Document:

EX-10.18

			
	  
 

	  	 29 Hartwell Avenue
 Lexington, MA 02421

P (617) 945 7361

 EXHIBIT 10.18 

March 11, 2020 
 Richard Wooster 

 

	Re:	 Amended and Restated Employment Agreement 

Dear Richard: 
 On behalf of Translate Bio, Inc.,
a Delaware corporation (the “Company”), I am pleased to provide you this Amended and Restated Employment Agreement (the “Agreement”) that includes, among other things, enhanced benefits in the event of a change of
control of the Company. The terms and conditions of your employment are set forth below. Please note that you must sign and return this Agreement within seven (7) days of receipt to avail yourself of its terms. 

 

	1.	 Position. Your position with the Company is Chief Scientific Officer and you report to Ronald Renaud,
Chief Executive Officer. You agree to devote your full business time, best efforts, skill, knowledge, attention and energies to the advancement of the Company’s interests and the performance of your duties as an employee of the Company and not
to engage in any other business activities without prior approval of the Company. 

  

	2.	 Base Salary. The Company will pay you a salary at the bi-weekly
rate of $16,153.85 (which is equivalent to an annualized rate of $420,000.00 per year), payable in accordance with the Company’s standard payroll schedule and subject to applicable tax and other withholdings as required by law. Such base
salary may be subject to periodic review and adjustments at the Company’s sole discretion. 

  

	3.	 Discretionary Bonus. You will be eligible to receive an annual cash discretionary bonus of up to 40% of
your base salary (the “bonus”) in accordance with the terms of the applicable bonus plan. The amount, if any, of the cash bonus payment, and the Company’s determination of your performance, corporate objectives and business conditions
at the Company are all within the sole discretion of the Company. Eligibility for and earning of the bonus, which is also a retention incentive that you remain employed by the Company, requires the you be employed for the full period covered by the
bonus as well as on the date the bonus is to be paid. Your eligibility for the bonus is also contingent on approval by the Board of Directors of the Company (the “Board”). The Company expects to review your job performance on an
annual basis and to discuss with you the criteria which the Company will use to assess your performance for bonus purposes. The Company also may make adjustments in the targeted amount of your bonus in the Company’s sole discretion.

  

	4.	 Benefits. You will be eligible to participate in the Company’s employee benefits and insurance
programs generally made available from time to time to its full-time employees, in accordance with, and provided you are eligible under, the plan documents governing those programs. You will also be eligible for up to 20 of 

  
 

 

	 	
days of paid vacation per year which shall accrue on a prorated basis, in accordance with the Company’s vacation policy as in effect from time to time. The Company reserves the right to
modify or terminate any or all of its benefit plans or policies at any time at its discretion. 

  

	5.	 Incentive Equity Awards. In connection with your ongoing employment, the Company may propose to the
Board from time to time, that a stock option grant be made to you of Company’ common stock pursuant to the Company’s 2018 Equity Incentive Plan (the “Proposed Grant”). Any Proposed Grant will be subject to the terms and
conditions of a Option Agreement to be entered into by you and the Company. Your ownership of the common stock will be subject to a vesting schedule and will be contingent on your continued employment or continuous service as a consultant or advisor
with the Company. 

  

	6.	 Severance. Without otherwise limiting the “at-will”
nature of your employment, in the event your employment is terminated by the Company without Cause (as defined below) or you terminate for Good Reason, you shall be entitled to the base salary that has accrued and to which you are entitled as of the
effective date of such termination, and further, subject to the conditions set forth in the second paragraph of this Severance section, the Company shall, for a period of nine (9) months following your termination date: (i) continue to pay
you, in accordance with the Company’s regularly established payroll procedure, your base salary as Severance; and (ii) provided you are eligible for and timely elect to continue receiving group medical insurance pursuant to the
“COBRA” law, continue to pay the share of the premium for health coverage that is paid by the Company for active and similarly-situated employees who receive the same type of coverage, unless the Company’s provision of such COBRA
payments will violate the non-discrimination requirements of applicable law, in which case this benefit will not apply. If, in the twelve months following a Change of Control, the Company terminates your
employment without Cause or you terminate for Good Reason, the Company, subject to the conditions set forth in the second paragraph of this Severance section, will: (a) extend the Severance benefits described in (i) and (ii) above for an
additional three (3) months, such that the total severance benefit period shall be twelve (12) months; (b) accelerate the vesting of all unvested stock options, restricted stock or other equity awards held by you as of the date your
employment is terminated such that 100% of such options, restricted stock or equity award shall become fully vested and, if applicable, exercisable effective as of such date (except as described in the next paragraph); and (c) pay to you a
bonus amount equal to 1x your target annual bonus for the year in which termination of employment occurs. 

Notwithstanding the foregoing, you will not be entitled to receive any severance benefits unless, within sixty (60) days following the
date of termination, you (i) have executed a severance and release of claims agreement in a form prescribed by the Company or persons affiliated with the Company (which will include, at a minimum, a release of all releasable claims and non-disparagement and cooperation obligations). Any severance payments shall commence on the first payroll period following the date the release becomes effective (the “Payment Date”).
Notwithstanding the foregoing, if the 60th day following the date of termination occurs in the calendar year following the calendar year of the termination, then the Payment Date shall be no earlier than January 1st of such subsequent calendar year.
Any stock options, restricted stock or equity award that would vest as a result of the prior paragraph will be treated as only provisionally vested and will only actually become exercisable and/or alienable if and when you satisfy the release
requirements, and any such provisionally vested portion will be deemed null and void retroactive to your date of termination if you either notify the Company that you will not execute or will revoke the release or the period for providing the
release expires without your complying with the release requirements. The Company may choose instead to provide to you any provisionally vested portions of these awards, subject to your undertaking to repay the Company in the manner determined by
the Company at such time if you fail to satisfy the release requirements thereafter. 
 For purposes of this Agreement,
“Cause” shall mean a finding by the Company in its sole discretion of any of the following: (i) dishonesty, embezzlement, misappropriation of assets or property of the Company; (ii) gross negligence, willful misconduct,
theft, fraud or breach of fiduciary duty to the Company; (iii) violation of federal or state securities laws; (iv) your material breach of any written agreement between you and the Company; (v) the conviction of a felony, or any crime
involving moral turpitude, including a 

  
 2 

 
plea of guilty or nolo contendre; or (vi) continued nonperformance of your responsibilities, provided that, if the Company determines that such nonperformance can be cured, the Company has
provided you with notice of such nonperformance and you have been provided with a reasonable opportunity to cure not to exceed thirty (30) days. 

For purposes of this Agreement, “Good Reason” shall mean that you have complied with the “Good Reason Process”
(hereinafter defined) following the occurrence of any of the following actions undertaken by the Company without your express prior written consent: (i) the material diminution in your responsibilities, authority and function; (ii) a
material reduction in your base salary, provided, however, that Good Reason shall not be deemed to have occurred in the event of a reduction in your base salary that is pursuant to a salary reduction program affecting substantially all of the senior
level employees of the Company and that does not adversely affect you to a greater extent than other similarly situated employees; (iii) a material breach of your Agreement or any other written agreement between you and the Company; or
(v) a change in the geographic location at which you must regularly report to work and perform services to a location that is more than fifty (50) miles from Lexington, Massachusetts, except for required travel on the Company’s
business. “Good Reason Process” means that (i) you have reasonably determined in good faith that a “Good Reason” condition has occurred; (ii) you have notified the Company in writing of the first occurrence of
the Good Reason condition within sixty (60) days of the first occurrence of such condition; (iii) you have cooperated in good faith with the Company’s efforts, for a period not less than thirty (30) days following such notice
(the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) you terminate your employment within sixty (60) days after the end of the Cure
Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred. 
 For
purposes of this Agreement, “Change in Control” shall mean any: (i) merger or consolidation in which the Company is a constituent party or a subsidiary of the Company is a constituent party and the Company issues equity
securities pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or a subsidiary in which the equity ownership of the Company outstanding immediately prior to such merger or consolidation continue to
represent, or are converted into or exchanged for equity securities that represent, immediately following such merger or consolidation, at least a majority, by both voting power and equity ownership, of (a) the surviving or resulting entity, or
(b) if the surviving or resulting entity is a wholly owned subsidiary of another entity immediately following such merger or consolidation, the parent entity of such surviving or resulting entity (provided that all capital stock issuable upon
exercise of options outstanding immediately prior to such merger or consolidation or upon conversion of convertible securities outstanding prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or
consolidation and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding capital stock are converted or exchanged); (ii) sale, lease, transfer, exclusive license or other disposition, in a
single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or
otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or
other disposition is to a wholly owned subsidiary of the Company; (iii) any transfer of the Company’s equity securities, or securities exchangeable for or convertible into the Company’s equity securities, if, immediately following the
transfer, any one or more persons (other than the Company’s equity holders as of immediately prior to the transfer) own a majority of the equity ownership or otherwise control a majority of the voting power of the Company; or (iv) any
transfer of a subsidiary of the Company’s equity securities, or securities exchangeable for or convertible into equity securities of such subsidiary, if, immediately following the transfer, any one or more persons ( other than the
Company’s equity holders as of immediately prior to the transfer) own a majority of the equity ownership or otherwise control a majority of the voting power of such subsidiary; provided that, where required for compliance with
Section 409A, the event described in clauses (i)-(iv) is also a change in control event as set forth in Treas. Reg. Section 1.409A-3(i)(5). 

  
 3 

	7.	 Parachute Treatment. Notwithstanding any other provision of this Agreement to the contrary, if payments
and benefits provided for under this Agreement together with any payments or benefits under any other agreement or arrangement between the Company or any of its affiliates and you are considered “excess parachute payments” under
Section 280G of the Internal Revenue Code (the “Code”), then such excess parachute payments plus any other payments made by the Company and its affiliates that you are entitled to receive that are considered excess parachute
payments shall be limited to the greatest amount that may be paid to you under Section 280G of the Code without causing any loss of deduction to the Company under such Code Section, but only if, by reason of such reduction, the “Net After
Tax Benefit” (as defined below) to you shall exceed the net after tax benefit if such reduction was not made. “Net After Tax Benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to
you that would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, less (ii) the amount of federal, state and other income taxes payable with respect to the foregoing calculated at the maximum
marginal tax rate for each year in which the foregoing shall be paid to you (based upon the rate in effect for such year as set forth in the Code at the time of termination of your employment or the change in control), less (iii) the amount of
excise taxes imposed with respect to the payments and benefits described above by Section 4999 of the Code. The determination of whether payments would be considered excess parachute payments and the calculation of all the amounts referred to
in this section shall be made reasonably and in good faith by the parties, provided, that if the parties cannot agree, then such determination (and supporting calculations) shall be made by attorneys, accountants, or an executive compensation
consulting firm each as selected by the Company at the expense of the Company (the “280G Service Providers”). Any determination by the 280G Service Providers made in good faith shall be binding upon the Company and you.

  

	8.	 Tax Acknowledgement. All forms of compensation referred to in this Agreement are subject to all
applicable federal, state and/or local withholding and/or payroll taxes, and the Company may withhold from any amounts payable to you in order to comply with such withholding obligations and you shall be responsible for all applicable taxes with
respect to such compensation. You hereby acknowledge that the Company does not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or its board of
directors related to tax liabilities arising from your compensation. You further acknowledge that you are not relying upon the advice or representation of the Company with respect to the tax treatment of any of the compensation set forth in this
Agreement. 

  

	9.	 409A Compliance. This Agreement is intended to provide payments that are exempt from or compliant with
Section 409A, and should be interpreted consistent with that intent. The attached exhibit entitled “Payments Subject to Section 409A” is hereby appended to the Agreement as Attachment A and, if applicable, replaces any previous
such attachment concerning the same subject matter. 

  

	10.	 Interpretation, Amendment, Enforcement and Complete Agreement. This Agreement, the Employee Non-Competition, Non-Solicit, Confidentiality and Invention Assignment Agreement which you previously executed and which you reaffirm, and any plans and agreements applicable
to the incentive equity awards referred in Section 5 of this Agreement constitute the complete agreement between you and the Company, contain all of the terms of your employment with the Company and supersede any prior agreements, amendments,
representations or understandings (whether written, oral or implied) between you and the Company. This Agreement shall be amended only by a writing signed by the Chief Executive Officer of the Company and you. The terms of this Agreement will be
governed by statutes and common law of The Commonwealth or Massachusetts without regard to the conflict of laws provisions. You and the Company hereby irrevocably submit to and acknowledge and recognize the exclusive personal jurisdiction of the
federal and state courts located in The Commonwealth of Massachusetts (which courts for purposes of this Agreement, are the only courts of competent jurisdiction) in connection with any dispute or any claim related to this Agreement or the subject
matter hereof. 

  

	11.	 At-Will Employment. Your employment with the Company will be on
an “at will” basis. In other words, you or the Company may terminate your employment for any reason and at any time, with or without cause. 

  
 4 

	 	
Although your job duties, title, compensation and benefits, as well as the Company’s benefit plans and personnel policies and procedures, may change from time to time, the “at
will” nature of your employment may only be changed in an express written agreement signed by you and the Company. 

[remainder of page intentionally left blank] 

  
 5 

 We look forward to receiving a response from you within seven (7) days acknowledging,
by signing below, that you have accepted the terms of this Amended and Restated Employment Agreement. 
  

			
	Very truly yours,
	
	TRANSLATE BIO, INC.
		
	By:	 	/s/ Ronald C. Renaud, Jr.
		 	Ronald C. Renaud, Jr.
		 	Chief Executive Officer

 I have read and accept the terms of this Amended and Restated Employment Agreement. 

Accepted and Agreed as of March 11, 2020 
  

	
	 /s/ Richard Wooster

	Richard Wooster

  
 6 

 Attachment A 

Payments Subject to Section 409A 
 1.
Subject to this Attachment A, any severance payments that may be due under the letter agreement shall begin only upon the date of your “separation from service” (determined as set forth below) which occurs on or after the termination of
your employment. The following rules shall apply with respect to distribution of the severance payments, if any, to be provided to you under the letter agreement, as applicable: 

 

	 	a.	 It is intended that each installment of the severance payments under the letter agreement shall be treated as a
separate “payment” for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Neither the Company nor you shall have the right to accelerate or defer the delivery of any such
payments except to the extent specifically permitted or required by Section 409A. 

  

	 	b.	 If, as of the date of your “separation from service” from the Company, you are not a “specified
employee” (within the meaning of Section 409A), then each installment of the severance payments shall be made on the dates and terms set forth in the letter agreement. 

 

	 	c.	 If, as of the date of your “separation from service” from the Company, you are a “specified
employee” (within the meaning of Section 409A), then: 

  

	 	i.	 Each installment of the severance payments due under the letter agreement that is paid within the short-term
deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section l.409A-l(b)(4) to the maximum extent permissible under
Section 409A and shall be paid on the dates and terms set forth in the letter agreement; and 

  

	 	ii.	 Each installment of the severance payments due under the letter agreement that is not described in this
Attachment A, Section I (c)(i) and that would, absent this subsection, be paid within the six-month period following your “separation from service” from the Company shall not be paid until the date
that is six months and one day after such separation from service (or, if earlier, your death), with any such installments that are required to be delayed being accumulated during the six-month period and paid
in a lump sum on the date that is six months and one day following your separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding
provisions of this sentence shall not apply to any installment of payments if and to the maximum extent that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the
application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). Any installments that qualify for the exception under Treasury Regulation
Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of your second taxable year following the taxable year in which the separation from service occurs. 

2. The determination of whether and when your separation from service from the Company has occurred shall be made and in a manner consistent
with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1 (h). Solely for purposes of this Attachment A, Section 2, “Company” shall include all persons with
whom the Company would be considered a single employer under Section 414(b) and 414( c) of the Internal Revenue Code of 1986, as amended. 

3. The Company makes no representation or warranty and shall have no liability to you or to any other person if any of the provisions of the
letter agreement (including this Attachment) are determined to constitute deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section.Exhibit
4.7

 

DESCRIPTION
OF THE REGISTRANT’S SECURITIES

REGISTERED
PURSUANT TO SECTION 12 OF THE

SECURITIES
EXCHANGE ACT OF 1934

 

As
of December 31, 2019, PolarityTE, Inc. (“we”, “us”, “our”, or the “Company”) had
two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common stock and
preferred stock. The following description summarizes the material terms and provisions of our common stock and preferred stock.
The following description of our capital stock does not purport to be complete and is subject to, and qualified in its entirety
by, our certificate of incorporation and bylaws, which are exhibits to the Annual Report on Form 10-K to which this document is
attached as an exhibit, and by applicable law. You should read those documents for provisions that may be important to you. The
terms of our common stock and preferred stock may also be affected by Delaware law.

 

Authorized
Capital Stock

 

Our
authorized capital stock consists of 250,000,000 shares of common stock, par value $0.001 per share, and 25,000,000 shares of
preferred stock, par value $0.001 per share, all of which are undesignated preferred stock except for 100,000 shares designated
as Series A Junior Participating Preferred Stock.

 

Common
Stock

 

The
holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders.
The holders of our common stock do not have any cumulative voting rights. Holders of our common stock are entitled to receive
ratably any dividends declared by our board of directors out of funds legally available for that purpose, subject to any preferential
dividend rights of any outstanding preferred stock. Our common stock has no preemptive rights, conversion rights or other subscription
rights or redemption or sinking fund provisions.

 

In
the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in all
assets remaining after payment of all debts and other liabilities and any liquidation preference of any outstanding preferred
stock. All outstanding shares are fully paid and non-assessable.

 

Preferred
Stock

 

Our
board of directors is authorized to issue up to 25,000,000 shares of undesignated preferred stock in one or more series without
stockholder approval. Our board of directors may determine the rights, preferences, privileges and restrictions, including voting
rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

 

The
purpose of authorizing our board of directors to issue preferred stock in one or more series and determine the number of shares
in the series and its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances.
Examples of rights and preferences that the board of directors may fix are:

 

	 	●	dividend rights;
	 	●	conversion rights;
	 	●	voting rights;
	 	●	preemptive rights;

 

    	 	 	 

    	 

    

 

	 	●	terms of redemption;
	 	●	liquidation preferences;
	 	●	sinking fund terms;
    and
	 	●	the number of shares
    constituting, or the designation of, such series, any or all of which may be greater than the rights of common stock.

 

The
existence of authorized but unissued shares of undesignated preferred stock may enable our board of directors to render more difficult
or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For example,
if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not
in the best interests of us or our stockholders, our board of directors could cause shares of preferred stock to be issued without
stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the
proposed acquirer, stockholder or stockholder group. The rights of holders of our common stock described above, will be subject
to, and may be adversely affected by, the rights of any preferred stock that we may designate and issue in the future. The issuance
of shares of undesignated preferred stock could decrease the amount of earnings and assets available for distribution to holders
of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders
and may have the effect of delaying, deterring or preventing a change in control of us.

 

In
connection with the adoption of the Rights Agreement described below, we filed a Certificate of Designation of Series A Junior
Participating Preferred Stock of PolarityTE, Inc. (the “Certificate of Designation”) with the Secretary of State of
the State of Delaware, which designated 100,000 shares of Preferred Stock as Series A Junior Participating Preferred Stock. The
Rights Agreement is described in more detail below.

 

Rights
Agreement

 

On
November 7, 2019, the Board authorized and declared a dividend to stockholders of record at the close of business on November
18, 2019 (the “Record Date”) of one preferred share purchase right (a “Right”) for each outstanding share
of our common stock. Each Right entitles the holder to purchase from us one one-thousandth (subject to adjustment) of one share
of our Series A Junior Participating Preferred Stock, $0.001 par value per share (“Preferred Stock”) at an exercise
price of $12.00 per one one-thousandth of a share of Preferred Stock (the “Purchase Price”). The complete terms of
the Rights are set forth in the Rights Agreement (the “Rights Agreement”), dated as of November 7, 2019, between us
and Equity Stock Transfer, LLC, as rights agent.

 

Generally,
the Rights Agreement works by imposing a significant penalty upon any person or group (including a group of persons that are acting
in concert with each other) that acquires 10% or more (or 20% or more in the case of a “Passive Institutional Investor,”
as defined in the Rights Agreement) of our common stock without the approval of the Board. As a result, the overall effect of
the Rights Agreement and the issuance of the Rights may be to render more difficult or discourage a tender or exchange offer or
other acquisition of our common stock that is not approved by the Board. The Rights Agreement does not prevent the Board from
considering any offer that it considers to be in the best interest of its stockholders.

 

The
following is a summary of the terms of the Rights Agreement. The summary is qualified in its entirety by reference to the complete
text of the Rights Agreement, a copy of which is filed as Exhibit 4.1 to the Form 8-K that we filed with the SEC on November 7,
2019 and which is incorporated by reference herein.

 

    	 	2	 

    	 

    

 

Distribution
and Transfer of Rights; Rights Certificates

 

The
Board has declared a dividend of one Right for each outstanding share of our common stock. Prior to the Distribution Date referred
to below:

 

	 	●	the Rights will
    be evidenced by and trade with the certificates for the shares of our common stock (or, with respect to any uncertificated
    common stock registered in book-entry form, by notation in book-entry), and no separate rights certificates will be distributed;
	 	●	new certificates
    for shares of our common stock issued after the Record Date will contain a legend incorporating the Rights Agreement by reference
    (for uncertificated shares of Common Stock registered in book-entry form, this legend will be contained in a notation in book-entry);
	 	●	the surrender for
    transfer of any certificates for shares of our common stock (or the surrender for transfer of any uncertificated shares of
    our common stock registered in book-entry form) will also constitute the transfer of the Rights associated with such shares
    of our common stock; and
	 	●	the Rights will
    accompany any new shares of our common stock that are issued after the Record Date.

 

Distribution
Date

 

Subject
to certain exceptions specified in the Rights Agreement, the Rights will separate from the shares of our common stock and become
exercisable following the earlier of (i) the tenth (10th) business day after a public announcement that either discloses
that a person or a group of related persons has acquired beneficial ownership of 10% or more (or 20% or more in the case of a
Passive Institutional Investor) of the shares of our common stock other than as a result of repurchases of shares of our common
stock by us or certain inadvertent acquisitions (an “Acquiring Person”) or information which reveals the existence
of an Acquiring Person, or (ii) the tenth (10th) business day (or, if such tenth (10th) business day occurs
before the Record Date, the close of business on the Record Date), or such later date as may be determined by the Board, after
a person or a group of related persons announce or commence a tender or exchange offer that would result in a person or a group
of related persons becoming an Acquiring Person. For purposes of the Rights Agreement, beneficial ownership is defined to include
the ownership of derivative securities.

 

The
date on which the Rights separate from the shares of our common stock and become exercisable is referred to as the “Distribution
Date.”

 

After
the Distribution Date, we will mail Rights certificates to the Company’s stockholders as of the close of business on the
Distribution Date and the Rights will become transferable apart from the shares of our common stock. Thereafter, such Rights certificates
alone will represent the Rights.

 

Exempt
Persons

 

The
Rights Agreement provides that an Acquiring Person does not include the Company, any subsidiary of the Company, any employee benefit
plan of the Company or any subsidiary of the Company, or any person holding shares of our common stock for or pursuant to the
terms of any such employee benefit plan of the Company. In addition, certain inadvertent acquisitions will not trigger the occurrence
of the Distribution Date. The Rights Agreement also provides that any person that would otherwise be deemed an Acquiring Person
as of the date of the adoption of the Rights Agreement will be exempted but only for so long as neither it nor any of its Related
Persons (as defined in the Rights Agreement) acquire or are deemed to acquire, without the prior approval of the Board, beneficial
ownership of any additional shares of our common stock following the adoption of the Rights Agreement.

 

    	 	3	 

    	 

    

 

Grandfathered
Persons

 

The
Rights Agreement provides that a “Grandfathered Person” means any Person which, together with all of its Affiliates
and Associates, is, as of the date of the Agreement, the Beneficial Owner of 20% or more of the shares of our common stock then
outstanding; provided, however, that such Person shall cease to be a Grandfathered Person and shall become an Acquiring
Person if such Person exceeds its Grandfathered Percentage (as defined in the Rights Agreement) by 0.01% or more of the shares
of our common stock, subject to certain exemptions for (i) any unilateral grant of any security by the Company, (ii) the exercise
of any options, warrants, rights or similar interests, (iii) the grant of stock options pursuant to any written agreement with
us and (iv) any increase in the percentage of stock ownership as a result of any Company stock repurchases.

 

Preferred
Stock Purchasable Upon Exercise of Rights

 

After
the Distribution Date, each Right will entitle the holder to purchase, for the Purchase Price, one one-thousandth of a share of
Preferred Stock having economic and other terms similar to that of one share of our common stock. This portion of a share of Preferred
Stock is intended to give a stockholder approximately the same dividend, voting and liquidation rights as would one share of our
common stock.

 

Flip-In
Trigger

 

If
a person or group of related persons becomes an Acquiring Person, then each Right will entitle the holder thereof to purchase,
upon payment of the Purchase Price, in accordance with the terms of the Rights Agreement, in lieu of a number of one one-thousandths
of a share of Preferred Stock, a number of shares of our common stock (or, in certain circumstances, cash, property or other securities
of the Company) having a then-current market value of twice the Purchase Price. However, the Rights are not exercisable following
the occurrence of the foregoing event until such time as the Rights are no longer redeemable by us, as further described below.

 

Following
the occurrence of an event set forth in the preceding paragraph, all Rights that are or, under certain circumstances specified
in the Rights Agreement, were beneficially owned by an Acquiring Person or certain of its transferees will be null and void.

 

Flip-Over
Trigger

 

If,
after an Acquiring Person obtains 10% or more (or 20% or more in the case of a Passive Institutional Investor) of the shares of
our common stock, (i) we merge into another entity, (ii) an acquiring entity merges into us, and, in connection with such transaction,
all or part of the outstanding shares of our common stock are converted into stock or other securities of another entity, cash,
or other property or (iii) we sell or transfer 50% or more of the Company’s assets or earning power, then each Right (except
for Rights that have previously been voided as set forth above) will entitle the holder thereof to purchase, upon payment of the
Purchase Price, in accordance with the terms of the Rights Agreement, a number of shares of common stock of the person engaging
in the transaction having a then-current market value of twice the Purchase Price.

 

    	 	4	 

    	 

    

 

Redemption
of the Rights

 

The
Rights will be redeemable at the Board’s sole discretion for $0.001 per Right (payable in cash, shares of our common stock
or other consideration deemed appropriate by the Board) at any time ending on the earlier of (i) the tenth (10th) business
day (or such later date as may be determined by the Board) after the public announcement that a person has acquired beneficial
ownership of 10% or more (or 20% or more in the case of a Passive Institutional Investor) of the shares of our common stock and
(ii) the final expiration date of the Rights Agreement. Until such time as the Rights are no longer redeemable by us, the Rights
are not exercisable. Immediately upon the action of the Board ordering redemption, the Rights will terminate and the only right
of the holders of the Rights will be to receive the $0.001 redemption price. The redemption price will be adjusted if we undertake
a stock dividend, a stock split or similar transaction.

 

Exchange
Provision

 

At
any time after the date on which a person beneficially owns 10% or more (or 20% or more in the case of a Passive Institutional
Investor) of the shares of our common stock and prior to the acquisition by the person of 50% or more of the shares of our common
stock, the Board may exchange the Rights (other than Rights owned by the Acquiring Person or any Related Person, which would have
become void), in whole or in part, for shares of our common stock at an exchange ratio (subject to adjustment) of one share of
our common stock per Right (or, if insufficient shares are available, we may issue preferred stock, cash, debt or equity securities,
property or a combination thereof in exchange for the Rights).

 

Expiration
of the Rights

 

The
Rights expire at or prior to the earlier of (i) November 7, 2020 or (ii) the redemption or exchange of the Rights as described
above.

 

Amendment
of Terms of Rights Agreement and Rights

 

The
terms of the Rights and the Rights Agreement may be amended by action of the Board in any respect without the consent of the holders
of the Rights on or prior to the time a person becomes an Acquiring Person. Thereafter, the terms of the Rights and the Rights
Agreement may not be supplemented or amended in any manner that would adversely affect the interests of the holders of the Rights.

 

Rights
of Holders

 

Until
a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.

 

Anti-Dilution
Provisions

 

The
Board may adjust the Purchase Price, the number of shares of Preferred Stock issuable and the number of outstanding Rights to
prevent dilution that may occur from a stock dividend, a stock split or a reclassification of the Preferred Stock or common stock.

 

With
certain exceptions, no adjustments to the Purchase Price will be made until the cumulative adjustments amount to at least 1% of
the Purchase Price.

 

    	 	5	 

    	 

    

 

Taxes

 

The
distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the Rights
exercisable or upon redemption of the Rights, stockholders may recognize taxable income.

 

Certain
Anti-Takeover Effects

 

The
Rights are not intended to prevent a takeover of the Company and should not interfere with any merger or other business combination
approved by the Board. However, the Rights may cause substantial dilution to a person or group that acquires beneficial ownership
of 10% or more (or 20% or more in the case of a Passive Institutional Investor) of the outstanding shares of our common stock
(which includes for this purpose stock referenced in derivative transactions and securities).

 

Antitakeover
Effects of Delaware Law and Provisions of our Restated Certificate of Incorporation and Amended and Restated Bylaws

 

Certain
provisions of the Delaware General Corporation Law and of our restated certificate of incorporation and amended and restated bylaws
could have the effect of delaying, deferring or discouraging another party from acquiring control of us unless such takeover or
change of control is approved by the board of directors. These provisions, which are summarized below, are expected to discourage
certain types of coercive takeover practices and inadequate takeover bids and, therefore, they might also inhibit temporary fluctuations
in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions are
also designed in part to encourage anyone seeking to acquire control of us to first negotiate with our board of directors. These
provisions might also have the effect of preventing changes in our management. It is possible that these provisions could make
it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests. However, we
believe that the advantages gained by protecting our ability to negotiate with any unsolicited and potentially unfriendly acquirer
outweigh the disadvantages of discouraging such proposals, including those priced above the then-current market value of our common
stock, because, among other reasons, the negotiation of such proposals could improve their terms.

 

Delaware
Takeover Statute. We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section
203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested
stockholder” for a three-year period following the time that this stockholder becomes an interested stockholder, unless
the business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation and
an interested stockholder is prohibited unless it satisfies one of the following conditions:

 

	 	●	before
    the stockholder became interested, our board of directors approved either the business combination or the transaction which
    resulted in the stockholder becoming an interested stockholder;
	 	●	upon
    consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder
    owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for
    purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee
    stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or
	 	●	at
    or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized
    at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting
    stock which is not owned by the interested stockholder.

 

    	 	6	 

    	 

    

 

	 	●	Section
    203 defines a business combination to include:
	 	●	any
    merger or consolidation involving the corporation and the interested stockholder;
	 	●	any
    sale, transfer, lease, pledge, exchange, mortgage or other disposition involving the interested stockholder of 10% or more
    of the assets of the corporation;
	 	●	subject
    to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
    to the interested stockholder;
	 	●	subject
    to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the
    stock of any class or series of the corporation beneficially owned by the interested stockholder; or
	 	●	the
    receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits
    provided by or through the corporation.

 

In
general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

 

Provisions
of our Restated Certificate of Incorporation and Amended and Restated Bylaws. Our restated certificate of incorporation and
amended and restated bylaws include several provisions that may have the effect of delaying, deferring or discouraging another
party from acquiring control of us and encouraging persons considering unsolicited tender offers or other unilateral takeover
proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include
the items described below.

 

Board
composition and filling vacancies. In accordance with our restated certificate of incorporation, our board is divided into
three classes serving staggered three-year terms, with one class being elected each year. Our restated certificate of incorporation
also provides that directors may be removed only for cause and then only by the affirmative vote of the holders of two-thirds
or more of the shares then entitled to vote at an election of directors. Furthermore, any vacancy on our board of directors, however
occurring, including a vacancy resulting from an increase in the size of our board, may only be filled by the affirmative vote
of a majority of our directors then in office even if less than a quorum.

 

No
written consent of stockholders. Our restated certificate of incorporation provides that all stockholder actions are required
to be taken by a vote of the stockholders at an annual or special meeting, and that stockholders may not take any action by written
consent in lieu of a meeting. This limit may lengthen the amount of time required to take stockholder actions and would prevent
the amendment of our bylaws or removal of directors by our stockholder without holding a meeting of stockholders.

 

Meetings
of stockholders. Our bylaws provide that only a majority of the members of our board of directors then in office or stockholders
holding at least one-quarter of the voting power of all the then outstanding shares of our capital stock entitled to vote generally
in the election of directors may call special meetings of stockholders and only those matters set forth in the notice of the special
meeting may be considered or acted upon at a special meeting of stockholders. Our bylaws limit the business that may be conducted
at an annual meeting of stockholders to those matters properly brought before the meeting.

 

Advance
notice requirements. Our bylaws establish advance notice procedures regarding stockholder proposals pertaining to the nomination
of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide
that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which
the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 45
days or more than 75 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain
certain information specified in our bylaws.

 

Amendment
to certificate of incorporation and bylaws. As required by the Delaware General Corporation Law, any amendment of our restated
certificate of incorporation must first be approved by a majority of our board of directors, and if required by law or our restated
certificate of incorporation, must thereafter be approved by a majority of the outstanding shares entitled to vote on the amendment,
and a majority of the outstanding shares of each class entitled to vote thereon as a class, except that the amendment of the provisions
relating to stockholder action, directors, amending our bylaws, limitation of liability and the amendment of our restated certificate
of incorporation must be approved by not less than two-thirds of the outstanding shares entitled to vote on the amendment, and
a majority of the outstanding shares of each class entitled to vote thereon as a class. Our bylaws may be amended by the affirmative
vote of a majority vote of the directors then in office, subject to any limitations set forth in the bylaws; and may also be amended
by the affirmative vote of at least two-thirds of the voting power of all the then outstanding shares of our capital stock entitled
to vote generally in the election of directors, voting together as a single class.

 

    	 	7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00306-of-00352.parquet"}]]