Document:

Exhibit
10.3

 

CONVERTIBLE
PROMISSORY NOTE

THIS
NOTE AND ANY SHARES OF STOCK ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE AND ANY SHARES OF STOCK ISSUABLE UPON THE CONVERSION HEREOF MAY NOT BE
SOLD, OFFERED FOR SALE, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT COVERING THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR THE DELIVERY OF AN OPINION
OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. THIS NOTE IS ALSO SUBJECT TO RESTRICTIONS ON TRANSFER.

REGEN
BIOPHARMA, INC.

	Issue
    Date: December 6, 2017	 	Principal
    Amount:

1.
Terms. For value received, the Regen BioPharma, Inc., a Nevada corporation (the "Company") hereby absolutely and
unconditionally promises to pay to the order of __________________________(the "Lender") ON DEMAND AT ANY TIME AFTER
December 6, 2020 (the "Maturity Date"), the principal amount of fifty thousand dollars ($50,000) and interest on the
whole amount of said principal sum outstanding and remaining from time to time unpaid (the "Note"), commencing from
the date hereof and continuing until payment in full of this Note or conversion as hereinafter provided, at an annual rate equal
to ten percent (10%) simple interest. Interest shall be payable quarterly upon demand or upon conversion pursuant to Section 2
hereunder. Interest shall be computed on the basis of the actual number of days elapsed divided by 365. Principal and interest
shall be payable in lawful money of the United States of America, at the principal place of business of the Lender or at such
other place as the Lender may have designated from time to time in writing to the Company.

2. Conversion.

2.1
Conversion Right. The Lender shall have the right from time to time to convert all or a part of the outstanding and unpaid
principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of the Company into which such Common Stock shall hereafter be changed
or reclassified at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion").

The
Lender shall have the right to convert one hundred percent (100%) of the Principal Amount and any accrued interest commencing
as of the date which is the earlier of:

(i)
One day subsequent to the execution of an agreement to a transaction whose completion would result in a "Change of Control"
of the Company. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding
stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of
Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of
such transaction.

(ii)
One day subsequent to the execution of an agreement to a transaction whose completion would result in a "Change of Control"
of KCL Therapeutics, Inc. For purposes of this Note, a Change of Control shall be defined as any transaction or series of transactions,
whether by merger, sale of substantially all of the assets, or sale or transfer of more than fifty percent (50%) of the outstanding
stock of the relevant entity in which the members of the Board of Directors immediately preceding the closing of the Change of
Control transaction no longer constitute a majority of the Board of Directors of the surviving entity following the closing of
such transaction.

(iii)
One day subsequent to the commencement, in compliance with applicable law, of a broad solicitation by a third party to purchase
a majority percentage of the Company's outstanding equity securities for a limited period of time contingent on shareholders of
the Company tendering a fixed number of their equity securities ("Tender Offer"). 

(iv)
One day subsequent to the closing of a Transaction Event:

"Transaction
Event" shall mean either of:

(a)
The sale by the Company or by KCL Therapeutics, Inc. of the Company's proprietary NR2F6 intellectual property to an unaffiliated
third party, or,

(b)
The granting of a license by the Company or by KCL Therapeutics, Inc. to an unaffiliated third party granting that unaffiliated
third party the right to develop and/or commercialize the Company's proprietary NR2F6 intellectual property

(v)
That date which is twenty four (24) months subsequent to the date of execution of this Note.

 

The
number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the principal
amount of this Note to be converted (the "Conversion Amount") by the applicable Conversion Price as defined in this
Section 2 then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the "Notice
of Conversion"), delivered to the Company by the Lender on such conversion date (the "Conversion Date").

2.2
Conversion Price. The "Conversion Price" shall be defined as the lower $0.025 per share, or, a 75% discount to the
closing price of the Common Stock on the Over-the-Counter Bulletin Board on the trading day immediately prior to the date that
a Notice of Conversion is submitted pursuant to Section 2.3. or, if the Over-the-Counter Bulletin Board is not the principal trading
market for such security, the closing price of such security on the principal securities exchange or trading market where such
security is listed or traded on the trading day immediately prior to the date that a Notice of Conversion is submitted pursuant
to Section 2.3. or, if no closing bid price of such security is available in any of the foregoing manners, the average of the
closing bid prices of any market makers for such security that are listed in the "pink sheets" by the National Quotation
Bureau, Inc. on the trading day immediately prior to the date that a Notice of Conversion is submitted pursuant to Section 2.3. 

2.3
Method of Conversion. Subject to Section 2.1, this Note may be converted by the Lender by submitting to the Company a Notice
of Conversion by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion Date prior to 5:00
p.m., New York, New York time. The Lender shall not be required to physically surrender this Note to the Company unless the entire
unpaid principal amount of this Note is so converted. The Lender and the Company shall maintain records showing the principal
amount so converted and the dates of such conversions so as not to require physical surrender of this Note upon each such conversion.
In the event of any dispute or discrepancy, such records of the Company shall, prima facie, be controlling and determinative in
the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as aforesaid, the Lender
may not transfer this Note unless the Lender first physically surrenders this Note to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Lender a new Note of like tenor, registered as the Lender (upon payment by the
Lender of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid principal amount of this
Note. 

Upon
receipt by the Company from the Lender of a facsimile transmission, e-mail, or other reasonable means of communication of a Notice
of Conversion meeting the requirements for conversion, the Company shall issue and deliver or cause to be issued and delivered
to or upon the order of the Lender certificates for the Common Stock issuable upon such conversion within ten (10) business days
after such receipt. Upon receipt by the Company of a Notice of Conversion, the Lender shall be deemed to be the Lender of record
of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest
on this Note shall be reduced to reflect such conversion. All rights with respect to the portion of this Note being so converted
shall forthwith terminate except the right to receive the Common Stock or other securities as herein provided on such conversion.
In lieu of delivering physical certificates representing the Common Stock issuable upon conversion, provided the Company is participating
in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request
of the Lender, the Company shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock
issuable upon conversion to the Lender by crediting the account of Lender's Prime Broker with DTC through its Deposit Withdrawal
Agent Commission ("DWAC") system.

2.4
Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless
(i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Company or its transfer agent
shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions
of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration or 

(iii) such shares are sold or transferred pursuant to Rule 144 under the
Act (or a successor rule) ("Rule 144") or (iv) such shares are transferred to an "affiliate" (as defined in
Rule 144) of the Company who agrees to sell or otherwise transfer the shares only in accordance with this Section 2.5 and who
is an Accredited Investor as the term Accredited Investor is defined in Rule 501 of Regulation D, promulgated under the Act.

Subject
to the removal provisions set forth below, until such time as the shares of Common Stock issuable upon conversion of this Note
have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold, each certificate for shares of issuable upon conversion of this Note
that has not been so included in an effective registration statement or that has not been sold pursuant to an effective registration
statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

"NEITHER
THE ISSUANCE OR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE LENDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT."

The
legend set forth above shall be removed and the Company shall issue to the Lender a new certificate therefore free of any transfer
legend if (i) the Company or its transfer agent shall have received an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock
may be made without registration under the Act and the shares are so sold or transferred, (ii) such Lender provides the Company
or its transfer agent with reasonable assurances that the Common Stock issuable upon conversion of this Note (to the extent such
securities are deemed to have been acquired on the same date) can be sold pursuant to Rule 144 or (iii) in the case of the Common
Stock issuable upon conversion of this Note, such security is registered for sale by under an effective registration statement
filed under the Act or (iv) otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold. 

2.5
Reverse Stock Splits. If the number of shares of Common Stock outstanding at any time while this Note is outstanding is decreased
by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion
Price shall be appropriately increased so that the number of shares of Common Stock issuable on conversion hereof shall be decreased
in proportion to such decrease in outstanding shares.

2.6
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding subdivides outstanding shares
of Common Stock into a larger number of shares then the Conversion price shall be multiplied by a fraction of which the numerator
shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such
event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event

3. Payment.

 

WIRE INSTRUCTIONS:

 

4. Prepayment. Notwithstanding anything to the contrary contained herein, the Company shall have the right, exercisable on not
less than ten (10) Trading Days prior written notice to the Lender, to prepay the outstanding Note in part or in full, including
outstanding principal and accrued interest. Any notice of prepayment hereunder shall be delivered to the Lender at its registered
addresses and shall state that the Company is exercising its right to prepay the Note and the date of prepayment, which shall
be not more than ten (10) Trading Days from the date of the prepayment notice. Upon receipt of a prepayment notice, Lender shall
have the right, but not the obligation, to accelerate the conversion period specified in Section 2.1 and convert that portion
of the outstanding principal balance which is subject to prepayment to Common Shares as provided for in Section 2.

5. Warrant
Coverage. In the event that that the Company exercises its right to prepay the note, or if the Lender chooses not to convert the
remaining amount of the note into Common Shares of the company, the Lender shall receive warrants equal to 10% of the Common shares
it would have received had the Lender converted the remaining amount of the Note into Common shares of the Company. The warrants
shall have a strike price of $0.025 per share. See Exhibit B (incorporated into this Note) for instructions on completing the
Exercise of Warrants document.

6. Events
of Default.

 6.1
The following shall constitute events of default (individually an "Event of Default"):

(a)
default in the payment, when due or payable, of an obligation to pay interest or principal under this Note, which default is not
cured by payment in full of the amount due within thirty (30) days from the date that the Lender receives notice of the occurrence
of such default;

(b)
filing of a petition in bankruptcy or the commencement of any proceedings under any bankruptcy laws by or against the Company,
which filing or proceeding, is not dismissed within ninety (90) days after the filing or commencement thereof; or 

(c)
failure of the Company to comply in any way with the terms, covenants or conditions contained in this Note.

6.2
If an Event of Default shall occur and be continuing, the Lender may, at its option, declare this Note to be immediately due and
payable without further notice or demand, whereupon this Note shall become immediately due and payable without presentment, demand
or protest, all of which are hereby waived by the Company.

7. Transfer
of Note. This Note may not be transferred or assigned other than a transfer or assignment to an Affiliate of the Lender. As used
herein, the term "Affiliate" means an entity that directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, the Lender.

8. Certain Waivers. The Company hereby expressly and irrevocably waives presentment, demand, protest, notice of protest and any
other formalities of any kind.

9. Amendment, Modification or Termination. This Note may only be modified, amended, or terminated (other than by payment in full)
by an agreement in writing signed by the Company and the Lender. No waiver of any term, covenant or provision of this Note shall
be effective unless given in writing by the Lender.

10. Governing Law. This Note and the obligations of the Company hereunder shall be governed by and interpreted and determined
in accordance with the laws of the State of California (excluding the laws and rules of law applicable to conflicts or choice
of law).

 

IN
WITNESS WHEREOF, this Note has been duly executed on behalf of the undersigned on the day and in the year first above written.

	REGEN BIOPHARMA INC	 	 
	 	 	 
	/s/ David R. Koos 	 	 
	David R. Koos, CEO	 	 
	 	 	 
	12/29/ 2017	 	 

 

    	 	1	 

     

    

 

EXHIBIT
A

NOTICE
OF CONVERSION

The
undersigned hereby elects to convert $ ___________________________ principal amount and ________________ accrued
interest of the Note into that number of shares of Common Stock to be issued pursuant to the conversion of the Note as set
forth below of REGEN BIOPHARMA, INC. according to the conditions of the convertible note of the Company dated as of December
20, 2017 as of the date written below.

Date
of Conversion: 

	Applicable Conversion Price	 	 
	(Attach Bloomberg price documentation)	 
	Number of Shares of Common Stock to be Issued
    Pursuant to Conversion of Note:	 	 
	 	 	 
	Amount of Principal Balance Due Remaining Under
    the Note After This Conversion:	 	 

 

Checked
box corresponds to applicable instructions:

The
Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").

 

	 	Name of DTC Prime Broker:	 	 
	 	Account Number	 	 

[1
The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock
set forth below in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

	 	Name:	 	 
	 	Address:	 	 
	 	 	 	 
	 	 	 	 
	 	Phone:	 	 

 

	 	 	 	 
	Name	 	Date	 
	Title	 	 	 

 

    	 	2	 

     

    

 

EXHIBIT
B

COMMON
STOCK PURCHASE WARRANT

REGEN BIOPHARMA, INC.

THIS
WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION.

THIS
COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that, for value received, Lender is entitled, solely upon the
terms and subject to the limitations on exercise and the conditions hereinafter set forth, to subscribe for and purchase from
the Company, shares of common stock of the Company (the "Warrant Shares"). The purchase price of one Warrant Share under
this Warrant shall be equal to the $0.025 per Warrant Share ("Exercise Price").

 

1.
In the event that Company shall exercise Company's rights pursuant to Section 4 of the Note ("Prepayment Clause") ,
Lender shall be entitled , on or prior to the close of business on the three (3) month anniversary of the date that the Note shall
have been prepaid by the Company("Prepayment Date") , to subscribe for and purchase from the Company up to that number
of Warrant Shares at the Exercise Price per Share equivalent to that one tenth of that number of Common Shares that Lender would
have been entitled to be issued had Lender exercised Lender's Conversion Right pursuant to Section 2.1 of the Note as of the Prepayment
Date.

 

2.
In the event that, as of the Maturity Date, part of the outstanding and unpaid principal amount of this Note and any Accrued Interest
remains outstanding, Lender shall be entitled , on or prior to the close of business on the three (3) month anniversary of the
Maturity Date , to subscribe for and purchase from the Company up to that number of Warrant Shares at the Exercise Price per Share
equivalent to that one tenth of that number of Common Shares that Lender would have been entitled to be issued had Lender exercised
Lender's Conversion Right pursuant to Section 2.1 of the Note as of the Maturity Date.

 

3.
If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of
the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately
before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such
event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3 shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or reclassification

 

4. Exercise
of the purchase rights represented by this Warrant may be made, in whole or in part, from and after the initial exercise date,
and then at any time, by delivery to the Company (or such other office or agency of the Company as it may designate by notice
in writing to Lender at the address of the Lender appearing on the books of the Company) of a duly executed facsimile or emailed
copy of the Notice of Exercise form annexed hereto and delivery of the aggregate Exercise Price for the Warrant Shares specified
in the applicable Notice of Exercise by wire transfer

 

5.
Warrant Shares purchased hereunder will be delivered to Holder within 10 business days of Notice of Exercise.

 

6. The Warrant Shares may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration statement
under the Act or (ii) the Company or its transfer agent shall have been furnished with an opinion of counsel (which opinion shall
be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to
be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares are sold
or transferred pursuant to Rule 144 under the Act (or a successor rule) ("Rule 144") or (iv) such shares are transferred
to an "affiliate" (as defined in Rule 144) of the Company who agrees to sell or otherwise transfer the shares only in
accordance with this Section 6 and who is an Accredited Investor as the term Accredited Investor is defined in Rule 501 of Regulation
D, promulgated under the Act. Subject to the removal provisions set forth below, until such time as the Warrant Shares have been
registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold, each certificate for Warrant Shares that have not been so included
in an effective registration statement or that have not been sold pursuant to an effective registration statement or an exemption
that permits removal of the legend, shall bear a legend substantially in the following form, as appropriate:

"NEITHER
THE ISSUANCE OR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE LENDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT."

The
legend set forth above shall be removed and the Company shall issue to the Lender a new certificate therefore free of any transfer
legend if (i) the Company or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such securities may be made
without registration under the Act and the shares are so sold or transferred, (ii) such Lender provides the Company or its transfer
agent with reasonable assurances that the Warrant Shares can be sold pursuant to Rule 144 or (iii) such security is registered
for sale by under an effective registration statement filed under the Act or (iv) otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can then be immediately sold.

 

7.
The Lender shall not be required to physically surrender this Warrant to the Company. If the Lender has purchased all of the Warrant
Shares available hereunder and the Warrant has been exercised in full, this Warrant shall automatically be cancelled without the
need to surrender the Warrant to the Company for cancellation.

 

8.
This Warrant may not be transferred or assigned other than a transfer or assignment to an Affiliate of the Lender. As used herein,
the term "Affiliate" means an entity that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Lender.

 

9.
FORM OF WARRANT NOTICE

 

    	 	3	 

     

    

NOTICE
OF EXERCISE

TO:
REGEN BIOPHARMA, INC.

The
undersigned hereby elects to purchase_____________ Warrant Shares of the Company pursuant to the terms of the Warrant issued in
connection with that Convertible Note in the amount of _______ by and between________ and the Company dated______ and maturing______
, 2020 and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

Please
issue a certificate or certificates representing said Warrant Shares in the name of the undersigned. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE]

Name:

Date:

 

    	 	4ex_104409.htm

Exhibit 10.1

 

RETENTION BONUS AGREEMENT

 

This Retention Bonus Agreement (this “Agreement”) is made as of February 2, 2018, by and between Park Electrochemical Corp., a New York corporation (the “Company”), and Christopher T. Mastrogiacomo, 720 South Collier Avenue #502, Marco Island, Florida 34145 (the “Employee”).  

 

Recitals

 

A.     The Employee is now employed by the Company and the Employee’s continued employment through the Retention Period (as defined herein) is critical to maintaining and strengthening the Company’s business relationships with its customers, suppliers, employees and other business partners relating to the Company’s electronics and to otherwise assist the Company in pursuing a Sale Transaction (as defined herein).

 

B.     The Company desires to provide additional incentive to the Employee to remain in the employ of the Company through the Retention Period (as defined herein).  

 

C.     As an inducement thereto, the Company desires to provide for the payment of a bonus to the Employee in connection with a Closing (as defined herein), subject to the terms and conditions set forth in this Agreement.  

 

Therefore, the parties agree as follows:

 

1.     Defined Terms.

 

(a)     “Cause” shall mean the Employee’s (i) commission of a crime of moral turpitude or a felony that involves financial misconduct or has resulted, or reasonably could be expected to result, in any economic or reputational injury to the Company, (ii) dishonesty or willful commission or omission of any action that has resulted, or reasonably could be expected to result, in demonstrable and significant economic or reputational injury to the Company, or (iii) material breach of this Agreement or any other agreement entered into between the Employee and the Company or any of its subsidiaries or affiliates, or any material written Company policy, for this clause (iii) after notice and a reasonable opportunity to cure (if such breach can be cured).

 

(b)     “Good Reason” shall mean voluntary resignation within six (6) months after any of the following actions are taken by the Company or any of its subsidiaries or affiliates without the Employee’s consent: (i) any material breach of any provision of this Agreement or any other agreement between the Company and any of its subsidiaries or affiliates and the Employee; (ii) a material diminution in the responsibilities or authority of the Employee and which is materially inconsistent with the Employee’s position other than (1) in connection with the termination of the Employee’s employment for Cause, (2) temporarily while the Employee is physically or mentally incapacitated or (3) as required by applicable law; (iii) a material diminution in the annual base salary or bonus to be paid to the Employee (other than a general reduction that affects all similarly situated employees in substantially the same proportions); or (iv) a relocation of the Employee's principal place of employment by more than 50 miles; provided, however, that none of the foregoing events shall constitute Good Reason unless the Employee shall have notified the Company in writing describing the event(s) which constitute Good Reason within thirty (30) days of the Employee’s knowledge of the event and then only if the Company shall have failed to cure such event(s) within thirty (30) days after the Company’s receipt of such written notice.

 

(c)     “Qualifying Termination” shall mean the Employee’s voluntary termination of employment during the Retention Period for “good reason” within the meaning of Treasury Regulations Section 1.409A-1(n)(2) (including, for the avoidance of doubt, the Employee’s voluntary termination during the Retention Period for Good Reason).

 

 

 

 

(d)     “Retention Period” shall mean the period from the date of this Agreement through and including the Closing.

 

(e)     “Sale Transaction” shall mean a transaction or series of transactions in which the Company consummates, directly or indirectly, the sale, transfer or other disposition of all or a majority of the Company’s electronics division to a non-affiliated third party, whether in one or a series of transactions, including, without limitation, by way of negotiated sale, merger or consolidation, spin-off, reorganization, tender or exchange offer, divestiture, share exchange, or leveraged buyout.

 

2.     Retention Bonus.  Upon the consummation of the first Sale Transaction (the “Closing”) on or before April 30, 2019, the Employee shall be entitled to receive from the Company a one-time lump sum cash bonus in an aggregate amount equal to $365,730.00 (the “Retention Bonus”), if the Employee: 

 

(a)     (i) is continuously employed by the Company or any of its subsidiaries or affiliates during the Retention Period, or (ii) is terminated by the Company without Cause or effectuates a Qualifying Termination during the Retention Period; and

 

(b)     executes and delivers, and allows to become effective, a general release, substantially in the form of Exhibit A, in favor of the Company, its respective affiliates and subsidiaries, and its and their respective employees, officers, managers, directors, stockholders, members, subsidiaries, affiliates, successors and assigns. The release must be executed, delivered and become effective prior to Closing.  

 

If the foregoing conditions are satisfied or deemed satisfied, the Retention Bonus shall be paid on the Closing, 

 

3.     Representations, Warranties and Covenants.  The Employee represents, warrants and covenants to the Company as follows:

 

(a)     No Right to Continued Employment; Benefits.  This Agreement does not and shall not confer upon the Employee any right to be retained in any position, as an employee, consultant or director of the Company or any successor or assign.  The Retention Bonus is in excess of any earned wages or benefits due and owing the Employee, and the value of the Retention Bonus is not part of the Employee’s normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit; provided, that this shall not be construed as amending or modifying any employee benefit plan. 

 

(b)     No Claims.  As of the date hereof, the Employee has no claims, actions, suits, charges, grievances and/or causes of action, in law or in equity, existing by reason of and/or based upon any fact or set of facts against the Company or any of its subsidiaries or affiliates.  Further, the Employee has not filed any action, charge, suit, or claim against the Company or any of its subsidiaries or affiliates with any federal, state or local agency or court.

 

4.     Taxes and Withholding.  

 

(a)     Withholding.  All amounts payable to the Employee hereunder shall be subject to all required tax and other withholdings by the Company or any of its subsidiaries as determined by the Company.  

 

2

 

 

(b)     Section 409A.  This Agreement and the Retention Bonus are intended to either be exempt from, or comply in form and operation with, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the final regulations issued thereunder (“Section 409A”).  To the extent permitted by applicable Department of Treasury/Internal Revenue Service guidance, or law or regulation, the Company and the Employee will take reasonable actions to reform this Agreement or any actions taken pursuant to the operation of this Agreement if necessary to comply with Section 409A.  Notwithstanding the foregoing, in no event shall the Company or any of its subsidiaries, affiliates or representatives be liable to the Employee for any additional tax, interest or penalty imposed upon, or other detriment suffered by, the Employee under Section 409A or for any damage suffered by the Employee for failure of this Agreement to comply with or be exempt from Section 409A.  In addition, for purposes of this Agreement, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Section 1.409A-1(h) of the Treasury regulations after giving effect to the presumptions contained therein). Notwithstanding anything contained herein to the contrary, if the Employee is a “specified employee” within the meaning of Section 409A, then to the extent required in order to avoid additional and/or accelerated taxation under Section 409A, if the Employee becomes entitled to receive the Retention Bonus on account of the Employee’s Qualifying Termination or on account of the Employee being terminated by the Company without Cause, the Retention Bonus shall be paid on the earlier of (i) the first business day after the date that is six (6) months following the Employee’s termination or (ii) the date of the Employee’s death.

 

5.     Confidential Terms. THE EMPLOYEE SHALL NOT, IN ANY MANNER OR FORM, DISCLOSE, DIRECTLY OR INDIRECTLY, TO ANY PERSON OR ENTITY UNDER ANY CIRCUMSTANCES THE EXISTENCE, NATURE, TERMS, OR CONDITIONS OF THIS AGREEMENT (EXCEPT IF AND TO THE EXTENT THIS AGREEMENT IS DISCLOSED BY THE COMPANY IN FILINGS MADE TO THE U.S. SECURITIES AND EXCHANGE COMMISSSION AND EXCEPT TO THE EMPLOYEE’S ACCOUNTING, FINANCIAL, LEGAL AND TAX ADVISORS AND EMPLOYEE’S SPOUSE) AND, UNLESS SPECIFICALLY AUTHORIZED BY AN OFFICER OF THE COMPANY, ANY PROPOSED TRANSACTION.  

 

6.     Termination. This Agreement shall terminate on April 30, 2019 if the Closing has not occurred by such date and thereafter this Agreement shall become null and void, except Section 5 which shall continue in full force and effect for three years from the termination date; provided, that no party shall be relieved or released from any liabilities or damages arising out of any willful breach of this Agreement by such party.

 

7.     Interpretation and Administration of this Agreement.  Unless otherwise determined by the Board of Directors of the Company (the “Board”), this Agreement shall be interpreted and administered by the Compensation Committee of the Board.  The rules, interpretations, computations and other actions by the Compensation Committee or Board shall be binding and conclusive on all parties.

 

8.     Notices.  Every notice relating to this Agreement shall be in writing and will be deemed to have been given when personally delivered or delivered by express courier service.  Notices, demands and communications to the Employee shall be delivered to the Employee personally or addressed to the Employee at the Employee’s last residence address as then contained in the records of the Company or such other address as the Employee may designate.  Notices, demands and communications to the Company shall, unless another address is specified in writing, be sent to the address indicated below: 

 

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To the Company:

 

Park Electrochemical Corp.

48 South Service Road

Suite 300

Melville, NY 11747

Attention: Brian Shore, Chairman and CEO

 

9.     Complete Agreement.  This Agreement and those documents expressly referred to herein embody the complete agreement and understanding among the parties regarding the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way, including, without limitation, any provision in any employment agreement between the Employee and the Company or any of its subsidiaries or affiliates which refers to any type of similar sale or retention bonus.  

 

10.     Governing Law; Venue; Waiver of Jury Trial.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice or conflict of laws provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. Any proceeding arising out of or relating to this Agreement may be instituted in the federal courts of the United States of America, or the courts of the State of New York, in each case located in Suffolk County, New York, and each party irrevocably submits to the non-exclusive jurisdiction of such courts in any such proceeding. Service of process, summons, notice or other document by mail to such party’s address set forth in this Agreement shall be effective service of process for any proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any proceeding in such court and agree not to plead or claim in any such court that any such proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT.

 

11.     Assignment; Successors and Assigns.  

 

(a)     The Company may assign any of its rights under this Agreement without notice or consent. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.    

 

(b)     This Agreement is personal to the Employee and, without the prior written consent of the Company, shall not be assignable, grantable, transferable, pledgeable or otherwise assignable, in whole or in part, by the voluntary or involuntary acts of the Employee or by operation of law by the Employee otherwise than by will or the laws of descent and distribution. Any such attempted grant, transfer, pledge or assignment shall be null and void and without any legal effect. This Agreement shall inure to the benefit of and be enforceable by Employee’s legal representatives or estate upon employee’s death or, if applicable, disability. 

 

12.     Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

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13.     Headings.  The headings of sections herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any of the provisions of this Agreement.

 

14.     Amendment and Waiver.  The provisions of this Agreement may be amended or waived only with the prior written consent of the Company, on one hand, and the Employee, on the other hand.  The waiver by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement or of any subsequent breach by such party of a provision of this Agreement.

 

15.     Counterparts.  This Agreement may be (a) executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement, and (b) executed and delivered by facsimile or other electronic transmission with the same effect as if a manually signed original were personally delivered.

 

16.     ADVICE OF COUNSEL.  THE EMPLOYEE ACKNOWLEDGES THAT THE EMPLOYEE IS NOT RELYING UPON THE ADVICE OF THE COMPANY OR THE COMPANY’S COUNSEL AND HAS BEEN ADVISED, AND HAS BEEN PROVIDED SUFFICIENT TIME, TO ENGAGE INDEPENDENT COUNSEL TO ASSIST THE EMPLOYEE IN EVALUATING THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE RELEASE ATTACHED AS EXHIBIT A.

 

Section 280G. Notwithstanding any other provision of this Agreement, if the Retention Bonus is payable to the Employee as a result of a Sale Transaction, and if the Retention Bonus (together with any other payment or benefit to be made or provided to the Employee as a result of the Sale Transaction) constitutes a “parachute payment” within the meaning of Section 280G(b)(2) of the Code, then the Retention Bonus will be reduced or eliminated to the extent necessary so that the Retention Bonus (together with any other payment or benefit to be made or provided to the Employee as a result of the Sale Transaction) does not constitute a parachute payment.

 

IN WITNESS WHEREOF, the parties have entered into this Retention Bonus Agreement on the date first above written.

 

	 	
			CoMPANY: 

			 

			PARK ELECTROCHEMICAL CORP.

			 

			 

			By:        /s/ Stephen E. Gilhuley                

			Name:   Stephen E. Gilhuley

			Title:     Executive Vice President – Administration and Secretary

			
	 	 
	 	
			EMPLOYEE:

			 

			 

			           /s/ Christopher T. Mastrogiacomo           

			Name: Christopher T. Mastrogiacomo

			
	 	 
	 	 

 

5

 

 

Exhibit A

 

Release and Waiver of Claims

 

To be signed on as a Condition to Receiving A RETENTION BONUS

 

In consideration of receiving certain benefits under the Retention Bonus Agreement (the “Agreement”) between me and Park Electrochemical Corp., a New York corporation (the “Company”), I have agreed to sign this Release and Waiver of Claims (“Release”). Capitalized terms used but not defined in this Release shall be defined as set forth in the Agreement. I understand that I am not entitled to the payment of the Retention Bonus, or any part thereof, unless I sign this Release and it becomes legally effective. Accordingly, I agree to the following:

 

(i)     ()In consideration of the payment of the Retention Bonus in accordance with the Agreement, I (on behalf of myself and my heirs, successors and assigns, and any individual or entity who could assert a claim through me or on my behalf), hereby generally and completely release the Company, its current and former directors, officers, stockholders, employees, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, assigns and all other persons and entities acting in connection with any of them (collectively, the “Released Parties”) from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to or on the date that I sign this Release (collectively, the “Released Claims”). The Released Claims include, but are not limited to: (a) all claims arising out of or in any way related to my employment with, or service to, the Company or, if applicable, the termination of that employment or services; (b) all claims related to my compensation or benefits from any Released Party including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; (e) all federal, state, and local statutory claims, including but not limited to claims for discrimination, harassment, retaliation, misclassification, attorneys’ fees, or other claims arising under the Title VII, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act of 1967 (the “ADEA”), the Older Workers Benefit Protection Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act (with respect to unvested benefits), the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, and Section 1981 of U.S.C. Title 42, the New York State Human Rights Law, the New York State Labor Law, and the New York State Civil Rights Law; and (f) any other federal, state, local or foreign law (statutory, regulatory or otherwise) that may be legally waived and released. Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (w) any rights or claims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, the charter, bylaws or operating agreements of the Company, or under applicable law; (x) any rights or claims to unemployment compensation, undisputed compensation accrued through the date I sign this Release, or any vested benefits or incentives; (y) any rights that are not waivable as a matter of law; or (z) any claims arising after the day on which I sign this Release. 

 

(ii)     ()I represent that no assignment or transfer has been made of any Released Claim. I further represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims. I understand that this Release does not impair state and federal agencies from seeking to enforce any laws and does not prevent me from participating in an investigation or proceeding conducted by any government agencies, but that (except for whistleblower awards from the Securities and Exchange Commission) I agree that I will not receive any individual monetary damages, recovery and/or relief related to any Released Claim(s), whether pursued by me or any governmental agency, other person or group.

 

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(iii)     ()I agree that neither this Release, nor the furnishing of the Retention Bonus, will be deemed or construed at any time to be an admission by any Released Party of any improper or unlawful conduct.

 

(iv)     ()I acknowledge that, among other claims, I am waiving and releasing any rights and claims I may have under ADEA, that this Release is knowing and voluntary, and that the consideration given for this Release is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised, that: (a) the release and waiver granted herein does not relate to claims which may arise after this Release is executed; (b) I should consult with an attorney prior to executing this Release; and (c) I have twenty-one (21) calendar days from the date on which I received this Release in which to consider this Release (although I may choose to knowingly and voluntarily waive all or part of that period by signing and returning this Release early); (d) I have seven (7) calendar days following the execution of this Release to revoke my consent; and (e) this Release will not be effective until the revocation period has expired without my having revoked this Release. Any revocation must be delivered to the Company’s Chief Executive Officer. 

 

(v)     ()This Release will be enforceable to the fullest extent permitted by law. If any provision is held to be unenforceable, then such provision will be construed or revised in a manner so as to permit its enforceability to the fullest extent permitted by applicable law. If such provision cannot be reformed in that manner, such provision will be deemed to be severed from this Release, but every other provision of this Release will remain in full force and effect. 

 

(vi)     ()New York law will govern this Release regardless of the laws that might otherwise govern under applicable principles of conflicts of laws. I HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVE ANY RIGHTS I MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON OR ARISING OUT OF OR IN CONNECTION WITH THIS RELEASE. In any action in which a Released Party prevails in enforcing this Release (in whole or in part), in addition to any available legal and equitable damages, such Released Party will be entitled to recover its reasonable attorneys’ fees and costs associated with such action.

 

(vii)     ()This Release constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to my release of claims. I am not relying on any promise or representation that is not expressly stated herein. This Release may only be modified by a writing signed by both me and a duly authorized officer of the Company. 

 

	Dated: __________ ___,       	
			By:                                                                     

			
	 	 
	 	Name:     Christopher T. Mastrogiacomo          
	 	 
	 	 

              

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