Document:

Exhibit 10.2

 

RESEARCH AND DEVELOPMENT SERVICES AGREEMENT

 

THIS RESEARCH AND DEVELOPMENT SERVICES AGREEMENT (“Agreement”) is being entered into as of this 6th day of March, 2015 (the “Effective Date”), by and between ONCOSEC MEDICAL INCORPORATED, a Nevada Corporation with a principal place of business at 9810 Summers Ridge Rd., Ste. 110, San Diego, CA 92121 (the “Company”), and MERLIN CSI, LLC, a California Limited Liability Company, having a principal place of business at 13135 Danielson Street, #212, Poway, CA 92064 (“Merlin”). Merlin and Company are at times referred to individually as a “Party” and jointly as the “Parties.”

 

RECITALS

 

WHEREAS, Company desires to engage Merlin, and Merlin has agreed to be engaged by Company, to provide the services set forth on Exhibit “A” attached hereto and incorporated by reference (“Services”); and,

 

WHEREAS, the Services to be performed by Merlin for and on behalf of the Company relate to the research and development products which are described in Exhibit “A,” which description is incorporated by reference (the “Products”).

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the following mutual promises, representations, conditions, and covenants, the Parties hereby agree as follows:

 

1.                                      RECITALS.  The Recitals set forth above are hereby incorporated by reference into this Agreement, as if fully set forth herein.

 

2.                                      DEFINITIONS.  Capitalized terms used in this Agreement and not otherwise defined shall have the following meanings:

 

(a)                                 “Company Documents and Materials”  shall refer to all documents or other media, whether tangible or intangible, that contain or embody Proprietary Information, as defined below, or any other information concerning the business, operations or plans of the Company, whether such documents or media have been prepared by Company, or by others on behalf of the Company.  Company Documents and Materials include, but are not limited to, blueprints, drawings, photographs, charts, graphs, notebooks, tests, test results, experiments, customer lists, computer disks, tapes or printouts, sound recordings and other printed, electronic, typewritten or handwritten documents or information, sample products, prototypes and models.

 

(b)                                 “Inventions” means, the Product being developed pursuant to this Agreement resulting from the performance of the Services. Unless specifically included on Exhibit “A” as part of the Services to be performed,  the term “Inventions” does not include any software programs or subroutines, source or object code, algorithms, improvements, works of authorship, technology, designs, formulas, ideas, processes, techniques, methodology, know-how and data, whether or not patentable or copyrightable, made, discovered, conceived, reduced to practice, or developed by Merlin, which are not an integral part of the Product even if developed or discovered by Merlin in designing or developing the Product.

 

 

(c)                                  “Proprietary Information” means information relating to the Services or the Product which is developed, created, or discovered by or on behalf of the Company, or which became or will become known to, or was or is conveyed to the Company pursuant to this Agreement, which has commercial value in Company’s business, whether or not patentable or copyrightable, including, without limitation: (i) specifically developed software programs,  subroutines, source and object code, algorithms, (ii) specifically developed designs, technology, know-how, processes, data, ideas, techniques; (iii) works of authorship; and (iv) product development plans.  Propriety Information will also included any information provided by Company to Merlin relating to: (i) customer lists; (ii) terms of compensation and performance levels of the Company’s employees and consultants; (iii) Company’s customers; (iv) other information concerning the Company’s actual or anticipated business, research or development:  or (v) information which is received in confidence by or for the Company from any other person or entity by Merlin which is marked “Confidential.”  However, Proprietary Information does not apply to any information known to Merlin prior to the signing of this Agreement or which is common knowledge or otherwise published by Company.

 

(d)                                 “Services” means those services as set forth on Exhibit “A,” to be performed by Merlin for and on behalf of the Company related to the research and development of the Product.

 

(e)                                  “Deliverables” means all work product and related materials prepared and developed by Merlin in connection with this Agreement, including, but not limited to, the preliminary prototype components, initial design specifications and drawings, documentation of materials and processes used to fabricate the prototypes, summary of bench testing, and the materials related to the Services provided under this Agreement, including, but not limited to, all materials, prototypes and files.

 

3.                                      RESEARCH AND DEVELOPMENT SERVICES.  Merlin shall use commercially reasonable efforts, and devote sufficient time, attention and provide qualified personnel, to perform the Services, in accordance with the schedule set forth on Exhibit “A.” Merlin does not guarantee that the Product can be developed. If the Product cannot be developed using commercially reasonable efforts, Company will still be required to make all payments for the Services pursuant to the terms of this Agreement.

 

4.                                      COMPENSATION.

 

(a)                                 Company shall pay Merlin for the Services to be performed under this Agreement the compensation set forth on Exhibit “B,” including any hourly cost for labor performed as part of the Services (the “Labor Costs”).  Company acknowledges that the Labor Costs do not include the cost of capital equipment, outside services or First in Man (“FIM”) Product incurred in connection with Merlin’s performance of the Services (the “Excluded Costs”).  Excluded Costs will be the sole and exclusive responsibility of the Company, payable in accordance with the schedule set forth on Exhibit “B” of such Excluded Costs. Company will also pay to Merlin any and all other Compensation in accordance with the schedule set forth on Exhibit “B”.   Company will pay to Merlin travel time (door to door) related to the performance of the Services at the Labor Costs rates set forth on Exhibit “B.”

 

 

(b)                                 In addition, the Company will reimburse Merlin for all reasonable, documented and actual expenses, including, without limitation, actual travel expenses (airfare, hotel, rental car, meals, parking, etc.) incurred by Merlin in connection with its performance of the Services.

 

(c)                                  The Company shall pay to Merlin all amounts due under this Section 4 within thirty (30) calendar days of the Company’s receipt from Merlin of Merlin’s invoice.

 

(d)                                 Merlin has the option to invoice expenses twice per month if Merlin reasonably determines the carrying costs of these expenses warrants doing so.

 

(e)                                  The Company will pay all capital expenses directly to the vendor responsible for delivering the capital items.

 

5.                                      TERM.  The term of this Agreement shall commence on the Effective Date and continue until the earlier of: (i) Merlin’s completion of the Services; (ii) termination by either Party, for any reason, upon giving not less than thirty (30) days’ written notice to the other Party; (iii) immediately upon a material breach of this Agreement by a Party, if such breach is not cured within ten (10) days following notice of such breach; (iv) by Merlin in the event that payment is not received within thirty (30) days of an invoice being due and payable by Company; or (v) the dissolution, voluntary or involuntary bankruptcy of either Party, or assignment by either Party of all or substantially all of its assets for the benefit of creditors.  Notwithstanding the termination of this Agreement, any liability or obligation of either Party which may have accrued prior to such termination, shall continue in full force and effect, including but not limited to the rights and obligations of the Parties under Sections 4, 5, 6, 7, 8, 11, 13, and 21 of this Agreement.

 

6.                                      CONFIDENTIALITY OF PROPRIETARY INFORMATION.

 

(a)                                 Nature of Information.  Merlin acknowledges that the Company possesses and will possess Proprietary Information which is important to its business.  Merlin further acknowledges that Merlin’s engagement creates a relationship of confidence and trust between the Company and Merlin with respect to Proprietary Information.

 

(b)                                 Property of the Company.  All of Company Documents and Materials, all of Company’s Proprietary Information and all patents, patent rights, copyrights, Company trade secret, Company trademarks and other Company intellectual property rights, are and shall be the sole property of the Company.  Merlin assigns to the Company any and all rights, title and interest Merlin may acquire in any such Company Proprietary Information or Company Documents and Materials, in performing the Services, to the Company.

 

(c)                                  Confidentiality.  At all times, except as may be necessary in performing the Services, both during the term of Merlin’s engagement by the Company and after Merlin’s termination, Merlin shall not use or disclose any Proprietary Information or anything relating to it without the prior written consent of the Company.

 

(d)                                 Compelled Disclosure.  In the event that Merlin is requested in any legal proceeding to disclose any Proprietary Information, Merlin shall give the Company prompt notice of such request so that the Company may seek an appropriate protective order.  If, in the absence of a protective order, if Merlin is compelled by any Court of competent jurisdiction to disclose such Proprietary Information, Merlin may disclose such information without liability.

 

 

(e)                                  Records.  Merlin agrees to make and maintain adequate and current written records, of all Inventions, trade secrets and works of authorship assigned or to be assigned to the Company pursuant to this Agreement.

 

(f)                                   Handling of the Company Documents and Materials.  Except as may be necessary in performing the Services, Merlin shall not remove any Company Documents and Materials from the business premises of the Company or deliver any Company Documents and Materials to any person or entity outside the Company.  Merlin immediately upon termination of this Agreement, or if so requested by the Company, will return all Company Documents and Materials, apparatus, equipment and other physical property, excepting that Merlin may maintain one copy of such material for its business records subject to the non disclosure terms of this Agreement.

 

7.                                      INVENTIONS.

 

(a)                                 Disclosure.  Merlin shall promptly disclose in writing to Company all discoveries and new developments made during the term of Merlin’s engagement with the Company relating to the Services.  Merlin will disclose to Company any discoveries, or inventions made, discovered, conceived, reduced to practice or developed by Merlin, either alone or jointly with others, within six (6) months after the termination of this Agreement which result, in whole or in part, relating to the Services.  Such disclosures shall be received by the Company in confidence, to the extent such inventions are not assigned to the Company pursuant to subsection (b) below, and do not extend the assignments set forth below.

 

(b)                                 Assignment of Inventions to the Company.  All Inventions which Merlin makes, discovers, conceives, reduces to practice or develops (in whole or in part, either alone or jointly with others) in performing the Services shall be the sole property of the Company, to the maximum extent permitted by law and Merlin will assign to the Company all of its rights, title and interest to such Inventions.  Unless specifically included on Exhibit “A” as part of the Services to be performed, such assignment does not apply to any software programs or subroutines, source or object code, algorithms, improvements, works of authorship, technology, designs, formulas, ideas, processes, techniques, methodology, know-how and data, whether or not patentable or copyrightable, made, discovered, conceived, reduced to practice, or developed by Merlin, which are not developed or discovered by Merlin in designing or developing the Product.

 

(c)                                  Works Made for Hire.  Merlin acknowledges that the Company shall be the sole owner of all patents, patent rights, copyrights, trade secret rights, trademark rights and all other intellectual property rights in connection with the Inventions.  Merlin further acknowledges that such Inventions, including, without limitation, any computer programs, programming documentation and other works of authorship, are “works made for hire” for purposes of the Company’s rights under patent or copyright laws.  Merlin hereby assigns to the Company any and all rights, title and interest Merlin may have or acquire in such Inventions.  If in the course of Merlin’s engagement with the Company, Merlin incorporates into a Company

 

 

product, process or machine a prior invention or improvement not related to the Services that is owned by Merlin or in which Merlin has an interest, the Company is granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, sublicensable, worldwide license to make, have made, modify, use, market, sell and distribute such prior invention as part of or in connection with such Product.  Company will be responsible for obtaining all intellectual property protection, including all licenses, trademarks and copyrights.

 

(d)                                 Cooperation.  Merlin will perform, all acts necessary to permit and assist Company, at Company’s expense, in further evidencing and perfecting the assignments made to the Company under this Agreement and in obtaining, maintaining, defending and enforcing patents, patent rights, copyrights, trademark rights, trade secret rights or any other rights in connection with such Inventions and improvements related to the Services in any and all countries.  Such acts may include, without limitation, execution of documents and assistance or cooperation in legal proceedings.

 

8.                                      NON-COMPETITION.  During the term of this Agreement and for three years thereafter, Merlin shall not, with or without consideration, develop a product similar to the Product, for any person, business, firm or corporation. Merlin is not precluded from providing services to any person, business, firm or corporation engaged in any business competitive with the business conducted by the Company, so long as the services being provided do not include developing a similar product to the Product developed pursuant to this Agreement.

 

9.                                      ARRANGEMENT NON-EXCLUSIVE.  Except for the restrictions set forth above in this Agreement, this is not an exclusive agreement and Merlin is not restricted from providing similar services for any other existing or potential customer.

 

10.                               INDEPENDENT CONTRACTOR.  The Parties acknowledge that Merlin shall, at all times, be acting and performing as an independent contractor.  Nothing in this Agreement is intended to create an employer/employee relationship or a joint venture relationship between the Parties.  Merlin is not eligible for any compensation, fringe benefits, pension, workers’ compensation, sickness or health insurance benefits, or other similar benefits accorded employees of the Company.  Company will not withhold any sums for income tax, unemployment insurance, social security, or any other withholding pursuant to any law or requirement of any governmental body on behalf of Merlin.  Merlin acknowledges that the Company has no obligation under local, state, or federal laws regarding Merlin and that the total commitment and liability of the Company in regard to any arrangement with, or work performed by, Merlin hereunder is to compensate Merlin as set forth in Section 4 hereof.

 

11.                               MAINTENANCE OF RECORDS.  During the term of this Agreement and for five (5) years after the completion of the Services, Merlin shall make available, upon written request of the Company or its designee, any records maintained by Merlin regarding any of the Services performed hereunder by Merlin.

 

12.                               NO AUTHORITY TO BIND.  Merlin shall have no power or authority to execute any agreements or contracts for or on behalf of the Company or to bind the Company in any other manner.

 

 

13.                               LIABILITY LIMITATION.                                   Without limiting any other provisions hereunder, under no circumstances shall Merlin be liable to Company with respect to this Agreement for any consequential, indirect, exemplary, special or incidental damages of any kind regardless of the form of action, whether in contract, tort (including negligence), strict liability, or otherwise.  Merlin’s liability for any other cause of action will be limited to thirty percent (30%) of the compensation already paid to Merlin, even if Merlin has been advised of the possibility of such damages.

 

14.                               NO ASSIGNMENT.  This Agreement may not be assigned by either Party without the written consent of the other party.

 

15.                               SEVERABILITY.  If one or more provisions of this Agreement are held to be unenforceable by a Court of competent jurisdiction, then such provisions shall be excluded from this Agreement and the balance of the Agreement shall remain in full force and effect.

 

16.                               BINDING EFFECT.  This Agreement shall inure to the benefit of and are binding upon, the Parties and their respective successors and permitted assigns.

 

17.                               AMENDMENT.  This Agreement may only be amended in writing signed by both Parties.

 

18.                               NOTICE.                                          All notices and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on date of delivery, if delivered personally, or on the date delivered if by overnight mail, or certified mail, postage pre-paid, if sent pre-paid and addressed as follows:

 

	
If   to Merlin:
    	
Merlin   CSI, LLC
    
	
 
    	
Attn:   Tom Voorhees, President and CEO
    
	
 
    	
13135   Danielson Street, #212
    
	
 
    	
Poway,   CA 92064
    
	
 
    	
 
    
	
If   to Company:
    	
OncoSec   Medical Incorporated
    
	
 
    	
Legal   Department
    
	
 
    	
Attn:   Sheela Mohan-Peterson
    
	
 
    	
9810   Summers Ridge Rd., Ste. 110
    
	
 
    	
San   Diego, CA 92121
    

 

A Party may change its address by providing notice to the other Party.

 

19.                               ARBITRATION.

 

Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, including, but not limited to, the validity and enforceability of this Agreement under all Federal and State Laws or otherwise, will be settled by binding arbitration in accordance with the appropriate Rules of the Judicial Arbitration and Mediation Services (JAMS), and judgment upon the award rendered may be entered in any court having jurisdiction thereof.  Any such arbitration award will be binding on the Parties. Such arbitration will be conducted before JAMS in Ontario, California.

 

 

The Parties may seek or obtain any provisional remedy, including, but not limited to, prejudgment attachment and injunctive relief, in a court of competent jurisdiction without waiving the right to arbitration.

 

Within ten (10) days of the service of a claim or demand for arbitration by a Party upon the other Party, the Parties will select from JAMS a mutual arbitrator to hear this matter.  If the Parties are unable to select a mutually acceptable arbitrator, then each Party will designate in writing and appoint one arbitrator from JAMS and these two arbitrators will then select a third arbitrator from JAMS, who will then serve as the sole arbitrator in this matter.  Each Party will pay their or its own party-appointed arbitrator fees and expenses in connection with the arbitration, subject to recovery by the prevailing Party, as set forth in Paragraph 22 below.  The Parties acknowledge that they are willing to have the third arbitrator paid at his or her normal hourly rate, which cost is to be split between the Parties.

 

The arbitrators will be required to decide all matters in accordance with the applicable law and in accordance with the provisions of this Agreement.

 

20.                               ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement between the Parties and supersedes any and all other written or oral agreements between the Parties with respect to the subject matter of this Agreement.

 

21.                               GOVERNING LAW AND CONSENT TO JURISDICTION.  This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its principles of conflicts of laws.  The Parties hereto irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in the County of San Diego, State of California for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. The above provision in no ways affects the provisions of Section 19 pertaining to Arbitration.

 

22.                               ATTORNEY’S FEES.  If any action is necessary to enforce any provision of this Agreement, the prevailing party shall be entitled to recover all of its costs, including all attorney fees and court costs.

 

23.                               COUNTERPARTS.  This Agreement may be executed in one or more counterparts with either an original or facsimile or pdf signature considered to be an original, and all of which together shall constitute one and the same instrument.

 

 

IN WITNESS WHEREOF, the Company and Merlin have made this Agreement effective as of the Effective Date.

 

	
MERLIN   CSI, LLC
    	
ONCOSEC   MEDICAL INCORPORATED
    
	
 
    	
 
    
	
By:
    	
/s/ Tom Voorhees
    	
 
    	
By:
    	
/s/ Punit Dhillon
    
	
Name:
    	
Tom Voorhees
    	
 
    	
Name:
    	
Punit Dhillon
    
	
Title:
    	
CEO
    	
 
    	
Title:
    	
President & CEO
    

 

 

EXHIBIT A

 

A.            SCOPE OF WORK

 

1.              Research & Product Development Project 1

2.              Research & Product Development Project 2

 

B.            SERVICES TO BE PROVIDED

 

1.              Research, Development, Testing and Regulatory Filing of Project 1

2.              Research, Development, Testing and Regulatory Filing of Project 2

 

C.            PRODUCT DESCRIPTION

 

1. Project 1

2.  Project 2

 

D.            PROJECT DELIVERABLES

 

1.              All Product Development Phase Reviews (through regulatory filing) for both Products

 

 

EXHIBIT B — HOURLY

 

PRICING AND PAYMENT TERMS

 

·                       Merlin Labor Estimate $1,525,000

 

PURCHASE ORDER

 

Company will place a purchase order with Merlin in the amount of One Million, Five Hundred and Twenty-Five Thousand Dollars ($1,525,000).

 

PAYMENT TERMS

 

This is a time and materials contract.  Monthly invoices will be provided for service provided. Payment is due within thirty (30) calendar days of receipt of such invoice.

 

LATE PAYMENT PENALTY

 

A late payment penalty will be imposed following any payments that are deemed late as per payment terms section above.  A late payment penalty of two percent (2%) of the invoiced amount will be immediately due.Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADAMIS PHARMACEUTICALS CORPORATION

2015 BONUS PLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Excludes those covered under the Field Sales Incentive Plans

 

 

 

1

 

 

Adamis Pharmaceuticals Corporation

2015 Bonus Plan

The Adamis Pharmaceuticals Corporation (“Adamis” or the “Company”) 2015 Bonus Plan (the “Plan”) is designed to offer employees a performance based plan that rewards the achievement of corporate goals, as well as individual goals that are consistent with the corporate goals.

 

Purpose of the Plan

 

The Plan is designed to:

 

	
·
	
Provide a bonus program that helps achieve overall corporate goals and enhances shareholder value

 

	
·
	
Reward individuals for achievement of corporate and individual goals

 

	
·
	
Encourage teamwork among all disciplines within the Company

 

	
·
	
Offer an attractive bonus program to help attract and retain key employees

 

Plan Governance

 

The Compensation Committee of the Board of Directors is responsible for reviewing and approving the Plan and any proposed modifications to the Plan. The President and CEO of Adamis is responsible for administration of the Plan; provided that the Compensation Committee of the Board of Directors is responsible for reviewing and approving all compensation, including compensation under this Plan, for all officers, vice presidents, executive directors and any other employees with an annual base salary greater than or equal to $250,000.

 

Eligibility

 

All regular employees of the Company who are regularly scheduled to work at least 20 hours per week will be eligible to participate in the Plan, other than any employee eligible to participate in the Company’s Field Sales Incentive Plans. Temporary employees and part-time employees (who are regularly scheduled to work less than 20 hours per week) are not included in this Plan. In order to be eligible to receive any bonus award (or “Bonus”) under this Plan, a participant: (a) must have commenced their employment with the Company prior to October 1, 2015 and remained continuously employed through December 31, 2015 and until the time Bonuses are paid; and (b) must be an employee in good standing (e.g., not on a performance improvement plan as of December 31, 2015 or an Unacceptable performer as determined during the 2015 review cycle), as determined by the Compensation Committee of the Board of Directors or the President and CEO of Adamis, as applicable in their sole discretion. Employees joining during the bonus plan year will have their actual bonus amount prorated based on their actual time with the Company during the Plan year.

 

A participant whose employment terminates voluntarily prior to the payment of a Bonus award will not be eligible to receive a Bonus award. Continued employment is a condition of payout for the plan. If a participant’s employment is terminated involuntarily during the Plan year, or prior to payment of Bonus awards, it will be at the absolute discretion of the Company whether or not a Bonus award payment is made.

 

Corporate and Individual Performance

 

The President and CEO will present to the Compensation Committee of the Board of Directors a list of the overall corporate goals for the Plan year, which is subject to approval by both the Compensation Committee and the independent members of the Board of Directors. All participants in the Plan will then develop a list of key individual goals, which will be approved by their manager and used for the basis of the performance review and individual performance rating.

 

The total bonus pool for the Plan will be based on achievement of the 2015 corporate goals and, where applicable, the individual’s annual performance review rating.

 

Bonus Awards

 

The Bonus will be paid in cash and is based on achievement of the 2015 corporate goals and achievement of individual goals. The Bonus will be calculated by using the base salary as of December 31, 2015, weighting factor, target bonus percentage, and goal multipliers as identified below:

 

2

 

 

Weighting Factor

 

The relative weight between the corporate and individual Bonus components will vary based on levels within the organization. The weighting factors will be reviewed annually and adjusted, as necessary or appropriate. The weighting for

2015 will be as follows:

 

					
	
Position
	
 
	
Corporate
	
 
	
Individual

	
President and CEO
	
100%
	
 
	
 

	
Group K (EVP Level Officer)
	
100%
	
 
	
 

	
Group J (SVP Officers)
	
100%
	
 
	
 

	
Group I (Non-Officer VPs)
	
80%
	
 
	
20%

	
Group H (Executive Directors)
	
80%
	
 
	
20%

	
Group G (Senior Directors)
	
80%
	
 
	
20%

	
Group F (Directors)
	
80%
	
 
	
20%

	
Group E (Senior Managers)
	
60%
	
 
	
40%

	
Group D (Managers)
	
60%
	
 
	
40%

	
Group C
	
40%
	
 
	
60%

	
Group A & B
	
20%
	
 
	
80%

 

Target Bonus Percentages

 

Bonus amounts will be determined by applying a “target bonus percentage” to the base salary of employees in the Plan. Following are the 2015 target bonus percentages:

 

			
	
Position
	
 
	
Target Bonus Percentages

	
President and CEO
	
50%

	
Group K
	
45%

	
Group J
	
40%

	
Group I
	
30%

	
Group H
	
25%

	
Group G
	
20%

	
Group F
	
17%

	
Group E
	
15%

	
Group D
	
12%

	
Group C
	
10%

	
Group B
	
10%

	
Group A
	
10%

 

The base salary as of December 31, 2015 times the target bonus percentage will be used to establish the target Bonus amount for the 2015 year.

 

3

 

 

Goal Multipliers

 

Corporate Goal Multiplier: The following scale will be used by the Compensation Committee of the Board of Directors and the independent members of the Board of Directors to determine the “total corporate goal multiplier” based upon measurement of actual corporate performance versus the pre-established corporate goals. The Compensation Committee will evaluate each corporate goal as follows:

 

			
	
Performance Category
	
 
	
Goal Multiplier

	
1.    Performance for the year significantly exceeded the goal or was excellent in view of prevailing conditions

 
	
100-150%

	
2.    Performance fully met the year’s goal or is considered achieved in view of prevailing conditions

 
	
100%

	
3.    Performance for the year met some aspects of the goal but not all or met most aspects in view of prevailing conditions

 
	
75-100%

	
4.    Performance for the year was significantly less than the goal (i.e., below 75%)

 
	
0%

 

Each goal is evaluated separately, weighting applied and a total corporate goal multiplier is reached. A total corporate goal multiplier of at least 75% is required prior to any payout of Bonuses under the Plan (provided, however, that the Compensation Committee shall retain the discretion to determine otherwise and to approve payouts based on a multiplier of less than 75%), and the total corporate goal multiplier may not exceed 150%.

 

Individual Goal Multiplier: The “individual goal multiplier” will be determined by taking into account the performance rating (Outstanding, Exceeds, Meets, Fair, etc.) given to the individual through the 2015 review cycle as well as any other relevant criteria relating to the individual’s job performance during 2015. 

 

Calculation of Bonus Amount

 

The example below shows a sample Bonus amount calculation under the Plan. First, a target Bonus amount is calculated for each Plan participant by multiplying the employee’s base salary by the target bonus percentage. This dollar figure is then divided between the corporate component and the individual component based on the weighting factor for that position. This calculation establishes specific dollar target Bonus amounts for the performance period for each of the corporate and individual components.

 

4

 

 

At the end of the performance period, corporate and individual goal multipliers will be established using the criteria described above. The corporate goal multiplier, which is based on overall corporate performance, is used to calculate the corporate component of the Bonus amount for all Plan participants. This is accomplished by multiplying the target corporate Bonus amount established for each individual by the total corporate goal multiplier. The individual goal multiplier, which is based on an individual’s performance rating, is used in the same way to calculate the actual individual component of the Bonus amount.

 

			
	
Example: Actual Bonus Amount Calculation
	
 
	
 

	
Group Level
	
B

	
Position
	
Executive Assistant

	
Base Salary as of December 31
	
$50,000

	
Target Bonus Percentage
	
10%

	
Performance Rating
	
Exceeds

	
Target Bonus Amount
	
$5,000

	
 
	
 

	
Target Bonus Components:
	
 

	
Target Bonus Amount based on corporate performance (20%)
	
$1,000

	
Target Bonus Amount based on individual performance (80%)
	
$4,000

	
 
	
 

	
Corporate Goal Multiplier
	
80%

	
Individual Goal Multiplier 
	
105%

	
 
	
 

	
Actual Bonus Amount Calculation:
	
 

	
Corporate Bonus Amount
	
$800 ($1,000 x 80%)

	
Individual Bonus Amount
	
$4,200 ($4,000 x 105%)

	
Actual Cash Bonus Amount
	
$5,000

 

Payment of the Bonus Amounts

 

Annual performance reviews for Plan participants will be completed by January 31, 2016. Payments of actual Bonus amounts will be made as soon as practical, but not later than March 15, 2016.  Participants’ entitlement to Bonuses under this Plan does not occur until the Bonuses are actually paid.  This plan is not intended to be subject to Section 409A of the Internal Revenue Code of 1986, as amended.

 

Company’s Absolute Right to Alter or Abolish the Plan

 

The Compensation Committee of the Board of Directors reserves the right in its absolute discretion to terminate and/or abolish all or any portion of the Plan at any time or to alter the terms and conditions under which a Bonus will be paid.  In the event of the Plan’s termination prior to the payment of a Bonus, such Bonus will not be payable under this Plan.  Such discretion may be exercised any time before, during, and after the Plan year is completed.  No participant shall have any right to receive any payment until actual delivery of such compensation. Notwithstanding the generality of the foregoing, at the Company’s discretion, and subject to compliance in all events with, and if and only if permitted by, applicable federal and state securities laws and the listing rules and requirements of any stock exchange or trading market on which the Company’s common stock is listed or traded, all or a portion of a Bonus payment may be made in vested shares of the Company’s common stock.  No payment in stock or other equity under this Plan may be made if such issuance or payment would conflict with any such securities laws or listing rules or requirements.

 

The Compensation Committee, in its discretion, may also determine whether to increase the payout under the Plan for extraordinary achievement or to reduce payout if economic and business conditions warrant such action.

 

Employment Duration/Employment Relationship

 

This Plan does not, and the Company's policies and practices in administering this Plan do not, constitute an express or implied contract or other agreement concerning the duration of any participant's employment with the Company.  The employment relationship of each participant is "at will" and may be terminated at any time by the Company or by the participant with or without cause.

 

5

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