Document:

kldo-ex101_10.htm

 

Exhibit 10.1

kALEIDO BIOSCIENCES, INC.

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made as of September 30, 2020, between Kaleido Biosciences, Inc., a Delaware corporation (the “Company”), and Daniel Menichella (the “Employee”) and is effective as October 13, 2020 (the “Effective Date”).  In consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.Employment.

(a)Term.  The term of this Agreement shall commence on the Effective Date and continue until terminated in accordance with the provisions hereof (the “Term”).  The Employee’s employment with the Company will continue to be “at will,” meaning that the Employee’s employment may be terminated by the Company or the Employee at any time and for any reason subject to the terms of this Agreement. 

(b)Position and Duties.  During the Term, the Employee shall serve as the President & Chief Executive Officer (CEO) of the Company, and shall have such duties and authorities as may from time to time be reasonably prescribed by the Company’s Board of Directors (the “Board”).  The Employee shall also serve as a Director on the Board.  The Employee shall devote substantially all working time and efforts to the business and affairs of the Company.  Notwithstanding the foregoing, the Employee may serve on other boards of directors, with the advance written approval of the Board, or engage in religious, charitable or other community activities as long as such services and activities do not interfere with the Executive’s performance of his duties to the Company as provided in this Agreement.

2.Compensation and Related Matters.

(a)Base Salary.  The Company shall pay the Employee an initial base salary of $540,000, subject to annual review by the Compensation Committee for potential upward adjustments (the “Compensation Committee”) of the Company’s Board of Directors (“Board”).  The base salary in effect at any given time is referred to herein as “Base Salary.”  The Base Salary shall be payable in a manner that is consistent with the Company’s usual payroll practices.

(b)Incentive Compensation.  During the Term, the Employee shall be eligible to receive cash incentive compensation as determined by the Board or the Compensation Committee from time to time, in accordance with Company’s bonus program.  The Company will initially target the Employee’s Incentive Bonus at 50% of his Base Salary (pro-rated for 2020 based on the Effective Date). The actual incentive target and any Incentive Bonus is discretionary and will be subject to the Company’s assessment of the Employee’ performance, as well as business conditions at the Company.  The Incentive Bonus also will be subject to approval by and adjustment at the discretion of the Board and the terms of any applicable 

incentive plan.  Any Incentive Bonus will be paid by March 15 of the year following the year in which it is earned.  Except as otherwise provided in Section 4(b)(i) below or the Company’s bonus program, to earn incentive compensation, the Employee must be employed by the Company on the day such incentive compensation is paid.   

(c)Equity.  Within 5 days of the Date of Hire, the Employee shall be eligible to participate in Kaleido’s equity incentive program and be granted, at such time as the Board determines, an option to purchase 600,000 shares of common stock (such equity award is referred to as the “Equity Award”).  Subject to the Board’s approval of the Equity Award, the Equity Award will vest according to the following schedule: 25% of the Equity Award will vest on the first anniversary of the Date of Hire, and the remaining 75% of the Equity Award will vest in equal installments at the end of each calendar quarter over the next three years, provided that, in each case, that the Employee continues to provide continuous services to the Company as of each such vesting date.  The grant of the Equity Award will be conditioned upon, among other things, the Employee’s execution of all necessary documentation relating to the Equity Award as determined by the Company (all such documentation is collectively referred to as the “Equity Award Documentation”).  In all respects, these options will be governed by the 2019 Stock Option and Incentive Plan and the applicable Stock Option Agreement.

 

(d)Expenses.  The Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by his during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and established by the Company.

(e)Vacation.  During the Term, the Employee shall be entitled to paid vacation in accordance with the Company’s policies and procedures.  The Employee shall also be entitled to all paid holidays given by the Company in accordance with the policies and procedures then in effect and established by the Company.  

(f)Other Benefits.  During the Term, the Employee shall be eligible to participate in or receive benefits under the Company’s employee benefit plans in effect from time to time, subject to the terms of such plans.  

3.Termination.  During the Term, the Employee’s employment hereunder may be terminated without any breach of this Agreement under the following circumstances:

(a)Death.  The Employee’s employment hereunder shall terminate upon his death.

(b)Disability.  The Company may terminate the Employee’s employment if he is disabled and unable to perform the essential functions of the Employee’s then existing position or positions under this Agreement with or without reasonable accommodation for a period of 180 consecutive days in any 12-month period.  If any question shall arise as to whether during any period the Employee is disabled so as to be unable to perform the essential functions of the Employee’s then existing position or positions with or without reasonable accommodation, the Employee may, and at the request of the Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Employee.  In the event the 

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Company has additional requests for information, the Employee shall cooperate with any reasonable request to obtain additional detail form the Employee’s physician in connection with such certification .  If such question shall arise and the Employee shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Employee.  Nothing in this Section 3(b) shall be construed to waive the Employee’s rights, if any, under existing law.  

(c)Termination by Company for Cause.  The Company may terminate the Employee’s employment hereunder for Cause.  For purposes of this Agreement, “Cause” shall mean:  (i) conduct by the Employee constituting a material act of misconduct in connection with the performance of his duties, including, without limitation, misappropriation of funds; (ii) the commission by the Employee of any felony or a misdemeanor involving moral turpitude, deceit, dishonesty or fraud, or any conduct by the Employee that would reasonably be expected to result in material injury or reputational harm to the Company or any of its subsidiaries or affiliates if he were retained in his position; (iii) a material violation by the Employee of the Company’s written employment policies; or (iv) failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.

(d)Termination Without Cause.  The Company may terminate the Employee’s employment hereunder at any time without Cause.  Any termination by the Company of the Employee’s employment under this Agreement which does not constitute a termination for Cause under Section 3(c) and does not result from the death of the Employee under Section 3(a) or the disability of the Employee under Section 3(b) shall be deemed a termination without Cause.

(e)Termination by the Employee.  The Employee may terminate his employment hereunder at any time for any reason, including but not limited to Good Reason.  For purposes of this Agreement, “Good Reason” shall mean that the Employee has complied with the “Good Reason Process” (hereinafter defined) following the occurrence of any of the following events:  (i) a material diminution in the Employee’s responsibilities, authority or duties; (ii) a material diminution in the Employee’s Base Salary except for across-the-board salary reductions based on the Company’s financial performance similarly affecting all or substantially all senior management employees of the Company; (iii) a material change in the geographic location at which the Employee provides services to the Company, except for required travel for the Company’s business; or (iv) the material breach of this Agreement by the Company.  “Good Reason Process” shall mean that (i) the Employee reasonably determines in good faith that a “Good Reason” condition has occurred; (ii) the Employee notifies the Company in writing of the first occurrence of the Good Reason condition within 60 days of the first occurrence of such condition; (iii) the Employee cooperates in good faith with the Company’s efforts, for a period not less than 30 days following such notice (the “Cure Period”), to remedy the condition; (iv) notwithstanding such efforts, the Good Reason condition continues to exist; and (v) the Employee terminates his employment within 60 days after the end of the Cure Period.  If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred.

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(f)Notice of Termination.  Except for termination as specified in Section 3(a), any termination of the Employee’s employment by the Company or any such termination by the Employee shall be communicated by written Notice of Termination to the other party hereto.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon.

(g)Date of Termination.  “Date of Termination” shall mean:  (i) if the Employee’s employment is terminated by his death, the date of his death; (ii) if the Employee’s employment is terminated by the Company on account of the Employee’s disability under Section 3(b) or by the Company for Cause under Section 3(c), the date on which a Notice of Termination is given; (iii) if the Employee’s employment is terminated by the Employee under Section 3(e) without Good Reason, 30 days after the date on which a Notice of Termination is given, and (iv) if the Employee’s employment is terminated by the Employee under Section 3(e) with Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period.  Notwithstanding the foregoing, in the event that the Employee gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of this Agreement, provided, however, that in the event the Company accelerates the Date of Termination, the Employee shall be entitled to all compensation, including but not limited to salary, bonus (if any), benefits and vesting of equity, that would otherwise have been owed the Employee for the period between the Date of Termination set by the Company and the Date of Termination set out in the Notice of Termination to the Company.

4.Compensation Upon Termination.

(a)Termination Generally.  If the Employee’s employment with the Company is terminated for any reason, the Company shall pay or provide to the Employee (or to his authorized representative or estate) (i) any Base Salary earned through the Date of Termination, unpaid expense reimbursements (subject to, and in accordance with, Section 2(d) of this Agreement) and unused vacation that accrued through the Date of Termination on or before the time required by law but in no event more than 30 days after the Employee’s Date of Termination; and (ii) any vested benefits the Employee may have under any employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in accordance with the terms of such employee benefit plans (collectively, the “Accrued Benefit”).

(b)Termination by the Company Without Cause or by the Employee with Good Reason.  During the Term, if the Employee’s employment is terminated by the Company without Cause as provided in Section 3(d), or the Employee terminates his employment for Good Reason as provided in Section 3(e), then the Company shall pay the Employee his Accrued Benefit.  In addition, subject to the Employee signing a separation agreement containing, among other provisions, a general release of claims in favor of the Company and related persons and entities, confidentiality, return of property and non-disparagement, in a form and manner satisfactory to the Company (the “Separation Agreement and Release”) and the Separation Agreement and Release becoming irrevocable and fully effective, all within 60 days after the Date of Termination (or such shorter time period provided in the Separation Agreement and Release): 

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(i)The Company shall pay the Employee an amount equal to twelve (12) months of the Employee’s Base Salary plus an amount equal to the incentive compensation paid to the Employee pursuant to Section 2(b) above during the fiscal year prior to the year of termination (the “Severance Amount”). Notwithstanding the foregoing, if the Employee breaches any of the provisions contained in Section 7 of this Agreement, all payments of the Severance Amount shall immediately cease; 

(ii)Notwithstanding any provision in the Equity Documents to the contrary, and subject to the Employee’s compliance with the provisions contained in Section 7 of this Agreement, the Company shall extend the period during which the Employee can exercise any of his vested options to purchase stock in the Company until the anniversary of the Employee’s Date of Termination;

(iii)If the Employee was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Employee a monthly cash payment for twelve (12) months or the Employee’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Employee if the Employee had remained employed by the Company as well as any administrative fee; and

(iv)the amounts payable under Section 4(b)(i) and (iii) shall be paid out in substantially equal installments in accordance with the Company’s payroll practice commencing within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, the Severance Amount shall begin to be paid in the second calendar year by the last day of such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day immediately following the Date of Termination.  Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2).

5.Change in Control Payment.  The provisions of this Section 5 set forth certain terms of an agreement reached between the Employee and the Company regarding the Employee’s rights and obligations upon the occurrence of a Change in Control of the Company.  These provisions are intended to assure and encourage in advance the Employee’s continued attention and dedication to his assigned duties and his objectivity during the pendency and after the occurrence of any such event.  These provisions shall apply in lieu of, and expressly supersede, the provisions of Section 4(b) regarding severance pay and benefits upon a termination of employment, if such termination of employment occurs in anticipation of, on or within fifteen (15) months after the occurrence of the first event constituting a Change in Control.  These provisions shall terminate and be of no further force or effect beginning fifteen (15) months after the occurrence of a Change in Control.

(a)Change in Control.  During the Term, if in anticipation of, on or  within fifteen (15) months after a Change in Control, the Employee’s employment is terminated by the Company without Cause as provided in Section 3(d) or the Employee terminates his employment for Good Reason as provided in Section 3(e), then, subject to the signing of the Separation 

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Agreement and Release by the Employee and the Separation Agreement and Release becoming irrevocable and fully effective, all within 60 days after the Date of Termination (or such shorter time period provided in the Separation Agreement and Release): 

(i)the Company shall pay the Employee a lump sum in cash in an amount equal to 1.5 times the sum of (A) the Employee’s current Base Salary (or the Employee’s Base Salary in effect immediately prior to the Change in Control, if higher), plus (B) the target incentive compensation established for the Employee in the fiscal year of termination; and if no such target has been established, the target incentive compensation established for the Employee in the fiscal year prior to the year of termination;  

(ii)notwithstanding anything to the contrary in any applicable option agreement or stock-based award agreement, all stock options and other stock-based awards held by the Employee (the “Equity Awards”) shall immediately accelerate and become fully exercisable or nonforfeitable as of the later of (x) the Date of Termination or (y) the Effective Date of the Separation Agreement and Release (the “Accelerated Vesting Date”); provided that any termination or forfeiture of the unvested portion of such Equity Awards that would otherwise occur on the Date of Termination in the absence of this Agreement will be delayed until the Effective Date of the Separation Agreement and Release and will only occur if the vesting pursuant to this subsection does not occur due to the absence of the Separation Agreement and Release becoming fully effective within the time period set forth therein.  ; and

(iii) if the Employee was participating in the Company’s group health plan immediately prior to the Date of Termination and elects COBRA health continuation, then the Company shall pay to the Employee a monthly cash payment for eighteen (18) months or the Employee’s COBRA health continuation period, whichever ends earlier, in an amount equal to the monthly employer contribution that the Company would have made to provide health insurance to the Employee if the Employee had remained employed by the Company as well as any administrative fee; and

(iv)The amounts payable under Section 5(a)(i) and (iii) shall be paid or commence to be paid within 60 days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such payment shall be paid or commence to be paid in the second calendar year by the last day of such 60-day period.

(b)Additional Limitation.

(i)Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any compensation, payment or distribution by the Company to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall 

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be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which the Employee becomes subject to the excise tax imposed by Section 4999 of the Code; provided that such reduction shall only occur if it would result in the Employee receiving a higher After Tax Amount (as defined below) than the Employee would receive if the Aggregate Payments were not subject to such reduction.  In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).

(ii)For purposes of this Section 5(b), the “After Tax Amount” means the amount of the Aggregate Payments less all federal, state, and local income, excise and employment taxes imposed on the Employee as a result of the Employee’s receipt of the Aggregate Payments.  For purposes of determining the After Tax Amount, the Employee shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. 

(iii)The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to Section 5(b)(i) shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Employee within 15 business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Employee.  Any determination by the Accounting Firm shall be binding upon the Company and the Employee.

(c)Definitions.  For purposes of this Section 5, the following terms shall have the following meanings:

“Change in Control” shall mean any of the following:

(i)any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Act”) (other than the Company, any of its subsidiaries, or any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its subsidiaries), together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Act) of such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 50 percent or more of the combined voting power of the Company’s then 

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outstanding securities having the right to vote in an election of the Board (“Voting Securities”) (in such case other than as a result of an acquisition of securities directly from the Company); or

(ii)the date a majority of the members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; or

(iii)the consummation of (A) any consolidation or merger of the Company where the stockholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in the aggregate more than 50 percent of the voting shares of the Company issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any), or (B) any sale or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company and its affiliates on a consolidated basis. 

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred for purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the Company which, by reducing the number of shares of Voting Securities outstanding, increases the proportionate number of Voting Securities beneficially owned by any person to 50 percent or more of the combined voting power of all of the then outstanding Voting Securities; provided, however, that if any person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns 50 percent or more of the combined voting power of all of the then outstanding Voting Securities, then a “Change in Control” shall be deemed to have occurred for purposes of the foregoing clause (i).

6.Section 409A.

(a)Anything in this Agreement to the contrary notwithstanding, if at the time of the Employee’s separation from service within the meaning of Section 409A of the Code, the Company determines that the Employee is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Employee becomes entitled to under this Agreement on account of the Employee’s separation from service would be considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (A) six months and one day after the Employee’s separation from service, or (B) the Employee’s death.  If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.  

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(b)All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred by the Employee during the time periods set forth in this Agreement.  All reimbursements shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred.  The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses).  Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(c)To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Employee’s termination of employment, then such payments or benefits shall be payable only upon the Employee’s “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury Regulation Section 1.409A‐1(h).

(d)The parties intend that this Agreement will be administered in accordance with Section 409A of the Code.  To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code.  Each payment pursuant to this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A‐2(b)(2).  The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

(e)The Company makes no representation or warranty and shall have no liability to the Employee or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

7.Confidential Information, Noncompetition and Cooperation. The terms of the Employee Confidentiality, Assignment and Noncompetition Agreement (the “Restrictive Covenant Agreement”), between the Company and the Employee, attached hereto as Exhibit A, shall continue to be in full force and effect and are incorporated by reference in this Agreement.  The Employee hereby reaffirms the terms of the Restrictive Covenant Agreement as material terms of this Agreement.

(a)Litigation and Regulatory Cooperation.  During and after the Employee’s employment, the Employee shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Employee was employed by the Company.  The Employee’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to 

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prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.  During and after the Employee’s employment, the Employee also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Employee was employed by the Company.  The Company shall reimburse the Employee for any reasonable out‐of‐pocket expenses incurred in connection with the Employee’s performance of obligations pursuant to this Section 7(a).

(b)Relief.  The Employee agrees that it would be difficult to measure any damages caused to the Company which might result from any breach by the Employee of the promises set forth in this Section 7, and that in any event money damages would be an inadequate remedy for any such breach.  Accordingly, subject to Section 8 of this Agreement, the Employee agrees that if the Employee breaches, or proposes to breach, any portion of this Agreement, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company. In addition, in the event the Employee breaches this Section 7 during a period when he is receiving severance benefits pursuant to Section 4 or Section 5 hereof, the Company shall have the right to suspend or terminate such severance benefits.  Such suspension or termination shall not limit the Company’s other options with respect to relief for such breach and shall not relieve the Employee of his duties under this Agreement.

(c)Protected Disclosures and Other Protected Action.  Nothing contained in this Agreement limits the Employee’s ability to communicate with any federal, state or local governmental agency or commission, including to provide documents or other information, without notice to the Company.

8.Arbitration of Disputes.  Any controversy or claim arising out of or relating to this Agreement or the breach thereof or otherwise arising out of the Employee’s employment or the termination of that employment (including, without limitation, any claims of unlawful employment discrimination whether based on age or otherwise) shall, to the fullest extent permitted by law, be settled by arbitration in any forum and form agreed upon by the parties or, in the absence of such an agreement, under the auspices of the American Arbitration Association (“AAA”) in Boston, Massachusetts in accordance with the Employment Dispute Resolution Rules of the AAA, including, but not limited to, the rules and procedures applicable to the selection of arbitrators.  In the event that any person or entity other than the Employee or the Company may be a party with regard to any such controversy or claim, such controversy or claim shall be submitted to arbitration subject to such other person or entity’s agreement.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  This Section 8 shall be specifically enforceable.  Notwithstanding the foregoing, this Section 8 shall not preclude either party from pursuing a court action for the sole purpose of obtaining a temporary restraining order or a preliminary injunction in circumstances in which such relief is appropriate; provided that any other relief shall be pursued through an arbitration proceeding pursuant to this Section 8.

9.Consent to Jurisdiction.  To the extent that any court action is permitted consistent with or to enforce Section 8 of this Agreement, the parties hereby consent to the jurisdiction of 

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the Superior Court of the Commonwealth of Massachusetts and the United States District Court for the District of Massachusetts.  Accordingly, with respect to any such court action, the Employee (a) submits to the personal jurisdiction of such courts; (b) consents to service of process; and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

10.Integration.  This Agreement, including the Restrictive Covenant Agreement, and Stock Option Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties concerning such subject matter, including the Prior Agreement.

11.Withholding.  All payments made by the Company to the Employee under this Agreement shall be net of any tax or other amounts required to be withheld by the Company under applicable law.

12.Successor to the Employee.  This Agreement shall inure to the benefit of and be enforceable by the Employee’s personal representatives, executors, administrators, heirs, distributees, devisees and legatees.  In the event of the Employee’s death after his termination of employment but prior to the completion by the Company of all payments due to him under this Agreement, the Company shall continue such payments to the Employee’s beneficiary designated in writing to the Company prior to his death (or to his estate, if the Employee fails to make such designation).

13.Enforceability.  If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

14.Survival.  The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the Employee’s employment to the extent necessary to effectuate the terms contained herein.

15.Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

16.Notices.  Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Employee at the last address the Employee has filed in writing with the Company or, in the case of the Company, at its main offices, attention of the Board.

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17.Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Employee and by a duly authorized representative of the Company.

18.Governing Law.  This is a Massachusetts contract and shall be construed under and be governed in all respects by the laws of the Commonwealth of Massachusetts without giving effect to the conflict of laws principles thereof.

19.Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

20.Successor to Company.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement to the same extent that the Company would be required to perform it if no succession had taken place.  Failure of the Company to obtain an assumption of this Agreement at or prior to the effectiveness of any succession shall be a material breach of this Agreement.

21.Gender Neutral.  Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender unless the context clearly indicates otherwise.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date and year first above written.

KALEIDO BIOSCIENCES, INC.

By:

Its:

 

EMPLOYEE

 

DAN MENICHELLA

 

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Exhibit 10.1

GENERAL RELEASE AGREEMENT

This General Release (the “Agreement”) is made as of September 29, 2020 (the “Effective Date”), by and between United Insurance Holdings Corp., a Delaware corporation (the “Company,” and together with its subsidiaries and affiliates, the “Company Group”), and Deepak Menon (“Executive”).

WHEREAS, the Company and Executive wish to set forth the terms and conditions governing Executive’s decision to terminate employment, and to provide for the settlement and release of any and all claims, demands, and causes of action Executive may have against the Company Group arising out of or in any way related to Executive’s employment and termination thereof with the Company, according to the terms of this Agreement.

NOW, THEREFORE, in consideration of their mutual promises and undertakings contained in this Agreement, the Company and Executive agree as follows:

1.Employment Termination Date.  The Company acknowledges receipt of Executive’s resignation and agrees that Executive’s last day of employment with the Company shall be September 30, 2020 (the “Termination Date”).  As of the Termination Date, Executive shall, and hereby does, resign from any and all officer, director and committee positions with the Company Group.

2.Accrued Obligations.  After the Termination Date, the Company shall pay to Executive all Accrued Payments, as defined in the Amended and Restated Employment Agreement, dated December 12, 2016, by and between the Company and Executive, as thereafter amended (the “Employment Agreement”). 

3.Severance Benefits.  Executive acknowledges and agrees that he has voluntarily resigned from employment without Cause, as defined in the Employment Agreement, and is eligible only for the severance benefits as defined in Section 4.3(ii) of the Employment Agreement (the “Severance Benefits”), subject to (i) Executive executing and returning this Agreement within 21 days after his receipt hereof, (ii) Executive not revoking this Agreement in accordance with Section 15(d) below, and (iii) Executive’s continued compliance with the terms of this Agreement, the Employment Agreement, and any other agreement between Executive and any member of the Company Group containing continuing obligations on the part of Executive. As more fully described in the Employment Agreement, the Severance Benefits shall include:

a.Except as set forth in the next paragraph below, and so long as Executive remains in compliance with the restrictive covenants contained in his Employment Agreement, an aggregate payment of $180,250.00, one hundred and eighty thousand, two-hundred and fifty dollars and zero cents, representing six-months’ base salary from October 1, 2020 through March 31, 2021.  Payments will be made in conformity with the Company’s normal payroll periods and practices.  The first payment shall be made on the first regular bi-monthly pay date following expiration of the seven-day revocation period set forth below. 
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In exchange for the Company’s agreement to a limited, partial waiver of Section 5.2 of the Employment Agreement, Executive agrees that the severance amount shall be reduced to a maximum of $100,000.00, one hundred thousand dollars and zero cents, should Executive obtain employment with GeoVera Insurance Group Holdings, Ltd., (“GeoVera”). Executive acknowledges and agrees that the $100,000.00 shall be further reduced by the total amount of Severance Benefits already paid to Executive before he accepts employment with GeoVera.   

b.For the avoidance of doubt, any bonus Executive earned under the 2020 Annual Incentive Plan shall be forfeited, and all unvested equity-based compensation awards held by Executive as of the date of this Agreement, including, but not limited to, stock options, performance stock units and restricted stock units, shall not be entitled to accelerated vesting, and shall be forfeited and terminate as of the Termination Date.

4.Tax Withholding.  Except as otherwise stated in this Agreement, the Company shall deduct (or cause to be deducted) from the amounts payable to Executive pursuant to this Agreement the amount of all federal, state and local taxes required to be withheld pursuant to applicable law.

5.Restrictive Covenants.  The Parties agree and acknowledge that the covenants and remedies appearing in the Employment Agreement, as well as any additional covenants or obligations owed by Executive pursuant to any other agreement entered into between Executive and any member of the Company Group, shall remain in full force and effect and are incorporated herein, and Executive hereby reaffirms his commitment to comply fully with all such obligations, and agrees to notify any subsequent employer of the legal restrictions on Executive’s post-termination activities.  Notwithstanding the foregoing, the Company acknowledges that Executive may interview with GeoVera.  Such discussions, and subsequent employment at GeoVera will not be considered a breach of the non-compete restrictions in the Employment Agreement.

6.Non-Disparagement and Return of Property.  Executive agrees to the following covenants: 

a.Non-Disparagement.  Executive shall not, directly or indirectly, disclose, communicate, or publish in any format any libelous, defamatory, or disparaging information concerning the Company Group, its executives, officers, Board of Directors, its subsidiaries, affiliates, employees, operations, technology, proprietary or technical information, strategies or business whatsoever, or cause others to disclose, communicate, or publish any disparaging information concerning the same.  Notwithstanding anything to the contrary in this Section 6, nothing shall prohibit Executive from giving truthful testimony or evidence to a governmental entity, or if properly subpoenaed or otherwise required to do so under applicable law, or from complying with applicable reporting and disclosure requirements.

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b.Return of Property.  Executive agrees that by no later than October 2, 2020 he will return to the Company Group the following: (1) Company Group credit cards, identification cards, access cards and keys to the Company Group’s properties or facilities that Executive may have in his possession; (2) all confidential files and confidential and proprietary information of the Company Group that Executive may have in his possession; (3) all Company Group information contained or stored on any computer equipment or devices that were issued to Executive by the Company Group shall be scrubbed and removed by the Company Group; (4) all  Company Group property, including but not limited to, computer equipment, devices, peripherals, printers, and company vehicles.

7.Release of Claims; Agreement Not to Sue.  Executive, for himself, his heirs, executors, administrators, representatives, attorneys, successors, and assigns, for the consideration set forth in this Agreement, plus other good and sufficient consideration, the receipt of which is hereby acknowledged, does remise, release, acquit, satisfy, and forever discharge the Company Group, its current and former Boards of Directors, officers, members, managers, employees, attorneys, agents, insurers, contractors, affiliates, predecessors, successors, assigns, employee benefit and/or pension plans or funds (including qualified and non-qualified plans or funds), benefit plan administrators, successors and/or assigns, and any of its or their past, present or future parent corporations, subsidiaries, divisions, affiliates, officers, directors, agents, trustees, administrators, attorneys, employees, employee benefit and/or pension plans or funds (including qualified and non-qualified plans or funds), successors and/or assigns (whether acting as agents for the Company Group or in their individual capacities), of and from all, and all manner of action and actions, cause and causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, executions, claims and demands whatsoever, in law or in equity, including, without limitation, all claims which involve in any way or relate to Executive’s employment with the Company Group, Executive’s dealings with the Company Group, Executive’s claims for benefits from the Company Group, or any other claims against the Company Group or the released parties which Executive has, had, or may have and which arose from the beginning of the world to the date of this Agreement. The claims being released include, but are not limited to, all claims for compensation, unpaid wages or bonuses, claims of discrimination or concerning other employment practices prohibited under federal, state, or local law, and include, without limitation, claims arising under or for alleged violations of: the Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621 et seq., Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, 42 U.S.C. §2000 et. seq.; 42 U.S.C. §§1981, 1983, 1986 and 1988; The Americans with Disabilities Act; 42 U.S.C. § 12101, et. seq. (“ADEA”); the Family and Medical Leave Act, The Employee Retirement Income Security Act of 1974 (“ERISA”), Federal Common Law; The Florida Civil Rights Act of 1992, as amended; The Florida Equal Rights Law, as amended; The Florida General Labor Regulations, as amended; The Florida Private-Sector Whistleblower Act; Tort; Wrongful discharge; Tortious interference with contractual relations, or the common law of the State of Florida, including but not limited to breach of contract (whether written or oral), intentional 
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infliction of emotional distress, defamation, and negligent supervision or retention, or claims for attorneys’ fees and costs, which Executive or the releasing parties ever had, now has, hereafter can, shall or may have, against the Company Group or the released parties, upon or by reason of any matter, cause or thing from the beginning of time to the date of this Agreement; provided, however, that notwithstanding the foregoing, nothing contained herein shall in any way diminish or impair: (I) any claim for employee benefits under plans covered by ERISA to the extent such claim may not lawfully be waived; (II) any rights Executive may have to vested benefits under employee benefit plans (such as Executive’s entitlements under the Company Group’s 401(k) plans), his rights in respect of any vested equity awards and his rights to the Severance Benefits pursuant to this Agreement; or (III) any obligations of the Company Group to Executive pursuant to Section 7 of the Employment Agreement and any accrued but unpaid obligations to Executive pursuant to Sections 3.1 and 3.4 of the Employment Agreement.

8.Executive Cooperation and Assistance.  Executive agrees to cooperate with the Company Group in the defense or prosecution of any lawsuits, arbitrations, or any other types of proceedings, and in the preparation of any response to any examination or investigation by any government entity or agency, and with respect to any other claims or matters (all such lawsuits, arbitrations, proceedings, examinations, investigation, claims and matters being collectively referred to as “Proceedings”), arising out of or in any way related to the policies, practices, or conduct of the Company Group during the time Executive was employed by the Company, and shall testify fully and truthfully in connection therewith. In addition, Executive agrees that, upon reasonable notice, Executive will participate in such informal interviews by counsel for the Company Group as may be reasonably necessary to ascertain Executive’s knowledge concerning the facts relating to any such Proceedings, and to cooperate with such counsel in providing testimony whether through deposition or affidavit in any such Proceeding.  Executive agrees to immediately notify the Company if he is served with legal process to compel disclosure of any information related to either Executive’s employment with the Company or information regarding one or more of its affiliates, unless prohibited by law.  Executive further agrees to immediately notify the Company if he is contacted regarding any potential legal claim or legal matter related to his employment with the Company, unless prohibited by applicable law.  In all events, the Company will reimburse Executive for his reasonable travel, lodging and other out-of-pocket expenses associated with his compliance with this Section. The Company will make reasonable efforts to accommodate Executive’s personal and business schedules when requesting his assistance and cooperation.

9.Executive Acknowledgments.  Executive acknowledges and agrees that the following are true statements: (a) Executive has reported to the Company any and all work-related injuries incurred during his employment with the Company; (b) the Company properly provided any leave of absence because of Executive’s or a family member’s health condition, and Executive has not been subjected to any improper treatment, conduct or actions due to a request for or taking such leave; and (c) Executive had the opportunity to provide the Company with written notice of any and all concerns regarding suspected ethical and compliance issues or violations on the part of the Company or any released 
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party and to report to the Company any complaints, claims, or actions filed against the Company or any released party.

10.Denial of Liability.  Nothing in this Agreement shall be construed to be an admission of liability by the Company, any other member of the Company Group or any of their respective shareholders, officers, employees, agents, successors, assigns, or any other affiliated person or entity for any alleged violation of any of Executive's statutory rights or any common law duty imposed upon any member of the Company Group, which the Company expressly denies.

11.Adequate Consideration.  Executive agrees that the payments and benefits  provided under this Agreement are adequate consideration for all promises, obligations and releases by Executive contained in this Agreement. 

12.Non-Waiver.  The waiver by either Party of a breach of any provision of this Agreement or the Employment Agreement by the other Party shall not operate or be construed as a waiver of any subsequent breach of the same or any other provision of this Agreement or the Employment Agreement.

13.Complete Agreement.  Except as otherwise specifically provided herein, this Agreement and Sections 4.3, 5, 6, 8, 9, 10, 11, 12, 15, 17 and 18 of the Employment Agreement (which shall be deemed incorporated into this Agreement) constitute the complete agreement and understanding of the Parties with respect to the subject matter hereof and with respect to Executive’s employment with the Company and supersedes any prior agreements or understanding covering this subject matter, either written or oral, between the Parties.   

14.Section 409A.  This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), and shall be interpreted and construed consistently with such intent.  The payments to Executive pursuant to this Agreement are also intended to be exempt from Section 409A to the maximum extent possible, under either the separation pay exemption pursuant to Treasury Regulation §1.409A-1(b)(9)(iii) or as short-term deferrals pursuant to Treasury Regulation §1.409A-1(b)(4), and for this purpose each payment shall constitute a “separately identified” amount within the meaning of Treasury Regulation §1.409A-2(b)(2).  In the event the terms of this Agreement would subject Executive to taxes or penalties under Section 409A (“409A Penalties”), the Company and Executive shall cooperate diligently to amend the terms of this Agreement to avoid such 409A Penalties, to the extent possible; provided that in no event shall the Company or any other member of the Company Group be responsible for any 409A Penalties that arise in connection with any amounts payable under this Agreement.  To the extent any amounts under this Agreement are payable by reference to Executive’s “termination of employment,” such term shall be deemed to refer to Executive’s “separation from service,” within the meaning of Section 409A.  Any reimbursement or advancement payable to Executive pursuant to this Agreement or otherwise shall be conditioned on the submission by Executive of all expense reports reasonably required by the Company under any applicable expense reimbursement policy, and shall be paid to Executive as 
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soon as administratively practicable following receipt of such expense reports, but in no event later than the last day of the calendar year following the calendar year in which Executive incurred the reimbursable expense.  Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year.  The right to any reimbursement or in-kind benefit pursuant to this Agreement or otherwise shall not be subject to liquidation or exchange for any other benefit.

15.Consultation with Counsel; Executive’s Acknowledgement of Rights and Deadlines.  

a.Counsel.  The Company recommends Executive consult with an attorney prior to signing this Agreement, which includes a release of certain specified rights. 

b.Time to Review Agreement.  Executive acknowledges and understands that he has up to 21 days following his receipt of this Agreement to sign and return this Agreement to the contact person and address for the Company provided in the Employment Agreement.

c.ADEA Waiver.  Executive further acknowledges and understands that the Severance Benefits due to Executive under this Agreement provide adequate consideration to Executive for the waiver of any rights Executive may have under the ADEA and the other releases set forth in Section 8.

d.Right of Revocation.  Executive understands that he has the right, within seven days of signing this Agreement, to revoke his waiver of rights to claim damages under Section 8, including the ADEA if applicable.  If Executive does revoke that waiver within the seven-day period, this Agreement shall be null and void.  Any revocation must be in writing and delivered to the contact person and address for the Company provided in the Employment Agreement. Revocation must be received by 5:00 p.m. on the seventh day after Executive signs this Agreement.  Unless Executive returns the revocation in person, it must be: (1) properly addressed; (2) received no later than the seventh day after execution of this Agreement; and (3) sent by overnight courier or certified mail, return receipt requested.

16.Re-Employment.   Executive agrees that he will not, at any time, seek re-employment with the Company.

17.Headings Not Binding.  The use of headings in this Agreement is only for ease of reference; the headings have no effect and are not to be considered part or a term of this Agreement.

18.Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original.

[Signature Page to Follow]
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TO EVIDENCE THEIR AGREEMENT, the parties have executed this document effective as of the Effective Date.

Deepak Menon

/s/ Deepak Menon

United Insurance Holdings Corp. 

By: /s/ B. Bradford Martz
Its: President and Chief Financial Officer

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