EX-10.2



 Exhibit 10.2 

Employment Term Sheet 
 Set forth
below is an outline of the management compensation terms by which the undersigned parties agree to abide. 
  

			
	Name:	  	Steve Borst (the “Executive”).
		
	Position:	  	President, Chief Executive Officer and Chairman of the Board of Directors for Q Therapeutics, Inc. (the “Company”).
		
	Effective Date:	  	Executive currently serves as the Company’s Chief Financial Officer. Beginning September 9, 2015 (the “Effective Date”), Executive shall begin serving as the Company’s President and Chief Executive Officer
and member of the Company’s Board of Directors.
		
	Base Salary:	  	$270,400. The base salary shall be reviewed no less frequently than annually.
		
	Performance Bonus:	  	 Mutually agreeable performance-based bonus plan. Target Bonus is 35% of Base Salary.

 
 The Executive shall participate in the Company’s “Executive Bonus Plan”
(or any successor plan), as such plan is implemented on an annual basis as approved by the Board of Directors, it being understood that the Executive’s actual annual bonus, if any, shall be determined at the discretion of the Company and the
Board of Directors.

		
	Equity Award and Vesting:	  	 On the Effective Date, Executive shall be awarded an option grant under the Company’s 2011 Equity Incentive Compensation Plan as
follows:
  

•    400,000 shall vest at the rate of 28% on the one year anniversary of the grant date and
2% per month thereafter.
  

•    100,000 upon closing an equity and/or debt financing in the cumulative amount of $10
million on or prior to June 30, 2016.
  

•    100,000 upon first patient dosed in the Company’s Phase 1 clinical trial.

 
 Executive shall also be eligible for additional option awards at the discretion of the
Board of Directors.

		
	Employee Benefits:	  	 Participation in the employee benefit plans made available to senior executives of the Company generally.

 
 25 days of paid vacation each year in addition to Company paid holidays, any portion of
which can be carried over to subsequent years as long as no more than 40 days in total are accrued at any time.



  
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	Employment Term:	  	The period beginning from the day on which the Executive begins employment with the Company as CEO(the “Start Date”) and shall continue through the date on which it is terminated by the Executive or the Company as provided
for in this Employment Term Sheet or any subsequent employment agreement. The Executive’s obligations hereunder shall survive expiration of the employment term.
		
	Chairman of the Board and Outside Activities:	  	 Executive shall serve as the Chairman of the Board of Directors. As Chairman, Executive shall not be considered an independent director nor
shall Executive be entitled to any Board fees or other payments for attending Board meetings other than reimbursement of expenses.
  

Executive may continue to serve on outside company Boards of Directors as long as such service does not impede Executive’s ability to carry out his duties
hereunder. Executive may also continue his activities with Upstart Ventures.

		
	Accrued Salary and Bonus:	  	 On the Effective Date Executive has accrued salary, vacation, and bonus in the following amounts:

 
 Accrued Salary : $400,441.38

 
 Vacation Accrual: $31,692.31

 
 Special Bonus: Up to $192,400. The Special Bonus will be paid
on a pro-rata basis equivalent to the percentage of back bonuses paid to other employees, until the Special Bonus is paid in full. Payment of the Special Bonus is contingent upon the Employer’s closing a financing in an amount of at least $10
million or the paying of bonuses to employees as described above.
  
 All accrued but
unpaid salary and bonuses shall be paid immediately in full upon the occurrence of a “Change of Control.”

		
	Severance/Change in Control Benefits:	  	 In the event that the Executive’s employment is terminated by the Company without Cause or the Executive resigns employment for Good
Reason, subject to the Executive’s execution and non-revocation of a release in a form satisfactory to the Company, the Company shall pay the Executive severance in an amount equal to the Executive’s then current base salary for a period
of 18 months (the “Severance Term”). The Executive will not be entitled to any severance in the event that the Executive’s employment with the Company is terminated for Cause or the Executive resigns without Good Reason.
Payment dates will be modified to comply with Section 409A of the Internal Revenue Code as necessary.
  

(1) any unpaid bonus through the date of Executive’s termination that had been earned but not yet paid for the prior year plus a prorata portion of
the Performance Bonus as set forth above, and (2) provided that Executive properly elects COBRA continuation coverage, the Company shall pay the COBRA premium for health care coverage for Executive and his spouse
and



  
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		  	 covered dependents, as applicable and to the extent eligible (the “COBRA Benefits”), for the Severance Term immediately
following the date of termination of employment.
  
 (b) In the event a Change in Control
occurs during the Term and (a) Executive is not offered continued employment by the acquiring company and in connection therewith Executive’s employment with the Company is terminated by the Company without Cause or by Executive for Good
Reason, or (b) Executive is offered continuing employment, but Executive’s employment with the acquiring company is terminated by the acquiring company without Cause or by Executive for Good Reason, in either event, within twelve
(12) months following such Change in Control event, then, in addition to any other accrued amounts payable to Executive through the date of termination of Executive’s employment, (1) the Executive shall receive a lump-sum severance
payment (the “CIC Severance Payment”) in an amount equal to the sum of (x) 1.5 times the Executive’s annual base salary as in effect on the date of termination, (y) any unpaid bonus through the date of
Executive’s termination for the prior year that had been earned but not yet paid plus a prorata portion of the Performance Bonus as set forth above; and (2) provided that Executive properly elects COBRA continuation coverage, the COBRA
premium for health care coverage for Executive and his spouse and covered dependents, as applicable and to the extent eligible (the “CIC COBRA Benefits”), for the Severance Term immediately following the date of termination of
Executive’s employment. Except as set forth above, Executive shall not be entitled to any CIC Severance Payment or CIC COBRA Benefits in the event Executive is offered continued employment by the acquiring company following such Change in
Control event with the acquiring company assuming this Agreement, or entering into an agreement substantially similar to this Agreement. If Executive is eligible for and entitled to the CIC Severance Payment or CIC COBRA Benefits, then Executive
shall not be eligible for or entitled to the Severance Payment and COBRA Benefits.
  

(c) Any Severance Payment, CIC Severance Payment, COBRA Benefits, or CIC COBRA Benefits vesting and/or any other benefits contemplated by this Section are
conditional on Executive signing and returning to the Company a non-revocable general release of claims providing for a release of all claims relating to Executive’s employment and/or this letter against the Company or its successors,
its subsidiaries and parent company and its and their respective directors, officers and stockholders, in a form satisfactory to the Company (the “Release”); provided that such Release becomes effective and irrevocable no later
than sixty (60) days following Executive’s termination of employment date or such earlier date required by the Release (such deadline, the “Release Deadline”) and such payments to be paid in a lump sum shall be paid on the
date of the Release Deadline. If the Release does not become effective by the Release Deadline, Executive shall forfeit any rights to any Severance Payment, CIC Severance Payment, COBRA Benefits, CIC COBRA Benefits, vesting and/or any other
benefits.



  
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 (d) In no event shall Executive be entitled to any benefits in the
event of a termination of Executive’s employment by the Company with Cause or by Executive without Good Reason, and Executive shall be entitled solely to Executive’s compensation and other benefits accrued as of the date of
Executive’s termination other than payment of the Performance Bonus as set forth above.

		
	Severance Term:	  	18 months.
		
	Cause:	  	“Cause” shall mean (i) Executive’s willful, knowing or grossly negligent failure or refusal to perform Executive’s duties under this Employment Term Sheet or any subsequent employment agreement; (ii)
Executive’s breach of any fiduciary duty to the Company; (iii) Executive’s commission of an act which is a fraud or embezzlement against the Company; and, (iv) the conviction of Executive for, or a plea of guilty or nolo contendere by
Executive to a criminal act which is a felony or a misdemeanor involving an act of moral turpitude.
		
	Good Reason:	  	“Good Reason” shall mean the occurrence of any one or more of the following events without Executive’s prior written consent, subject to the notification and cure provisions below: (i) a material diminution of
Executive’s authority, functions, duties or responsibilities; (ii) a relocation of Executive’s principal workplace more than 50 miles outside the workplace Executive had been assigned to work over the prior six (6) month period; (iii) the
Company’s material diminution of Executive’s annual base salary in effect on the date hereof or as the same may be increased from time to time; or (iv) a material breach by the Company of this Agreement; provided that “Good
Reason” shall not be deemed to have occurred unless: (1) Executive provides the Company with written notice that he intends to terminate his employment for one of the grounds set forth in (i)-(iv) within thirty (30) days of such ground
occurring, (2) if such ground is capable of being cured, the Company has failed to cure such ground within a period of thirty (30) days from the date of such written notice, and (3) Executive terminates his employment within sixty one (61) days from
the date that Good Reason first occurs.
		
	Change in Control:	  	For purposes hereof, Change in Control shall mean (i) any person (as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities (excluding for this
purpose the Company or its Affiliates or any employee benefit plan of the Company) pursuant to a transaction or a series of related transactions of which the Board does not approve; (ii) a merger or consolidation of the Company, whether or not
approved by the Board, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity or the parent of such


  
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		  	corporation) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity or parent of such corporation outstanding immediately after such merger or consolidation; or
(iii) the stockholders of the Company approve an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets. For purposes of this Employment Term Sheet, “Change in Control” shall be
interpreted in a manner, and limited to the extent necessary, so that it will not cause adverse tax consequences for either party with respect to Section 409A.
		
	Code Section 280G:	  	In the event that Executive becomes entitled to receive or receives any payment or benefit under this Employment Term Sheet or under any other plan, agreement or arrangement with the Company, or any person whose actions result in
a Change in Control or any other person affiliated with the Company or such person (all such payments and benefits being referred to herein as the “Total Payments”) and it is determined that any of the Total Payments shall be subject to
any excise tax pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended, or any similar or successor provision (the “Excise Tax”) then the Company shall make an additional “gross up” payment to Executive in order
to pay the Excise Tax.
		
	Section 409A:	  	 If any payments or benefits under this Employment Term Sheet or any subsequent employment agreement that would be considered deferred
compensation under Section 409A , then the following rules shall apply:
  

(i)     Any termination of Executive’s employment triggering payments or benefits must
constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination of Executive’s employment does
not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by Executive to the Company at the time
Executive’s employment terminates), any payments or benefits that constitute non-qualified deferred compensation under Section 409A shall be delayed until after the date of a subsequent event constituting a separation of service under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h).
  

(ii)    The above-described payments and benefits shall be paid on, or, in the case of
installments, shall not commence until, the sixtieth (60th) day following Executive’s termination of employment; provided that if Executive is deemed at the time of Executive’s separation from service to be a “specified
employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Employment Term Sheet or any subsequent employment agreement is
required in order to avoid an additional tax under Section 409A(a)(1)(B) of the Code, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier
of



  
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		  	 (a) the first business day following the expiration of the six-month period measured from the date of
Executive’s separation from service, (b) the date of Executive’s death, or (c) such earlier date that shall avoid the imposition of the additional tax under Section 409A(a)(1)(B). Upon the expiration of the applicable
six-month period pursuant to Code Section 409A(a)(2)(B)(i), all payments deferred shall be paid in a lump sum to Executive. It is intended that each installment of the above-described payments and benefits shall be treated as a separate
“payment” for purposes of Section 409A.
  

(iii)  To the extent that any of the above-described payments or benefits are deemed to be subject to
Section 409A, this Employment Term Sheet or any subsequent employment agreement shall be interpreted in accordance with Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder in order to (a) preserve
the intended tax treatment of the benefits provided with respect to such payments and benefits, and (b) comply with the requirements of Section 409A. Nothing in this Employment Term Sheet or any subsequent employment agreement shall be construed as
a guarantee by the Company of any particular tax effect. The Company shall not be liable to Executive for any tax, penalty, or interest imposed on any amount paid or payable hereunder by reason of Section 409A, or for reporting in good faith any
payment made under this Employment Term Sheet or any subsequent employment agreement as an amount includible in gross income under Section 409A. Neither the Company nor Executive shall have the right to accelerate or defer the delivery of any such
payments or benefits except to the extent specifically permitted or required by Section 409A.

		
	Confidentiality; Work Product:	  	Executive shall enter into the Company’s standard Employee Invention Assignment and Confidentiality Agreement.
		
	Governing Law	  	This term sheet shall be governed by the laws of Utah, without regard to principles of conflict of laws.

 By signing below, the parties agree that this term sheet will be binding upon the parties, will take effect on the
Effective Date, and will as of such date supersede any other employment, severance, change of control or related agreements between the undersigned executive and the Company and its affiliates. 

 

					
	Date: September 9, 2015	  		  	
			
	Q Therapeutics, Inc.	  		  	Executive – Steve Borst
			
	  
	  		  	  

	By: Peter Grebow	  		  	
	Its: Chair Compensation Committee	  		  	


  
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