Document:

onct-ex103_248.htm

EXHIBIT 10.3

 

EMPLOYMENT TRANSITION AGREEMENT

This Employment Transition Agreement (the “Agreement”) is entered into by and among Frank Hsu, M.D. (“Executive”), and Oncternal Therapeutics, Inc. (the “Company”) effective as of February 25, 2021 (the “Effective Date”).

Recitals

WHEREAS, Executive is a party to that certain Employment Agreement with the Company dated August 26, 2019 (the “Employment Agreement”);

WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue employment with the Company, through March 15, 2021 (such date, or any earlier date on which Executive’s employment with the Company terminates for any reason, the “Transition Date”), on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties agree as follows:

Agreement

1.Employment Period.  

(a)Transition Date.  The Transition Date will occur on March 15, 2021, or such earlier date on which Executive’s employment with the Company terminates for any reason.  The parties acknowledge that the Transition Date will constitute the date of Executive’s “separation from service” (as defined in Treasury Regulation Section 1.409A-1(h)).  

(b)Employment Period.  During the period (the “Employment Period”) commencing on the Effective Date and ending on the Transition Date, Executive shall continue to be employed by the Company as its Chief Medical Officer.  Executive hereby agrees that, effective as of the Transition Date, he shall automatically cease to serve in the position of Chief Medical Officer (and any other titles or officer positions he may hold) of the Company (and any of its affiliates and subsidiaries). Executive shall execute any additional documentation necessary to effectuate the foregoing. 

(c)Duties and Responsibilities.  During the Employment Period, Executive will continue to serve the Company as an employee in the role of Chief Medical Officer of the Company.  Executive shall be subject to and comply with the policies and procedures generally applicable to employees of the Company to the extent the same are not inconsistent with any term of this Agreement.

(d)Exclusive Services.  During the Employment Period, Executive shall serve and will perform such duties as are customarily associated with his position.  Executive agrees to devote his full working time and attention to the business affairs of the Company.    

(e)Compensation During Employment Period.  As compensation for the services to be rendered by Executive to the Company during the Employment Period, Executive shall be paid the compensation and benefits:

(i)Base Salary.  For the period commencing on the Effective Date and ending on the Transition Date, the Company shall continue to pay to Executive his base salary at the rate of $400,000 per year, payable in accordance with the Company’s usual pay practices (and in any event no less frequently than monthly). 

 

 

(ii)Annual Bonus.  Executive acknowledges that he has received his annual bonus for 2020 and will not be eligible for any annual bonus for 2021.

(iii)Benefits.  Executive shall be entitled to participate in benefits under the Company’s benefit plans and arrangements, including, without limitation, any employee benefit plan or arrangement made available in the future by the Company to its senior employees, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements. The Company shall have the right to amend or delete any such benefit plan or arrangement made available by the Company to its senior employees and not otherwise specifically provided for herein.  

(iv)Expenses.  The Company shall reimburse Executive for reasonable out-of-pocket business expenses incurred in connection with the performance of his duties hereunder, subject to such policies as the Company may from time to time establish, and Executive furnishing the Company with evidence in the form of receipts satisfactory to the Company substantiating the claimed expenditures.

(v)Paid Time Off.  Executive shall be entitled to such periods of paid time off (“PTO”) each year as provided from time to time under the Company’s PTO policy and as otherwise provided for similarly-situated executive employees.

(vi)Stock Options.  During the Employment Period, Executive’s stock options granted by the Company shall continue to vest in accordance with the terms of the stock option agreement and the equity plan pursuant to which such stock options were issued.  Upon the termination of the Employment Period for any reason, Executive’s outstanding stock options will cease vesting and any unvested stock options shall terminate.

(f)At-Will Employment; Termination.  The Company and Executive acknowledge that Executive’s employment is and shall continue to be at-will, as defined under applicable law, and that Executive’s employment with the Company may be terminated by either party at any time for any or no reason, with or without notice.  If Executive’s employment terminates for any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided in this Agreement.  Executive’s employment under this Agreement shall be terminated immediately on the death of Executive.  

2.Transition Date Matters.  

(a)Compensation Through Transition Date.  On the Transition Date, the Company will issue to Executive his final paycheck, reflecting (i) his earned but unpaid base salary through the Transition Date, and (ii) all accrued, unused PTO due Executive through the Transition Date. In addition, as a result of his termination, Executive shall be entitled to receive all benefits, including continuation and conversion rights, provided upon termination of employment under the Company’s employee benefit plans and policies in accordance with the terms of such plans and policies.  The amounts described in this Section 2(a) and Section 2(b) below are referred to as the “Accrued Obligations.”

(b)Expense Reimbursements.  The Company, within thirty (30) days after the Transition Date, will reimburse Executive for any and all reasonable and necessary business expenses incurred by Executive in connection with the performance of his job duties prior to the Transition Date, which expenses shall be submitted to the Company with supporting receipts and/or documentation no later than the Transition Date.

(c)Benefits.  Executive’s entitlement to health benefits from the Company, and eligibility to participate in the Company’s health benefit plans, shall cease on the last day of the 

 

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calendar month during which the Transition Date occurs, except to the extent Executive elects to and is eligible to receive continued healthcare coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for himself and any covered dependents. Executive’s entitlement to other benefits from the Company, and eligibility to participate in the Company’s other benefit plans and programs, shall cease on the Transition Date.

(d)Relocation.  Effective February 1, 2021, Executive will not be eligible to receive any further relocation reimbursements or related tax-gross ups under Section 3(h) of the Employment Agreement.  In addition, Executive acknowledges that he was provided with temporary housing assistance under Section 3(h)(iv) of the Employment Agreement in excess of $14,000.  The Company acknowledges and agrees that it will not require the return or repayment of any such excess temporary housing costs.

3.Termination Benefits.  

(a)Termination Benefits.  Upon (i) the expiration of the Employment Period on March 15, 2021, or (ii) any earlier termination of the Employment Period for any reason (other than Executive’s discharge by the Company for Cause (as defined in the Employment Agreement) or Executive’s voluntary resignation), and subject to the occurrence of the Release Effective Date (as defined below), Executive’s compliance with Section 5 and the terms of the Proprietary Information Agreement (as defined below), including Section 5(d) regarding the return of Company property, and the provisions of Section 4, and in addition to the Accrued Obligations, the Company agrees to provide Executive with the following termination benefits, which shall be the sole benefits to which Executive is entitled in connection with his termination of employment (the “Termination Benefits”):

(i)Cash Severance.  The Company shall pay to Executive a cash termination payment equal to $200,000, which represents Executive’s base salary for a period of six (6) months, payable in cash in a lump sum within ten (10) days following the Release Effective Date; 

(ii)COBRA.  For the period beginning on the Transition Date and ending on the date which is six (6) full months following the Transition Date (or, if earlier, (A) the date on which the applicable continuation period under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) expires or (B) the date Executive becomes eligible to receive the equivalent or increased healthcare coverage from a subsequent employer) (such period, the “COBRA Coverage Period”), if Executive and his eligible dependents who were covered under the Company’s health insurance plans as of the Transition Date elect to have COBRA coverage and are eligible for such coverage, the Company shall directly pay or reimburse Executive on a monthly basis for an amount equal to (1) the monthly premium Executive is required to pay for continuation coverage pursuant to COBRA for Executive and his eligible dependents who were covered under the Company’s health plans as of the Transition Date (calculated by reference to the premium as of the Transition Date) less (2) the amount Executive would have had to pay to receive group health coverage for Executive and his covered dependents based on the cost sharing levels in effect on the Transition Date. If any of the Company’s health benefits are self-funded as of the Transition Date, or if the Company cannot provide the foregoing benefits in a manner that is exempt from Section 409A (as defined below) or that is otherwise compliant with applicable law (including, without limitation, Section 2716 of the Public Health Service Act), instead of providing the payments or reimbursements as set forth above, the Company shall instead pay to Executive the foregoing monthly amount as a taxable monthly payment for the COBRA Coverage Period (or any remaining portion thereof). Executive shall be solely responsible for all matters relating to continuation of coverage pursuant to COBRA, including, without limitation, the election of such coverage and the timely payment of premiums. Executive shall notify the Company immediately; and

 

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(iii)Vesting.  The vesting and/or exercisability of each of Executive’s outstanding unvested stock options shall be automatically accelerated on the Release Effective Date as to the number of stock options that would vest over the six (6) month period following the Transition Date had Executive remained continuously employed by the Company during such period.

(b)Release. As a condition to Executive’s receipt of the Termination Benefits, Executive shall execute and not revoke a general release of all claims in favor of the Company (the “Release”) in the form attached hereto as Exhibit A.  The date on which Executive’s Release becomes effective in accordance with its terms is referred to as the “Release Effective Date.”  In the event Executive’s Release does not become effective within the fifty-five (55) day period following the Transition Date, Executive shall not be entitled to the aforesaid Termination Benefits.  The Termination Benefits set forth above represent full satisfaction of the Company’s severance obligations to Executive under the Employment Agreement or otherwise.

(c)Exclusive Remedy; No Mitigation. The Termination Benefits shall be the exclusive termination benefits to which Executive is entitled, unless Executive has breached the provisions of this Agreement or the Proprietary Information Agreement, in which case Section 5(e) shall apply. Executive will not be required to mitigate the amount of any payment contemplated by this Agreement, nor will any earnings that Executive may receive from any other source reduce any such payment.

4.Warranty.  Executive acknowledges that, other than the compensation set forth in Section 2 above paid to him as provided therein and the Termination Benefits set forth in Section 3 above, he has or will have received all wages, accrued but unused vacation pay or paid time off, and other compensation or benefits due to him as a result of his employment with and termination from the Company, including any amounts due to him under the Employment Agreement.  Executive specifically acknowledges and agrees that the Company does not have any further obligations to Executive for any compensation under the Employment Agreement.  

5.Confirmation of Continuing Obligations.  

(a)Proprietary Information and Inventions.  Executive hereby expressly reaffirms his obligations under the Proprietary Information and Inventions Agreement (the “Proprietary Information Agreement”), a copy of which is attached hereto as Exhibit B and incorporated herein by reference, and agrees that such obligations shall survive the Transition Date.  

(b)Solicitation of Employees.  Executive shall not during the term of Executive’s employment and for a period of one (1) year following the Transition Date (the “Restricted Period”), directly or indirectly, solicit or attempt to solicit any employee of the Company or any of its affiliates to terminate his or her relationship with the Company or its affiliates in order to become an employee or consultant to or for any other person or entity, or otherwise encourage or solicit any employee of the Company or any of its affiliates to leave the Company or such affiliates for any reason or to devote less  than all of any such employee’s efforts to the affairs of the Company.

(c)Nondisparagement. Executive shall not disparage the Company, its board of directors, affiliates, or the Company’s business, and the Company shall not disparage, and shall instruct its then-current members of its board of directors and its executive officers not to disparage, Executive. Nothing contained herein shall preclude any person from enforcing the terms of this Agreement or providing truthful testimony in any judicial or other governmental proceeding when required to do so by legal process.

 

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(d)Return of Property.  By signing below, Executive represents and warrants that he has returned to the Company all lists, books and records of, or in connection with, the Company’s business, and all other property belonging to the Company, it being distinctly understood that all such lists, books and records, and other documents, are the property of the Company.  Executive further represents and warrants that he has not nor will he copy or transfer any Company information, nor will he maintain any Company information after the Transition Date.  Executive’s compliance with this Section 5(d) shall be a condition to his receipt of the Transition Benefits.

(e)Remedy in the Event of Breach.  The receipt of the Termination Benefits shall be subject to Executive not violating the provisions of this Agreement or the Proprietary Information Agreement. In the event Executive breaches the provisions of this Agreement or the Proprietary Information Agreement, in addition to all other rights and remedies available to the Company under law or in equity, all continuing payments and benefits to which Executive may otherwise be entitled pursuant to Section 3 shall be immediately suspended, provided that if it is subsequently determined by arbitration or by a court of competent jurisdiction that Executive did not breach such provisions, all suspended amount shall be promptly paid to Executive.  

(f)Whistleblower Provision.  Nothing herein shall be construed to prohibit Executive from communicating directly with, cooperating with, or providing information to, any government regulator, including, but not limited to, the U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, or the U.S. Department of Justice. Executive acknowledges that the Company has provided Executive with the following notice of immunity rights in compliance with the requirements of the Defend Trade Secrets Act: (i) Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of proprietary information that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, (ii) Executive shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of proprietary information that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal and (iii) if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the proprietary information to Executive’s attorney and use the proprietary information in the court proceeding, if Executive files any document containing the proprietary information under seal, and does not disclose the proprietary information, except pursuant to court order.

(g)Definitions. For purposes of this Section 5, the term “Company” means not only Oncternal Therapeutics, Inc., but also any company, partnership or entity which, directly or indirectly, controls, is controlled by or is under common control with Oncternal Therapeutics, Inc.

6.Cooperation.  Executive will reasonably cooperate, for up to one year following the Transition Date, in connection with any litigation, arbitration, proceedings, government hearing or investigation involving the Company or any other matter that relates to Executive’s employment period and about which the Executive has knowledge; provided, however, that such cooperation shall be provided at times that are mutually convenient to the Executive and the Company, and the Company shall make good faith efforts to arrange for such cooperation to be provided by the Executive telephonically.  The Company will provide Executive with reasonable advanced notice in the event Executive’s assistance is required.  The Company recognizes that Executive’s ability to cooperate will necessarily be impacted by other personal, professional and work obligations.  The Company will reimburse Executive for reasonable expenses incurred in providing such cooperation and will reasonably compensate Executive for his time. 

7.Arbitration.  Any dispute, claim or controversy based on, arising out of or relating to Executive’s employment or this Agreement shall be settled by final and binding arbitration in San Diego County, California, before a single neutral arbitrator in accordance with the National Rules for the 

 

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Resolution of Employment Disputes (the “Rules”) of the American Arbitration Association (“AAA”), and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction. The Rules may be found online at www.adr.org. Arbitration may be compelled pursuant to the California Arbitration Act (Code of Civil Procedure §§ 1280 et seq.). If the parties are unable to agree upon an arbitrator, one shall be appointed by the AAA in accordance with its Rules. Each party shall pay the fees of its own attorneys, the expenses of its witnesses and all other expenses connected with presenting its case; however, Executive and the Company agree that, to the extent permitted by law, the arbitrator may, in his or her discretion, award reasonable attorneys’ fees to the prevailing party; provided, further, that the prevailing party shall be reimbursed for such fees, costs and expenses within forty-five (45) days following any such award, but in no event later than the last day of Executive’s taxable year following the taxable year in which the fees, costs and expenses were incurred; provided, further, that the parties’ obligations pursuant to this sentence shall terminate on the tenth (10th) anniversary of the date of Executive’s termination of employment. Other costs of the arbitration, including the cost of any record or transcripts of the arbitration, AAA’s administrative fees, the fee of the arbitrator, and all other fees and costs, shall be borne by the Company. This Section 7 is intended to be the exclusive method for resolving any and all claims by the parties against each other for payment of damages under this Agreement or relating to Executive’s employment; provided, however, that Executive shall retain the right to file administrative charges with or seek relief through any government agency of competent jurisdiction, and to participate in any government investigation, including but not limited to (a) claims for workers’ compensation, state disability insurance or unemployment insurance; (b) claims for unpaid wages or waiting time penalties brought before the California Division of Labor Standards Enforcement; provided, however, that any appeal from an award or from denial of an award of wages and/or waiting time penalties shall be arbitrated pursuant to the terms of this Agreement; and (c) claims for administrative relief from the United States Equal Employment Opportunity Commission and/or the California Department of Fair Employment and Housing (or any similar agency in any applicable jurisdiction other than California); provided, further, that Executive shall not be entitled to obtain any monetary relief through such agencies other than workers’ compensation benefits or unemployment insurance benefits. This Agreement shall not limit either party’s right to obtain any provisional remedy, including, without limitation, injunctive or similar relief, from any court of competent jurisdiction as may be necessary to protect their rights and interests pending the outcome of arbitration, including without limitation injunctive relief, in any court of competent jurisdiction pursuant to California Code of Civil Procedure §1281.8 or any similar statute of an applicable jurisdiction. Seeking any such relief shall not be deemed to be a waiver of such party’s right to compel arbitration. Both Executive and the Company expressly waive their right to a jury trial.

8.Entire Agreement; Modification.  This Agreement, together with the Proprietary Information Agreement and the other agreements referenced herein and therein, constitutes the entire agreement of the Parties in respect of the subject matter contained herein and therein and supersede all prior or simultaneous representations, discussions, negotiations and agreements, whether written or oral, including, without limitation, the Employment Agreement.  The Employment Agreement shall be superseded entirely by this Agreement and the Employment Agreement shall be terminated and be of no further force or effect.  This Agreement may be amended or modified only with the written consent of Executive and an authorized representative of the Company. No oral waiver, amendment or modification will be effective under any circumstances whatsoever.  

9.Survival.  The covenants, agreements, representations and warranties contained in or made in this Agreement shall survive the Transition Date or any termination of this Agreement.

10.Third-Party Beneficiaries. Except as expressly set forth herein, this Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement. 

 

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11.Waiver. The failure of either party hereto at any time to enforce performance by the other party of any provision of this Agreement shall in no way affect such party’s rights thereafter to enforce the same, nor shall the waiver by either party of any breach of any provision hereof be deemed to be a waiver by such party of any other breach of the same or any other provision hereof. 

12.Section Headings. The headings of the several sections in this Agreement are inserted solely for the convenience of the parties and are not a part of and are not intended to govern, limit or aid in the construction of any term or provision hereof.

13.Notices. Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (a) by personal delivery when delivered personally; (b) by overnight courier upon written verification of receipt; (c) by email, telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (d) by certified or registered mail, return receipt requested, upon verification of receipt. Notice shall be sent to Executive at the address listed on the Company’s personnel records and to the Company at its principal place of business, or such other address as either party may specify in writing.

14.Severability.  In the event any provision of this Agreement is found to be unenforceable by an arbitrator or court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit contemplated herein to the fullest extent permitted by law.  If a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby.

15.Governing Law and Venue.  This Agreement will be governed by and construed in accordance with the laws of the United States of America and the State of California applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws principles thereof. Any suit brought hereon shall be brought in the state or federal courts sitting in San Diego County, California, the Parties hereby waiving any claim or defense that such forum is not convenient or proper. Each party hereby agrees that any such court shall have in personam jurisdiction over it and consents to service of process in any manner authorized by California law.

16.Non-transferability of Interest. Except as provided in this Section 16, no party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto.  The Company may assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company or any of its affiliates, provided, that the Company shall require such successor or affiliate to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, the term “Company” shall mean the Company and any successor to its business and/or assets or affiliate, which assumes and agrees to perform the duties and obligations of the Company under this Agreement by operation of law or otherwise, or to which Executive’s employment is transferred prior to the Transition Date. This Agreement is binding upon, and shall inure to the benefit of, the parties and their respective heirs, executors and administrators (including the Executive’s estate, in the event of the Executive’s death), and their respective permitted successors and assigns.

17.Gender. Where the context so requires, the use of the masculine gender shall include the feminine and/or neuter genders and the singular shall include the plural, and vice versa, and the word “person” shall include any corporation, firm, partnership or other form of association.

18.Counterparts; Facsimile or .pdf Signatures. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all 

 

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of which together shall constitute one and the same agreement. This Agreement may be executed and delivered by facsimile or by .pdf file and upon such delivery the facsimile or .pdf signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

19.Construction.  The language in all parts of this Agreement shall in all cases be construed simply, according to its fair meaning, and not strictly for or against any of the parties hereto. Without limitation, there shall be no presumption against any party on the ground that such party was responsible for drafting this Agreement or any part thereof.  

20.Withholding and Other Deductions; Right to Seek Independent Advice. All compensation payable to Executive hereunder shall be subject to such deductions as the Company is from time to time required to make pursuant to law, governmental regulation or order. Executive acknowledges and agrees that neither the Company nor the Company’s counsel has provided any legal or tax advice to Executive and that Executive is free to, and is hereby advised to, consult with a legal or tax advisor of his choosing.

21.Section 409A.  

(a)This Agreement is not intended to provide for any deferral of compensation subject to Section 409A of the Code, and, accordingly, the severance payments payable under Section 3 shall be paid no later than the later of: (A) the fifteenth (15th) day of the third month following Executive’s first taxable year in which such amounts are no longer subject to a substantial risk of forfeiture, and (B) the fifteenth (15th) day of the third month following first taxable year of the Company in which such amounts are is no longer subject to substantial risk of forfeiture, as determined in accordance with Code Section 409A and any Treasury Regulations and other guidance issued thereunder. To the extent applicable, this Agreement shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder. Each series of installment payments made under this Agreement is hereby designated as a series of “separate payments” within the meaning of Section 409A of the Code. 

 

(b)If Executive is a “specified employee” (as defined in Section 409A of the Code), as determined by the Company in accordance with Section 409A of the Code, on the date of Executive’s Separation from Service, to the extent that the payments or benefits under this Agreement constitute “non-qualified deferred compensation” subject to Section 409A of the Code and the delayed payment or distribution of all or any portion of such amounts to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, then such portion deferred pursuant to this Section 21(b) shall be paid or distributed to Executive in a lump sum on the earlier of (i) the date that is six (6) months following Executive’s Separation from Service, (ii) the date of Executive’s death or (iii) the earliest date as is permitted under Section 409A of the Code. Any remaining payments due under the Agreement shall be paid as otherwise provided herein.

 

(c)To the extent applicable, this Agreement shall be interpreted in accordance with the applicable exemptions from Section 409A of the Code. If Executive and the Company determine that any payments or benefits payable under this Agreement intended to comply with Sections 409A(a)(2), (3) and (4) of the Code do not comply with Section 409A of the Code, Executive and the Company agree to amend this Agreement, or take such other actions as Executive and the Company deem reasonably  necessary or appropriate, to comply with the requirements of Section 409A of the Code and the Treasury Regulations thereunder (and any applicable transition relief) while preserving the economic agreement of the parties. To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner that no payments payable under this Agreement shall be subject to an “additional tax” as defined in Section 409A(a)(1)(B) of the Code..

 

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(d)Any reimbursement of expenses or in-kind benefits payable under this Agreement shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv) and shall be paid on or before the last day of Executive’s taxable year following the taxable year in which Executive incurred the expenses. The amount of expenses reimbursed or in-kind benefits payable during any taxable year of Executive’s shall not affect the amount eligible for reimbursement or in-kind benefits payable in any other taxable year of Executive’s, and Executive’s right to reimbursement for such amounts shall not be subject to liquidation or exchange for any other benefit.

 

(e)In no event whatsoever shall the Company be liable for any taxes, penalties or interest that may be imposed on Executive pursuant to Section 409A or under any other similar provision of state tax law, including but not limited to, damages for failing to comply with Section 409A and/or any other similar provision of state tax law.

(f)To the extent that the payments or benefits under this Agreement are “non-qualified deferred compensation” subject to Section 409A of the Code, if the period during which you may deliver the Release required hereunder spans two calendar years, the payment of your Termination Benefits shall occur on the later of (i) January 1 of the second calendar year, or (ii) the first regularly-scheduled payroll date following your Release Effective Date.

22.RIGHT TO ADVICE OF COUNSEL.  EXECUTIVE ACKNOWLEDGES THAT HE HAS THE RIGHT, AND IS ENCOURAGED, TO CONSULT WITH HIS LAWYER; BY HIS SIGNATURE BELOW, EXECUTIVE ACKNOWLEDGES THAT HE HAS CONSULTED, OR HAS ELECTED NOT TO CONSULT, WITH HIS LAWYER CONCERNING THIS AGREEMENT.

[Signature Page Follows]

 

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THE UNDERSIGNED AGREE TO THE TERMS OF THIS AGREEMENT AND VOLUNTARILY ENTERS INTO IT WITH THE INTENT TO BE BOUND THEREBY.

 

	
Dated:
	
 
	
February 25, 2021
	
 
	
/s/ Frank Hsu M.D.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
Frank Hsu, M.D.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Dated:
	
 
	
February 25, 2021
	
 
	
ONCTERNAL THERAPEUTICS, INC.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
 
	
/s/ James B. Breitmeyer, M.D., Ph.D.

	
 
	
 
	
 
	
 
	
Name:
	
 
	
James B. Breitmeyer, M.D., Ph.D.

	
 
	
 
	
 
	
 
	
Title:  
	
 
	
Chief Executive Officer and President

 

 

 

 

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Exhibit A

 

GENERAL RELEASE OF CLAIMS

This General Release of Claims (“Release”) is entered into as of this 15th day of March, 2021, between Frank Hsu, M.D. (“Executive”), and Oncternal Therapeutics, Inc. (the “Company”) (collectively referred to herein as the “Parties”).

WHEREAS, Executive and the Company are parties to that certain Employment Transition Agreement dated as of February 25, 2021 (the “Transition Agreement”);

WHEREAS, the Parties agree that Executive is entitled to certain severance benefits under Section 3 of the Transition Agreement (the “Termination Benefits”), subject to Executive’s execution of this Release; 

WHEREAS, the Company and Executive now wish to fully and finally to resolve all matters between them; and

WHEREAS, defined terms used herein without definition shall have the meanings given to such terms in the Transition Agreement.

NOW, THEREFORE, in consideration of, and subject to, the severance benefits payable to Executive pursuant to the Transition Agreement, the adequacy of which is hereby acknowledged by Executive, and which Executive acknowledges that he would not otherwise be entitled to receive, Executive and the Company hereby agree as follows:

	
 
	
1.
	
Release of Known and Unknown Claims By Executive.  

(a)In exchange for the Termination Benefits set forth in Section 3 of the Transition Agreement, and in consideration of the further agreements and promises set forth herein, Executive, on behalf of himself and his executors, heirs, administrators, representatives and assigns, hereby agrees to release and forever discharge the Company, and all predecessors, successors and its parent corporations, affiliates, related, and/or subsidiary entities, and all of their past and present investors, directors, stockholders, officers, general or limited partners, employees, attorneys, agents and representatives, and the employee benefit plans in which Executive is or has been a participant by virtue of his employment with or service to the Company or any affiliate (collectively, the “Company Releasees”), from any and all claims, debts, demands, accounts, judgments, rights, causes of action, equitable relief, damages, costs, charges, complaints, obligations, promises, agreements, controversies, suits, expenses, compensation, responsibility and liability of every kind and character whatsoever (including attorneys’ fees and costs), whether in law or equity, known or unknown, asserted or unasserted, suspected or unsuspected (collectively, “Claims”), which Executive has or may have had against such entities based on any events or circumstances arising or occurring on or prior to the date hereof or on or prior to the date hereof, arising directly or indirectly out of, relating to, or in any other way involving in any manner whatsoever Executive’s employment by or service to the Company or any affiliate or the termination thereof, including any and all claims arising under federal, state, or local laws relating to employment, including without limitation claims of wrongful discharge, breach of express or implied contract, fraud, misrepresentation, defamation, or liability in tort, and claims of any kind that may be brought in any court or administrative agency including, without limitation, claims under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000, et seq.; the Americans with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq.; the Civil Rights Act of 1866, and the Civil Rights Act of 1991; 42 U.S.C. Section 1981, et seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section 621, et seq. (the 

 

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“ADEA”); the Equal Pay Act, as amended, 29 U.S.C. Section 206(d); regulations of the Office of Federal Contract Compliance, 41 C.F.R. Section 60, et seq.; the Family and Medical Leave Act, as amended, 29 U.S.C. § 2601 et seq.; the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; and the California Fair Employment and Housing Act, California Government Code Section 12940, et seq.

Notwithstanding the generality of the foregoing, Executive does not release any claim which, by law, may not be released, including the following claims:

(i)Claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law; 

(ii)Claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Company; 

(iii)Claims pursuant to the terms and conditions of the federal law known as COBRA;

(iv)Claims for indemnity under the bylaws of the Company, as provided for by California law (including California Labor Code Section 2802) or Delaware law or under any applicable insurance policy with respect to Executive’s liability as an employee, director or officer of the Company;

(v)Claims for Executive’s right to bring to the attention of the Equal Employment Opportunity Commission or the California Department of Fair Employment and Housing or any other federal, state or local government agency claims of discrimination, or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission or any other federal, state or local government agency; provided, however, that Executive does release his right to secure any damages for alleged discriminatory treatment;

(vi)Claims based on any right Executive may have to enforce the Company’s executory obligations under this Release or the Transition Agreement; and

(vii)Executive’s right to communicate or cooperate with any government agency.

(b)EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED OF AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY, AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

BEING AWARE OF SAID CODE SECTION, EXECUTIVE HEREBY EXPRESSLY WAIVES ANY RIGHTS HE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

 

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(c)Executive acknowledges that Executive is entitled to have twenty-one (21) days’ time in which to consider this Release after the delivery of such Release to him.  Executive further acknowledges that the Company has advised him that he is waiving his rights under the ADEA, and that Executive should consult with an attorney of his choice before signing this Release, and Executive has had sufficient time to consider the terms of this Release.  Executive represents and acknowledges that if Executive executes this Release before twenty-one (21) days have elapsed, Executive does so knowingly, voluntarily, and upon the advice and with the approval of Executive’s legal counsel (if any), and that Executive voluntarily waives any remaining consideration period.

(d)Executive understands that after executing this Release, Executive has the right to revoke it within seven (7) days after his execution of it.  Executive understands that this Release will not become effective and enforceable unless the seven (7) day revocation period passes and Executive does not revoke this Release in writing.  Executive understands that this Release may not be revoked after the seven (7) day revocation period has passed.  Executive also understands that any revocation of this Release must be made in writing and delivered to the Chief Executive Officer of the Company within the seven (7) day period.

(e)Executive understands that this Release shall become effective, irrevocable, and binding upon Executive on the eighth (8th) day after his execution of it, so long as Executive has not revoked it within the time period and in the manner specified in clause (d) above.  

(f)Executive further understands that Executive will not be given any Termination Benefits unless this Release is effective on or before the date that is fifty-five (55) days following the Transition Date. 

(g)Executive represents and warrants to the Company Releasees that there has been no assignment or other transfer of any interest in any Claim that Executive may have against the Company Releasees.  Executive agrees to indemnify and hold harmless the Company Releasees from any liability, claims, demands, damages, costs, expenses and attorneys’ fees incurred as a result of any such assignment or transfer from Executive.

2.Additional Representations and Warranties By Executive.  Executive represents that Executive has no pending complaints or charges against the Company  Releasees, or any of them, with any state or federal court, or any local, state or federal agency, division, or department based on any event(s) occurring prior to the date Executive signs this Release.  Executive further represents that Executive will not in the future, file, participate in, encourage, instigate or assist in the prosecution of any claims, complaints, charges or in any lawsuit by any party in any state or federal court against the Company Releasees, or any of them. unless such aid or assistance is ordered by a court or government agency or sought by compulsory legal process, claiming that the Company Releasees, or any of them, have violated any local, state or federal laws, statutes, ordinances or regulations based upon events occurring prior to the execution of this Release.

3.No Assignment.  Executive represents and warrants to the Company Releasees that there has been no assignment or other transfer of any interest in any Claim that Executive may have against the Company Releasees.  Executive agrees to indemnify and hold harmless the Company Releasees from any liability, claims, demands, damages, costs, expenses and attorneys’ fees incurred as a result of any such assignment or transfer from Executive.  The Company may assign this Release to any successor to all or substantially all of its business and/or assets or any affiliate. 

4.Severability.  In the event any provision of this Release is found to be unenforceable by an arbitrator or court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit 

 

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contemplated herein to the fullest extent permitted by law.  If a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby.

5.Interpretation; Construction. The headings set forth in this Release are for convenience only and shall not be used in interpreting this Agreement. This Release has been drafted by legal counsel representing the Company, but Executive has participated in the negotiation of its terms. Furthermore, Executive acknowledges that Executive has had an opportunity to review and revise the Release and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Release. Either party’s failure to enforce any provision of this Release shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Release.

6.Governing Law and Venue.  This Release will be governed by and construed in accordance with the laws of the United States of America and the State of California applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws principles thereof. Any suit brought hereon shall be brought in the state or federal courts sitting in San Diego, California, the Parties hereby waiving any claim or defense that such forum is not convenient or proper. Each party hereby agrees that any such court shall have in personam jurisdiction over it and consents to service of process in any manner authorized by California law.

7.Entire Agreement; Modification.  This Release, together with the Transition Agreement, Proprietary Information Agreement and the other agreements referenced herein and therein, constitutes the entire agreement of the Parties in respect of the subject matter contained herein and therein and supersede all prior or simultaneous representations, discussions, negotiations and agreements, whether written or oral.  This Release may be amended or modified only with the written consent of Executive and an authorized representative of the Company.  No oral waiver, amendment or modification will be effective under any circumstances whatsoever.  

8.Counterparts; Facsimile or .pdf Signatures. This Release may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement. This Release may be executed and delivered by facsimile or by .pdf file and upon such delivery the facsimile or .pdf signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

[Signature Page Follows]

 

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PLEASE READ CAREFULLY. THIS RELEASE CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

THE UNDERSIGNED AGREE TO THE TERMS OF THIS RELEASE AND VOLUNTARILY ENTERS INTO IT WITH THE INTENT TO BE BOUND THEREBY.

 

	
Dated:
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
Frank Hsu, M.D.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Dated:
	
 
	
 
	
 
	
ONCTERNAL THERAPEUTICS, INC.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
 
	
Name:
	
 
	
James B. Breitmeyer, M.D., Ph.D.

	
 
	
 
	
 
	
 
	
Title:  
	
 
	
Chief Executive Officer and President

 

 

 

 

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EXHIBIT B

PROPRIETARY INFORMATION AND INVENTION ASSIGNMENT AGREEMENTnlsnnv-ex103_289.htm

Exhibit 10.3

PERFORMANCE STOCK OPTION AGREEMENT

THIS GRANT is hereby made effective as of the Grant Date set forth on the schedule attached hereto as Schedule A (“Schedule A”, such date, the “Grant Date”) by and between Nielsen Holdings plc, a company incorporated under the laws of England and Wales, having its registered office in the United Kingdom (hereinafter referred to as the “Company”), and the individual whose name is set forth on Schedule A hereof, who is in the Employment of the Company or a Subsidiary (hereinafter referred to as the “Optionee”). Any capitalized terms herein not otherwise defined in this Agreement shall have the meaning set forth in the Nielsen 2019 Stock Incentive Plan (the “Plan”).

 

WHEREAS, the Company desires to grant the Participant the Option (as defined below) as provided hereunder and pursuant to the Plan, the terms of which are hereby incorporated by reference and made a part of this Agreement; and

 

WHEREAS, the Committee, charged with administration of the Plan, has determined that it would be to the advantage and best interest of the Company and its shareholders to grant the Option provided for herein to the Optionee as an incentive for increased efforts during her term of office with the Company or any Subsidiary, and has advised the Company thereof and instructed the undersigned officers to grant said Option;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I 

DEFINITIONS 

Whenever the following terms are used in this Agreement, they shall have the meaning specified in the Plan or below unless the context clearly indicates to the contrary.

Section 1.1. Cause

“Cause” shall have the meaning ascribed to such term in the severance plan or policy of the Company or any of its Subsidiaries in which the Optionee is eligible to participate immediately prior to the termination of the Optionee’s Employment (the “Policy”).

 

Section 1.2. Good Reason

“Good Reason” shall have the meaning ascribed to such term in the Policy.

Section 1.3. Option 

“Option” shall mean the right and option to acquire, on the terms and conditions set forth in Section 3.1, all or any part of an aggregate of the number of Shares, as shall be evidenced by entry in the Company’s shareholder register, set forth on Schedule A.

 

Section 1.4. Permanent Disability

“Permanent Disability” shall have the meaning ascribed to such term in the Policy.

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Section 1.5. Retirement

“Retirement” shall mean (a) any statutorily mandated retirement date required under laws applicable to the Optionee or (b) such other retirement date (which date may vary by Optionee) as may be approved by the Committee or a designated officer of the Company, as delegated in accordance with the Plan.

ARTICLE II

GRANT OF OPTIONS 

Section 2.1. Grant of Options

For good and valuable consideration, on and as of the date hereof the Company irrevocably grants to the Optionee an Option upon the terms and conditions set forth in this Agreement.

 

Section 2.2. Exercise Price

Subject to Section 2.4, the exercise price of the Shares covered by the Option (the “Option Price”) shall be as set forth on Schedule A.

Section 2.3. No Guarantee of Employment

Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue in the Employment of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company or any Subsidiary, which are hereby expressly reserved, to terminate the Employment of the Optionee at any time for any reason whatsoever, with or without cause, subject to the applicable provisions of, if any, the Optionee’s employment agreement with the Company or a Subsidiary, or an offer letter provided by the Company or a Subsidiary to the Optionee.

 

Section 2.4. Adjustments to Option

The Option shall be adjusted pursuant to Section 9(a) of the Plan, as applicable. Any such adjustment made in good faith thereunder shall be final and binding upon the Optionee, the Company and all other interested persons.

 

ARTICLE III

PERIOD OF EXERCISABILITY

Section 3.1. Commencement of Exercisability

(a)The Option shall be subject to both performance and service vesting conditions 

as described in Sections 3.1(b) and (c) below, and will only be vested and exercisable with respect to any of the Shares subject thereto when both the performance and service conditions have been achieved with respect to such Shares (except as otherwise provided in this Section 3.1).

(b)The Option will satisfy the performance vesting component (the “Performance Vesting Condition”) with respect to 100% of the Shares subject thereto if, on or prior to the Share Price Goal End Date set forth on Schedule A, the closing price for one Share as listed on the New York Stock Exchange has equaled or exceeded the Share Price Goal set forth on Schedule A for a period greater thanor equal to 21 consecutive trading days. If the Performance Vesting Condition has not been achieved on or prior to the Share Price Goal End Date (and provided that the Option has not otherwise become vested and 

 

 

exercisable in connection with an earlier Change in Control or the Optionee’s termination of employment due to death or Permanent Disability), the Option shall be automatically cancelled without payment upon the Share Price Goal End Date.

(c)Except as otherwise provided in this Section 3, the Shares subject to the Option will satisfy the service vesting component (the “Service Vesting Condition”) with respect to 100% of the Shares subject thereto based on the Optionee’s continued employment with the Company or any Subsidiary through the Share Price Goal End Date (such date, the “Service Vesting Date”).

(d)Upon a Change in Control that occurs on or prior to the Share Price Goal End Date, the Option (to the extent it then remains outstanding) shall be deemed to have satisfied the Performance Vesting Condition, and (i) if the Option is not assumed, continued, or substituted by the Company or its successor as provided in Section 9 of the Plan and the Optionee is employed with the Company or any of its Subsidiaries on the effective date of the Change in Control, then, on the effective date of the Change in Control, the Option shall become immediately fully vested and exercisable with respect to 100% of the Shares subject thereto and (ii) if the Option is so assumed, continued or substituted by the Company or its successor, then the Option shall remain subject to satisfaction of the Service Vesting Condition; provided, that, if, prior to the Service Vesting Date, the Optionee’s employment with the Company and its Subsidiaries (or any successors thereto) is involuntarily terminated by the Company and its Subsidiaries without Cause, terminated by the Optionee for Good Reason, or terminates due to the Optionee’s death, Permanent Disability or Retirement, then the Option shall become immediately fully vested and exercisable with respect to 100% of the Shares subject thereto effective upon the date of such termination of employment. 

 

(e)Upon a termination of the Optionee’s Employment for any reason (other than for Cause by the Company or any Subsidiary, without Good Reason by the Optionee or due to the Optionee’s death or Permanent Disability) prior to a Change in Control, (i) if the Performance Vesting Condition has been satisfied on or prior to the date of such termination of Employment, a pro rata portion of the Shares subject to the Option will be deemed to have satisfied the Service Vesting Condition upon such termination date, which pro rata portion shall be determined by multiplying the total number of Shares subject to the Option by a fraction, the numerator of which is the number of days commencing on the Grant Date and ending on the date of the termination of the Optionee’s Employment and the denominator of which is the number of days from the Grant Date through the Service Vesting Date (such portion, the “Pro Rata Portion of the Option”) and the Option shall automatically expire with respect to the remainder of the Shares subject thereto without becoming exercisable, and (ii) if the Performance Vesting Condition has not been satisfied on or prior to the date of such termination of Employment, the Pro Rata Portion of the Option will be deemed to have satisfied the Service Vesting Condition upon such termination date and shall remain outstanding following such termination and shall vest and become exercisable on the date on which the Performance Vesting Condition is satisfied and the Option shall automatically expire with respect to the remainder of the Shares subject thereto without becoming exercisable; provided, that, if the Performance Vesting Condition is not satisfied on or prior to the Share Price Goal End Date, the Pro Rata Portion of the Option shall be automatically cancelled without payment upon the Share Price Goal End Date.

(f)Upon the Optionee’s death or Permanent Disability prior to a Change in Control while the Option remains outstanding, the Option shall become immediately fully vested and exercisable with respect to 100% of the Shares subject thereto, without regard to whether either the Service Vesting Condition or Performance Vesting Condition has been satisfied at the time of such termination of Employment.

 

 

 

 

(g)Notwithstanding the foregoing, no portion of the Option shall become exercisable as to any additional Shares (which do not otherwise become exercisable in accordance with Sections 3.1(d), (e), or (f) above) following the Optionee’s termination of Employment for any reason and any portion of the Option which is unexercisable as of the Optionee’s termination of Employment, shall be immediately cancelled without payment therefor. Accordingly, except as is provided in Sections 3.1(d), (e) and (f), if at the time of the Optionee’s termination, the Performance Vesting Condition has not been satisfied, then the Option shall automatically expire without becoming exercisable even if all or a portion of the Option has satisfied the Service Vesting Condition.

Section 3.2. Expiration of Option

The Optionee may not exercise any portion of the Option to any extent after the first to occur of the following events:

 

(a)The seventh anniversary of the Grant Date; provided that the Optionee remains in the Employment of the Company or any Subsidiary through such date;

(b)Six months after (i) the Optionee’s Employment is terminated by the Company and all its Subsidiaries without Cause or the Optionee terminates employment for Good Reason (unless earlier terminated as provided in Section 3.2(g) below) or (ii) solely in the case of the Option becoming vested and exercisable following such termination pursuant to Section 3.1(e), the date on which the Option vests and becomes exercisable;

(c)The first anniversary of the date of the Optionee’s termination of Employment, if the Optionee’s Employment is terminated by reason of death or Permanent Disability (unless earlier terminated as provided in Section 3.2(g) below);

(d)Unless earlier terminated as provided in Section 3.2(g) below, three months after the Optionee’s termination of Employment without Good Reason (other than due to death or Permanent Disability) unless, in the Company’s sole determination, such termination is in connection with the rendering of services (as proprietor, investor, director, officer, employee, consultant, partner or otherwise) to any business that competes with the business of the Company, in which event the Option shall expire immediately upon termination of employment with the Company;

(e)Immediately upon the date of the Optionee’s termination of Employment with the Company and all its Subsidiaries for Cause;

(f)Immediately upon the date of the Optionee’s termination of Employment for any reason other than by reason of death or Permanent Disability if the Performance Vesting Condition has not been satisfied as of the date of such termination; or

(g)At the discretion of the Company, if the Committee so determines pursuant to Section 9 of the Plan.

Notwithstanding anything set forth in this Section 3.2 to the contrary, in the event any vested and exercisable portion of the Option is scheduled to expire pursuant to any of Sections 3.2(a), (b), (c) or (d) above, and the Option Price is at least $0.10 less than the Fair Market Value on the applicable expiration date, then on the date that such exercisable portion of the Option is scheduled to expire, such exercisable portion of the Option (to the extent not previously exercised by the Optionee) shall be automatically exercised on behalf of the Optionee and the net number of Shares resulting from such automatic exercise (after deduction for payment of the exercise price and withholding taxes) shall be delivered to the Optionee as soon as practicable thereafter.

 

 

For purposes of the foregoing, to the extent the Optionee is employed outside of the United States, the date on which the Optionee’s Employment terminates shall be the earliest of (i) the date on which the Company, or the Subsidiary that employs him, provides the Optionee with notice of termination of Employment, (ii) the last day of the Optionee’s active service with the Company and its Subsidiaries; or (iii) the last day on which the Optionee is an employee of the Company or the Subsidiary that employs him, as determined in each case without including any required advance notice period and irrespective of the status of the termination under local labor or employment laws.

ARTICLE IV

EXERCISE OF OPTION

Section 4.1. Person Eligible to Exercise 

During the lifetime of the Optionee, only he may exercise the Option or any portion thereof. After the death of the Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.2, be exercised by his personal representative or by any person empowered to do so under the Optionee’s will or under the then-applicable laws of descent and distribution.

Section 4.2. Partial Exercise

Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.2; provided, that any partial exercise shall be for whole Shares only.

 

Section 4.3. Manner of Exercise

The Option, or any exercisable portion thereof, may be exercised solely by delivering to the designated individual at the Company or his office all of the following prior to the time when the Option or such portion becomes unexercisable under Section 3.2:

 

(a)Notice from the Optionee or the other person then entitled to exercise the Option or portion thereof, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules, policies, and procedures established by the Committee;

(b)Full payment (in cash or by check or by a combination thereof) for the Shares with respect to which the Option or portion thereof is exercised (the “net settlement” feature as described in the Plan shall not be permitted);

(c)Full payment (in cash or by check or by a combination thereof) of all amounts which, under applicable law, the Company is required to withhold upon exercise of the Option; and

(d)In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option.

Without limiting the generality of the foregoing, the Committee may require an opinion of counsel acceptable to it to the effect that any subsequent transfer of shares acquired on exercise of the Option does not violate the Securities Act of 1933, as amended.

 

 

Section 4.4. Conditions to Issuance of Shares

The Shares issuable upon the exercise of the Option, or any portion thereof, shall not be required to be so physically issued to the Optionee.  For the avoidance of doubt, Shares shall be deemed to have been issued when evidenced by entry in the Company’s shareholder register. Such Shares shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any certificate or certificates for Shares acquired upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions:

 

(a)The obtaining of approval or other clearance from any state, provincial or federal governmental agency which the Committee shall, in its reasonable and good faith discretion, determine to be necessary or advisable (and the Company and the Optionee shall each use reasonable efforts to obtain all such clearances and approvals as soon as reasonably practicable); and

(b)The lapse of such reasonable period of time following the exercise of the Option as the Committee may from time to time establish for reasons of administrative convenience or as may otherwise be required by applicable law.

Section 4.5. Rights as Shareholder

The Optionee shall not be, nor have any of the rights or privileges of, a shareholder of the Company in respect of any Shares he may be issued upon the exercise of the Option or any portion thereof unless and until such Shares shall have been issued as evidenced by entry in the Company’s shareholder register upon satisfaction of the conditions set forth in Section 4.4.

ARTICLE V

MISCELLANEOUS 

Section 5.1. Administration

The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Optionee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Option. In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement.

 

Section 5.2. Option Not Transferable

Subject to applicable law to the contrary, neither the Option nor any interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Optionee or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided, that this Section 5.2 shall not prevent transfers by will or by the applicable laws of descent and distribution or to a partnership, limited liability company, corporation, trust or custodianship, the beneficiaries of which 

 

 

may include only the Optionee, his spouse (or ex-spouse) or his lineal descendants (including adopted children) or, if at any time after any such transfer there shall be no then living spouse or lineal descendants, then to the ultimate beneficiaries of any such trust or to the estate of a deceased beneficiary.

 

Section 5.3. Notices

Any written notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the designated individual, and any notice to be given to the Optionee shall be addressed to him at the address on file at the Company; provided that notice may be provided electronically by complying with any applicable rules, policies, and procedures established by the Committee. By a notice given pursuant to this Section 5.3, either party may hereafter designate a different address for notices to be given to it or him. Any notice which is required to be given to the Optionee, shall, if the Optionee is then deceased, be given to the Optionee’s personal representative if such representative has previously informed the Company of his status and address by notice under this Section 5.3 that complies with any applicable rules, policies, and procedures established by the Committee. Written notice, if permitted by the Committee, shall have been deemed duly given, in each case as follows: (a) upon electronic confirmation of facsimile, (b) one business day following the date sent when sent by overnight delivery and (c) five (5) business days following the date mailed when mailed by registered or certified mail return receipt requested and postage prepaid. 

 

Section 5.4. Titles; Pronouns

 

Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. The masculine pronoun shall include the feminine and neuter, and the singular the plural, where the context so indicates.

 

Section 5.5. Applicability of Plan

The Option and the Shares issued to the Optionee upon exercise of the Option shall be subject to all of the terms and provisions of the Plan, to the extent applicable to the Option and such Shares. In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall control.

 

Section 5.6. Amendment

This Agreement may be amended only by a writing executed by the parties hereto, which specifically states that it is amending this Agreement.

 

Section 5.7. Governing Law

The laws of the State of New York shall govern the interpretation, validity and performance of the terms of this Agreement, except to the extent that the issue or transfer of Shares shall be subject to mandatory provisions of the laws of England and Wales.

 

Section 5.8. Arbitration

In the event of any controversy among the parties hereto arising out of, or relating to, this Agreement which cannot be settled amicably by the parties, such controversy shall be finally, exclusively and conclusively settled by mandatory arbitration conducted expeditiously in accordance with the American Arbitration Association rules, by a single independent arbitrator. Such arbitration process shall take place within the Borough of Manhattan, in the City of New York, New York. The decision of the arbitrator shall be final and binding upon all parties hereto and shall be rendered pursuant 

 

 

to a written decision, which contains a detailed recital of the arbitrator’s reasoning. Judgment upon the award rendered may be entered in any court having jurisdiction thereof. Each party shall bear its own legal fees and expenses. Notwithstanding anything herein to the contrary, if the Optionee’s employment agreement or offer letter contains a similar provision relating to arbitration and/or dispute resolution, such provision in the employment agreement or offer letter shall govern any controversy hereunder.

Section 5.9.Code Section 409A

Notwithstanding any other provisions of this Agreement or the Plan, the Option granted hereunder shall not be deferred, accelerated, extended, paid out or modified in a manner that would result in the imposition of an additional tax under Section 409A of the Code upon the Optionee. In the event it is reasonably determined by the Committee that, as a result of Section 409A of the Code, the transfer of Shares under this Agreement may not be made at the time contemplated hereunder without causing the Optionee to be subject to taxation under Section 409A of the Code, the Company will make such payment on the first day that would not result in the Optionee incurring any tax liability under Section 409A of the Code. Notwithstanding anything herein to the contrary, if at the time of the Optionee’s termination of Employment with the Company the Optionee is a “specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of Employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Optionee) until the date that is six months following the Optionee’s termination of Employment with the Company (or the earliest date as is permitted under Section 409A of the Code without any accelerated or additional tax). The Optionee is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or in respect of such Optionee in connection with the Option (including any taxes and penalties under Section 409A), and neither the Company nor any of its Subsidiaries shall have any obligation to indemnify or otherwise hold the Optionee (or any beneficiary) harmless from any or all of such taxes or penalties. If the Option is considered “deferred compensation” subject to Section 409A, references in this Agreement and the Plan to “termination of Employment” and “separation from service” (and substantially similar phrases) shall mean “separation from service” within the meaning of Section 409A. For purposes of Section 409A, each payment that may be made in respect of the Option is designated as a separate payment.

Section 5.10.Counterparts

This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

Section 5.11. No Acquired Rights

In participating in the Plan, the Optionee acknowledges and accepts (i) that the Board has the power to amend or terminate the Plan, to the extent permitted thereunder, at any time, and (ii) that the opportunity given to the Optionee to participate in the Plan is entirely at the discretion of the Committee and does not obligate the Company or any of its Affiliates to offer such participation in the future (whether on the same or different terms). The Optionee further acknowledges and accepts that (a) such Optionee’s participation in the Plan is not to be considered part of any normal or expected compensation, (b) the value of the Options or the Shares shall not be used for purposes of determining any benefits or compensation payable to the Optionee or the Optionee’s beneficiaries or estate under any benefit arrangement of the Company or any Subsidiary, including but not limited to severance or indemnity payments, and (c) the termination of the Optionee’s employment with the Company and all Subsidiaries under any circumstances whatsoever will give the Optionee no claim or right of action against the 

 

 

Company or any Subsidiary in respect of any loss of rights under this Agreement or the Plan that may arise as a result of such termination of employment.

Section 5.12 Confidential Information; Non-Compete; Non-Solicitation

The Optionee acknowledges and agrees that the Optionee is bound by and will comply with the restrictive covenants and obligations contained in the Appendix to this Agreement, which covenants and obligations are incorporated herein by reference and made a part of this Agreement.

Section 5.13 Data Privacy The Optionee hereby acknowledges that:

(a)if he or she is based outside the UK and EEA, and his or her data is not 

otherwise subject to the General Data Protection Regulation (EU) 2016/679 ("GDPR"), the GDPR in such form as incorporated into the law of England and Wales, Scotland and Northern Ireland by virtue of the European Union (Withdrawal) Act 2018 (the "UK GDPR")  and any regulations thereunder and the UK Data Protection Act 2018, the Company holds information about the Optionee relating to his or her employment, the nature and amount of his or her compensation, bank details, and other personal details and the fact and conditions of the Optionee’s participation in the Plan. The Optionee understands that the Company is the controller of the Optionee’s personal data and is the only person authorized to process that data and is responsible for maintaining adequate security with regard to it. As the Company is part of a group of companies operating internationally, it may be necessary for the Company to make the details referred to above available to: (i) other companies within the Company's group that may be located outside the geographical location in which the Optionee is employed and where there may be no legislation concerning an individual’s rights concerning personal data; (ii) third party advisers and administrators of the Plan; and/or (iii) the regulatory authorities. Any personal data made available by the Company to the parties referred to above in (i), (ii), or (iii) in relation to the Plan will only be for the purpose of administration and management of the Plan by the Company, on behalf of the Company. The Optionee’s information will not, under any circumstances, be made available to any party other the parties listed above under (i), (ii), or (iii). The Optionee hereby authorizes and directs the Company to disclose to the parties as described above under (i), (ii), or (iii) any of the above data that is deemed necessary to facilitate the administration of the Plan. The Optionee understands and authorizes the Company to store and transmit such data in electronic form. The Optionee confirms that the Company has notified the Optionee of his or her entitlement to reasonable access to the personal data held about the Optionee and of his or her rights to rectify any inaccuracies in that data; or

(b) if he or she is based in the UK and/or EEA, or his or her data is otherwise subject to GDPR, the UK GDPR or the UK Data Protection Act 2018, his or her personal data will be processed in accordance with the Company's European Union privacy notice (which will be provided to such Optionees and is available upon request).

Section 5.14 Forfeiture of Grant

 

If the Optionee does not sign and return this Agreement within six months following the Grant Date, this Option shall be forfeited and shall be of no further force and effect.

 

 

11

NIELSEN HOLDINGS PLC

By: Laurie Lovett

 Chief Human Resources Officer OPTIONEE: 

Participant name

Online grant acceptance satisfies signature requirement

 

 

 

12

Schedule A

 

 

		
	
Name of Optionee:
	
Participant Name

	
Grant Date
	
Grant Date

	
Aggregate number of Shares for which the Option granted hereunder is exercisable:
	
 

 

 

Quantity Granted

	
Option Price per Share:
	
Grant price

	
Share Price Goal End Date:

Share Price Goal:

Normal Vesting of Performance Stock Options:
	
 

Grant Custom 4

 

$Grant Custom 5

 

 

Vesting Schedule (Dates & Quantities)

 

	
Vesting on a “Change in Control”:
	
Per Section 3.1(d) of the Agreement.

13

 

 

 

APPENDIX

Confidential Information; Non-Compete; Non-Solicitation

1.In consideration of the Company entering into this Agreement with the Optionee, the Optionee shall not, directly or indirectly, (i) at any time during or after the Optionee’s employment with the Company or any of its subsidiaries, parents or affiliates (collectively, “Nielsen”), disclose any Confidential Information (as defined below) except (A) when required to perform his or her duties to Nielsen; (B) as required by law or judicial process; or (C) in connection with any Protected Activity (as defined below) by the Optionee; or (ii) at any time during the Optionee’s employment with Nielsen and for a period of 12 months thereafter or, if the Optionee’s employment with Nielsen is terminated under circumstances that entitle the Optionee to receive severance under any severance plan, policy or agreement with Nielsen applicable to the Optionee at the time of such termination, for the duration of the applicable severance period under such plan, policy or agreement if such severance period is longer than 12 months (with, for the avoidance of doubt, the severance period for any lump sum severance payment being equal to the number of months of base salary being paid in such lump sum (for example, 1.5x base salary equates to a severance period of 18 months)) (A) associate with (whether as a proprietor, investor, director, officer, employee, consultant, partner or otherwise) or render services to any business that competes with the business of Nielsen, in any geographic or market area where Nielsen conducts business or provides products or services (or which the Optionee has knowledge, at the time in question, that Nielsen has plans to commence engaging in within twelve (12) months); provided, that nothing herein shall be deemed to prohibit the Optionee’s ownership of not more than 2% of the publicly-traded securities of any competing business; (B) induce, influence, encourage or solicit in any manner any (x) client or prospective client with which the Optionee had interactions in connection with his/her employment in the 18 months prior to termination of the Optionee’s employment with Nielsen, or (y) vendor or supplier of Nielsen, to cease or reduce doing business with Nielsen or to do business with any business in competition with the business of Nielsen; (C) solicit, recruit, or seek to hire, or otherwise assist or participate in any way in the solicitation or recruitment of, any person who has been employed or engaged by Nielsen at any time during the 6 months immediately preceding the termination of the Optionee’s employment, or induce, influence, or encourage in any manner, or otherwise assist or participate in any way in the inducement, influence or encouragement of, any such person to terminate his or her employment or engagement with Nielsen; or (D) hire or otherwise assist or participate in any way in the hiring of, any person who has been employed or engaged by Nielsen at any time during the 6 months immediately preceding the termination of the Optionee’s employment. The provisions hereof shall be in addition to and not in derogation of any other agreement covering similar matters to which the Optionee and the Company or any subsidiary or affiliate thereof are parties. For purposes of this agreement, the “business of Nielsen” means consumer purchasing measurement and analytics, media audience measurement and analytics, and any other line of business in which Nielsen is engaged at the time of the termination of the Optionee’s employment (or which the Optionee has knowledge, at the time in question, that Nielsen has plans to commence engaging in within twelve (12) months). If the Optionee is primarily providing services in California at the time the Optionee’s employment with Nielsen terminates, then sub-clauses (A), (B) and (D) of clause (ii) of this Section 1 shall not apply following such termination. If the Optionee lived or provided services in Massachusetts for at least thirty (30) days immediately preceding the Optionee’s termination, then sub-clause (A) of clause (ii) of this Section 1 shall not apply following such termination.

2.“Confidential Information” shall include all trade secrets and proprietary or other confidential information owned, possessed or used by Nielsen in any form, whether or not explicitly designated as confidential information, including, without limitation, business plans, strategies, customer lists, customer projects, cooperator lists, personnel information, financial information, pricing information, cost information, methodologies, software, data, and product research and development. Confidential Information shall not include any information that is generally known to the industry or the public other than as a result of the Optionee’s breach of this covenant or any breach of other confidentiality obligations by the Optionee, employees or third parties.

 

 

3.If the Optionee performs services for an entity other than Nielsen at any time prior to the end of the 12-month post-termination period or, if longer, the applicable severance period (whether or not such entity is in competition with Nielsen), the Optionee shall notify the Company on or prior to the commencement thereof. To “perform services” shall mean employment or services as an employee, consultant, owner, partner, associate, agent or otherwise on behalf of any person, principal, partnership, firm or corporation.

4.If at any time a court holds that the restrictions stated in Section 1 above are unreasonable or otherwise unenforceable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographic area determined to be reasonable under such circumstances by such court will be substituted for the stated period, scope or area or, if the court does not undertake such substitution, then the remainder of Section 1 shall be given full effect without regard to the invalid portion. Because the Optionee’s services are unique and because the Optionee has had and will continue to have access to Confidential Information, the parties hereto agree that money damages will be an inadequate remedy for any breach of this Agreement. In the event of a breach or threatened breach of this Agreement, Nielsen or its successors or assigns may, in addition to other rights and remedies existing in their favor, (i) apply to any court of competent jurisdiction for specific performance and/or injunctive relief in order to enforce, or prevent any violations of, the provisions hereof (without the posting of a bond or other security); and (ii) may require the Optionee (A) to forfeit any vested or unvested portion of the Grant and to return all Shares previously issued to the Optionee under the Grant (“Grant Shares”); and (B) to pay to Nielsen the full value of any consideration received for the Grant Shares that were previously sold by the Optionee or otherwise disposed of to a third party (or if no such consideration was received, the then fair market value of the Grant Shares).

5.The Optionee acknowledges that the restrictions in Section 1 above are not greater than required to protect Nielsen’s legitimate business interests, including without limitation the protection of its Confidential Information and the protection of its client relationships, and are reasonably limited in time or duration, geography and scope of activity. The Optionee further acknowledges that, viewed separately or together, the restrictions in Section 1 above do not unfairly or unreasonably restrict the Optionee’s ability to obtain other comparable employment, earn a living, work in any particular area or otherwise impose an undue hardship on Optionee.

6.Protected Activity. Nothing in this Agreement shall prohibit or impede the Optionee from communicating, cooperating or filing a complaint with any U.S. federal, state or local governmental or law enforcement branch, agency or entity (collectively, a “Governmental Entity”) with respect to possible violations of any U.S. federal, state or local law or regulation, or otherwise making disclosures to any Governmental Entity, in each case, that are protected under the whistleblower provisions of any such law or regulation; provided, that in each case such communications and disclosures are consistent with applicable law. An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order. Except as otherwise provided in this paragraph or under applicable law, under no circumstance is the Optionee authorized to disclose any information covered by Nielsen’s attorney-client privilege or attorney work product, or Nielsen’s trade secrets, without Nielsen’s prior written consent. The Optionee does not need the prior authorization of (or to give notice to) Nielsen regarding any communication, disclosure, or activity described in this paragraph.

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