Document:

Exhibit 10.2

 

GEMPHIRE THERAPEUTICS INC.
 2019 EQUITY INCENTIVE PLAN

 

1.    DEFINITIONS.

 

Unless otherwise specified or unless the context otherwise requires, the following terms, as used in this Gemphire Therapeutics Inc. 2019 Equity Incentive Plan, have the following meanings:

 

Administrator means the Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the term Administrator means the Committee.

 

Affiliate means a corporation or other entity, which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect.

 

Agreement means a written or electronic document setting forth the terms of a Stock Right delivered pursuant to the Plan in such form as the Administrator shall approve.

 

Board of Directors means the Board of Directors of the Company.

 

Cause means, with respect to a Participant (a) dishonesty with respect to the Company or any Affiliate, (b) insubordination, substantial malfeasance or non-feasance of duty, (c) unauthorized disclosure of confidential information, (d) breach by a Participant of any provision of any employment, consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company or any Affiliate, and (e) conduct substantially prejudicial to the business of the Company or any Affiliate; provided, however, that any provision in an agreement between a Participant and the Company or an Affiliate, which contains a conflicting definition of Cause for termination and which is in effect at the time of such termination, shall supersede this definition with respect to that Participant. The determination of the Administrator as to the existence of Cause will be conclusive on the Participant and the Company.

 

Code means the United States Internal Revenue Code of 1986, as amended including any successor statute, regulation and guidance thereto.

 

Committee means the committee of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to the provisions of the Plan.

 

Common Stock means shares of the Company’s common stock, $0.001 par value per share.

 

Company means Gemphire Therapeutics Inc., a Delaware corporation.

 

Consultant means any natural person who is an advisor or consultant who provides bona fide services to the Company or its Affiliates, provided that such services are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s or its Affiliates’ securities.

 

Corporate Transaction means a merger, consolidation, or sale of all or substantially all of the Company’s assets or the acquisition of all of the outstanding voting stock of the Company in a single transaction or a series of related transactions by a single entity other than a transaction to merely change the state of incorporation.

 

Disability or Disabled means permanent and total disability as defined in Section 22(e)(3) of the Code.

 

Employee means any employee of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the Plan.

 

 

Exchange Act means the United States Securities Exchange Act of 1934, as amended.

 

Fair Market Value of a Share of Common Stock means:

 

If the Common Stock is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly reported for the Common Stock, the closing or, if not applicable, the last price of the Common Stock on the composite tape or other comparable reporting system for the trading day on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date;

 

If the Common Stock is not traded on a national securities exchange but is traded on the over-the-counter market, if sales prices are not regularly reported for the Common Stock for the trading day referred to in clause (1), and if bid and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock at the close of trading in the over-the-counter market for most recent the trading day on which Common Stock was traded on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date; and

 

If the Common Stock is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the Administrator, in good faith, shall determine in compliance with applicable laws.

 

Fully Diluted Shares as of a date means an amount equal to the number of shares of Common Stock (i) outstanding and (ii) issuable upon exercise, conversion or settlement of outstanding Stock Rights under the Plan and any other outstanding options, warrants or other securities of the Company that are (directly or indirectly) convertible or exchangeable into or exercisable for shares of Common Stock, in each case as of the close of business of the Company on such date. For purposes of calculating the number of Fully Diluted Shares: (x) if the number of shares subject to an outstanding Stock Right is variable on the applicable date, then the number of shares of Common Stock issuable upon exercise or settlement of the Stock Right shall be the maximum number of shares that could be received under such Stock Right and (y) if two or more types of Stock Rights are granted to a Participant in tandem with each other such that the exercise of one type of Stock Right with respect to a number of shares cancels at least an equal number of shares of the other, then the number of shares of Common Stock issuable upon exercise or settlement of the Stock Right shall be the largest number of shares that would be counted under either of the Stock Rights.

 

ISO means a stock option intended to qualify as an incentive stock option under Section 422 of the Code.

 

Non-Qualified Option means a stock option which is not intended to qualify as an ISO.

 

Option means an ISO or Non-Qualified Option granted under the Plan.

 

Participant means an Employee, director or Consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan. As used herein, “Participant” shall include “Participant’s Survivors” where the context requires.

 

Performance-Based Award means a Stock Grant or Stock-Based Award which vests based on the attainment of written Performance Goals as set forth in Paragraph 9 hereof.

 

Performance Goals means performance goals determined by the Committee in its sole discretion and set forth in an Agreement. The satisfaction of Performance Goals shall be subject to certification by the Committee. The Committee has the authority to take appropriate action with respect to the Performance Goals (including, without limitation, making adjustments to the Performance Goals or determining the satisfaction of the Performance Goals in connection with a Corporate Transaction) provided that any such action does not otherwise violate the terms of the Plan.

 

 

Plan means this Gemphire Therapeutics Inc. 2019 Equity Incentive Plan.

 

Securities Act means the United States Securities Act of 1933, as amended.

 

Shares means shares of the Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which the Shares are changed or for which they are exchanged within the provisions of Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.

 

Stock-Based Award means a grant by the Company under the Plan of an equity award or an equity based award, which is not an Option or a Stock Grant.

 

Stock Grant means a grant by the Company of Shares under the Plan.

 

Stock Right means a right to Shares or the value of Shares of the Company granted pursuant to the Plan—an ISO, a Non-Qualified Option, a Stock Grant or a Stock-Based Award.

 

Survivor means a deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to a Stock Right by will or by the laws of descent and distribution.

 

2.    PURPOSES OF THE PLAN.

 

The Plan is intended to encourage ownership of Shares by Employees and directors of and certain Consultants to the Company and its Affiliates in order to attract and retain such people, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-Qualified Options, Stock Grants and Stock-Based Awards.

 

3.    SHARES SUBJECT TO THE PLAN.

 

(a)    Plan Shares:

 

(i)(a)The number of Shares which may be issued from time to time pursuant to this Plan shall be the sum of: (i) 75,000,000 shares of Common Stock and (ii) any shares of Common Stock that are represented by awards granted under the NeuroBo Pharmaceuticals, Inc. 2018 Stock Plan that are forfeited, expire or are cancelled without delivery of shares of Common Stock or which result in the forfeiture of shares of Common Stock back to the Company on or after December 6, 2019, or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 25 of this Plan; provided, however, that no more than 839,000 Shares shall be added to the Plan pursuant to subsection (ii). 
 (ii)Notwithstanding Subparagraph (a) above, on the first day of each fiscal year of the Company during the period beginning in fiscal year 2020, and ending on the second day of fiscal year 2029, the number of Shares that may be issued from time to time pursuant to the Plan, shall be increased by an amount equal to the lesser of (i) 4% of the number of outstanding shares of Common Stock on such date and (ii) an amount determined by the Administrator. 
 (iii)Notwithstanding any other provision of this Section 3, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options under this Plan will be 167,000,000 shares of Common Stock.

 

(b)   If an Option ceases to be “outstanding”, in whole or in part (other than by exercise), or if the Company shall reacquire (at not more than its original issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any Stock Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued, the unissued or reacquired Shares which were subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding the foregoing, if a Stock Right is

 

 

exercised, in whole or in part, by tender or withholding of Shares or if the Company or an Affiliate’s tax withholding obligation is satisfied by the tender or withholding of Shares, the number of Shares deemed to have been issued under the Plan for purposes of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right or portion thereof, and not the net number of Shares actually issued. In addition, Shares repurchased by the Company with the proceeds of the option exercise price may not be reissued under the Plan. However, in the case of ISOs, the foregoing provisions shall be subject to any limitations under the Code.

 

4.    ADMINISTRATION OF THE PLAN.

 

The Administrator of the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee, in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized to:

 

(a)   Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations which it deems necessary or advisable for the administration of the Plan;

 

(b)   Determine which Employees, directors and Consultants shall be granted Stock Rights;

 

(c)   Determine the number of Shares for which a Stock Right or Stock Rights shall be granted, provided however that in no event shall the aggregate grant date fair value of Stock Rights to be granted to any non-employee director under the Plan in any calendar year exceed $500,000, except that the aggregate grant date fair value of Stock Rights to be granted to any non-employee director in the calendar year in which such director commences his or her service with the Company shall not exceed $1,000,000;

 

(d)   Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted;

 

(e)   Amend any term or condition of any outstanding Stock Right, other than reducing the exercise price or purchase price or extending the expiration date of an Option, provided that (i) such term or condition as amended is not prohibited by the Plan; (ii) any such amendment shall not impair the rights of a Participant under any Stock Right previously granted without such Participant’s consent or in the event of death of the Participant the Participant’s Survivors; and (iii) any such amendment shall be made only after the Administrator determines whether such amendment would cause any adverse tax consequences to the Participant, including, but not limited to, the annual vesting limitation contained in Section 422(d) of the Code and described in Paragraph 6(b)(iv) below with respect to ISOs and pursuant to Section 409A of the Code;

 

(f)    Determine and make any adjustments in the Performance Goals included in any Performance-Based Awards in compliance with (d) above; and

 

(g)   Adopt any sub-plans applicable to residents of any specified jurisdiction as it deems necessary or appropriate in order to comply with or take advantage of any tax or other laws applicable to the Company, any Affiliate or to Participants or to otherwise facilitate the administration of the Plan, which sub-plans may include additional restrictions or conditions applicable to Stock Rights or Shares issuable pursuant to a Stock Right;

 

provided, however, that all such interpretations, rules, determinations, terms and conditions shall be made and prescribed in the context of potential tax consequences under Section 409A of the Code and preserving the tax status under Section 422 of the Code of those Options which are designated as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that would otherwise be the responsibility of the Committee.

 

To the extent permitted under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any portion of

 

 

its responsibilities and powers to any other person selected by it. The Board of Directors or the Committee may revoke any such allocation or delegation at any time. Notwithstanding the foregoing, only the Board of Directors or the Committee shall be authorized to grant a Stock Right to any director of the Company or to any “officer” of the Company as defined by Rule 16a-1 under the Exchange Act.

 

5.    ELIGIBILITY FOR PARTICIPATION.

 

The Administrator will, in its sole discretion, name the Participants in the Plan; provided, however, that each Participant must be an Employee, director or Consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator may authorize the grant of a Stock Right to a person not then an Employee, director or Consultant of the Company or of an Affiliate; provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to Employees who are deemed to be residents of the United States for tax purposes. Non-Qualified Options, Stock Grants and Stock-Based Awards may be granted to any Employee, director or Consultant of the Company or an Affiliate. The granting of any Stock Right to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock Rights or any grant under any other benefit plan established by the Company or any Affiliate for Employees, directors or Consultants.

 

6.    TERMS AND CONDITIONS OF OPTIONS.

 

Each Option shall be set forth in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the following terms and conditions:

 

(a)    Non-Qualified Options:     Each Option intended to be a Non-Qualified Option shall be subject to the terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards for any such Non-Qualified Option:

 

(i)Exercise Price:    Each Option Agreement shall state the exercise price (per share) of the Shares covered by each Option, which exercise price shall be determined by the Administrator and shall be at least equal to the Fair Market Value per share of the Common Stock on the date of grant of the Option. 
 (ii)Number of Shares:    Each Option Agreement shall state the number of Shares to which it pertains.

(iii)Vesting:    Each Option Agreement shall state the date or dates on which it first is exercisable and the date after which it may no longer be exercised, and may provide that the Option rights accrue or become exercisable in installments over a period of months or years, or upon the occurrence of certain performance conditions or the attainment of stated goals or events. 
 (iv)Additional Conditions:    Exercise of any Option may be conditioned upon the Participant’s execution of a shareholders agreement in a form satisfactory to the Administrator providing for certain protections for the Company and its other shareholders, including requirements that: 
 A.The Participant’s or the Participant’s Survivors’ right to sell or transfer the Shares may be restricted; and 
 B.The Participant or the Participant’s Survivors may be required to execute letters of investment intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions. 
 (v)Term of Option:    Each Option shall terminate not more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide.

 

(b)    ISOs:    Each Option intended to be an ISO shall be issued only to an Employee who is deemed to be a resident of the United States for tax purposes, and shall be subject to the following terms and conditions, with such additional restrictions or changes as the Administrator determines are appropriate but

 

 

not in conflict with Section 422 of the Code and relevant regulations and rulings of the Internal Revenue Service:

 

(iv)Minimum Standards:    The ISO shall meet the minimum standards required of Non-Qualified Options, as described in Paragraph 6(a) above, except clause (i) and (v) thereunder. 
 (v)Exercise Price:    Immediately before the ISO is granted, if the Participant owns, directly or by reason of the applicable attribution rules in Section 424(d) of the Code: 
 A.10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than 100% of the Fair Market Value per share of the Common Stock on the date of grant of the Option; or 
 B.More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than 110% of the Fair Market Value per share of the Common Stock on the date of grant of the Option. 
 (vi)Term of Option:    For Participants who own: 
 A.10% or less of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than ten years from the date of the grant or at such earlier time as the Option Agreement may provide; or 
 B.More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate, each ISO shall terminate not more than five years from the date of the grant or at such earlier time as the Option Agreement may provide. 
 (vii)Limitation on Yearly Exercise:    The Option Agreements shall restrict the amount of ISOs which may become exercisable in any calendar year (under this or any other ISO plan of the Company or an Affiliate) so that the aggregate Fair Market Value (determined on the date each ISO is granted) of the stock with respect to which ISOs are exercisable for the first time by the Participant in any calendar year does not exceed $100,000.

 

7.    TERMS AND CONDITIONS OF STOCK GRANTS.

 

Each Stock Grant to a Participant shall state the principal terms in an Agreement duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following minimum standards:

 

(a)   Each Agreement shall state the purchase price per share, if any, of the Shares covered by each Stock Grant, which purchase price shall be determined by the Administrator but shall not be less than the minimum consideration required by the Delaware General Corporation Law, if any, on the date of the grant of the Stock Grant;

 

(b)   Each Agreement shall state the number of Shares to which the Stock Grant pertains; and

 

(c)   Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to the Stock Grant, including the time period or attainment of Performance Goals or such other performance criteria upon which such rights shall accrue and the purchase price therefor, if any.

 

8.    TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.

 

The Administrator shall have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions as the Administrator may determine, including, without limitation, the grant of Shares based upon certain conditions, the grant of securities convertible into Shares and the grant of stock appreciation rights, phantom stock awards or stock units. The principal terms of each Stock-Based Award shall be set forth in an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company. Each Agreement shall include the terms of any right of the Company including the right to terminate the Stock-Based Award without the issuance of Shares, the terms of any vesting conditions, Performance Goals or events upon

 

 

which Shares shall be issued. Under no circumstances may the Agreement covering stock appreciation rights (a) have an exercise or base price (per share) that is less than the Fair Market Value per share of Common Stock on the date of grant or (b) expire more than ten years following the date of grant.

 

The Company intends that the Plan and any Stock-Based Awards granted hereunder be exempt from the application of Section 409A of the Code or meet the requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code, to the extent applicable, and be operated in accordance with Section 409A so that any compensation deferred under any Stock-Based Award (and applicable investment earnings) shall not be included in income under Section 409A of the Code. Any ambiguities in the Plan shall be construed to effect the intent as described in this Paragraph 8.

 

9.    PERFORMANCE-BASED AWARDS.

 

The Committee shall determine whether, with respect to a performance period, the applicable Performance Goals have been met with respect to a given Participant and, if they have, to so certify and ascertain the amount of the applicable Performance-Based AWARD. No Performance-Based Awards will be issued for such performance period until such certification is made by the Committee. The number of Shares issued in respect of a Performance-Based Award determined by the Committee for a performance period shall be paid to the Participant at such time as determined by the Committee in its sole discretion after the end of such performance period.

 

10.    EXERCISE OF OPTIONS AND ISSUE OF SHARES.

 

An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company or its designee (in a form acceptable to the Administrator, which may include electronic notice), together with provision for payment of the aggregate exercise price in accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set forth in the Option Agreement. Such notice shall be signed by the person exercising the Option (which signature may be provided electronically in a form acceptable to the Administrator), shall state the number of Shares with respect to which the Option is being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the exercise price for the Shares as to which such Option is being exercised shall be made (a) in United States dollars in cash or by check; or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) having a Fair Market Value equal as of the date of the exercise to the aggregate cash exercise price for the number of Shares as to which the Option is being exercised; or (c) at the discretion of the Administrator, by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of Shares having a Fair Market Value equal as of the date of exercise to the aggregate exercise price for the number of Shares as to which the Option is being exercised; or (d) at the discretion of the Administrator, in accordance with a cashless exercise program established with a securities brokerage firm, and approved by the Administrator; or (e) at the discretion of the Administrator, by any combination of (a), (b), (c) and (d) above or (f) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may determine. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of an ISO as is permitted by Section 422 of the Code.

 

The Company shall then reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant’s Survivors, as the case may be). In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares.

 

11.    PAYMENT IN CONNECTION WITH THE ISSUANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF SHARES.

 

Any Stock Grant or Stock-Based Award requiring payment of a purchase price for the Shares as to which such Stock Grant or Stock-Based Award is being granted shall be made (a) in United States dollars in cash or by check; or (b) at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) and having a Fair Market Value equal as of the date of

 

 

payment to the purchase price of the Stock Grant or Stock-Based Award; or (c) at the discretion of the Administrator, by any combination of (a) and (b) above; or (d) at the discretion of the Administrator, by payment of such other lawful consideration as the Administrator may determine.

 

The Company shall when required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or Stock-Based Award was made to the Participant (or to the Participant’s Survivors, as the case may be), subject to any escrow provision set forth in the applicable Agreement. In determining what constitutes “reasonably promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including, without limitation, state securities or “blue sky” laws) which requires the Company to take any action with respect to the Shares prior to their issuance.

 

12.    RIGHTS AS A SHAREHOLDER.

 

No Participant to whom a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right except after due exercise of an Option or issuance of Shares as set forth in any Agreement, tender of the aggregate exercise or purchase price, if any, for the Shares being purchased and registration of the Shares in the Company’s share register in the name of the Participant.

 

13.    ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.

 

By its terms, a Stock Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement provided that no Stock Right may be transferred by a Participant for value. Notwithstanding the foregoing, an ISO transferred except in compliance with clause (i) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited by this Paragraph. Except as provided above during the Participant’s lifetime a Stock Right shall only be exercisable by or issued to such Participant (or his or her legal representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void.

 

14.    EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.

 

Except as otherwise provided in a Participant’s Option Agreement, in the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate before the Participant has exercised an Option, the following rules apply:

 

(a)   A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate (for any reason other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs 15, 16, and 17, respectively), may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of service, but only within such term as the Administrator has designated in a Participant’s Option Agreement.

 

(b)   Except as provided in Subparagraph (c) below, or Paragraph 16 or 17, in no event may an Option intended to be an ISO, be exercised later than three months after the Participant’s termination of employment.

 

(c)   The provisions of this Paragraph, and not the provisions of Paragraph 16 or 17, shall apply to a Participant who subsequently becomes Disabled or dies after the termination of employment, director status or consultancy; provided, however, in the case of a Participant’s Disability or death within three months after the termination of employment, director status or consultancy, the Participant or the Participant’s

 

 

Survivors may exercise the Option within one year after the date of the Participant’s termination of service, but in no event after the date of expiration of the term of the Option.

 

(d)   Notwithstanding anything herein to the contrary, if subsequent to a Participant’s termination of employment, termination of director status or termination of consultancy, but prior to the exercise of an Option, the Administrator determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute Cause, then such Participant shall forthwith cease to have any right to exercise any Option.

 

(e)   A Participant to whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide; provided, however, that, for ISOs, any leave of absence granted by the Administrator of greater than three months, unless pursuant to a contract or statute that guarantees the right to reemployment, shall cause such ISO to become a Non-Qualified Option on the date that is six months following the commencement of such leave of absence.

 

(f)    Except as required by law or as set forth in a Participant’s Option Agreement, Options granted under the Plan shall not be affected by any change of a Participant’s status within or among the Company and any Affiliates, so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.

 

15.    EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE.

 

Except as otherwise provided in a Participant’s Option Agreement, the following rules apply if the Participant’s service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause prior to the time that all his or her outstanding Options have been exercised:

 

(a)   All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated for Cause will immediately be forfeited.

 

(b)   Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service but prior to the exercise of an Option, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then the right to exercise any Option is forfeited.

 

16.    EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.

 

Except as otherwise provided in a Participant’s Option Agreement:

 

(a)   A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability may exercise any Option granted to such Participant to the extent that the Option has become exercisable but has not been exercised on the date of the Participant’s termination of service due to Disability; and in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of the Participant’s termination of service due to Disability of any additional vesting rights that would have accrued on the next vesting date had the Participant not become Disabled. The proration shall be based upon the number of days accrued in the current vesting period prior to the date of the Participant’s termination of service due to Disability.

 

(b)   A Disabled Participant may exercise the Option only within the period ending one year after the date of the Participant’s termination of service due to Disability, notwithstanding that the Participant might have been able to exercise the Option as to some or all of the Shares on a later date if the Participant had

 

 

not been terminated due to Disability and had continued to be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.

 

(c)   The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.

 

17.    EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

 

Except as otherwise provided in a Participant’s Option Agreement:

 

(a)   In the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate, such Option may be exercised by the Participant’s Survivors to the extent that the Option has become exercisable but has not been exercised on the date of death; and in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s date of death.

 

(b)   If the Participant’s Survivors wish to exercise the Option, they must take all necessary steps to exercise the Option within one year after the date of death of such Participant, notwithstanding that the decedent might have been able to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued to be an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.

 

18.    EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED STOCK GRANTS AND STOCK-BASED AWARDS.

 

In the event of a termination of service (whether as an Employee, director or Consultant) with the Company or an Affiliate for any reason before the Participant has accepted a Stock Grant or a Stock-Based Award and paid the purchase price, if required, such grant shall terminate.

 

For purposes of this Paragraph 18 and Paragraph 19 below, a Participant to whom a Stock Grant or a Stock-Based Award has been issued under the Plan who is absent from work with the Company or with an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated such Participant’s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator may otherwise expressly provide.

 

In addition, for purposes of this Paragraph 18 and Paragraph 19 below, any change of employment or other service within or among the Company and any Affiliates shall not be treated as a termination of employment, director status or consultancy so long as the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.

 

19.    EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE, DEATH or DISABILITY.

 

Except as otherwise provided in a Participant’s Agreement, in the event of a termination of service for any reason (whether as an Employee, director or Consultant), other than termination for Cause, death or Disability for which there are special rules in Paragraphs 20, 21, and 22 below, before all forfeiture provisions or Company rights of repurchase shall have lapsed, then the Company shall have the right to cancel or repurchase that number of Shares subject to a Stock Grant or Stock-Based Award as to which the Company’s forfeiture or repurchase rights have not lapsed.

 

 

20.    EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR CAUSE.

 

Except as otherwise provided in a Participant’s Agreement, the following rules apply if the Participant’s service (whether as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause:

 

(a)   All Shares subject to any Stock Grant or Stock-Based Award that remain subject to forfeiture provisions or as to which the Company shall have a repurchase right shall be immediately forfeited to the Company as of the time the Participant is notified his or her service is terminated for Cause.

 

(b)   Cause is not limited to events which have occurred prior to a Participant’s termination of service, nor is it necessary that the Administrator’s finding of Cause occur prior to termination. If the Administrator determines, subsequent to a Participant’s termination of service, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct which would constitute Cause, then all Shares subject to any Stock Grant or Stock-Based Award that remained subject to forfeiture provisions or as to which the Company had a repurchase right on the date of termination shall be immediately forfeited to the Company.

 

21.    EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF TERMINATION OF SERVICE FOR DISABILITY.

 

Except as otherwise provided in a Participant’s Agreement, the following rules apply if a Participant ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of Disability: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or Stock-Based Award through the date of Disability as would have lapsed had the Participant not become Disabled. The proration shall be based upon the number of days accrued prior to the date of Disability.

 

The Administrator shall make the determination both as to whether Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost of which examination shall be paid for by the Company.

 

22.    EFFECT ON STOCK GRANTS AND STOCK-BASED AWARDS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.

 

Except as otherwise provided in a Participant’s Agreement, the following rules apply in the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company or of an Affiliate: to the extent the forfeiture provisions or the Company’s rights of repurchase have not lapsed on the date of death, they shall be exercisable; provided, however, that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a pro rata portion of the Shares subject to such Stock Grant or Stock-Based Award through the date of death as would have lapsed had the Participant not died. The proration shall be based upon the number of days accrued prior to the Participant’s date of death.

 

23.    PURCHASE FOR INVESTMENT.

 

Unless the offering and sale of the Shares shall have been effectively registered under the Securities Act, the Company shall be under no obligation to issue Shares under the Plan unless and until the following conditions have been fulfilled:

 

(a)   The person who receives a Stock Right shall warrant to the Company, prior to the receipt of Shares, that such person is acquiring such Shares for his or her own account, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person acquiring such Shares shall be bound

 

 

by the provisions of the following legend (or a legend in substantially similar form) which shall be endorsed upon the certificate evidencing the Shares issued pursuant to such exercise or such grant of a Stock Right:

 

“The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws.”

 

(b)   At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares may be issued in compliance with the Securities Act without registration thereunder.

 

24.    DISSOLUTION OR LIQUIDATION OF THE COMPANY.

 

Upon the dissolution or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all Stock Grants and Stock-Based Awards which have not been accepted, to the extent required under the applicable Agreement, will terminate and become null and void; provided, however, that if the rights of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have the right immediately prior to such dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the applicable Agreement.

 

25.    ADJUSTMENTS.

 

Upon the occurrence of any of the following events, a Participant’s rights with respect to any Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in a Participant’s Agreement.

 

(a)   Stock Dividends and Stock Splits.    If (i) the shares of Common Stock shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such shares of Common Stock, each Stock Right and the number of shares of Common Stock deliverable thereunder shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including, in the exercise, base or purchase price per share and in the Performance Goals applicable to outstanding Performance-Based Awards to reflect such events. The number of Shares subject to the limitations in Paragraph 3(a) and 4(c) shall also be proportionately adjusted upon the occurrence of such events.

 

(b)   Corporate Transactions.    If the Company is to be consolidated with or acquired by another entity in a Corporate Transaction, the Administrator or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”), shall, as to outstanding Options, either: (i) make appropriate provision for the continuation of such Options by substituting on an equitable basis for the Shares then subject to such Options either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that such Options must be exercised (either (A) to the extent then exercisable or (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph), within a specified number of days of the date of such notice, at the end of which period such Options which have not been exercised shall terminate; or (iii) terminate such Options in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock into which such Option would have been exercisable (either (A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or fully exercisable for purposes of this Subparagraph) less the aggregate exercise price thereof. For purposes of determining the payments to be made pursuant to Subclause (iii) above, in the case of a Corporate Transaction the consideration for

 

 

which, in whole or in part, is other than cash, the consideration other than cash shall be valued at the fair value thereof as determined in good faith by the Board of Directors.

 

With respect to outstanding Stock Grants, the Administrator or the Successor Board, shall make appropriate provision for the continuation of such Stock Grants on the same terms and conditions by substituting on an equitable basis for the Shares then subject to such Stock Grants either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity. In lieu of the foregoing, in connection with any Corporate Transaction, the Administrator may provide that, upon consummation of the Corporate Transaction, each outstanding Stock Grant shall be terminated in exchange for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the number of shares of Common Stock comprising such Stock Grant (to the extent such Stock Grant is no longer subject to any forfeiture or repurchase rights then in effect or, at the discretion of the Administrator, all forfeiture and repurchase rights being waived upon such Corporate Transaction).

 

In taking any of the actions permitted under this Paragraph 25(b), the Administrator shall not be obligated by the Plan to treat all Stock Rights, all Stock Rights held by a Participant, or all Stock Rights of the same type, identically.

 

A Stock Right may be subject to additional acceleration of vesting and exercisability upon or after a change of control as may be provided in the Agreement for such Stock Right, in any other written agreement between the Company or any Affiliate and the Participant or in any director compensation policy of the Company.

 

(c)    Recapitalization or Reorganization.     In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of Common Stock, a Participant upon exercising an Option or accepting a Stock Grant after the recapitalization or reorganization shall be entitled to receive for the price paid upon such exercise or acceptance if any, the number of replacement securities which would have been received if such Option had been exercised or Stock Grant accepted prior to such recapitalization or reorganization.

 

(d)    Adjustments to Stock-Based Awards.     Upon the happening of any of the events described in Subparagraphs (a), (b) or (c) above, any outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The Administrator or the Successor Board shall determine the specific adjustments to be made under this Paragraph 25, including, but not limited to the effect of any, Corporate Transaction and, subject to Paragraph 4, its determination shall be conclusive.

 

(e)    Modification of Options.     Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph (a), (b) or (c) above with respect to Options shall be made only after the Administrator determines whether such adjustments would (i) constitute a “modification” of any ISOs (as that term is defined in Section 424(h) of the Code) or (ii) cause any adverse tax consequences for the holders of Options, including, but not limited to, pursuant to Section 409A of the Code. If the Administrator determines that such adjustments made with respect to Options would constitute a modification or other adverse tax consequence, it may in its discretion refrain from making such adjustments, unless the holder of an Option specifically agrees in writing that such adjustment be made and such writing indicates that the holder has full knowledge of the consequences of such “modification” on his or her income tax treatment with respect to the Option. This paragraph shall not apply to the acceleration of the vesting of any ISO that would cause any portion of the ISO to violate the annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6(b)(iv).

 

26.    ISSUANCES OF SECURITIES.

 

Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Stock Rights. Except as expressly provided herein, no

 

 

adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.

 

27.    FRACTIONAL SHARES.

 

No fractional shares shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market Value thereof.

 

28.    WITHHOLDING.

 

In the event that any federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act withholdings or other amounts are required by applicable law or governmental regulation to be withheld from the Participant’s salary, wages or other remuneration in connection with the issuance of a Stock Right or Shares under the Plan or for any other reason required by law, the Company may withhold from the Participant’s compensation, if any, or may require that the Participant advance in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount of such withholdings unless a different withholding arrangement, including the use of shares of the Company’s Common Stock or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value of the shares withheld for purposes of payroll withholding shall be determined in the manner set forth under the definition of Fair Market Value provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the Fair Market Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance the difference in cash to the Company or the Affiliate employer.

 

29.    NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

 

Each Employee who receives an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Shares acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale or gift) of such Shares before the later of (a) two years after the date the Employee was granted the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code. If the Employee has died before such Shares are sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

 

30.    TERMINATION OF THE PLAN.

 

The Plan will terminate on August 29, 2029, the date which is ten years from the earlier of the date of its adoption by the Board of Directors and the date of its approval by the shareholders of the Company. The Plan may be terminated at an earlier date by vote of the shareholders or the Board of Directors of the Company; provided, however, that any such earlier termination shall not affect any Agreements executed prior to the effective date of such termination. Termination of the Plan shall not affect any Stock Rights theretofore granted.

 

31.    AMENDMENT OF THE PLAN AND AGREEMENTS.

 

The Plan may be amended by the shareholders of the Company. The Plan may also be amended by the Administrator; provided that any amendment approved by the Administrator which the Administrator determines is of a scope that requires shareholder approval shall be subject to obtaining such shareholder approval including, without limitation, to the extent necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for favorable federal income tax treatment as may be afforded ISOs under Section 422 of the Code and to the extent necessary to qualify the Shares issuable under the Plan for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers. Other than as set forth in Paragraph 25 of the Plan, at any time when the exercise price of such Option is above the fair market value of a share, the Administrator may not without shareholder approval reduce the exercise price of an Option or cancel any outstanding Option of Common Stock in exchange for (i) a replacement option having a lower exercise price, (ii) a Stock Grant, (iii) any other Stock-Based Award or (iv) for cash. In addition the Administrator shall not take any other action that is considered a direct or indirect “repricing” for purposes of the shareholder

 

 

approval rules of the applicable securities exchange or inter-dealer quotation system on which the Shares are listed, including any other action that is treated as a repricing under generally accepted accounting principles. Any modification or amendment of the Plan shall not, without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her, unless such amendment is required by applicable law or necessary to preserve the economic value of such Stock Right. With the consent of the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Agreements may be amended by the Administrator in a manner which is not adverse to the Participant. Nothing in this Paragraph 31 shall limit the Administrator’s authority to take any action permitted pursuant to Paragraph 25.

 

32.    EMPLOYMENT OR OTHER RELATIONSHIP.

 

Nothing in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director status or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period of time.

 

33.    SECTION 409A.

 

If a Participant is a “specified employee” as defined in Section 409A of the Code (and as applied according to procedures of the Company and its Affiliates) as of his separation from service, to the extent any payment under this Plan or pursuant to the grant of a Stock-Based Award constitutes deferred compensation (after taking into account any applicable exemptions from Section 409A of the Code), and to the extent required by Section 409A of the Code, no payments due under this Plan or pursuant to a Stock-Based Award may be made until the earlier of: (i) the first day of the seventh month following the Participant’s separation from service, or (ii) the Participant’s date of death; provided, however, that any payments delayed during this six-month period shall be paid in the aggregate in a lump sum, without interest, on the first day of the seventh month following the Participant’s separation from service.

 

The Administrator shall administer the Plan with a view toward ensuring that Stock Rights under the Plan that are subject to Section 409A of the Code comply with the requirements thereof and that Options under the Plan be exempt from the requirements of Section 409A of the Code, but neither the Administrator nor any member of the Board of Directors, nor the Company nor any of its Affiliates, nor any other person acting hereunder on behalf of the Company, the Administrator or the Board of Directors shall be liable to a Participant or any Survivor by reason of the acceleration of any income, or the imposition of any additional tax or penalty, with respect to a Stock Right, whether by reason of a failure to satisfy the requirements of Section 409A of the Code or otherwise.

 

34.    INDEMNITY.

 

Neither the Board of Directors nor the Administrator, nor any members of either, nor any employees of the Company or any parent, subsidiary, or other Affiliate, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with their responsibilities with respect to this Plan, and the Company hereby agrees to indemnify the members of the Board or Directors, the members of the Committee, and the employees of the Company and its parent or subsidiaries in respect of any claim, loss, damage, or expense (including reasonable counsel fees) arising from any such act, omission, interpretation, construction or determination to the full extent permitted by law.

 

35.    CLAWBACK.

 

Notwithstanding anything to the contrary contained in this Plan, the Company may recover from a Participant any compensation received from any Stock Right (whether or not settled) or cause a Participant to forfeit any Stock Right (whether or not vested) in the event that the Company’s Clawback Policy as then in effect is triggered.

 

36.    GOVERNING LAW.

 

This Plan shall be construed and enforced in accordance with the law of the State of Delaware.Exhibit 10.3

 

Consulting Agreement

 

This Consulting Agreement (“Agreement”) is effective as of May 1, 2018 by and between NeuroBo Pharmaceuticals, Inc. (“NeuroBo”), a Massachusetts corporation with its principal place of business at 177 Huntington Avenue, Suite 1732, Boston, MA 02115 (email — jkang@jkbiopharma.com) and vZenium LLC (“Consultant”), a Massachusetts limited liability company, owned and managed entirely by Mark Versavel, MD, PhD, MBA with a principal place of business at  47 Marathon Street, Arlington, MA 02474 (email - mark.versavel@vzenium.com).

 

RECITALS

 

WHEREAS, on February 1, 2018, NeuroBo and Consultant entered a consulting agreement which was mutually terminated on April 30, 2018 and is replaced in its entirety by this Agreement.

 

AND WHEREAS, NeuroBo wishes to continue to engage the services and expertise of the Consultant on the terms and conditions hereinafter set forth, and the Consultant wishes to accept such an engagement on those terms and conditions;

 

AND WHEREAS, Consultant has agreed to perform consulting work for NeuroBo as set forth in Attachment A to this Agreement;

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.0                               Consultant’s Services.  Consultant shall provide to NeuroBo certain professional services as set forth in Attachment A to this Agreement, including Mark Versavel serving as Chief Medical Officer of NeuroBo.

 

2.0                               Compensation.  In consideration of the consulting services to be performed by Consultant under this Agreement NeuroBo will pay Consultant as set forth in Attachment B to this Agreement.

 

2.1                               Direct Costs.  Whenever possible NeuroBo shall pay directly for expenses related to its operations; however, NeuroBo will reimburse Consultant’s out of pocket costs which are approved in advance by NeuroBo’s Board of Directors and necessary to NeuroBo’s business. NeuroBo shall not reimburse Consultant for any indirect costs.  Invoices for out of pocket costs shall be submitted and paid pursuant to the payments terms advised to Consultant by NeuroBo’s Board of Directors and shall be accompanied by receipts. Invoices shall be submitted by the 5th day of the month following each calendar month during which expenses were incurred.  NeuroBo shall, except as otherwise provided in this Agreement, pay approved invoices within fifteen (15) days.  No advance payment for Consultant’s costs shall be permitted.

 

3.0                               Term.  This agreement shall continue month to month without limitation, except that the Agreement shall terminate immediately (i) upon the death or disability of Mark Versavel, or (ii) if Mark Versavel ceases to be the sole owner of Consultant, (iii) for Cause, as defined below, or

 

 

(iv) if prior to January 1, 2019, the parties have not agreed to extend, amend or replace this Agreement.  Otherwise, the Agreement shall terminate at any time by agreement of the parties or upon ten (10) day’s written notice by one party to the other.

 

3.1                               Cause.  “Cause” shall mean (i) Mark Versavel’s neglect or refusal to perform the duties of Chief Medical Officer of NeuroBo or to follow any lawful direction of the Board of Directors of NeuroBo, provided that the Board shall give written notice to Consultant which shall have ten (10) days to cure any neglect or refusal to perform duties or follow any lawful direction of the Board; (ii) any willful or intentional act of Consultant or Mark Versavel that violates Consultant’s or Mark Versavel’s fiduciary duties to NeuroBo, violates any written codes of conduct of NeuroBo including anti-discrimination and anti-harassment policies, as they exist from time to time, or injures the reputation or business of NeuroBo, or its affiliates in any material respect; (iii) intoxication in public by Mark Versavel, or his intoxication in the workplace, illegal use of narcotics which is, or could reasonably be expected to become, materially injurious to the reputation or business of NeuroBo or its affiliates or which impairs, or could reasonably be expected to impair, the performance of Consultant’s duties; (iv) conviction of, or plea of guilty or nolo contendere to, the commission of a felony by Consultant or Mark Versavel, or any other crime involving moral turpitude or dishonesty; (v) the commission by Consultant or Mark Versavel of an act of fraud , embezzlement or misappropriation against NeuroBo or its shareholders or their affiliates; or (vi) Consultant’s breach of any material provision of this Agreement.

 

4.0                               Independent Contractor.  Nothing contained in this Agreement or any document executed in connection with this Agreement, shall be construed to create an employer-employee, partnership or joint venture relationship between NeuroBo and Consultant (and/or Mark Versavel or any other of Consultant’s owners or employees).  Consultant, its owner and its employees are independent contractors and not employees of NeuroBo or any of NeuroBo’s parents, subsidiaries or affiliates.  The consideration set forth in Section 2 shall be the sole consideration due to Consultant, and its owners and employees for the services rendered.  It is understood that NeuroBo will not withhold any amounts for payment of taxes from the compensation of Consultant.  All sums subject to deductions, if any, required to be withheld and/or paid under any applicable national, regional or municipal laws or union or professional guild regulations, shall be Consultant’s sole responsibility and Consultant shall indemnify and hold NeuroBo harmless from all damages, claims and expenses arising out of or resulting from any claims asserted by any taxing authority as a result of or in connection with those payments.

 

None of Consultant’s owners or employees including Mark Versavel shall be eligible to participate in any health, life, disability or other insurance plan, or any 401K, SEP-IRA or other pension or retirement plan, offered by NeuroBo to its employees.  Neither Consultant nor its employees will represent to be or hold themselves out as employees of NeuroBo, although an employee of Consultant may be an officer or director of NeuroBo.

 

5.0                               Proprietary Information and Nondisclosure.  Consultant and its owner Mark Versavel acknowledge and agree that as a result of entering into this Agreement with NeuroBo, it/he has and will come into contact with, have access to and learn Proprietary Information, which is the property of NeuroBo (including for the purpose of this provision, its subsidiaries and affiliates).  All such information, referred to as “Proprietary Information,” includes but is not limited to

 

2

 

methods, procedures, devices and other means used by NeuroBo in the conduct of its business, marketing plans and strategies, pricing plans and strategies, and technical and research projects, all of which Proprietary Information is not publicly available, but has been developed by NeuroBo at its substantial effort and expense, all of which Proprietary Information is not available from directories or other public sources.  Consultant and Mark Versavel acknowledge and agree that any disclosure, divulging, revealing or other use of any of the aforesaid Proprietary Information by the Consultant or Mark Versavel will be highly detrimental to the business of NeuroBo and serious loss of business and pecuniary damage may result.  Accordingly, Consultant and Mark Versavel specifically covenant and agree to hold all such Proprietary Information and any documents containing or reflecting the same in the strictest confidence, and Consultant and Mark Versavel will not, both during its/his work for NeuroBo or at any time thereafter, without NeuroBo’s prior written consent, disclose, divulge or reveal to any person or use for any purpose other than the exclusive benefit of NeuroBo, any Proprietary Information whether contained in the Consultant’s or Mark Versavel’s memory or embodied in writing or other physical form.

 

5.1.                            Intellectual Property.

 

(a) To the extent they relate to, or result from, directly or indirectly, the actual or anticipated operations of Company or any of its affiliates, or the activities of Consultant in the course and scope of its services, Consultant hereby agrees that all patents, trademarks, copyrights, trade secrets, and other intellectual property rights, all inventions, whether or not patentable, and any product, drawing, design, recording, writing, literary work or other author’s work, in any other tangible form developed in  whole or in part by Consultant during the term of this Agreement, or otherwise  developed, purchased or acquired by Company or any of its affiliates (“Intellectual Property”), shall be the exclusive property, free of charge, of Company or such affiliate.

 

(b) Consultant will hold all Intellectual Property in trust for Company and will deliver all Intellectual Property in Consultant’s possession or control to Company upon request and, in any event, at the end of Consultant’s services with Company.

 

(c) Consultant shall assign and does hereby assign to Company all property rights that Consultant may now or hereafter have in the Intellectual Property. As part of the Consultant’s services under this Agreement, Consultant shall take such action, including, but not limited to, the execution, acknowledgment, delivery and assistance in preparation of documents, and the giving of testimony, as may be requested by Company to evidence, transfer, vest or confirm Company’s right, title and interest in the Intellectual Property.

 

(d) Consultant will not contest the validity of any invention, any copyright, any trademark or any mask work registration owned by or vesting in Company or any of its affiliates under this Agreement.

 

(e) To the maximum extent permitted by law, Intellectual Property shall be Proprietary Information, as defined herein.

 

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6.0                               Consultant’s Owners and Employees.  All owners and employees of Consultant shall held to the same standards as  Consultant and shall conform with all obligations and responsibilities of Consultant under this Agreement, including but not limited to those set forth in Sections 4.0 and 5.0, provided that Consultant’s owner(s) and/or employee(s), if serving as an officer or director of NeuroBo, may as an officer or director, but not as an employee of Consultant, handle Proprietary Information in the manner permitted by NeuroBo for its officers and directors.

 

7.0                               Competent Work.  All work will be done in a competent fashion in accordance with highest standards of the pharmaceutical industry.

 

8.0                               Representations and Warranties.  The Consultant will make no representations, warranties, or commitments binding NeuroBo without NeuroBo’s prior written consent, although an owner or employee of Consultant who is an officer or director of NeuroBo may act as permitted by NeuroBo’s Bylaws, applicable shareholders’ agreements, and relevant law and regulations.

 

9.0                               Legal Right.  NeuroBo and Consultant each covenant and warrant that it has the unlimited legal right to enter into this Agreement and to perform in accordance with its terms without violating the rights of others or any applicable law and that it has not and shall not become a party to any other Agreement of any kind which conflicts with this Agreement.

 

10.0                        Notice.  Any notice or communication permitted or required by this Agreement shall be deemed effective when personally delivered, sent by electronic mail (with confirmed confirmation of receipt) or mailed, certified, return receipt requested, to the appropriate party at the address set forth above.

 

11.0                        Governing Law and Disputes.  This Agreement shall be governed by and construed in accordance with the substantive and procedural laws of Massachusetts (without giving effect to any otherwise applicable choice of law principles) applicable to contracts made and to be performed entirely within Massachusetts.

 

11.1                        Jurisdiction.  The parties agree irrevocably that the federal and state courts with jurisdiction over Boston, Massachusetts shall have exclusive jurisdiction to settle any dispute or claim which arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).

 

12.0                        Limitations of Liability.  Except for liability arising from a breach of the confidentiality and nondisclosure obligations, in no event shall either party be liable to the other party for consequential, incidental, special (including multiple or punitive) or other indirect damages that are claimed to be incurred by the other party whether such claim arises under contract, tort (including strict liability) or any other theory of law.

 

12.1                        Indemnification.  Each party shall indemnify, defend and hold the other party and its parent, subsidiaries, affiliates and employees harmless from and against any and all damages, losses, liabilities and expense (including reasonable attorneys’ fees) arising out of or relating to any claims, causes of action, lawsuits or other proceedings, regardless of legal theory, that result

 

4

 

or arise, in whole or in part, from a party’s: (i) intentional misconduct, negligence, or fraud; (ii) acts or omissions; or (iii) products or services including, without limitation, any claims that such products or services infringe any patent, copyright, trademark, trade secret or any other proprietary right of any third party.

 

13.0                        General

 

13.1                        No Assignment.  Consultant may not assign or transfer its rights or obligations contained herein without the prior written consent of NeuroBo.

 

13.2                        Amendment.  This Agreement shall not be amended or modified, nor shall any waiver of any right hereunder be effective unless set forth in a document titled “Amendment” and executed by duly authorized representatives of both parties.

 

13.3                        Waivers.  The waiver of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition or any subsequent breach of the same

 

13.4                        Severability.  If any provision of this Agreement is or becomes void or unenforceable by force or operation of law, the other provisions of this Agreement shall remain valid and enforceable.

 

13.5                        Headings.  Paragraph headings contained in this Agreement are included only for convenience, and shall have no substantive effect or form any part of the Agreement and understanding between the Parties.

 

13.6                        Non-solicitation.  Consultant agrees that during the term of this Agreement and for a period of 3 years thereafter, it shall not hire or directly solicit for employment or retention as an independent contractor any employee of Company or Company’s affiliated companies.

 

13.7.                     Survival.  The provisions of Sections 5.0, 5.1, 6.0, and 13.6 shall survive the termination or expiration of this Agreement.

 

[Signatures on following page.]

 

5

 

	
NeuroBo   Pharmaceuticals, Inc.
    	
 
    	
vZenium LLC
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
by:
    	
 
    
	
 
    	
Jeong   Gu Kang, Vice President
    	
 
    	
 
    	
Mark   Versavel, Owner
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
And   for all relevant provisions
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Mark   Versavel, individually
    

 

6

 

Attachment A

 

Services to be provided by Consultant:

 

·                  Responsible for clinical development strategies including Phase I through III, lifecycle management, medical affairs, safety responsibilities, scientific interactions with regulatory bodies, and interactions with corporate partner(s).

 

·                  Lead and oversee the strategic definition and tactical development of clinical trials programs, including protocol writing, interpretation of clinical data, and literature reviews.

 

·                  Ensure the work with colleagues and collaborators are coordinated and that all people, systems, processes and materials required for clinical trials are available and appropriately prepared.

 

·                  May represent the Clinical Research line function on multidisciplinary project teams.

 

·                  Participate as an active member of the Executive team of NeuroBo.

 

Owner to provide services on behalf of Consultant:

 

Mark Versavel, the owner of Consultant, shall provide all services requested or required under the terms of this Agreement unless otherwise agreed by the Board of NeuroBo.

 

Time Commitment:

 

May 1 — September 30, 2018:

 

60% of full time, which shall be approximately 104 hours per month.

 

October 1 — December 31, 2018:

 

80% of full time, which shall be approximately 139 hours per month.

 

7

 

Attachment B

 

Consulting Fee:

 

May — September 2018: $17,500 per month

 

October — December 2018: $23,333 per month

 

All paid in arrears on the last business day of the month.  No advance payment or loan is permitted.

 

During the Term, Consultant shall not be entitled to earn, nor shall Consultant be paid, any other compensation, including incentive or bonus payments.

 

Stock Options:

 

To the extent permitted by law and on terms established by the Board, NeuroBo shall grant Mark Versavel options for 30 shares of NeuroBo’s common stock

 

8

 

Consulting Agreement (Extension)

 

This Consulting Agreement (“Agreement”) is effective as of January 1, 2019 by and between NeuroBo Pharmaceuticals, Inc. (“NeuroBo”), a Massachusetts corporation with its principal place of business at 177 Huntington Avenue, Suite 1700, Boston, MA 02115 (email — rkang@neurobopharma.com) and vZenium LLC (“Consultant”), a Massachusetts limited liability company, owned and managed entirely by Mark Versavel, MD, PhD, MBA with a principal place of business at  47 Marathon Street, Arlington, MA 02474 (email - mark.versavel@vzenium.com).

 

RECITALS

 

WHEREAS, on May 1, 2018, NeuroBo and Consultant entered a consulting agreement (“May 1, 2018 Agreement”) which pursuant to Section 3 thereof would terminate immediately if the parties did not agree to extend, amend or replace the May 1, 2018 Agreement prior to January 1, 2019.

 

AND WHEREAS, NeuroBo wishes to extend the term of the May 1, 2018 Agreement on the terms and conditions hereinafter set forth, and the Consultant wishes to accept the extension of the May 1, 2018 Agreement on those terms and conditions;

 

AND WHEREAS, Consultant has agreed to perform consulting work for NeuroBo as set forth in Attachment A to this Agreement;

 

NOW, THEREFORE, the parties hereby agree as follows:

 

1.0                               Consultant’s Services.  Consultant shall provide to NeuroBo certain professional services as set forth in Attachment A to this Agreement, including Mark Versavel serving as Chief Medical Officer of NeuroBo.

 

2.0                               Compensation.  In consideration of the consulting services to be performed by Consultant under this Agreement NeuroBo will pay Consultant as set forth in Attachment B to this Agreement.

 

2.1                               Direct Costs.  Whenever possible NeuroBo shall pay directly for expenses related to its operations; however, NeuroBo will reimburse Consultant’s out of pocket costs which are approved in advance by NeuroBo’s Board of Directors and necessary to NeuroBo’s business. NeuroBo shall not reimburse Consultant for any indirect costs.  Invoices for out of pocket costs shall be submitted and paid pursuant to the payments terms advised to Consultant by NeuroBo’s Board of Directors and shall be accompanied by receipts. Invoices shall be submitted by the 5th day of the month following each calendar month during which expenses were incurred.  NeuroBo shall, except as otherwise provided in this Agreement, pay approved invoices within fifteen (15) days.  No advance payment for Consultant’s costs shall be permitted.

 

3.0                               Term.  This agreement shall continue month to month without limitation, except that the Agreement shall terminate immediately (i) upon the death or disability of Mark Versavel, or (ii)

 

 

if Mark Versavel ceases to be the sole owner of Consultant, (iii) for Cause, as defined below, or (iv) if prior to January 1, 2020, the parties have not agreed to extend, amend or replace this Agreement.  Otherwise, the Agreement shall terminate at any time by agreement of the parties or upon ten (10) day’s written notice by one party to the other.

 

3.1                               Cause.  “Cause” shall mean (i) Mark Versavel’s neglect or refusal to perform the duties of Chief Medical Officer of NeuroBo or to follow any lawful direction of the Board of Directors of NeuroBo, provided that the Board shall give written notice to Consultant which shall have ten (10) days to cure any neglect or refusal to perform duties or follow any lawful direction of the Board; (ii) any willful or intentional act of Consultant or Mark Versavel that violates Consultant’s or Mark Versavel’s fiduciary duties to NeuroBo, violates any written codes of conduct of NeuroBo including anti-discrimination and anti-harassment policies, as they exist from time to time, or injures the reputation or business of NeuroBo, or its affiliates in any material respect; (iii) intoxication in public by Mark Versavel, or his intoxication in the workplace, illegal use of narcotics which is, or could reasonably be expected to become, materially injurious to the reputation or business of NeuroBo or its affiliates or which impairs, or could reasonably be expected to impair, the performance of Consultant’s duties; (iv) conviction of, or plea of guilty or nolo contendere to, the commission of a felony by Consultant or Mark Versavel, or any other crime involving moral turpitude or dishonesty; (v) the commission by Consultant or Mark Versavel of an act of fraud , embezzlement or misappropriation against NeuroBo or its shareholders or their affiliates; or (vi) Consultant’s breach of any material provision of this Agreement.

 

4.0                               Independent Contractor.  Nothing contained in this Agreement or any document executed in connection with this Agreement, shall be construed to create an employer-employee, partnership or joint venture relationship between NeuroBo and Consultant (and/or Mark Versavel or any other of Consultant’s owners or employees).  Consultant, its owner and its employees are independent contractors and not employees of NeuroBo or any of NeuroBo’s parents, subsidiaries or affiliates.  The consideration set forth in Section 2 shall be the sole consideration due to Consultant, and its owners and employees for the services rendered.  It is understood that NeuroBo will not withhold any amounts for payment of taxes from the compensation of Consultant.  All sums subject to deductions, if any, required to be withheld and/or paid under any applicable national, regional or municipal laws or union or professional guild regulations, shall be Consultant’s sole responsibility and Consultant shall indemnify and hold NeuroBo harmless from all damages, claims and expenses arising out of or resulting from any claims asserted by any taxing authority as a result of or in connection with those payments.

 

None of Consultant’s owners or employees including Mark Versavel shall be eligible to participate in any health, life, disability or other insurance plan, or any 401K, SEP-IRA or other pension or retirement plan, offered by NeuroBo to its employees.  Neither Consultant nor its employees will represent to be or hold themselves out as employees of NeuroBo, although an employee of Consultant may be an officer or director of NeuroBo.

 

5.0                               Proprietary Information and Nondisclosure.  Consultant and its owner Mark Versavel acknowledge and agree that as a result of entering into this Agreement with NeuroBo, it/he has and will come into contact with, have access to and learn Proprietary Information, which is the property of NeuroBo (including for the purpose of this provision, its subsidiaries and affiliates).

 

2

 

All such information, referred to as “Proprietary Information,” includes but is not limited to methods, procedures, devices and other means used by NeuroBo in the conduct of its business, marketing plans and strategies, pricing plans and strategies, and technical and research projects, all of which Proprietary Information is not publicly available, but has been developed by NeuroBo at its substantial effort and expense, all of which Proprietary Information is not available from directories or other public sources.  Consultant and Mark Versavel acknowledge and agree that any disclosure, divulging, revealing or other use of any of the aforesaid Proprietary Information by the Consultant or Mark Versavel will be highly detrimental to the business of NeuroBo and serious loss of business and pecuniary damage may result.  Accordingly, Consultant and Mark Versavel specifically covenant and agree to hold all such Proprietary Information and any documents containing or reflecting the same in the strictest confidence, and Consultant and Mark Versavel will not, both during its/his work for NeuroBo or at any time thereafter, without NeuroBo’s prior written consent, disclose, divulge or reveal to any person or use for any purpose other than the exclusive benefit of NeuroBo, any Proprietary Information whether contained in the Consultant’s or Mark Versavel’s memory or embodied in writing or other physical form.

 

5.1.                            Intellectual Property.

 

(a) To the extent they relate to, or result from, directly or indirectly, the actual or anticipated operations of Company or any of its affiliates, or the activities of Consultant in the course and scope of its services, Consultant hereby agrees that all patents, trademarks, copyrights, trade secrets, and other intellectual property rights, all inventions, whether or not patentable, and any product, drawing, design, recording, writing, literary work or other author’s work, in any other tangible form developed in  whole or in part by Consultant during the term of this Agreement, or otherwise  developed, purchased or acquired by Company or any of its affiliates (“Intellectual Property”), shall be the exclusive property, free of charge, of Company or such affiliate.

 

(b) Consultant will hold all Intellectual Property in trust for Company and will deliver all Intellectual Property in Consultant’s possession or control to Company upon request and, in any event, at the end of Consultant’s services with Company.

 

(c) Consultant shall assign and does hereby assign to Company all property rights that Consultant may now or hereafter have in the Intellectual Property. As part of the Consultant’s services under this Agreement, Consultant shall take such action, including, but not limited to, the execution, acknowledgment, delivery and assistance in preparation of documents, and the giving of testimony, as may be requested by Company to evidence, transfer, vest or confirm Company’s right, title and interest in the Intellectual Property.

 

(d) Consultant will not contest the validity of any invention, any copyright, any trademark or any mask work registration owned by or vesting in Company or any of its affiliates under this Agreement.

 

(e) To the maximum extent permitted by law, Intellectual Property shall be Proprietary Information, as defined herein.

 

3

 

6.0                               Consultant’s Owners and Employees.  All owners and employees of Consultant shall held to the same standards as  Consultant and shall conform with all obligations and responsibilities of Consultant under this Agreement, including but not limited to those set forth in Sections 4.0 and 5.0, provided that Consultant’s owner(s) and/or employee(s), if serving as an officer or director of NeuroBo, may as an officer or director, but not as an employee of Consultant, handle Proprietary Information in the manner permitted by NeuroBo for its officers and directors.

 

7.0                               Competent Work.  All work will be done in a competent fashion in accordance with highest standards of the pharmaceutical industry.

 

8.0                               Representations and Warranties.  The Consultant will make no representations, warranties, or commitments binding NeuroBo without NeuroBo’s prior written consent, although an owner or employee of Consultant who is an officer or director of NeuroBo may act as permitted by NeuroBo’s Bylaws, applicable shareholders’ agreements, and relevant law and regulations.

 

9.0                               Legal Right.  NeuroBo and Consultant each covenant and warrant that it has the unlimited legal right to enter into this Agreement and to perform in accordance with its terms without violating the rights of others or any applicable law and that it has not and shall not become a party to any other Agreement of any kind which conflicts with this Agreement.

 

10.0                        Notice.  Any notice or communication permitted or required by this Agreement shall be deemed effective when personally delivered, sent by electronic mail (with confirmed confirmation of receipt) or mailed, certified, return receipt requested, to the appropriate party at the address set forth above.

 

11.0                        Governing Law and Disputes.  This Agreement shall be governed by and construed in accordance with the substantive and procedural laws of Massachusetts (without giving effect to any otherwise applicable choice of law principles) applicable to contracts made and to be performed entirely within Massachusetts.

 

11.1                        Jurisdiction.  The parties agree irrevocably that the federal and state courts with jurisdiction over Boston, Massachusetts shall have exclusive jurisdiction to settle any dispute or claim which arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).

 

12.0                        Limitations of Liability.  Except for liability arising from a breach of the confidentiality and nondisclosure obligations, in no event shall either party be liable to the other party for consequential, incidental, special (including multiple or punitive) or other indirect damages that are claimed to be incurred by the other party whether such claim arises under contract, tort (including strict liability) or any other theory of law.

 

12.1                        Indemnification.  Each party shall indemnify, defend and hold the other party and its parent, subsidiaries, affiliates and employees harmless from and against any and all damages, losses, liabilities and expense (including reasonable attorneys’ fees) arising out of or relating to any claims, causes of action, lawsuits or other proceedings, regardless of legal theory, that result

 

4

 

or arise, in whole or in part, from a party’s: (i) intentional misconduct, negligence, or fraud; (ii) acts or omissions; or (iii) products or services including, without limitation, any claims that such products or services infringe any patent, copyright, trademark, trade secret or any other proprietary right of any third party.

 

13.0                        General

 

13.1                        No Assignment.  Consultant may not assign or transfer its rights or obligations contained herein without the prior written consent of NeuroBo.

 

13.2                        Amendment.  This Agreement shall not be amended or modified, nor shall any waiver of any right hereunder be effective unless set forth in a document titled “Amendment” and executed by duly authorized representatives of both parties.

 

13.3                        Waivers.  The waiver of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition or any subsequent breach of the same

 

13.4                        Severability.  If any provision of this Agreement is or becomes void or unenforceable by force or operation of law, the other provisions of this Agreement shall remain valid and enforceable.

 

13.5                        Headings.  Paragraph headings contained in this Agreement are included only for convenience, and shall have no substantive effect or form any part of the Agreement and understanding between the Parties.

 

13.6                        Non-solicitation.  Consultant agrees that during the term of this Agreement and for a period of 3 years thereafter, it shall not hire or directly solicit for employment or retention as an independent contractor any employee of Company or Company’s affiliated companies.

 

13.7.                     Survival.  The provisions of Sections 5.0, 5.1, 6.0, and 13.6 shall survive the termination or expiration of this Agreement.

 

[Signatures on following page.]

 

5

 

	
NeuroBo Pharmaceuticals, Inc.
    	
 
    	
vZenium LLC
    
	
 
    	
 
    	
 
    
	
By: 
    	
 
    	
 
    	
by:
    	
 
    
	
 
    	
Jeong   Gu Kang, Vice President
    	
 
    	
 
    	
Mark   Versavel, Owner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
And   for all relevant provisions
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Mark   Versavel, individually
    
	
 
    	
 
    	
 
    
	
Dated:   January 7, 2019
    	
 
    	
Dated:   January 7, 2019
    

 

6

 

Attachment A

 

Services to be provided by Consultant:

 

·                  Responsible for clinical development strategies including Phase I through III, lifecycle management, medical affairs, safety responsibilities, scientific interactions with regulatory bodies, and interactions with corporate partner(s).

 

·                  Lead and oversee the strategic definition and tactical development of clinical trials programs, including protocol writing, interpretation of clinical data, and literature reviews.

 

·                  Ensure the work with colleagues and collaborators are coordinated and that all people, systems, processes and materials required for clinical trials are available and appropriately prepared.

 

·                  May represent the Clinical Research line function on multidisciplinary project teams.

 

·                  Participate as an active member of the Executive team of NeuroBo.

 

Owner to provide services on behalf of Consultant:

 

Mark Versavel, the owner of Consultant, shall provide all services requested or required under the terms of this Agreement unless otherwise agreed by the Board of NeuroBo.

 

Time Commitment:

 

80% of full time, which shall be approximately 139 hours per month.

 

7

 

Attachment B

 

Consulting Fee:

 

$28,333 per month, paid in arrears on the last business day of the month.  No advance payment or loan is permitted.

 

During the Term, Consultant shall not be entitled to earn, nor shall Consultant be paid, any other compensation, including incentive or bonus payments.

 

Stock Options:

 

To the extent permitted by law and on terms established by the Board, NeuroBo shall grant Mark Versavel options for 30 shares of NeuroBo’s common stock

 

8

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