Exhibit 10.1

 

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February 1, 2016

  

 

Brian Piper

1029 Radley Drive

West Chester, PA 19382

 

 

Dear Brian,

 

On behalf of Medgenics, I am pleased to offer you a promotion to the position of
Chief Financial Officer, reporting to me as CEO of Medgenics. The effective date
of your promotion is February 9, 2016

 

The terms of your employment are as follows:

 

Compensation:

 

Annual Base Salary: $300,000 (paid in substantially equal semi-monthly
installments), subject to withholding of taxes and other authorized deductions
in accordance with the Company’s standard payroll practices. The base salary
will be reviewed annually and subject to increase based on a recommendation from
me, as the CEO of Medgenics and at the discretion of the Board.

 

Annual Incentive Bonus:

 

·Subject to the terms of the company’s Annual Incentive Bonus program, provided
that you continue in service through the end of the calendar year, you are
eligible to receive a target bonus award of 50% of your annual base salary,
which will be paid on or before March 15 of the calendar year next following the
calendar year during which you earned the bonus. The amount of the award is
subject to the evaluation of performance at the Company and individual levels,
as well as any other performance criteria that apply to your position. You and
the Company will work in good faith to agree upon your performance objectives
prior to the start of each calendar year.

 

·As stated above, bonuses will be paid on or before March 15 of the following
year. Employees may opt to have the bonus award paid in Medgenics stock, which
will be fully vested upon issuance, and will be priced as of the date that your
cash bonus otherwise would have been paid.   For 2016, subject the terms of the
Company’s Annual Incentive Bonus Program, the applicable percentage for your
target bonus will be pro-rated between the target bonus percentage for your
period of service through February 9, 2016 and the 50% target bonus percentage
applicable to your service as the Company’s Chief Financial Officer, based upon
the number of days worked at Medgenics in each capacity for calendar year 2016.

 

401(k) Plan:

 

·Medgenics is in the process of establishing a 401(k) plan with Vanguard which
is expected to be available to employees later in 2016.

 

 

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Benefits:

 

Employee and employee’s spouse and dependents will be eligible for the
Company-provided health insurance plan as well as dental, vision, and life
insurance. All matters of eligibility for coverage or benefits under any benefit
plan shall be determined in accordance with the provisions of the plan. The
Company reserves the right to change, alter, or terminate any benefit plan in
its sole discretion.

 

Vacation: 20 days of paid vacation per calendar year, plus 5 days of paid leave
per calendar year for continuing professional education (CPE), in addition to
all designated company holidays, as administered in accordance with the
Company’s standard vacation policy for similarly situated employees.

 

Severance: See Exhibit A.

 

Restrictive Covenants: See Exhibit B.

 

Employment at Will:

 

Employment with Medgenics is at will (subject to the severance and acceleration
provisions noted above); that is, employment is not for any specific duration
and may be terminated by either party at any time, with or without cause.

 

Please confirm your acceptance of this offer by signing this letter and Exhibit
B. Please return a signed copy of each to me.

 

 

Kind regards,

  

 

Michael Cola

CEO Medgenics

 

 

I accept the offer of employment as set forth above.

 

  

  Signature: /s/ Brian Piper   Date: February 1, 2016     Brian Piper      

 

 

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EXHIBIT A -- SEVERANCE

 

For purposes of this Exhibit A:

 

“Executive” means Brian Piper.

 

“Cause” means any of the following (in each case as determined by the Company’s
Board of Directors (the “Board”) :

 

(1)           Executive’s conviction of, or plea of nolo contendere to, a crime
of embezzlement or fraud or any felony under the laws of the United States or
any state thereof;

 

(2)           An act of fraud, gross negligence, willful misconduct or
dishonesty by Executive that could reasonably be expected to be materially
injurious to the Company or an Affiliate;

 

(3)           A material breach by Executive of any of the provisions of the
Agreement;

 

(4)           An act of moral turpitude by Executive that could reasonably be
expected to lead to a material harm (financial or reputational) to the Company
or an Affiliate; or

 

(5)           Executive’s alcoholism or illegal drug use or drug abuse.

 

“Good Reason” means the occurrence of any one of the following events, unless
Executive agrees in writing that such event shall not constitute Good Reason:

 

(1)           A material and adverse change in the nature, scope, or status of
Executive’s position, authorities, or duties; provided, however, that a change
in title as a result of a merger or reorganization of the Company or an
Affiliate, where Executive maintains a similar level of responsibility or
oversight (including, where applicable, duties with respect to a public company
officer or director), shall not constitute Good Reason or a breach of this
Agreement;

 

(2)           A material reduction in Executive’s then-current Annual Base
Salary, or a material reduction in Executive’s aggregate benefits or other
compensation plans in effect immediately following the Effective Date;

 

(3)           A permanent relocation of Executive’s primary place of employment
of more than 25 miles from initially-agreed place of employment, which
relocation also causes Executive’s primary place of employment to be located
further from Executive’s primary residence

 

Subject to Executive’s execution, delivery and non-revocation of a release (the
“Release”) in form and substance satisfactory to the Company which becomes final
and binding on or before the 28th day following Executive’s termination of
employment (the “Termination Date”):

 

Termination With Good Reason or Without Cause. Executive shall be entitled to
terminate his employment for Good Reason by giving at least 10 days’, but not
more than 30 days’, prior written notice of termination to the Company, in which
event the date specified in the notice of termination shall be deemed the
Termination Date; provided, however, that (A) prior to giving such notice of
Termination for Good Reason, Executive must give the Company written notice of
the existence of any condition giving rise to Good Reason within 30 days of its
initial existence and the Company shall have 30 days from the date of such
notice in which to cure the condition giving rise to Good Reason, if curable,
and if, during such 30-day period, the Company cures the condition giving rise
to Good Reason, such condition shall not constitute Good Reason and (B) any
Termination for Good Reason must occur within six months of the initial
existence of the condition constituting Good Reason. The Company shall be
entitled to terminate Executive’s employment for any reason that does not
constitute Cause, or no reason, by giving at least 10 days’ prior written notice
to Executive, in which event the date specified in the notice of termination
shall be deemed the Termination Date. Upon a Termination by Executive for Good
Reason or a Termination by the Company without Cause, Executive shall be
entitled to the following:

 

 

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(1)           A lump sum payment, payable on the 45th day following the
Termination Date, in an amount equal to the sum of (x) Executive’s Annual Base
Salary in effect on the Termination Date, and (y) the Target Bonus for the
fiscal year in which the Termination Date occurs;

 

(2)           All unvested stock options then held be Executive shall
immediately vest and all vested stock options shall remain exercisable through
the earlier of the 24-month anniversary of the Termination Date or the original
expiration date of the applicable stock option; and

 

(3)           Medical and Dental Benefit Continuation, as follows:

 

 

If Executive’s employment is terminated as provided in this Exhibit A, then, to
the extent that Executive, Executive’s spouse or any of Executive’s dependents
may be covered under the terms of any medical or dental plans of the Company (or
an Affiliate) for active employees immediately prior to the Termination Date and
provided Executive is eligible for and elects to continue coverage (under the
health care continuation rules of COBRA, provided that if, on the Termination
Date, the Company is not subject to COBRA, the Company shall provide for
continuation coverage as if it were subject to COBRA for the entire period to
which COBRA would have applied if the Company had been subject to COBRA
(collectively for purposes of this Agreement, “COBRA”)), the Company shall
provide Executive, his spouse and those dependents with coverage equivalent to
the coverage in effect immediately prior to the applicable Termination Date for
a period of up to 12 months following the Termination Date, such that Executive
shall be required to pay, on a monthly basis, the same amount as Executive would
pay if Executive continued in employment with the Company during such period
(“Subsidized Coverage”) and thereafter Executive shall be responsible for the
full cost of such continued coverage; provided, however, that Subsidized
Coverage shall be provided as described above unless the Company determines,
based on a written legal opinion of counsel, that the Company’s provision of
Subsidized Coverage results in the violation of non-discrimination provisions of
applicable law, as may be applicable to the Company, the imposition of a
material additional tax or other material penalty being imposed on the Company
(or an Affiliate) or any employee participating in such plans. If the Company
makes such a determination, then the Company shall pay Executive an additional
severance benefit equal to the cost to the Company of the Subsidized Coverage
(had such Subsidized coverage been provided) to assist Executive with the cost
of COBRA or, if not available, to assist Executive with the cost of comparable
coverage for Executive and his eligible dependents. In the event Executive, his
spouse or any of Executive’s dependents is or becomes eligible for coverage
under the terms of any other medical and/or dental plan of a subsequent employer
with plan benefits that are comparable to Company (or Affiliate) plan benefits,
the Company’s and its Affiliates’ obligations under the Medical and Dental
Continuation Benefits paragraph of this Exhibit A shall cease with respect to
the eligible Executive, spouse and/or dependent. Executive and Executive’s
dependents must notify the Company of any subsequent employment and provide
information regarding medical and/or dental coverage available.

 

 

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Code Section 409A.

To the extent any provision of this Exhibit A or action by the Company would
subject Executive to liability for interest or additional taxes under Code
Section 409A, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Company. It is intended that this Offer Letter and
Exhibits will comply with Code Section 409A, and shall be administered
accordingly and interpreted and construed on a basis consistent with such
intent. Notwithstanding any provision to the contrary, no termination or similar
payments or benefits shall be payable hereunder on account of Executive’s
termination of employment unless such Termination constitutes a “separation from
service” within the meaning of Code Section 409A. For purposes of Code Section
409A, all installment payments of deferred compensation made hereunder, or
pursuant to another plan or arrangement, shall be deemed to be separate
payments. To the extent any reimbursements or in-kind benefit payments under
this Agreement are subject to Code Section 409A, such reimbursements and in-kind
benefit payments shall be made in accordance with Treasury Regulation Section
1.409A-3(i)(1)(iv). This Agreement may be amended to the extent necessary
(including retroactively) by the Company to avoid the application of taxes or
interest under Code Section 409A, while maintaining to the maximum extent
practicable the original intent of this Agreement. Notwithstanding any provision
of this Agreement to the contrary, if Executive is determined to be a “Specified
Employee” as of the Termination Date, then, to the extent required pursuant to
Code Section 409A, payments due that are deemed to be deferred compensation
shall be subject to a six-month delay following the Termination Date; and all
delayed payments shall be accumulated and paid in a lump-sum payment as of the
first day of the seventh month following the Termination Date (or, if earlier,
as of Executive’s death), with all such delayed payments being credited with
interest (compounded monthly) for this period of delay equal to the prime rate
in effect on the first day of such six-month period. Any portion of the benefits
hereunder that were not otherwise due to be paid during the six-month period
following the Termination Date shall be paid to Executive in accordance with the
payment schedule established herein.

 

 

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EXHIBIT B – RESTRICTIVE COVENANTS

 

1.           Restrictive Covenants. Executive acknowledges that Executive has
been and will continue to be provided intimate knowledge of the business
practices, trade secrets, and other confidential and proprietary information of
the Company (including the Confidential Information), which, if exploited by
Executive, would seriously, adversely, and irreparably affect the interests of
the Company and the ability of the Company to continue its business. Executive
further acknowledges that, during the course of Executive’s employment with the
Company, Executive may produce and have access to Confidential Information.

  

2.           Confidential Information. During the course of Executive’s
employment and following a Termination:

 

Executive shall not directly or indirectly use, disclose, copy, or make lists of
Confidential Information for the benefit of anyone other than the Company,
except to the extent that such information is or thereafter becomes lawfully
available from public sources, or such disclosure is authorized in writing by
the Company, required by law, or otherwise as reasonably necessary or
appropriate in connection with the performance by Executive of Executive’s
duties to the Company.

 

If Executive receives a subpoena or other court order or is otherwise required
by law to provide information to a governmental authority or other person
concerning the activities of the Company or its Affiliates, or Executive’s
activities in connection with the business of the Company or its Affiliates,
Executive shall immediately notify the Company of such subpoena, court order, or
other requirement and deliver forthwith to the Company a copy thereof and any
attachments and non-privileged correspondence related thereto.

 

Executive shall take reasonable precautions to protect against the inadvertent
disclosure of Confidential Information.

 

Executive shall abide by the Company’s policies, as in effect from time to time,
respecting avoidance of interests conflicting with those of the Company and its
Affiliates. In this regard, Executive shall not directly or indirectly render
services to any person or Entity where Executive’s service would involve the use
or disclosure of Confidential Information.

 

Executive shall not use any Confidential Information to guide Executive in
searching publications or other publicly available information, selecting a
series of items of knowledge from unconnected sources, and fitting them together
to claim that Executive did not violate any terms set forth in this Agreement.

 

 

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3.           Documents and Property. All records, files, documents, and other
materials or copies thereof relating to the business of the Company or its
Affiliates that Executive prepares, receives, or uses, shall be and remain the
sole property of the Company and, other than in connection with the performance
by Executive of Executive’s duties to the Company, shall not be removed from the
premises of the Company or its Affiliates without the Company’s prior written
consent, and shall be immediately returned to the Company upon a Termination,
together with all copies (including copies or recordings in electronic form),
abstracts, notes, or reproductions of any kind made from or about the records,
files, documents, or other materials.

 

Executive acknowledges that Executive’s access to and permission to use the
Company’s and its Affiliates’ computer systems, networks, and equipment, and all
the Company and Affiliate information contained therein, is restricted to
legitimate business purposes on behalf of the Company and reasonable personal
use in accordance with the Company’s applicable policies and procedures. Any
other access to or use of such systems, networks, equipment, and information is
without authorization and is prohibited. The restrictions contained in this
Paragraph 3 extend to any personal computers or other electronic devices of
Executive that are used for business purposes relating to the Company or its
Affiliates. Executive shall not transfer any Company or Affiliate information to
any personal computer or other electronic device that is not otherwise used for
any business purpose relating to the Company or an Affiliate. Upon a
Termination, Executive’s authorization to access and permission to use the
Company’s and its Affiliates’ computer systems, networks, and equipment, and any
Company and Affiliate information contained therein, shall cease, and Executive
shall delete any Company and Affiliate information from Executive’s personal
computer or other electronic device.

 

4.           Non-Competition and Non-Solicitation. The primary service area of
the Company’s business in which Executive will actively participate extends
separately to each state in the United States and each country in which the
Company or its Affiliates are actively engaged in or pursing business at the
time of Executive’s termination of employment (the “Restricted Area”).
Therefore, as an essential ingredient of and in consideration of the
compensation and benefits (including the initial stock option award and the
severance benefits) provided herein, this Agreement and Executive’s employment
with the Company, Executive shall not, during Executive’s employment with the
Company or during the Restricted Period, directly or indirectly do any of the
following (all of which are collectively referred to in this Agreement as the
“Restrictive Covenant”):

 

           (1)           Engage or invest in, own, manage, operate, finance,
control, participate in the ownership, management, operation, or control of, be
employed by, associated with, or in any manner connected with, serve as a
director, officer, or consultant to, lend Executive’s name or any similar name
to, lend Executive’s credit to or render services or advice to, in each case in
the capacity (or any substantially similar capacity) that Executive provided
services to the Company, any person, firm, partnership, corporation, other
business entity, or trust that owns, operates, or is in the process of forming,
a Competitor doing or planning to do business in the Restricted Area (as may be
evidenced by being identified in a filing with any regulatory authority, if
applicable); provided, however, that the ownership by Executive of shares of the
capital stock of any Entity, which shares are listed on a securities exchange
and that do not represent more than 2% of the Entity’s outstanding capital
stock, shall not violate any terms of this Agreement;

 

 

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           (2)           (A) Induce or attempt to induce any employee of the
Company or its Affiliates to leave the employ of the Company or its Affiliates;
(B) interfere with the relationship between the Company or its Affiliates and
any employee of the Company or its Affiliates; or (C) induce or attempt to
induce any customer, supplier, licensee, advisor, consultant, or other business
relation of the Company or its Affiliates with whom Executive or any reporting
employee had a business relationship to cease doing business with the Company or
its Affiliates or interfere with the relationship between the Company or its
Affiliates and their respective customers, suppliers, licensees, advisors,
consultants or other business relations with whom Executive or any reporting
employee had a business relationship.

 

           (3)           Serve as the agent, broker, or representative of, or
otherwise assist, any person or entity in obtaining services or products from
any Competitor within the Restricted Area, with respect to products, activities,
or services that Executive or any reporting employee devoted time to on behalf
of the Company or any Affiliate (or any substantially similar products,
activities, or services) and that compete in whole or in part with the products,
activities, or services of the Company or its Affiliates.

 

           (4)           Accept employment with, provide services to, or act in
any other such capacity for or with any Competitor, if in such employment or
capacity Executive would inevitably use or disclose the Company’s Confidential
Information in Executive’s work or service for such Competitor.

 

5.           Works Made for Hire; Ownership of Company Work Product.

The Parties understand and agree that all work prepared by Executive for the
Company or for its Affiliates shall be a Work Made For Hire as such phrase is
defined under the U.S. Copyright laws, 17 U.S.C. § 101 et seq., and if such work
does not qualify as a Work Made For Hire, Executive shall, and does, assign to
the Company all of Executive’s right, title, and interest in and to the work,
including all patent, copyright, trademark, and other proprietary rights
thereto.  Executive waives and releases all moral rights in any of the works as
Executive may possess by virtue of the Visual Artist’s Moral Rights Act of 1990
and various country or state laws of attribution, authorship, and integrity
commonly referred to as Moral Rights Law.  Executive shall not assert any claim
based upon such moral rights against the Company, the Affiliates, or any of
their respective successors in interest or assigns.  Executive shall have no
right, title, or interest in any of the work and shall not be entitled to any
royalties or other proceeds received by the Company or its Affiliates from the
commercialization in any manner of the work.

 

Executive hereby assigns to the Company any right, title, and interest in and to
all Company Work Product that Executive may have, by law or equity, without
additional consideration of any kind whatsoever from the Company or its
Affiliates.

 

Executive shall execute and deliver any instruments or documents and do all
further acts (including the giving of testimony and executing any applications,
oaths, and assignments) requested by the Company (both before and after a
Termination) in order to vest more fully in the Company or its Affiliates all
ownership rights in the Company Work Product (including obtaining patent,
copyright, trademark, or other intellectual property protection therefore in the
United States and foreign countries). 

 

 

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The Company or its Affiliates shall at all times own and have exclusive right,
title, and interest in and to all Confidential Information and Company Work
Product, and the Company or its Affiliates shall retain the exclusive right to
use, license, sell, transfer, and otherwise exploit and dispose of the same. 
Executive acknowledges the Company’s or its Affiliates’ exclusive right, title,
and interest in and to the Confidential Information and Company Work Product,
and shall not contest, challenge or make any claim adverse to the Company’s or
its Affiliates’ ownership of or the validity of the Confidential Information and
Company Work Product, any future application for registration or registration
thereof, or any rights of the Company or its Affiliates therein, or which,
directly or indirectly, may impair any part of the Company’s or its Affiliates’
right, title, and interest therein.

 

To the extent required by applicable state statute, this Paragraph 6 shall not
apply to an invention for which no equipment, supplies, facility, or trade
secret information of the Company or its Affiliates was used and that was
developed entirely on Executive’s own time, unless the invention (i) relates to
the business of the Company or an Affiliate or to the Company’s or an
Affiliate’s actual or demonstrably anticipated research or development or (ii)
results from any work performed by Executive for the Company or an Affiliate. 

 

6.           Consent and Release. From time to time, the Company’s business
locations may be the subject of a Promotional Work.  Executive acknowledges that
Executive is aware that Executive’s name, image, and likeness may be captured in
such Promotional Work, and hereby consents and agrees that the Company may use
Executive’s name, image, and likeness as captured in the Promotional Work in any
manner, in connection with the Company’s products and services, and, at all
times, the Company, its Affiliates, and, without limitation, their respective
customers, successors, licensees, and assigns, may continue to use the
Promotional Work that includes Executive’s name, image, or likeness.  Executive,
Executive’s heirs, predecessors, successors, assigns, and all affiliated
entities hereby fully and finally release, remise, and forever discharge the
Company, its Affiliates, their respective predecessors, successors, assigns, and
all affiliated entities, and each of their respective directors, officers,
members, shareholders, partners, employees, customers, agents, and attorneys, to
the extent that such apply, of and from any and all manner of actions, causes of
action, losses, claims, demands, liabilities, obligations, suits, debts, sums of
money, accounts, reckonings, bonds, bills, specialties, covenants,
controversies, agreements, promises, variances, trespasses, damages, judgments,
and executions, in law or in equity, that arise out of or are related to the
Company’s or its Affiliates’ use of a Promotional Work that includes Executive’s
name, image, or likeness.

 

7.           Company Proprietary and Intellectual Property. The Company or its
Affiliates shall at all times own and have exclusive right, title, and interest
in and to all Company Proprietary and Intellectual Property, and the Company or
its Affiliates shall retain the exclusive right to use, license, sell, transfer,
and otherwise exploit and dispose of the same.  Executive acknowledges the
Company’s or its Affiliates’ exclusive right, title, and interest in and to
Company Proprietary and Intellectual Property, and shall not contest, challenge,
or make any claim adverse to the Company’s or its Affiliates’ ownership of or
the validity of Company Proprietary and Intellectual Property, any future
application for registration or registration thereof, or any rights of the
Company or its Affiliates therein, or which, directly or indirectly, may impair
any part of the Company’s or its Affiliates’ right, title, and interest
therein.  Executive shall not use or otherwise exploit any of Company
Proprietary and Intellectual Property in any manner not authorized by the
Company.

 

 

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8.           Remedies for Breach of Restrictive Covenant. Executive has reviewed
the provisions of this Agreement with legal counsel, or has been given adequate
opportunity to seek such counsel, and Executive acknowledges that the covenants
contained in this Exhibit B are reasonable with respect to their duration,
geographical area, and scope.

 

Executive acknowledges that (A) the restrictions contained in this Exhibit B are
reasonable and necessary for the protection of the legitimate business interests
of the Company, (B) such restrictions create no undue hardships, (C) any
violation of these restrictions would seriously, adversely, and irreparably
injure the Company and such interests, and (D) such restrictions were a material
inducement to the Company to employ Executive and to enter into this Agreement
and to provide the compensation, benefits and opportunities hereunder.

 

Executive must, and the Company may, communicate the existence and terms of this
Agreement to any third party with whom Executive may seek or obtain future
employment or other similar arrangement.

 

In the event of any violation or threatened violation of the restrictions
contained in this Exhibit B, the Company, in addition to and not in limitation
of, any other rights, remedies, or damages available to the Company under this
Agreement or otherwise at law or in equity, shall not be required to provide any
amounts or benefits under this Agreement and shall be entitled to preliminary
and permanent injunctive relief to prevent or restrain any such violation by
Executive and all persons directly or indirectly acting for or with Executive,
as the case may be, without any requirement that the Company post bond.

 

If Executive violates the Restrictive Covenant and the Company brings legal
action for injunctive or other relief, the Company shall not, as a result of the
time involved in obtaining such relief, be deprived of the benefit of the full
period of the Restrictive Covenant; accordingly, the Restrictive Covenant shall
be deemed to have the duration specified herein computed from the date the
relief is granted but reduced by the time between the period when the Restricted
Period began to run and the date of the first violation of the Restrictive
Covenant by Executive.

 

 

           This Exhibit B shall be governed by and construed under the laws of
the Commonwealth of Pennsylvania, without regard to principles of conflict of
laws (whether in the Commonwealth of Pennsylvania or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
Commonwealth of Pennsylvania.

 

 

I accept Exhibit B as set forth above.

  

 

  Signature: /s/ Brian Piper   Date: February 1, 2016     Brian Piper      

 

  

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