Document:

EX-10.2

 Exhibit 10.2 
  

 
 December 29, 2014 

Thomas A. Keuer 
 4878 Valhalla Drive 

Boulder, CO 80301 
  

	Re:	Amended and Restated Employment Agreement 

 Dear Tom: 

ARCA biopharma, Inc. (the “Company”) is pleased to offer you the following agreement regarding your employment as the Company’s Chief
Operating Officer and certain severance benefits (the “Agreement”). This Agreement amends, supersedes and terminates any and all prior agreements with respect to your employment terms and severance benefits, including but not
limited to, that certain Offer Letter and Letter Agreement dated October 12, 2006; provided, however, that, except as otherwise expressly provided, the Employee Intellectual Property Agreement (as defined below) is not modified or
terminated hereby, and shall continue in full force and effect. 
 1. Employment. The Company hereby agrees to employ you and you
hereby accept such employment upon the terms and conditions set forth herein and agree to perform such duties as are commensurate with your office as prescribed by the Board of Directors of the Company. Your start date will be effective as of
January 1, 2015 (the “Start Date”). 
 2. Duties. You shall render exclusive, full-time services to the Company
as its Chief Operating Officer and shall report to the Company’s President and Chief Executive Officer. Your responsibilities, title, working conditions, duties, reporting relationship and/or any other aspect of your employment may be changed,
added to or eliminated during your employment at the sole discretion of the Company. During the term of your employment hereunder, you shall devote your best efforts and your full business time, skill and attention to the performance of your duties
on behalf of the Company. 
 3. Compensation.  

(a) For all services rendered and to be rendered hereunder, and for the other agreements by you contained herein, the Company agrees to
pay you, and you agree to accept a salary of $23,333.33 per month. Such salary will be subject to review and adjustment on an annual basis in accordance with the procedures set forth by the Company’s Board of Directors or Compensation Committee
of the Board of Directors. Any such salary shall be payable pursuant to the Company’s payroll procedures which may be changed by the Company from time to time and shall be subject to such deductions or withholdings as the Company is required to
make pursuant to law, or by further agreement with you. In addition to your base salary, you may be 

  
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eligible to receive a bonus pursuant to an employee bonus plan as approved by the Board of Directors in its sole discretion. You will also be eligible to participate in the Company’s benefit
plans based on the eligibility criteria for each of those plans as they become available, which plans will remain subject to change from time to time at the Company’s discretion. 

4. Termination. You and the Company each acknowledge that your employment relationship with the Company is at-will and that either
party has the right to terminate your employment with the Company at any time for any reason whatsoever, with or without cause or advance notice pursuant to the following provisions. 

(a) Termination by Death or Disability. In the event you shall die during the period of your employment hereunder or become permanently
disabled, which shall mean you are unable to perform each of the essential duties of your position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a
continuous period of not less than twelve (12) months, your employment and the Company’s obligation to make payments hereunder shall terminate on the date of your death, or the date upon which, in the sole reasonable determination of the
Board of Directors, you are determined to be permanently disabled. The Company’s ability to terminate you as a result of any disability shall be to the extent permitted by state and/or federal law. 

(b) Voluntary Resignation. In the event you voluntarily resign from your employment with the Company (other than for Good Reason as
defined below), the Company’s obligation to make payments hereunder shall cease upon such resignation, and you shall not be entitled to any severance pay, accelerated vesting, pay in lieu of notice or any other such compensation, except the
Company shall pay you (i) any salary earned but unpaid prior to the resignation and all accrued but unused vacation, (ii) if applicable, all commissions rightfully earned prior to your resignation and (iii) any business expenses
incurred by you in connection with your performance of your duties, according to the policies of the Company, that were incurred but not reimbursed as of the date of resignation. Vesting of any of your stock options outstanding on the date of
resignation shall cease on the date of resignation. 
 (c) Termination for Cause. In the event you are terminated by the Company for
Cause (as defined below), the Company’s obligation to make payments hereunder shall cease upon the date of receipt by you of written notice and explanation of such termination (the “Date of Termination”), and you shall not be
entitled to any severance pay, accelerated vesting, pay in lieu of notice or any other such compensation, except the Company shall pay you (i) any salary earned but unpaid prior to the Date of Termination and all accrued but unused vacation,
(ii) if applicable, all commissions rightfully earned prior to the Date of Termination and (iii) any business expenses incurred by you in connection with your performance of your duties, according to the policies of the Company, that were
incurred but not reimbursed as of the Date of Termination. Vesting of any stock options outstanding on the Date of Termination shall cease on the Date of Termination. 

(d) Termination by the Company Without Cause or Resignation for Good Reason. Subject to the terms and conditions of this Agreement, the
Company will provide you with Severance Benefits (as defined below) if (i) the Company terminates your employment without Cause or (ii) you resign your employment for Good Reason. You will not be entitled to

  
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receive any Severance Benefits if (A) the Company terminates your employment for Cause, (B) you resign from your employment with the Company other than for Good Reason, or (C) in
the event of your death or permanent disability. In addition, to the extent that any federal, state or local laws, including, without limitation, so-called “plant closing” laws, require the Company to give advance notice or make a payment
of any kind to you because of your involuntary termination due to a layoff, reduction in force, plant or facility closing, sale of business, change of control, or any other similar event or reason, the Severance Benefits payable under this Agreement
shall either be reduced proportionately or eliminated, such that the total amounts paid to you do not exceed the amounts specified herein. The Severance Benefits provided under this Agreement are intended to satisfy any and all statutory obligations
that may arise out of your involuntary termination of employment for the foregoing reasons. 
 5. Description of Severance Benefits.
For purposes of this Agreement, “Severance Benefits” are defined as: 
 (a) severance pay (the “Severance
Pay”) equivalent to: (A)(i) twelve (12) months of your Base Salary (as defined below) in effect as of your last day of employment with the Company in accordance with this agreement if a Notice Date (as defined below) occurs
(a) on the same day as a Corporate Transaction or (b) within thirteen (13) months after the effective date of a Corporate Transaction or (ii) six (6) months of your Base Salary (as defined below) in effect as of your last
day of full-time employment with the Company if a Corporate Transaction has not occurred on or within thirteen (13) months before the Notice Date; and (B) a pro rata portion of any bonus compensation under any employee bonus plan that has
been approved by the Board of Directors (“Bonus Pay”) payable to you for the fiscal year in which your employment terminated to be paid at the same time that such incentive bonus would have been paid if such termination had not
occurred. Your pro rata portion of any Bonus Pay shall be based upon the number of days in such calendar year elapsed through the Notice Date of such termination as a proportion of 365. 

The date you are notified that your employment with the Company is being terminated without Cause or the date you notify the Company that you
are terminating your employment for Good Reason, shall be referred to herein as the “Notice Date.” The Severance Pay shall be payable in equal installments over the applicable number of months (the “Initial Severance
Period”) in accordance with the Company’s then applicable payroll policies, beginning no earlier than seven (7) days after the effective date of the release described below, and will be subject to standard payroll deductions and
withholdings; provided, however, that any Bonus Pay shall not be payable to you until such time as bonus compensation under the applicable employee bonus plan is paid to other employees of the Company; and 

(b) reimbursement of your out-of-pocket costs to continue your group health insurance benefits (and dependent coverage, if applicable)
under COBRA at substantially the same level of coverage in effect immediately prior to the Notice Date for (i) twelve (12) months, if Severance Pay is payable pursuant to paragraph 5(a)(A)(i) above, or (ii) six (6) months,
if Severance Pay is payable pursuant to paragraph 5(a)(A)(ii) above, following the last day of the month in which your Notice Date occurs, payable at the sole discretion of the Company either in advance on the first day of each month or in a
single lump sum, whether or not you elect or are eligible to receive COBRA; provided, that even if you do not elect or are not eligible to receive COBRA, you shall receive the equivalent of such out-of-pocket costs paid by you not to exceed
the costs that such benefits would equal under COBRA if you were so eligible. 

  
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 To receive any of the Severance Benefits, you must first sign and date a general release of
claims in favor of the Company in the form attached hereto as Exhibit A (the “Release”). Such Release shall not be signed or dated until the Notice Date, and, except as otherwise required by applicable law, is not valid (and
will not entitle you to Severance Benefits) unless signed and delivered to the Company within three (3) days after such Notice Date. 

(c) The Company may elect, in its sole discretion, to pay you the equivalent of up to twelve (12) months of your Base Salary in
effect as of your last day of employment with the Company in accordance with this agreement, which additional payment shall extend your covenants and obligations set forth in Article IV of the Employee Intellectual Property, Confidentiality
and Non-Compete Agreement for such additional period. If the Company elects to make such additional payment to you, the Company shall make such payments in equal installments over the applicable number of months following the Initial Severance
Period in accordance with the Company’s then applicable payroll policies, or in the sole discretion of the Company as designated by the Company in writing within seven (7) days after the Notice Date, in a single lump sum cash payment,
subject to standard payroll deductions and withholdings, and such additional amounts shall be deemed to be “Severance Pay” and to be part of the “Severance Benefits” for purposes of this Agreement. 

6. Parachute Payments. 

(a) Notwithstanding anything in this Agreement to the contrary, if any payment or benefit you would receive pursuant to a Corporate
Transaction from the Company or otherwise (“Payment”) (i) would constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”),
and (ii) but for this sentence, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount (as defined below). For the avoidance of
doubt, a Payment shall not be considered a parachute payment for purposes of this paragraph if such Payment is approved by the shareholders of the Company in accordance with the procedures set forth in Sections 280G(b)(5)(A)(ii) and (B) of the
Code and the regulations thereunder, and at the time of such shareholder approval, no stock of the Company is readily tradeable on an established securities market or otherwise (within the meaning of Section 280G(b)(5)(A)(ii)(I) of the Code)
(“280G Shareholder Approval”). The “Reduced Amount” shall be either (i) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (ii) the
Payment or a portion thereof after payment of the applicable Excise Tax, whichever amount after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate), results in your receipt, on an after-tax basis, of the greatest amount of the Payment to you. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced
Amount, reduction shall occur in the following order unless you elect in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date on which the event that triggers the
Payment occurs): reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting
shall be cancelled in the reverse order of the date of grant of your stock awards unless you elect in writing a different order for cancellation. 

  
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 (b) The accounting firm engaged by the Company for general audit purposes as of the day
prior to the effective date of the event giving rise to the Payment (“Payment Event”) shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the Payment Event, the Board shall have the discretion to appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations
by such accounting firm required to be made hereunder. 
 (c) The accounting firm engaged to make the determinations hereunder shall
provide its calculations, together with detailed supporting documentation, to the Company and you within fifteen (15) calendar days after the date on which your right to a Payment is triggered (if requested at that time by the Company or you)
or such other time as requested by the Company or you. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Company and you with
an opinion reasonably acceptable to you that no Excise Tax will be imposed with respect to such Payment. The Company shall be entitled to rely upon the accounting firm’s determinations, which shall be final and binding. 

7. Compliance with Revenue Code Section 409A. To the extent any Severance Benefits are paid from the date of termination of your
employment through March 15 of the calendar year following such termination, such Severance Benefits are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations and thus payable pursuant
to the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations; (b) are paid following said March 15, such Severance Benefits are intended to constitute separate payments for purposes of
Section 1.409A-2(b)(2) of the Treasury Regulations made upon an involuntary separation from service and payable pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations, to the maximum extent permitted by said provision, and
(c) are in excess of the amounts specified in clauses (a) and (b) of this paragraph, shall (unless otherwise exempt under Treasury Regulations) be considered separate payments subject to the distribution requirements of
Section 409A(a)(2)(A) of the Code, including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that payments or benefits be delayed until 6 months after your separation from service (if the Company is publicly
traded and you are a “specified employee” within the meaning of the aforesaid section of the Code at the time of such separation from service). In the event that a six-month delay of any such separation payments or benefits is required, on
the first regularly scheduled pay date following the conclusion of the delay period you shall receive a lump sum payment or benefit in an amount equal to the separation payments and benefits that were so delayed, and any remaining separation
payments or benefits shall be paid on the same basis and at the same time as otherwise specified pursuant to this Agreement (subject to applicable tax withholdings and deductions). 

8. Description of Corporate Transaction. For purposes of this Agreement, “Corporate Transaction” is defined as:
(i) a sale of all or substantially all of the assets of the Company; (ii) a merger, consolidation or reorganization involving the Company if, immediately 

  
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after the consummation of such merger, consolidation or reorganization, the stockholders of the Company immediately prior thereto do not own, directly or indirectly, either (A) outstanding
voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving entity in such merger, consolidation or reorganization or (B) more than fifty percent (50%) of the combined
outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction; or (iii) any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity)
which results in any person or entity (other than persons who are stockholders or affiliates of the Company immediately prior to the transaction) owning fifty percent (50%) or more of the combined voting power of all classes of stock of the
Company, other than the sale by the Company of stock in transactions the primary purpose of which is to raise capital for the Company’s operations and activities. 

9. Salary and Accrued PTO/Vacation. On your last date of employment with the Company, the Company will pay to you all of your accrued
salary and all of your accrued but unused paid time off (“PTO”) or vacation as the case may be earned through your last day of employment. 

10. Definition of Base Salary. For purposes of this Agreement, “Base Salary” means your base salary in effect as of
your last day of full-time employment with the Company, excluding the following: any type of commissions, incentive payments or any other similar remuneration paid directly to you, or any other income received in connection with stock options,
contributions made by the Company under any employee benefit plan, or similar items of compensation. 
 11. Definition of Cause. For
purposes of this Agreement, “Cause” means that you have committed or engaged in: (i) willful misconduct, gross negligence, theft, fraud, or other illegal or dishonest conduct, any of which are considered to be materially
harmful to the Company; (ii) refusal, unwillingness, failure, or inability to perform material job duties or habitual absenteeism; or (iii) violation of fiduciary duty, violation of any duty of loyalty, or material breach of any material
term of this Agreement or of your Employee Intellectual Property, Confidentiality and Non-Compete Agreement (a copy of which is attached hereto as Exhibit B) (the “Employee Intellectual Property Agreement”) or any other
contract between you and the Company. In the event you are terminated for Cause you will not be entitled to the Severance Benefits, pay in lieu of notice, vesting of any shares under any option plan, vesting of any unrestricted shares, or any other
such compensation set forth herein and you shall immediately forfeit all rights to any options to purchase shares of the Company’s common stock (including vested options) and such options shall immediately expire, but you will be entitled to
all other compensation (including commissions rightfully earned), benefits and unreimbursed expenses accrued through the Date of Termination. 

12. Definition of Good Reason. For purposes of this Agreement, “Good Reason” shall mean (i) the relocation of
your normal principal place of work greater than thirty (30) miles from your then current normal work location; (ii) a decrease in your then current base salary of more than fifteen percent (15%), other than any such decrease resulting
from a general reduction by the Company in the base salary of all Company executive officers; or (iii) the Company unilaterally makes significant detrimental reductions in your job responsibilities; provided, that

  
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you shall give written notice to the Chairman of the Company’s Board of Directors setting forth your intent to resign for Good Reason and the facts in support of your claim that Good Reason
exists within ninety (90) days of the initial existence of any of the foregoing conditions; and the Company shall have thirty (30) days after the applicable party has received such notice to take such actions, if any, as the Company may
deem appropriate to eliminate such claimed Good Reason (without thereby admitting that such Good Reason had occurred); and your final separation from service occurs within two (2) years of the initial existence of any of the foregoing
conditions. If the Company acts to eliminate such claimed Good Reason within the thirty (30) day period after receipt of your notice, then you shall not be deemed to be resigning for Good Reason under such facts. 

13. At-Will Employment. Nothing in this Agreement alters the at-will nature of your employment relationship with
the Company. Any contrary representations or agreements, which may have been made to you, are superseded by this Agreement. Subject to the terms of this Agreement, either you or the Company may terminate your employment relationship at any time,
with or without Cause or advance notice.  
 14. Employee Intellectual Property Agreement. 

(a) Execution and Compliance. You acknowledge that you are a member of the Company’s executive and management personnel and that,
as such, you have been and will be privy to extremely sensitive, confidential and valuable commercial information, which constitutes trade secrets of the Company, the disclosure of which would greatly harm the Company. Your work for the Company is
conditioned on your execution of and continued compliance with the Employee Intellectual Property Agreement, which shall continue in full force and effect. 

(b) Extension of Time. In the event that you breach any covenant, obligation or duty in the Employee Intellectual Property Agreement or
its subparts, any such duty, obligation, or covenants to which you and the Company agreed by the Employee Intellectual Property Agreement and its subparts shall automatically toll from the date of the first breach, and all subsequent breaches, until
the resolution of the breach through private settlement, judicial or other action, including all appeals. The duration and length of your duties and obligations as agreed by the Employee Intellectual Property Agreement and its subparts shall
continue upon the effective date of any such settlement, or judicial or other resolution. 
 15. Miscellaneous. Except as
specifically set forth herein, this Agreement constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to your employment terms and Severance Benefits. It is entered into without
reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in writing signed
by you and a duly authorized officer of the Company. This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of Colorado as applied to contracts made and to be performed
entirely within Colorado. 
 ***** 

  
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 Please sign below to indicate your understanding and acceptance of this Agreement and return the signed original
to me at your earliest convenience. 
 Very truly yours, 
  

			
	ARCA BIOPHARMA, INC.
		
	By:	 	/s/ Michael R. Bristow
		
	Name:	 	Michael R. Bristow
		
	Title:	 	President and Chief Executive Officer

  

					
	UNDERSTOOD AND AGREED:	 		 	
			
	/s/ Thomas A. Keuer	 		 	December 29, 2014
	Thomas A. Keuer	 		 	Date

  
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 EXHIBIT A 

RELEASE 
 In exchange for the Severance
Benefits provided under the foregoing Employment and Retention Agreement with ARCA biopharma, Inc. (the “Company”), dated
[                    ], and except as set forth in this release, I hereby release, acquit and forever discharge the Company, its parents and
subsidiaries, and their officers, directors, agents, servants, employees, shareholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities
and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed (other than any claim for indemnification I may have as a result of any third party action against me
based on my employment with the Company), arising out of or in any way related to agreements, events, acts or conduct at any time prior to the date I execute this release, including, but not limited to: all such claims and demands directly or
indirectly arising out of or in any way connected with my employment with the Company or the termination of that employment, including but not limited to, claims of intentional and negligent infliction of emotional distress, any and all tort claims
for personal injury, claims or demands related to salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any other form of
compensation; all claims for breach of contract and wrongful termination; claims pursuant to any federal, state or local law or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Employee
Retirement Income Security Act of 1974, as amended; the federal Americans with Disabilities Act of 1990; Colorado anti-discrimination statutes, including the Colorado Civil Rights Act (as amended); tort law; contract law; wrongful discharge;
discrimination; fraud; defamation; emotional distress; and breach of the implied covenant of good faith and fair dealing; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from its
existing obligations to indemnify me pursuant to any agreement or applicable law. 
 I also hereby acknowledge that I am knowingly and voluntarily waiving
and releasing any rights I may have under the federal Age Discrimination in Employment Act of 1967, as amended (“ADEA”). I also acknowledge that the consideration given for the release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that: 
  

	 	(a)	my waiver and release do not apply to any rights or claims that arise on or after the date I execute this release; 

  

	 	(b)	I have the right to consult with an attorney prior to executing this release; 

  

	 	(c)	I have twenty-one (21) days to consider this release (although I may choose to voluntarily execute this release earlier); 

  

	 	(d)	I have seven (7) days following my execution of this release to revoke the release; and 

  

	 	(e)	this release shall not be effective until the date upon which the revocation period has expired, which shall be the eighth day after I execute this release. 

 This Release constitutes the complete, final and exclusive embodiment of the entire agreement between the Company
and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated herein. This Release may only be modified by a writing signed by both me and a duly authorized officer of
the Company. This Release will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of Colorado as applied to contracts made and to be performed entirely within Colorado. This Release shall
be effective on the date I sign and return it to the Company, provided that the Company has also signed it. 
 I accept and agree to the terms and
conditions stated above. 
  

			
	 
	[Name]
		
	Date:	 	 

  

			
	ARCA BIOPHARMA, INC.
		
	 By:
	 	 
		
	Name:	 	 
		
	Title:	 	 

 EXHIBIT B 

EMPLOYEE INTELLECTUAL PROPERTY, CONFIDENTIALITY AND NON- 

COMPETE AGREEMENT 

			
		 	Exhibit B
	

	 	
		 	 11080 CirclePoint Road, Suite 140

Westminster, CO 80020

 EMPLOYEE INTELLECTUAL PROPERTY, CONFIDENTIALITY
AND NON-COMPETE AGREEMENT 

 

 In consideration of my employment by ARCA biopharma, Inc. or its affiliates (the “Company”) and
the salary paid to me, I acknowledge and agree: 
 I. INTELLECTUAL PROPERTY 

A. I do hereby assign and agree to assign in the future to the Company all my right, title and interest in and to any and all Intellectual Property (including
works not considered “works made for hire”) that I may make, conceive, create or author, either alone or jointly with others, during the period of my employment with the Company, regardless of whether the Intellectual Property is
patentable, copyrightable or protectable by any other intellectual property right. I further agree that any Intellectual Property disclosed by me to the Company or a third person or described in a patent application filed by me or on my behalf
within one year following termination of my employment with the Company shall be presumed to be Intellectual Property subject to the terms of this agreement unless proved by me to have been conceived and first reduced to practice by me following the
termination of my employment with the Company. By way of illustration but not limitation, the term “Intellectual Property” includes (a) data, results, ideas, processes, techniques, formulae, compounds, know-how, improvements,
discoveries, developments and designs, (b) tangible and intangible information relating to biological materials such as cell lines, antibodies, tissue samples, proteins, nucleic acids and the like, assays and assay components and media,
procedures and formulations for producing any such assays or assay components, and pre-clinical and clinical data, results, developments or experiments, and (c)

 
plans for research, development and new products, marketing and selling information, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and
customers, and information regarding the skills and compensation of other employees of the Company. All copyrightable Intellectual Property are “works made for hire” as defined or understood under the United States Copyright Act (17 USC
§§ 100 et seq.), and the Company will be the author thereof for all purposes of the United States Copyright Act and otherwise. 
 B. I will
promptly disclose to the Company all Intellectual Property as I make, conceive, create or author it and all patent applications filed by me or in which I am named as an inventor or co-inventor, each during the period of my employment and for one
(1) year thereafter. 
 C. I will assist the Company (at its expense) in every proper manner, during and after the term of my employment, to obtain,
perfect, protect and enforce its rights in all countries in any Intellectual Property of the Company. 
 D. Further, I hereby irrevocably appoint the
Company and its duly authorized officers and agents as my attorneys-in-fact, coupled with an interest, to act for and on my behalf and instead of me, to execute all documents and papers, including any application for patent, copyright or mask work,
and to do all other lawfully permitted acts reasonably necessary to assign, or otherwise transfer and perfect my right, title and interest in and to the Intellectual Property, to and in the Company, and to obtain, perfect, protect and enforce its
rights in the Intellectual Property. 

 II. EXCLUDED INTELLECTUAL PROPERTY 

As the Company will own all Intellectual Property, for my own protection of my prior existing rights, I have fully described on Annex A all the
inventions, improvements, discoveries, writings, art, algorithms, computer codes and programs, mask works, business methods, trade secrets and other intellectual property that may relate to the research or business interests, present or prospective,
of the Company which I made, conceived, created or authored, either alone or jointly with others, prior to my term of employment with the Company which I wish to be excluded from this agreement (collectively referred to as “Prior
Inventions”). The descriptions in Annex A are sufficiently complete to enable qualified persons to distinguish between the intellectual property excluded from this agreement and any Intellectual Property subject to this agreement and
include all U.S. and foreign patent and patent application numbers, of which I am aware, corresponding to the described items. 
 If no Annex A
is attached, I represent that there are no Prior Inventions. If, in the course of my employment with the Company, I incorporate a Prior Invention into a Company product, process or machine, the Company is hereby granted and shall have a
nonexclusive, fully-paid, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to reproduce, make derivative works of, distribute, publicly perform, and publicly display in any
form or medium, whether now known or later developed, make, have made, modify, use and sell such Prior Invention. Notwithstanding the foregoing, I agree

 

  
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that I will not incorporate, or permit to be incorporated, Prior Inventions in any Company Intellectual Property without the Company’s prior written consent. 

III. CONFIDENTIALITY 
 A. In addition to
the Intellectual Property I may produce, the Company, in reliance on my compliance with the terms of this agreement, will disclose or allow me access to confidential or proprietary technical or business information of the Company, or confidential or
proprietary technical or business information of a third party. Neither during the term of my employment, nor at any time thereafter, will I, without prior written authorization from the Company, disclose or use, except as required in my performance
of my duties to the Company, any confidential or proprietary information of the Company or of any third party provided to me by the Company. I will obtain the written approval of the Company’s General Counsel before publishing or submitting for
publication any material (written, oral, or otherwise) that relates to my work at Company and/or incorporates any confidential information of the Company or any third party provided to me by the Company. 

B. Upon termination of my employment, or at any time at the request of the Company, I will return all documents, recorded material in any media, and any
property of the Company, and all documents, recorded material and any property of a third party, and all copies thereof, which I acquired from the Company or which I produced during or as a result of my employment. I also will not retain any copies,
notes or abstracts of any of the foregoing. 
 C. If at any time during or after my employment, I am uncertain whether any information provided to me by the
Company, or produced by me, is confidential or proprietary information of the Company, or of any third party, or if I am solicited to disclose or use confidential or proprietary information, I will inform the Company in writing (by

 
certified mail, if after my employment) and consult with an officer, or designated representative of the Company, to determine whether the information is confidential or proprietary information
to the Company or a third party. 
 D. The Company may notify any of my future or prospective employers or other third parties of this agreement, without my
further consent. 
 E. I understand that the unauthorized use or disclosure of confidential or proprietary information of the Company, or of a third party,
provided to me by the Company would cause irreparable harm to the Company and therefore the Company is entitled to injunctive relief to preclude or restrain me from disclosing or using, or further disclosing or using, confidential or proprietary
information of the Company, or of a third party, provided to me by the Company. 
 F. I further agree that I will neither disclose to the Company nor use in
the performance of my duties to the Company any confidential or proprietary information of any other party, unless permitted by agreement between the Company and the other party. 

IV. NON-COMPETE AND NON-SOLICITATION 

A. During my term of employment by the Company and for one (1) year period thereafter, I will not engage or participate or assist any person, directly or
indirectly, in any individual or representative capacity in any business or enterprise that competes with the business, present or prospective, of the Company without the express written consent of the Company. I may, however, retain personal
investments held by me as of the date hereof provided that by those investments I am not involved in the management or operation of that business. It is agreed that, should I own or control less than five percent (5%) of the issued
publicly traded stock of, or equity in, a business,

 
such ownership shall not constitute a violation of this provision. 
 B. I agree further that for the
period of my employment by the Company and for 12 months after the date of termination of my employment with the Company I will neither (a) solicit the business of any client or customer of the Company (other than on behalf of the Company),
(b) either directly or through others, solicit or attempt to solicit any employee, independent contractor or consultant of the Company to terminate his or her relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or entity, nor (c) directly or indirectly induce any client, customer, supplier, vendor, consultant or independent contractor of the Company to terminate or negatively alter his, her or its
relationship with the Company. 
 C. I acknowledge that through my employment with the Company I will acquire access to information suited to immediate
application by a business in competition with the Company. I specifically acknowledge that, because of the nature and type of business that the Company engages in, the geographic scope of the covenants in this Article IV shall include all counties,
cities and states in the United States and any other city, country, territory or region in which the Company conducts business. I agree and acknowledge that the foregoing restrictions, geographic scope and time limitations set forth in this Article
IV are reasonable, and that the provisions in this Article IV are reasonably necessary for the protection of the Company. If any restriction set forth in this Article IV is found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be
enforceable. 
 D. I further acknowledge the following provisions of Colorado law, set forth in

 

  

					
		 	- 2 -	 	ARCA biopharma, Inc.

 
Colorado Revised Statutes Section 8-2-113(2): 
 “Any covenant not to compete which restricts
the right of any person to receive compensation for performance of skilled or unskilled labor for any employer shall be void, but this subsection (2) shall not apply to: 

(a) Any contract for the purchase and sale of a business or the assets of a business; 

(b) Any contract for the protection of trade secrets; 

(c) Any contract provision providing for the recovery of the expense of educating and training an employee who has served an employer for a
period of less than two years; 
 (d) Executive and management personnel and officers and employees who constitute professional staff to
executive and management personnel.” 
 I acknowledge that this agreement is a contract for the protection of trade secrets under
Section 8-2-113(2)(b), and is intended to protect the confidential information and trade secrets of the Company; and that I am an executive and management employee or professional staff to executive or management personnel, within the meaning
of Section 8-2-113(2)(d). 
 E. I acknowledge and am prepared for the possibility that my standard of living may be reduced during the noncompetition
period provided in this Article IV following the termination of my employment, and fully accept any risk associated with that possibility. 
 V.
PRIOR EMPLOYMENT 
 My performance of my duties to the Company during my employment does not conflict with and will not be
constrained in any manner by any prior or current employment or business relationship. I have not entered into any agreement that will prevent my full

 
compliance with the terms of this agreement except as I have fully described on Annex B and to which I have attached a true copy of that agreement. 

VI. LEGAL AND EQUITABLE REMEDIES. 

In view of the nature of the rights in goodwill, employee relations, trade secrets, and business reputation and prospects of the Company to be protected under
this agreement, I understand and agree that the Company could not be reasonably or adequately compensated in damages in an action at law for my breach of my obligations (whether individually or together) hereunder. Accordingly, I specifically agree
that the Company shall be entitled to temporary and permanent injunctive relief, specific performance, and other equitable relief to enforce the provisions of this agreement and that such relief may be granted without the necessity of proving actual
damages, and without bond. I acknowledge and agree that the provisions in this agreement, and that upon my breach of this agreement, the Company is entitled to withhold payments or consideration, as equitable relief to prevent continued breach,
to recover damages and to seek any other remedies available to the Company. This provision with respect to injunctive relief shall not, however, diminish the right of the Company to claim and recover damages or other remedies in addition to
equitable relief. 
 VII. MISCELLANEOUS 

This agreement sets forth the entire and complete understanding and agreement I have with the Company relating to its subject matter and supersedes all other
oral or written representations and understandings. The terms of this agreement may not be waived, amended or superseded except by a written amendment that refers to this agreement and is signed by both me and a duly authorized representative of the
Company. The formation, interpretation,

 
compliance and performance of this agreement will be governed by the laws of the State of Colorado, excluding its conflict-of-law rules. I hereby expressly consent to the personal jurisdiction of
the state courts located in Denver County, Colorado and the federal courts located in the city and county of Denver, Colorado for any lawsuit filed there against me by the Company arising from or related to this agreement. If any provision of this
agreement is found invalid or unenforceable, the remainder of the provisions will remain valid and enforceable. If moreover, any term, word, clause, phrase, provision, restriction, or section of this agreement is more restrictive than permitted by
the law of the jurisdiction in which the Company seeks enforcement thereof, the provisions of this agreement shall be limited only to the extent that a judicial determination finds the same to be unreasonable or otherwise unenforceable. 

This agreement shall survive the termination of my employment and the assignment of this agreement by Company to any successor-in-interest or other assignee
and be binding upon my heirs and legal representatives. 
 I agree and understand that nothing in this Agreement shall confer any right with respect to
continuation of employment by Company, nor shall it interfere in any way with my right or Company’s right to terminate my employment at any time, with or without cause and with or without advance notice. 

I have been furnished with a copy of this agreement prior to my signing. I have carefully read all of the provisions of this agreement and I understand each
and all of the provisions. I have had the opportunity to seek independent business advice and legal counsel regarding this agreement and my obligations hereunder. I will fully and faithfully comply with all the provisions and obligations of this
agreement. 

 

  

					
		 	-3 -	 	ARCA biopharma, Inc.

 * * * * * 

I ACKNOWLEDGE THAT I HAVE READ AND UNDERSTAND THIS
AGREEMENT AND HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS IT WITH
INDEPENDENT LEGAL COUNSEL. 
  

					
	 /s/Thomas A. Keuer
	 	 December 29, 2014
	 	
	Signature	 	Date	 	

  

					
	 Thomas A. Keuer
	 	 Chief Operating Officer
	 	
	Name (type or print)	 	Job Title	 	

  
  

COMPANY: 
 ACCEPTED AND
AGREED: 
  

					
	 /s/Michael R. Bristow
	 	 December 29, 2014
	 	
	Signature	 	Date	 	

  

					
	 Michael R. Bristow
	 	 Chief Executive Officer
	 	
	Name (type or print)	 		 	

  
  

Copies to Employee and ARCA biopharma, Inc. 

  

					
		 	- 4 -	 	ARCA biopharma, Inc.

 ANNEX A 

PRIOR INVENTIONS 
  

							
	Title	  		  	Date of Invention/Authorship
				
	1.	 	  
	  		  	  

	2.	 	  
	  		  	  

	3.	 	  
	  		  	  

	4.	 	  
	  		  	  

Signature of Employee:
                                         
                    
 Print Name of Employee:
                                         
                  
 Date:
                                        

  

					
		 		 	ARCA biopharma, Inc.

 ANNEX B 

PRIOR EMPLOYMENT AGREEMENTS 

 

					
	Title of Agreement	 	Name of Employer	 	Date of Agreement

 Signature of Employee:
                                         
                        
 Print Name
of Employee:
                                         
                     
 Date:
                                        

  

					
		 		 	ARCA biopharma, Inc.ex10-1.htm

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made and entered into effective as of December 22, 2014 (the “Effective Date”), by and between Echo Therapeutics, Inc., a Delaware corporation with a place of business at 8 Penn Center, 1628 JFK Boulevard, Suite 300, Philadelphia, PA 19103 (the “Company” or “Echo”) and Scott W. Hollander, residing at 5 Caroline Drive, Princeton, NJ 08540 (the “Executive”). The Company and Executive are hereinafter sometimes collectively referred to as the “Parties.”

 

WHEREAS, the Company has offered to employ Executive as its President and Chief Executive Officer, and the Executive desires to accept such employment; and

 

WHEREAS, the Parties wish to establish terms, covenants, and conditions for the Executive’s employment with the Company through this Employment Agreement,

 

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the Parties hereto agree as follows:

 

	
1.  

	
Duties. From and after the Effective Date, and based upon the terms and conditions set forth herein, the Company agrees to employ the Executive and the Executive agrees to be employed by the Company, as the Company’s President and Chief Executive Officer and in such additional executive level position or positions as shall be assigned to him by the Company’s Board of Directors. While serving in such executive level position or positions, the Executive shall report to, be responsible to, and shall take direction from the Board of Directors of the Company (the “Board”). During the Term of this Agreement (as defined in Section 2 below), the Executive agrees to devote substantially all of his working time to the position he holds with the Company and to faithfully, industriously, and to the best of his ability, experience and talent, perform the duties that are assigned to him. The Executive shall also observe and abide by the reasonable corporate policies and decisions of the Company in all business matters.

 

The Executive represents and warrants to the Company that Exhibit A attached hereto sets forth a true and complete list of (a) all offices, directorships and other positions held by the Executive in corporations and firms other than the Company and its subsidiaries, and (b) any investment or ownership interest in any corporation or firm other than the Company beneficially owned by the Executive (excluding investments in life insurance policies, bank deposits, publicly traded securities that are less than five percent (5%) of their class and real estate). The Executive will promptly notify the Board of any additional positions undertaken or investments made by the Executive during the Term if they are of a type which, if they had existed on the date hereof, should have been listed on Exhibit A hereto. As long as the Executive’s other positions or investments in other firms do not create a conflict of interest, violate the Executive’s obligations under this Section or Section 7 below or cause the Executive to neglect his duties hereunder, such activities and positions shall not be deemed to be a breach of this Agreement.

 

It is expected that upon any vacancy on the Board, the Company’s Board intends to cause the Executive to fill such vacancy and to nominate the Executive for election to the Board at the immediately following shareholders’ meeting.  In the event that the Executive serves as a member of the Board or as an officer or director of any affiliate of the Company, such service shall for no additional compensation.

 

	
2.  

	
Term of this Agreement. Subject to Sections 4 and 5 hereof, the term of this Agreement shall be for a period commencing on the Effective Date and terminating December 22, 2017 (the “Term”), unless terminated earlier pursuant to the termination provisions set forth in Section 4 of this Agreement.

 

	
3.  

	
Compensation. During the Term, the Company shall pay, and the Executive agrees to accept as full consideration for the services to be rendered by the Executive hereunder, compensation consisting of the following (the “Compensation”):

  

-1-

  

 

	
A.  

	
Salary. Beginning on the first day of the Term, the Company shall pay the Executive a salary of Four Hundred Twenty Thousand Dollars ($420,000) per year, payable in semi-monthly or monthly installments as requested by the Executive (the “Base Salary”).  The Board’s Compensation, Nominating and Governance Committee (the “Committee”) shall review the Executive’s Base Salary on an annual basis and may increase, but not decrease, the Base Salary at its discretion.

 

	
B.  

	
Bonus. The Committee, on an annual basis, may grant the Executive on or about the end of the fiscal year a yearly bonus (the “Bonus Compensation”) at its discretion.

 

	
C.  

	
Benefits. During the Term of this Agreement, the Executive will receive such employee benefits as are generally available to other executive employees of the Company (the “Benefits”), provided, that nothing herein shall obligate the Company to maintain any such benefits generally.

 

	
D.  

	
Stock Options. The Committee may, from time to time, grant to the Executive stock options, restricted stock purchase opportunities and such other forms of equity-based incentive compensation as it deems appropriate, in its discretion, under the Echo Therapeutics, Inc. 2008 Equity Incentive Plan, as amended and restated, (the “Stock Plan”). Additionally, in consideration of entering this Agreement and as an inducement to the Executive joining the Company, the Committee will grant the Executive non-statutory stock options to purchase three-hundred twenty-five thousand (325,000) shares of the Company’s common stock, $0.001 par value, at the closing market price on the trading day immediately preceding Effective Date, to become vested and exercisable in three (3) tranches. The first tranche of one-hundred twenty-five thousand (125,000) shares will vest and become exercisable on the Effective Date.  The second tranche of one-hundred thousand (100,000) shares will vest and become exercisable on or after the first anniversary of the Effective Date, provided that the options will not be exercisable unless and until the average closing price per share of the Company’s stock for the ten (10) trading days prior to exercise equals or exceeds four dollars ($4.00) per share (as adjusted for stock splits, dividends and the like). The third tranche of one-hundred thousand (100,000) shares will vest and become exercisable on or after the second anniversary of the date of grant, provided that the options would not be exercisable unless and until the average closing price per share of the Company’s stock for the ten (10) trading days prior to exercise equals or exceeds seven dollars and fifty cents ($7.50) per share (as adjusted for stock splits, dividends and the like). All awards of equity incentives shall be governed by a separate equity incentive award agreement (the “Stock Option Agreement”) attached hereto as Exhibit B, the terms of which shall govern the rights of the Executive and the Company in the event of any conflict between the Stock Option Agreement and this Agreement.

 

	
E.  

	
Vacation. The Executive shall be entitled to twenty-five (25) days of vacation during each calendar year (prorated for partial years) during the Term, in accordance with the Company’s vacation policies, as in effect from time to time (“Vacation Time”).

 

	
F.  

	
Expenses. The Company shall reimburse the Executive for all reasonable out-of-pocket expenses incurred by him in the performance of his duties hereunder, including expenses for travel, entertainment and similar items (“Expenses”) promptly after the presentation by the Executive, from time-to-time, of an itemized account of such expenses, which account shall be submitted a reasonable time following the incurrence of such Expenses.

 

	
G.  

	
Clawback Policy. The Company’s obligation to pay any Bonus Compensation or stock options under Section 3(B) and (D), respectively, and the Executive’s right to receive or retain such compensation, shall be subject to any policy adopted by the Board or the Committee (or any successor committee of the Board with authority over executive compensation) pursuant to the “clawback” provisions of Section 304 of the Sarbanes-Oxley Act of 2002, Section 10D of the Securities Exchange Act of 1934, or regulations promulgated thereunder, or pursuant to any rule of any national securities exchange on which the equity securities of the Company are listed implementing Section 10D of the Securities Exchange Act of 1934, or regulations promulgated thereunder.

  

-2-

  

	
4.  

	
Termination.

 

	
A.  

	
For Cause. The Company may terminate the employment of the Executive prior to the end of the Term “for cause.” Termination “for cause” shall be defined as a termination by the Company of the employment of the Executive occasioned by:

 

	
i.  

	
the Executive’s willful refusal or willful failure: (a) to meet any performance objectives that were mutually agreeable to the Parties, (b) to carry out  reasonable direction or instruction issued by the Board, or (c) by his repeated willful failure to perform any of his duties and responsibilities under this Agreement to the reasonable satisfaction of the Board (other than as a result of a Disability), which refusal or failure is not cured within fifteen (15) days after written notice thereof by the Board;

 

	
ii.  

	
the failure by the Executive to cure a willful breach of a material duty imposed on the Executive under this Agreement or any other written agreement between Executive and the Company within fifteen (15) days after written notice thereof by the Company;

 

	
iii.  

	
the Executive’s commission of an act of theft, fraud, embezzlement, falsification of Company or affiliated parties’ (collectively, “Company Party” or “Company Parties”) documents, misappropriation of funds or other assets of the Company Parties, or other acts of dishonesty, misconduct or moral turpitude;

 

	
iv.  

	
the Executive’s gross negligence or willful misconduct, which results in material damage to the Company or any other Company Party;

 

	
v.  

	
the Executive’s conviction of (or entering of a plea of guilty or nolo contendere with respect to) any felony or misdemeanor evidencing moral turpitude, fraud or embezzlement under the laws of the United States or any other jurisdiction; provided, however, that should the Executive be indicted for any felony described in this paragraph (v), the Company shall be entitled to suspend the Executive without pay pending resolution of such indictment; and provided further, that if the Company suspends the Executive pending resolution of such indictment,  and such indictment is resolved without the Executive being convicted (or entering a plea of guilty or nolo contendere with respect to) any felony that is the subject matter of such indictment, the Company shall promptly reinstate the Executive and pay to him all compensation to which he otherwise would have been entitled, but for such suspension; or

 

	
vi.  

	
the Executive’s substantial dependence, as reasonably determined in good faith by the Board, on alcohol, or on any narcotic drug or other controlled or illegal substance.

 

No act, or failure to act, on the Executive’s part shall be considered “willful” unless intentionally done, or intentionally omitted to be done, by him.  Determination as to whether or not “cause” exists for termination of the Executive’s employment will be made by disinterested members of the Board acting in good faith.  In the event of termination by the Company “for cause,” the Base Salary, all benefits and other compensation shall cease at the time of termination; provided, however, the Company shall pay the Executive the value of any accrued but unused Vacation Time, and the amount of all accrued but previously unpaid Base Salary through the date of such termination. The Company shall promptly reimburse the Executive for the amount of any Expenses incurred prior to such termination by the Executive after which the Company shall have no further obligations to the Executive upon presentation of an account of expenses pursuant to Section 3(F) above.

  

-3-

  

 

	
B.  

	
Resignation. If the Executive resigns for any reason, the Base Salary, all benefits and other compensation set forth in Section 3 shall cease at the time such resignation becomes effective. At the time of any such resignation, the Company shall pay the Executive the value of any accrued but unused Vacation Time, and the amount of all accrued but previously unpaid Base Salary through the date of such resignation. The Company shall promptly reimburse the Executive for the amount of any Expenses incurred prior to such resignation by the Executive upon presentation of an account of expenses pursuant to Section 3(F) above.

 

	
C.  

	
Disability, Death. The Company may terminate the employment of the Executive prior to the end of the Term if the Executive has been unable to perform his duties hereunder or a similar job for a continuous period of six (6) months due to a physical or mental condition that, in the opinion of a licensed physician, will be of indefinite duration or is without a reasonable probability of recovery for a period of at least six (6) months. The Executive agrees to submit to an examination by a licensed physician reasonably acceptable to the Parties in order to obtain such opinion, at the request of the Company, made after the Executive has been absent from his place of employment for at least six (6) months. The Company shall pay for any requested examination. However, this provision does not abrogate either the Company’s or the Executive’s rights and obligations pursuant to the Family and Medical Leave Act of 1993, and a termination of employment under this paragraph C shall not be deemed to be a termination “for cause.”

 

If during the Term, the Executive dies or the Executive’s employment is terminated because of the Executive’s disability, all compensation set forth in Section 3 shall cease at the time of the Executive’s death or termination due to disability; provided, however, that the Company shall pay such other amounts or provide such other benefits required to be paid or provided to the Executive or the Executive’s estate under any plan, program, policy, practice, contract, or arrangement under which the Executive or the Executive’s estate is eligible to receive such payments or benefits from the Company, for the longer of twelve (12) months after such death or termination due to disability or the full unexpired Term on the same terms and conditions (including cost) as were applicable before such death or termination due to disability. In addition, for the first six (6) months of any disability, as defined under Section 409A of the Internal Revenue Code of 1986, as amended, and any guidance thereunder, that results in the Executive being unable to perform any gainful activity, the Company shall pay to the Executive the difference, if any, between any cash benefits received by the Executive from a Company-sponsored disability insurance policy and the Executive’s Base Salary, hereunder. At the time of any termination due to disability, the Company shall pay the Executive or Executive’s estate the value of any accrued but unused Vacation Time. The Company shall promptly reimburse the Executive or Executive’s estate for the amount of any Expenses incurred by the Executive prior to termination due to disability upon presentation of an account of expenses pursuant to Section 3(F) above.

 

Notwithstanding the foregoing, if the Company reasonably determines that any of the benefits described in this paragraph C may not be exempt from federal income tax, then for a period of six (6) months after the date of the Executive’s termination due to death or disability, the Executive or Executive’s Estate shall pay to the Company an amount equal to the stated taxable cost of such coverages. After the expiration of the six (6) month period, the Executive or Executive’s estate shall receive from the Company a reimbursement of the amounts paid by the Executive or the Executive’s Estate upon presentation of an account of expenses pursuant to Section 3(F) above.

 

	
D.  

	
Termination Without Cause. A termination “without cause” is a termination of the employment of the Executive by the Company prior to the end of the Term that is not “for cause” and not occasioned by the resignation, termination for Good Reason (as defined below in Section 4(E)), death or disability of the Executive. If the Company terminates the employment of the Executive without cause before the end of the Term, the Company shall, at the time of the termination without cause, pay to the Executive the Severance Payment (as defined below in Section 4(G)).

 

If the Company terminates the employment of the Executive because it has ceased to do business or substantially completed the liquidation of its assets, such termination of employment shall be deemed to be without cause.

  

-4-

  

 

	
E.  

	
Termination by the Executive for Good Reason.  If Executive terminates his employment for Good Reason (as defined below herein), the Company, shall, at the time of the termination for Good Reason, pay to the Executive the Severance Payment (as defined below in Section 4(G)).  A termination for “Good Reason” is a termination of the employment of the Executive based on: (i) the assignment to the Executive of any substantial and continual duties inconsistent with the Executive’s position (including status, offices, and titles), authority, duties or responsibilities as contemplated by this Agreement, or any other action by the Company which results in a substantial diminution in Executive’s position, authority, duties or responsibilities contemplated by this Agreement, or (ii) a material breach by the Company of its material obligations under this Agreement after notice and reasonable opportunity to cure, or (iii) the Company’s requiring the Executive to be based at any office or location (other than in New York City or Philadelphia) without the Executive’s consent, except for travel reasonably required in connection with the performance of the Executive’s responsibilities hereunder.  No termination for Good Reason will be effective unless the Executive provides the Company with ten (10) days’ notice of such intention to terminate, and the stated reason is not cured by the Company within twenty (20) days of such notice.

 

	
F.  

	
Extension of Employment Agreement/Failure of Renewal.

 

	
i.  

	
The Executive may request to renew his employment agreement for one additional one year term provided (i) he notifies the Board in writing his intent to renew his employment agreement within one hundred fifty (150) days to one hundred eighty (180) days before the expiration of the initial Term and (ii) the Board takes no action  to reject such extension or the Board fails to respond in writing to the Executive’s written notice within one hundred twenty (120) days prior to the expiration of the Term (the “Election to Renew”).  The exercise of an Election to Renew by the Executive shall be deemed to extend the Term by one year, and all other provisions hereof shall remain in full force and effect.

 

	
ii.  

	
Notwithstanding the foregoing, the Company may elect to not renew or extend the Executive’s employment at the end of this Term under the provisions set forth herein without any liability on the part of the Company.  If the Company has not made an offer to the Executive within ninety (90) days prior to the end of the Term (or any renewal Term) to extend his employment with the Company, and the Executive has not notified the Board of his intent to renew in accordance with the terms set forth herein in Section 4F(i) (a “Failure to Renew”), the Executive's employment shall terminate at the expiration of the Term (or the renewal Term) after which the Company shall have no further obligations to the Executive. If there is a Failure to Renew, all unvested options shall vest immediately.

 

	
G.  

	
Severance. If the employment of the Executive is terminated by the Company without cause or the Employee terminates this Agreement for Good Reason before the end of the Term, then the Executive shall be paid, as a severance payment at the time of such termination, the amount of Four Hundred Twenty Thousand Dollars ($420,000), together with the Executive’s Bonus Compensation at target in effect at the time of termination and prorated to the date of termination, the value of any accrued but unused Vacation Time and the amount of all accrued but previously unpaid Base Salary through the date of such termination (as the case may be), and the Company shall provide him with all Benefits to which he is entitled for the longer of eighteen (18) months or the full unexpired Term. The Company shall promptly reimburse the Executive for the amount of any Expenses incurred prior to such termination (collectively, the “Severance Payment”); provided however, in the event that a benefit plan, Stock Plan or award agreement which covers the Executive has specific provisions concerning termination of employment, or the death or disability of an employee (e.g., life insurance or disability insurance), then such benefit plan, Stock Plan or award agreement shall control the disposition of the benefits or stock options. Notwithstanding the foregoing, all of the Executive’s then outstanding and unvested share options and any other equity awards shall immediately accelerate and become 100% vested and exercisable, and the Executive will have until the original expiration date of the option to exercise any share option then held by the Executive; and all of the Executive’s then outstanding restricted stock shall no longer be subject to the Company’s right of repurchase.  Any severance payments hereunder will be conditioned on a release by the Executive of any and all claims against the Company, which release will be in form and substance acceptable to the Company.

 

  

-5-

  

 

	
H.  

	
Change of Control Severance. If there is a Change in Control of the Company (as defined below) during the Term and the employment of the Executive is concurrently or subsequently terminated prior to the end of the Term by the Company due to Change in Control, the Company shall pay the Executive, as a severance payment related to the Change of Control (the “Change of Control Severance”), at the time of the termination, the amount of Four Hundred Twenty Thousand Dollars ($420,000) together with the value of any accrued but unused Vacation Time, and the amount of all accrued but previously unpaid Base Salary through the date of termination set forth herein paragraph H; and shall provide him with all Benefits for the longer of twelve (12) months or the full unexpired Term.  Such payments shall be made in the same intervals as the Executives salary is paid.  The Company shall promptly reimburse the Executive for the amount of any Expenses incurred by the Executive prior to the termination set forth herein paragraph H; provided, however, in the event that a benefit plan, Stock Plan or award agreement which covers the Executive has specific provisions concerning termination of employment, or the death or disability of an employee (e.g., life insurance or disability insurance), then such benefit plan, Stock Plan or award agreement shall control the disposition of the benefits or stock options. In no event shall the Executive be entitled to any Severance Payment pursuant to Section 4(G) above if the Executive is paid the Change of Control Severance.  Notwithstanding the foregoing, all of the Executive’s then outstanding and unvested share options and any other equity awards shall immediately accelerate and become 100% vested and exercisable, and the Executive will have until the original expiration date of the option to exercise any share option then held by the Executive; and all of the Executive’s then outstanding restricted stock shall no longer be subject to the Company’s right of repurchase.  Any severance payments hereunder will be conditioned on a release by the Executive of any and all claims against the Company, which release will be in form and substance acceptable to the Company.

 

For the purpose of this Agreement, a Change in Control of the Company has occurred when: (i) any person (defined for the purposes of this paragraph GH to mean any person within the meaning of Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)), other than: (a) Echo Therapeutics, (b) an employee benefit plan created by its Board for the benefit of its employees, (c) a participant in a transaction approved by its Board for the principal purpose of raising additional capital, either directly or indirectly, (d) any current equity owner (and its affiliates) that has reported its holdings pursuant to Section 13(d) or 13(g) of the Exchange Act, or (e) an affiliate of a participant in a transaction described in clause (c) above, acquires beneficial ownership (determined under Rule 13d-3 of the Regulations promulgated by the Securities and Exchange Commission under Section 13(d) of the Exchange Act) of securities issued by Echo Therapeutics having thirty percent (30%) or more of the voting power of all the voting securities issued by Echo Therapeutics in the election of Directors at the next meeting of the holders of voting securities to be held for such purpose; (ii) the stockholders of Echo Therapeutics approve a merger or consolidation of Echo Therapeutics with another person other than a merger or consolidation in which the holders of Echo Therapeutics voting securities issued and outstanding immediately before such merger or consolidation continue to hold voting securities in the surviving or resulting corporation (in the same relative proportions to each other as existed before such event) comprising fifty percent (50%) or more of the voting power for all purposes of the surviving or resulting corporation; or (iii) the stockholders of Echo Therapeutics approve a transfer of substantially all of the assets of Echo Therapeutics to another person other than: (a) a transfer to a transferee, eighty percent (80%) or more of the voting power of which is owned or controlled by Echo Therapeutics or by the holders of Echo Therapeutics voting securities issued and outstanding immediately before such transfer in the same relative proportions to each other as existed before such event, or (b) a transfer following which Echo Therapeutics continues the operation of one or more lines of business that were operated by Echo Therapeutics prior to the transfer, and a class of common stock of Echo Therapeutics remains registered under Section 12 of the Exchange Act.

 

	
I.  

	
Resignation of All Other Positions. Upon termination of the Executive’s employment hereunder for any reason, the Executive shall be deemed to have resigned from all positions that the Executive holds as an officer or member of the Board (or a committee thereof) of the Company or any of its affiliates.

  

-6-

  

 

	
J.  

	
Cooperation. The Parties agree that certain matters in which the Executive will be involved during his employment hereunder may necessitate the Executive’s cooperation following termination of his employment. Accordingly, following the termination of the Executive’s employment for any reason, to the extent reasonably requested by the Board, the Executive shall cooperate with the Company in connection with matters arising out of the Executive’s service to the Company; provided that, the Company shall make reasonable efforts to minimize disruption of the Executive’s other activities. The Company shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation and, to the extent that the Executive is required to spend substantial time on such matters as determined by the Board in its sole discretion, the Company shall compensate the Executive at an hourly rate based on the Executive’s Base Salary on the date of termination.

 

	
5.  

	
Confidential Disclosure Agreement. Within thirty (30) days of the Effective Date, the Executive shall execute a Confidential Disclosure Agreement as a condition of employment with the Company on the Company’s customary form in addition to any other customary and typical agreements that executive employees enter into and execute. In addition to those terms and provisions agreed to by the Parties in the Confidential Disclosure Agreement, the Executive acknowledges and agrees:

 

	
A.  

	
Confidential Information includes, in addition to the definition set out in the Confidential Disclosure Agreement, all proprietary information that has or could have commercial value or other utility in the business in which the Company Parties are engaged or contemplates engaging, and all proprietary information the unauthorized disclosure of which could be detrimental to the interests of the Company and the other Company Parties. Whether or not such information is specifically labeled as Confidential Information is not determinative. By way of example and without limitation, Confidential Information includes any and all information developed, obtained or owned by the Company and/or its subsidiaries, affiliates, or licensees concerning trade secrets, techniques, know-how (including designs, plans, procedures, processes and research records), software, computer programs, innovations, discoveries, improvements, research, development, test results, reports, specifications, data, formats, marketing data and plans, business plans, strategies, forecasts, unpublished financial information, orders, agreements and other forms of documents, price and cost information, merchandising opportunities, expansion plans, designs, store plans, budgets, projections, customer, supplier and subcontractor identities, characteristics and agreements, and salary, staffing and employment information;

 

	
B.  

	
That upon leaving the Company’s employ, the Executive shall not take with the Executive any software, computer programs, disks, tapes, research, development, strategies, designs, reports, study, memoranda, books, papers, plans, information, letters, e-mails, or other documents or data reflecting any Confidential Information of the Company, its subsidiaries, affiliates or licensees; provided, that the Executive shall be entitled to keep his mobile phone(s), tablet device(s) and laptop(s) or other computer equipment after the Company is given the opportunity to delete confidential or proprietary information thereon;

 

	
C.  

	
While employed by the Company, the Executive shall disclose to the Company all designs, inventions and business strategies or plans developed for the Company, including without limitation any process, operation, product, or improvement. The Executive agrees that all of the foregoing are and shall be the sole and exclusive property of the Company and that the Executive shall at the Company’s request and cost do whatever is necessary to secure the rights thereto, by patent, copyright or otherwise, to the Company; and

 

	
D.  

	
The Executive shall act in accordance with the provisions of the Confidential Disclosure Agreement and any other customary and typical agreements that the Executive shall enter into at all times during the Term.

 

	
6.  

	
Non-Competition. Executive agrees that for so long as he is employed by the Company under this Agreement, including any at-will employment, and for three (3) years thereafter, the Executive will not:

  

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A.  

	
enter into the employ of or render any services to any person, firm, or corporation, or other entity that is engaged, in any part, in a Competitive Business (as defined below);

 

	
B.  

	
engage in any directly Competitive Business for his own account;

 

	
C.  

	
become associated with or interested in through retention or by employment any Competitive Business as an individual, partner, shareholder, creditor, director, officer, principal, agent, employee, trustee, consultant, advisor, or in any other relationship or capacity;

 

	
D.  

	
solicit, interfere with, or endeavor to entice away from the Company, any of its customers, strategic partners, or sources of supply or

 

	
E.  

	
directly or indirectly solicit, entice, encourage or influence any employee of the Company to terminate such employee’s employment with the Company to become employed by a Competitive Business.

 

Nothing in this Agreement shall preclude Executive from investing his personal assets in the securities of any Competitive Business if such securities are traded on a national stock exchange or in the over-the-counter market and if such investment does not result in his beneficially owning, at any time, more than one percent (1%) of the publicly-traded equity securities of such Competitive Business. “Competitive Business” for purposes of this Agreement shall mean any business or enterprise:

 

	
i.  

	
which is engaged in the development, commercialization or distribution of glucose monitoring systems or other wearable health devices;

 

	
ii.  

	
which reasonably could be understood to be competitive in the relevant market with products and/or systems described in clause (i) above; or

 

	
iii.  

	
in which the Company engages in during the term of employment hereunder pursuant to a determination of the Board and from which the Company derives more than five percent (5%) of its revenue in any fiscal quarter.

 

	
7.  

	
Nondisparagement.  The Executive agrees to refrain from disparaging the Company as provided herein.  During the Term and thereafter, the Executive shall not make any statements or comments that reasonably could be considered to disparage the business or reputation of the Company or any of its subsidiaries, affiliates or licensees, or the Board; provided, however, the foregoing limitation shall not apply to (i) compliance with legal process or subpoena, (ii) statements in response to any inquiry from a court or regulatory body, or (iii) statements made in connection with an action claiming breach of this Agreement.

 

	
8.  

	
Equitable Remedies.  The Executive acknowledges and agrees that the agreements and covenants set forth throughout Sections 5, 6 and 7 of this Agreement are reasonable and necessary for the protection of Company’s business interests and that immediate and irreparable injury will result to Company if the Executive breaches any of the terms of said covenants in Sections 5, 6 or 7 for which money damages are likely inadequate.  Accordingly, the Executive consents to injunctive and other appropriate equitable relief upon the institution of proceedings therefor by the Company in order to protect the Company’s rights hereunder.  Such relief may include, without limitation, an injunction to prevent:

 

	
A.  

	
the breach or continuation of the Executive’s breach;

 

	
B.  

	
the Executive from disclosing any trade secrets or Confidential Information (as defined in Section 5(A) and the Confidential Disclosure Agreement);

 

	
C.  

	
any Competitive Business from receiving from the Executive or using any such trade secrets or Confidential Information; and/or

 

	
D.  

	
any such Competitive Business from retaining or seeking to retain any employees of the Company.

 

  

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9.  

	
Jurisdiction; Service of Process. Except as otherwise provided in Section 10, any action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the state or federal courts located in the Southern District of New York, New York and each of the Parties irrevocably submits to the jurisdiction of each such court in any such action or proceeding, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the action or proceeding shall be heard and determined only in any such court and agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other court. The Parties agree that either or both of them may file a copy of this Section 9 with any court as written evidence of the knowing, voluntary and bargained agreement between the Parties irrevocably to waive any objections to venue or to convenience of forum. Process in any action or proceeding referred to in the first sentence of this section may be served on any party anywhere in the world.

 

	
10.  

	
Arbitration. Except for actions to enforce the provisions of Sections 5, 6 and 7, any other dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in New York, New York, in accordance with the non-union employment arbitration rules of the American Arbitration Association (“AAA”) then in effect. If specific non-union employment dispute rules are not in effect, then AAA commercial arbitration rules shall govern the dispute. If the amount claimed exceeds One Hundred Thousand Dollars ($100,000), the arbitration shall be before a panel of three arbitrators. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The costs of the arbitrators shall be borne equally and each party shall bear its own legal fees and expenses.

 

	
11.  

	
Attorneys’ Fees and Expenses. In the event that any action, suit, or other legal or equitable proceeding is brought by either party to enforce the provisions of this Agreement, or to obtain money damages for the breach thereof, then the party which substantially prevails in such action (whether by judgment or settlement) shall be entitled to recover from the other party all reasonable expenses of such litigation (including any appeals), including, but not limited to, reasonable attorneys’ fees and disbursements.

 

	
12.  

	
Governing Law. The Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflicts of laws principles.

 

	
13.  

	
Waiver of Jury Trial. THE PARTIES HEREBY UNCONDITIONALLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING DIRECTLY OR INDIRECTLY OUT OF, RELATED TO, OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OR BREACH OF THIS AGREEMENT, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN THEM. The scope of this waiver is intended to be all encompassing of any and all disputes that may be filed in any court or other tribunal (including, without limitation, contract claims, tort claims, breach of duty claims, and all other common law and statutory claims). THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS AGREEMENT AND RELATED DOCUMENTS. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

 

	
14.  

	
Indemnification.  The Company will indemnify the Executive for and defend the Executive in accordance with the Company’s bylaws and applicable law.  The Company will maintain directors’ and officers’ insurance in connection with its indemnification obligations.

 

	
15.  

	
Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of the Agreement, which shall remain in full force and effect.

 

  

-9-

  

 

	
16.  

	
Compliance with Section 409A of the Internal Revenue Code. It is intended that this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, and any guidance thereunder (“Section 409A”). If, when the Executive’s employment with the Company terminates, the Executive is a “specified employee” as defined in Section 409A(a)(1)(B)(i), and if any payments under this Agreement, including payments under Section 4, will result in additional tax or interest to the Executive under Section 409A(a)(1)(B) (“Section 409A Penalties”), then despite any provision of this Agreement to the contrary, the Executive will not be entitled to payments until the earliest of (i) the date that is at least six (6) months after termination of the Executive’s employment for reasons other than the Executive’s death, (ii) the date of the Executive’s death, or (iii) any earlier date that does not result in Section 409A Penalties to the Executive. As soon as practicable after the end of the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a lump sum. Additionally, if any provision of this Agreement would subject the Executive to Section 409A Penalties, the Company will apply such provision in a manner consistent with Section 409A during any period in which an arrangement is permitted to comply operationally with Section 409A and before a formal amendment to this Agreement is required. For purposes of this Agreement, any reference to the Executive’s termination of employment will mean that the Executive has incurred a “separation from service” under Section 409A. No payments to be made under this Agreement may be accelerated or deferred except as specifically permitted under Section 409A. Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A of the Code shall be paid under the applicable exception. Each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of Section 409A. To the extent that any reimbursements provided under this Agreement constitute deferred compensation subject to Section 409A, such amounts shall be paid or reimbursed to Executive promptly, but in no event later than December 31 of the year following the year in which the Expense is incurred. The amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and Executive’s right to such payments or reimbursement shall not be subject to liquidation or exchange for any other benefit.

 

	
17.  

	
Entire Agreement. This Agreement, together with the Confidential Disclosure Agreement referenced in Section 5 above, constitutes the entire understanding between the Parties with respect to the subject matter hereof, and supersedes all negotiations, prior discussions, and preliminary agreements to this Agreement. This Agreement may not be amended except in writing executed by the Parties hereto.

 

	
18.  

	
Effect on Successors of Interest. This Agreement shall inure to the benefit of and be binding upon heirs, administrators, executors, successors and assigns of each of the Parties hereto. Notwithstanding the above, the Executive recognizes and agrees that his obligation under this Agreement may not be assigned without the consent of the Company. The Company, however, may assign its rights and obligations under this Agreement.

 

[signature page follows]

  

-10-

  

 

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

 

 

	
COMPANY:

ECHO THERAPEUTICS, INC.

	
EXECUTIVE:

 

	 	 
	
By:  /s/ Shepard M. Goldberg

Name:  Shepard M. Goldberg

Title:  Designated Signatory

	
/s/ Scott W. Hollander

SCOTT W. HOLLANDER

 

 

 

-11-

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