Exhibit 10.1

 

FIRST AMENDMENT TO THE
AMENDED AND RESTATED EMPLOYMENT AGREEMENT OF JOSEPH OLIVETO

 

This First Amendment to the Amended And Restated Employment Agreement Of Joseph
Oliveto (the “Amendment”) is entered into this 4th day of June 2020 (the
“Effective Date”), by and between Joseph Oliveto (the “Executive”) and Milestone
Pharmaceuticals USA, Inc. (the “Company”).

 

Recitals

 

A. The Company and the Executive have entered into that certain Amended and
Restated Employment Agreement effective April 26, 2019 (the “Executive
Agreement”); and

 

B. In light of the Board’s recent approval of the retention bonus provisions and
equity awards herein, the Company and the Executive desire to amend the
Executive Agreement as provided in this Amendment.

 

Agreement

 

The parties agree to the following:

 

1.             Amendment to Section 3. Section 3 of the Executive Agreement is
hereby and replaced in its entirety as follows:

 

(a)               Base Salary. Effective June 1, 2020 and continuing until May
31, 2021 (the “Initial Term”), the Company will pay Executive as compensation
for Executive’s services a base salary at a rate of $412,500 annually (the “Base
Salary”). Following the Initial Term, unless otherwise agreed by Executive and
the Company, the Base Salary shall increase to $550,000.  The Base Salary will
be paid in regular installments in accordance with the Company’s normal payroll
practices (subject to required withholding). Any increase or decrease in Base
Salary (together with the then existing Base Salary) shall serve as the “Base
Salary” for future employment under this Agreement. The first and last payment
will be adjusted, if necessary, to reflect a commencement or termination date
other than the first or last working day of a pay period.

 

(b)               Annual Bonus. Executive will also be eligible to earn an
annual discretionary bonus (an “Annual Bonus”) with a target amount equal to 50%
of the greater of the Base Salary as defined in Section 3(a) and $550,000. The
amount of the Annual Bonus, if any, will be determined in the sole discretion of
the Board and based, in part, on Executive’s performance and the performance of
the Company during the calendar year. The Company will pay Executive the Annual
Bonus, if any, by no later than March 15th of the following calendar year. The
Annual Bonus is not earned until paid and no pro-rated amount will be paid if
Executive’s employment terminates for any reason prior to the payment date,
provided, however, that if Executive’s employment is terminated by Company
without Cause after the Annual Bonus is declared but before it is paid, then
despite such termination Executive will be entitled to receive the declared
Annual Bonus at the time it otherwise would have been paid.

 

(c)               Retention Bonus Eligibility. If (i) Executive’s employment
continues through June 1, 2021 (“First Retention Date”) and Executive has
neither resigned nor retired prior to the First Retention Date, or (ii) the
Company terminates Executive’s employment without Cause (the date of such
termination, the “Severance Date”) prior to the First Retention Date, the
Company will pay Executive a lump sum retention bonus of $137,500, subject to
applicable deductions and withholdings. Provided Executive’s employment
continues through the earlier of (i) a Change of Control as defined in the
Company’s 2019 Equity Incentive Plan, or (ii) December 31, 2021, upon the
closing of the Change of Control or on the next regular payroll date on or
following December 31, 2021, as applicable, the Company will pay Executive an
additional lump sum retention bonus of $34,375, subject to applicable deductions
and withholdings.

 

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(d)               Stock Option. Subject to approval by the Board or a committee
of the Board, the Company shall grant Executive an option to acquire 150,000
shares of common stock of the Company (the “Option”). The Option shall have an
exercise price equal to the Company’s fair market value on the grant date and
shall vest, subject to Executive’s continued employment with the Company, in 24
equal monthly installments with the first installment vesting on July 1, 2020.
The Option shall be subject to the Company’s 2019 Equity Incentive Plan and the
option agreement evidencing the Option.

 

(e)               Tax Equalization and Related Benefits. Executive and the
Company acknowledge and agree that the Company will require Executive to spend a
significant portion of his time working in Canada. As a result, Executive’s
gross Base Salary and Annual Bonus will be subject to equalization for non-U.S.
taxes so that, to the extent the Company requires Executive to work in Canada,
Executive’s net after-tax compensation from the Company is treated as though
employed exclusively in the United States and paid in U.S. Dollars. The Company
will engage an accounting firm to assist with the equalization calculations
described in the preceding sentence. The Company will pay or reimburse Executive
for any expenses necessary for Executive to conduct business in Canada if
Executive is required by the Company to conduct business in Canada (e.g., work
permits or similar immigration-related authorization). In addition, the Company
will reimburse Executive, in an amount not to exceed an aggregate of $12,000 per
year, for accounting and legal expenses incurred in connection with advice,
preparation, filing and defense, if applicable, of Executive’s personal Canadian
income tax return and for any added complexity to Executive’s U.S. tax return.

 

2.             A new Section 9(a)(iii) is hereby added to the Executive
Agreement as follows:

 

i.For purposes of this Section 9 (including for purposes of calculating the
“Annual Bonus” under this Section 9), the Base Salary of the Executive shall be
determined based on the greater of the Base Salary as defined in Section 3 and
$550,000.

 

3.             The Company and the Executive further agree that this Amendment
does not constitute grounds for “Good Reason” pursuant Sections 9 and 10 of the
Executive Agreement, or otherwise constitute any trigger for the Company’s
payment of any severance benefits to Executive pursuant to Section 9(a)(i) of
the Executive Agreement.

 

4.             The Executive will continue to abide by Company rules and
policies. Executive acknowledges and agrees to continue to comply with the
Employee Confidential Information, Inventions, Non-Solicitation And
Non-Competition Agreement, which Executive signed on [date] and which prohibits
unauthorized use or disclosure of the Company’s proprietary information, among
other obligations.

 

5.             Except as modified or amended in this Amendment, no other term or
provision of the Executive Agreement is amended or modified in any respect. The
Executive Agreement, and its exhibits, along with this Amendment, set forth the
entire understanding between the parties with regard to the subject matter
hereof and supersedes any prior oral discussions or written communications and
agreements. This Amendment cannot be modified or amended except in writing
signed by the Executive and an authorized officer of the Company.

 

[Signature page follows]

 

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The parties have executed this First Amendment to the Amended And Restated
Employment Agreement Of Joseph Oliveto on the day and year first written above.

 

  Milestone Pharmaceuticals USA, Inc.       /s/ Amit Hasija   Amit Hasija  
Treasurer       Executive:           /s/ Joseph Oliveto   Joseph Oliveto

 

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