Document:

Exhibit 10.24

 

OVASCIENCE, INC.

 

Nonstatutory Stock Option Agreement

Granted Under 2012 Stock Incentive Plan

 

1.                                      Grant of Option.

 

This agreement evidences the grant by OvaScience, Inc., a Delaware corporation (the “Company”), on December 9, 2014 (the “Grant Date”) to Michelle Dipp, M.D., Ph.D., an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2012 Stock Incentive Plan (the “Plan”), a total of 200,000 shares (the “Shares”) of common stock, $0.001 par value per share, of the Company (“Common Stock”) at $32.36 per Share.  Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on December 8, 2024 (the “Final Exercise Date”).

 

It is intended that the option evidenced by this agreement shall not be an incentive stock option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”).Except as otherwise indicated by the context, the term “Participant”, as used in this option, shall be deemed to include any person who acquires the right to exercise this option validly under its terms.

 

2.                                      Vesting Schedule.

 

This option will become exercisable (“vest”) as to 25% of the original number of Shares on the first anniversary of the Vesting Commencement Date and as to an additional 6.25% of the original number of Shares at the end of each successive three-month period following the first anniversary of the Vesting Commencement Date until the fourth anniversary of the Vesting Commencement Date.  For purposes of this agreement, “Vesting Commencement Date” shall mean December 9, 2014.

 

Notwithstanding the foregoing, in the event that the Participant’s employment as the full-time Chief Executive Officer of the Company is terminated by the Company without Cause, or the Participant terminates her position as full-time Chief Executive Officer of the Company for Good Reason, then the unvested portion of this option that would otherwise have vested during the six (6) month period following such termination shall vest as of the date of termination.  Further, upon a Change of Control, the unvested portion of this option shall vest in full as of the date of such Change of Control.  “Cause”, “Good Reason” and “Change of Control” are each defined in Exhibit A attached hereto.  The vesting acceleration obligation contained herein shall be conditioned upon the Participant’s execution and non-revocation of a reasonable release of claims (said release not to include new or other contractual obligations of any kind and not to extinguish any rights to indemnification or insurance coverage the Participant might possess) within 60 days following the date of termination, which provides for a release of any and all claims that Participant has or might have against the Company.

 

The right of exercise shall be cumulative so that to the extent the option is not exercised in any period to the maximum extent permissible it shall continue to be exercisable, in whole or in part, with respect to all Shares for which it is vested until the earlier of the Final Exercise Date or the termination of this option under Section 3 hereof or the Plan.

 

 

3.                                      Exercise of Option.

 

(a)                                 Form of Exercise.  Each election to exercise this option shall be accompanied by a completed Notice of Stock Option Exercise in the form attached hereto as Exhibit B, signed by the Participant, and received by the Company at its principal office, accompanied by this agreement, and payment in full in the manner provided in the Plan.  The Participant may purchase less than the number of Shares covered hereby, provided that no partial exercise of this option may be for any fractional share.  The Participant may elect to pay the exercise price relating to the exercise of any portion of the option as described in Section 5(f)(1) through 5(f)(3) of the Plan without the need for further approval of the Board, any committee thereof, the Company or any other person.

 

(b)                                 Continuous Relationship with the Company Required.  Except as otherwise provided in this Section 3, this option may not be exercised unless the Participant, at the time she exercises this option, is, and has been at all times since the Grant Date, the full-time Chief Executive Officer of the Company or any parent or subsidiary of the Company as defined in Section 424(e) or (f) of the Code (an “Eligible Participant”).

 

(c)                                  Termination of Relationship with the Company.  If the Participant ceases to be an Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the right to exercise this option shall terminate three months after such cessation (but in no event after the Final Exercise Date), or, in the event that the Participant’s employment as the full-time Chief Executive Officer of the Company is terminated by the Company without Cause, or the Participant terminates her position as full-time Chief Executive Officer of the Company for Good Reason, the right to exercise this option shall terminate six months after such termination (but in no event after the Final Exercise Date), provided that this option shall be exercisable only to the extent that the Participant was entitled to exercise this option on the date of such cessation (after giving effect to any acceleration of vesting as provided in Section 2).  Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date, violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company, the right to exercise this option shall terminate immediately upon such violation.

 

(d)                                 Exercise Period Upon Death or Disability.  If the Participant dies or becomes disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date while she is an Eligible Participant and the Company has not terminated such relationship for “Cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of one year following the date of death or disability of the Participant, by the Participant (or in the case of death by an authorized transferee), provided that this option shall be exercisable only to the extent that this option was exercisable by the Participant on the date of her death or disability, and further provided that this option shall not be exercisable after the Final Exercise Date.

 

(e)                                  Termination for Cause.  If, prior to the Final Exercise Date, the Participant’s employment is terminated by the Company for Cause, the right to exercise this option shall terminate immediately upon the effective date of such termination of employment.  If, prior to the Final Exercise Date, the Participant is given notice by the Company of the termination of her employment as the full-time Chief Executive Officer of the Company by the Company for

 

2

 

Cause, and the effective date of such employment termination is subsequent to the date of delivery of such notice, the right to exercise this option shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s employment shall not be terminated for Cause as provided in such notice or (ii) the effective date of such termination of employment (in which case the right to exercise this option shall, pursuant to the preceding sentence, terminate upon the effective date of such termination of employment).

 

4.                                      Reorganization Event.

 

In the event of a Reorganization Event, with respect to any outstanding and unvested portion of this option, not vested prior to, and that does not become vested in connection with, the consummation of such Reorganization Event, the Board shall use its best efforts to provide for the assumption or continuation of such unvested portion of this option in accordance with Section 9(b)(2)(A)(i) of the Plan.

 

5.                                      Withholding.

 

No Shares will be issued pursuant to the exercise of this option unless and until the Participant pays to the Company, or makes provision satisfactory to the Company for payment of, any federal, state or local withholding taxes required by law to be withheld in respect of this option.

 

6.                                      Transfer Restrictions.

 

This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the lifetime of the Participant, this option shall be exercisable only by the Participant.

 

7.                                      Provisions of the Plan.

 

This option is subject to the provisions of the Plan (including the provisions relating to amendments to the Plan), a copy of which is furnished to the Participant with this option.

 

[Remainder of Page Intentionally Left Blank]

 

3

 

IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal by its duly authorized officer.  This option shall take effect as a sealed instrument.

 

	
 
    	
OVASCIENCE, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas Malley
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Thomas   Malley
    
	
 
    	
 
    	
Title:
    	
Chair,   Compensation Committee
    

 

SIGNATURE PAGE TO NONSTATUTORY STOCK OPTION AGREEMENT

 

 

PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing option and agrees to the terms and conditions thereof.  The undersigned hereby acknowledges receipt of a copy of the Company’s 2012 Stock Incentive Plan.

 

	
 
    	
PARTICIPANT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Michelle Dipp, M.D., Ph.D.
    
	
 
    	
Michelle   Dipp, M.D., Ph.D.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    	
c/o   OvaScience, Inc.
    
	
 
    	
 
    	
215   First Street, Suite 240
    
	
 
    	
 
    	
Cambridge,   MA 02142
    

 

 

Exhibit A

 

Definitions

 

1.                                      For purposes of this Agreement, the terms below shall have the following assigned meanings:

 

(a)                                 “Cause.” The following shall constitute “Cause” for termination of employment:

 

(i)                                     The Participant’s willful failure to perform, or gross negligence in the performance of, the Participant’s material duties and responsibilities to the Company and its Affiliates, which failure or negligence is not remedied within thirty (30) days of written notice thereof;

 

(ii)                                  The Participant’s material breach of any material provision of this Agreement or any other agreement with the Company or any of its Affiliates, which breach is not remedied within thirty (30) days of written notice thereof;

 

(iii)                               Fraud, embezzlement or other dishonesty with respect to the Company or any of its Affiliates, taken as a whole, which, in the case of such other dishonesty, causes or could reasonably be expected to cause material harm to the Company or any of its Affiliates, taken as a whole; or

 

(iv)                              The Participant’s conviction of a felony.

 

(b)                                 “Good Reason” shall mean, without the Participant’s consent, the occurrence of any one or more of the following events, provided (x) the Participant has furnished written notice to the Company of the condition giving rise to the claimed Good Reason no later than thirty (30) days following the occurrence of such condition, (y) the Company has failed to remedy the condition within thirty (30) days thereafter and (z) the Participant’s employment with the Company terminates within six months following the delivery of such notice:

 

(i)                                     a material diminution in the nature or scope of the Participant’s responsibilities, duties or authority, provided that in the absence of a Change of Control neither (x) the Company’s failure to continue the Participant’s appointment or election as a director or officer of any of its Affiliates, nor (y) any diminution in the nature or scope of the Participant’s responsibilities, duties or authority that is reasonably related to a diminution of the business of the Company or any of its Affiliates shall constitute “Good Reason”;

 

(ii)                                  a failure of the Company to provide the Participant the equity awards required to be granted in accordance with Section 3 of the letter agreement dated December 5, 2012 between the Company and the Participant after thirty (30) days’ notice during which the Company does not cure such failure; or

 

(iii)                               relocation of the Participant’s office more than fifty (50) milesfrom the location of the Company’s principal offices as of the Grant Date.

 

A - 1

 

(c)                                  “Change of Control” shall mean (i) the acquisition of beneficial ownership (as defined in Rule 13-3 under the Exchange Act) directly or indirectly by any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), of securities of the Company representing a majority or more of the combined voting power of the Company’s then outstanding securities, other than in an acquisition of securities for investment purposes pursuant to a bona fide financing of the Company; (ii) a merger or consolidation of the Company with any other corporation in which the holders of the voting securities of the Company prior to the merger or consolidation do not own more than 50% of the total voting securities of the surviving corporation; or (iii) the sale or disposition by the Company of all or substantially all of the Company’s assets other than a sale or disposition of assets to an Affiliate of the Company or a holder of securities of the Company; notwithstanding the foregoing, no transaction or series of transactions shall constitute a Change of Control unless such transaction or series of transactions constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i).

 

A - 2

 

Exhibit B

 

NOTICE OF STOCK OPTION EXERCISE

 

Date:                    (1)

 

OvaScience, Inc.

215 First Street, Suite 240

Cambridge, Massachusetts 02142

 

Attention:  Treasurer

 

Dear Sir or Madam:

 

I am the holder of a Nonstatutory Stock Option granted to me under the OvaScience, Inc. (the “Company”) 2012 Stock Incentive Plan on                     (2) for the purchase of                     (3) shares of Common Stock of the Company at a purchase price of $                    (4) per share.

 

I hereby exercise my option to purchase                   (5) shares of Common Stock (the “Shares”), for which I have enclosed                     (6) in the amount of                     (7).  Please register my stock certificate as follows:

 

	
Name(s):
    	
 
    	
(8)
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Tax   I.D. #:
    	
 
    	
(9)
    

 

(1) Enter the date of exercise.

(2) Enter the date of grant.

(3) Enter the total number of shares of Common Stock for which the option was granted.

(4) Enter the option exercise price per share of Common Stock.

(5) Enter the number of shares of Common Stock to be purchased upon exercise of all or part of the option.

(6) Enter “cash”, “personal check” or if permitted by the option or Plan, “stock certificates No.  XXXX and XXXX”.

(7) Enter the dollar amount (price per share of Common Stock times the number of shares of Common Stock to be purchased), or the number of shares tendered.  Fair market value of shares tendered, together with cash or check, must cover the purchase price of the shares issued upon exercise.

(8) Enter name(s) to appear on stock certificate:  (a) Your name only; (b) Your name and other name (i.e., John Doe and Jane Doe, Joint Tenants With Right of Survivorship); or (c) In the case of a Nonstatutory option only, a Child’s name, with you as custodian (i.e., Jane Doe, Custodian for Tommy Doe).  Note:  There may be income and/or gift tax consequences of registering shares in a Child’s name.

(9) Social Security Number of Holder(s).

 

B - 1

 

	
Very   truly yours,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Signature)
    	
 
    

 

B - 2Exhibit 10.32

 

 

October 21, 2014

 

David P. Harding

51 Summer Street

Weston, MA 02493

 

Dear David:

 

On behalf of OvaScience, Inc. (the “Company”), I am pleased to offer you employment with the Company.  The purpose of this letter is to summarize the terms of your employment with the Company, should you accept our offer.

 

1.                                      Employment.  You will be employed, effective on December 8, 2014, to serve on a full-time basis as Chief Commercial Officer of the Company.  In this role, you will initially report to the Company’s Chief Executive Officer, and have such duties and responsibilities as are customary for such position, and as are otherwise assigned to you from time to time by the Company. You agree to devote your full business time, best efforts, skill, knowledge, attention and energies to the advancement of the Company’s business and interests, and to the performance of your duties and responsibilities as an employee of the Company and not to engage in any other business activities without prior approval from the Company.

 

2.                                      Compensation.  Your base salary will be $29,166.66 per month ($350,000 on an annualized basis), subject to applicable taxes and withholdings and may be reviewed yearly at the sole discretion of the Board.  Please note that the annualized amount of your salary as described above is set forth as a matter of convenience, and shall not constitute or be interpreted as an agreement by the Company to employ you for any specific period of time.

 

In addition to your base salary, you will be eligible to receive an annual discretionary bonus award of up to 40% of your then current base salary.  The bonus award, if any, will be determined by the Board of Directors of the Company or a Committee thereof (the “Board”) in its sole discretion, based on achieving specific goals to be determined by the Chief Executive Officer of the Company in consultation with the Board.  For fiscal year 2014, your annual bonus eligibility shall be prorated to reflect the portion of the year that you are employed by the Company after your start date.  To the extent that you earn any bonus hereunder, such bonus will be paid at the same time that bonuses are paid to other Company employees of similar rank and tenure, but in no event later than sixty-five (65) days following the end of the fiscal year in which it was earned.  You must be an active employee of the Company on the date on which bonuses are distributed in order to be eligible for and to be deemed as having earned any bonus award.

 

3.                                      Benefits.  You will be eligible to participate in any and all benefit programs that the Company establishes and makes available to its employees from time to time, provided you meet the specific eligibility criteria as set forth in (and subject to all provisions of) the plan documents governing those programs.  The benefits made available by the Company, and the rules, terms and 

 

 

conditions for participation in such benefit plans, may be changed by the Company at any time and from time to time without advance notice.

 

4.                                      Vacation.  You will be eligible to accrue up to a maximum of twenty (20) days of paid vacation per calendar year to be taken at such times as may be approved by the Company.  The number of vacation days for which you are eligible shall accrue at the rate of 1.67 days per month that you are employed during such calendar year, and shall be subject to the Company’s vacation policies and practices as are then in effect.

 

5.                                      Stock Options.  Subject to the approval of the Board (including a majority of the independent members of the Board) or Compensation Committee, the Company will grant to you a non-qualified stock option (the “Option”) for the purchase of an aggregate of 329,490,000 shares of Common Stock of the Company (subject to appropriate adjustments for stock splits, stock dividends, combinations, recapitalizations and similar transactions affecting the Common Stock of the Company after the date hereof) at a price per share equal to the closing sale price of the Common Stock on the Nasdaq Global Market on the date of grant, as an inducement material to you joining the Company, pursuant to Rule 5635(c)(4) of the Nasdaq Listed Company Manual.  The Option shall be subject to all terms, vesting schedules and other provisions set forth in a separate option agreement. The Option will have a term of ten (10) years except as set forth in the stock option agreement and be subject to a vesting schedule of four (4) years, with 25% of the shares vesting on the first anniversary of your employment start date and 6.25% of the shares vesting each quarter thereafter. Notwithstanding anything to the contrary in the stock option agreement, if a “Change in Control Event” (as defined on Exhibit A attached hereto) occurs and, within one (1) year of such Change in Control Event, your employment is terminated by the Company (or any successor) without “Cause” (as defined on Exhibit A) or by you for “Good Reason” (as defined on Exhibit A), the vesting schedule of the Option shall be accelerated in full.  You may be eligible to receive future stock options grants as the Board shall deem appropriate and in its sole and absolute discretion.

 

6.                                      Severance Benefits Upon Termination by the Company Without “Cause” or by you for “Good Reason”.  If the Company terminates your employment without Cause (as defined on Exhibit A attached hereto) or you terminate your employment for Good Reason (as defined on Exhibit A), you shall be eligible to receive the following severance benefits: (a) severance pay in an amount equal to nine (9) months of your base salary as in effect at the time of your termination, payable in accordance with the Company’s regular payroll procedures proportionately over a nine (9) month period following the termination of your employment (such period, the “Severance Period”); provided that, if you commence any employment substantially similar to your employment hereunder (based upon responsibility, reporting and compensation) during the Severance Period, your severance amount shall be reduced such that the number of months of severance pay to which you will be entitled shall be equal to that number of months between the date your employment with the Company terminates and the date you commence such employment; and (b) should you be eligible for and elect to continue receiving group medical and dental insurance coverage under the law known as COBRA, the Company shall continue to pay on your behalf that portion of the monthly premiums for such coverage that it pays for active and similarly situated employees receiving the same type of coverage, through the earlier of (x) the last day of the Severance Period, or (y) the date that you become eligible for group health and/or dental insurance coverage from any new employer; provided that, if the Company determines that the payment of the premiums due under paragraph 6(b) would reasonably be expected to result in the 

 

 

imposition of any excise taxes on the Company for failure to comply with the nondiscrimination requirements of the Patient Protection and Affordable Care Act of 2010, as amended, (the “Act”), this payment will be treated as a taxable payment, subject to imputed income tax to the extent necessary to eliminate any discriminatory treatment or taxation under the Act.  No severance pay or other benefit hereunder shall be provided to you unless, within sixty (60) days following the date that your employment is terminated, you first execute and do not revoke a separation agreement in a form prepared by and acceptable to the Company, which shall include, at a minimum, a full release of all claims against the Company (as well as its parents, subsidiaries and affiliates, and its and their, executives, officers, directors, employees, consultants, agents, shareholders, and assigns), as well as non-disparagement and confidentiality provisions in favor of the Company (the “Separation Agreement”).  The severance payments shall commence on the first payroll period following the date the Separation Agreement becomes effective (the “Payment Date”).  Notwithstanding the payment requirements set forth in the immediately preceding sentence, if the sixty (60) day period following the date your separation from service begins in one tax year and ends in the following tax year, the Company will commence payment on the next regular payroll date following the later of January 1 of the second tax year and the date the Separation Agreement becomes enforceable and no longer subject to revocation.  The first such payment will include a catch-up payment equal to all amounts you otherwise would have received under paragraph 6(a) prior to the first payment.  The distribution of any severance payments shall be subject to the provisions of Exhibit B attached hereto.

 

7.                                      Notices.  Any purported termination of employment by the Company for Cause or by you for Good Reason shall be communicated to the other party through written notice, indicating the specific grounds for such termination.  Such notice, and all other communications which are required or may be given pursuant to the terms of this letter, shall be sufficient in all respects if given in writing and shall be deemed given (i) if delivered personally, on the date of delivery, (ii) if mailed by certified or registered mail, return receipt requested and postage prepaid, three (3) days after the mailing date, (iii) if sent via a nationally recognized overnight courier, on the next business day thereafter, or (iv) if sent via facsimile confirmed in writing to the recipient, or via email, on the next business day thereafter, in each case, if to the Company, at the Company’s principal place of business, and if to you at the most recent home address (and/or, as applicable, the most recent personal email address) which you have provided to the Company or to such other address or addresses as either party shall have designated in writing to the other party.

 

8.                                      Invention, Non-Disclosure, Non-Competition and Non-Solicitation.  As a condition of your employment with the Company, you will be required to execute an Invention and Non-Disclosure Agreement and a Non-Competition and Non-Solicitation Agreement in the forms attached as Exhibit C and Exhibit D.

 

9.                                      Other Agreements.  You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter.

 

10.                               Proof of Legal Right to Work.  You agree to provide to the Company, within three (3) days of your hire date, documentation of your eligibility to work in the United States, as required by the Immigration Reform and Control Act of 1986.  If you need to obtain a work visa in order to be eligible to work in the United States, your employment with the Company will be 

 

 

conditioned upon your obtaining a work visa in a timely manner as determined by the Company.

 

11.                               At-Will Employment.  This letter shall not be construed as an agreement, either express or implied, to employ you for any stated term, and shall in no way alter the Company’s policy of employment at will, under which both you and the Company remain free to terminate the employment relationship for any reason or no reason, with or without cause, at any time, with or without notice.  Similarly, nothing in this letter shall be construed as an agreement, either express or implied, to pay you any compensation or grant you any benefit beyond the end of your employment with the Company, except as explicitly set forth in paragraph 6.

 

12.                               Company Policies and Procedures.  As an employee of the Company, you will be required to comply with all Company policies and procedures.  Further, the Company’s premises, including all workspaces, furniture, documents and other tangible materials, and all information technology resources of the Company (including, but not limited to, computers, data and other electronic files, and all internet and e-mail systems) are subject to oversight and inspection by the Company at any time.  Company employees should have no expectation of privacy with regard to any Company premises, materials, resources or information.

 

This offer letter, and the Exhibits specifically referenced herein, constitute the entire offer regarding the terms and conditions of your prospective employment with the Company.  It supersedes any prior agreements, or other promises or statements (whether oral or written) regarding the offered terms of employment.  The resolution of any disputes under this letter or related to your employment with or separation of employment from the Company shall be governed by Massachusetts law.  By accepting this offer of employment, you agree that any action, demand, claim or counterclaim in connection with any aspect of your employment with the Company, or any separation of employment (whether voluntary or involuntary) from the Company, shall be resolved in a court of competent jurisdiction in Massachusetts by a judge alone, and you waive and forever renounce your right to a trial before a civil jury.  This offer letter shall be binding upon and shall inure to the benefit of the parties and their respective successors. You shall be indemnified pursuant to any Company D&O insurance policies and/or by-laws to the same extent as similarly situated Company employees.

 

If this letter correctly sets forth the terms under which you will be employed by the Company, please sign the enclosed duplicate of this letter in the space provided below and return it to me or Human Resources.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
OVASCIENCE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Jeffrey Young
    
	
 
    	
 
    	
Jeffrey   Young
    
	
 
    	
 
    	
Chief   Financial Officer
    

 

The foregoing correctly sets forth the terms of my at-will employment with OvaScience, Inc.  I am not relying on any representations other than as set forth above.

 

 

	
/s/   David P. Harding
    	
 
    	
Date:
    	
12/8/2014
    
	
David   P. Harding
    	
 
    	
 
    

 

 

Exhibit A

 

Definitions

 

“Cause” for termination shall be deemed to exist upon:

 

(A)                         a good faith finding by the Company (i) of failure of or refusal by the employee to perform his or her duties and responsibilities to the Company, or (ii) that the employee has engaged in dishonesty, gross negligence or misconduct, which dishonesty, gross negligence or misconduct has caused harm or damage to the business or affairs of the Company;

 

(B)                         the commission by the employee, the conviction of the employee of, or the entry of a pleading of guilty or nolo contendere by the employee to any crime involving moral turpitude or any felony; or

 

(C)                         a breach by the employee of any material provision of any invention and non-disclosure agreement or non-competition and non-solicitation agreement with the Company, which breach is not cured within ten days written notice thereof.

 

A “Change in Control Event” shall be deemed to exist upon the sale of all or substantially all of the outstanding shares of capital stock, assets or business of the Company, by merger, consolidation, sale of assets or otherwise (other than a transaction in which all or substantially all of the individuals and entities who were beneficial owners of the capital stock of the Company immediately prior to such transaction beneficially own, directly or indirectly, more than 50% of the outstanding securities (on an as-converted to Common Stock basis) entitled to vote generally in the election of directors of the (i) resulting, surviving or acquiring corporation in such transaction in the case of a merger, consolidation or sale of outstanding shares, or (ii) acquiring corporation in the case of a sale of assets); provided that, in each of the foregoing cases, the Change in Control Event also meets all of the requirements of a “change in the ownership of a corporation” within the meaning of Treasury Regulation §1.409A-3(i)(5)(v) or “a change in the ownership of a substantial portion of the corporation’s assets” within in the meaning of Treasury Regulation §1.409A-3(i)(5)(vii).

 

“Good Reason” shall be deemed to exist upon:

 

(A)                         the relocation of the Company’s offices such that the employee’s daily commute is increased by at least forty (40) miles each way without the written consent of the employee;

 

(B)                         material reduction of the employee’s annual base salary without the prior consent of the employee (other than in connection with, and substantially proportionate to, reductions by the Company of the annual base salary of more than 50% of its employees); or

 

(C)                         material diminution in employee’s duties, authority or responsibilities

 

 

without the prior consent of the employee, other than changes in duties, authority or responsibilities resulting from the employee’s misconduct;

 

provided, however, that (i) no such event or condition shall constitute Good Reason unless (x) the employee gives the Company a written notice of termination for Good Reason not more than 90 days after the initial existence of the condition, (y) the grounds for termination if susceptible to correction are not corrected by the Company within 30 days of its receipt of such notice and (z) the employee’s termination of employment occurs within six months following the Company’s receipt of such notice; and (ii) at all times “Good Reason” will be interpreted in a manner consistent with the definition of “good reason” within the meaning of Section 409A (as defined below).

 

 

Exhibit B

 

Payments Subject to Section 409A

 

1.                                      Subject to this Exhibit B, payments or benefits during the Severance Period under this offer letter (“Severance Payments”) shall begin only upon the date of your “separation from service” (determined as set forth below) which occurs on or after the termination of your employment.  The following rules shall apply with respect to distribution of the Severance Payments, as applicable:

 

(a)                                  It is intended that each installment of the Severance Payments shall be treated as a separate “payment” for purposes of Section 409A of the Code and the guidance issued thereunder (“Section 409A”).  Neither the Company nor you shall have the right to accelerate or defer the delivery of any such Severance Payments except to the extent specifically permitted or required by Section 409A.

 

(b)                                  If, as of the date of your “separation from service” from the Company, you are not a “specified employee” (within the meaning of Section 409A), then each installment of the Severance Payments shall be made on the dates and terms set forth in the offer letter.

 

(c)                                   If, as of the date of your “separation from service” from the Company, you are a “specified employee” (within the meaning of Section 409A), then:

 

(i)                                     Each installment of the Severance Payments due under the offer letter that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when your separation from service occurs, be paid within the Short-Term Deferral Period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A and shall be made on the dates and terms set forth in the offer letter; and

 

(ii)                                  Each installment of the Severance Payments due under the offer letter that is not described in this Exhibit B, Section 1(c)(i) and that would, absent this subsection, be paid within the six-month period following your “separation from service” from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; 

 

 

                                                provided, however, that the preceding provisions of this sentence shall not apply to any installment of Severance Payments if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service).  Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of your second taxable year following the taxable year in which the separation from service occurs.

 

2.                                      The determination of whether and when your separation from service from the Company has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h).  Solely for purposes of this Exhibit B, Section 2, “Company” shall include all persons with whom the Company would be considered a single employer under Section 414(b) and 414(c) of the Code.

 

3.                                      All expense reimbursements shall be paid as soon as administratively practicable.  If an expense reimbursement or provision of in-kind benefit is not exempt from Section 409A of the Code, the following rules apply: (i) 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; (ii) the amount of reimbursable expenses incurred or provision of in-kind benefits in one tax year shall not affect the expenses eligible for reimbursement or the provision of in-kind benefits in any other tax year; and (iii) the right to reimbursement for expenses or provision of in-kind benefits is not subject to liquidation or exchange for any other benefit.

 

4.                                      The Company makes no representation or warranty and shall have no liability to you or to any other person if any of the provisions of the offer letter (including this Exhibit) are determined to constitute deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}]]