EXHIBIT 10.1

 
EXECUTIVE EMPLOYMENT AGREEMENT
 
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), is made as of June 1,
2018, by and between Tenax Therapeutics, Inc., a Delaware corporation, with its
principal place of business in North Carolina (the “Company”), and Anthony A.
DiTonno (the “Executive”).
 
W I T N E S S E T H:
 
WHEREAS, the Company desires to employ the Executive as its Chief Executive
Officer and provide adequate assurances to the Executive and the Executive
desires to accept such employment on the terms set forth below.
 
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises
herein, and of other good and valuable consideration, the receipt and
sufficiency of which the parties acknowledge, the Company and the Executive
agree as follows:
 
1. Employment. Effective as of June 1, 2018 (the “Effective Date”), the Company
hereby employs the Executive and the Executive hereby accepts employment as
Chief Executive Officer of the Company upon the terms and conditions of this
Agreement.
 
2. Duties. The Executive will have such authority, and will faithfully perform
all of the duties, normally associated with the position of Chief Executive
Officer, including but not limited to all duties set forth in this Agreement,
and all additional duties consistent with such position that are reasonably
prescribed from time to time by the Board of Directors of the Company (the
“Board”). The Executive shall devote such business time and attention as
reasonably necessary to perform his duties and responsibilities on behalf of the
Company and in furtherance of its best interests; provided, however, that he,
subject to his obligations hereunder, shall be permitted to make personal
investments, perform reasonable volunteer services and serve on the boards of
directors (or similar governing bodies) of nonprofit entities and/or for profit
entities that are not in competition with the Company. The Executive shall
comply with all Company policies, standards, rules and regulations (the “Company
Policies”) as may exist from time-to-time and all applicable government laws,
rules and regulations that are now or hereafter in effect.
 
3. Term. Unless earlier terminated as provided herein, the initial term of this
Agreement shall commence on the Effective Date and shall continue until the
one-year anniversary of the Effective Date (the “Initial Term”). After the
Initial Term, this Agreement shall automatically renew for successive one-year
terms on the same terms and conditions set forth herein unless: (a) earlier
terminated or amended as provided herein; or (b) either party gives the other
written notice of non-renewal at least ninety (90) days prior to the end of the
Initial Term or any renewal term of this Agreement, in which case, this
Agreement shall terminate on the expiration of the then-current Term. The
Initial Term of this Agreement and all applicable renewals thereof are referred
to herein as the “Term.”
 
4. Compensation. During the Term, as compensation for the services rendered by
the Executive under this Agreement, the Executive shall be entitled to receive
the following (all payments are subject to applicable withholdings):
 
 

 
 
(a) Base Salary. The Executive shall receive an annual salary of Four Hundred
Thirty Thousand Dollars and 00/100 Dollars ($430,000.00) (less applicable
withholdings) (“Base Salary”) payable in accordance with the payroll policies of
the Company as such policies may exist from time to time or as otherwise agreed
upon by the parties. The Board shall review, on an annual basis, the Executive’s
salary and may increase or decrease such salary as the Board deems appropriate;
provided, however, that any decrease shall only be effective if it is a result
of an across-the-board decrease affecting all senior executives as a group.
 
(b) Bonuses. Each fiscal year during the Term, the Executive shall be entitled
to an annual bonus the amount of which is based on percentage achievement of
annual goals set by the Company, after consultation with the Executive, at the
beginning of each fiscal year for such fiscal year (“Annual Bonus”), which
achievement shall be determined as of the last day of such fiscal year. If the
Executive achieves one hundred percent (100%) of the annual goals, the Annual
Bonus shall be fifty percent (50%) of his Base Salary (“Target Bonus”). There is
no cap on the Annual Bonus for exceeding one hundred percent (100%) of annual
goals; for example, an achievement of two hundred percent (200%) of annual goals
would result in an Annual Bonus equal to one hundred percent (100%) of his Base
Salary. The Annual Bonus shall be paid in accordance with the Company’s regular
bonus payment procedures, and, in all events, will be paid no later than sixty
(60) days following the end of the fiscal year in which the Annual Bonus was
earned. Except as otherwise set forth in Section 5(d)(ii)(C), in order to be
eligible to receive the Annual Bonus, the Executive must be employed by the
Company on the last day of the fiscal year in which the Annual Bonus was earned.
 
(c) Benefits. The Executive shall be entitled to receive those benefits provided
from time to time to other executive employees of the Company, in accordance
with the terms and conditions of the applicable plan documents, provided that
the Executive meets the eligibility requirements thereof. All such benefits are
subject to amendment or termination from time to time by the Company without the
consent of the Executive or any other employee of the Company.
 
(d) Business Expenses. The Company shall pay, or reimburse the Executive for,
all reasonable expenses incurred by the Executive directly related to conduct of
the business of the Company; provided that the Executive complies with the
Company’s policies for the reimbursement or advancement of business expenses
that are now or hereafter in effect. The Company shall provide such payments or
reimbursements within thirty (30) days following the Executive’s incurrence of
the expense.
 
(e) Option Award. The Board has approved a [nonstatutory] stock option entitling
the Executive to purchase up to 50,000 shares of Company Common Stock (the
“Option”) at the fair market value as of the date of grant as determined by the
Board in its sole discretion. The terms and conditions, including vesting, for
the Option will be set forth in a [Nonstatutory] Stock Option Agreement between
the Executive and the Company in the form set forth on Exhibit A.
 
 
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(f) Relocation Expenses. The Company shall pay, or reimburse the Executive for,
all reasonable relocation expenses incurred by the Executive directly related to
his relocation to North Carolina, up to $30,000 (“Relocation Expenses”). If the
Executive is terminated for Cause, or leaves the Company without Good Reason,
within twelve (12) months of the Effective Date, the Executive must repay the
costs of Relocation Expenses paid on his behalf prior to his termination date.
If the Executive becomes obligated to repay the Relocation Expenses to the
Company, the Executive hereby authorizes the Company to deduct the Relocation
Expenses from any paycheck owed to the Executive. The Company shall provide such
payments or reimbursements within thirty (30) days following the Executive’s
incurrence of the expense.
 
5. Termination and Obligations of the Company upon Termination. This Agreement
and the Executive’s employment by the Company shall or may be terminated, as the
case may be, as set forth below.
 
(a) Termination upon Expiration of the Term. This Agreement and the Executive’s
employment by the Company shall terminate upon the expiration of the Term.
 
(b) Termination by the Executive. The Executive may terminate this Agreement and
his employment with the Company as follows:
 
(i) Voluntary Resignation. For any reason other than Good Reason thirty (30)
days after written notice of the Executive’s resignation is received by the
Company (“Voluntary Resignation”).
 
(ii) For Good Reason. For purposes of this Agreement, the Executive’s
termination of his employment will be deemed to have been for “Good Reason” if
the Executive resigns within six (6) months after any of the following
conditions having arisen without his prior written consent and after having
given the Company written notice of the existence of such condition within
ninety (90) days of the Executive’s knowledge of the existence of the condition
and providing the Company with thirty (30) days to remedy the condition:
 
(A)
a material diminution in the Executive’s base salary;
 
(B)
a material diminution in the Executive’s authority, duties, or responsibility by
the assignment to him of authority, duties, or responsibilities materially
inconsistent with his position as Chief Executive Officer;
 
(C)
the Executive’s place of employment is relocated by more than fifty (50) miles;
or
 
(D)
any breach by the Company of any material provision of this Agreement or any
other written agreement with the Executive.
 
 
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(c) Termination by the Company. The Company may terminate this Agreement and the
Executive’s employment by the Company immediately upon written notice to the
Executive (or his personal representative):
 
(i) Without Cause. At any time and for any reason other than reasons set forth
in Sections 5(c)(ii) (Death), (iii) (Disability) or (iv) (Cause) (“Without
Cause”);
 
(ii) Death. Upon the death of the Executive, in which case this Agreement shall
terminate immediately; provided that, such termination shall not prejudice any
benefits payable to the Executive’s spouse or beneficiaries which are fully
vested as of the date of death (“Death”);
 
(iii) Disability. If the Executive is “permanently disabled” (as defined
herein), in which case this Agreement shall terminate immediately; provided
that, such termination shall not prejudice any benefits payable to the
Executive, the Executive’s spouse or beneficiaries which are fully vested as of
the date of the termination of this Agreement. For purposes of this Agreement,
the Executive shall be considered “permanently disabled” when a qualified
medical doctor mutually acceptable to the Company and the Executive or the
Executive’s personal representative shall have certified in writing that the
Executive has been unable, because of a medically determinable physical or
mental disability, to perform substantially all of the Executive’s duties, with
or without a reasonable accommodation, for more than one hundred eighty (180)
calendar days measured from the last full day of work (“Disability”);
 
(iv) For “Cause”. The term “Cause”, as used herein, shall mean:
 
(A) 
Any willful material breach of the terms of this Agreement, or of any other
written agreement with the Executive, by the Executive, which breach is not
cured by the Executive within thirty (30) days after the Company provides the
Executive with written notice specifying the nature of such breach;
 
(B) 
The Executive’s material misappropriation of the Company’s tangible or
intangible property, or material and intentional breach of the Confidentiality
Agreement (provided, however, that for this purpose, the Executive will not be
deemed to have breached the Confidentiality Agreement in connection with any
disclosure made pursuant to a court order, subpoena or other legal obligation);
 
(C) 
The Executive’s material failure to comply with the Company Policies or any
other reasonable policies and/or directives of the Board, which failure is not
cured by the Executive within thirty (30) days after the Company provides the
Executive with written notice specifying the nature of such failure;
 
 
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(D) 
The Executive’s abuse of illegal drugs or any illegal substance, or the
Executive’s abuse of alcohol in any manner that materially interferes with the
performance of the Executive’s duties under this Agreement;
 
(E) 
Any dishonest or illegal action (including, without limitation, embezzlement) by
the Executive which is detrimental to the interest and well-being of the
Company, including, without limitation, harm to its reputation; or
 
(F) 
The Executive’s failure to disclose any conflict of interest known to the
Executive that the Executive may have with the Company in a transaction between
the Company and any third party which failure is detrimental to the interest and
well-being of the Company.
 
(d) Obligations upon Termination.
 
(i) Upon the termination of this Agreement and the Executive’s employment with
the Company pursuant to the expiration of the Term following the Executive’s
notice of non-renewal pursuant to Section 3, by the Executive pursuant to
Section 5(b)(i) (Voluntary Resignation), or by the Company pursuant to Section
5(c)(ii) (Death), (iii) (Disability) or (iv) (Cause), the Company shall have no
further obligations hereunder other than the payment of all compensation and
other benefits payable to the Executive (or his estate or heirs) through the
date of such termination in accordance with the Company’s normal payroll cycle
and terms of the applicable benefit plans and programs in existence at the time
the Executive’s employment is terminated.
 
(ii) Upon termination of this Agreement and the Executive’s employment with the
Company by the Company pursuant to Section 5(c)(i) (Without Cause), upon
expiration of the Term following the Company’s notice of non-renewal pursuant to
Section 3, or by the Executive pursuant to Section 5(b)(ii) (Good Reason), the
Executive shall be entitled to the following, with those benefits described in
Sections 5(d)(ii)(B), (C) and (D) specifically conditioned upon Executive’s
execution and nonrevocation of a valid release under Section 6 and compliance
with his obligations under Section 7:
 
(A)
payment of all compensation and other benefits payable to the Executive through
the date of such termination in accordance with the Company’s normal payroll
cycle and terms of the applicable benefit plans and programs in existence at the
time the Executive’s employment is terminated;
 
 
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(B)
payment of an amount equal to twelve (12) months of his then current Base Salary
(less applicable withholdings), payable in a lump sum on the sixtieth (60th) day
following the date of the Executive’s separation from service (the “Severance
Payment Date”);
 
(C)
a lump sum payment in an amount equal to the Target Bonus for the fiscal year in
which such termination occurred, multiplied by a fraction, the numerator of
which is the number of days during which the Executive was employed by the
Company in the fiscal year of his termination and the denominator of which is
365 (less applicable withholdings), with such payment to be made on the
Severance Payment Date; and
 
(D)
reimbursement for premium payments the Executive makes under the Consolidated
Budget Reconciliation Act (“COBRA”) to continue the Executive and, if
applicable, the Executive’s family’s health insurance coverage under the
Company’s group health insurance plan for twelve (12) months from the date of
termination. Reimbursements for COBRA premium payments shall begin on the
Severance Payment Date and shall be made as soon as possible following the
Executive’s submission to the Company of proof of timely payments, but not later
than thirty (30) days after the Executive’s submission of proof of timely
payments; provided, however, all such claims for reimbursement shall be
submitted by the Executive and paid by the Company no later than fifteen (15)
months following the termination of the Executive’s employment. Any obligation
for the Company to make payments for COBRA reimbursement under this Agreement
shall immediately cease when the Executive becomes eligible for health insurance
from a subsequent employer, and the Executive shall promptly notify the Company
of such subsequent eligibility. If the Executive desires COBRA coverage, the
Executive shall bear full responsibility for applying for COBRA coverage and
nothing herein shall constitute a guarantee of COBRA benefits. Under no
circumstances will the Executive be entitled to a cash payment or other benefit
in lieu of reimbursements for the actual costs of premiums for COBRA
continuation hereunder. The amount of expenses eligible for reimbursement during
any calendar year shall not be affected by the amount of expenses eligible for
reimbursement in any other calendar year.
 
 
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6. Release of Claims. Notwithstanding any provision of this Agreement to the
contrary (other than the last sentence of this Section 6), the Company’s
obligation to provide the payments and benefits under Section 5(d)(ii)(B),(C)
and (D) of this Agreement is conditioned upon the Executive’s execution and
non-revocation of an enforceable release of claims and his compliance with his
obligations under Section 7 of this Agreement. If the Executive chooses not to
execute such a release, timely revokes his execution of the release, or fails to
comply with his obligations under Section 7 of this Agreement, then the
Company’s obligation to compensate him ceases upon the termination of his
employment except as to amounts due at the time pursuant to Section 5(d)(ii)(A).
The Company shall provide the release of claims to the Executive within seven
(7) days of his separation from service, and the Executive must execute it
within the time period specified in the release (which shall not be longer than
forty five (45) days from the date of receipt). Such release shall not be
effective until any applicable revocation period has expired.
 
7. Confidential Information and Competitive Business Activities. [The Executive
acknowledges that by virtue of his employment and position with the Company, he
has or will have access to confidential information of the Company, including
valuable information about its business operations and entities with which it
does business in various locations, and has developed or will develop
relationships with parties with whom it does business in various locations. The
Executive also acknowledges that the confidential information and competitive
business activities provisions set forth in the Employee Non-Disclosure,
Invention Assignment Agreement executed by the Executive, Effective June 1, 2018
(the “Confidentiality Agreement”), are reasonably necessary to protect the
Company’s legitimate business interests, are reasonable as to the time,
territory and scope of activities which are restricted, do not interfere with
public policy or public interest and are described with sufficient accuracy and
definiteness to enable him to understand the scope of the restrictions imposed
on him. The Executive acknowledges that his failure to abide by the provisions
set forth in the Confidentiality Agreement would cause irreparable harm to the
Company for which legal remedies would be inadequate. Therefore, in addition to
any legal or other relief to which the Company may be entitled by virtue of the
Executive’s failure to abide by the provisions set forth in the Confidentiality
Agreement: (i) the Company will be released of its obligations under this
Agreement to make any post-termination payments; (ii) the Company may seek legal
and equitable relief, including but not limited to preliminary and permanent
injunctive relief, for the Executive’s actual or threatened failure to abide by
these provisions; (iii) the Executive will return all post-termination payments
received pursuant to this Agreement; and (iv) the Executive will indemnify the
Company for all reasonable and documented expenses, including attorneys’ fees,
incurred by it in successfully enforcing these provisions. In the event that the
Company exercises its right to discontinue payments under this provision and/or
the Executive returns all post-termination payments received pursuant to this
Agreement, the Executive shall remain obligated to abide by the provisions set
forth in Section 3 in the Confidentiality Agreement.
 
8. Representations and Warranties.
 
(a) The Executive represents and warrants to the Company that the Executive’s
performance of this Agreement and as an employee of the Company does not and
will not breach any noncompetition agreement or any agreement to keep in
confidence proprietary information acquired by the Executive in confidence or in
trust prior to the Executive's employment by the Company. The Executive
represents and warrants to the Company that the Executive has not entered into,
and agrees not to enter into, any agreement that conflicts with or violates this
Agreement.
 
 
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(b) The Executive represents and warrants to the Company that the Executive has
not brought and shall not bring with the Executive to the Company, or use in the
performance of the Executive's responsibilities for the Company, any materials
or documents of a former employer which are not generally available to the
public or which did not belong to the Executive prior to the Executive’s
employment with the Company, unless the Executive has obtained written
authorization from the former employer or other owner for their possession and
use and provided the Company with a copy thereof.
 
9. Notices. All notices, requests, consents, approvals, and other communications
to, upon, and between the parties shall be in writing and shall be deemed to
have been given, delivered, made, and received when: (a) personally delivered;
(b) deposited for next day delivery by Federal Express, or other similar
overnight courier services; (c) transmitted via telefacsimile or other similar
device to the attention of the Company’s Chief Financial Officer with receipt
acknowledged; or (d) three (3) days after being sent or mailed by certified
mail, postage prepaid and return receipt requested, addressed as follows:
 
If to the Company:
 
Tenax Therapeutics, Inc.
Attn: Chief Financial Officer
One Copley Parkway
Suite 490
Morrisville, NC 27560
 
If to the Executive:
 
Anthony A. DiTonno
1673 sugarloaf drive
San Mateo CA 94403
 

10. Indemnification, Liability Insurance. The Company shall indemnify and hold
the Executive harmless to the fullest extent permitted by the laws of the
Company’s state of incorporation in effect at the time against and in respect of
any and all actions, suits, proceedings, claims, demands, judgments, costs,
expenses (including advancement of reasonable attorney’s fees), losses, and
damages resulting from the Executive’s performance of the Executive’s duties and
obligations with the Company. The Executive will be entitled to be covered, both
during and, while potential liability exists, by the insurance policies that the
Company maintains generally for the benefit of officers and directors of the
Company against all costs, charges and expenses incurred in connection with any
action, suit or proceeding to which the Executive may be made a party by reason
of being an officer or director of the Company in the same amount and to the
same extent as the Company covers its other officers and directors. These
obligations shall survive the termination of the Executive’s employment with the
Company.
 
 
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11. Effect/Assignment. This Agreement shall be binding on and inure to the
respective benefit of the Company and its successors and assigns and the
Executive and his personal representatives. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, within fifteen (15) days of such succession, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent as the Company would be required to perform if no such succession had
taken place. The Executive may not assign this Agreement or delegate his
obligations hereunder. As used in this Agreement, “Company” shall mean the
Company and any such successor which assumes and agrees to perform the duties
and obligations of the Company under this Agreement by operation of law or
otherwise.
 
12. Entire Agreement. Except as expressly provided in this Agreement and except
for the Confidentiality Agreement, this Agreement: (i) supersedes all other
understandings and agreements, oral or written, between the parties with respect
to the subject matter of this Agreement; and (ii) constitutes the sole agreement
between the parties with respect to this subject matter. Each party acknowledges
that: (A) no representations, inducements, promises or agreements, oral or
written, have been made by any party or by anyone acting on behalf of any party,
which are not embodied in this Agreement; and (B) no agreement, statement or
promise not contained in this Agreement shall be valid. No change or
modification of this Agreement shall be valid or binding upon the parties unless
such change or modification is in writing and is signed by the parties.
 
13. Severability. If a court of competent jurisdiction holds that any provision
or sub-part thereof contained in this Agreement is invalid, illegal or
unenforceable, that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement.
 
14. Amendment and Waiver. No provision of this Agreement, including the
provisions of this Section, may be amended, modified, deleted, or waived in any
manner except by a written agreement executed by the parties. Further, the
Company’s or the Executive’s waiver of any breach of a provision of this
Agreement shall not waive any subsequent breach by the other party.
 
15. Governing Law. This Agreement and the employment relationship created by it
shall be governed by North Carolina law without giving effect to North Carolina
choice of law provisions.
 
16. Consent to Jurisdiction and Venue. Each of the parties agrees that any suit,
action, or proceeding arising out of this Agreement may be instituted against it
in the Superior Court of Wake County, North Carolina or in the United States
District Court for the Eastern District of North Carolina (assuming that such
court has subject matter jurisdiction over such suit, action or proceeding).
Each of the parties hereby waives any objection that it may have to the venue of
any such suit, action, or proceeding, and each of the parties hereby irrevocably
consents to the personal jurisdiction of any such court in any such suit,
action, or proceeding.
 
17. Counterparts. This Agreement may be executed in more than one counterpart,
each of which shall be deemed an original, and all of which shall be deemed a
single agreement.
 
 
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18. Headings. The headings herein are for convenience only and shall not affect
the interpretation of this Agreement.
 
19. Taxes.
 
(a) Section 409A of the Internal Revenue Code.
 
(i) Parties’ Intent. The parties intend that the provisions of this Agreement
comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder (collectively, “Section 409A”), or an
exemption, and all provisions of this Agreement shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties under Section
409A. If any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause the Executive to incur
any additional tax or interest under Section 409A, the Company shall, upon the
specific request of the Executive, use its reasonable business efforts to in
good faith reform such provision to comply with Code Section 409A; provided,
that to the maximum extent practicable, the original intent and economic benefit
to the Executive and the Company of the applicable provision shall be
maintained. The Company shall timely use its reasonable business efforts to
amend any plan or program in which the Executive participates to bring it in
compliance with Section 409A.
 
(ii) Separation from Service. A termination of employment shall not be deemed to
have occurred for purposes of any provision of this Agreement relating to the
payment of any amounts or benefits upon or following a termination of employment
unless such termination also constitutes a “Separation from Service” within the
meaning of Section 409A and, for purposes of any such provision of this
Agreement, references to a “termination,” “termination of employment,”
“separation from service” or like terms shall mean Separation from Service.
 
(iii) Separate Payments. Each installment payment required under this Agreement
shall be considered a separate payment for purposes of Section 409A.
 
(iv) Delayed Distribution to Specified Employees. If the Company determines in
accordance with Sections 409A and 416(i) of the Code and the regulations
promulgated thereunder, in the Company’s sole discretion, that the Executive is
a specified employee of the Company, determined in accordance with Section 409A,
any payments and/or benefits provided under this Agreement that constitute
”nonqualified deferred compensation” subject to Section 409A that are provided
to Executive on account of his Separation from Service shall not be provided
until the day after the six-month anniversary of Executive’s termination date
(“Specified Employee Payment Date”). The aggregate amount of any payments that
would otherwise have been made to Executive during such six-month period shall
be paid in a lump sum to Executive on the Specified Employee Payment Date
without interest and, thereafter, any remaining reimbursements shall be paid
without delay in accordance with their original schedule.
 
(b) Withholdings. The Company shall withhold any amounts required from any
payment due the Executive hereunder in accordance with state and federal tax law
requirements.
 
[Signatures on following page]
 
 
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the day and year first above written.
 
 
Tenax Therapeutics, Inc.
 
 
 
 
By: /s/Michael Jebsen   

Name: Michael Jebsen
Title: President/CFO
 
 
 
 
Anthony A. DiTonno
 
 
 
/s/ Tony DiTonno

 
 
 
 
 
 
 
 
 
[Signature Page to Executive Employment Agreement]

 

 
Exhibit A
 
[Nonstatutory] Stock Option Agreement
 
 
 
 
 
 
 

 
 
TENAX THERAPEUTICS INC.
2016 STOCK INCENTIVE PLAN
 
AWARD AGREEMENT
(Awarding Nonqualified Stock Option to Employees and Contractors)
 
THIS AWARD AGREEMENT (this “Agreement”) is made by and between Tenax
Therapeutics, Inc., a Delaware corporation (the “Company”), and [Insert Name of
Grantee] (the “Optionee”) pursuant to the provisions of the Tenax Therapeutics,
Inc. 2016 Stock Incentive Plan (the “Plan”), which is incorporated herein by
reference. Capitalized terms not defined in this Agreement shall have the
meanings given to them in the Plan.
 
WITNESSETH:
 
WHEREAS, the Optionee is providing, or has agreed to provide, services to the
Company, or Affiliate or a Subsidiary of the Company, as an Employee or Third
Party Service Provider; and
 
WHEREAS, the Company considers it desirable and in its best interests that the
Optionee be given a personal stake in the Company’s growth, development and
financial success through the grant of an option to purchase shares of the
$0.0001 par value common stock of the Company (the “Shares”).
 
NOW, THEREFORE, in consideration of the premises and the mutual agreements set
forth herein, the parties agree as follows:
 
1. Grant of Option. Effective as of [Insert Grant Date] (the “Date of Grant”),
the Company hereby grants to the Optionee, an option (the “Option”) to
purchase [Insert Number of Shares] Shares at the Option Price per Share of
[Insert Option Price] (the “Option Price”), subject to the terms and conditions
of the Plan and this Agreement. The future value of such Shares is unknown and
cannot be predicted with certainty. If such Shares do not increase in value, the
Option will have no value.
 
2. Term of Option. Subject to earlier termination under Section 4 hereof, the
term of the Option shall be ten (10) years (the “Term”).
 
3. Vesting Schedule. The Option shall vest and become exercisable as to [Insert
Vesting Schedule].
 
In no event will any portion of the Option that is not vested and exercisable at
the time of the termination of the Optionee’s service relationship become vested
and exercisable following such termination. Further, notwithstanding any
provision of the Plan or this Agreement to the contrary, in no event will any
portion of the Option that is not vested and exercisable immediately prior to
the time of a Sale of the Company become vested and exercisable because of such
event.
 
 

 
 
4. Termination of Option. Except as otherwise provided herein, the Option shall
terminate on the earliest to occur of the following:
 
(a)
The expiration of the Term of the Option.
 
(b)
The 91st day after termination of the Optionee’s service relationship for any
reason other than one specified in (c) or (d) below.
 
(c)
The 366th day after termination of the Optionee’s service relationship as a
result of the Optionee’s death, or a disability, retirement or redundancy that
is approved by the Committee for this purpose.
 
(d)
Termination of the Optionee’s employment relationship by the Company for Cause,
or of the Optionee’s service relationship by the Company for reasons that would
constitute Cause if the Optionee were an employee.
 
5. Exercise of Option. The vested portion of the Option may be exercised in
whole or in part by delivery of an exercise notice in the form attached
as Exhibit A (the “Exercise Notice”) which shall state the election to exercise
the Option and set forth the number of Shares with respect to which the Option
is being exercised. The Exercise Notice shall be accompanied by payment of an
amount equal to the aggregate Option Price as to all exercised Shares. Payment
of such amount shall be by any of the following methods, or combination thereof,
at the election of the Optionee: (a) in cash or its equivalent; (b) by tendering
(either by actual delivery or attestation) previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the Option Price;
(c) by a cashless (broker-assisted) exercise; or (d) any other method approved
or accepted by the Committee in its sole discretion. The Option shall be deemed
to be exercised upon receipt by the Company of such fully executed Exercise
Notice accompanied by the aggregate Option Price.
 
In connection with such exercise, the Company shall have the right to require
that the Optionee make such provision, or furnish the Company such
authorization, as may be necessary or desirable so that the Company may satisfy
any obligation it has under applicable income tax laws to withhold for income or
other taxes due upon or incident to such exercise. The Committee may, in its
discretion, permit such withholding obligation to be satisfied through the
withholding of Shares that would otherwise be delivered upon exercise of the
Option.
 
6. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or the laws of descent and distribution and,
during the Optionee’s lifetime, may only be exercised by the Optionee.
 
7. Restrictions on Shares. This Agreement shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any governmental agencies
or stock exchange as may be required. The Optionee agrees to take all steps the
Committee determines are necessary to comply with all applicable provisions of
federal and state securities law in exercising his or her rights under this
Agreement. The Committee may impose such restrictions on any Shares acquired
pursuant to the exercise of this Option as it deems advisable, including,
without limitation, minimum holding period requirements, restrictions under
applicable federal securities laws, under the requirements of any stock exchange
or market upon which such Shares are then listed and/or traded, or under any
blue sky or state securities laws as may be applicable to such Shares.
 
 

 
 
8. Forfeiture. Where an Optionee engages in certain competitive activity or is
terminated by the Company for Cause, his or her Option and Shares are subject to
forfeiture conditions under Section 11.3 of the Plan. Upon the occurrence of any
of the events set forth in Section 11.3 of the Plan, in addition to the remedies
provided in Section 11.3, the Company shall be entitled to issue a stop transfer
order and other documents implementing the forfeiture to its transfer agent, the
depository or any of its nominees, and any other person with respect to this
Option and the Shares.
 
9. Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, the terms and conditions of the Plan
and this Agreement shall be binding upon the Optionee and his or her heirs,
executors, administrators, successors and assigns.
 
10. Interpretation. Any dispute regarding the interpretation of this Agreement
shall be submitted by the Optionee or by the Company forthwith to the Committee,
which shall review such dispute at its next regular meeting. The resolution of
such a dispute by the Committee shall be final and binding on all parties.
 
11. Tax Consequences. The exercise of this Option and the subsequent disposition
of the Shares may cause the Optionee to be subject to federal, state and/or
foreign taxation. The Optionee should consult a tax advisor before exercising
this Option or disposing of the Shares purchased hereunder.
 
12. Acknowledgement. The Optionee acknowledges and agrees: (i) that the Plan is
discretionary in nature and may be suspended or terminated by the Company at any
time; (ii) that the grant of the Option does not create any contractual or other
right to receive future grants of options or any right to continue an employment
or other relationship with the Company (for the vesting period or otherwise);
(iii) that the Optionee remains subject to discharge from such relationship to
the same extent as if the Option had not been granted; (iv) that all
determinations with respect to any such future grants, including, but not
limited to, when and on what terms they shall be made, will be at the sole
discretion of the Committee; (v) that participation in the Plan is voluntary;
(vi) that the value of the Option is an extraordinary item of compensation that
is outside the scope of the Optionee’s employment contract if any; and
(vii) that the Option is not part of normal or expected compensation for
purposes of calculating any severance, resignation, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or
similar benefits.
 
13. Employee Data Privacy. As a condition of the grant of this Option, the
Optionee consents to the collection, use and transfer of personal data as
described in this paragraph. The Optionee understands that the Company and its
Affiliates hold certain personal information about the Optionee, including but
not limited to the Optionee’s name, home address and telephone number, date of
birth, social security number, salary, nationality, job title, shares of common
stock or directorships held in the Company, details of all Options or other
entitlement to shares of common stock awarded, cancelled, exercised, vested,
unvested or outstanding in the Optionee’s favor for the purpose of managing and
administering the Plan (“Data”). The Optionee further understands that the
Company and/or its Affiliates will transfer Data amongst themselves as necessary
for the purposes of implementation, administration and management of the
Optionee’s participation in the Plan, and that the Company and/or any of its
Affiliates may each further transfer Data to any third parties assisting the
Company in the implementation, administration and management of the Plans. The
Optionee understands that these recipients may be located in the Optionee’s
country of residence or elsewhere. The Optionee authorizes them to receive,
possess, use, retain and transfer Data in electronic or other form, for the
purposes of implementing, administering and managing the Optionee’s
participation in the Plan, including any requisite transfer of such Data as may
be required for the administration of the Plan and/or the subsequent holding
shares of common stock on the Optionee’s behalf to a broker or other third party
with whom the shares acquired on exercise may be deposited. The Optionee
understands that the Optionee may, at any time, view the Data, require any
necessary amendments to it or withdraw the consent herein in writing by
contacting the local human resources representative.
 
 

 
 
14. Confidentiality. The Optionee agrees not to disclose the terms of this offer
to anyone other than the members of the Optionee’s immediately family or the
Optionee’s counsel or financial advisors and agrees to advise such persons of
the confidential nature of this offer.
 
15. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Optionee
with respect to the subject matter hereof, and may not be modified adversely to
the Optionee’s interest except by means of a writing signed by the Company and
Optionee. This Agreement is governed by the internal substantive laws but not
the choice of law rules of Delaware.
 
 
 
 
 
 
 
 
 
 
OPTIONEE
 
 
 
 
TENAX THERAPEUTICS, INC.
 
 
 
 
 
 
 
 
 
By:
 
  
Signature
 
 
 
Name:
 
  
 
 
 
 
Title:
 
  

 

 

 
Exhibit A
 
FORM OF
EXERCISE NOTICE FOR 2016 STOCK INCENTIVE PLAN
 
Tenax Therapeutics, Inc.
One Copley Parkway, Suite 490
Morrisville, North Carolina 27560
Attention: Stock Plan Administrator
 
1. Exercise of Option. Effective as of today,                     , 20    , the
undersigned (the “Optionee”) hereby elects to exercise the Optionee’s option
(the “Option”) to purchase              shares of the Common Stock (the
“Shares”) of Tenax Therapeutics, Inc. (the “Company”) under and pursuant to the
Tenax Therapeutics, Inc. 2016 Stock Incentive Plan (the “Plan”) and the Award
Agreement with a grant date of                 , 20     (the “Award”). The Grant
Number of the Option is             , and the per share exercise price is
$        .
 
2. Delivery of Payment. The Optionee herewith delivers to the Company the
aggregate exercise price of the Option, as set forth in the Award, by means
of (check one):
 
 
☐
a check in U.S. dollars made payable to Tenax Therapeutics, Inc. or bank
transfer;

 
or
 
 
☐
(i) a share certificate (or certificates) representing previously acquired
shares and (ii) a check in U.S. Dollars made payable to Tenax Therapeutics, Inc.
or bank transfer that, in combination, have an aggregate value (the Fair Market
Value of the shares delivered plus the check or bank transfer amount) equal to
the aggregate exercise price of the Option.

 
3. Representations of Optionee. The Optionee acknowledges that the Optionee has
received, read and understood the Plan and the Award and agrees to abide by and
be bound by their terms and conditions. In making the decision to exercise the
option(s) the Optionee has relied upon his or her own independent investigations
or those made by his or her representatives, if any (including professional,
financial, tax, legal and other advisors). The Optionee (and his or her
representatives, if any) has had an opportunity to review information with
respect to the Company, desires no further additional information concerning the
Company or its operations, and deems such information reviewed adequate to
evaluate the merits and risks of the Optionee’s investment in the Company.
 
The Optionee acknowledges that the Company is relying upon each of the above
representations in connection with the exercise of the option and the issuance
of the underlying Shares.
 
4. Rights as Shareholder. Until the issuance of the Shares (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a shareholder shall exist with respect to the Shares, notwithstanding the
exercise of the Option. The Shares shall be issued to the Optionee as soon as
practicable after the Option is exercised. No adjustment shall be made for a
dividend or other right for which the record date is prior to the date of
issuance except as provided in the Plan.
 
 

 
 
5. Tax Consultation and Withholding. The Optionee understands that the Optionee
may suffer adverse tax consequences as a result of the Optionee’s purchase or
disposition of the Shares. The Optionee represents that the Optionee has
consulted with any tax consultants the Optionee deems advisable in connection
with the purchase or disposition of the Shares and that the Optionee is not
relying on the Company for any tax advice. The Optionee further understands that
the Optionee’s purchase of the Shares may give rise to an obligation on the part
of the Company to withhold for income or other taxes due and agrees to make a
payment to the Company in the amount necessary to allow the Company to satisfy
any withholding obligations.
 
6. Restrictive Legends. The Optionee understands and agrees that the Company
shall cause the legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership of the Shares
together with any other legends that may be required by the Company or by state
or federal securities laws:
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TENAX
THERAPEUTICS, INC. 2016 STOCK INCENTIVE PLAN, AS SUCH PLAN MAY BE ALTERED,
AMENDED, RESTATED OR MODIFIED FROM TIME TO TIME, AND ANY TRANSFEREE OF THESE
SECURITIES SHALL BE SUBJECT TO THE TERMS OF SUCH PLAN. COPIES OF THE FOREGOING
PLAN ARE MAINTAINED WITH THE CORPORATE RECORDS OF THE ISSUER AND ARE AVAILABLE
FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE ISSUER.
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO AN AWARD
AGREEMENT BETWEEN THE ISSUER AND THE HOLDER, AS SUCH AGREEMENT MAY BE AMENDED,
RESTATED OR MODIFIED FROM TIME TO TIME, AND ANY TRANSFEREE OF THESE SECURITIES
SHALL BE SUBJECT TO THE TERMS OF SUCH AGREEMENT. COPIES OF THE FOREGOING
AGREEMENT ARE MAINTAINED WITH THE CORPORATE RECORDS OF THE ISSUER AND ARE
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE ISSUER.
 
7. Governing Law. This Agreement shall be governed by the internal substantive
laws but not the choice of law rules of Delaware.
 
8. Entire Agreement. The Plan and Award are incorporated herein by reference.
This Agreement, the Plan, and the Award constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Optionee
with respect to the subject matter hereof, and may not be modified adversely to
the Optionee’s interest except by means of a writing signed by the Company and
the Optionee.
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
Submitted by:
 
 
 
Accepted by:
 
 
 
OPTIONEE
 
 
 
TENAX THERAPEUTICS, INC.
 
 
 
 
 
 
 
 
By:
 
  
Signature
 
 
 
 
 
Name: 
 
  
Name:
 
  
 
 
 
Title:
 
  
 
 
 
 
 
 
Date: