Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (this “Agreement”) is made and entered into
as of October 4, 2018, by and between Mustang Bio, Inc. (the “Company”) and
Martina A. Sersch, M.D., Ph.D. (“Executive”). The Company and Executive are
hereinafter collectively referred to as the “Parties”, and either may be
individually referred to as a “Party”.

 

Recitals

 

WHEREAS the Company desires to employ Executive and Executive desires to accept
such employment, on the terms and conditions set forth in this Agreement;

 

WHEREAS, in her position, Executive will have access to confidential information
concerning the Company’s business, its customers and employees; and

 

WHEREAS, the Company wishes to protect itself from unauthorized use of this
information and to protect its investment in its employees and confidential
information.

 

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

 

Agreement

 

1.Employment.

 

1.1                    Title. Effective as of the Effective Date, Executive is
employed by the Company in the position of Chief Medical Officer (“CMO”),
subject to the terms and conditions set forth in this Agreement.

 

1.2                    Term. The term of this Agreement shall begin on October
15, 2018 (the “Effective Date”), and shall continue until it is terminated
pursuant to Section 4 herein (the “Term”).

 

1.3                    Duties. Executive shall do and perform all services, acts
or things necessary or advisable to conduct the business of the Company and that
are normally associated with the position of CMO. In her capacity as CMO,
Executive shall report to the Company’s Chief Executive Officer.

 

1.4                    Location. Executive’s principal place of business for
performance of the services under this Agreement shall be her home office in
California, provided, however, that the Company may from time to time require
the Executive to travel temporarily to other locations (domestic and
international) in connection with the Company’s business, including but not
limited to regular travel to the facilities of the Company and its affiliates in
New York and Massachusetts.

 

1.5                    Policies and Practices. Executive will abide by the
policies and practices established by the Company and/or the Company’s Board of
Directors (the “Board”), or any designated committee thereof. In the event that
the terms of this Agreement differ from or are in conflict with the Company’s
policies or practices or the Company’s Employee Handbook, this Agreement shall
control.

 

 

 

 

2.Loyalty; Nonsolicitation.

 

2.1                    Loyalty; Conflicts of Interest. During Executive’s
employment by the Company, Executive will devote Executive’s full business
energies, interest, abilities and productive time to the proper and efficient
performance of Executive’s duties under this Agreement.

 

2.1.1        During her employment with the Company, Executive will not, on her
own behalf or on behalf of any other person, engage in any business activity
competitive with or adverse to that of the Company. In addition, during her
employment with the Company, Executive will not acquire, assume or participate
in, directly or indirectly, any position, investment or interest known by
Executive to be adverse or antagonistic to the Company, its Business, or
prospects, financial or otherwise, or in any company, person, or entity that is,
directly or indirectly, in competition with the Business of the Company or any
of its Affiliates (as defined below). Ownership by Executive, in professionally
managed funds over which the Executive does not have control or discretion in
investment decisions, or as a passive investment, of less than two percent (2%)
of the outstanding shares of capital stock of any corporation with one or more
classes of its capital stock listed on a national securities exchange or
publicly traded on a national securities exchange or in the over-the-counter
market shall not constitute a breach of this Section 2.1.1. As used in this
Agreement, “Affiliate” means, with respect to any specific entity, any other
entity that, directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such specified
entity; and “Business” means the business(es) in which the Company or its
Affiliates are or were engaged at the time of, or during the 12 month period
prior to the conduct in question.

 

2.1.2        Notwithstanding the above, Executive may, on her own time, at her
own expense and to the extent consistent with and non-deleterious to her duties
and responsibilities at the Company: (i) participate in civic, educational,
charitable or fraternal organizations; (ii) manage her personal investments;
(iii) with prior approval of the Executive Chairman, serve as a consultant to,
or on the board of directors of, other companies that do not compete with the
Company.

 

2.2                    Agreements Protecting Confidential and Proprietary
Information. In connection with and as a material condition of the Company’s
decision to offer Executive employment, Executive understands, acknowledges and
agrees to immediately execute and be bound by certain covenants in effect during
and after her employment with the Company, as contained in the Company’s
Proprietary Information and Inventions Agreement (“PIIA”). A copy of the PIIA is
attached to this Agreement as Exhibit A.

 

2.3              Non-Solicitation of Employees and Contractors. Executive
understands and agrees that the relationship between the Company and each of its
employees and contractors constitutes a valuable asset of the Company and may
not be converted to Executive’s own use or benefit or for the use or benefit of
any other third party. Executive therefore agrees that during her employment and
for a period of six (6) months thereafter, Executive will not, without the
Company’s prior written consent, directly or indirectly, solicit, induce, or
attempt to solicit or induce any employee or contractor of the Company to
terminate his or her employment or engagement with the Company. Executive
acknowledges and agrees that the covenants in this Section 2.3 are essential
elements of Executive’s employment by the Company and are reasonable given
Executive’s access to the Company’s confidential information and the substantial
knowledge and goodwill Executive will acquire with respect to the business of
the Company as a result of her employment with the Company. Executive further
acknowledges and agrees that the Company will suffer irreparable harm in the
event that Executive breaches any of Executive’s obligations under this Section
2.3 and that monetary damages would be inadequate to compensate the Company for
such breach. Accordingly, Executive agrees that, in the event of a breach by
Executive of any of Executive’s obligations under this Section 2.3, the Company
will be entitled to obtain from any court of competent jurisdiction preliminary
and permanent injunctive relief, in order to prevent or to restrain any such
breach. Executive agrees to waive any requirement for the securing or posting of
any bond in connection with such remedies. The Company will be entitled to
recover its costs incurred in connection with enforcing this Section 2.3,
including reasonable attorneys’ fees and expenses, to the maximum extent
permitted by law.

 

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3.Compensation of Executive.

 

3.1                    Base Salary. The Company shall pay Executive a base
salary at the annualized rate of Four Hundred Twenty-Five Thousand Dollars
($425,000.00) (the “Base Salary”), less all applicable taxes, deductions and
withholdings, to be paid in equal installments in accord with the Company’s
normal payroll practices. The Base Salary shall be prorated for any partial year
of employment on the basis of a 365-day fiscal year and may be changed in the
discretion of the Board. The Base Salary may only be decreased in connection
with a Company-wide decrease in executive compensation; provided, however that
Executive shall not be subject to any greater percentage reduction than any
other Company executive. The Board shall review annually and may increase the
Base Salary thereby setting a new level for the entirety of this Agreement.

 

3.2                    Commencement Bonus. The Company will pay Executive a
one-time bonus in the gross amount of One Hundred Fifty Thousand Dollars
($150,000) (the “Commencement Bonus”). The Commencement Bonus will be paid on or
about October 19, 2018.

 

3.3                    Annual Bonus. At the sole discretion of the Board or the
compensation committee of the Board, if established (the “Compensation
Committee”), following each calendar year of the Company while employed
hereunder, Executive will be eligible to receive an additional target cash bonus
of up to forty percent (40%) of the Base Salary (the “Annual Bonus”). The amount
of the Annual Bonus to be paid shall be based on Executive’s attainment of
certain financial, clinical development, and/or business milestones (the
“Milestones”) to be established annually by the Board or the Compensation
Committee. The determination of whether Executive has met or exceeded the
Milestones, and if so, the bonus amount (if any) that will be paid, shall be
determined by the Board or the Compensation Committee in its sole discretion.
Except as described in Sections 4.5.2, 4.5.4, or 4.5.5 below, Executive must
remain employed by the Company through and including the last day of the
applicable calendar year in order to be eligible to earn or receive any Annual
Bonus for that year. The Annual Bonus for any given calendar year will be paid
in cash as a single lump-sum payment no later than March 15 of the year
following the conclusion of the calendar year to which the Annual Bonus relates.

 

3.4                    Equity. Subject to approval by the Board, the Company
shall grant to Executive a number of restricted shares of the Company’s common
stock equal to one percent (1%) of the Company’s issued and outstanding Common
Stock, calculated as of the Effective Date, subject to vesting as set forth
below (the “Restricted Shares”). One-half of the Restricted Shares will vest
over time (the “Time Based Shares”), with twenty five percent (25%) of the Time
Based Shares vesting after twelve (12) months of employment, and the remaining
shares vesting in twelve (12) equal quarterly installments thereafter, subject
to Executive’s Continuous Service (as defined in the Company’s 2016 Incentive
Plan) to the Company on each vesting date. The remaining one-half of the
Restricted Shares (the “Performance Shares”) will vest upon the occurrence of
the following milestones being achieved: (i) 25% of the Performance Share grant
will vest upon the dosing of the first patient in the first Phase 2 clinical
trial of any Company product candidate, (ii) 25% of the Performance Share grant
will vest upon the dosing of the first patient in the first Phase 2 clinical
trial of a second Company product candidate, (iii) 25% of the Performance Share
grant will vest upon the Company’s achievement of a fully-diluted Market
Capitalization of $500,000,000, and (iv) 25% of the Performance Share grant will
vest upon the Company’s achievement of a fully-diluted Market Capitalization of
$1,000,000,000; in each case subject to Executive’s Continuous Service to the
Company on the date of such occurrences. Notwithstanding the foregoing, in the
event that a Phase 2 clinical trial for either of the Company product candidates
referenced in subsections 3.4(i) or 3.4(ii) herein is bypassed, the
corresponding percentage of the Performance Share grant that would have
otherwise vested pursuant to subsections 3.4(i) or 3.4(ii) herein will vest upon
the earlier of (x) the dosing of the first patient in the first Phase 3 clinical
trial for that Company product candidate, or (y) the filing of a Biologics
License Application (“BLA”) or New Drug Application (“NDA”) with the U.S. Food
and Drug Administration, or alternatively the filing of an equivalent regulatory
filing with a foreign regulatory agency, with respect to that Company product
candidate. Vesting of the Restricted Shares will terminate upon the termination
of the Executive’s Continuous Service, except as described in Sections 4.5.4 and
4.5.5 below. In addition, all of the Restricted Shares will automatically vest
in their entirety upon a Change in Control (as defined in the Plan) provided
that Executive provides Continuous Service to the Company through such date. The
Restricted Shares will be subject to the Plan and the execution of an Restricted
Share Agreement to be entered between the Company and Executive. “Market
Capitalization” shall be determined by multiplying the total shares of the
Company’s common stock that are outstanding (including common stock issuable
upon conversion, exchange or exercise of any derivative security, including
without limitation, options, warrants, convertible equity or debt or restricted
equity) by the last reported closing price of the Company’s common stock on a
nationally recognized exchange or in the over-the-counter market.

 

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3.5                    Expense Reimbursements. The Company will reimburse
Executive for all reasonable business expenses incurred by Executive in
connection with the performance of her duties hereunder, subject to the
Company’s reimbursement policies in effect from time to time.

 

3.6                    Benefits. Executive shall, in accordance with Company
policy and the applicable plan documents, be eligible to participate in benefits
under any benefit plan or arrangement that may be in effect from time to time
and made available to the Company’s senior management employees.

 

3.7                    Holidays and Vacation. Executive shall be eligible to
accrue up to four (4) weeks of paid vacation per year and will receive paid
Company holidays in accordance with Company policy. Accrued vacation time is
capped at four (4) weeks, such that once Executive has accrued four (4) weeks of
vacation, no further accrual of vacation time will occur until Executive has
used a portion of the previously-accrued vacation time. All available time off
must be used in accordance with the Company’s policies and procedures. To the
extent Executive would be entitled to a greater number of vacation days or
personal days under any other Company policy, such other policy shall govern. In
any event, this provision and all policies related to paid time off will be
construed and applied in a manner compliant with applicable law.

 

3.8                    Withholdings. The Company may withhold from any amounts
payable under this Agreement such federal, state and local taxes as the Company
determines are required to be withheld pursuant to any applicable law along with
any other amount properly requested by Executive.

 

4.Termination.

 

4.1                    Termination by the Company. Executive’s employment with
the Company is at will and may be terminated by the Company at any time and for
any reason, or for no reason, including, but not limited to, under the following
conditions:

 

4.1.1        Termination by the Company for Cause. The Company may terminate
Executive’s employment under this Agreement for “Cause” (as defined below) by
delivery of written notice to Executive in accordance with the procedures set
forth in Section 4.6.2 below. Any notice of termination given pursuant to this
Section 4.1.1 shall effect termination as of the date of the notice or as of
such other date as specified in the notice, subject to Section 4.6.2.

 

4.1.2        Termination by the Company without Cause. The Company may terminate
Executive’s employment under this Agreement without Cause at any time and for
any reason or for no reason. Such termination shall be effective on the date
Executive is so informed or as otherwise specified by the Company.

 

4.2                    Termination by Resignation of Executive. Executive’s
employment with the Company is at will and may be terminated by Executive at any
time and for any reason or for no reason, including via a resignation for Good
Reason in accordance with the procedures set forth in Section 4.6.3 below.

 

4.3                    Termination for Death or Complete Disability. Executive’s
employment with the Company shall terminate effective upon the date of
Executive’s death or Complete Disability (as defined below).

 

4.4                    Termination by Mutual Agreement of the Parties.
Executive’s employment with the Company may be terminated at any time upon a
mutual agreement in writing of the Parties. Any such termination of employment
shall have the consequences specified in such agreement.

 

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4.5                    Compensation Upon Termination.

 

4.5.1        Generally. When this Agreement is terminated for any reason,
Executive, or her estate, as the case may be, will be entitled to receive the
compensation and benefits earned through the effective date of termination,
including, but not limited to, as applicable, any Base Salary earned by
Executive, expense reimbursement amounts owed to Executive, all unpaid amounts
of the Annual Bonus for the prior year, if any, Executive earned prior to the
termination date by meeting the conditions set forth in Section 3.3, less
standard deductions and withholdings.

 

4.5.2        Death or Complete Disability. If Executive’s employment under this
Agreement is terminated by her death or Complete Disability, then, in addition
to the amounts described in Section 4.5.1, and conditioned upon Executive (or
her estate or heirs as applicable) executing and not revoking a release of
claims in the form attached as Exhibit B (the “Release”)) within the time
periods specified therein, the Company will provide the following separation
benefits: (i) the Company will continue Executive’s Base Salary (at the rate in
effect as of the termination) for a period of ninety (90) days beginning on the
sixtieth (60th) day following the termination of Executive’s employment with the
Company, provided that the first installment will include all installments that
would have been paid from the date of termination had the initial payment not be
delayed, and (ii) Executive shall be entitled to a pro-rata share of the Annual
Bonus, to be paid when and if such Annual Bonus would have been paid under this
Agreement.

 

4.5.3        Termination For Cause or Resignation without Good Reason. If
Executive’s employment is terminated by the Company for Cause, or Executive
resigns her employment hereunder without Good Reason, the Company shall pay
Executive the amounts described in Section 4.5.1. The Company shall thereafter
have no further obligations to Executive under this Agreement, except as
otherwise provided by law.

 

4.5.4        Termination Without Cause or Resignation For Good Reason Not In
Connection with a Change in Control. If Executive’s employment under this
Agreement is terminated by the Company without Cause or Executive resigns for
Good Reason, at any time other than at the time of, or within twelve (12) months
following a Change in Control, then, in addition to the amounts described in
Section 4.5.1, and conditioned upon Executive executing and not revoking the
Release within the time periods specified therein, the Company will provide the
following separation benefits: (i) the Company will continue Executive’s Base
Salary (at the rate in effect as of the termination) for a period of twelve (12)
months, beginning on the sixtieth (60th) day following the termination of
Executive’s employment with the Company, provided that the first installment
will include all installments that would have been paid from the date of
termination had the initial payment not be delayed; (ii) if Executive timely
elects continued health insurance coverage under COBRA, the Company shall pay
the entire premium necessary to continue such coverage for Executive and
Executive’s eligible dependents until the conclusion of the time when Executive
is receiving continuation of Base Salary payments or until Executive becomes
eligible for group health insurance coverage under another employer’s plan,
whichever occurs first, provided however that the Company has the right to
terminate such payment of COBRA premiums on behalf of Executive and instead pay
Executive a lump sum amount equal to the COBRA premium times the number of
months remaining in the specified period if the Company determines in its
discretion that continued payment of the COBRA premiums is or may be
discriminatory under Section 105(h) of the Internal Revenue Code; (iii)
Executive shall be entitled to a pro-rata share of the Annual Bonus for the year
in which the termination occurred, to be paid when and if such Annual Bonus
would have been paid under this Agreement; and (iv) immediate partial
accelerated vesting of all unvested time-based equity awards with respect to the
same number of shares that would have vested if Executive had continued in
employment for one year after the termination date.

 

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4.5.5        Termination Without Cause or Resignation For Good Reason In
Connection with a Change in Control. If the Company terminates Executive’s
employment without Cause, or if Executive resigns for Good Reason, upon the
occurrence of, or within the twelve (12) months following, the effective date of
a Change in Control, then, in addition to the amounts described in Section
4.5.1, and conditioned upon Executive executing and not revoking the Release
within the time periods specified therein, the Company will provide the
following separation benefits: (i) the Company will continue Executive’s Base
Salary (at the rate in effect as of the termination) for a period of twelve (12)
months, beginning on the sixtieth (60th) day following the termination of
Executive’s employment with the Company, provided that the first installment
will include all installments that would have been paid from the date of
termination had the initial payment not be delayed; (ii) if Executive timely
elects continued health insurance coverage under COBRA, the Company shall pay
the entire premium necessary to continue such coverage for Executive and
Executive’s eligible dependents until the conclusion of the time when Executive
is receiving continuation of Base Salary payments or until Executive becomes
eligible for group health insurance coverage under another employer’s plan,
whichever occurs first, provided however that the Company has the right to
terminate such payment of COBRA premiums on behalf of Executive and instead pay
Executive a lump sum amount equal to the COBRA premium times the number of
months remaining in the specified period if the Company determines in its
discretion that continued payment of the COBRA premiums is or may be
discriminatory under Section 105(h) of the Internal Revenue Code; (iii)
Executive shall be entitled to a pro-rata share of the Annual Bonus for the year
in which the termination occurred, to be paid when and if such Annual Bonus
would have been paid under this Agreement; and (iv) immediate accelerated
vesting of all unvested equity awards such that, on the effective date of the
Release, the Executive shall be vested in one hundred percent (100%) of all such
equity awards.

 

4.6                    Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:

 

4.6.1        Complete Disability. As used herein, “Complete Disability” means
the inability of Executive, due to the condition of her physical, mental or
emotional health, effectively to perform the essential functions of her job with
or without reasonable accommodation for a continuous period of more than 90 days
or for 90 days in any period of 180 consecutive days, as determined by the Board
in consultation with an independent physician retained for such purpose. For
purposes of making a determination as to whether a Complete Disability exists,
at the Board’s request Executive agrees to make himself available and to
cooperate in a reasonable examination by the independent physician retained by
the Board and to authorize the disclosure and release to the Board of all
medical records related to such examination.

 

4.6.2        Cause. As used herein, “Cause” means: (i) Executive’s fraud,
embezzlement or misappropriation with respect to the Company, (ii) Executive’s
material breach of this Agreement, (iii) Executive’s material breach of the
PIIA, (iv) Executive’s breach of fiduciary duties to the Company, (v)
Executive’s willful failure or refusal to perform her material duties under this
Agreement or failure to follow any specific lawful instructions of the Board,
(vi) Executive’s conviction or plea of nolo contendere in respect of a felony or
of a misdemeanor involving moral turpitude, or (vii) Executive’s willful or
negligent misconduct that has a material adverse effect on the property,
business, or reputation of the Company. Prior to terminating Executive’s
employment for Cause pursuant to clauses (ii), (iii), (iv), (v) or (vii),
Executive shall have thirty (30) days after Executive’s receipt of written
notice thereof from the Company to cure any such failure, action or breach, to
the extent subject to being cured.

 

4.6.3        Good Reason. For purposes of this Agreement, “Good Reason” means
the occurrence of any of the following events without Executive’s consent: (i) a
material reduction of Executive’s Base Salary (except in connection with a
Company-wide decrease in executive compensation, as provided in Section 3.1 of
this Agreement) (ii) a material diminution of Executive’s authority, duties,
responsibilities, or line of reporting (iii) the relocation of Executive’s
then-principal place of employment, without Executive’s consent, in a manner
that lengthens her one-way commute distance by fifty (50) miles from her
then-current principal place of employment immediately prior to such relocation,
or (iv) the Company’s material breach of this Agreement. In order for Executive
to resign for Good Reason, Executive must provide written notice to the Company
of the existence of the Good Reason condition within thirty (30) days of the
date on which Executive discovers, or reasonably should have discovered, the
existence of such Good Reason condition. Upon receipt of such notice, the
Company will have thirty (30) days during which it may remedy the Good Reason
condition and not be required to provide for the benefits described in Section
4.5.4 or 4.5.5 as applicable as a result of such proposed resignation. If the
Good Reason condition is not remedied within such thirty (30) day period,
Executive may resign based on the Good Reason condition specified in the notice
effective immediately upon the expiration of the thirty (30) day cure period.

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4.6.4        Change in Control. For purposes of this Agreement, “Change in
Control” has the meaning provided to such term in the Company’s 2016 Incentive
Plan.

 

4.7                    Survival of Certain Sections. Sections 2, 4, 5, 6, 7, 8,
9, 10, 11, 12, 13, 14, 15, 17, and 18 of this Agreement will survive the
termination of this Agreement.

 

4.8                    Parachute Payment. If any payment or benefit the
Executive would receive pursuant to this Agreement, either alone or together
with other payments and benefits provided to her by the Company (the “Total
Payments”) would (i) constitute a “parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and
(ii) but for this sentence, be subject to the excise tax imposed by Section 4999
of the Code (the “Excise Tax”), then the Total Payments shall be reduced if and
to the extent that a reduction in the Total Payments would result in Executive
retaining a larger amount than if Executive received all of the Total Payments,
in each case measured on an after-tax basis (taking into account federal, state,
and local income taxes, and, if applicable, the Excise Tax). The determination
of any reduction in the Total Payments will be made at the Company’s expense by
the Company’s independent public accountants or a law or consulting firm
selected by the Company, applying reasonable, good faith interpretations
regarding the applicability of Section 280G and Section 4999, along with any
other applicable portions of the Code or other tax laws. If a reduction in the
Total Payment is necessary, such reduction shall occur in the following order:
(i) reduction of cash payments; (ii) cancellation of accelerated vesting of
equity awards other than stock options; (iii) cancellation of accelerated
vesting of stock options; and (iv) reduction of other benefits paid to
Executive. Within any such category of payments and benefits (that is, (i),
(ii), (iii) or (iv)), a reduction shall occur first with respect to amounts that
are not “deferred compensation” within the meaning of Section 409A (as defined
in Section 4.9 below) and then with respect to amounts that are. In the event
that acceleration of compensation from Executive’s equity awards is to be
reduced, such acceleration of vesting shall be canceled, subject to the
immediately preceding sentence, in the reverse order of the date of grant.

 

4.9                    Section 409A Compliance. The Parties intend that all
provisions of this Agreement and the payments made pursuant thereto will comply
with, or be exempt from, the application of Section 409A of the Code and the
regulations and other guidance thereunder and any state law of similar effect
(collectively “Section 409A”), and all provisions of this Agreement will be
construed, to the maximum extent possible, in a manner consistent with the
requirements for avoiding taxes or penalties under Section 409A. Notwithstanding
anything to the contrary set forth herein, any payments and benefits provided
under this Section 4 that constitute “deferred compensation” within the meaning
of Section 409A will not commence in connection with Executive’s termination of
employment unless and until Executive has also incurred a “separation from
service” (as such term is defined in Treasury Regulation Section 1.409A-1(h)),
unless the Company reasonably determines that such amounts may be provided to
Executive without causing Executive to incur the additional 20% tax under
Section 409A. The parties intend that each installment of the separation
benefits payments provided for in this Agreement is a separate “payment” for
purposes of Section 409A. For the avoidance of doubt, the parties intend that
payments of the Separation Benefits set forth in this Agreement satisfy, to the
greatest extent possible, the exemptions from the application of Section 409A
provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and
1.409A-1(b)(9). Executive and the Company agree to use their best efforts to
amend the terms of this Agreement from time to time as may be necessary to avoid
the imposition of penalties or additional taxes under Section 409A of the
Internal Revenue Code; provided, however, any such amendment will provide
Executive substantially equivalent economic payments and benefits as set forth
herein and will not in the aggregate, materially increase the cost to, or
liability of, the Company hereunder. However, if the Company determines that the
Separation Benefits constitute “deferred compensation” under Section 409A and
Executive is, on the termination of service, a “specified employee” of the
Company or any successor entity thereto, as such term is defined in Section
409A, then, solely to the extent necessary to avoid the incurrence of the
adverse personal tax consequences under Section 409A, the timing of the
Separation Benefits payments will be delayed until the earlier to occur of: (i)
the date that is six months and one day after Executive’s separation from
service, or (ii) the date of Executive’s death (such applicable date, the
“Specified Employee Initial Payment Date”), and the Company (or the successor
entity thereto, as applicable) will (A) pay to Executive a lump sum amount equal
to the sum of the Separation Benefits payments that Executive would otherwise
have received through the Specified Employee Initial Payment Date if the
commencement of the payment of the Separation Benefits had not been so delayed
pursuant to this Section, and (B) commence paying the balance of the separation
benefits in accordance with the applicable payment schedules set forth in this
Agreement.

 

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5.Assignment and Binding Effect.

 

This Agreement shall be binding upon and inure to the benefit of Executive and
Executive’s heirs, executors, personal representatives, assigns, administrators
and legal representatives. Because of the unique and personal nature of
Executive’s duties under this Agreement, neither this Agreement nor any rights
or obligations under this Agreement shall be assignable by Executive. This
Agreement shall be binding upon and inure to the benefit of the Company and its
successors, assigns and legal representatives. Any such successor of the Company
will be deemed substituted for the Company under the terms of this Agreement for
all purposes. For this purpose, “successor” means any person, firm, corporation
or other business entity which at any time, whether by purchase, merger or
otherwise, directly or indirectly acquires all or substantially all of the
assets or business of the Company.

 

6.Notices.

 

All notices or demands of any kind required or permitted to be given by the
Company or Executive under this Agreement shall be given in writing and shall be
personally delivered (and receipted for) or mailed by certified mail, return
receipt requested, postage prepaid, addressed as follows:

 

If to the Company:

 

Mustang Bio, Inc.
2 Gansevoort Street, 9th Floor
New York, New York 10014
Attn: CEO

 

If to Executive:

 

Martina A. Sersch, M.D., Ph.D.

2908 Salmon River Circle

Westlake Village, CA 91362

 

Any such written notice shall be deemed given on the earlier of the date on
which such notice is personally delivered or three (3) days after its deposit in
the United States mail as specified above. Either Party may change its address
for notices by giving notice to the other Party in the manner specified in this
Section.

 

7.Choice of Law.

 

This Agreement shall be construed and interpreted in accordance with the
internal laws of the State of California without regard to its conflict of laws
principles.

 

8.Integration.

 

This Agreement, including all documents referenced herein, contains the
complete, final and exclusive agreement of the Parties relating to the terms and
conditions of Executive’s employment and the termination of Executive’s
employment, and supersedes all prior and contemporaneous oral and written
employment agreements or arrangements between the Parties.

 

-8-

 

 

9.Amendment.

 

This Agreement cannot be amended or modified except by a written agreement
signed by Executive and the Company.

 

10.Waiver.

 

No term, covenant or condition of this Agreement or any breach thereof shall be
deemed waived, except with the written consent of the Party against whom the
wavier is claimed, and any waiver or any such term, covenant, condition or
breach shall not be deemed to be a waiver of any preceding or succeeding breach
of the same or any other term, covenant, condition or breach.

 

11.Severability.

 

The finding by a court of competent jurisdiction of the unenforceability,
invalidity or illegality of any provision of this Agreement shall not render any
other provision of this Agreement unenforceable, invalid or illegal. Such court
shall have the authority to modify or replace the invalid or unenforceable term
or provision with a valid and enforceable term or provision, which most
accurately represents the Parties’ intention with respect to the invalid or
unenforceable term, or provision.

 

12.Interpretation; Construction.

 

The headings set forth in this Agreement are for convenience of reference only
and shall not be used in interpreting this Agreement. This Agreement has been
drafted by legal counsel representing the Company, but Executive has been
encouraged to consult with, and has consulted with, Executive’s own independent
counsel and tax advisors with respect to the terms of this Agreement. The
Parties acknowledge that each Party and its counsel has reviewed and revised, or
had an opportunity to review and revise, this Agreement, and any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

 

13.Attorneys’ Fees.

 

Except as otherwise prohibited by law, in the event a Party brings an action to
enforce the terms of this Agreement, in addition to any other remedies, the
prevailing party in a final, non-appealable judgment by a court of competent
jurisdiction will be entitled to recovery of its reasonable and documented
attorneys’ fees and costs incurred by it arising out of such breach or the
defense thereof.

 

14.Representations and Warranties.

 

14.1                Obligations to Prior Employers. Executive represents and
warrants to the Company that Executive is not obligated or restricted under any
agreement (including any non-competition or confidentiality agreement),
judgment, decree, order or other restraint of any kind that could impair
Executive’s ability to perform the duties and obligations required of Executive
hereunder. Executive further represents and warrants to the Company that she has
not violated any confidentiality agreement or other similar obligation that she
has to any former employer and that she has not disclosed any confidential or
trade secret information belonging to any former employer to the Company or its
agents. Executive agrees that she will not use confidential information and/or
trade secrets belonging to any former employer in her employment with the
Company or otherwise as a resource for building the business of the Company and
will structure her and the Company’s work environment and practices in such a
way to ensure that any such information will not be used or disclosed during the
course of her relationship with the Company.

 

-9-

 

 

14.2                Litigation Support. Both during and after Executive’s
employment with the Company, if the Company is evaluating, pursuing, contesting
or defending any proceeding, charge, complaint, claim, demand, notice, action,
suit, litigation, hearing, audit, investigation, arbitration or mediation, in
each case whether initiated by or against the Company (collectively, a
“Proceeding”), other than a Proceeding initiated by or against Executive,
Executive will reasonably cooperate with the Company and its counsel in the
evaluation, pursuit, contest or defense of the Proceeding and provide such
testimony and access to books and records as may be necessary in connection
therewith. Any such cooperation shall be done at times mutually convenient for
Executive and the Company, and the Company will ensure that any such cooperation
does not interfere with any duties or obligations that Executive may have to a
third party, including any future employer. The Company will reimburse Executive
for Executive’s reasonable out-of-pocket expenses related to such cooperation.

 

14.3                Future Employment. In the event of Executive’s separation
from the Company, regardless of the reason or cause of that separation,
Executive agrees that for a period of twelve (12) months from the date her
employment terminates, she will provide the Company with no fewer than three (3)
business days’ notice of her intent to accept employment with or for an
organization other than Company for the express purpose of allowing the Company
to determine if such proposed employment interferes with any of Executive’s
surviving obligations under this Agreement. The notice of intent to accept
employment will identify the new employer, list Executive’s anticipated title
and describe her anticipated duties.

 

15.Indemnification.

 

The Company shall defend and indemnify Executive in her capacity as CMO of the
Company to the fullest extent permitted under the Delaware General Corporate
Law.

 

16.Counterparts.

 

This Agreement may be executed in two counterparts, each of which shall be
deemed an original, all of which together shall contribute one and the same
instrument. Signatures to this Agreement transmitted by fax, by email in
“portable document format” (“.pdf”) or by any other electronic means intended to
preserve the original graphic and pictorial appearance of this Agreement shall
have the same effect as physical delivery of the paper document bearing original
signature.

 

17.Jurisdiction; Venue.

 

The Parties agree that any litigation arising out of or related to this
Agreement or Executive’s employment by the Company shall be brought exclusively
in any state or federal court in New York, New York. Each Party (i) consents to
the personal jurisdiction of said courts, (ii) waives any venue or inconvenient
forum defense to any proceeding maintained in such courts, and (iii) except as
otherwise provided in this Agreement, agrees not to bring any proceeding arising
out of or relating to this Agreement or Executive’s employment by the Company in
any other court.

 

18.Advertising Waiver.

 

Executive agrees to permit the Company, and persons or other organizations
authorized by the Company, to use, publish and distribute advertising or sales
promotional literature concerning the products and/or services of the Company,
or the machinery and equipment used in the provision thereof, in which
Executive’s name and/or pictures of Executive taken in the course of Executive’s
provision of services to the Company appear. Executive hereby waives and
releases any claim or right Executive may otherwise have arising out of such
use, publication or distribution.

 

[Signature page follows]

 

-10-

 

 

In Witness Whereof, the Parties have executed this Agreement as of the date
first above written.

 

Mustang Bio, Inc.

 

/s/ Manuel Litchman   Date: October 4, 2018

Name: Manuel Litchman, M.D.

 

Title: President & CEO

 

 

 

Executive:

 

/s/ Martina A. Sersch   Date: October 4, 2018

Martina A. Sersch, M.D., Ph.D.

 

 

-11-

 

 

EXHIBIT A

 

Form of Proprietary Information and Inventions Agreement

 

MUSTANG BIO, INC.

EMPLOYEE PROPRIETARY INFORMATION

AND INVENTIONS AGREEMENT

 

In consideration of my employment by Mustang Bio, Inc. (the "Company"), the
compensation to be paid to me, and other valuable consideration, I hereby agree
as follows:

 

1.Nondisclosure

 

1.1                Recognition of Company's Rights; Nondisclosure. At all times
during my employment with the Company and thereafter, I will hold in strictest
confidence and will not disclose, use, distribute, lecture upon, or publish any
of the Company's and/or its Affiliates’ Proprietary Information (defined below),
except as may be required in connection with my work for the Company, or unless
an officer of the Company expressly authorizes such in writing. I will obtain
the Company's written approval before publishing or submitting for publication
any material (written, verbal, or otherwise) that relates to my work at the
Company and/or incorporates any Proprietary Information. I hereby assign to the
Company any rights I may have or acquire in such Proprietary Information and
recognize that all Proprietary Information shall be the sole property of the
Company and its assigns. For purposes of this Agreement, “Affiliate” means, with
respect to any specific entity, any other entity that, directly or indirectly,
through one or more intermediaries, controls, is controlled by or is under
common control with such specified entity. For purposes of clarification, the
Company and Fortress Biotech, Inc. are Affiliates.

 

1.2                Proprietary Information. The term "Proprietary Information"
shall mean any and all confidential and/or proprietary knowledge, data or
information of the Company and/or its Affiliates. By way of illustration but not
limitation, "Proprietary Information" includes (a) trade secrets, inventions,
mask works, ideas, processes, formulas, screening and/or diagnostic techniques
or tests, source and object codes, data, programs, other works of authorship,
know-how, improvements, discoveries, developments, designs and techniques
(hereinafter collectively referred to as "Inventions"); and (b) information,
plans, strategies, and/or data regarding research, development, new products,
marketing and selling, business plans, budgets and unpublished financial
statements, licenses, prices and costs, suppliers and customers; and (c)
information regarding the skills, potential, performance, and/or compensation of
other employees of the Company and/or its Affiliates. Notwithstanding the
foregoing, it is understood that I am free to use information which is generally
known in the trade or industry, and which is not gained as a result of a breach
of this Agreement.

 

1.3                Third Party Information. I understand, in addition, that the
Company has received and in the future will receive from third parties
confidential or proprietary information ("Third Party Information") subject to a
duty on the Company's part to maintain the confidentiality of such information
and to use it only for certain limited purposes. During the term of my
employment and thereafter, I will hold Third Party Information in the strictest
confidence and will not disclose to anyone (other than Company personnel who
need to know such information in connection with their work for the Company) or
use, except in connection with my work for the Company, Third Party Information
unless expressly authorized by an officer of the Company in writing.

 

1.4                No Improper Use of Information of Prior Employers and Others.
During my employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or any
other person to whom I have an obligation of confidentiality, and I will not
bring onto the premises of the Company any unpublished documents or any property
belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer or person. I will use in the performance of my duties only information
which is generally known and used by persons with training and experience
comparable to my own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the
Company.

 

1

 

 

1.5                Employee’s Acknowledgement. Nothing in this Agreement is
intended to or will prohibit me from communicating with any governmental
authority, or making a report in good faith and with a reasonable belief of any
violations of law or regulation to a governmental authority, or from filing,
testifying or participating in a legal proceeding relating to such violations,
including making disclosures protected or required by any whistleblower law or
regulation to the Securities and Exchange Commission, the Department of Labor,
or any other appropriate government authority charged with the enforcement of
any applicable laws. In addition, nothing in this Agreement is intended to or
will limit any employee’s right to discuss the terms, wages, and working
conditions of their employment, as protected by applicable law. Pursuant to the
Defend Trade Secrets Act of 2016, an individual will not be held criminally or
civilly liable under any federal or state trade secret law for the disclosure of
a trade secret that (i) is made (A) in confidence to a federal, state or local
government official, either directly or indirectly, or to an attorney; and (B)
solely for the purpose of reporting or investigating a suspected violation of
law; or (ii) is made in a complaint or other document filed in a lawsuit or
other proceeding, if such filing is made under seal. An individual who files a
lawsuit for retaliation by an employer for reporting a suspected violation of
law may disclose the trade secret to his or her attorney and use the trade
secret information in the court proceeding, if the individual files any document
containing the trade secret under seal, and does not disclose the trade secret,
except pursuant to court order.

 

2.Assignment of Inventions.

 

2.1                Proprietary Rights. The term "Proprietary Rights" shall mean
all trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.

 

2.2                Prior Inventions. Inventions, if any, patented or unpatented,
which I made prior to the commencement of my employment with the Company are
excluded from the scope of this Agreement. To preclude any possible uncertainty,
Exhibit A hereto contains a complete list of all Inventions that I have, alone
or jointly with others, conceived, developed or reduced to practice or caused to
be conceived, developed or reduced to practice prior to the commencement of my
employment with the Company, that I consider to be my property or the property
of third parties and that I wish to have excluded from the scope of this
Agreement (collectively referred to as "Prior Inventions"). If no Inventions are
listed in Exhibit A, I represent that there are no Prior Inventions. If, in the
course of my employment with the Company, I incorporate a Prior Invention into a
Company product, process or machine, the Company is hereby granted and shall
have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license
(with rights to sublicense through multiple tiers of sublicensees) to make, have
made, modify, use and sell such Prior Inventions. Notwithstanding the foregoing,
I agree that I will not incorporate, or permit to be incorporated, Prior
Inventions in any Company Inventions without the Company's prior written
consent.

 

2.3                Assignment of Inventions. Subject to Sections 2.4, and 2.6, I
hereby assign and agree to assign in the future (when any such Inventions or
Proprietary Rights are first reduced to practice or first fixed in a tangible
medium, as applicable) to the Company all my right, title and interest in and to
any and all Inventions (and all Proprietary Rights with respect thereto) whether
or not patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by me, either alone or jointly with
others, during the period of my employment with the Company. Inventions assigned
to the Company, or to a third party as directed by the Company pursuant to this
Section 2, are hereinafter referred to as "Company Inventions."

 

2.4                Nonassignable Inventions. This Agreement does not apply to
any Invention that qualifies fully as a nonassignable Invention under the laws
of the state where I am domiciled. Without limiting the generality of the
preceding sentence, I recognize, however, that the provisions of Section 2.3
above do not apply to any Invention which qualifies fully under the provision of
Section 2870 of the California Labor Code (a copy of which is attached hereto as
Exhibit B).

 

2.5                Obligation to Keep Company Informed. During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions authored, conceived or reduced to practice by me, either alone or
jointly with others.

 

2.6                Government or Third Party. I also agree to assign all my
right, title and interest in and to any particular Company Invention to a third
party, including without limitation the United States, as directed by the
Company.

 

2

 

 

2.7                Works for Hire. I acknowledge that all original works of
authorship which are made by me (solely or jointly with others) within the scope
of my employment and which are protectable by copyright are "works made for
hire," pursuant to United States Copyright Act (17 U.S.C., Section 101).

 

2.8                Enforcement of Proprietary Rights. I will assist the Company
in every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Rights relating to Company Inventions in any and all
countries. To that end I will execute, verify and deliver such documents and
perform such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such Proprietary Rights and the assignment thereof. In
addition, I will execute, verify and deliver assignments of such Proprietary
Rights to the Company or its designee. My obligation to assist the Company with
respect to Proprietary Rights relating to such Company Inventions in any and all
countries shall continue beyond the termination of my employment, but the
Company shall compensate me at a reasonable rate after my termination for the
time actually spent by me at the Company's request on such assistance.

 

In the event the Company is unable for any reason, after reasonable effort, to
secure my signature on any document needed in connection with the actions
specified in the preceding paragraph, I hereby irrevocably designate and appoint
the Company and its duly authorized officers and agents as my agent and attorney
in fact, which appointment is coupled with an interest, to act for and in my
behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of the preceding paragraph with
the same legal force and effect as if executed by me. I hereby waive and
quitclaim to the Company any and all claims, of any nature whatsoever, which I
now or may hereafter have for infringement of any Proprietary Rights assigned
hereunder to the Company.

 

3.                   Records. I agree to keep and maintain adequate and current
records (in the form of notes, sketches, drawings and in any other form that may
be required by the Company) of all Proprietary Information developed by me and
all Inventions made by me during the period of my employment with the Company,
which records shall be available to and remain the sole property of the Company
at all times.

 

4.                   Additional Activities. I agree that during the period of my
employment by the Company I will not, without the Company's express written
consent, engage in any employment or business activity which is competitive
with, or would otherwise conflict with, my employment by the Company.

 

5.                   [Intentionally Omitted]

 

6.                   No Conflicting Obligation. I represent that my performance
of all the terms of this Agreement and as an employee of the Company does not
and will not breach any agreement to keep in confidence information acquired by
me in confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree I will not enter into, any agreement either written or
oral in conflict herewith.

 

7.                   Return of Company Documents. When I leave the employ of the
Company, I will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company Inventions,
Third Party Information or Proprietary Information of the Company. I further
agree that any property situated on the Company's premises and owned by the
Company, including but not limited to all storage media of any type, computer
and related equipment, filing cabinets or other work areas, is subject to
inspection by Company personnel at any time with or without notice. Prior to
leaving, I will cooperate with the Company in completing and signing the
Company's termination statement.

 

8.                   Legal and Equitable Remedies. Because my services are
personal and unique and because I may have access to and become acquainted with
the Proprietary Information of the Company, the Company shall have the right to
enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief, without bond and without prejudice to any
other rights and remedies that the Company may have for a breach of this
Agreement.

 

3

 

 

9.                   Notices. Any notices required or permitted hereunder shall
be given to the appropriate party at the address specified below or at such
other address as the party shall specify in writing. Such notice shall be deemed
given upon personal delivery to the appropriate address or if sent by certified
or registered mail, three (3) days after the date of mailing.

 

10.                Notification of New Employer. In the event that I leave the
employ of the Company, I hereby consent to the notification of my new employer
of my rights and obligations under this Agreement.

 

11.                General Provisions.

 

11.1             Governing Law. This Agreement will be governed by and construed
according to the laws of the State of California.

 

11.2             Severability. In case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. If moreover, any one or more of the
provisions contained in this Agreement shall for any reason be held to be
excessively broad as to duration, geographical scope, activity or subject, it
shall be construed by limiting and reducing it, so as to be enforceable to the
extent compatible with the applicable law as it shall then appear.

 

11.3             Successors and Assigns. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives and will be for
the benefit of the Company, its successors, and its assigns.

 

11.4             Survival. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the Company
to any successor in interest or other assignee.

 

11.5             Employment. I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company's
right to terminate my employment at any time, with or without cause.

 

11.6             Waiver. No waiver by the Company of any breach of this
Agreement shall be a waiver of any preceding or succeeding breach. No waiver by
the Company of any right under this Agreement shall be construed as a waiver of
any other right. The Company shall not be required to give notice to enforce
strict adherence to all terms of this Agreement.

 

4

 

 

11.7             Entire Agreement. This Agreement, along with my Employment
Agreement with the Company, constitutes the final, complete agreement of the
parties with respect to the subject matter hereof and supersedes and merges all
prior discussions between me and the Company, except as specifically noted
herein. No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, will be effective unless in writing and signed by
me and the Chief Executive Officer of the Company. Any subsequent change or
changes in my duties, salary or compensation will not affect the validity or
scope of this Agreement.

 

This Agreement shall be effective as of the first day of my employment with the
Company.

 

  

I have read this Agreement carefully and understand its terms.

 

/s/ Martina A. Sersch (Signature)   Martina A. Sersch, M.D., Ph.D. (Printed
Name)    

Date:   

 

Address of Residence:        

 

Accepted and Agreed To:

 

Mustang Bio, Inc.

 

By:   

 

Title:   

 

Date:   

 

Address:

 

2 Gansevoort, 9th Floor

 

New York, NY 10014

 

5

 

 

Exhibit A

 

Prior Inventions Disclosure

 

The following is a complete list of all Prior Inventions:

 

xNone

 

¨See immediately below:

 

 

 

 

 

 

 

 

Exhibit B

 

WRITTEN NOTIFICATION TO EMPLOYEE

 

In accordance with Section 2870 of the California Labor Code, the undersigned
employee is hereby notified that the foregoing Proprietary Information and
Inventions Agreement does not require him/her to assign to the Company of any
Invention that the employee develops entirely on his/her own time without using
the Company’s equipment, supplies, facilities, or trade secret information,
except for those inventions that either: (i) relate at the time of conception or
reduction to practice of the invention to the Company’s business, or actual or
demonstrably anticipated research or development of the Company; or (ii) result
from any work performed by the employee for the Company.

 

Below is the text of Section 2870 of the California Labor Code:

 

(a)       Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:

 

(1)       Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer; or

 

(2)       Result from any work performed by the employee for the employer.

 

(b)       To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.

 

The undersigned acknowledges receipt of this written notification as of the date
indicated below.

 

 

EMPLOYEE:

 

/s/ Martina Sersch     Date:  10/5/18         

 

 

 

 

EXHIBIT B

 

RELEASE OF CLAIMS

 

THIS RELEASE OF CLAIMS (this “Release”) is made by Martina A. Sersch, M.D.,
Ph.D. (“Executive”) as of the date it is signed by Executive, as indicated on
the signature page hereof.

 

Executive acknowledges that she previously executed an Executive Employment
Agreement (the “Agreement”) that included, among other items, a promise of
severance pay and other benefits by Mustang Bio, Inc. (the “Company”) in certain
situations, contingent upon Executive’s execution of a release of claims.
Pursuant to the terms of the Agreement and Company’s promise to provide
severance pay and other benefits, Executive executes this Release.

 

Executive, on her own behalf and on behalf of her heirs, personal
representatives, successors and assigns, hereby releases and forever discharges
the Company and each of its Affiliates and each and every one of their
respective present and former shareholders, directors, officers, members,
employees, agents, insurers, predecessors, successors and assigns (the “Released
Parties”), of and from any and all claims, demands, actions, causes of action,
damages, costs and expenses which Executive now has or may have by reason of
anything occurring, done or omitted to be done as of or prior to date she signs
this Release including, but not limited to, (i) any and all claims related to
Executive’s employment with Company and the termination of same; (ii) any and
all claims for additional compensation or benefits other than the compensation
and benefits set forth in the Agreement, including but not limited to wages,
commissions, deferred compensation, bonuses, or other benefits of any kind;
(iii) any and all claims relating to employment practices or policies of Company
or its Affiliates; (iv) any common law claims, including but not limited to
wrongful discharge, breach of contract, negligent or intentional infliction of
emotional distress, or negligent supervision or retention; and (v) any and all
claims arising under any state or federal legislation, including, but not
limited to, claims under the Employee Retirement Income Security Act, the Family
Medical Leave Act, Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, as amended, the Older Workers Benefit
Protection Act, the California Fair Employment and Housing Act, the California
Family Rights Act, the California Equal Pay Law, the California Occupational
Health and Safety Act of 1973, the California Labor Code, and any other federal,
state or local law or regulation prohibiting employment discrimination or
otherwise governing the employment relationship between Executive and Company
(the “Released Claims”).

 

Notwithstanding anything contained in this Release, Executive understands that
she is not releasing (i) any claim for indemnification or advancement by the
Company, whether pursuant to law, the Company’s bylaws, or under any directors
and officers insurance policy maintained by the Company (understanding that (A)
this Release is not a concession, acknowledgment, or guarantee that Executive
has any such rights in any given situation; (B) this Release does not create any
additional rights to defense or indemnification; and (C) the Company retains any
defenses it may have to such defense or indemnification); or (ii) any claims
which cannot be released by private agreement as a matter of law.

 

Applicability to Known and Unknown Claims. Executive acknowledges that this
Release applies both to known and unknown claims that may exist between
Executive and the Released Parties. Executive expressly waives and relinquishes
all rights and benefits which Executive may have under any state or federal
statute or common law principle that would otherwise limit the effect of this
Release to claims known or suspected prior to the date Executive executes this
Release, and does so understanding and acknowledging the significance and
consequences of such specific waiver. In addition, Executive hereby expressly
understands and acknowledges that it is possible that unknown losses or claims
exist or that present losses may have been underestimated in amount or severity,
and Executive explicitly took that into account in giving this release.

 

Executive hereby waives any and all rights under California Civil Code § 1542,
which provides that:

 

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.

 

 

 

 

Executive further covenants and agrees that she will not sue or make any claim
against any of the Released Parties on any ground arising out of or related to
any of the Released Claims. Executive acknowledges and agrees that this covenant
does not preclude him from filing a charge or complaint with, or cooperating in
an investigation by, any government agency (including but not limited to the
U.S. Equal Employment Opportunity Commission and the California Department of
Fair Employment and Housing), to the extent permitted by law, but Executive
expressly releases, waives, and disclaims any right to monetary damages,
attorneys’ fees and/or costs related to or arising from any charge, complaint or
lawsuit filed by Executive or on her behalf, individually or collectively,
involving the Released Parties.

 

In making this Release, Executive further represents and acknowledges that:

 

(a)               She is voluntarily entering into and signing this Release;

 

(b)              The claims waived, released and discharged in the above Release
include any and all claims Executive has or may have arising out of or related
to her employment with the Company and the termination of that employment,
including any and all claims under the Age Discrimination in Employment Act;

 

(c)               Those claims waived, released and discharged in this Release
do not include, and Executive is not waiving, releasing or discharging, any
claims that may arise after the date she signs this Release;

 

(d)              The payments and benefits conditioned upon Executive’s
execution of this Release constitute consideration that Executive was not
entitled to receive before the effective date of this Release absent the
execution of this Release;

 

(e)               Executive was given twenty-one (21) days within which to
consider this Release;

 

(f)                The Company has advised Executive of her right to consult
with an attorney regarding this Release before executing the Release and
encouraged her to exercise that right;

 

(g)               Executive may revoke this Release at any time within seven (7)
days after the date she signs this Release, and this document will not become
effective or enforceable until the eighth (8th) day after the date she signs
this Release (on which day this Release will automatically become effective and
enforceable unless previously revoked within that seven (7) day period); and

 

(h)              EXECUTIVE HAS CAREFULLY READ THIS DOCUMENT, AND FULLY
UNDERSTANDS EACH AND EVERY TERM.

 

 

I hereby execute this Release on the ___ day of _______, ______.

 

      Martina A. Sersch, M.D., Ph.D.