Exhibit 10.1

 

amended & restated

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS AMENDED & RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), is
made as of the 1st day of January, 2020 (the “Effective Date”), by and between
Ocugen, Inc., a Delaware corporation (the “Company”), and Shankar Musunuri, an
individual (“Employee”).

 

WHEREAS, the Company and Employee are parties to an Executive Employment
Agreement dated January 1, 2018, as amended (the “Existing Agreement”).

 

WHEREAS, the Company and Employee now desire to amend, restate and supersede the
Existing Agreement as set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the facts, mutual promises and covenants
contained herein and intending to be legally bound hereby, the Company and
Employee agree as follows:

 

1.            Definitions. As used herein, the following terms shall have the
meanings set forth below unless the contexts otherwise requires:

 

“Affiliates” means, with respect to a person, all other persons controlling,
controlled by or under common control with the first person; the term “control,”
and correlative terms, means the power, whether by contract, equity ownership or
otherwise, to direct the policies or management of a person; and “person” means
an individual, partnership, corporation, limited liability company, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

 

“Base Compensation” shall mean the annual rate of compensation set forth in
Section 4.1, as such amount may be adjusted from time to time.

 

“Board” shall mean the Company’s Board of Directors.

 

“Cause” shall mean the occurrence of any one or more of the events set forth
below in clauses (a) through (d), which, in the case of the event or events set
forth below in clause (a) is not cured by Employee within the time periods set
forth therein:

 

(a)           failure or refusal by Employee to substantially perform a material
portion of the duties of his employment or to comply with the written rules and
policies of the Company which failure continues uncured thirty (30) days after
written notice to Employee setting forth in reasonable detail the nature of such
failure or refusal (or such longer period as is necessary to cure such event so
long as Employee is diligently pursuing such cure and provided such additional
period is approved by the Board);

 

 

 

 

(b)           Employee’s repeatedly engaging in willful and serious misconduct
in connection with his employment that has caused or would reasonably be
expected to result in material injury to the Company;

 

(c)           engagement by Employee in fraudulent conduct that has caused or
would reasonably be expected to result in material injury to the Company; or

 

(d)           Employee’s conviction of, or plea of no contest to, a felony or
other crime the circumstances of which are substantially related to the
Employee’s position.

 

“Change of Control” shall mean (i) the closing of the sale, transfer or other
disposition of all or substantially all of the Company’s assets, (ii) the
acquisition by any person or group of persons in any transaction or series of
related transactions of direct or indirect beneficial ownership (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934), other than the
Current Holders of Securities of the Company, of the power, directly or
indirectly, to vote or direct the voting of securities having more than 50% of
the ordinary voting power for the election of directors of the Company, (iii)
the consummation of the merger or consolidation of the Company with or into
another entity (except a merger or consolidation in which the holders of capital
stock of the Company immediately prior to such merger or consolidation continue
to hold not less than fifty percent (50%) of the voting power of the capital
stock of the Company or the surviving or acquiring entity immediately following
such merger or consolidation), or (iv) a liquidation, dissolution or winding up
of the Company; provided, however, that a transaction shall not constitute a
Change of Control if the Change of Control is the result of an equity or debt
financing, or if its sole purpose is to change the state of the Company’s
incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company’s securities
immediately prior to such transaction.

 

“Current Holders of Securities of the Company” shall mean the current holders of
issued and outstanding “Securities” of the Company, their “Affiliates” (as such
terms are defined herein), and their respective employees, officers, directors,
blood or legal relatives, guardians, legal representatives, and trusts for the
primary benefit of any of such persons.

 

“Disability” shall mean Employee’s inability, for a period of six (6)
consecutive months, or a cumulative period of one hundred eighty (180) business
days out of a period of twelve (12) consecutive months, to perform the essential
duties of Employee’s position, even after taking into account any reasonable
accommodation required by law, due to a mental or physical impairment. The
determination of whether Employee is suffering from a Disability shall be made
either (a) by an independent physician, mutually chosen by Employee and the
Company; or (b) because Employee qualifies as disabled for purposes of the
Company’s long term insurance disability plan, if applicable.

 

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“Good Reason” shall mean the occurrence of one or more of the events set forth
in clauses (a) through (e) below without the prior written consent of Employee,
provided that (i) Employee delivers written notice to the Company of Employee’s
intention to resign from employment due to one or more of such events, which
notice specifies in reasonable detail the circumstances claimed to provide the
basis for such resignation, (ii) such event or events are not cured by the
Company within thirty (30) days following delivery of such written notice and
(iii) if not cured by the Company, Employee resigns his employment within
fifteen (15) days following the Company’s cure period:

 

(a)           a reduction in Employee’s annual rate of Base Compensation unless
such a proportionate reduction is made across substantially all executives or
employees of the Company;

 

(b)           a termination or material reduction of a material benefit under
any Company benefit plans, programs or arrangements in which the Employee
participates unless such termination or reduction is made across all executives
or employees of the Company;

 

(c)           a material reduction in Employee’s job title, powers or authority;

 

(d)           the Company’s material failure to comply with the terms of this
Agreement or any stock option or similar agreement with Employee then in effect;

 

(e)           the requirement by the Company that Employee relocate or the
transfer of Employee’s principal office to a location more than 50 miles from
Employee’s personal residence in Chester Springs, PA (except that the
requirement to travel in Section 2.3 shall not trigger this subsection (e)).

 

“Proceeding” shall have the meaning set forth in Section 8 hereof.

 

“Severance Period” shall mean a period of two (2) years immediately following
the effective date of termination of Employee’s employment hereunder if such
termination is by the Company without Cause or by Employee for Good Reason,
including without limitation after a Change of Control.

 

“Securities” means any and all securities as such term is defined in Section 2
of the Securities Act of 1933, as amended, including, without limitation, all
common stock, preferred stock, convertible promissory notes, subordinated debt
instruments, and other securities issued by the Company.

 

“Term” shall have the meaning set forth in Section 3 hereof

 

2.            Employment and Duties.

 

2.1.          As of the Effective Date, Company hereby employs Employee and
Employee hereby accepts continuing appointment as the Chairman (“Chairman”) of
the Board and the Chief Executive Officer (“CEO”) of the Company. Employee shall
be responsible for all duties and entitled to all authority customarily assigned
to the position of Chairman and CEO, as well as those other duties and such
other authority as specified by the Board.

 

2.2.          Employee shall render such services as are necessary and desirable
to protect and advance the best interests of the Company, acting, in all
instances, under the supervision of the Board and in accordance with the
policies set by the Company.

 

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2.3.          So long as Employee shall remain an employee of the Company,
except as provided below, Employee’s entire working time, energy, skill and
efforts shall be devoted to the performance of Employee’s duties hereunder in a
manner that will faithfully and diligently further the business and interests of
the Company; provided, however, that Employee may (i) serve on corporate, civic
or charitable boards or committees; (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions; (iii) manage personal passive
investments, so long as the foregoing activities, in the aggregate, do not
materially interfere with the performance of Employee’s duties to the Company in
accordance with this Agreement; or (iv) undertake such other endeavors as may be
consented to by the Board. Employee will be based out of and shall work from a
Malvern, PA office provided by the Company or other mutually agreeable office.
Employee may be required to travel for up to 50% of Employee’s working time. The
Company acknowledges and agrees that notwithstanding this Section 2.3, Employee
may continue to serve as a member of the Board of Directors of Pharm Ops, Inc.
and as a member of the Board of Directors of Mainline Biosciences LLC.

 

3.            Term. Employee’s employment under this Agreement shall commence on
the Effective Date and shall continue until such employment is terminated
pursuant to Section 6 (the “Term”).

 

4.            Compensation and Benefits.

 

4.1.          For all of the services rendered by Employee to the Company,
Employee shall receive base compensation at the gross annual rate (without
regard to authorized tax or other legally required deductions and withholdings)
of $500,000 payable in installments in accordance with the Company’s regular
payroll practices in effect from time to time. The Base Compensation shall be
reviewed annually by the Compensation Committee of the Board (the “Compensation
Committee”) and may be adjusted as the Compensation Committee shall determine in
its sole discretion.

 

4.2.          In the sole discretion of the Compensation Committee and within
the guidelines set by the Compensation Committee for the Executive Management
Team, the Company may pay to Employee an annual bonus of up to 50% of Employee’s
Base Compensation (the “Target Bonus”), based upon performance criteria set for
Employee by the Compensation Committee and certain other factors, including the
Company’s performance, financial stability, availability of cash, industry
benchmarks and standards and market conditions. Any annual bonus so awarded
shall be payable by February 28th of each year for the Employee’s performance in
the previous year (the “Measuring Year”). To be eligible for an annual bonus,
the Employee must be employed on December 31st of the Measuring Year.

 

4.3.          The Company shall obtain and maintain a Directors and Officers
liability insurance policy covering the Executive on commercially reasonable
terms, and the amount of coverage shall be reasonable in relation to the
Executive’s position and provide Employee with Directors and Officers insurance
coverage consistent with similar stage companies.

 

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5.            Fringe Benefits. Employee shall be entitled to the benefits set
forth below for so long as Employee’s employment with the Company continues:

 

5.1.         The Company will reimburse Employee for all reasonable and
necessary expenses incurred by Employee on behalf or for the benefit of the
Company upon receipt of documentation therefor in accordance with the Company’s
regular reimbursement procedures and practices in effect from time to time. The
Company from time to time may require prior approval for individual expense
items in excess of pre-established aggregate amounts for a fixed period or in
excess of pre-established amounts for any type of expenditure during any fixed
period.

 

5.2.          Upon Employee’s achieving the eligibility requirements therefor,
if any, Employee will be eligible to participate in all applicable and
established Company benefit plans, programs and arrangements that may exist from
time to time (including, without limitation, pension, profit sharing, 401(k)
plans, and medical and life insurance programs) on the same terms as apply
generally to other similarly situated employees of the Company from time to
time. Employee shall be entitled to vacation, sick and other personal time off
(PTO) in accordance with the Company’s applicable employee handbook or policies.

 

6.            Termination; Payments to Employee.

 

6.1.           If Employee dies or suffers a Disability during the Term,
Employee’s employment with the Company shall terminate as of the date of death
or Disability.

 

6.2.           Subject to Sections 6.4 and 6.5 below, either Employee or the
Company may terminate this Agreement and Employee’s employment hereunder
immediately upon written notice to the other party.

 

6.3.           If Employee’s employment terminates for any reason, Employee (or
his estate in the event of Employee’s death) shall be entitled to receive a lump
sum cash payment equal to the sum of the following: (i) payment of accrued but
unpaid Base Compensation up to the date of termination, and any earned but
unused paid vacation through the date of termination, if any, (ii) any annual
bonus, earned but unpaid for the previous calendar year, if applicable, and
(iii) unreimbursed business expenses covered by Section 5.1 hereof.

 

6.4.           In addition to the amounts to be paid to Employee in accordance
with the provisions of Section 6.3 above, and except as otherwise provided in
Section 6.5, if Employee’s employment is terminated (i) by the Company without
Cause or (ii) by Employee for Good Reason, then subject to Section 6.6, Employee
shall be entitled to receive the following (collectively, (A) and (B), the
“Severance Payment”): (A) for the duration of the Severance Period, Employee’s
then current Base Compensation minus any applicable taxes and other
withholdings, payable in accordance with the Company’s standard payroll
practices; and (B) from the commencement of the Severance Period until the
earlier of the expiration of the Severance Period, expiration of COBRA
eligibility, or such date as Employee may be eligible for health insurance
coverage under another employer’s or a spouse’s employer’s health plan, the
Company will pay the Employee’s COBRA premium for any applicable health or
dental insurance, if he is eligible to and does elect COBRA continuation
coverage.

 

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6.5.          If Employee’s employment is terminated (i) by the Company without
Cause or (ii) by Employee for Good Reason, in either case within three (3)
months prior to or within twelve (12) months after a Change of Control, Employee
shall be entitled to receive the following (collectively, (A), (B), (C) and (D)
the “Change of Control Severance Payment”), in lieu of the Severance Payment
described in Section 6.4 and in addition to the amounts to be paid to Employee
in accordance with the provisions of Section 6.3 above: (A) for the duration of
the Severance Period, Employee’s then current Base Compensation minus any
applicable taxes, and other withholdings, payable in accordance with the
Company’s standard payroll practices; (B) from the commencement of the Severance
Period until the earlier of the expiration of the Severance Period, expiration
of COBRA eligibility or such date as Employee, may be eligible for health
insurance coverage under another employer’s or a spouse’s employer’s health
plan, the Company will pay the Employee’s COBRA premium for any applicable
health or dental insurance, if he is eligible to elect COBRA continuation
coverage; (C) 200% of Employee’s then-current Target Bonus payable in a lump
sum; and (D) all unvested restricted stock, stock options and other equity
incentives awarded to the Employee by the Company will become immediately and
automatically fully vested and exercisable (as applicable).

 

6.6.         Employee shall not be entitled to receive the Severance Payment or
Change of Control Severance Payment unless and until Employee executes, and does
not revoke as permitted by law, a release in a form reasonably acceptable to the
Company that unconditionally releases, waives, and fully and forever discharges
the Company and its past and current shareholders, directors, officers,
employees, and agents from and against any and all claims, liabilities,
obligations, covenants, rights, demands and damages of any nature whatsoever,
whether known or unknown, anticipated or unanticipated, including without
limitation, any claims relating to or arising out of Employee’s employment with
the Company, claims arising under the Age Discrimination in Employment Act of
1967, as amended, Title VII of the Civil Rights Act of 1964, as amended, or the
Civil Rights Act of 1991, or claims arising under the applicable state fair
employment laws, but excluding any rights of Employee under any remaining stock
option agreements (if any) or other agreements relating to equity in the Company
and Employee’s right to indemnification from the Company in respect of his
services as a director, officer or employee of the Company or any of its
Affiliates. The release shall also contain customary non-disparagement covenants
by Employee. Employee’s right to receive the Severance Payment or Change of
Control Severance Payment is conditioned upon Employee’s performance of the
obligations and covenants contained in this Employment Agreement and any other
agreement between Employee and the Company (including without limitation the
Non-Competition Agreement and the Non-Disclosure and Business Ideas Agreement,
each as defined below). In the event of any material breach of any such
obligations during or after payment of the Severance Payment or Change of
Control Severance Payment, the Company may cease to make any remaining payments.

 

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6.7.          Notwithstanding anything in this Agreement to the contrary, all
payments to be made upon a termination of employment under this Agreement will
only be made upon a “separation from service” within the meaning of Section 409A
of the Internal Revenue Code of 1986 (the “Code”). To the maximum extent
permitted under Section 409A of the Code and its corresponding regulations, the
cash severance benefits payable under this Agreement are intended to meet the
requirements of the short-term deferral exemption under Section 409A of the Code
and the “separation pay exception” under Treas. Reg. §1.409A-1(b)(9)(iii). For
purposes of the application of Treas. Reg. § 1.409A-1(b)(4)(or any successor
provision), each payment in a series of payments to Employee will be deemed a
separate payment. In addition, to the extent compliance with the requirements of
Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid
the application of an additional tax under Section 409A of the Code to payments
due to Employee upon or following his “separation from service”, then
notwithstanding any other provision of this Agreement (or any otherwise
applicable plan, policy, agreement or arrangement), any such payments that are
otherwise due within six months following the Employee’s “separation from
service” will be deferred without interest and paid to Employee in a lump sum
immediately following such six month period. This paragraph should not be
construed to prevent the application of Treas. Reg. § 1.409A-1(b)(9)(iii) (or
any successor provision) to amounts payable hereunder. For purposes of the
application of Section 409A of the Code, each payment in a series of payments
will be deemed a separate payment.

 

7.            Noncompetition; Nonsolicitation; Confidential Information.

 

7.1.          Employee acknowledges and agrees that Employee is bound by the
Employee Non-Competition Agreement dated as of August 29, 2017 (the
“Non-Competition Agreement”), which shall continue in full force and effect.

 

7.2.          Employee acknowledges and agrees that Employee is bound by the
Employee Non-Disclosure and Business Ideas Agreement dated as of August 29, 2017
(the “Non-Disclosure and Business Ideas Agreement”), which shall continue in
full force and effect.

 

8.             Indemnification. Subject to the Company’s Articles of
Incorporation and By-laws, the Company shall indemnify Employee to the fullest
extent permitted by law against all costs, expenses, liabilities and losses
(including, without limitation, attorneys’ fees, judgments, fines, penalties,
and amounts paid in settlement) reasonably incurred by Employee in connection
with any “Proceeding” (as defined herein). For the purposes of this Section 8, a
“Proceeding” shall mean any action, suit or proceeding, whether civil, criminal,
administrative or investigative, in which Employee is made, or is threatened to
be made, a party to, or a witness in, such action, suit or proceeding by reason
of the fact that he is or was an officer, director or employee of the Company or
is or was serving as an officer, director, member, employee, trustee or agent of
any other entity at the request of the Company.

 

9.            Golden Parachute Tax Provisions.

 

9.1          In the event that the Company or any of their Affiliates undergoes
a Change of Control prior to the time that it (or any Affiliate that would be
treated, together with the Company, as a single corporation under Section 280G
of the Code and the regulations thereunder) has stock that is readily tradeable
on an established securities market (within the meaning of the Section 280G of
the Code and the regulations thereunder), if the payments or benefits provided
under this Agreement, either alone or together with other payments or benefits
which Employee receives or is entitled to receive from the Company or any of its
Affiliates, would constitute an “excess parachute payment” within the meaning of
Section 280G of the Code, the following provisions shall apply:

 

9.1.1        The Company or any of applicable Affiliates will cooperate in good
faith with Employee such that any such payments or benefits will not be deemed
an “excess parachute payment” within the meaning of Section 280G of the Code.

 

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9.1.2        In the event that any payments or benefits (whether payable
pursuant to this Agreement or otherwise) to Employee could be exempt from
Section 280G of the Code if the shareholder approval requirements under Section
280G(b)(5) of the Code and the regulations thereunder were met, such payments
will be conditioned on shareholder approval in accordance with Section
280G(b)(5)(B) of the Code and regulations thereunder and the Company or any of
its applicable Affiliates agrees to use best efforts to seek to obtain such
shareholder approval. The actions of the Company or any of its applicable
Affiliates pursuant to this provision are not intended to bind, nor shall be
construed as binding, the shareholders of the Company or any of its applicable
Affiliates.

 

9.2          In the event that the Company or any of its applicable Affiliates
undergoes a Change of Control at such time that it (or any Affiliate that would
be treated, together with the Company, as a single corporation under Section
280G of the Code and the regulations thereunder) has stock that is readily
tradeable on an established securities market (within the meaning of the Section
280G of the Code and the regulations thereunder), if the payments or benefits
provided under this Agreement, either alone or together with other payments or
benefits which Employee receives or is entitled to receive from the Company or
any of its applicable Affiliates, would constitute an “excess parachute payment”
within the meaning of Section 280G of the Code, Employee shall be entitled to
receive (i) an amount limited so that no portion thereof shall fail to be tax
deductible under Section 280G of the Code or subject to an excise tax under
Section 4999 of the Code (the “Limited Amount”), or (ii) if the amount otherwise
payable hereunder together with other payments or benefits which Employee
receives or is entitled to receive from the Company or any of its applicable
Affiliates (without regard to clause (i)) reduced by all taxes applicable
thereto (including, for the avoidance of doubt, the excise tax imposed by
Section 4999 of the Code) would be greater than the Limited Amount reduced by
all taxes applicable thereto, the amount otherwise payable hereunder together
with other payments or benefits which Employee receives or is entitled to
receive from the Company or any of its applicable Affiliates.

 

9.3          In the event that any payments under this Agreement or otherwise
are required to be reduced as described in this Section 9, the adjustment will
be made, first, by reducing the cash severance, if any, due to Employee pursuant
to Section 6; second, if additional reductions are necessary, by reducing the
payments due to Employee under Section 6.5(C) (Target Bonus) and third, if
additional reductions are still necessary, by eliminating the accelerated
vesting of equity-based awards, starting with those awards for which the amount
required to be taken into account under the Section 280G of the Code rules is
the greatest; provided, that in all events, such reductions shall be done in a
manner consistent with the requirements of Section 409A of the Code, to the
extent applicable.

 

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10.          Miscellaneous.

 

10.1.        Binding Nature of Agreement. This Agreement shall be binding upon
the Company and shall inure to the benefit of the Company, its Affiliates,
successors and assigns, including any transferee of the business operation, as a
going concern, in which Employee is employed and shall be binding upon Employee,
Employee’s heirs and personal representatives. None of the rights or obligations
of Employee hereunder may be assigned or delegated, except that in the event of
Employee’s death or Disability, any rights of Employee hereunder shall be
transferred to Employee’s estate or personal representative, as the case may be.
The Company may assign its rights and obligations under this Agreement in whole
or in part to any one or more Affiliates or successors. Any entity into which
the Company is merged or with which the Company is consolidated or which
acquires the business of the Company or the business unit in which Employee is
to be principally employed shall be deemed to be a successor of the Company for
purposes hereof.

 

10.2.        Entire Agreement. This Agreement, together with the Non-Competition
Agreement and the Non-Disclosure and Business Ideas Agreement, contains the
entire understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written
(including but not limited to the Existing Agreement). The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. Notwithstanding the foregoing,
nothing herein shall limit the application of any generally applicable Company
policy, practice, plan or the terms of any manual or handbook applicable to the
Company’s employees generally.

 

10.3.        Notices. All notices, requests, consents, and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally, or mailed
first-class, postage prepaid, by registered or certified mail (notices sent by
mail shall be deemed to have been given on the third day after the date sent),
or by nationally recognized overnight carrier (notices sent by overnight shall
be deemed to have been given on the day after the date sent) or by confirmed
facsimile or electronic mail transmission with a hard copy deposited in first
class mail the same day or the following day, as follows (or to such other
address as either party shall designate by notice in writing to the other):

 

If to Company:

 

Ocugen Inc.
5 Great Valley Parkway
Suite 160
Malvern PA 19355
Attn: Kelly Beck, VP of Investor Relations & Operations

 

If to Employee, to the address on file with the Company.

 

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10.4.        Governing Law; Forum. This Agreement shall be governed by the laws
of the State of Delaware.

 

10.5.        Headings. The article and section headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.

 

10.6.        Amendment. This Agreement may be amended, modified, superseded,
canceled, renewed, or extended and the terms or covenants of this Agreement may
be waived, only by a written instrument executed by both of the parties, or in
the case of a waiver, by the party waiving compliance.

 

10.7.        Waiver. The failure of either party at any time or times to require
performance of any provision of this Agreement shall in no manner affect the
right at a later time to enforce the same. No waiver by either party of the
breach of any term or covenant contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the breach
of any other term or covenant contained in this Agreement.

 

10.8.        Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which taken
together shall constitute one and the same instrument.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.

 

  COMPANY:       OCUGEN, INC.       By:   /s/ Frank Leo     Frank Leo, Chairman
of the Compensation Committee of the Board of Directors               EMPLOYEE:
                /s/ Shankar Musunuri   Shankar Musunuri

 

[Signature Page to Executive Employment Agreement]