Document:

mstx-ex1040_153.htm

 

Exhibit 10.40

MAST THERAPEUTICS, INC.

NOTICE OF GRANT OF RESTRICTED STOCK UNITS

 

The Awardee has been granted an award of Restricted Stock Units (the “Award”) pursuant to the Mast Therapeutics, Inc. 2015 Omnibus Incentive Plan (the “Plan”), each of which represents the right to receive on the applicable Settlement Date one (1) Share common stock of Mast Therapeutics, Inc. (the “Company”), as follows:

 

	
Awardee:
	
 
	
 
	
 

	
Grant Approval Date:
	
January 17, 2017
	
 
	
 

	
Number of Restricted Stock Units:
	
          , subject to adjustment as provided by the Restricted Stock Units Agreement.

	
Settlement Date:
	
For each Restricted Stock Unit, except as otherwise provided by the Restricted Stock Units Agreement, the first date that is administratively practicable following the date on which such unit becomes a Vested Unit (if any) in accordance with the vesting schedule set forth below; but no later than March 15th of the calendar year following the calendar year in which the Restricted Stock Units become Vested Units.

	
Vested Units:
	
Except as provided by the Restricted Stock Units Agreement and provided that the Awardee’s service has not terminated prior to the consummation of the Merger (as defined in the Restricted Stock Units Agreement), the Number of Restricted Stock Units shall become Vested Units as follows: 

The Award shall become one hundred percent (100%) vested and non-forfeitable upon the occurrence of all the following events, with vesting occurring on the date that the last of such events occurs; provided that all such events occur on or before July 6, 2017:

	
 
	
•
	
The consummation of the Merger on or before July 6, 2017; and

	
 
	
•
	
Awardee executing and not revoking a release of claims in a form satisfactory to the Company taking into account the effect of this Award, the Merger, and any change, if any, in the Awardee’s service relationship with the Company which release must become effective in accordance with its terms no later than sixty (60) days following the consummation of the Merger.1

By their signatures below or by electronic acceptance or authentication in a form authorized by the Company, the Company and the Awardee agree that the Award is governed by this Grant Notice and by the provisions of the Plan and the Restricted Stock Units Agreement, both of which are made a part of this document.  The Awardee acknowledges that copies of the Plan, Restricted Stock Units Agreement, and the prospectus for the Plan have been made available to the Awardee.  

In addition, Awardee agrees that in accordance with the determination made by the Company’s Board of Directors, all of the Awardee’s outstanding stock options previously granted under the Plan (which are also listed as an attachment to this Grant Notice) shall be cancelled immediately prior to, but contingent upon, the consummation of the Merger and that such stock options shall cease to be exercisable as of such date.  In addition, Awardee also waives any right to accelerated vesting with respect to such stock options regardless of any provision in any agreement or plan to the contrary.  [Further, Awardee agrees that this Award shall not be subject to the terms of the Executive Severance Agreement dated March 23, 2016]2.  Thus, the Awardee shall not be entitled to this Award, which shall not be treated as having been granted, until this Agreement is executed.  The Awardee represents that the Awardee has read and is familiar with the provisions of the Plan and Restricted Stock Units Agreement, and 

	
	 

	
1 
	
 Notices of Grant to Mast’s non-employee directors do not include this general release requirement.

	
2 
	
 Included only in Notices of Grant to Mast’s executive officers. 

 

 

hereby accepts the Award subject to all of their terms and conditions.  Failure by the Awarded to execute this Grant Notice on or before January 27, 2017 shall result in this Award being null and void.

 

	
MAST THERAPUETICS, INC.
	
 
	
AWARDEE
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
By: 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Signature
	
 

	
Its: 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Date
	
 

	
Address:
	
3611 Valley Centre Drive
	
 
	
 
	
 

	
 
	
Suite 500
	
 
	
Address
	
 

	
 
	
San Diego, CA 92130
	
 
	
 
	
 

 

	
ATTACHMENTS:
	
Restricted Stock Units Agreement; 2015 Omnibus Incentive Plan, as amended to the Grant Date; Plan Prospectus; List of Awardee’s outstanding stock options

 

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MAST THERAPEUTICS INC.

RESTRICTED STOCK UNITS AGREEMENT

 

Mast Therapeutics, Inc. (“Mast” or the “Company”) has granted to the Awardee named in the Notice of Grant of Restricted Stock Units (the “Grant Notice”) to which this Restricted Stock Units Agreement (the “Agreement”) is attached an Award consisting of Restricted Stock Units (the “Units”) subject to the terms and conditions set forth in the Grant Notice and this Agreement.  The Award has been granted pursuant to and shall in all respects be subject to the terms conditions of the Mast Therapeutics, Inc. 2015 Omnibus Incentive Plan (the “Plan”), as amended to the Grant Date attached as Exhibit A, the provisions of which are incorporated herein by reference.  By signing the Grant Notice, the Awardee: (a) acknowledges receipt of and represents that the Awardee has read and is familiar with the Grant Notice, this Agreement, the Plan and a prospectus for the Plan prepared in connection with the registration with the Securities and Exchange Commission of the shares issuable pursuant to the Award (the “Plan Prospectus”), (b) accepts the Award subject to all of the terms and conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Company’s Board of Directors or its delegatee(s) (collectively, the “Board”) upon any questions arising under the Grant Notice, this Agreement or the Plan.

1.Definitions and Construction.

1.1Definitions.  Unless otherwise defined herein, capitalized terms shall have the meanings assigned in the Grant Notice or the Plan. In addition, the term “Merger” shall mean the transaction contemplated by that certain Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), by and among Mast, Savara Inc. (“Savara”) and Victoria Merger Corp., a Delaware corporation and wholly-owned subsidiary of Mast (the “Merger Sub”), pursuant to which, among other things, Mast would acquire all shares of Savara’s capital stock through the exchange of such shares for shares of common stock of Mast resulting in Mast’s stockholders collectively owning approximately 24%, and Savara’s stockholders collectively owing approximately 76%, of the combined company on a pro-forma basis, subject to adjustment based on the Mast’s net cash balance and Mast’s and Savara’s capitalization at closing, and, upon the terms and conditions set forth in the Merger Agreement, Merger Sub would be merged with and into Savara (the “Merger”), with Savara, as the surviving entity in the Merger, becoming a wholly-owned subsidiary of Mast.

1.2Construction.  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.Administration.

All questions of interpretation concerning the Grant Notice, this Agreement and the Plan shall be determined by the Board.  All such determinations shall be final and binding upon all persons having an interest in the Award as provided by the Plan.  Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent or actual authority with respect to such matter, right, obligation, or election.

3.The Award.

3.1Grant of Units.  On the Grant Date, the Awardee shall acquire, subject to the provisions of this Agreement, the Number of Restricted Stock Units set forth in the Grant Notice, subject to adjustment as provided in Section 9 of this Agreement.  Each Unit represents a right to receive on a date determined in accordance with the Grant Notice and this Agreement one (1) Share.

3.2No Monetary Payment Required.  The Awardee is not required to make any monetary payment (other than applicable tax withholding, if any) as a condition to receiving the Units or Shares issued upon settlement of the Units, the consideration for which shall be past services actually rendered and/or future services to 

 

 

be rendered to the Company or an affiliate.  Notwithstanding the foregoing, if required by applicable state corporate law, the Awardee shall furnish consideration in the form of cash or past services rendered having a value not less than the par value of the Shares issued upon settlement of the Units.

4.Vesting of Units.

The Units shall vest and become Vested Units as provided in the Grant Notice.

5.Company Reacquisition Right.

5.1Grant of Company Reacquisition Right.  Except to the extent otherwise provided in an employment agreement between the Company or an Affiliate and the Awardee, in the event that the Awardee’s Service terminates for any reason or no reason, with or without cause prior to the consummation of the Merger, the Awardee shall forfeit and the Company shall automatically reacquire all Units which are not, as of the time of such termination, Vested Units (“Unvested Units”), and the Awardee shall not be entitled to any payment therefor (the “Company Reacquisition Right”). In addition, if the Merger is not consummated on or before July 6, 2017, then the Award shall be forfeited and the Awardee shall not become entitled to any compensation under this Agreement.

5.2Dividends, Distributions and Adjustments.  Upon a dividend or distribution to the stockholders of the Company paid in shares of Stock or other property, or any other adjustment upon a change in the capital structure of the Company as described in Section 10.2 of the Plan, any and all new, substituted or additional securities or other property (other than regular, periodic dividends paid on Shares pursuant to the Company’s dividend policy) to which the Awardee is entitled by reason of the Awardee’s ownership of Unvested Units shall be immediately subject to the Company Reacquisition Right and included in the terms “Units” and “Unvested Units” for all purposes of the Company Reacquisition Right with the same force and effect as the Unvested Units immediately prior to the dividend, distribution or adjustment, as the case may be.  For purposes of determining the number of Vested Units following a dividend, distribution or adjustment, credited Service shall include all service with the Company or an Affiliate at the time the service is rendered.

6.Settlement of the Award.

6.1Issuance of Shares.  Subject to the provisions of Section 6.3 of this Agreement, the Company shall issue to the Awardee on the settlement date with respect to each Vested Unit to be settled on such date one (1) Share.  Shares issued in settlement of Units shall not be subject to any restriction on transfer other than any such restriction as may be required pursuant to Section 6.3 of this Agreement, Section 7 of this Agreement, other applicable laws, insider trading policies or any agreement between the Awardee and the Company applicable to the Shares (collectively, “Share Sale Restrictions”).

6.2Beneficial Ownership of Shares; Certificate Registration.  The Awardee hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Awardee with the broker designated by the Company with which the Awardee has an account, any or all Shares acquired by the Awardee pursuant to the settlement of the Award.  Except as provided by the preceding sentence, a certificate for the Shares as to which the Award is settled shall be registered in the name of the Awardee, or, if applicable, in the names of the heirs of the Awardee.

6.3Restrictions on Grant of the Award and Issuance of Shares.  The grant of the Award and issuance of Shares upon settlement of the Award shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities.  No Shares may be issued hereunder if the issuance of such Shares would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Shares may then be listed.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares subject to the Award shall relieve the Company of any liability in respect of the failure to issue such Shares as to which such requisite authority shall not have been obtained.  As a condition to the settlement of the Award, the Company may require the Awardee 

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to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

6.4Fractional Shares.  The Company shall not be required to issue fractional Shares upon the settlement of the Award.

7.Tax Withholding.

7.1In General.  At the time the Grant Notice is executed, or at any time thereafter as requested by the Company, the Awardee hereby authorizes withholding from payroll and any other amounts payable to the Awardee, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax (including any social insurance) withholding obligations of the Company and its affiliates, if any, which arise in connection with the Award, the vesting of Units or the issuance of Shares in settlement thereof.  The Company shall have no obligation to deliver shares of Stock until such tax withholding obligations of the Company have been satisfied by the Awardee.

7.2Assignment of Sale Proceeds; Payment of Tax Withholding by Check.  Subject to compliance with applicable law and any Share Sale Restrictions, the Company may permit the Awardee to satisfy the tax withholding obligations in accordance with procedures established by the Company providing for either (i) delivery by the Awardee to the Company or a broker approved by the Company of properly executed instructions, in a form approved by the Company, providing for the assignment to the Company of the proceeds of a sale with respect to some or all of the Shares being acquired upon settlement of Units, or (ii) payment by check.  

7.3Withholding in Shares.  The Company may require, or permit, the Awardee to satisfy all or any portion of the Company’s or Affiliate’s tax withholding obligations by deducting from the Shares otherwise deliverable to the Awardee in settlement of the Award a number of whole Shares having a fair market value, as determined by the Company as of the date on which the tax withholding obligations arise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates.

8.Effect of Change in Control on Award.

In the event of a Change in Control, except to the extent that the Board determines to cash out the Award, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of the Awardee, assume or continue the Company’s rights and obligations with respect to all or any portion of the outstanding Units or substitute for all or any portion of the outstanding Units substantially equivalent rights with respect to the Acquiror’s stock.  For purposes of this Section, a Unit shall be deemed assumed if, following the Change in Control, the Unit confers the right to receive, subject to the terms and conditions of the Plan and this Agreement, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a Share on the effective date of the Change in Control was entitled; provided, however, that if such consideration is not solely common stock of the Acquiror, the Board may, with the consent of the Acquiror, provide for the consideration to be received upon settlement of the Unit to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Share pursuant to the Change in Control.

9.Adjustments for Changes in Capital Structure.

Subject to any required action by the stockholders of the Company and the requirements of Section 409A of the Code to the extent applicable, in the event of any change in the Shares effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Shares (excepting normal cash dividends) that has a material effect on the Fair Market Value of Shares, appropriate and proportionate adjustments shall be made in the number of Units subject to the Award and/or the number and kind of shares to be issued in settlement of the Award, in order to prevent dilution or enlargement of the Awardee’s rights under the 

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Award.  For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.”  Any fractional Share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number.  Such adjustments shall be determined by the Board, and its determination shall be final, binding and conclusive.

10.Rights as a Stockholder or Employee.

The Awardee shall have no rights as a stockholder with respect to any Shares which may be issued in settlement of this Award until the date of the issuance of a certificate for such Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 9 of this Agreement.  If the Awardee is an Employee, the Awardee understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between the Company or an Affiliate and the Awardee, the Awardee’s employment is “at will” and is for no specified term.  Nothing in this Agreement shall confer upon the Awardee any right to continue in the service of the Company or an Affiliate or interfere in any way with any right to terminate the Awardee’s service at any time.

11.Legends.

The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing Shares issued pursuant to this Agreement.  The Awardee shall, at the request of the Company, promptly present to the Company any and all certificates representing Shares acquired pursuant to this Award in the possession of the Awardee in order to carry out the provisions of this Section.

12.Miscellaneous Provisions.

12.1Termination or Amendment.  The Board may terminate or amend the Plan or this Agreement at any time; provided, however, that except as provided in Section 8 of this Agreement in connection with a Change in Control, no such termination or amendment may adversely affect the Awardee’s rights under this Agreement without the consent of the Awardee unless such termination or amendment is necessary to comply with applicable law or government regulation, including, but not limited to, Section 409A.  No amendment or addition to this Agreement shall be effective unless in writing.

12.2Nontransferability of the Award.  Prior to the issuance of Shares on the applicable Settlement Date, neither this Award nor any Units subject to this Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Awardee or the Awardee’s beneficiary, except transfer by will or by the laws of descent and distribution.  All rights with respect to the Award shall be exercisable during the Awardee’s lifetime only by the Awardee or the Awardee’s guardian or legal representative.

12.3Further Instruments.  The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

12.4Binding Effect.  This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Awardee and the Awardee’s heirs, executors, administrators, successors and assigns.

12.5Delivery of Documents and Notices.  Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Awardee by the Company or any Affiliate, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature to the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

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(a)Description of Electronic Delivery.  The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Awardee electronically.  In addition, the Awardee may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time.  Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.

(b)Consent to Electronic Delivery.  The Awardee acknowledges that the Awardee has read Section 12.5(a) of this Agreement and consents to the electronic delivery of the Plan documents and Grant Notice, as described in Section 12.5(a).  The Awardee acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Awardee by contacting the Company by telephone or in writing.  The Awardee further acknowledges that the Awardee will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails.  Similarly, the Awardee understands that the Awardee must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.  The Awardee may revoke his or her consent to the electronic delivery of documents described in Section 12.5(a) or may change the electronic mail address to which such documents are to be delivered (if Awardee has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail.  Finally, the Awardee understands that he or she is not required to consent to electronic delivery of documents described in Section 12.5(a).

12.6Integrated Agreement.  The Grant Notice, this Agreement and the Plan, together with any employment, service or other agreement between the Awardee and the Company or an Affiliate referring to the Award, shall constitute the entire understanding and agreement of the Awardee and the Company or an Affiliate with respect to the subject matter contained herein or therein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Awardee and the Company or an Affiliate with respect to such subject matter other than those as set forth or provided for herein or therein.  To the extent contemplated herein or therein, the provisions of the Grant Notice, this Agreement and the Plan shall survive any settlement of the Award and shall remain in full force and effect.

12.7Applicable Law.  This Agreement shall be governed by the laws of the State of California as such laws are applied to agreements between California residents entered into and to be performed entirely within the State of California.

12.8Counterparts.  The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

5mstx-ex1048_402.htm

 

Exhibit 10.48

SEPARATION AGREEMENT

AND

GENERAL RELEASE OF CLAIMS

THIS SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (hereinafter “Agreement”) is entered into by and between R. Martin Emanuele (hereinafter “Employee”) and Mast Therapeutics, Inc. (hereinafter “Mast”).  Employee and Mast hereinafter are collectively referred to as “the Parties.”

RECITALS

A.Mast is a corporation and is doing business in the State of California.

B.Employee has been employed by Mast as a Senior Vice President, Development.

C.On or about October 28, 2016, Employee’s employment with Mast terminated as part of a reduction in force. 

D.In accordance with the terms of the Executive Severance Agreement, dated March 23, 2016, between Employee and Mast (the “Executive Severance Agreement”), Employee desires to settle and compromise any and all possible claims and disputes he has against Mast arising out of their relationship to date, and to provide for a general release of any and all such claims. 

E.Mast has offered Employee part-time, temporary employment, to commence subsequent to the termination of Employee’s employment, and which will become effective no earlier than Employee’s execution of this Agreement, all in accordance with the Temporary Employment Agreement attached as Exhibit 2 to this Agreement.  

AGREEMENT

1.Termination of Employment.  Employee agrees that his employment with Mast terminated as of October 28, 2016 and he has complied with the provisions of Section 1.3 of the Executive Severance Agreement. 

2.Separation Pay/Consideration.  In consideration of the covenants and releases given herein, eight (8) days after Employee’s execution of this Agreement, Employee will become eligible to receive the following consideration:

a.Separation Pay.  Mast will tender a check to Employee in an amount of Two Hundred Fifty Six Thousand One Hundred Two Dollars and Fifty Three Cents ($256,102.53), less applicable federal and California payroll tax deductions, which is the equivalent of (i) nine (9) months of Employee’s base salary and (ii) the amount equal to the premiums necessary to continue Employee’s health insurance coverage in effect for Employee and Employee’s covered dependents under the Consolidated Omnibus Reconciliation Act of 1985, for a period of nine (9) months; 

b.Acceleration and Extension of Exercise Period of Stock Options.  Each stock option granted to Employee before and outstanding immediately prior to Employee’s termination of employment on October 28, 2016 will become vested with respect to 18.75% of the total number of shares that were subject to the stock option on its date of grant, which accelerated vesting shall be in addition to the shares that had vested and become exercisable in accordance with the stock option’s normal vesting schedule as of such date (provided that no stock option shall become vested and exercisable for more than the total number of shares that were subject to the stock option on its date of grant), and the exercise period for each such stock option shall be extended such that Employee may exercise the stock option, to the extent vested (after giving affect to the foregoing acceleration) and in accordance with the terms of the written agreement evidencing the stock option, any time after this Agreement becomes effective and prior to the close of business on July 31, 2017, as shown in Exhibit 3 attached to this Agreement; and

 

 

c.Unemployment Insurance Claim.  Mast will not oppose Employee’s claim for unemployment insurance benefits, and, if asked, will inform the California Employment Development Department (the “EDD”) that Employee was laid off by Mast as part of a reduction in force.  If Employee accepts Mast’s offer of part-time, temporary employment, if asked, Mast will inform the EDD of his part-time employment.  Employee may still be eligible for unemployment insurance benefits; however, if eligible, Employee’s wages from Mast may reduce Employee’s weekly benefit amount.

3.Release.  

a.Release.  Employee does hereby unconditionally, irrevocably and absolutely release and discharge Mast, its directors, officers, employees, agents, attorneys, stockholders, insurers, divisions, affiliates, successors and assigns, and any related holding, parent, sister or subsidiary corporations from any and all loss, liability, claims, demands, causes of action or suits of any type, whether in law and/or in equity, related directly or indirectly, or in any way connected with any transactions, affairs or occurrences between them to date, including, but not limited to, Employee’s employment with Mast and the termination of said employment.  This Agreement specifically applies, without limitation, to any and all wage claims, claims for unpaid expenses, contract claims, tort claims, claims for wrongful termination, and claims arising under Title VII of the Civil Rights Act of 1991, the Americans with Disabilities Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act, the Sarbanes-Oxley Act of 2002, the California Fair Employment and Housing Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the California Family Rights Act, the California Labor Code, the California Business and Professions Code, and any and all federal or state statutes or laws governing wages and/or discrimination in employment.  In addition, this Agreement specifically applies to any claims for age discrimination harassment or retaliation in employment, including any claims arising under the Age Discrimination in Employment Act or any other statutes or laws which govern age discrimination in employment.  Nothing in this Agreement shall be construed to mean that Employee is releasing or waiving claims to enforce this Agreement, workers’ compensation claims, claims for unemployment insurance benefits, claims for any vested retirement or claims that, by law, cannot be waived.

b.Section 1542 Waiver.  Employee does expressly waive all of the benefits and rights granted to him pursuant to California Civil Code section 1542, which reads as follows:

A general release does not extend to claims which the creditor does not know of or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Employee does certify that he has read all of this Agreement, including the release provisions contained herein and the quoted Civil Code section, and that he fully understands all of the same.  Employee hereby expressly agrees that this Agreement shall extend and apply to all unknown, unsuspected and unanticipated injuries and damages, as well as those that are now disclosed.

c.No Further Action.  Except as set forth in Section 5, Employee irrevocably and absolutely agrees that he will not prosecute nor allow to be prosecuted on his behalf, in any administrative agency, whether federal or state, or in any court, whether federal or state, any claim or demand of any type related to the matters released above, it being the intention of the Parties that with the execution by Employee of this release, Mast, its directors, officers, employees, agents, attorneys, stockholders, insurers, divisions, successors and assigns, and any related holding, parent or subsidiary corporations will be absolutely, unconditionally and forever discharged of and from all obligations to or on behalf of Employee related in any way to the matters discharged herein. 

4.Additional Provisions Regarding Release of Age Claims/OWBPA Provisions.  

a.ADEA Claims.  This section of the Agreement exclusively addresses issues relating to Employee’s release of claims arising under federal law involving discrimination on the basis of age in employment (age forty and above).  This section is provided separately, in compliance with federal law, including but not limited to the Older Workers’ Benefit Protection Act of 1990 (“OWBPA”), to ensure that Employee clearly understands his rights so that any release of age discrimination claims under federal law (the ADEA) is knowing and voluntary on the part of Employee.

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b.Review Period/OWBPA Provisions.  In accordance with the provisions of the OWBPA, Employee is aware of the following:  Employee represents, acknowledges and agrees that Mast has advised him, in writing, (i) to discuss this Agreement with an attorney, and to that extent, if any, that Employee has desired, Employee has done so; (ii) that Mast has given Employee forty-five (45) days from receipt of this Agreement to review and consider this Agreement before signing it, and Employee understands that he may use as much of this forty-five (45) day period as he wishes prior to signing; (iii) that no promise, representation, warranty or agreements not contained herein have been made by or with anyone to cause him to sign this Agreement; (iv) that he has read this Agreement in its entirety, and fully understands and is aware of its meaning, intent, content and legal effect; (v) that he is executing this release voluntarily and free of any duress or coercion; (vi) that this Agreement includes rights and claims under the federal Age Discrimination in Employment Act, as amended, and the federal OWBPA, as amended; and (vii) that this Agreement does not waive rights or claims that may arise after the date Employee signs this Agreement.

c.Review of Exhibit.  Employee represents, acknowledges and agrees that he has reviewed Exhibit 1, attached to this Agreement, which sets forth the job titles and ages of employees in the applicable decisional unit whose current position have been impacted by the reduction in force and the relevant job titles and ages of employees who were not impacted by the reduction in force.  

d.Effective Date of Agreement.  The Parties acknowledge that for a period of seven (7) days following the execution of this Agreement, Employee may revoke the Agreement, and the Agreement shall not become effective or enforceable until the revocation period has expired.  This Agreement shall become effective eight (8) days after it has been signed by Employee and Mast, and in the event the parties do not sign on the same date, then this Agreement shall become effective eight (8) days after the date it is signed by Employee.

5.Protected Rights.  Employee understands that nothing contained in this Agreement limits Employee’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state or local government agency or commission (“Government Agencies”), including an Age Discrimination in Employment Act charge or complaint, although Employee may have no right to relief by reason of the claims Employee has released herein.  Employee further understands that this Agreement does not limit Employee’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Mast.  Nothing in this Agreement shall restrict or limit any right Employee may have to receive a whistleblower award or bounty for information provided to the Securities and Exchange Commission.

6.Acknowledgements/Affirmations.  Employee acknowledges and affirms that he has been paid and/or has received all wages, bonuses, incentive compensation, accrued vacation and benefits to which employee may be entitled.  Employee also acknowledges and affirms that he has been provided information regarding his ability to continue to receive health insurance benefits as COBRA benefits after the termination of his employment.

7.Confidentiality/Non-Disparagement.  Employee agrees that all matters relative to this Agreement shall remain confidential.  Accordingly, Employee hereby agrees that, with the exception of his spouse, counsel and tax advisors, he shall not discuss, disclose or reveal to any other persons, entities or organizations, whether within or outside of Mast, the terms and conditions of this Agreement.  Employee agrees not to make any derogatory or adverse statements, written or verbal, regarding Mast or any of its present or former directors, officers or employees, to anyone.

8.Reference Requests.  Any reference requests concerning Employee will be referred to the Human Resources Department.  The only information that will be provided in response to such a request will be Employee’s dates of employment, his title, confirmation of his rate of pay, a statement that Employee was terminated as a result of a reduction in force and would not have been terminated but for that company action, and a statement that it is Mast’s policy to only provide that information.

9.Entire Agreement.  The Parties further declare and represent that no promise, inducement or agreement not herein expressed has been made to them and that this Agreement together with the Executive 

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Severance Agreement contain the full and entire agreement between and among the Parties, and that the terms of this Agreement are contractual and not a mere recital.

10.Applicable Law.  The validity, interpretation, and performance of this Agreement shall be construed and interpreted according to the laws of the State of California.

11.Dispute Resolution.  Except as set forth in Section 5, any dispute arising out of or related to this Agreement shall be resolved through binding arbitration through JAMS in San Diego, California, under the then current applicable rules of JAMS.  Each party shall be responsible for its or his or her own costs and attorneys’ fees in connection with the arbitration, as well as half of the costs of the arbitration.

12.Knowing and Voluntary Agreement.  Employee acknowledges that he has carefully read and fully understands all the provisions and effects of this Agreement.  Employee further acknowledges that he has been given the opportunity to consult with his own independent legal counsel with respect to the matters referenced in this Agreement.  Employee acknowledges that he has fully discussed this Agreement with his attorney or has voluntarily chosen to sign this Agreement without consulting an attorney, fully understanding the consequences of this Agreement.  Employee further acknowledges that he is entering into this Agreement without coercion or duress from Mast and that neither Mast nor any of its agents or attorneys has made any representations or promises concerning the terms or effects of this Agreement other than those set forth in this Agreement.

13.Complete Defense.  This Agreement may be pleaded as a full and complete defense and may be used as the basis for an injunction against any action, suit or proceeding which may be prosecuted, instituted or attempted by either party in breach thereof.

14.Counterparts.  This Agreement may be executed in counterparts and, if so executed, each such counterpart shall have the force and effect of an original.  A facsimile signature shall have the same force and effect as an original signature.

15.Severability.  If any provision of this Agreement, or part thereof, is held invalid, void or voidable as against public policy or otherwise, the invalidity shall not affect other provisions, or parts thereof, which may be given effect without the invalid provision or part.  To this extent, the provisions, and parts thereof, of this Agreement are declared to be severable.  

16.No Admission of Liability.  It is understood that this Agreement is not an admission of any liability by any person, firm, association or corporation but is in compromise of a disputed claim.

17.Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, legal representatives, successors and assigns.

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates shown below.

 

	
Dated:  October 31, 2016
	
/s/ R. Martin Emanuele
	
 

	
 
	
R. Martin Emanuele
	
 

	
 
	
 
	
 
	
 

	
 
	
Mast Therapeutics, Inc.
	
 

	
 
	
 
	
 

	
 
	
 
	
 

	
Dated:  October 31, 2016
	
By:
	
/s/ Brian Culley
	
 

	
 
	
Name: 
	
Brian Culley
	
 

	
 
	
Title: 
	
CEO
	
 

	
 
	
 
	
 
	
 

 

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