Document:

Exhibit 10.17

 

RESTRICTED STOCK PURCHASE AGREEMENT

 

This Restricted Stock Purchase Agreement (this “Agreement”‘) is made effective as of January 28, 2014, (the “Effective Date”) by and between BioLife Cell Bank, Inc., a Delaware corporation (the “Company”), and Dr. Brian K. Kaspar (“Purchaser”).

 

Now, therefore, in consideration of the mutual covenants and representations herein set forth, the Company and Purchaser agree as follows:

 

1.     Purchase and Sale of Stock. Subject to the terms and conditions of this Agreement, the Company hereby agrees to sell to Purchaser and Purchaser agrees to purchase from the Company 1,691,588 shares (the “Stock”) of the Company’s common stock, par value $0.0001 per share, at a price of $0.0001 per share for an aggregate purchase price of $169.16 (the “Purchase Price”). The purchase price for the Stock shall be paid by Purchaser to the Company in the form of cash, check or wire transfer.

 

2.     Closing. The purchase and sale of the Stock shall occur contemporaneous upon the execution of this Agreement by both parties hereto. At the closing, Purchaser shall deliver to the Company payment equal to the Purchase Price and the Company will issue and deliver to Purchaser certificate(s) representing the Stock registered in the name of Purchaser.

 

3.     Purchase Option. The Stock shall be subject to the right and option of the Company to repurchase the Stock as set forth in this section 3.

 

(a)   Termination of Engagement. Subject to the terms of Sections 3(b) and 3(e) of this Agreement, in the event Purchaser shall cease to serve as a consultant or contractor to the Company (including a parent or subsidiary of the Company) because of the termination of that certain Consulting Agreement (as same may be amended from time to time, the “Consulting Agreement”) of even date herewith between the Company and the Purchaser by the Company pursuant to Sections 3(b)(iii) through 3(b)(x) of the Consulting Agreement or by Purchaser pursuant to Section 3(b)(xi) of the Consulting Agreement (collectively, a “Termination”), a purchase option (“Purchase Option”) shall come into effect as set forth in this section 3(a). Following such a Termination (but subject to the terms of Sections 3(b) and 3(e) of this Agreement), the Company shall have the right to purchase from Purchaser, at the purchase price per share equal to the per share price paid by Purchaser as set forth in section 1 above (“Purchase Option Price”), a portion of the Stock, such portion to be determined in accordance with section 3(b) of this Agreement.

 

(b)   Effective the date of this Agreement and in compliance with all of the terms and conditions hereof, twenty-five percent (25%) of the shares of the Stock (being 422,897 shares) shall be free of the Purchase Option. Thereafter,

 

(i)            The Purchase Option shall lapse as to an additional twenty-five percent (25%) (being 422,897 shares) of the Stock on the day before the second anniversary date of the Effective Date (the “Two Year Anniversary”); and

 

(ii)           Following the Two Year Anniversary, the Purchase Option shall lapse as to an additional twenty-five percent (25%) (being 422,897 shares) of the Stock on the

 

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day before each successive anniversary of the Two Year Anniversary until all Stock is free of the Purchase Option, being on the day before the fourth anniversary date of the Effective Date.

 

(c)   Notice of Intent to Purchase. Within 90 days following a Termination, the Company shall notify Purchaser (or his legal representative if the Termination is by reason of Purchaser’s death or disability) by written notice delivered or mailed as provided in section 10(c) as to whether it wishes to purchase the Stock pursuant to exercise of the Purchase Option. If the Company (or its parent, subsidiary or successor) elects to purchase the Stock hereunder, it shall set a date for the closing of the transaction at a place specified by the Company not later than 15 days from the date of such notice. At such closing, the Company (or its parent, subsidiary or successor) shall tender payment for the Stock and the certificates representing the Stock so purchased shall be transferred to the Company and shall be canceled. If at such closing, Purchaser does not execute an assignment of the Stock to the Company, Purchaser hereby expressly authorizes and directs the Secretary (or his designee) or the transfer agent of the Company for and on behalf of Purchaser as his lawful attorney-in-fact to complete, date, and deliver to the Company the attached assignment separate from the certificate and thereby to so transfer the Stock as to which the Purchase Option has been exercised from Purchaser to the Company. The Purchase Option Price may be payable, at the option of the Company, in cash, by check, or by cancellation of indebtedness owed to the Company by Purchaser, or any combination thereof.

 

(d)   The Company may, in its sole and unfettered discretion, assign its rights and delegate its duties under this Agreement, including without limitation the Purchase Option, to its parent or any subsidiary of the Company or to any person acquiring all or substantially all of the assets of the Company.

 

(e)   Notwithstanding anything to the contrary contained in this Agreement, if the Consulting Agreement is terminated by the Company pursuant to Section 3(b)(xii) thereof or by the Purchaser pursuant to Sections 3(b)(iii) or (iv) thereof, the Purchase Option shall lapse as to any Stock still subject thereto automatically on such termination. Thereafter, no shares of Stock held by Purchaser shall be subject to the Purchase Option.

 

4.     Stock Splits, Change in Control.

 

(a)           If, from time to time during the term of this Agreement, there is any stock dividend or liquidating dividend of cash and/or property, stock split, or other change in the character or amount of any of the outstanding securities of the Company, then, in such event, any and all new, substituted or additional securities or other property to which Purchaser is entitled by reason of his ownership of Stock shall be immediately subject to this Agreement and be included in the word “Stock” for all purposes with the same force and effect as the shares of Stock presently subject to this Agreement. While the aggregate Purchase Option Price shall remain the same after each such event, the Purchase Option Price per share of Stock upon execution of the Purchase Option shall be appropriately adjusted.

 

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(b)           If, during the term of this Agreement, there is a Change in Control of the Company, the Purchase Option shall lapse as to any Stock still subject thereto on the date of consummation of such Change in Control. Thereafter, no shares of Stock held by Purchaser shall be subject to the Purchase Option. For purposes of this Agreement, “Change in Control” shall mean:

 

(i)            a sale of all or substantially all of the assets of the Company; or

 

(ii)           a merger, share-exchange, reverse merger or consolidation of the Company in which the shareholders of the Company own, as a result of the transaction, less than 50% of the outstanding securities of the surviving corporation; or

 

(iii)         a transaction or a series of related transactions to which the Company is a party in which there is a sale of outstanding securities representing more than 50% of the voting power of the Company.

 

5.     Legends. All certificates representing any shares of Stock of the Company subject to the provisions of this Agreement shall have endorsed thereon legends in substantially the following form:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN PURCHASE OPTION RIGHTS AS SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION.”

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

6.     Investment Intent and Risk Factors. In purchasing the Stock, Purchaser acknowledges and represents that Purchaser has had an opportunity to discuss the business prospects and business plan of the Company with the officers and directors of the Company. Purchaser further acknowledges that the Stock is highly speculative and involves a high degree of risk, and that the Stock has not been registered under the Securities Act of 1933, as amended (the “Act”), and may not be sold or otherwise disposed of except pursuant to an effective Registration Statement filed under the Act or pursuant to an exemption from said Act. Purchaser hereby acknowledges that the Company is under no obligation to register the Stock under the Act on behalf of Purchaser. Purchaser warrants and represents to the Company that he is acquiring the Stock for investment and not with a view to or for sale in connection with any distribution of said Stock or with any present intention of distributing or selling said Stock and he does not presently have reason to anticipate any change in circumstances or any particular occasion or event which would cause him to sell said Stock. By execution of this Restricted Stock Purchase Agreement, Purchaser hereby expressly confirms the investment representations

 

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set forth in Exhibit A attached hereto and incorporated herein by this reference, and the Company hereby expressly agrees to the Company’s obligations set forth in said Exhibit A.

 

7.     Delivery of Certificate. To ensure the availability for delivery of Purchaser’s Stock upon exercise of the Purchase Option herein provided for, Purchaser hereby delivers to and deposits with the Secretary of the Company the Stock Assignment attached hereto as Exhibit B, duly endorsed (with the assignee, date, number of shares and certificate number(s) left blank), together with the certificate or certificates evidencing the Stock; provided, however, such Stock Assignment may be utilized by the Company only in accordance with Section 3(c) of this Agreement and only if at the closing anticipated by said Section 3(c) Purchaser does not execute an assignment of the Stock to the Company. Upon written request of Purchaser after each successive period from the Effective Date set forth in Section 3 of this Agreement, unless the Purchase Option has been exercised, the Company will deliver to Purchaser, within 15 days after such request, a certificate or certificates representing so many shares of the Stock as are not then subject to the Purchase Option. Within 15 days from receipt of the Company’s notice of intent to purchase following a Termination and upon closing of the repurchase transaction as provided in Section 3 of this Agreement, the Company will deliver to Purchaser a certificate or certificates representing the aggregate number of shares of Stock sold and issued pursuant to this Agreement and not purchased by the Company or its assignees pursuant to exercise of the Purchase Option. If the Company fails to timely deliver to Purchaser its notice of intent to purchase following a Termination, then the Company will deliver to Purchaser the aforementioned certificate or certificates within 120 days from the date of Termination.

 

8.     Miscellaneous.

 

(a)           Subject to the provisions hereof, Purchaser shall, during the term of this Agreement, be entitled to exercise all rights and privileges of a shareholder of the Company with respect to the Stock.

 

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

 

(c)           Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Mail, by registered or certified mail with postage and fees prepaid, addressed to Purchaser at his address shown on the Company’s records and to the Company at the address of its principal corporate offices (Attention: Chief Executive Officer) or at such other address as such party may designate by 10 days’ advance written notice to the other party hereto. Purchaser hereby represents that the address set forth below under his signature is his current residential address.

 

(d)           The Company may assign its rights and delegate its duties under sections 3 and 5 hereof. This Agreement shall inure to the benefit of the successors and assigns of the Company and Purchaser and be binding upon the Company and its successors and assigns and, subject to the restrictions on transfer herein set forth, be binding upon Purchaser, his heirs, executors, administrators, successors and assigns.

 

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9.     Arbitration. Any controversy or claim arising out of or relating to this Agreement, or violation of this Agreement, shall be settled by arbitration in accordance with the rules of JAMS, and judgment rendered by the arbitrator may be entered in any court having jurisdiction thereover. The arbitration shall be conducted in Dallas, Texas unless otherwise agreed by the parties thereto. The arbitrator shall be deemed to possess the power to issue mandatory orders and restraining orders in connection with such arbitration; provided, however, that nothing in this Section 11 shall be construed as to deny the Company the right and power to seek and obtain injunctive relief in a court of competent jurisdiction for any breach or threatened breach of Purchaser’s covenants and obligations contained in this Agreement.

 

10.  Representation re Exhibits; Obligations of the Company re Exhibit A. Purchaser hereby expressly represents that Purchaser has reviewed the attached Exhibits A and B and agrees to be bound by the terms thereof. The Company expressly represents that the Company has reviewed Section 7 of Exhibit A and agrees to be bound by the terms of said Section 7 of Exhibit A.

 

11.          Company’s Representations about the Stock. The Company represents and warrants to Purchaser as follows:

 

(a)           The authorized capitalization of the Company consists solely of 70,000,000 shares, of which 50,000,000 are Common Stock, par value $0.0001 per share, and 20,000,000 are Preferred Stock, par value $0.0001 per share.

 

(b)           As of the Effective Date but prior to the issuance of the Stock to Purchaser, 5,356,694 shares of the Common Stock are issued and outstanding and no shares of the Preferred Stock are issued and outstanding.

 

(c)           The Stock, when issued, will be validly issued, fully paid and non-assessable, and will not have been issued in violation of the preemptive or other rights of any person.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

 

	
BIOLIFE CELL   BANK, INC.,
    	
PURCHASER
    
	
a Delaware   Corporation
    	
Dr. Brian   K. Kaspar
    
	
 
    	
 
    
	
 
    	
/s/ Brian K. Kaspar
    
	
By:
    	
/s/ John A.   Carbona
    	
 
    	
 
    
	
 
    	
John A. Carbona,   CEO
    	
 
    	
 
    
	
 
    	
 
    
	
ADDRESS:
    	
ADDRESS:
    
	
 
    	
 
    
	
11970 N. Central   Expressway, Suite 260
    	
7883 Calverton   Square
    
	
Dallas, Texas   75243
    	
New Albany, Ohio   43054
    

 

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EXHIBIT A

INVESTMENT REPRESENTATIONS;

INDEMNIFICATION OBLIGATIONS OF THE COMPANY

 

This Exhibit A is an exhibit to, and is incorporated into and made a part of, the attached Restricted Stock Purchase Agreement, dated as of January 28, 2014 (the “Restricted Stock Purchase Agreement”), by and between BioLife Cell Bank, Inc., a Delaware corporation, and Dr. Brian Kaspar. Capitalized terms used herein but not defined shall have the meanings ascribed to them in the Restricted Stock Purchase Agreement. In connection with the purchase of the Stock Purchaser hereby agrees, represents and warrants to the Company, and the Company agrees, as follows:

 

1.             Purchase Entirely for Own Account.

 

Purchaser represents and warrants that Purchaser is purchasing the Stock solely for Purchaser’s own account for investment and not with a view to or for sale or distribution of the Stock or any portion thereof and not with any present intention of selling, offering to sell or otherwise disposing of or distributing the Stock or any portion thereof in any transaction other than a transaction exempt from registration under the Securities Act of 1933, as amended (the “Act”). Purchaser also represents that the entire legal and beneficial interest of the Stock Purchaser is purchasing is being purchased for, and will be held for the account of, Purchaser only and neither in whole nor in part for any other person.

 

2.     Residence.

 

Purchaser represents and warrants that Purchaser’s principal residence is within the state set forth below Purchaser’s signature on the Restricted Stock Purchase Agreement.

 

3.     Information Concerning Company.

 

Purchaser represents and warrants that Purchaser has heretofore discussed the Company and its plans, operations and financial condition with its officers and that Purchaser has heretofore received all such information as Purchaser deems necessary and appropriate to enable Purchaser to evaluate the financial risk inherent in making an investment in the Stock, and Purchaser further represents and warrants that Purchaser has received satisfactory and complete information concerning the business and financial condition of the Company in response to all inquiries in respect thereof. Purchaser acknowledges that, as of the Effective Date, the Company intends to consummate a capital raise through the establishment and issuance of shares of Class B Common Stock (so called herein), in connection with which the Stock acquired by Purchaser hereunder will (assuming such capital raise is consummated) be reclassified as Class A Common Stock (so called herein); Purchaser further acknowledges that the Class B Common Stock will be entitled to certain liquidation preferences in priority over the Class A Common Stock.

 

4.     Economic Risk.

 

Purchaser represents and warrants that Purchaser realizes that Purchaser’s purchase of the Stock will be a highly speculative investment and that Purchaser is able, without impairing

 

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Purchaser’s financial condition, to hold the Stock for an indefinite period of time and to suffer a complete loss on Purchaser’s investment.

 

5.     Sophistication; Accreditation.

 

Purchaser is a person who either alone or with his purchaser representative(s) has sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of an investment in the Company. Purchaser is an “accredited investor” within the meaning of Rule 501(a)(4) of Regulation D as promulgated under the Act by virtue of the fact that he is a director of the Company.

 

6.     Restricted Stock; Disposition Under Rule 144.

 

(a)           Purchaser represents and warrants that the Company has hereby disclosed to Purchaser in writing:

 

(i)            the sale of the Stock which Purchaser is purchasing has not been registered under the Act, and the Stock must be held indefinitely unless subsequently registered under the Act or unless an exemption from such registration is available;

 

(ii)           the share certificate(s) representing the Stock will be stamped with the legends specified in the Restricted Stock Purchase Agreement; and

 

(iii)          the Company will make a notation in its records of the aforementioned Purchase Option and legends.

 

(b)   Purchaser represents and warrants that Purchaser understands that the shares of Stock are restricted stock within the meaning of Rule 144 promulgated under the Act; that the exemption from registration under Rule 144 will not be available unless (i) Purchaser has held such shares for the applicable period required by Rule 144, (ii) a public trading market then exists for the Common Stock of the Company, (iii) adequate information concerning the Company is then available to the public, and (iv) all other applicable terms and conditions of Rule 144 are complied with; and that any sale of the Stock may be made by Purchaser only in limited amounts in accordance with such terms and conditions.

 

7.     Tax Disclosure; Company’s Covenants of Indemnification.

 

(a)           Purchaser represents and warrants that Purchaser has reviewed and understands the following information regarding potential tax liability resulting from the purchase of the Stock.

 

(b)           The common stock issued in this transaction has been valued in good faith by the board of directors of the Company for not less than fair market value and is being sold to Purchaser for such amount. The Company believes this valuation represents a fair attempt at reaching an accurate appraisal of its worth. However, it is possible that with the benefit of hindsight, the Internal Revenue Service would successfully assert that the value of the common shares is substantially greater than so determined.

 

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(c)           If the Internal Revenue Service were to succeed in a tax determination that the common stock received had value greater than that upon which the transaction was based, the additional value would constitute ordinary income to Purchaser as of the date of its receipt by Purchaser. The additional taxes (and interest) due would be payable by Purchaser. In certain cases, the Internal Revenue Service could have up to six years from the due date for filing the return (or the actual filing date of the return if filed thereafter) within which to assess Purchaser for the additional tax and interest, which would then be due. The events described in these clauses (b) and (c) will hereinafter be referred to collectively as an ‘‘Adverse Tax Event.”

 

(d)   The Company would have the benefit, in any such transaction, if a determination was made prior to the three year statute of limitations period affecting the Company, of an increase in its deduction for compensation paid, which would offset its operating profits, or, if not profitable, would create net operating loss carry forward arising from operations in that year.

 

(e)           Notwithstanding the terms of this Section 7, the Company covenants and agrees to indemnify, defend and hold harmless Purchaser and his heirs, executors, administrators, successors and assigns (collectively, the “Other Indemnified Parties”) from and against all taxes, interest, fines, penalties and costs and expenses (including, without limitation, reasonable attorneys’ fees, court costs and costs of appeal) that Purchaser or any of the Other Indemnified Parties suffer or incur arising out of, in connection with or related to an Adverse Tax Event. Purchaser (or the Other Indemnified Parties as the case may be) will promptly notify the Company in writing of any notice or other communication received and pertaining to a possible Adverse Tax Event; provided, however, that the failure to so notify the Company will not relieve the Company from liability under this Agreement with respect to such claim for indemnification unless the Company is materially prejudiced as result of such failure to give prompt notice. If the Company declines or fails to assume the defense of such Adverse Tax Event or fails to employ counsel reasonably satisfactory to Purchaser (or the Other Indemnified Parties as the case may be), in each case within thirty (30) days after receipt of the notice, then Purchaser and any of the Other Indemnified Parties may employ counsel to represent or defend them in regard to the Adverse Tax Event, and the Company will pay the reasonable fees and disbursements of such counsel as incurred. Purchaser (and the Other Indemnified Parties as the case may be) will have the right to participate in defense of the Adverse Tax Event and to retain their own counsel at such person’s own expense. The Company will at all times keep the Purchaser (and the Other Indemnified Parties as the case may be) reasonably apprised of the status of the defense of any Adverse Tax Event, and the Company and Purchaser (and the Other Indemnified Parties as the case may be) will cooperate in good faith with each other with respect to the defense of any such matter. Neither the Company nor the Purchaser (nor any of the Other Indemnified Parties as the case may be) may settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder without the prior written consent of the other, unless (i) the Company fails to assume and maintain the defense of such claim or (ii) such settlement, compromise or consent includes an unconditional release of Purchaser (and the Other Indemnified Parties as the case may be) from all liability and obligations to pay any amounts arising out of the Adverse Tax Event. The terms of Sections 7(b), (c) and (e) shall survive for a period of six (6) years after the due date for filing Purchaser’s federal income tax return (Form 1040) for the tax year in which the Stock was issued to Purchaser.

 

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EXHIBIT B

ASSIGNMENT SEPARATE FROM CERTIFICATE

 

FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase Agreement dated as of January 28, 2014, Dr. Brian Kaspar hereby sells, assigns and transfers unto                     ,                      shares of the common stock, par value $0.0001 of BioLife Cell Bank, Inc., a Delaware corporation, standing in the undersigned’s name on the books of said corporation represented by certificate no(s).                     , and does hereby irrevocably constitute and appoint the corporate secretary of said corporation as attorney to transfer the said stock on the books of the said corporation with full power of substitution in the premises.

 

Dated:                             , 2014

 

 

	
Signature:
    	
 
    	
 
    

 

10Exhibit 10.18

 

AVEXIS, INC.

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is entered into as of January 1, 2016, by and between Dr. Brian K. Kaspar, Ph.D. (the “Executive”) and AveXis, Inc., a Delaware Corporation (the “Company”).

 

RECITALS

 

A.            The Company desires the association and services of Executive and his skills, abilities, background and knowledge, and is willing to engage Executive’s services on the terms and conditions set forth in this Agreement.

 

B.            Executive desires to be in the employ of the Company, and is willing to accept such employment on the terms and conditions set forth in this Agreement.

 

C.            This Agreement supersedes any and all prior and contemporaneous oral or written employment agreements or arrangements between Executive and the Company or any predecessor thereof, including, without limitation that Consulting Agreement, dated January 28, 2014.

 

AGREEMENT

 

In consideration of the foregoing, the parties agree as follows:

 

1.             TERM OF EMPLOYMENT.

 

The Executive’s term of employment with the Company shall commence on the date hereof, and shall continue for eighteen (18) months (the “Initial Term”) unless terminated earlier in accordance with Section 8 of this Agreement.  After the expiration of the Initial Term, this Agreement shall automatically renew for additional successive one (1) year periods (collectively, the “Renewal Terms”) upon the same terms and conditions that existed at the expiration of the then current Initial Term or Renewal Term, as applicable, unless either party provides written notice of an intent not to renew at least ninety (90) days prior to the expiration of the Initial Term or the then current Renewal Term.  The Initial Term together with any Renewal Term shall hereinafter be referred to as the “Employment Term.”

 

2.             EMPLOYMENT BY THE COMPANY.

 

2.1          Position; Duties; Location.  Subject to the terms and conditions of this Agreement, Executive shall hold the position of Founder and Chief Scientific Officer.  Executive’s activities shall be as directed by the Company’s Chief Executive Officer (“CEO”) and shall have such duties, authorities and responsibilities commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies.  Notwithstanding anything in this Agreement to the contrary, Executive shall not conduct or engage in Research for Company outside of his role at RI (as defined below). For purposes of this Agreement, “Research” is defined as “the systematic, investigation including, research

 

 

development, testing and evaluation designed to develop or contribute to new knowledge or validate existing knowledge.”  Company may enter into written agreements with RI to sponsor Research activities in areas of interest to Company consistent with the mission of RI, and in Executive’s role within RI, Executive may participate in those sponsored Research activities at RI.  The Company reserves the right to change or modify Executive’s title and/or duties as business needs may require.  Executive shall report to the CEO and his principal place of employment shall be his home office in Columbus, Ohio, provided that the Company reserves the right to require periodic business travel upon reasonable notice to Executive. Executive shall devote appropriate and reasonable business energies, interest, abilities and productive time to the proper and efficient performance of Executive’s duties under this Agreement.  Notwithstanding any language to the contrary, the Company acknowledges and agrees that Executive remains an employee of Nationwide Children’s Hospital (“NCH”) assigned to its affiliate the Research Institute at Nationwide Children’s Hospital (“RI” with every reference to RI also deemed to include NCH), and nothing in this Agreement is intended or shall be construed to create a conflict of interest, time, activity or commitment to RI as an RI employee devoting a significant amount of his business time and attention to RI ( unless otherwise agreed to by RI).

 

2.2          Policies and Procedures.  The employment relationship between the parties shall be governed by this Agreement and by the policies and practices established by the Company and/or its Board of Directors (the “Board”).  In the event that the terms of this Agreement differ from or are in conflict with the Company’s policies or practices, this Agreement shall control.

 

2.3        Other Policies Applicable to Executive. The Company acknowledges that Executive is also an employee of, and member of the research faculty of RI, devoting a significant amount of his business time and attention to RI, and that his activities are subject to certain policies and regulations of RI, as well as certain contracts with RI, that relate to, among other things, the disclosure of proprietary information, the publication of research results, and/or the ownership of discoveries and inventions (“RI Policies and Regulations”). The Executive acknowledges and agrees that the Executive must adhere to the RI Policies and Regulations and represents that he has obtained the consent of RI to enter into this Agreement.  Executive further agrees not to improperly use or disclose any proprietary information or trade secrets of RI or Executive’s former or concurrent employers or companies, if any, during Executive’s employment with the Company and not to bring onto the premises of the Company any unpublished documents or any property belonging to RI or Executive’s former or concurrent employers or companies unless consented to in writing by RI or said employers or companies, or unless consistent with terms of Research sponsored by Company at RI.

 

2.4          Agreement not to Participate in Company’s Competitors.  Except with the prior written consent of the CEO, Executive will not during the Employment Term undertake or engage in any other employment, occupation or business enterprise; provided, however, Executive may continue to perform his usual and customary services for RI, The Ohio State University, and Milo Biotechnology, Inc. (“Milo”) without breaching this Agreement.  During the Employment Term, and except for his interest in Milo, and his positions with RI, The Ohio State University and Milo, Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known by Executive to be adverse or antagonistic to the Company, its business, or prospects, financial or otherwise, or in any company, person, or

 

 

entity that is, directly or indirectly, in competition with the business of the Company.  The foregoing restriction, however, is not intended and shall not be construed to prohibit, during or after the Employment Term, Executive from pursuing research with RI funded by a governmental, commercial, non-profit or academic sponsor(s); provided, however, that nothing herein shall, without the Company’s prior written consent, permit Executive to publish Company’s Confidential Information or Third Party Information (as such terms are defined in Section 5) and Executive shall provide the Company with a copy of any materials intended for publication that are reasonably related to the Company’s Confidential Information or Third Party Information at least sixty (60) days prior to submission of any intended publication to give the Company time to review the material for purposes of verifying that none of the Company’s Confidential Information or Third Party Information is disclosed. Ownership by Executive in professionally managed funds over which the Executive does not have control or discretion in investment decisions, or, as a passive investment, of less than two percent (2%) of the outstanding shares of capital stock of any corporation with one or more classes of its capital stock listed on a national securities exchange or publicly traded on a national securities exchange or in the over-the-counter market shall not constitute a breach of this Section.  Notwithstanding the foregoing, nothing in this Section 2.4 shall conflict with or supersede any of Executive’s rights and responsibilities under Section 2.3 hereof. The limitations in this Section 2.4 or those in Section 7.2 shall apply solely to Executive and nothing herein shall or is intended to restrict RI’s or Executive’s current or future ability to engage in Research in the field of research, development and testing of therapies and treatment of spinal muscular atrophy or any other medical condition or disease with any funding source, or shall apply to any engagements of Executive that predate the effective date of this Agreement.

 

2.5          Representations and Warranties.

 

(a)           Executive represents and warrants that: (i) Executive has and will maintain all required permits and licenses of any kind that may be required to carry out his employment duties under this Agreement; (ii) Executive’s performance of employment duties hereunder shall be in compliance with all applicable laws, rules and regulations; (iii) Executive’s performance of his employment duties hereunder does and will not infringe upon any patient privacy or intellectual property rights; and (iv) Executive has not been debarred pursuant to the Federal Food, Drug and Cosmetic Act, excluded from a federal health care program, debarred from federal contracting, or convicted of or pled nolo contendere to any felony, or to any federal or state legal violation (including misdemeanors) relating to prescription drug products or fraud.  If, during the term of this Agreement, Executive ceases to be in compliance with the previous sentence: (A) Executive agrees to immediately notify Company upon Executive’s knowledge of such circumstance, and (B) this Agreement shall terminate automatically, as of the first date of such noncompliance, and such termination shall be by Company (and deemed “for Cause”).  Executive shall exercise Executive’s best and independent professional judgment regarding the care and treatment of individual patients.

 

(b)           Executive represents and warrants that Executive has and will take any actions related to his employment and compensation/reimbursement hereunder required by: (i) any committee of which Executive is a member that develops clinical guidelines, formularies, or purchasing policies, or (ii) any healthcare institution, medical committee, or other medical or scientific organization or government agency that employs or contracts Executive, or to which

 

 

they have been elected/appointed, which actions may include, by way of example, disclosure of outside financial relationships, approval of outside consulting arrangements, and recusal from participation in certain decision-making activities. Executive certifies that he is not employed by a federal, state, local or foreign government (or an agency thereof, other than The Ohio State University)) and is not an elected or appointed public official.

 

(c)           Executive agrees to comply with any reporting requirements Company deems reasonably necessary to ensure Company’s compliance with applicable “sunshine”/transparency laws.  Executive acknowledges and agrees that Company may disclose certain payments or transfers of value hereunder in connection with such laws, without violation of any provisions hereunder.

 

(d)           Executive shall comply with all applicable Company policies and procedures, including, without limitation those pertaining to the reporting of adverse events pertaining to a Company product of which Executive becomes aware during the Employment Term.  Notwithstanding the foregoing, Executive will not disclose any RI information regarding any clinical trial or other research conducted at RI, provided that, in regard to Company products used in clinical trials at RI that have been sponsored by Company, Executive may disclose to Company that information that is required to be disclosed by RI under the applicable sponsored research agreements.

 

3.             AT-WILL EMPLOYMENT.

 

Executive’s employment relationship with the Company is, and shall at all times remain, at-will.  This means that either Executive or the Company may terminate the employment relationship at any time, for any reason or for no reason, with or without Cause or advance notice.

 

4.             COMPENSATION AND BENEFITS.

 

4.1          Salary. The Company shall pay Executive a base salary at the annualized rate of $325,000 (the “Base Salary”), less payroll deductions and all required withholdings, payable in regular periodic payments in accordance with the Company’s normal payroll practices.  The Base Salary may be increased from time to time in the Company’s discretion.  The Parties acknowledge and agree that the compensation set forth herein is intended to represent the fair market value of Executive’s services to Company, negotiated in an arms-length transaction, and has not been determined in a manner which takes into account the volume or value of any referrals or business otherwise generated between Company and Executive. Executive is being compensated solely for performance of his employment duties described in this Agreement. Nothing in this Agreement is intended, or should be construed as, a reward for past or incentive for future decisions regarding the prescription, use, purchase or recommendation of Company’s products. Company expects Executives to exercise their best and independent professional judgment regarding the care and treatment of individual patients.

 

4.2          Performance Bonus.  Each calendar year, Executive will be eligible to earn an additional cash bonus with a target bonus of up to forty percent (40%) of the Base Salary, based upon the Board’s assessment of Executive’s individual performance and the

 

 

Company’s attainment of targeted goals as set by the Board in its sole discretion.  In order to earn and receive the bonus, Executive must remain employed by the Company through and including the bonus payout date, which will be on or before March 15 of the year following the applicable calendar year for which the performance bonus is being measured.  The determination of whether Executive has earned a bonus and the amount thereof shall be determined by the Board (and/or a committee thereof) in its sole and absolute discretion.  The Company reserves the right to modify the bonus criteria and targets from year to year.

 

4.3          Standard Company Benefits.  Executive shall, in accordance with Company policy and the terms of the applicable plan documents, be eligible to participate in benefits under any benefit plan or arrangement that may be in effect from time to time and made available to similarly situated Company employees.  The Company reserves the right to modify, add or eliminate benefits from time to time so long as the Company provides Executive with reasonable advanced written notice.

 

4.4          Vacation. Executive shall be eligible to accrue vacation time at the rate of fifteen (15) days per year in accordance with the Company’s vacation policy.  Vacation is to be taken at such intervals as shall be appropriate and consistent with the proper performance of Executive’s duties hereunder and as and to the extent permitted under the Company’s vacation policy.

 

4.5          Expense Reimbursements.  The Company will reimburse Executive for all reasonable business expenses Executive incurs in conducting his duties hereunder, pursuant to the Company’s usual expense reimbursement policies, including, but not limited to, travel expenses from his home office in Columbus, Ohio to the corporate offices of the Company.

 

5.             CONFIDENTIAL INFORMATION.

 

5.1          Recognition of the Company’s Rights; Nondisclosure.  Executive understands and acknowledges that his employment by the Company creates a relationship of confidence and trust with respect to the Company’s Confidential Information (as defined below) and that the Company has a protectable interest therein.  At all times during Executive’s employment and thereafter, Executive will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Confidential Information, except as such disclosure, use or publication may be required in connection with his work for the Company, or unless an authorized officer of the Company expressly authorizes such in writing.  Executive hereby assigns to the Company any rights he may have or acquire in such Confidential Information and recognizes that all Confidential Information shall be the sole property of the Company and its assigns.  Executive will take all reasonable precautions to prevent the inadvertent or accidental disclosure of Confidential Information.

 

5.2          Confidential Information.  The term “Confidential Information” shall mean any and all confidential and/or proprietary knowledge, data or information of the Company, its affiliates, parents and subsidiaries, whether having existed, now existing, or to be developed by the Company during Executive’s employment.  By way of illustration but not limitation, “Confidential Information” includes (a) trade secrets, inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-

 

 

how, improvements, discoveries, developments, designs and techniques and any other proprietary technology and all Proprietary Rights therein (hereinafter collectively referred to as “Inventions”); (b) information regarding research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, margins, discounts, credit terms, pricing and billing policies, quoting procedures, methods of obtaining business, forecasts, future plans and potential strategies, financial projections and business strategies, operational plans, financing and capital-raising plans, activities and agreements, internal services and operational manuals, methods of conducting Company business, suppliers and supplier information, and purchasing; (c) information regarding customers and potential customers of the Company, including customer lists, names, representatives, their needs or desires with respect to the types of products or services offered by the Company, proposals, bids, contracts and their contents and parties, the type and quantity of products and services provided or sought to be provided to customers and potential customers of the Company and other non-public information relating to customers and potential customers; (d) information regarding any of the Company’s business partners and their services, including names, representatives, proposals, bids, contracts and their contents and parties, the type and quantity of products and services received by the Company, and other non-public information relating to business partners; (e) information regarding personnel, employee lists, compensation, and employee skills; and (f) any other non-public information which a competitor of the Company could use to the competitive disadvantage of the Company.  Notwithstanding the foregoing, it is understood that, at all such times, Executive is free to use information which is generally known in the trade or industry through no breach of this Agreement or other act or omission by Executive, and Executive is free to discuss the terms and conditions of his employment with others to the extent expressly permitted by Section 7 of the National Labor Relations Act.

 

5.3          Exclusions from Confidential Information. The Parties acknowledge and agree that each of the following shall be excluded from, and shall not be considered, Confidential Information: (a) information that is or becomes known to the general public under circumstances involving no breach by Executive of the terms of this Section; (b) information that is approved for public release by the Board or the CEO; (c) information that is obtained by Executive outside the context of the performance of his employment duties for the Company, from a third party who owes no obligation to the Company to maintain such information in confidence; (d) any other information, technology or data provided to, or developed by, Executive without the use of Company resources: or (e) any other information gained by Executive in the course of Executive’s employment duties for RI, Milo or The Ohio State University. Notwithstanding any language in this Agreement to the contrary, in the event that Company sponsors additional Research conducted by Executive in the course of his employment with RI, Confidential Information, and any duties with respect thereto, shall be determined by the provisions of such written agreement(s).

 

5.4          Third Party Information.  Executive understands, in addition, that the Company has received and in the future will receive confidential and/or proprietary knowledge, data, or information from third parties (“Third Party Information”).  During Executive’s employment and thereafter, Executive will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for the Company) or use, except in connection

 

 

with Executive’s work for the Company, Third Party Information unless expressly authorized by an authorized officer of the Company in writing.

 

5.5          Patient Information. Executive shall ensure that the use, retention and disclosure of individually identifiable patient information are at all times consistent with the requirements of applicable law and regulations regarding privacy.  Executive shall ensure that, if applicable, all necessary patient consents and/or authorizations have been obtained in accordance with applicable law, and nothing in this Agreement shall be construed to prohibit Executive from fully disclosing that Executive is employed by Company, where such disclosure would be appropriate under industry ethical standards or as part of professional practice.

 

5.6          Term of Nondisclosure Restrictions.  Executive understands that Confidential Information and Third Party Information are never to be used or disclosed by Executive, as provided in this Section 5.  If, however, a court decides that this Section 5 or any of its provisions is unenforceable for lack of reasonable temporal limitation and the Agreement or its restriction(s) cannot otherwise be enforced, Executive agrees and the Company agrees that the five (5) year period after the date Executive’s employment ends shall be the temporal limitation relevant to the contested restriction, provided, however, that this sentence shall not apply to trade secrets protected without temporal limitation under applicable law.

 

5.7          No Improper Use of Information of RI, Prior Employers and Others.  During Executive’s employment by the Company, he will not improperly use or disclose any confidential information, patient information or trade secrets, if any, of RI or of any former employer or any other person or entity to whom Executive has an obligation of confidentiality, and Executive will not bring onto the premises of the Company any unpublished documents or any property belonging to RI or to any former employer or any other person or entity, to whom he has an obligation of confidentiality unless consented to in writing by RI or that former employer, person or entity (as applicable), or unless otherwise directly and expressly authorized under any Research agreements between Company and RI.

 

6.             INVENTIONS AND DISCOVERIES.

 

6.1          Prior Inventions.  Inventions, if any, patented or unpatented, which Executive makes prior to the commencement of his employment with the Company (the “Prior Inventions”) are excluded from the scope of this Agreement except as otherwise expressly set forth herein.  Executive agrees that he will not incorporate, or permit to be incorporated, Prior Inventions in any Company work product or Research without the Company’s prior written consent and the written consent of the owner of such Prior Invention.

 

6.2          Inventions.  All rights in any inventions, discoveries, improvements, innovations, developments, concepts designs, research methods and results, processes, formulas, compound, works of authorship, trade secrets, know-how and creations, (patentable or not, or subject to copyright or trade secret protection), and whether or not reduced to tangible form, memorialized or reduced to practice that Executive makes, conceives or reduces to practice, either alone or jointly with others, shall reside in RI, unless otherwise specifically provided for by the terms of a sponsored research agreement.  In the event Company enters into a written agreement with RI to sponsor research conducted by Executive, RI and the Company will

 

 

determine the terms and conditions of intellectual property rights with respect to any such Invention created or developed under such agreement at that time.

 

6.3          Ownership of Work Product.  Executive agrees that, except as provided in Section 6.2, the Company will exclusively own all work product that is made by Executive (solely or jointly with others) within the scope of his employment, and Executive hereby irrevocably and unconditionally assigns to the Company all right, title, and interest worldwide in and to such work product.

 

7.             NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS.

 

7.1          NO SOLICITATION OF EMPLOYEES, CONSULTANTS, CONTRACTORS, OR CUSTOMERS OR POTENTIAL CUSTOMERS.  In order to protect the Company’s legitimate business interests, including (without limitation) its interests in the Company’s trade secrets and Confidential Information, its substantial and near permanent relationships with customers, and its customer goodwill, Executive agrees that during the Employment Term and for the one (1) year period after the date his employment ends for any reason, including but not limited to voluntary termination by Executive or involuntary termination by the Company, Executive will not, as an officer, director, employee, consultant, owner, partner, or in any other capacity, either directly or through others, except on behalf of the Company:

 

(a)           solicit, induce, encourage, or participate in soliciting, inducing, or encouraging any employee of the Company to terminate his or her relationship with the Company;

 

(b)           hire, employ, or engage in business with or attempt to hire, employ, or engage in business with any person employed by the Company or who has left the employment of the Company within the preceding three (3) months of any such prohibited activity or discuss any potential employment or business association with such person, even if Executive did not initiate the discussion or seek out the contact;

 

(c)           solicit, induce or attempt to induce any Customer or Potential Customer, or any consultant or independent contractor with whom Executive had direct or indirect contact during his employment with the Company or whose identity Executive learned as a result of his employment with the Company, to terminate, diminish, or materially alter in a manner harmful to the Company its relationship with the Company; or

 

(d)           solicit, perform, provide or attempt to perform or provide any Conflicting Services (as defined in Section 7.2 below) for a Customer or Potential Customer, provided, however, Executive may engage in such activities to the extent such Conflicting Services are part of either (i) Executive’s duties at RI or The Ohio State University, or (ii) the Research and business activities of RI or The Ohio State University, and, provided further, if Executive engages in such activities during the Employment Term, the Company may terminate him for Cause and if Executive engages in such activities during the one (1) year period after the date his employment ends, the Company may cease providing the Severance Benefits.

 

The parties agree that for purposes of this Agreement, a “Customer or Potential Customer” is any person or entity who or which, at any time during the one (1) year prior to the date

 

 

Executive’s employment with the Company ends, (i) contracted for, was billed for, or received from the Company any product, service or process with which Executive worked directly or indirectly during his employment by the Company or about which Executive acquired Confidential Information; or (ii) was in contact with Executive or in contact with any other employee, owner, or agent of the Company, of which contact Executive was or should have been aware, concerning any product, service or process with which Executive worked directly or indirectly during his employment with the Company or about which Executive acquired Confidential Information; or (iii) was solicited by the Company in an effort in which Executive was involved or of which Executive was or should have been aware.

 

7.2                               NON-COMPETE PROVISION.

 

(a)                                 In order to protect the Company’s legitimate business interests, including (without limitation) its interests in the Company’s trade secrets and Confidential Information, its substantial and near permanent relationships with customers, and its customer goodwill, Executive agrees that during the Employment Term and for the one (1) year period after the date his employment ends for any reason, including but not limited to voluntary termination by Executive or involuntary termination by the Company, Executive will not, directly or indirectly, as an officer, director, employee, consultant, owner, manager, member, partner, or in any other capacity solicit, perform, or provide, or attempt to perform or provide Conflicting Services anywhere in the world where the Company conducts business, including but not limited to locations where the Company performs research or development activities related to the Company’s products, services or processes, nor will Executive assist another person to solicit, perform or provide or attempt to perform or provide Conflicting Services anywhere in the world where the Company conducts business, including but not limited to locations where the Company performs research or development activities related to the Company’s products, services or processes.

 

(b)                                 Notwithstanding the foregoing, nothing in Section 7 is intended to or shall restrict Executive’s performance of his assigned duties (including Conflicting Services) for RI or The Ohio State University during or after the Employment Term; provided that, Executive shall not use Company Confidential Information or Third Party Information in the performance of such services; and provided further, if Executive provides Conflicting Services during the Employment Term, the Company may terminate him for Cause and if Executive provides Conflicting Services during the one (1) year period after the date his employment ends, the Company may cease providing the Severance Benefits.

 

(c)                                  The parties agree that for purposes of this Agreement, “Conflicting Services” means any product, service, or process or the research and development thereof, of any person or organization other than the Company that is related to or connected with a licensed or sponsored research program of the Company, including the research and development thereof, with which Executive worked directly or indirectly during his employment by the Company or about which he acquired Confidential Information during his employment by the Company.

 

7.3                               REASONABLENESS OF RESTRICTIONS.

 

(a)                                 Executive agrees that he has read this entire Agreement and 

 

 

understands it.  Executive agrees that this Agreement does not prevent him from earning a living or pursuing his career and that he has the ability to secure other non-competitive employment using his marketable skills.  Executive agrees that the restrictions contained in this Agreement are reasonable, proper, and necessitated by the Company’s legitimate business interests, including without limitation, the Company’s Proprietary Rights, Confidential Information and the goodwill of its customers.  Executive represents and agrees that he is entering into this Agreement freely and with knowledge of its contents with the intent to be bound by the Agreement and the restrictions contained in it.

 

(b)                                 In the event that a court finds this Agreement, or any of its restrictions, to be ambiguous, unenforceable, or invalid, the Company and Executive agree that the court shall read the Agreement as a whole and interpret the restriction(s) at issue to be enforceable and valid to the maximum extent allowed by law.

 

(c)                                  If the court declines to enforce this Agreement in the manner provided in subsection 7.3(b), the Company and Executive agree that this Agreement will be automatically modified to provide the Company with the maximum protection of its business interests allowed by law and Executive agrees to be bound by this Agreement as modified.

 

(d)                                 Furthermore, the parties agree that the market for the Company’s products is nationwide.  If, however, after applying the provisions of subsections 7.3(b) and 7.3(c), a court still decides that this Agreement or any of its restrictions is unenforceable for lack of reasonable geographic limitation and the Agreement or restriction(s) cannot otherwise be enforced, the parties hereby agree that the one hundred (100) mile radius from any location at which Executive worked for the Company on either a regular or occasional basis during the one (1) year immediately preceding termination of Executive’s employment with the Company shall be the geographic limitation relevant to the contested restriction.

 

7.4                               RETURN OF COMPANY PROPERTY.  Upon termination of Executive’s employment or upon Company’s request at any other time, Executive will deliver to Company all of Company’s property, drawings, notes, memoranda, specifications, devices, formals, equipment, and documents, together with all copies thereof, and any other material containing or disclosing any Third Party Information or Confidential Information and certify in writing that Executive has fully complied with the foregoing obligation.  Executive agrees that he will not copy, delete, or alter any information contained upon his Company computer or Company equipment before Executive returns it to Company.  In addition, if Executive has used any personal computer, server, or e-mail system to receive, store, review, prepare or transmit any Company information, including but not limited to, Confidential Information, Executive agrees to provide the Company with a computer-useable copy of all such Confidential Information and then permanently delete and expunge such Confidential Information from those systems; and Executive agrees to provide the Company access to Executive’s system as reasonably requested to verify that the necessary copying and/or deletion is completed.  Executive further agrees that any property situated on Company’s premises and owned by Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.  Prior to leaving the Company, Executive will cooperate with Company in attending an exit interview and certify in writing that Executive has complied with the requirements of this Section.

 

 

7.5                               LEGAL AND EQUITABLE REMEDIES.

 

(a)                                 Executive agrees that it may be impossible to assess the damages caused by his violation of this Agreement or any of its terms.  Executive agrees that any threatened or actual violation of this Agreement or any of its terms will constitute immediate and irreparable injury to the Company and the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company may have for a breach or threatened breach of this Agreement.

 

(b)                                 Executive agrees that if the Company is successful in whole or in part in any legal or equitable action against Executive under this Agreement, the Company shall be entitled to payment of all costs, including reasonable attorney’s fees, from Executive.

 

(c)                                  In the event the Company enforces this Agreement through a court order, Executive agrees that the restrictions of Sections 7.1 and 7.2 shall remain in effect for a period of twelve (12) months from the effective date of the Order enforcing the Agreement.

 

8.                                      TERMINATION OF EMPLOYMENT.

 

8.1                               Termination at Expiration of the Employment Term, For Cause or Resignation Without Good Reason.  If the Executive’s employment is terminated for failure to renew the Initial Term or any Renewal Term or is terminated by the Company for Cause (defined below), or Executive resigns for any reason other than Good Reason (defined below), the Company shall pay Executive any base salary earned, expenses incurred and unused vacation benefits accrued through the date of termination, at the rates then in effect, less standard deductions and withholdings.  The Company shall thereafter have no further obligations to Executive, except as may otherwise be required by law.

 

8.2                               Termination Without Cause or Resignation For Good Reason. If at any time Executive’s employment is terminated without Cause or Executive resigns for Good Reason (as both are defined below), then the Company shall pay Executive any earned but unpaid base salary and unused vacation benefits accrued through the date of termination, at the rates then in effect, less standard deductions and withholdings.  In addition, if Executive furnishes to the Company an executed waiver and release of claims in a form to be provided by the Company (the “Release”) within the time period specified therein, but in no event later than forty-five days following Executive’s termination, and if Executive allows such Release to become effective in accordance with its terms, then the Company shall continue payment of Executive’s Base Salary as in effect immediately preceding the last day of the Employment Term (ignoring any decrease in Base Salary that forms the basis for Good Reason), for a period of twelve (12) months following the termination date on the Company’s regular payroll dates (the “Severance Payments”); provided, however, that any payments otherwise scheduled to be made prior to the effective date of the Release (namely, the date it can no longer be revoked) shall accrue and be paid in the first payroll date that follows such effective date with subsequent payments occurring on each subsequent Company payroll date. In addition, in the event that Executive elects COBRA continuation coverage, the Company shall pay Executive’s COBRA premiums until the earlier of twelve months following the termination of employment or the date 

 

 

Executive becomes eligible for coverage under another employer’s health plan (the “COBRA Benefits”, and together with the Severance Payments, the “Severance Benefits”).

 

8.3                               Definitions.  For purposes of this Agreement, the following terms shall have the following meanings:

 

(a)                           “Cause” shall mean the occurrence of any of the following: (i) Executive’s conviction of any felony or any crime involving fraud or dishonesty; (ii) Executive’s participation in a fraud or other willful act of gross misconduct that demonstrably and materially injures the Company; (iii) Executive’s violation of any statutory or fiduciary duty, or duty of loyalty, owed to the Company; (iv) Executive’s breach of any material term of any contract between such Executive and the Company, including but not limited to this Agreement; (v) Executive’s inability to fulfill his duties under this Agreement due to a conflict with his employment with RI or his obligations to comply with the RI Policies and Regulations, unless such inability has been caused by acts or omissions of the Company; (vi) Executive solicits, performs, provides or attempts to perform or provide Conflicting Services for a Customer or Potential Customer under Section 7.1(d) of this Agreement; (vii) Executive provides Conflicting Services under Section 7.2 of this Agreement; and/or (viii) Executive’s material violation of material Company policy. Whether a termination is for Cause shall be decided by the Board in its sole and exclusive judgment and discretion.  Prior to any termination for Cause pursuant to each event listed above, to the extent such event(s) is capable of being cured by Executive, (A) the Company shall give the Executive notice of such event(s), which notice shall specify in reasonable detail the circumstances constituting Cause, and (B) there shall be no Cause with respect to any such event(s) if the Board determines in good faith that such events have been cured by Executive within thirty (30) days after the delivery of such notice. Without limiting the generality of the foregoing, the parties acknowledge and agree that there shall be no Cause with respect to any event listed in (v) above if the Board determines in good faith that such events have been cured by Executive within ninety (90) days after the delivery of such notice.

 

(b)                                 “Good Reason” for Executive to terminate his employment hereunder shall mean the occurrence of any of the following events without Executive’s written consent: (i) a material reduction by the Company of Executive’s Base Salary as initially set forth herein or as the same may be increased from time to time, provided, however, that if such reduction occurs in connection with and upon the same percentage of a Company-wide decrease in executive team compensation, such reduction shall not constitute Good Reason; (ii) a material breach of this Agreement by the Company; (iii) the relocation of Executive’s principal place of employment, without Executive’s consent, in a manner that lengthens his one-way commute distance by fifty (50) or more miles from his then-current principal place of employment immediately prior to such relocation; or (iv) a material reduction in Executive’s duties, authority, or responsibilities relative to Executive’s duties, authority, or responsibilities in effect immediately prior to such reduction unless Executive is performing duties and responsibilities for the Company or its successor that are similar to those Executive was performing for the Company immediately prior to such transaction (for example, if the Company becomes a division or unit of a larger entity and Executive is performing duties for such division or unit that are similar to those Executive was performing prior to such transaction but under a different title as Executive had prior to such transaction, there will be no “Good Reason”).  Provided, however, 

 

 

that, any such termination by Executive shall only be deemed for Good Reason pursuant to this definition if: (1) Executive gives the Company written notice of his intent to terminate for Good Reason within thirty (30) days following the occurrence of the condition(s) that he believes constitute(s) Good Reason, which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the “Cure Period”); and (3) Executive voluntarily terminates his employment within thirty (30) days following the end of the Cure Period.

 

8.4                               Effect of Termination.  Executive agrees that should his employment be terminated for any reason, he shall be deemed to have resigned from any and all positions with the Company, including, but not limited, to a position on the Board and all positions with any and all subsidiaries of the Company.

 

8.5                               Section 409A Compliance.  It is intended that any benefits under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), provided under Treasury Regulations Sections 1.409A-1(b)(4), and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A.  Notwithstanding anything to the contrary in this Agreement, if any severance pay or benefits are deferred compensation under Section 409A, and the period during which Executive may sign the Release begins in one calendar year and the first payroll date following the period during which Executive may sign the Release occurs in the following calendar year, then the severance pay or benefit shall not be paid or the first payment shall not occur until the later calendar year.  For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement (whether severance payments, if any, or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment.  Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company at the time of termination to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i), and if any of the payments set forth herein are deemed to be “deferred compensation,” then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided prior to the earliest of (i) the expiration of the six-month period measured from the date of termination, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation.  Upon the first business day following the expiration of such period, all payments deferred pursuant to this paragraph shall be paid in a lump sum, and any remaining payments due shall be paid as otherwise provided herein.  No interest shall be due on any amounts so deferred.

 

9.                                      INDEMNIFICATION.

 

The Company shall indemnify Executive to the extent that its officers, directors and employees are entitled to indemnification pursuant to the Company’s Certificate of Incorporation and Bylaws for any acts or omissions by reason of being a director, officer or 

 

 

employee of the Company as of the effective date of this Agreement.  At all times during the Employment Term, the Company shall maintain in effect a directors and officers’ liability insurance policy with the Executive as a covered officer and director.

 

10.                               GENERAL PROVISIONS.

 

10.1                        Restricted Stock Purchase Agreement. The parties acknowledge and agree that the terms and conditions of that certain Restricted Stock Purchase Agreement, dated January 28, 2014, by and between the Company and the Executive (the “Restricted Stock Purchase Agreement”) are hereby terminated and the Agreement shall be null and void, except that the parties shall remain bound by the terms of Exhibit A to the Restricted Stock Purchase Agreement, which contains certain indemnification obligations arising out of or resulting from issuance of the Stock (as defined in the Restricted Stock Purchase Agreement).  The Company acknowledges that Executive shall own the Stock free and clear of any purchase options held by the Company.

 

10.2                        Advertising Waiver.  Executive agrees to permit the Company, and persons or other organizations authorized by the Company, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Company in which Executive’s name and/or pictures of Executive appear.  Executive hereby waives and releases any claim or right Executive may otherwise have arising out of such use, publication or distribution.  Notwithstanding the forgoing, Company acknowledges it cannot use the name or logos of RI or the Ohio State University without their express permission in any way that endorses or implies an endorsement of Company or any product of Company.

 

10.3                        Miscellaneous.  This Agreement, along with Exhibit A to the Restricted Stock Purchase Agreement, constitutes the complete, final and exclusive embodiment of the entire agreement between Executive and the Company with regard to its subject matter.  It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. The parties agree that Sections 5, 6, 7, 8, 9 and 10.1 shall survive the termination of this Agreement. This Agreement may not be modified or amended except in a writing signed by both Executive and a duly authorized member of the Board.  This Agreement will bind the heirs, personal representatives, successors and assigns of both Executive and the Company, and inure to the benefit of both Executive and the Company, and to his and its heirs, successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question will be modified so as to be rendered enforceable.  This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of Illinois as applied to contracts made and to be performed entirely within Illinois.  Any ambiguity in this Agreement shall not be construed against either party as the drafter.  Any waiver of a breach of this Agreement shall be in writing and shall not be deemed to be a waiver of any successive breach.  This Agreement may be executed in counterparts and facsimile signatures will suffice as original signatures.

 

[Signatures appear on the following page]

 

 

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the day and year first written above.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
AVEXIS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sean P. Nolan
    
	
 
    	
 
    	
Sean   P. Nolan
    
	
 
    	
 
    	
President   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Brian Kaspar
    
	
 
    	
Dr. Brian   Kaspar, Ph.D.

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