rcel-ex101_505.htm



 

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this "Agreement") is made and entered into as of September 26,          2022, by and between James Corbett ("Executive") and Avita Medical, Inc., a Delaware corporation                         (the "Company").

 

WHEREAS, the Company desires to employ Executive and to enter into this Agreement embodying the terms of such employment, and Executive desires to enter into this Agreement and to accept    such employment, subject to the terms and provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the promises and mutual covenants contained   herein and for other good and valuable consideration, the receipt and sufficiency of which are mutually acknowledged, the Company and Executive hereby agree as follows:

 

1.Definitions. Capitalized terms not otherwise defined in this Agreement shall have the     meaning set forth on Appendix A, attached hereto.

 

2.Term. Executive's employment with the Company pursuant to the terms of this Agreement   shall be effective as of September 28, 2022 (the "Effective Date"), and shall continue until the third        anniversary of the Effective Date, unless Executive's employment is terminated earlier pursuant to Section 5      of this Agreement. If Executive's employment is not terminated, or no notice of termination has been        provided, pursuant to Section 5 of this Agreement prior to the [third] anniversary of the Effective Date or          each annual anniversary thereafter, this Agreement shall be deemed to be automatically extended, upon the     same terms and conditions, for successive periods of one year.

 

3.Position, Duties and Responsibilities; Performance.

 

3.1.  Position, Duties and Responsibilities.  During the Employment Term, Executive shall be employed and serve as President and Chief Executive Officer of the Company (together with such     other position or positions consistent with Executive's title as the Board shall specify from time to time)              and shall have such duties, authority and responsibilities commensurate with such title. Executive also           agrees to serve as an officer and/or director of any other member of the Company Group, in each case           without additional compensation. In addition, Executive shall continue to serve on the Board as of the      Effective Date, and thereafter as necessary, and Executive shall serve as a member thereof during the Employment Term.

 

3.2.Performance.        Executive shall devote substantially all of Executive's business      time, attention, skill, and efforts to the performance of Executive's duties under this Agreement and, except         as provided below, shall not engage in any other business or occupation, including any outside employment              or consulting services, during the Employment Term, including, without limitation, any activity that                      (x) conflicts with the interests of the Company or any other member of the Company Group, (y) materially interferes with the performance of Executive's duties for the Company, or (z) interferes with Executive's   exercise of Executive's judgment in the Company's best interests. Notwithstanding the foregoing, nothing    herein shall preclude Executive from (i) serving, with the prior written consent of the Board, as a member              of the boards of directors or advisory boards (or their equivalents in the case of a non-corporate entity)                     of one or more for-profit public or private companies and one or more charitable organizations, which with regard to charitable organizations such consent will not be unreasonably withheld or delayed, (ii) engaging            in charitable activities and community affairs, (iii) delivering lectures and fulfilling speaking engagements,       and (iv) managing Executive's personal investments and affairs (collectively, the "Permitted                        Activities"); provided, however, that the activities set out in clauses (i), (ii), (iii), and (iv) shall be limited               

 

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by Executive so as not to materially interfere, individually or in the aggregate, with the performance of Executive's duties and responsibilities hereunder and do not conflict with any applicable Company policy on conduct. Notwithstanding the foregoing, and for the avoidance of doubt, the parties acknowledge that Permitted Activities currently include the following: Executive's service as a board member of privately-held Invoy LLC; Executive's service as a board member of privately-held Alucent Biomedical; Executive's service as a strategy advisor to the CEO of Envveno Medical; and Executive's service as a board member  of privately-held Mozarc.

 

3.3.Principal Place of Performance. The principal place of Executive's employment                shall be the Company's office in Valencia, California; provided that, Executive shall be required to     regularly meet with shareholders and potential investors in Australia and may be required to otherwise   travel for business reasons during the Employment Term.

 

4.Compensation.

 

During the Employment Term, Executive shall be entitled to the following compensation:

 

4.1.Base Salary. Executive shall be paid an annualized base salary of $600,000 in             periodic installments in accordance with the Company's customary payroll practices, subject to annual review, with adjustments, if any, as may be approved in writing by the [Compensation Committee of the Board].

 

4.2.Annual Bonus.  For each completed fiscal year of the Employment Term, Executive shall be eligible to receive an annual bonus (the "Annual Bonus"). As of the Effective Date,  Executive's annual target bonus opportunity shall be equal to 60% of Base Salary, based on the achievement of individual and Company performance goals established by the Board; provided, that, depending on the results, Executive's actual bonus may be lower or higher than the target amount, with a minimum bonus opportunity of 0% of Base Salary and a maximum bonus opportunity of 200% of Base Salary, as determined by the Board. The Annual Bonus shall otherwise be subject to the terms and conditions of the annual bonus plan adopted by the Board or the Compensation Committee of the Board, if any, under which bonuses are generally payable to senior executives of the Company, as in effect from time to time. For the period beginning on the Effective Date and ending on the last day of the applicable fiscal year, Executive shall be eligible to receive a prorated Annual Bonus (calculated as the Annual Bonus that would have been paid for the entire fiscal year multiplied by a fraction, the numerator of which is equal to the number of days Executive was employed in the applicable fiscal year, and the denominator of which is equal to the total number of days in such fiscal year). The Annual Bonus, if any, shall be paid no later than the end of the calendar year in which the fiscal year to which it relates ends promptly after completion of the Company's audited year-end financial statements for such fiscal year (but in any event by the end of the calendar year in which the fiscal year ends) and at the same time as annual bonuses are paid to the other senior executive officers of the Company. In order to be eligible to earn an Annual Bonus, Executive must be employed by the Company on the last day of the applicable fiscal year.

 

4.3.Equity Incentive. Subject to the approval of the Company's shareholders, Executive shall receive an initial grant of options to acquire shares of the Company's common stock equal in value to $1 million, to be calculated utilizing the Black-Scholes methodology, as is currently used by the Company with respect to option grants, with a grant date of Executive's first day of employment. Such shares will vest based on Executive's continued employment with the Company over four (4) years in                    equal installments, with the first option installment vesting upon the completion of Executive's first year     of service. Such option grants shall be subject to the terms of a grant agreement pursuant to the Company's 2020 Omnibus Incentive Plan. For the avoidance of doubt, the grant agreement shall provide for "double-trigger" vesting of options in the event of a Change in Control. In addition, Executive shall be eligible for annual equity grants under the 2020 Omnibus Incentive Plan or similar plan in effect from time to time.

 

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4.4.Employee Benefits. During the Employment Term, Executive shall be entitled to participate in health, insurance, retirement, and other benefits provided generally to similarly situated employees of the Company. Executive shall be entitled to four weeks of paid vacation per year. Executive can accrue up to six (6) weeks of vacation time, at which point no additional vacation may accrue beyond the six (6) weeks until a portion thereof is used. Any accrued vacation will roll over into the following calendar year and will not be forfeited. Executive agrees to schedule planned vacation to be taken at a time mutually convenient to Executive and the Board. Executive shall also be entitled to holidays and sick days, as well as any other benefits, in each case as are generally allowed to similarly situated employees of the Company in accordance with the Company policy as in effect from time to time. Nothing contained herein shall be construed to limit the Company's ability to amend, suspend, or terminate any employee benefit    plan or policy at any time without providing Executive notice, and the right to do so is expressly reserved.

 

4.5.Business Expenses. Executive shall be entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment and travel expenses incurred by Executive in connection with the performance of Executive's duties hereunder in accordance with the Company's expense reimbursement policies and procedures and the terms and conditions of this Agreement. Subject                        to the foregoing, the Company will provide accommodations in Valencia, California for the 15-20 days per month it is anticipated Executive will be in Valencia, for so long as Executive is engaged in long-distance commuting to Valencia, and Executive's commuting costs to and from Valencia from his home in Orange County will be reimbursed in accordance with the Company policy on fuel reimbursement.

 

5.Termination of Employment.

 

5.1.General. The Employment Term, and Executive's employment hereunder, shall terminate upon the earliest to occur of (i) Executive's death, (ii) a termination by reason of a Disability,     (iii) a termination by the Company with or without Cause, and (iv) a termination by Executive with or without Good Reason. Except as otherwise expressly required by law (e.g., COBRA) or as specifically provided herein or in any plan or grant, all of Executive's rights to Base Salary, Annual Bonus, employee benefits and other compensatory amounts hereunder (if any) shall cease upon the termination of Executive's employment hereunder (the "Termination Date").

 

5.2.Deemed Resignation. Upon any termination of Executive's employment for any reason, except as may otherwise be requested by the Company in writing and agreed upon in writing by Executive, Executive shall be deemed to have resigned from any and all directorships, committee memberships, and any other positions Executive holds with the Company or any other member of the Company Group.

 

5.3.Termination Due to Death or Disability. Executive's employment shall terminate automatically upon Executive's death. The Company may terminate Executive's employment immediately upon the occurrence of a Disability upon the giving of written notice to Executive while the Disability    exists, such termination to be effective upon Executive's receipt of such written notice of such termination. Upon Executive's death or in the event that Executive's employment is terminated due to Executive's  Disability, Executive or Executive's estate or Executive's beneficiaries, as the case may be, shall be entitled to the Accrued Obligations. Following Executive's death or a termination of Executive's employment by reason of a Disability, except as set forth in this Section 5.3, Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

5.4.Termination by the Company for Cause.

 

(a)The Company may terminate Executive's employment at any time for Cause, effective upon delivery to Executive of written notice of such termination; provided, however,

 

 

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Executive's termination will be subject to any applicable cure period set forth in the definition of Cause     and if applicable, will only be effective if Executive fails to cure the event or circumstance constituting "Cause" within such cure period, and

 

(b)In the event that the Company terminates Executive's employment for Cause, Executive shall be entitled only to the Accrued Obligations. Following such termination of Executive's employment for Cause, except as set forth in this Section 5.4(b), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

5.5.Termination by the Company without Cause. The Company may terminate Executive's employment at any time without Cause, effective upon delivery to Executive of written notice of such termination. In the event that Executive's employment is terminated by the Company without Cause (other than due to death or Disability), Executive shall be entitled to:

 

(a)The Accrued Obligations;

 

(b)        Any unpaid Annual Bonus in respect of any completed fiscal year that has ended prior to the date of such termination, which amount shall be paid at such time annual bonuses are    paid to other senior executives of the Company, but in no event later than the date that is two and one-half months following the last day of the fiscal year in which such termination occurred;

 

(c)Continued payment of Executive's Base Salary at the time of the Termination Date on the Company's usual payroll dates for the one year period commencing on the Termination Date (the "Severance Period"), except that the first such payment shall not be made until the next administratively practicable payroll date after Executive has satisfied the requirement to provide a Release of Claims (as described in Section 5.9) and such Release of Claims has become effective and irrevocable (the "Payment Date"), and such first payment shall be inclusive of all such payments that would have been made prior to the Payment Date but for the requirement to provide an effective and irrevocable Release of Claims; and

 

(d)If Executive timely and properly elects continuation coverage under the Consolidated Omnibus Reconciliation Act of 1985 ("COBRA"), the Company shall reimburse Executive for the monthly COBRA premium paid by Executive for himself and his dependents for a period of twelve months (the "Benefits Reimbursement Period"). Any such reimbursement for the period prior to the  Payment Date shall be paid to Executive in a lump sum on the Payment Date and any reimbursement for any month (or portion thereof) on and after the Payment Date shall be paid to Executive on the tenth day of the month immediately following the month in which Executive timely remits the premium payment. Notwithstanding the foregoing, if the Company's making payments under this Section 5.5(d) would violate the nondiscrimination rules applicable to non-grandfathered group health plans, or result in the imposition of penalties under the Patient Protection and Affordable Care Act of 2010 and the related regulations and guidance promulgated thereunder ("PPACA"), the parties agree to reform this Section 5.5(d) in a manner   as is necessary to comply with PPACA.

 

Notwithstanding the foregoing, the payments and benefits described in clauses (b), (c), and (d) above shall immediately terminate, and the Company shall have no further obligations to Executive with respect thereto, in the event that Executive breaches Section 9 of this Agreement. Following such termination of Executive's employment by the Company without Cause, except as set forth in this Section 5.5, Executive shall have no further rights to any compensation or any other benefits under this Agreement. For the avoidance of doubt, Executive's sole and exclusive remedy upon a termination of employment by the Company without Cause shall be receipt of the Severance Benefits (as defined in Section 5.9, below).

 

 

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5.6.Termination by Executive with Good Reason. Executive may terminate Executive's employment with Good Reason in accordance with the time periods and cure periods set forth in the definition of Good Reason. Executive shall be entitled to the same payments and benefits as provided in Section 5.5 hereof for a termination by the Company without Cause, subject to the same conditions on payment and benefits as described in Section 5.5 hereof. Following such termination of Executive's employment by Executive with Good Reason, except as set forth in this Section 5.6, Executive shall have no further rights to any compensation or any other benefits under this Agreement. For the avoidance of doubt, Executive's sole and exclusive remedy upon a termination of employment with Good Reason shall be receipt of the Severance Benefits (as defined in Section 5.9, below).

 

5.7.Termination by Executive without Good Reason. Executive may terminate Executive's employment without Good Reason by providing the Company ninety (90) days' prior written notice of such termination. In the event of a termination of employment by Executive under this Section 5.7, Executive shall be entitled only to the Accrued Obligations. In the event of termination of Executive's employment under this Section 5.7, the Company may, in its sole and absolute discretion, by written notice accelerate such date of termination without changing the characterization of such termination as a termination by Executive without Good Reason. Following such termination of Executive's employment    by Executive without Good Reason, except as set forth in this Section 5.7, Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

5.8.Termination of Employment in Connecting With a Change in Control. Notwithstanding the terms set forth in Section 5.5 and 5.6, if Executive's employment with the Company    is terminated pursuant to Section 5.5 or Section 5.6 hereof (i) within 90 days prior to the effective time of   a Change in Control or (ii) from the effective time of a Change in Control until the date that is one year   after the occurrence of a Change in Control, subject to the same conditions on payment and benefits set  forth in Section 5.5, Executive shall be entitled to the payments and benefits provided in Sections 5.5(a), (b), (c) and (d) hereof, except that the Severance Period shall be eighteen (18) months and the Benefits Reimbursement Period shall be eighteen (18) months.

 

5.9.Release. Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit pursuant to Section 5.5, Section 5.6 or 5.8 (other than the Accrued Obligations) (collectively, the "Severance Benefits") shall be conditioned upon Executive's execution, delivery to the Company, and non-revocation of the Release of Claims (and the expiration of any revocation period contained in such Release of Claims) within sixty (60) days following the date of Executive's termination of employment hereunder. If Executive fails to execute the Release of Claims in such a timely manner so as to permit any revocation period to expire prior to the end of such sixty (60) day period,                or timely revokes Executive's acceptance of such release following its execution, Executive shall not be entitled to any of the Severance Benefits. Further, to the extent that any of the Severance Benefits constitutes "nonqualified deferred compensation" for purposes of Section 409A of the Code, any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the sixtieth (60th) day following the date of Executive's termination of employment hereunder, but for the condition on executing the Release of Claims as set forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60th) day, and any remaining Severance Benefits thereafter due shall be provided to Executive according to the applicable schedule set forth herein.

 

6.Section 280G. Notwithstanding anything to the contrary in this Agreement, this Section 6     shall apply in the event of (i) a "change in the ownership or effective control" of the Company or (ii) a         "change in the ownership of a substantial portion of the assets" of the Company, each within the meaning               of Section 280G of the Code (collectively, an "Excise Tax Event"). If an Excise Tax Event is consummated,    and as a result any payments and benefits provided for in this Agreement, together with any other payments     and benefits which Executive has the right to receive from the Company or any of its affiliates, would

 

 

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constitute a "parachute payment" (as defined in Section 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either (a) reduced (but not below zero) so that the present value of such total amounts and benefits received by Executive from the Company and its affiliates will be one dollar ($1.00) less than three times Executive's "base amount" (as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received by Executive shall be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the "Excise Tax"), or (b) paid in full, whichever produces the better net after-tax position to Executive (taking into account any applicable Excise Tax and any other applicable taxes). The reduction of payments and benefits hereunder, if applicable, shall be made in the following order: (1) by reducing the amounts of any payments or benefits that would not constitute deferred compensation under Section 409A, to the extent necessary to decrease the payments subject to the Excise Tax, as agreed by the Company and Executive; (2) next, by reducing, payments or benefits to be paid in cash hereunder and that constitute deferred compensation under Section 409A in the order in which such payment or benefit would be paid or provided (beginning with such payment or benefit that would be made last in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time); and (3) finally, by reducing any non-cash or in-kind benefit to be provided hereunder and that constitute deferred compensation under Section 409A in a similar order to that described in clause (2). The determination as to whether any such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by the Company in good faith. If a reduced payment or benefit is made or provided and through error or otherwise that payment or benefit, when aggregated with other payments and benefits from the Company (or its affiliates) used in determining if a "parachute payment" exists, exceeds one dollar ($1.00) less than three times Executive's base amount, then Executive shall immediately repay such excess to the Company upon notification that an overpayment has been made. Nothing in this Section 6 shall require the Company to be responsible for, or have any liability or obligation with respect to, Executive's Excise Tax liabilities.

 

7.Cooperation. The parties agree that certain matters in which Executive will be involved during the Employment Term may necessitate Executive's cooperation in the future. Accordingly,    following the termination of Executive's employment for any reason, to the extent reasonably requested by the Board, Executive shall cooperate with the Company in connection with matters arising out of  Executive's service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of Executive's other activities. The Company shall reimburse Executive for reasonable expenses incurred in connection with such cooperation and, to the extent that Executive is required to spend  substantial time on such matters, the Company shall compensate Executive at an hourly rate based on Executive's Base Salary on the Termination Date, unless such time is as a witness in a legal proceeding, in which case the Company will only pay costs and expenses as permitted by law.

 

8.Confidential Information. Executive recognizes that the nature of Executive's services are such that Executive will have access to information that constitutes trade secrets, is of a confidential nature, is of great value to the Company Group or is the foundation on which the business of the Company is predicated ("Confidential Information"). Executive agrees, during his employment and thereafter, not to disclose to any person other than the Company Group's employees or the Company Group's legal counsel or other parties authorized by the Company Group to receive confidential information nor use for any purpose, other than the performance of this Agreement, any Confidential Information. Confidential Information includes data or material (regardless of form) which is: (a) a trade secret; (b) provided,   disclosed or delivered to Executive by the Company, any officer, director, employee, agent, attorney, accountant, consultant or other person or entity employee by the Company in any capacity, any customer, borrower or business associate of the Company Group or any public authority having jurisdiction over the Company Group of any business activity conducted by the Company Group; or (c) produced, developed, obtained or prepared by or on behalf of Executive or the Company Group (whether or not such information was developed in the performance of this Agreement) with respect to the Company Group or any assets,

 

 

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business activities, officers, directors, employees, borrowers or customers of the foregoing. However, Confidential Information will not include any information, data or material which at the time of disclosure or use was generally available to the public other than by a breach of this Agreement, was available to the party to whom disclosed on a non-confidential basis by disclosure or access provided by the Company  Group or a third party, or was otherwise developed or obtained independently by the person to whom disclosed without a breach of this Agreement. The foregoing notwithstanding, nothing in this Agreement prohibits Executive from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. On request by the Company, the Company will be entitled to a copy of any Confidential Information in the possession of Executive. The provisions of this Section 8 will survive the termination, expiration or cancellation of Executive's employment.    Executive will deliver to the Company all originals and copies of the documents or materials containing Confidential Information. Executive further agrees that if Executive executes additional Company policies or agreements to protect the Confidential Information, this Agreement shall be read in conjunction with any such policies or Agreements to provide the broadest and greatest protection to the Confidential Information.

 

9.Protective Covenants.

 

9.1.Acknowledgment. Executive understands that the nature of Executive's position gives him access to and knowledge of Confidential Information and places him in a position of trust and confidence with the Company Group. Executive understands and acknowledges that the intellectual    services he provides to the Company Group are unique, special, and extraordinary. Executive further understands and acknowledges that the Company Group's ability to reserve these for the exclusive knowledge and use of the Company Group is of great competitive importance and commercial value to the Company Group, and that improper use or disclosure by Executive is likely to result in unfair or unlawful competitive activity.

 

9.2.Non-Competition. Executive covenants and agrees that, during his employment with the Company, Executive will not directly or indirectly, engage in any business (as an owner, joint venturer, partner, stockholder, director, officer, consultant, agent or otherwise, other than as the owner of less than 1% of the outstanding class of a publicly traded security) which competes with the business in which the Company is presently engaged or may be engaged at any time during the Employment Term. Nothing in this Section 9.2 shall be construed as limiting Executive's duty of loyalty to the Company while he is employed by the Company, or any other duty he may otherwise have to the Company while he is employed by the Company.

 

9.3.Non-Solicitation of Employees. Executive covenants and agrees that during his employment with the Company and for a period of one (1) years after the Termination Date, irrespective    of the reason for the termination (the "Restricted Period") Restricted Period, Executive shall not,  individually or jointly with others, directly or indirectly, recruit, hire, encourage, or attempt to recruit or hire, or by assisting others, any employees, contractors, or other service provider of the Company Group with whom Executive worked, had business contact, or about whom Executive gained non-public or Confidential Information (hereinafter, "Company Group's employees or former employees"), nor shall Executive contact or communicate with same, other than on behalf or the Company Group, for the purpose of inducing, assisting, encouraging and/or facilitating the Company Group's employees to terminate their employment with the Company Group or find employment or work with another person or entity.

 

Additionally, Executive shall not provide or pass along to any person or entity the name, contact and/or background information about any of the Company Group's employees or provide references or any other information about them. Additionally, Executive shall not provide or pass along to the




 

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Company Group's employees any information regarding potential jobs or entities or persons to work for, including but not limited to, job openings, job postings, or the names or contact information of individuals or companies hiring people or accepting job applications. Further, Executive shall not offer employment to or work to any employees of the Company Group's employees or former employees. For purposes of this covenant "Company Group's employees or former employees" shall refer to employees of the Company Group Executive supervised, was supervised by, or otherwise worked with in any capacity during the twelve (12) month period prior to the Termination Date.

 

9.4.Reasonableness. The Company and Executive have attempted to specify a reasonable period of time and reasonable restrictions to which the provisions of this Section 9 shall apply. The Company and Executive agree, however, that if a court or agency of competent jurisdiction determines that any of the terms of this Section 9 are not enforceable because they are overbroad or for any other reason, the provisions of this Section 9 shall be reformed and modified to reflect restrictions that are determined to be reasonable by such court or agency of competent jurisdiction.

 

10.Non-Disparagement. Executive agrees and covenants that he will not at any time make, publish or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning the Company Group or its businesses, or any of its employees, officers, and existing and prospective customers, suppliers, investors and other associated third parties.    This Section 10 does not, in any way, restrict or impede Executive from exercising protected rights to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency,  provided that such compliance does not exceed that required by the law, regulation or order. Executive    shall promptly provide written notice of any such order to the Company's General Counsel.

 

11.Acknowledgement. Executive acknowledges and agrees that the services to be rendered by him to the Company are of a special and unique character; that Executive will obtain knowledge and  skill relevant to the Company's industry, methods of doing business and marketing strategies by virtue of Executive's employment; and that the protective covenants and other terms and conditions of this  Agreement are reasonable and reasonably necessary to protect the legitimate business interest of the Company Group.

 

12.Remedies. In the event of a breach or threatened breach by Executive of Sections 7 - 10 of this Agreement, Executive hereby consents and agrees that the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall be in addition to, not in    lieu of, legal remedies, monetary damages or other available forms of relief.

 

13.Arbitration. In consideration of the Company employing Executive, and the salary and benefits provided under this Agreement, Executive and the Company agree that all claims arising out of or relating to his employment, including its termination, shall be resolved by binding arbitration. This Agreement expressly does not prohibit either party from seeking an application for a provisional remedy pursuant to Cal. Code Civ. Proc. Section 1281.8. The dispute will be arbitrated in accordance with the rules of the American Arbitration Association ("AAA") under its existing Employment Arbitration Rules. These rules may be found at https://www.adr.org/sites/default/files/Employment-Rules-Web.pdf. The Company shall pay for the arbitration administrative costs and arbitrator's fees pursuant to applicable law and the   AAA rules. Each party in the arbitration shall bear his/its own attorneys' fees and legal costs. The parties agree to file any demand for arbitration within the time limit established by the applicable statute of limitations for the asserted claims. Failure to demand arbitration within the prescribed time period shall

 

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 result in waiver of said claims. The parties agree that the arbitration will be venued at or near Los Angeles, California.

 

This pre-dispute resolution agreement will cover all matters directly or indirectly arising out of or related to Executive's employment, recruitment, relocation and/or termination of employment, including, but not limited to, claims involving laws against any form of discrimination or wrongful termination, and whether brought under federal or state law, and/or claims involving other employees. Excluded from this arbitration provision are workers' compensation claims, unemployment insurance claims or any other claim which is not subject to arbitration by law. THE PARTIES UNDERSTAND AND AGREE THAT THEY ARE WAIVING THEIR RIGHTS TO BRING SUCH CLAIMS TO COURT, INCLUDING THE RIGHT TO A JURY TRIAL.

 

14.Proprietary Rights.

 

14.1. Work Product. Executive acknowledges and agrees that all writings, works of authorship, technology, inventions, discoveries, ideas and other work product of any nature whatsoever,   that are created, prepared, produced, authored, edited, amended, conceived or reduced to practice by Executive individually or jointly with others during the period of his employment by the Company and relating in any way to the business or contemplated business, research or development of the Company (regardless of when or where the Work Product is prepared or whose equipment or other resources is used in preparing the same) and all printed, physical and electronic copies, all improvements, rights and claims related to the foregoing, and other tangible embodiments thereof (collectively, "Work Product"), as well as any and all rights in and to copyrights, trade secrets, trademarks (and related goodwill), patents and other intellectual property rights therein arising in any jurisdiction throughout the world and all related rights of priority under international conventions with respect thereto, including all pending and future applications and registrations therefor, and continuations, divisions, continuations-in-part, reissues, extensions and renewals thereof (collectively, "Intellectual Property Rights"), shall be the sole and exclusive property of the Company.

 

14.2. Work Made for Hire; Assignment. Subject to Section 14.3, below, Executive acknowledges that, by reason of being employed by the Company at the relevant times, to the extent permitted by law, all of the Work Product consisting of copyrightable subject matter is "work made for   hire" as defined in 17 U.S.C. § 101 and such copyrights are therefore owned by the Company. To the extent that the foregoing does not apply, Executive hereby irrevocably assigns to the Company, for no additional consideration, Executive's entire right, title and interest in and to all Work Product and Intellectual Property Rights therein, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, and all rights corresponding thereto throughout the world. Nothing contained in this Agreement shall be construed to reduce or limit the Company's rights,     title or interest in any Work Product or Intellectual Property Rights so as to be less in any respect than that the Company would have had in the absence of this Agreement.

 

14.3. California Labor Code Section 2870. Executive acknowledges and agrees that Executive's agreement to assign and assignment of rights to the Company as set forth in Section 14.2 above shall not apply to any invention that qualifies fully under the provisions of California Labor Code Section 2870, where Executive developed such invention entirely on Executive's own time without using the Company's equipment, supplies, facilities or Confidential Information and such invention does not either 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 result from any work performed by Executive for the Company. Executive will promptly identify in writing to the Company all inventions made by Executive that Executive believes meet the criteria of California Labor Code Section 2870 to permit a determination as to whether or not the invention constitutes Work Product subject to the assignment provisions set forth in Section 14.2 hereof. If any invention is determined, pursuant to    

 

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California Labor Code Section 2870, not to be the property of the Company, Executive agrees, prior to commercially exploiting such invention or disclosing such invention to any third party, to submit to the Company an offer of commercially reasonable license terms with respect to such invention, and the Company will notify Executive within ten (10) business days after Company's receipt of such offer if the Company accepts such offer or desires to commence negotiations of the terms set forth in Executive's offer. If no definitive agreement is reached within sixty (60) days after the Company's acceptance of Executive's offer or commencement of negotiations, Executive may commence negotiations with any third party with respect to the licensing and exploitation of such invention.

 

14.4. Further Assurances; Power of Attorney. During and after his employment,    Executive agrees to reasonably cooperate with the Company to (a) apply for, obtain, perfect and transfer to the Company the Work Product as well as an Intellectual Property Right in the Work Product in any jurisdiction in the world; and (b) maintain, protect and enforce the same, including, without limitation, executing and delivering to the Company any and all applications, oaths, declarations, affidavits, waivers, assignments and other documents and instruments as shall be requested by the Company. Executive hereby irrevocably grants the Company power of attorney to execute and deliver any such documents on  Executive's behalf in his name and to do all other lawfully permitted acts to transfer the Work Product to  the Company and further the transfer, issuance, prosecution and maintenance of all Intellectual Property Rights therein, to the full extent permitted by law, if Executive does not promptly cooperate with the Company's request (without limiting the rights the Company shall have in such circumstances by operation of law). The power of attorney is coupled with an interest and shall not be effected by Executive's  subsequent incapacity.

 

14.5. No License. Executive understands that this Agreement does not, and shall not be construed to, grant Executive any license or right of any nature with respect to any Work Product or Intellectual Property Rights or any Confidential Information, materials, software or other tools made available to him by the Company.

 

15.Exit Obligations. Upon voluntary or involuntary termination of Executive's employment, Executive shall (i) provide or return to the Company any and all Company Group property and all Company Group documents and materials belonging to the Company and stored in any fashion, including but not limited to those that constitute or contain any Confidential Information or Work Product, that are in the possession or control of Executive, whether they were provided to Executive by the Company Group or   any of its business associates or created by Executive in connection with his employment by the Company; and (ii) delete or destroy all copies of any such documents and materials not returned to the Company that remain in Executive's possession or control, including those stored on any non-Company Group devices, networks, storage locations and media in Executive's possession or control.

 

16.Publicity. Executive hereby irrevocably consents to any and all uses and displays, by the Company Group and its agents, representatives and licensees, of Executive's name, voice, likeness, image, appearance and biographical information in, on or in connection with any pictures, photographs, audio and video recordings, digital images, websites, television programs and advertising, other advertising and publicity, sales and marketing brochures, books, magazines, other publications, CDs, DVDs, tapes and all other printed and electronic forms and media throughout the world, at any time during or after the period   of his employment by the Company, for all legitimate commercial and business purposes of the Company Group ("Permitted Uses") without further consent from or royalty, payment or other compensation to Executive. Executive hereby forever waives and releases the Company Group and its directors, officers, employees and agents from any and all claims, actions, damages, losses, costs, expenses and liability of any kind, arising under any legal or equitable theory whatsoever at any time during or after the period of his employment by the Company, arising directly or indirectly from the Company Group's and its agents', representatives' and licensees' exercise of their rights in connection with any Permitted Uses.

 

 

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17.Taxes. The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment, and social insurance taxes, as shall be required by law. Executive acknowledges and represents that the Company has not provided any tax advice to Executive in connection with this Agreement and that Executive has been advised by the Company to seek tax advice from Executive's own tax advisors regarding this Agreement and payments that may be made to Executive pursuant to this Agreement, including specifically, the application of the provisions of Section 409A of the Code to such payments.

 

18.Set Off Mitigation. The Company's obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, or recoupment of agreed amounts owed by Executive to the Company or its affiliates; provided, however, that to the extent any amount so subject to set-off, counterclaim, or recoupment is payable in installments hereunder, such set-off, counterclaim, or recoupment shall not modify the applicable payment date of any installment, and to the extent an obligation cannot be satisfied by reduction of a single installment payment, any portion not satisfied shall remain an outstanding obligation of Executive and shall be applied to the next installment only at such time the installment is otherwise payable pursuant to the specified payment schedule, no right shall exist with regard to setoff or recoupment to the extent it would violate Section 409A of the Code and there shall be no right to setoff or recoupment with regard to any not agreed upon amounts. Executive shall not be required to mitigate the amount of any payment provided pursuant to this Agreement by seeking  other employment or otherwise, and except as provided in Section 5.5(d), the amount of any payment provided for pursuant to this Agreement shall not be reduced by any compensation earned as a result of Executive's other employment or otherwise.

 

19.Governing Law. This Agreement, for all purposes, shall be construed in accordance with the laws of the State of California without regard to conflicts of law principles; provided, however, that any provisions relating to equity compensation shall also be subject to any federal or state securities laws that may be applicable and the rules of any stock exchange on which the relevant equity is listed for trading.

 

20.Entire Agreement. Unless specifically provided or stated herein, this Agreement contains all of the understandings and representations between Executive and the Company pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. Without limiting the generality of the foregoing, the parties specifically acknowledge that this Agreement supersedes any agreements Executive had with the Company and any of its affiliates or predecessors relating to the subject matter hereof. The parties mutually agree that the Agreement can be specifically enforced in court and can be     cited as evidence in legal proceedings alleging breach of the Agreement.

 

21.Modification and Waiver. No provision of this Agreement may be amended or modified unless such amendment or modification is agreed to in writing and signed by Executive and by an executive officer of the Company. No waiver by either of the parties of any breach by the other party hereto of any condition or provision of this Agreement to be performed by the other party hereto shall be deemed a waiver of any similar or dissimilar provision or condition at the same or any prior or subsequent time, nor shall the failure of or delay by either of the parties in exercising any right, power or privilege hereunder operate as a waiver thereof to preclude any other or further exercise thereof or the exercise of any other such right,   power or privilege.

 

22.Severability. Should any provision of this Agreement be held by a court or arbitrator of competent jurisdiction to be enforceable only if modified, or if any portion of this Agreement shall be held as unenforceable and thus stricken, such holding shall not affect the validity of the remainder of this Agreement, the balance of which shall continue to be binding upon the parties with any such modification to become a part hereof and treated as though originally set forth in this Agreement. The parties further  agree that any such court or arbitrator is expressly authorized to modify any such unenforceable provision 

 

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of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the offending provision, adding additional language to this Agreement or by making such other modifications as it deems warranted to carry out the intent and agreement of the parties as embodied herein to the maximum extent permitted by law.  The parties expressly agree that this Agreement as so modified by the court or arbitrator shall be binding upon and enforceable against each of them. In any event, should one or more of the provisions of this Agreement be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions hereof, and if such provision or provisions are not modified as provided above, this Agreement shall be construed as if such invalid, illegal or unenforceable provisions had not been set forth herein.

 

23.Captions. Captions and headings of the sections and paragraphs of this Agreement are intended solely for convenience and no provision of this Agreement is to be construed by reference to the caption or heading of any Section or paragraph.

 

24.Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

 

25.Additional Section 409A Provisions.

 

Notwithstanding any provision in this Agreement to the contrary:

 

25.1. Any payment otherwise required to be made hereunder to Executive at any date as    a result of the termination of Executive's employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the "Delay Period"). On the first business day following the expiration of the Delay Period, Executive shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.

 

25.2.Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code.

 

25.3. Notwithstanding anything herein to the contrary, the payment (or commencement     of a series of payments) hereunder of any nonqualified deferred compensation (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Executive has also undergone a "separation from service" as defined in Treas. Reg. 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the date of Executive's termination of employment hereunder) shall be paid (or commence to be paid) to Executive on the schedule set forth in Section 5 as if Executive had undergone such termination of employment (under the same circumstances) on the date of Executive's ultimate "separation from service."

 

25.4. To the extent that any right to reimbursement of expenses or payment of any       benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange


 

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for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided, that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect.

 

25.5. While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall any member of the Company Group be liable for any additional tax, interest, or penalties that may be imposed on Executive as a result of Section 409A of the Code for failing to comply with    Section 409A of the Code (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A of the Code) provided that the Company Group act in reasonable good faith in connection with complying with Section 409A of the Code.

 

26.Successors and Assigns; No Third-Party Beneficiaries.

 

26.1. This Agreement shall inure to the benefit of the Company and its respective                      permitted successors and assigns. Neither this Agreement nor any of the rights, obligations, or interests arising hereunder may be assigned by the Company to any person other than to an acquiror of all or substantially all of the assets of the Company who assumes the agreement in writing.

 

26.2. Executive's rights and obligations under this Agreement shall not be transferable                          by Executive by assignment or otherwise, without the prior written consent of the                                      Company; provided, however, that if Executive shall die, all amounts then payable to Executive hereunder shall be paid in accordance with the terms of this Agreement to Executive's devisee, legatee, or other designee, or if there be no such designee, to Executive's estate.

 

26.3. Except as otherwise set forth in Section 5.3 or Section 26.2 hereof, nothing                         expressed or referred to in this Agreement will be construed to give any person other than the Company,  the other members of the Company Group, and Executive any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement.

 

27.Notification to Subsequent Employer. When Executive's employment with the Company terminates, Executive agrees to notify any subsequent employer of the protective covenants sections contained in this Agreement. Executive will also deliver a copy of such notice to the Company before Executive commences employment with any subsequent employer. In addition, Executive authorizes the Company to provide a copy of the protective covenants sections of this Agreement to third parties, including but not limited to, Executive's subsequent, anticipated or possible future employer.

 

28.Indemnification. Executive shall be entitled to indemnification to the maximum extent permitted by law with regard to actions or inactions taken in good faith performance of Executive's duties to the Company and directors and officers liability insurance coverage in accordance with the Company's policies that cover officers and directors generally.

 

29.Notice.

 

29.1. Place of Delivery. Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered to the party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, that unless and until some other address be so designated, all notices and communications by Executive to the Company shall be mailed or delivered to the Company at its principal


 

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executive office, and all notices and communications by the Company to Executive may be given to Executive personally or may be mailed to Executive at Executive's last known address, as reflected in the Company's records.

 

29.2. Date of Delivery. Any notice so addressed shall be deemed to be given (i) if                       delivered by hand, on the date of such delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing, and (iii) if mailed by registered or certified mail, on the third business day after the date of such mailing.

 

30.Representations of Executive. Executive represents and warrants to the Company that:

 

30.1. Executive is entering into this Agreement voluntarily and that Executive's employment hereunder and compliance with the terms and conditions hereof will not conflict with or result in the breach by Executive of any agreement to which Executive is a party or by which Executive may be bound;

 

30.2. Executive has not violated, and in connection with Executive's employment with the Company will not violate, any non-solicitation, non-competition, or other similar covenant or            agreement with any person by which Executive is or may be bound; and

 

30.3. In connection with Executive's employment with the Company, Executive will not use any confidential or proprietary information Executive may have obtained in connection with employment or service with any prior service recipient.

 

31.Survival. Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto shall survive such expiration or other termination to the extent   necessary to carry out the intentions of the parties under this Agreement.

 

32.Acknowledgment of Full Understanding. EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. EXECUTIVE ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS CHOICE BEFORE SIGNING THIS AGREEMENT.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 


	
AVITA MEDICAL, INC.

	
 
	
 

	
By:
	
/s/ Lou Panaccio

	
Name:
	
Lou Panaccio




 

 


	
EXECUTIVE

	
 
	
 

	
By:
	
/s/ James Corbett

	
Name:
	
James Corbett

	
Date:
	
September 26, 2022

 

 

	
 
	
 

 

 

 

 

 




 

 

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Appendix A

 

Definitions

 

"Accrued Obligations" shall mean (i) all accrued but unpaid Base Salary through the date of termination of Executive's employment, (ii) any unpaid or unreimbursed expenses incurred in accordance with Section 4.6 hereof, (iii) any benefits provided under the Company's employee benefit plans upon a termination of employment, including rights with respect to Company equity, in accordance with the terms contained therein, or in any grant, and (iv) all rights to indemnification and directors and officers liability insurance coverage.

 

"Base Salary" shall mean the salary provided in Section 4.1, as in effect from time to time.

 

"Board" shall mean the Board of Directors of the Company.

 

"Cause" shall mean the occurrence of any of the following events: (i) Executive's unauthorized misuse of the Company's trade secrets or proprietary information, (ii) Executive's conviction or plea of nolo contendere to a felony or a crime involving moral turpitude, (iii) Executive's committing an act of fraud against the Company, or (iv) Executive's gross negligence or willful misconduct in the performance of his duties that has had or is likely to have a material adverse effect on the Company. Except for a failure, breach or refusal which, by its nature, cannot reasonably be expected to be cured, Executive shall have ten (10) business days from the delivery date of the Company's written notice of termination within which to cure any acts constituting Cause.

 

"Change in Control" shall have the meaning set forth in the Company's 2020 Omnibus Incentive Plan.

 

"Code" shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

"Company Group" shall mean the Company together with any of its direct or indirect subsidiaries.

 

"Disability" shall have the meaning set forth in the Company's 2020 Omnibus Incentive Plan.

 

"Employment Term" shall mean the period during which Executive is employed by the Company, as specified in Section 2 hereof.

 

"Good Reason" shall mean the occurrence of any of the following, in each case during the Employment Term without Executive's written consent: (i) a material reduction in Executive's Base Salary unless a proportionate reduction is made to the Base Salary of all members of the Company's senior management, (ii) a permanent relocation of Executive's principal place of employment by more than 50 miles from the location in effect immediately prior to such relocation, (iii) any material breach by the Company of any material provision of this Agreement, or (iv) a material diminution in the nature or scope of Executive's authority or responsibilities from those applicable to Executive as of the Effective Date; provided that in no event shall Executive's resignation be for "Good Reason" unless (x) an event or circumstance set forth in clauses (i), (ii), (iii), (iv), (v) or (vi) shall have occurred and Executive provides the Company with written notice thereof within a reasonable period of time, not to exceed ninety (90) days, after the initial occurrence or existence of such event or circumstance, which notice specifically identifies the event or circumstance that Executive believes constitutes Good Reason, (y) the Company fails to correct the circumstance or event so identified within thirty (30) days after the receipt of such notice, and (z) Executive resigns within one hundred and twenty (120) days after the date of delivery of the notice referred to in clause (x) above. Executive acknowledges and agrees that Executive's exclusive remedy in the event of any breach of this Agreement shall be to assert Good Reason pursuant to the terms and conditions of Section 5.6.

 

"Release of Claims" shall mean the Release of Claims in the form provided to Executive by the Company on or following the Termination Date.

 

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