Document:

exv10w4

Exhibit 10.4

July 15, 2011

Dr. James Crapo, MD

4650 S. Forest Street

Englewood, CO 80113

Subject: Employment Terms

Dear James:

On behalf of the Board of Directors of Omni Bio Pharmaceutical, Inc. (the “Board”), I would like to
clarify and further explain certain terms of your employment as outlined in your original offer
letter dated February 23, 2011. This letter outlines the terms of your employment relationship
with Omni, and supersedes and replaces the February 23rd letter in its entirety.

This letter confirms the Board’s approval of your compensation as CEO of Omni Bio Pharmaceutical,
Inc. (“Omni” or “Company”).

Below is a summary of certain other terms of your employment with Omni.

	 	 	 
	Start date:

	 	March 1, 2011
	 
	 	 
	Position:

	 	Chief Executive Officer, reporting to the Board
	 
	 	 
	Cash Compensation:

	 	$10,000 per month salary, plus $2,000 allowance
per month for health insurance and other fringe
benefits.
	 
	 	 
	Confidentiality Agreement:

	 	In connection with the execution of this
letter, as a condition of your employment with
Omni, you will sign the Confidentiality and
Inventions Assignment Agreement attached hereto
as Exhibit A (the “Confidentiality Agreement”).
	 
	 	 
	At-Will Employment:

	 	Your employment with the Company is not for a
specific period of time. Rather, your
employment with the Company is “at will,”
meaning that it could be terminated at any
time, for any or no reason, at the option of
either you or the Company. Notwithstanding the
foregoing, the Company agrees that it shall not
terminate you in bad faith in order to avoid
payment of any Incentive Bonus (as
defined below. You also should understand that the compensation
and benefits described in this letter are subject to change during
your employment at the discretion of the Company.

 

 

 

	 	 	 
	Company Policies:

	 	You are expected to follow all applicable policies
and procedures adopted by the Company from time to
time, including without limitation policies
relating to business ethics, conflict of interest,
non-discrimination, confidentiality and protection
of trade secrets.
	 
	 	 
	Restricted Stock Units:

	 	300,000 restricted stock units (“RSUs”), vesting
over three years as follows: 100,000 as of March
1, 2012, 100,000 as of March 1, 2013 and 100,000
as of March 1, 2014. Automatic vesting of all
unvested RSUs upon “change of control.” Details
regarding this restricted stock unit grant will be
provided to you in a separate RSU agreement.
	 
	 	 
	Restrictions:

	 	The Board recognizes that you will also be the
chief executive officer of BioMimetix
Pharmaceutical, Inc. (“BioMimetix”) and
acknowledges that certain corporate opportunity
and conflict of interest situations may arise out
of such role. Therefore, you agree that you will
not assist or participate in raising additional
capital for BioMimetix until the earlier of: (1)
the Company raising a total of $7 million; (2) 12
months from the date of the Company’s initial
investment in BioMimetix; (3) the Company
executing an agreement with a strategic partner
resulting in payments made to the Company; or (4)
permission of the Board.
	 
	 	 
	Incentive Bonus:

	 	You will be eligible to receive an incentive bonus
(the “Incentive Bonus”) in connection with the
occurrence of a Liquidity Event (as defined
below), so long as either (i) you have been
continuously employed by the Company from your
Start Date through the effective date of the
Liquidity Event, or (ii) the Liquidity Event
occurs with one or more parties introduced by you
to the Company for purposes of a Liquidity Event
prior to 12 months from the effective date of
termination of your services other than for Cause
(as defined below) (the “Tail Period”). For the
avoidance of doubt, if (1) your employment with
the Company terminates other than for Cause prior
to the occurrence of a Liquidity Event or (2) the
Liquidity Event occurs after the expiration of the
Tail Period, you will not be entitled to receive
payment of any Incentive Bonus.

 

 

 

Bonus Calculation and Payment. The Incentive Bonus amount payable to you in connection with the
occurrence of a Liquidity Event will be equal to the Net Proceeds (defined below) multiplied by the
Applicable Percentage (defined below). Subject to the paragraph below dealing with escrows and
hold-backs, any Incentive Bonus payable hereunder will be paid to you in a single lump sum payment
as soon as administratively practicable after the occurrence of the Liquidity Event giving rise to
such payment, but in no event later than the 15th day of the third calendar month after
the close of the calendar year in which the Liquidity Event occurred. Payment of any Incentive
Bonus hereunder will be made from the general assets of the Company.

Definitions. The following definitions will apply for purposes of this Agreement.

	(a)	 	“Applicable Percentage” means the percentage specified in the table below corresponding to
the amount of Net Proceeds received in connection with a Liquidity Event:

	 	 	 
	Applicable	 	 
	Percentage	 	Net Proceeds
	1.0%
	 	Less than or equal to $100 million
	1.5%
	 	Greater than $100 million, less than or equal to $200 million
	2.0%
	 	Greater than $200 million, less than or equal to $300 million
	3.0%
	 	Greater than $300 million

(b) “Cause” means, except to the extent specified otherwise by the Board, a finding by the Board
that the you (i) have breached the terms of your employment or service agreement with the Company,
(ii) has engaged in disloyalty to the Company, including, without limitation, fraud, embezzlement,
theft, commission of a felony or proven dishonesty in the course of your employment or service,
(iii) have disclosed trade secrets or confidential information of the Company to persons not
entitled to receive such information or (iv) have engaged in such other behavior detrimental to the
interests of the Company as the Board determines.

	(c)	 	“Liquidity Event” means the consummation of:

	 	(1)	 	the sale (including in one or a series of related transactions) of all or
substantially all of the Company’s consolidated assets to a person or a group of
persons acting in concert (other than a person or group affiliated with the Company);

	 	(2)	 	the sale or transfer (including in one or a series of related transactions)
to a person or a group of persons acting in concert (other than a person or group
affiliated with the Company) of Company equity securities
representing more than 50% of the combined voting power of the Company’s then
outstanding equity securities entitled to vote generally in the election of
directors;

 

 

 

	 	(3)	 	the merger or consolidation of the Company with or into another entity,
unless immediately following such transaction, all or substantially all of the persons
who were the beneficial owners of the Company’s outstanding voting securities
immediately before the transaction beneficially own, directly or indirectly, more than
50% of the combined voting power of the then outstanding voting securities (or
comparable equity interests) of the surviving or resulting entity (or its parent
entity); or

	 	(4)	 	the sale (including in one or a series of related transactions) of the
Company’s intellectual property related to the use of the FDA approved drug Alpha-1
Antitrypsin to a person or a group of persons acting in concert (other than a person
or group affiliated with the Company). Net Proceeds will be aggregated over any
series of applicable transactions, and any difference due to an increase in the
Applicable Percentage as a result of such aggregation will be paid in connection with
the most recent transaction.

By way of illustration for (4), if the Company sells applicable intellectual
property in a transaction with Net Proceeds of $50 million, assuming you are
eligible to receive an Incentive Bonus for the transaction, the Applicable
Percentage would be 1% and you would receive an Incentive Bonus of $0.5 million. If
the Company subsequently sells other applicable intellectual property in a second
transaction with Net Proceeds of $75 million, then, assuming you are eligible to
receive an Incentive Bonus for this transaction, the Applicable Percentage would be
1.5% (instead of 1%) on the aggregate Net Proceeds of $125 million, and the
aggregate Incentive Bonus would be $1.875 million. Therefore, in connection with
the second transaction, you would receive an Incentive Bonus of $1.375 million.

	(d)	 	“Net Proceeds” means the fair market value, as of the date of the Liquidity Event and as
determined in good faith by the Board, of the aggregate consideration (whether cash, notes,
stock or other securities) actually received by the Company or its stockholders as a result of
the Liquidity Event, less all transaction fees and expenses incurred by the Company in
connection with such Liquidity Event, including legal, accounting and investment banking fees.

Escrow or Hold-Back. Notwithstanding the foregoing, if any portion of the proceeds from a
Liquidity Event are deposited into an escrow account (whether established by the Company or any
purchaser or acquirer) or are subject to a hold-back by the purchaser or acquirer for distribution
upon the occurrence or satisfaction of any event, that portion of the proceeds shall be included in
calculating Net Proceeds, but a comparable portion of the incentive bonus amount shall be withheld
and released to you only as and when that
portion of the Liquidity Event proceeds are released from any escrow or hold-back arrangement.

 

 

 

Term of Bonus Arrangement. This Incentive Bonus arrangement will remain in effect until the
earlier of (i) until your employment by the Company is terminated for Cause or (ii) until the
expiration of the Tail Period, if any. The Company may modify this Incentive Bonus arrangement if
any such modification is, in the discretion of the Company, necessary or desirable to ensure the
compliance of this arrangement with the requirements of the Internal Revenue Code, including
Section 409A thereof, or any other applicable law or regulation.

Successors. All obligations of the Company under this Incentive Bonus arrangement will be binding
upon any successor to the Company, whether the existence of such successor is the result of merger,
consolidation, purchase of all or substantially all of the business or assets of the Company, or
otherwise.

Please acknowledge and accept the terms of your employment as outlined above by countersigning
below.

The Board is extremely excited about having you join our team.

Sincerely,

Vicki Barone

Chairperson

On Behalf of the Board of Directors of Omni Bio Pharmaceutical, Inc.

Agreed to:

	 	 	 
	 

James Crapo

	 	 

 

5

 

Exhibit A

Confidentiality and Inventions Assignment Agreement

[See attached]

 

 

 

Exhibit A

EMPLOYEE CONFIDENTIALITY

AND ASSIGNMENT OF INVENTIONS AGREEMENT

This Employee Confidentiality and Assignment of Inventions Agreement (the “Agreement”), dated
as of July 13, 2011, is intended to formalize in writing certain understandings and procedures
which are and will be in effect during the time Dr. James Crapo, MD (“Employee”) is employed by
Omni Bio Pharmaceutical, Inc., a Colorado corporation (the “Company”). In return for such
employment by the Company, Employee and the Company agree that:

1. At-Will Employment; No Conflict. Employee will perform for the Company such duties
as may be designated by the Company from time to time. Employee agrees that Employee’s employment
with the Company is for no specified term, and may be terminated by the Company at any time, with
or without cause, and with or without notice. Similarly, Employee may terminate employment with
the Company at any time, with or without cause and with or without notice. During Employee’s
period of employment by the Company, Employee will devote Employee’s best efforts to the interests
of the Company and will not engage in any other employment or in any activities determined by the
Company to be detrimental to the best interests of the Company without the prior written consent of
the Company.

2. Prior Work. All previous work, if any, done by Employee for the Company relating
in any way to the conception, design, development or support of products for the Company is the
property of the Company.

3. Proprietary Information. Employee’s employment creates a relationship of
confidence and trust in Employee for the benefit of the Company with respect to any information:

(a) Applicable to the business of the Company; or

(b) Applicable to the business of any client or customer of the Company, which may be
disclosed to Employee by the Company or by any client or customer of the Company, or learned by
Employee in such context during the period of Employee’s employment.

All of such information has commercial value in the business in which Company is engaged and
is referred to as “Company Proprietary Information” in this Agreement. By way of illustration, but
not limitation, Company Proprietary Information includes any and all technical and non-technical
information including patents, copyrights, trade secrets, and proprietary information, techniques,
sketches, drawings, models, inventions, know-how, processes, apparatus, equipment, algorithms,
software programs, software source documents, and formulae related to the current, future and
proposed products and services of the Company, and includes, without limitation, its respective
information concerning research, experimental work, development, design details and specifications,
engineering, financial information, procurement requirements, purchasing manufacturing, customer
lists, business forecasts, sales and merchandising and marketing plans and information. “Third
Party Proprietary Information”
includes proprietary or confidential information of any third party who may disclose such
information to the Company or Employee in the course of the Company’s business.

 

 

 

4. Nondisclosure of Proprietary Information. All Company Proprietary Information is
the sole property of the Company, its assigns, and the Company, its assigns and its customers will
be the sole owner of all patents, copyrights, maskworks, trade secrets and other rights in
connection therewith. Employee hereby assigns to the Company any rights Employee may have or
acquire in such Company Proprietary Information. At all times, both during Employee’s employment
by the Company and after termination of such employment, Employee will keep in confidence and trust
all Company Proprietary Information and Third Party Proprietary Information, and Employee will not
use or disclose any Company Proprietary Information or Third Party Proprietary Information or
anything directly relating to it without the written consent of the Company, except as may be
necessary in the ordinary course of performing Employee’s duties as an employee of the Company.
Notwithstanding the foregoing, it is understood that, at all such times, Employee is free to use
information which is generally known in the trade or industry not as a result of a breach of this
Agreement. Outside of employment by the Company and after termination of employment with the
Company, Employee may use the general skill, knowledge, know-how and experience acquired during
employment with the Company, provided that such use (a) does not relate (i) directly to the
business of the Company or (ii) to the Company’s actual or demonstrably anticipated research or
development or (b) does not result from any work performed by Employee for the Company.

5. Return of Materials. Upon termination of Employee’s employment or at the request
of the Company before termination, Employee will deliver to the Company all written and tangible
material and copies of all intangible records (e.g., in electronic form) in Employee’s possession
incorporating any Company Proprietary Information or otherwise relating to the Company’s business.

6. Inventions, Ideas, and Expressions of Ideas. As used in this Agreement, (i) the
term “Inventions, Ideas, and Expressions of Ideas” means any and all new or useful art, discovery,
improvement, technical development, or invention, whether or not patentable, and all related
know-how, designs, maskworks, trademarks, formulae, processes, manufacturing techniques, trade
secrets, ideas, artwork, software or other copyrightable or patentable works, and (ii) the term
“Specified Inventions” means any Inventions, Ideas and Expressions of Ideas arising out of or
related to alpha-1 antitrypsin (“AAT”), including, but not limited to, compositions, therapies,
kits and methods of use thereof including, but not limited to, AAT, any derivative thereof, any
peptide thereof, any fragment thereof, any fusion protein thereof, any mutant thereof, any antibody
or antibody fragment derived thereof, any aptamer derived thereof, any primer or other molecule for
generating thereof, and any compositions (e.g. therapeutic drug, therapeutic use or otherwise) or
combinations therapeutic or otherwise thereof comprising, in each case including, incorporating or
otherwise making, purifying, generating, using or commercializing related to any Specified
Invention thereto.

7. Disclosure of Prior Inventions. Employee has identified on Exhibit A all
Inventions, Ideas, and Expressions of Ideas relating in any way to the Company’s business or
demonstrably anticipated research and development related to the Specified Inventions that were
made by Employee prior to employment with the Company (“Prior Inventions”), and Employee
represents that such list is complete. Employee represents that Employee has no rights in any
such Inventions, Ideas, and Expressions of Ideas other than those Prior Inventions specified in
Exhibit A. If there is no such list on Exhibit A, Employee represents that Employee has made no
such Prior Inventions at the time of signing this Agreement.

 

2

 

8. Ownership of Company Inventions; License of Prior Inventions. Employee
acknowledges that all original works of authorship related to the Specified Inventions that are
made by Employee (solely or jointly with others) within the scope of employment and that are
protectable by copyrights are “works made for hire” as that term is defined in the United States
Copyright Act (17 USCA § 101). Employee hereby agrees promptly to disclose and describe to the
Company, and hereby assigns and agrees to assign to the Company or its designee, Employee’s entire
right, title, and interest in and to all Specified Inventions and any associated intellectual
property rights that Employee may solely or jointly conceive, develop or reduce to practice during
the period of employment with the Company (a) that relate at the time of conception or reduction to
practice of the invention to the Company’s business or actual or demonstrably anticipated research
or development, or (b) that were developed on any amount of the Company’s time or with the use of
any of the Company’s equipment, supplies, facilities or trade secret information, or (c) that
resulted from any work Employee performed for the Company (“Company Inventions”). Employee agrees
to grant the Company or its designees a royalty free, irrevocable, worldwide license (with rights
to sublicense through multiple tiers of distribution) to practice all applicable patent and patent
applications, know-how, copyright and other intellectual property rights relating to any Prior
Inventions that Employee incorporates, or permits to be incorporated, in any Company Inventions.
Notwithstanding the foregoing, Employee agrees that Employee will not incorporate, or permit to be
incorporated, such Prior Inventions in any Company Inventions without the Company’s prior written
consent.

9. Future Inventions. Employee recognizes that Company Inventions or Company
Proprietary Information relating to Employee’s activities while working for the Company and
conceived or made by Employee, alone or with others, within one year after termination of
employment may have been conceived in significant part while employed by the Company. Accordingly,
Employee agrees that such post employment inventions and proprietary information will be presumed
to have been conceived during employment with the Company and are to be assigned and are hereby
assigned to the Company unless and until Employee has established the contrary.

10. Inventions, Ideas, and Expression of Ideas. Notwithstanding any other language in
this Agreement, the Company will have rights to all Inventions, Ideas, and Expression of Ideas
related to AAT and AAT recombinant. Inventions, Ideas and Expression of Ideas in all other fields
including metalloporphyrins remain the exclusive property of the Employee.

11. Cooperation in Perfecting Rights to Inventions.

(a) Employee agrees to perform, during and after employment, all acts deemed necessary or
desirable by the Company to permit and assist it, at its expense, in obtaining and enforcing the
full benefits, enjoyment, rights and title throughout the world in the Inventions, Ideas, and
Expressions of Ideas hereby assigned to the Company. Such acts may include, but are not limited
to, execution of documents and assistance or cooperation in the
registration and enforcement of applicable patents, copyrights, maskworks or other legal
proceedings.

 

3

 

(b) In the event that the Company is unable for any reason to secure my signature to any
document required to apply for or execute any patent, copyright, maskwork or other applications
with respect to any Inventions, Ideas, and Expressions of Ideas (including improvements, renewals,
extensions, continuations, divisions or continuations in part thereof), Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents as Employee’s
agents and attorneys-in-fact to act for and on Employee’s behalf and instead of Employee, to
execute and file any such application and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyrights, maskworks or other rights thereon with the same
legal force and effect as if executed by Employee.

12. No Violation of Rights of Third Parties. Employee agrees that performance of all
the terms of this Agreement and as an employee of the Company does not and will not breach any
agreement to keep in confidence proprietary information, knowledge or data acquired by Employee
prior to employment with the Company, and Employee will not disclose to the Company, or induce the
Company to use, any confidential or proprietary information or material belonging to any previous
employer or others. Employee is not a party to any other agreement that will interfere with
Employee’s full compliance with this Agreement. Employee agrees not to enter into any agreement,
whether written or oral, in conflict with the provisions of this Agreement.

13. Survival. This Agreement (a) will survive Employee’s employment by the Company,
(b) does not in any way restrict Employee’s right or the right of the Company to terminate
Employee’s employment at any time, for any reason or for no reason, (c) inures to the benefit of
successors and assigns of the Company, and (d) is binding upon Employee’s heirs and legal
representatives.

14. Post-Employment Disclosure. Employee agrees to disclose promptly in writing to
the Company all Inventions, Ideas, and Expressions of Ideas made or conceived by Employee during
the term of employment by the Company and for one year thereafter, whether or not Employee believes
such Inventions, Ideas, and Expressions of Ideas are subject to this Agreement, to permit a
determination by the Company as to whether or not the Inventions, Ideas, and Expressions of Ideas
are the property of the Company.

15. Injunctive Relief. A breach of any of the promises or agreements contained herein
will result in irreparable and continuing damage to the Company for which there will be no adequate
remedy at law, and the Company shall be entitled to injunctive relief and/or a decree for specific
performance, and such other relief as may be proper (including monetary damages if appropriate).

16. Notices. Any notice required or permitted by this Agreement must be in writing
and must be delivered as follows with notice deemed given as indicated: (a) by personal delivery
when delivered personally; (b) by overnight courier upon written verification of receipt; (c) by
telecopy, facsimile or other electronic transmission upon acknowledgement of receipt of such
transmission; or (d) by certified or registered mail, return receipt requested, upon verification
of
receipt. Notices to Employee may be sent to the most recent address of Employee in the
Company’s records or such other address as Employee may specify in writing. Notices to the Company
will be sent to the Company’s President or to such other address as the Company may specify in
writing.

 

4

 

17. Governing Law. This Agreement will be governed in all respects by the laws of the
United States of America and by the laws of the State of Colorado, as such laws are applied to
agreements entered into and to be performed entirely within Colorado without regards to the
conflict of laws provisions thereof.

18. Severability. Should any provisions of this Agreement be held by a court of law
to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining
provisions of this Agreement will not be affected or impaired thereby.

19. Waiver. The waiver by the Company of a breach of any provision of this Agreement
by Employee will not operate or be construed as a waiver of any other or subsequent breach by
Employee.

20. Entire Agreement; Amendment. This Agreement represents the entire understanding
of the parties with respect to the subject matter of this Agreement and supersedes all previous
understandings, written or oral. This Agreement may be amended or modified only with the written
consent of both Employee and the Company. No oral waiver, amendment or modification shall be
effective under any circumstances whatsoever.

[The remainder of this page is intentionally left blank.]

 

5

 

The parties certify and acknowledge that they have carefully read all of the provisions of
this Agreement and they understand and will fully and faithfully comply with such provisions.

	 	 	 	 	 	 	 	 	 	 	 
	OMNI BIO PHARMACEUTICAL, INC.	 	 	 	EMPLOYEE:
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	 	 	Dr. James Crapo, MD
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	 	 	 	 	 	 	4650 S. Forest Street
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Englewood, CO 80113

 

6

 

Exhibit A

PRIOR INVENTIONS

 

7exv10w5

Exhibit 10.5

Omni Bio Pharmaceutical, Inc.

Restricted Stock Unit Agreement 

Omni Bio Pharmaceutical, Inc. (the “Company”), pursuant to approval by the Company’s board of
directors (the “Board”) and as set forth in your letter of employment dated July 15, 2011, hereby
grants an award of restricted stock units (“Units”) to you, the Participant named below. The terms
and conditions of this grant are set forth in this Restricted Stock Unit Agreement (the
“Agreement”), consisting of this cover page and the Terms and Conditions on the following pages.

Name of Participant:      James D. Crapo

	 	 	 	 	 	 	 	 	 
	Number of Units:

	 	 	300,000	 	 	Date of Grant:
	 	March 1, 2011

Vesting Schedule:

	 	 	 	 	 
	Vesting Dates	 	Number of Units that Vest	 
	 
	 	 	 	 
	March 1, 2012
	 	 	100,000	 
	March 1, 2013
	 	 	100,000	 
	March 1, 2014
	 	 	100,000	 

By signing below, you agree to all of the terms and conditions contained in this Agreement
which is attached. You acknowledge that you have reviewed this document and that it sets forth the
entire agreement between you and the Company regarding the grant to you of the number of Units
specified in the table above.

	 	 	 	 	 	 	 	 	 
	PARTICIPANT:	 	OMNI BIO PHARMACEUTICAL, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:	 	 
	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

 

Omni Bio Pharmaceutical, Inc.

Restricted Stock Unit Agreement

Terms and Conditions

	1.	 	Grant of Restricted Stock Units. The Company hereby grants to you, subject to the
terms and conditions in this Agreement, a grant of the number of Units specified on the cover
page of this Agreement (the “Grant”), each Unit representing the right to receive one share of
the Company’s common stock (“Common Stock”)). The Units granted to you will be credited to an
account in your name maintained by the Company. This account shall be unfunded and maintained
for book-keeping purposes only.

	2.	 	Restrictions on Units. Neither this Grant nor the Units subject to this Grant may be
sold, assigned, transferred, exchanged or encumbered other than by will or the laws of descent
and distribution. Any attempted transfer in violation of this Section 2 shall be of
no effect and shall result in the forfeiture of all Units. The Units and your rights to the
Units under this Agreement shall be subject to forfeiture as provided in Section 4
until satisfaction of the vesting conditions set forth in Section 3.

	3.	 	Vesting of Units.

(a) If you remain an employee with the Company and its subsidiaries (an “Employee”)
continuously from the Date of Grant specified on the cover page of this Agreement, then the
Units will vest in the numbers and on the dates specified in the Vesting Schedule on the
cover page of this Agreement.

(b) Vesting of the Units subject to this Grant shall be accelerated under the circumstances
and to the extent described in Sections 4 and 5 of this Agreement.

	4.	 	Effect of Termination of Employment. If you cease to be an Employee other than as a
result of your “Disability” or death prior to the Vesting Date(s) specified on the cover page
of this Agreement, you will forfeit all unvested Units. If you cease to be an Employee due to
your Disability or death, then a pro rata portion of the unvested Units scheduled to vest on
the next scheduled Vesting Date shall immediately vest and the balance of the unvested Units
shall be forfeited. The pro rata portion that vests shall be determined by utilizing a
fraction, the numerator of which is the number of days between the date your employment ended
and the later of the Date of Grant or the most recent scheduled Vesting Date prior to the date
your employment ended, and the denominator of which is the number of days between the next
scheduled Vesting Date after your employment ended and the later of the Date of Grant or the
most recent Vesting Date prior to the date your employment ended.

For purposes of this Agreement, “Disability” shall mean a Participant’s becoming disabled
within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
(the “Code”).

 

 

 

	5.	 	Change of Control.

(a) All unvested Units subject to this Grant shall vest in full upon a “Change of Control”
as defined in Section 5(b)(i) or 5(b)(ii)(C) below, or upon the
consummation of a transaction described in clause (A) or clause (B) of Section
5(b)(ii) below.

(b) For purposes of this Agreement, a “Change of Control” shall be deemed to have occurred
if:

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) (other than persons who are
stockholders of the Company on that date of this Agreement) becomes a “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing more than 50% of the voting power of the then outstanding
securities of the Company; provided that a Change of Control shall not be deemed to occur
as a result of a change of ownership resulting from the death of a stockholder of the
Company and a Change of Control shall not be deemed to occur as a result of a transaction
in which the Company becomes a subsidiary of another corporation and in which the
stockholders of the Company immediately prior to the transaction will beneficially own,
immediately after the transaction, shares entitling such stockholders to more than 50% of
all votes to which all stockholders of the parent corporation would be entitled in the
election of directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote); or

(ii) The stockholders of the Company approve (or, if stockholder approval is not
required, the Board approves) an agreement providing for (A) the merger or consolidation of
the Company with another corporation where the stockholders of the Company immediately
prior to the merger or consolidation will not beneficially own, immediately after the
merger or consolidation, shares entitling such stockholders to more than 50% of all votes
to which all stockholders of the surviving corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect directors by
a separate class vote), (B) the sale or other disposition of all or substantially all of
the assets of the Company, or (C) a liquidation or dissolution of the Company.

Notwithstanding the foregoing, for purposes of any Grant that is subject to the
provisions of Section 409A of the Code and the regulations promulgated thereunder, no
Change of Control shall be deemed to have occurred upon an event described in clauses (i)
or (ii) above that would have the effect of changing the time or form of payment of such
Grant unless such event would also constitute a change in the ownership or effective
control of, or a change in the ownership of a substantial portion of the assets of, the
Company for purposes of Section 409A of the Code.

	6.	 	Settlement of Units. After any Units vest pursuant to Sections 3, 4 or 5,
the Company shall, no later than March 15 of the year following the calendar year in which
such Units vest, cause to be issued to you, or to your designated beneficiary or estate in the
event of your death, one share of Common Stock in payment and settlement of each vested Unit.
Such issuance shall be evidenced by a stock certificate or an appropriate entry in the stock
register maintained by the Company or
its duly authorized transfer agent, shall be subject to the tax withholding provisions of
Section 7, and shall be in complete satisfaction and settlement of such vested
Units.

 

 

 

	7.	 	Tax Consequences and Withholding.

(a) As a condition precedent to settlement of the Units, you are required to pay to the
Company (or the subsidiary or affiliate of the Company employing you), in accordance with
Section 7(b) below, the amount of any required domestic or foreign tax withholding
obligation, including any social security or social insurance obligation.

(b) Withholding of Taxes.

(i) Required Withholding. Any Grant under this Agreement shall be subject to
applicable federal (including FICA), state and local tax withholding requirements. The
Company may require that you or any other person receiving or exercising any Grant pay to
the Company the amount of any federal, state or local taxes that the Company is required to
withhold with respect to such Grant, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such Grant.

(ii) Election to Withhold Shares. If the Board permits, you may elect to satisfy the
Company’s income tax withholding obligation with respect to a Grant by having shares
withheld up to an amount that does not exceed your minimum applicable withholding tax rate
for federal (including FICA), state and local tax liabilities. The election must be in a
form and manner prescribed by the Board and may be subject to the prior approval of the
Board.

	8.	 	No Shareholder Rights. The Units subject to this Grant do not entitle you to any
rights of a stockholder of the Common Stock. You will not have any of the rights of a
shareholder of the Company in connection with the award of Units subject to this Agreement
unless and until Shares are issued to you upon settlement of the Units as provided in
Section 6.

	 
	9.	 	Adjustments for Changes in Capitalization.

(a) The Units subject to this Agreement shall be subject to adjustments for changes in the
Company’s capitalization as provided in Section 9(b) below.

(b) If there is any change in the number or kind of shares of Common Stock of the Company
outstanding (i) by reason of a stock dividend, spin-off, recapitalization, stock split, or
combination or exchange of shares, (ii) by reason of a merger, reorganization or
consolidation in which the Company is the surviving corporation, (iii) by reason of a
reclassification or change in par value, or (iv) by reason of any other extraordinary or
unusual event affecting the outstanding Common Stock as a class without the Company’s
receipt of consideration, or if the value of outstanding shares of Common Stock is
substantially reduced as a result of a spin-off or the Company’s payment of an
extraordinary dividend or distribution, the number of
 shares of Common Stock covered this Grant, the kind of shares covered this Grant, and the
price per share of the Grant shall be appropriately adjusted by the Board to reflect any
increase or decrease in the number of, or change in the kind or value of, issued shares of
Common Stock to preclude, to the extent practicable, the enlargement or dilution of rights
and benefits under this Grant; provided, however, that any fractional shares resulting from
such adjustment shall be eliminated. Any adjustments determined by the Board shall be
final, binding and conclusive.

 

 

 

	10.	 	Choice of Law. This Agreement will be interpreted and enforced under the laws of the
state of Colorado (without regard to its conflicts or choice of law principles).

	11.	 	Binding Effect. This Agreement will be binding in all respects on your heirs,
representatives, successors and assigns, and on the successors and assigns of the Company.

	12.	 	Other Agreements. You agree that you will execute such documents as may be necessary
to become a party to any stockholder, voting or similar agreements as the Company may require.
No shares of Common Stock shall be issued or transferred in connection with this Grant unless
and until all legal requirements applicable to the issuance or transfer of such shares have
been complied with to the satisfaction of the Board. Certificates representing shares of
Common Stock issued or transferred under this Grant will be subject to such stop-transfer
orders and other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon.

	13.	 	Section 409A of the Code. The award of Units as provided in this Agreement and any
issuance of shares of Common Stock or payment pursuant to this Agreement are intended to be
excepted from Section 409A of the Code under the short-term deferral exception specified in
Treas. Reg. § 1.409A-l(b)(4).

By signing the cover page of this Agreement, you agree to all the terms and conditions described
above.

 

5

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