Document:

EX-10.1 Offer letter

Cyan, Inc.
1383 N. McDowell Blvd., Suite 300
Petaluma, CA 94954

March 25, 2014

Via Email
Jeff Ross

Re:    Employment Offer

Dear Jeff:

On behalf of Cyan, Inc. (the “Company”), I am pleased to extend this employment offer to you.  Provided that you accept this offer and commence employment, the terms of your employment with the Company will be as set forth below:
1.Position
(a)You will become the Chief Financial Officer of the Company.  You will initially report to the Company’s Chief Executive Officer.  

(b)You agree to the best of your ability and experience that you will at all times loyally and conscientiously perform all of the duties and obligations required of and from you pursuant to the express and implicit terms hereof, and to the reasonable satisfaction of the Company.  During the term of your employment, you further agree that you will devote all of your business time and attention to the business of the Company, the Company will be entitled to all of the benefits and profits arising from or incident to all such work services and advice, you will not render commercial or professional services of any nature to any person or organization, whether or not for compensation, without the prior written consent of the Company, and you will not directly or indirectly engage or participate in any business that is competitive in any manner with the business of the Company.  Nothing in this letter agreement will prevent you from accepting speaking or presentation engagements in exchange for honoraria or from serving on boards of charitable organizations, or from owning no more than one percent (1%) of the outstanding equity securities of a corporation whose stock is listed on a national stock exchange.
2.Start Date.  Subject to fulfillment of the conditions imposed by this letter agreement, you will commence your employment with the Company on Wednesday, March 26, 2014 (the “Start Date”). 
3.Proof of Right to Work.  For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States.  Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.

Jeff Ross
March 25, 2014
Page 2 

4.Compensation.  
(a)    Base Salary.  You will be paid a semi-monthly salary of $14,5833.33, which is equivalent to $350,000 on an annualized basis (the “Base Salary”).  Your salary will be payable semi-monthly pursuant to the Company’s regular payroll policy.  The Base Salary will be reviewed annually as part of the Company’s normal executive salary review process.
(b)    Incentive Compensation.  In addition to your Base Salary, you will be eligible to participate in Cyan’s Non-Sales Incentive Program and related annual plan (collectively, the “Incentive Plan”).  Your annualized target bonus under the Incentive Plan will be 50% of the Base Salary you earn in the applicable Incentive Plan year, i.e., pro rated for partial year’s service.  The bonus will be subject to the terms of the Incentive Plan.
5.Equity Awards.  
(a)    Initial Equity Award.  In connection with your employment, the Company will recommend that the Board of Directors grant you an option to purchase 400,000 shares of the Company’s Common Stock (“Option Shares”).  The option will have an exercise price equal to the fair market value on the date of the grant and will vest at the rate of 25% of the Option Shares on the twelve (12) month anniversary of your Start Date and the remaining Option Shares will vest monthly thereafter at the rate of 1/48 of the total number of the Option Shares per month, for a total of four years of vesting.  Vesting will, of course, depend on your continued employment with the Company.  The option will be subject to the terms of the Company’s 2013 Stock Plan and the Stock Option Agreement between you and the Company.
(b)    Subsequent Long Term Incentives.  Beginning in 2015, you will be eligible to participate in any long term equity incentive arrangement approved for executive officers, in such structure and amount, and on such terms and conditions, as may be approved by the Company’s Compensation Committee.
6.Housing Allowance.  Cyan understands your family home is in Oakland, and that in connection with joining Cyan, you will rent an apartment in or around Petaluma.  To help defray the costs of your establishing and maintaining a residence close to Cyan, Cyan will pay you a monthly housing allowance of $3,000.00 per month (the “Housing Allowance”) for up to the first 12 months of your employment.  If and when, during the first 12 months of your employment, your principal place of work changes from Petaluma to Cyan’s San Francisco office, the Housing Allowance would be discontinued.  The Housing Allowance will be payable in accordance with the Company’s regular payroll policy.  This arrangement will be re-evaluated at or near the end of the first year of your employment, and may be extended.  You acknowledge that the Housing Allowance will be deemed to be compensation reportable on your Form W-2, and will be subject to customary withholding taxes.
7.Benefits.
(a)    Insurance Benefits.  The Company will provide you with the opportunity to participate in the standard benefits plans currently available to other Company employees, subject to any eligibility requirements imposed by such plans.  

Jeff Ross
March 25, 2014
Page 3 

(b)    Vacation; Sick Leave.  You will be entitled to paid time off according to the Company’s standard policies. 
8.Additional Agreements.  
(a)    Confidential Information and Invention Assignment Agreement.  Your acceptance of this offer and commencement of employment with the Company is contingent upon the execution and delivery to an officer of the Company, on or before your Start Date, of a Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the “Confidentiality Agreement”).
(b)    Severance & Change in Control Agreement.  You will be provided the opportunity to enter into a Severance and Change in Control Agreement in the standard form entered into between the Company and its executive officers (the “Severance Agreement”).
(c)    Indemnification Agreement.  You will be provided the opportunity to enter into an Indemnification Agreement in the standard form entered into between the Company and its executive officers (the “Indemnification Agreement”).
9.At-Will Employment.  The Company is excited about your joining and looks forward to a beneficial and productive relationship. Nevertheless, you should be aware that your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason, without further obligation or liability.  Subject to the terms of the Severance Agreement, the Company may also modify your duties, compensation or other terms and conditions of your employment at any time for any reason, with or without notice.  
10.No Conflicting Obligations.  You understand and agree that by accepting this offer of employment, you represent to the Company that your performance will not breach any other agreement to which you are a party and that you have not, and will not during the term of your employment with the Company, enter into any oral or written agreement in conflict with any of the provisions of this letter or the Company’s policies.  You are not to bring with you to the Company, or use or disclose to any person associated with the Company, any confidential or proprietary information belonging to any former employer or other person or entity with respect to which you owe an obligation of confidentiality under any agreement or otherwise.  The Company does not need and will not use such information and we will assist you in any way possible to preserve and protect the confidentiality of proprietary information belonging to third parties.  Also, we expect you to abide by any obligations to refrain from soliciting any person employed by or otherwise associated with any former employer and suggest that you refrain from having any contact with such persons until such time as any non-solicitation obligation expires. 
11.Governing Law; Arbitration.  This letter will be governed by the laws of the State of California without regard to is conflict of laws provision.  In the event of any dispute or claim relating to or arising out of our employment relationship, you and the Company agree that (i) any and all disputes between you and the Company shall be fully and finally resolved by binding arbitration, (ii) you are waiving any and all rights to a jury trial but all court remedies will be available in arbitration, (iii) all disputes shall be resolved by a neutral arbitrator who shall issue a written opinion, (iv) the arbitration shall provide for adequate discovery, and (v) the Company shall pay all 

Jeff Ross
March 25, 2014
Page 4 

the arbitration fees, except an amount equal to the filing fees you would have paid had you filed a complaint in a court of law. 
12.Entire Agreement.  This letter, together with the Confidentiality Agreement, the Severance Agreement and the Indemnification Agreement, sets forth the entire agreement and understanding between you and the Company relating to your employment and supersedes all prior agreements and discussions between us.  This letter may not be modified or amended except by a written agreement, signed by the Company and by you.  
We are all delighted to be able to extend you this offer and look forward to working with you.  To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement.  This offer will terminate if not accepted by you on or before 7 p.m. Pacific Time on Tuesday, March 25, 2014.
	
				
	 
	Very truly yours,
	 
	ACCEPTED AND AGREED

	 
	 
	 
	 

	 
	CYAN, INC.
	 
	JEFF ROSS

	 
	 
	 
	 

	By:
	/s/ Mark Floyd
	 
	/s/ Jeffrey Ross

	 
	Mark Floyd, CEO
	 
	Signature

	 
	 
	 
	 

	 
	 
	 
	3/25/2014

	 
	 
	 
	DateUnassociated Document

 

Exhibit 4.8

 

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

ECHO THERAPEUTICS, INC.

 

COMMON STOCK PURCHASE, WARRANT

 

	 
Warrant No. _________ 

	 	 	 
Number of Shares: _______

 

Issue Date: _____________________

 

1.           Issuance. This warrant (“Warrant”) is issued to _____________________ (the “Holder”) by Echo Therapeutics, Inc. a Delaware corporation (hereinafter with its successors the “Company”).

 

2.           Purchase Price; Number of Shares. Subject to the terms and conditions hereinafter set forth, the Holder, at any time on or after the date that is six months and one day following the issue date listed above (the “Issue Date”), is entitled upon surrender of this Warrant with the subscription form annexed hereto duly executed, at the office of the Company or such other office as the Company shall notify the Holder of in writing, to purchase from the Company, at a price per share of  $_____ (the “Purchase Price”), up to __________________ fully paid and nonassessable shares (the “Warrant Shares”) of the Company's common stock, par value $0.01 per share (“Common Stock”); provided that, the Holder shall only be entitled to purchase Warrant Shares that have vested pursuant to Section 3 below and that may be purchased without violating the terms of Section 8 below. Until such time as this Warrant is exercised in full or expires, the securities issuable upon exercise of this Warrant are subject to adjustment as hereinafter provided.

 

3.           Vesting of Warrant Shares. One hundred percent (100%) of the Warrant Shares shall vest upon the occurrence of the Closing (including payment of the Purchase Price in full), as such terms are defined in the Securities Purchase Agreement dated on or about December 10, 2013 by and among the Company and the purchaser named therein.

 

  

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4.           Payment of Purchase Price. The Purchase Price shall be paid by (i) check payable to the Company, (ii) wire transfer of funds to the Company, (iii) cancellation of indebtedness of the Company to the Holder or (iv) any combination of the foregoing.

 

5.           Net Issue Election. The Holder may elect to receive, without payment by the Holder of any additional consideration, shares equal to the value of this Warrant or any portion hereof by the surrender of this Warrant or such portion to the Company, with the net issue election notice annexed hereto duly executed, at the office of the Company. Thereupon, the Company shall issue to the Holder such number of fully paid and nonassessable shares of Common Stock as is computed using the following formula:

 

X = V (A-B)

A

 

where

 

X = the number of shares to be issued to the Holder pursuant to this Section 5.

 

V = the number of vested Warrant Shares covered by this Warrant in respect of which the net issue election is made pursuant to this Section 5.

 

A = the fair market value of one share of Common Stock, as determined in accordance with the rules of NASDAQ, at the time the net issue election is made pursuant to this Section 5.

 

B = the Purchase Price in effect under this Warrant at the time the net issue election is made pursuant to this Section 5.

 

The Board shall promptly respond in writing to an inquiry by the Holder as to the fair market value of one share of Common Stock.

 

6.           Partial Exercise. This Warrant may be exercised in part, in which case the Holder shall be entitled to receive a new warrant, dated as of the date of this Warrant, covering the number of Warrant Shares in respect of which this Warrant shall not have been exercised, which new Warrant shall in all other respects be identical with this Warrant.

 

  

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7.           Delivery of Certificates Upon Exercise.

 

(a)           Certificates for shares issuable upon the exercise hereof shall be transmitted by the transfer agent of the Company to the Holder by crediting the account of the Holder’s broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is a participant in such system and such shares are eligible for legend removal, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise within Five (5) Trading Days (the “Warrant Share Delivery Date”) from the delivery to the Company of the Notice of Exercise form, surrender of this Warrant (if required) and payment of the aggregate Exercise Price as set forth above.  This Warrant shall be deemed to have been exercised on the date the Notice of Exercise is transmitted to the Company.  The shares issuable upon the exercise of the Warrant shall be deemed to have been issued, and the Holder or any other person designated in the Notice of Exercise as the person in whose name the shares issuable upon the exercise of this Warrant shall be issued, shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the exercise price and all taxes required to be paid by the Holder, if any, prior to the issuance of such shares, have been paid.   The shares issued upon exercise of this Warrant shall be issued without any legend or stop transfer orders provided (i) a registration statement under the Securities Act covering the proposed disposition of such Warrant Shares has become effective under the Securities Act, (ii) the Company has received other evidence reasonably satisfactory to the Company that such registration and qualification under the Securities Act and state securities laws are not required, or (iii) the Holder provides the Company with reasonable documentation confirming the legend can be removed pursuant to applicable provisions of the Securities Act (such as Rule 144).

 

(b)           In addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder.  The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Company.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

8.           Restrictions on Exercise.

 

(a)           Notwithstanding anything to the contrary herein, this Warrant may only be exercised to the extent that the issuance of Common Stock upon such exercise would not constitute a violation of any applicable federal or state securities laws or other laws or regulations.

 

  

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(b)           Notwithstanding anything to the contrary set forth in this Warrant, at no time may the Holder exercise this Warrant to the extent that the number of shares of Common Stock to be issued pursuant to such exercise would exceed, when aggregated with all other shares of Common Stock owned by the Holder at such time, the number of shares of Common Stock which would result in the Holder owning more than 9.99% of all of the Common Stock outstanding at such time; provided, however, that upon the Holder providing the Company with sixty-one (61) days’ notice (pursuant to Section 13 hereof) (a “Waiver Notice”) that such holder would like to waive Section 8(b) of this Warrant with regard to any or all shares of Common Stock issuable upon exercise of this Warrant, this Section 8(b) shall be of no force or effect with regard to those shares of Common Stock referenced in the Waiver Notice.

 

(c)           Notwithstanding anything to the contrary set forth in this Warrant, at no time may the Holder exercise this Warrant if the number of shares of Common Stock to be issued pursuant to such exercise would exceed, when aggregated with all other shares of Common Stock owned by the Holder at such time, the number of shares of Common Stock which would result in the Holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules thereunder) in excess of 19.99% of all of the Common Stock outstanding at such time; provided, however, that upon both (A) the Holder providing the Company with a Waiver Notice that the Holder would like to waive Section 8(c) of this Warrant with regard to any or all shares of Common Stock issuable upon conversion of this Warrant, and (B) the stockholders of the Company approving the waiver of Section 8(c) of this Warrant with regard to any or all shares of Common Stock issuable upon exercise of this Warrant and the ownership by the Holder of greater than 20% of the outstanding shares of Common Stock, in accordance with applicable NASDAQ listing standards, this Section 8(c) shall be of no force or effect.

 

9.           Expiration Date. This Warrant shall expire on the fifth anniversary of the Issue Date and shall be void thereafter.

 

10.           Reserved Shares: Valid Issuance. The Company covenants that it will at all times from the date hereof until the expiration date set forth in Section 10 above reserve and keep available such number of its authorized shares of Common Stock as will be sufficient to permit the exercise of this Warrant in full. The Company further covenants that such shares as may be issued pursuant to the exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof.

 

11.           Adjustments for Dividends and Stock Splits. If after the Issue Date the Company shall subdivide the Common Stock or combine the Common Stock, or issue additional shares of Common Stock in payment of a stock dividend on the Common Stock, the Purchase Price and the number of shares issuable on the exercise of this Warrant shall forthwith be proportionately adjusted.

 

12.           Fractional Shares. No fractional shares may be issued upon any exercise of this Warrant, and any fractions shall be rounded down to the nearest whole number of shares.  If upon any exercise of this Warrant for the full remaining number of shares underlying this Warrant a fraction of a share results, the Company will pay the cash value of any such fractional share, calculated as determined in good faith by the Board.

 

  

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13.           Notices.  All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or three (3) business days following being mailed by certified or registered mail, postage prepaid, return-receipt requested, or delivered to an express mail delivery service such as Federal Express, with written receipt by the addressee required, in either case addressed to the holder of record at its address appearing on the books of the Company.

 

14.           Amendment. The terms of this Warrant may be amended, modified or waived only with the written consent of the Company and the Holder.

 

15.           Transfers This Warrant may not be transferred by the Holder with respect to any or all of the shares purchasable hereunder without the prior written consent of the Company; provided, however, this Warrant may be transferred to an affiliate of the Holder upon surrender of this Warrant by the Holder to the Company together with an appropriate assignment form properly endorsed.  The transferee shall sign an investment letter in form and substance reasonably satisfactory to the Company.

 

16.           No Rights as Stockholder. This Warrant does not by itself entitle the Holder to any voting or other rights as a stockholder of the Company.

 

17.           Governing Law. This Warrant shall be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law.

 

18.           Successors and Assigns. This Warrant shall inure to the benefit of the Holder's successors, legal representatives and permitted assigns.

 

 

[remainder of page intentionally left blank]

 

 

  

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This Warrant is hereby executed as of the Issue Date indicated above.

 

 

ECHO THERAPEUTICS, INC.

 

 

By:                                                             

Name:

Title:

 

 

ACKNOWLEDGED AND AGREED:

 

____________________________________

 

 

By:                                                          

Name:

Title:

 

 

 

[Signature Page to Warrant No. CSW-264]

 

  

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Warrant Exercise Notice

 

	 
 
To: Echo Therapeutics, Inc., Attn: CEO and CFO 

	 	 	 
 
Date: ________________

 

The undersigned hereby exercises Warrant No. CSW-264 for ________________ shares of Common Stock covered by this Warrant. The certificate(s) for such shares shall be issued in the name of the undersigned or as otherwise indicated below:

 

By:                                                

Name:

Title:

                                                                 

Name for Registration

 

                                                                 

Mailing Address

 

 

Net Issue Election Notice

 

	 
 
To: Echo Therapeutics, Inc., Attn: CEO and CFO 

	 	 	 
 
Date: ________________

 

The undersigned hereby elects under Section 5 to surrender the right to purchase ________ shares of Common Stock pursuant to this Warrant and to receive in lieu thereof ________ shares of Common Stock. The certificate(s) for the shares issuable upon such net issue election shall be issued in the name of the undersigned or as otherwise indicated below.

 

By:                                                

Name:

Title:

                                                                   

Name for Registration

 

                                                                   

Mailing Address

 

 

 

[Warrant Exercise Notice/New Issuance Election Notice]

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