act of 1967 ("ADEA"), and that this waiver and
release is knowing and voluntary.  Participant agrees that this waiver and
release does not apply to any rights or claims that may arise under the ADEA
after the Effective Date of this Release.  Participant acknowledges that the
consideration given for this waiver and release is in addition to anything of
value to which Participant was already entitled.  Participant further
acknowledges that he/she has been advised by this writing that: (a) he/she
should consult with an attorney prior to executing this Release; (b) he/she has
twenty-one (21) days within which to consider this Release; (c) he/she has seven
(7) days following his/her execution of this Release to revoke this Release; (d)
this Release shall not be effective until after the revocation period has
expired; and (e) nothing in this Release prevents or precludes Participant from
challenging or seeking a determination in good faith of the validity of this
waiver under the ADEA, nor does it impose any condition precedent, penalties, or
costs for doing so, unless specifically authorized by federal law.  In the event
Participant signs this Release and returns it to the Company in less than the
21-day period identified above, Participant hereby acknowledges that he/she has
freely and voluntarily chosen to waive the time period allotted for considering
this Release.

6. California Civil Code Section 1542.  Participant acknowledges that he/she has
been advised to consult with legal counsel and is familiar with the provisions
of California Civil Code Section 1542, a statute that otherwise prohibits the
release of unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

Participant, being aware of said code section, agrees to expressly waive any
rights he/she may have thereunder, as well as under any other statute or common
law principles of similar effect.

7. No Pending or Future Lawsuits.  Participant represents that he/she has no
lawsuits, claims, or actions pending in his/her name, or on behalf of any other
person or entity, against the Company or any of the other
Releasees.  Participant also not to bring any claims on his/her own behalf or on
behalf of any other person or entity against the Company or any of the other
Releasees.

8. Confidentiality.  Participant agrees to maintain in complete confidence the
existence of this Release, the contents and terms of this Release, and the
consideration for this Release (hereinafter collectively referred to as
“Separation Information”).  Except as required by law, Participant may disclose
Separation Information only to his/her immediate family members, the arbitrator
or Court in any proceedings to enforce the terms of this Release, Participant’s
attorney(s), and Participant’s accountant and any professional tax advisor to
the extent that they need to know the Separation Information in order to provide
advice on tax treatment or to prepare tax returns, and must prevent disclosure
of any Separation Information to all other third parties.  Participant agrees
that he/she will not publicize, directly or indirectly, any Separation
Information.

9. Trade Secrets and Confidential Information/Company Property.  Participant
agrees at all times hereafter to hold in the strictest confidence, and not to
use or disclose to any person or entity, any Confidential Information of the
Company.  Participant understands that “Confidential Information” means any
Company proprietary information, technical data, trade secrets or know-how,
including, but not limited to, research, product plans, products, services,
customer lists and customers (including, but not limited to, customers of the
Company on whom Participant has called or with whom he/she became acquainted
during the term of his/her employment), markets, software, developments,
inventions, processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing, finances, or other business
information disclosed to Participant by the Company either directly or
indirectly, in writing, orally, or by drawings or observation of parts or
equipment.  Participant further understands that Confidential Information does
not include any of the foregoing items that have become publicly known and made
generally available through no wrongful act of Participant’s or of others who
were under confidentiality obligations as to the item or items involved or
improvements or new versions thereof.  Participant hereby grants consent to
notification by the Company to any new employer about Participant’s obligations
under this paragraph.  Participant represents that he/she has not to date
misused or disclosed Confidential Information to any unauthorized party. 
Participant’s signature below constitutes his/her certification under penalty of
perjury that he/she has returned all documents and other items provided to
Participant by the Company, developed or obtained by Participant in connection
with his/her employment with the Company, or otherwise belonging to the
Company.  

10. No Cooperation.  Participant agrees that he/she will not knowingly
encourage, counsel, or assist any attorneys or their clients in the presentation
or prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against any of the Releasees, unless under a
subpoena or other court order to do so or as related directly to the ADEA waiver
in this Release.  Participant agrees both to immediately notify the Company upon
receipt of any such subpoena or court order, and to furnish, within three (3)
business days of its receipt, a copy of such subpoena or other court order.  If
approached by anyone for counsel or assistance

 

 

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in the presentation or prosecution of any disputes, differences, grievances,
claims, charges, or complaints against any of the Releasees, Participant shall
state no more than that he/she cannot provide counsel or assistance.

11. Restrictive Covenants.  By executing this Release, Participant agrees to
abide by each of the restrictive covenants set forth in Section 7(b) of the Plan
as consideration for the Severance provided for in the Plan (as summarized in
Section 1 of this Release), and acknowledges that the provisions and covenants
contained in Section 7(b) of the Plan are reasonable in geographic and temporal
scope and do not impose a greater restriction or restraint than is necessary to
protect the goodwill and other legitimate business interests of the Company, and
do not adversely affect Participant’s ability to earn a living in any capacity
that does not violate the covenants contained in Section 7(b) of the Plan.  

12. Breach.  In addition to the rights provided in the Plan, Participant
acknowledges and agrees that any material breach of this Release, unless such
breach constitutes a legal action by Participant challenging or seeking a
determination in good faith of the validity of the waiver herein under the
ADEA,  or of any provision of the Confidentiality Agreement shall entitle the
Company immediately to recover and/or cease providing the consideration provided
to Participant under this Release and the Plan and to obtain damages, except as
provided by law.

13. No Admission of Liability.  Participant understands and acknowledges that
this Release constitutes a compromise and settlement of any and all actual or
potential disputed claims by Participant.  No action taken by the Company
hereto, either previously or in connection with this Release, shall be deemed or
construed to be (a) an admission of the truth or falsity of any actual or
potential claims or (b) an acknowledgment or admission by the Company of any
fault or liability whatsoever to Participant or to any third party.

14. Costs.  The Parties shall each bear their own costs, attorneys’ fees, and
other fees incurred in connection with the preparation of this Release.

15. ARBITRATION.  THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE
TERMS OF THIS RELEASE, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN
RELEASED, SHALL BE SUBJECT TO ARBITRATION IN SAN DIEGO COUNTY, BEFORE JUDICIAL
ARBITRATION & MEDIATION SERVICES (“JAMS”), PURSUANT TO ITS EMPLOYMENT
ARBITRATION RULES & PROCEDURES (“JAMS RULES”).  THE ARBITRATOR MAY GRANT
INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES.  THE ARBITRATOR SHALL ADMINISTER
AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE
CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE
AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY
CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION.  TO THE EXTENT THAT THE JAMS
RULES CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE.  THE
DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE
PARTIES TO THE ARBITRATION.  THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY
ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT
JURISDICTION TO ENFORCE THE ARBITRATION AWARD.  THE PARTIES TO THE ARBITRATION
SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND
EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES;
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO
THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW.  THE PARTIES HEREBY AGREE TO
WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY
A JUDGE OR JURY.  NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT
EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL REMEDY)
FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER OF
THEIR DISPUTE RELATING TO THIS RELEASE AND THE AGREEMENTS INCORPORATED HEREIN BY
REFERENCE.  SHOULD ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS
PARAGRAPH CONFLICT WITH ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE
PARTIES AGREE THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.

16. Authority.  The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who
may claim through it to the terms and conditions of this Release.  Participant
represents and warrants that he/she has the capacity to act on his/her own
behalf and on behalf of all who might claim through him/her to bind them to the
terms and conditions of this Release.  Each Party warrants and represents that
there are no liens or claims of lien or assignments in law or equity or
otherwise of or against any of the claims or causes of action released herein.

17. No Representations.  Participant represents that he/she has had an
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Release.  Participant has not
relied upon any representations or statements made by the Company that are not
specifically set forth in this Release.

 

 

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18. Severability.  In the event that any provision or any portion of any
provision hereof or any surviving agreement made a part hereof becomes or is
declared by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Release shall continue in full force and effect
without said provision or portion of provision.

19. Attorneys’ Fees.  Except with regard to a legal action challenging or
seeking a determination in good faith of the validity of the waiver herein under
the ADEA, in the event that either Party brings an action to enforce or effect
its rights under this Release, the prevailing Party shall be entitled to recover
its costs and expenses, including the costs of mediation, arbitration,
litigation, court fees, and reasonable attorneys’ fees incurred in connection
with such an action.

20. Entire Agreement.  This Release, together with the Plan, represents the
entire agreement and understanding between the Company and Participant
concerning the subject matter of this Release and Participant’s employment with
and separation from the Company and the events leading thereto and associated
therewith, and supersedes and replaces any and all prior agreements and
understandings concerning the subject matter of this Release and Participant’s
relationship with the Company, with the exception of the terms of any equity
awards held by Participant (as modified by the Plan or this Release), if
applicable.

21. No Oral Modification.  This Release may only be amended in a writing signed
by Participant and the Company’s Chief Executive Officer.

22. Governing Law.  This Release shall be governed by the laws of the State of
California, without regard for choice-of-law provisions.  Participant consents
to personal and exclusive jurisdiction and venue in the State of California.

23. Effective Date.  Participant understands that this Release shall be null and
void if not executed by him/her within twenty one (21) days.   Each Party has
seven (7) days after that Party signs this Release to revoke it.  This Release
will become effective on the eighth (8th) day after Participant signed this
Release, so long as it has been signed by the Parties and has not been revoked
by either Party before that date (the “Effective Date”).

24. Counterparts.  This Release may be executed in counterparts and by
facsimile, and each counterpart and facsimile shall have the same force and
effect as an original and shall constitute an effective, binding agreement on
the part of each of the undersigned.

25. Breach by Participant.  Participant specifically agrees that the Company’s
payments to Participant under this Release are made in return for Participant’s
obligations set forth in this Release.  Participant further agrees that if he or
she breaches any of the obligations set forth in this Release, such a breach
would cause harm to Company and its business, for which the Company may recover
damages, including restitution of any and all payments made under this Release.

26. Voluntary Execution of Release.  Participant understands and agrees that
he/she executed this Release voluntarily, without any duress or undue influence
on the part or behalf of the Company or any third party, with the full intent of
releasing all of his/her claims against the Company and any of the other
Releasees.  Participant acknowledges that:

(a) he/she has read this Release;

(b) he/she has been represented in the execution of this Release by legal
counsel of his/her own choice or has elected not to retain legal counsel;

(c) he/she understands the terms and consequences of this Release and of the
releases it contains; and

(d) he/she is fully aware of the legal and binding effect of this Release.

 

 

 

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IN WITNESS WHEREOF, the Parties have executed this Release on the respective
dates set forth below.

 

 

 

________, an individual

 

 

 

 

Dated:  ________________, 20__

 

 

 

 

 

 

 

 

Organovo Holdings, Inc.

 

 

 

 

Dated:  ________________, 20__

 

By