Blueprint





 







 Exhibit 10.2



 


 




 


May 12,
2017


 


Dear
Michael:

 


ENDRA
Life Sciences Inc. (the “Company”) is pleased to offer
you continued employment on the following terms:

 

1. Position. Your title will be Chief
Technology Officer of the Company, and you will report directly to
the Chief Executive Officer of the Company and the Board of
Directors of the Company (the “Board”). This is a
full-time position. While you render services to the Company, you
will not engage in any other employment, consulting or other
business activity (whether full-time or part-time) that would
create a conflict of interest with the Company. By signing this
letter agreement, you confirm to the Company that you have no
contractual commitments or other legal obligations that would
prohibit you from performing your duties for the
Company.

 

2. Term.
Subject to the remaining provisions of this paragraph, this letter
agreement will be for an initial term that begins as of the date
first set forth above and continues in effect through
December 31, 2019 (the “Initial Term”) and,
unless terminated sooner, will continue on a year-to-year basis
after the Initial Term (each year, a “Renewal Term”).
If either party elects not to renew this letter agreement, that
party must give a written notice of termination to the other party
at least 90 days before the expiration of the then-current Initial
Term or Renewal Term. If one party provides the other with a notice
of termination, no further automatic extensions will occur and this
letter agreement will terminate at the end of the then-existing
Initial Term or Renewal Term, and such termination will not result
in any entitlement to compensation pursuant to Section 9 below
or otherwise.

 

3. Cash Compensation. The Company will pay
you a base salary at an
annual rate of $245,000, in accordance with the
Company’s standard payroll schedule and subject to applicable
deductions and withholdings. This salary will be subject to
periodic review and adjustments at the Board’s discretion. In
addition, you will be eligible to receive an annual bonus to be
paid based on attainment of Company and individual performance
objectives to be established annually by the Board. With respect to
2016, the annual bonus target to be paid if all goals are achieved
will be a cash payment equal to 22% of your base salary earned in
2016 and will be based on
the realization of milestones determined and approved by the Board.
 

 

4. Employee Benefits. As a regular employee
of the Company, you will be eligible to participate in a number of
Company-sponsored benefits. You will receive 15 days of paid time
off (PTO) per calendar year, in accordance with Company policy in
effect from time to time. Without limiting the generality of the
foregoing, while you are an employee of the Company, the Company
will provide you life insurance, with you to designate the
beneficiary thereunder, in an amount equal to your base salary as
in effect on the date of this letter agreement and as in effect on
the first business day of each calendar year thereafter. You will
also be eligible to participate in a long-term disability insurance
plan sponsored by the Company.

 



 

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5. IPO Stock Option.

 

(a) Number of Shares. Immediately prior to a
firm commitment, underwritten Initial Public Offering (as defined
in the Company’s Second Amended and Restated 2013 Stock
Incentive Plan, as amended (the “Plan”)), you will be
granted an Option (as defined in the Plan) to purchase such number
of shares of the Company’s common stock (the “Common
Stock”) that, together with any options to purchase Common
Stock held by you immediately prior to the Initial Public Offering,
is equal to 5% (on a fully-diluted basis) of the Company’s
total issued and outstanding shares of Common Stock at the time of
the Initial Public Offering (the “IPO
Option”).

 

(b) Exercise Price; Term. The exercise price
per share of the IPO Option will be equal to the price at which shares
of Common Stock are sold to the public in such Initial Public
Offering. The IPO Option will have a term that expires eight years
from the grant date.

 

(c) Plan Terms Control. The IPO Option will
be subject to the terms and conditions applicable to Options
granted under the Plan, as described in the Plan and the applicable
Award Agreement (as defined in the Plan).

 

(d) Scheduled Vesting. The IPO Option will
vest in three equal annual installments on the first, second and
third annual anniversaries of the Grant Date, as described in the
applicable Award Agreement.

 

(e) Accelerated Vesting. If your Separation
from Service (as defined in the Plan) is the result of an
involuntary discharge by the Company that is without Cause (as
defined in the Plan) and is not the result of your death or
Disability (as defined in the Plan), then any shares subject to the
IPO Option that are scheduled to vest within 12 months of such
Separation from Service will vest immediately upon such Separation
from Service, and any remaining unvested portion of the IPO Option
will terminate immediately.

 

(f) Accelerated Vesting upon Change in
Control. If your Separation from Service is the result of an
involuntary discharge by the Company that is without Cause, and is
not the result of your death or Disability, and is within 12 months
following a Change in Control (as defined in the Plan), then all
shares subject to the IPO Option will vest immediately upon such
Separation from Service.

 

(g) Forfeiture of Unvested Options. If your
Separation from Service is for any reason other than an involuntary
discharge by the Company that is without Cause, the unvested
portion of the IPO Option will immediately terminate.

 

(h) Separation from Service for Cause. If
your Separation from Service is for Cause, the unvested and vested
portion of the IPO Option will immediately terminate.

 



 

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(i) Exercise Period following Separation from
Service. Following your Separation from Service for any
reason other than Cause, the vested potion of the Option will
remain exercisable for one year (by you or your beneficiaries in
the event of your death), subject to any outer limits contained in
the Plan or the applicable Award Agreement.

 

6. Confidential Information, Assignment of
Inventions, and Non-Solicitation Agreement. You will be
required, as a condition of your continued employment with the
Company, to sign (or re-sign) the Company’s Confidential
Information, Assignment of Inventions, and Non-Solicitation
Agreement, a copy of which is attached hereto as Exhibit A.

 

7. Time and Place of Employment; Travel.
Your regular workplace will be Ann Arbor, Michigan. The Company
will pay or reimburse your reasonable travel for business on the
Company’s behalf from your home, lodging, meal and related
incidental costs, consistent with the Company’s travel
policies in effect from time to time. Additionally, upon the
Company’s establishment of a new corporate headquarters
outside the state of Michigan, you will be expected to relocate
your permanent residence to such general location. In connection
with your relocation, the Company agrees to reimburse your
reasonable moving expenses and up to two months for temporary
housing, such amounts to be ultimately determined by the Board. The
Company requires presentation of receipts or an itemized accounting
prior to making any reimbursements under this
paragraph.

 

8. Employment Relationship. Your employment
with the Company will continue to be “at will,” meaning
that either you or the Company may terminate your employment at any
time and for any reason, with or without cause. Any contrary
representations that may have been made to you are superseded by
this letter agreement. This is the full and complete agreement
between you and the Company on this term. Although your job duties,
title, compensation and benefits, as well as the Company’s
personnel policies and procedures, may change from time to time,
the “at will” nature of your employment may only be
changed in an express written agreement signed by you and a duly
authorized officer of the Company (other than you).

 

9. Certain Payments upon Termination. If
you are terminated by the Company without Cause, then, contingent
upon your execution, delivery and non-revocation of a release in
form and substance satisfactory to the Company and consistent with
the Company’s standard release agreement, which contains a
full release of all claims against the Company and certain other
provisions (the “Release Agreement”), including a
reaffirmation of the covenants in your Confidential Information,
Assignment of Inventions, and Non-Solicitation Agreement, you will
be entitled to (i) 12 months’ (or 24 months’ if such
termination occurs within one year following a Change in Control)
continuation of your current base salary and (ii) a lump sum
payment equal to 12 months (or 24 months if such termination occurs
within one year following a Change in Control) of COBRA premiums
based on the terms of Company’s group health plan and your
coverage under such plan as of the date of your Separation from
Service (regardless of any COBRA election actually made by you or
the actual COBRA coverage period under the Company’s group
health plan). The Company’s obligations under this paragraph
are subject to the requirements and time periods set forth in this
paragraph and in the Release Agreement. Prior to receiving the
payments described in this paragraph, you must execute the Release
Agreement on or before the date 21 days (or such longer period to
the extent required by law) after your Separation from Service. If
you fail to timely execute and remit the Release Agreement, you
waive any right to the payments provided under this paragraph.
Payments under this paragraph will commence within 15 days of your
execution and delivery of the Release Agreement, provided that you
do not revoke the Release Agreement. Your rights following a
Separation from Service under the terms of any Company plan,
whether tax-qualified or not, that are not specifically addressed
in this letter agreement, will be subject to the terms of such
plan, and this letter agreement will have no effect upon such terms
except as specifically provided herein. Except as specifically
provided in this paragraph, you will not have any further rights to
compensation under this letter agreement following your Separation
from Service.

 



 

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10. Removal from any Boards and Positions.
Unless you and the Company agree otherwise at the time of your
Separation from Service, upon your Separation from Service, you
will be deemed to resign (a) if a member, from the Board and the
board of directors of any affiliate and any other board to which
you have been appointed or nominated by or on behalf of the Company
or an affiliate, (b) from each position with the Company and any
affiliate, including as an officer of the Company or an affiliate
and (c) as a fiduciary of any employee benefit plan of the Company
and any affiliate.

 

11. Tax Matters.

 

(a) Withholding. All forms of compensation
referred to in this letter agreement are subject to reduction to
reflect applicable withholding and payroll taxes and other
deductions required by law.

 

(b) Tax Advice. You are encouraged to obtain
your own tax advice regarding your compensation from the Company.
You agree that the Company does not have a duty to design its
compensation policies in a manner that minimizes your tax
liabilities.

 

12. Confidentiality. You and the Company
have entered into a Confidential Information, Assignment of
Inventions, and Non-Solicitation Agreement. In addition to the
terms of that agreement, you agree that the terms and conditions of
this letter agreement are strictly confidential and, with the
exception of your legal counsel, tax advisor, immediate family or
as required by applicable law, have not and will not be disclosed,
discussed or revealed to any other persons, entities or
organizations, whether within or outside the Company, without prior
written approval of the Company. For avoidance of doubt, you may
not utilize the terms of this letter agreement to seek employment
with another party.

 

13. Interpretation, Amendment and
Enforcement. This letter agreement and Exhibit A hereto constitute the
complete agreement between you and the Company, contain all of the
terms of your continued employment with the Company and supersede
any prior agreements, representations or understandings (whether
written, oral or implied) between you and the Company. This letter
agreement may not be amended or modified, except by an express
written agreement signed by both you and a duly authorized officer
of the Company. The terms of this letter agreement and the
resolution of any disputes as to the meaning, effect, performance
or validity of this letter agreement or arising out of, related to,
or in any way connected with, this letter agreement, your
employment with the Company or any other relationship between you
and the Company will be governed by Michigan law, excluding laws
relating to conflicts or choice of law.

 

14. Section 409A. It is intended that this
letter agreement comply with Section 409A of the Internal Revenue
Code of 1986 (“Section 409A”), to the extent
applicable. This letter agreement will be administered in a manner
consistent with this intent, and any provision that would cause
this letter agreement to fail to satisfy Section 409A will have no
force or effect until amended to comply with Section 409A.
Notwithstanding anything in this letter agreement to the contrary,
in the event any payment or benefit hereunder is determined to
constitute nonqualified deferred compensation subject to Section
409A, then to the extent necessary to comply with Section 409A,
such payment or benefit will not be made, provided or commenced
until six months after your Separation from Service. For purposes
of Section 409A, the right to a series of installment payments will
be treated as a right to a series of separate payments.
Notwithstanding anything in this letter agreement to the contrary,
to the extent required in order to avoid accelerated taxation
and/or additional taxes under Section 409A, amounts reimbursable to
you under this letter agreement will be paid to you on or before
the last day of the year following the year in which the expense
was incurred and the amount of expenses eligible for reimbursement
(and in-kind benefits provided to you) during any one year may not
effect amounts reimbursable or provided in any subsequent
year.

 


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You may
indicate your agreement with the terms of this letter agreement by
signing and dating both the enclosed duplicate original of this
letter agreement and the enclosed Confidential Information,
Assignment of Inventions, and Non-Solicitation Agreement and
returning them to me.

 


If you
have any questions, please call me at (617) 453-8401.

 


Very
truly yours,

 



ENDRA LIFE SCIENCES INC.


 


 /s/
Francois Michelon







By:
Francois Michelon, Chief
Executive Officer 

 


I have
read and accept this employment letter agreement:

 

 /s/
Michael Thornton

 


Signature of
Michael Thornton

 

Dated: May 12, 2017

 



Attachment

 


Exhibit
A: Confidential Information, Assignment of Inventions, and
Non-Solicitation Agreement

 




 

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