Document:

svra-ex1014_100.htm

 

Exhibit 10.14

 

CONSULTING SERVICES AGREEMENT

 

THIS CONSULTING SERVICES AGREEMENT (this “Agreement”) is made effective as of April 28, 2017 (the “Effective Date”) by and between SAVARA INC., a Delaware corporation having a principal place of business at 900 S. Capital of Texas Highway, Suite 150, Austin, Texas 78746 USA (“Savara”), and Brandi Roberts, an individual having a principal place of business at 9975 Fox Meadow Rd, San Diego, CA 92127 (“Consultant”) (each herein referred to individually as a “Party,” or collectively as the “Parties”).

 

BACKGROUND:

 

	
 
	
A.
	
Pursuant to that certain Agreement and Plan of Merger and Reorganization, dated January 6, 2017, by and among Mast Therapeutics, Inc. (“Mast”), Victoria Merger Corp. (“Merger Sub”), a wholly-owned subsidiary of Mast, and Savara Inc., on or about April 27, 2017, Merger Sub merged with and into Savara, with Savara becoming a wholly-owned subsidiary of Mast (the “Merger”), and concurrently with the Merger, Mast changed its name to “Savara Inc.” and Savara Inc., the wholly-owned subsidiary, changed its name to “[Aravas Inc.]”  

 

	
 
	
B.
	
Prior to the Merger, Consultant served as Mast’s Chief Financial Officer and has expertise relevant to Savara’s business.

 

	
 
	
C.
	
Savara now desires to engage Consultant to provide services, and Consultant is willing to perform such services, on and subject to the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, intending to be legally bound, and in consideration of the mutual promises contained herein, the Parties agree as follows:

 

1.Consulting Services.

 

1.1.Consultant will provide the services described on the attached Schedule A (the “Services”) to Savara and its Affiliates (as defined in Section 10.2 below).  If mutually agreed upon in writing by amendment to this Agreement, Consultant also will perform as part of the Services other services and duties assigned by Savara to Consultant from time to time.  Consultant will report to Savara’s Chief Financial Officer (“CFO”) or his designee.  

 

1.2.When providing the Services, Consultant will comply with Savara’s policies, standards, rules, and regulations, as they may exist from time to time and that are applicable to independent contractors.  Consultant will perform the Services to the best of its abilities and in a diligent, trustworthy, businesslike, and efficient manner, exercising due care in the performance of Services and rendering them in accordance with prevailing professional standards and ethics.

 

1.3.Consultant has no authority to enter into any contracts or instruments, or to create any obligations that are binding upon Savara.

 

2.Compensation.

 

2.1.Compensation.  As compensation for the Services, Savara will pay to Consultant the amounts specified in the attached Schedule B to this Agreement. All payments provided for under this Agreement are intended to be exempt from or otherwise comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance thereunder (together, “Section 409A”) so that none of the payments to be provided 

 

	
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hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or so comply. Each payment under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

 

2.2.Payments.  Payments due to Consultant under this Agreement will be made at the times specified in the attached Schedule B to this Agreement.  Invoices are to be submitted together with all appropriate supporting documentation to Savara’s CFO via e-mail to dave.lowrance@savarapharma.com.  Upon Savara’s request, Consultant will submit a copy of the invoice and any supporting documentation to Savara at the address set forth in this Agreement, Attention: David Lowrance. 

 

2.3.Withholdings.  Consultant will at all times be an independent contractor and not an agent or employee of Savara.  As such, Consultant acknowledges that Savara will not withhold or deduct any amount from compensation to pay any federal, state, or local taxes and Consultant will not be eligible for any employee benefits, including, but not limited to, paid time off, sick leave, medical insurance, and 401k participation.  Consultant has sole responsibility to and will pay taxes, if any, and file returns as are required in accordance with applicable laws and regulations.

 

2.4.Company Equipment.  While consultant will be expected to provide their own equipment, Savara in its discretion may provide access to certain company-owned laptop computer and other equipment and software to Consultant for use in provision of Services, in which event the computer, related software and equipment will remain the property of Savara and Consultant will use the assigned items for Savara business exclusively.  Upon expiration or termination of this Agreement, Consultant promptly will return the items to Savara.

 

3.Expenses.  Savara will reimburse Consultant for reasonable “out-of-pocket” expenses ordinary and necessary in nature, including mileage at the standard IRS rate, which Consultant incurs at Savara’s request in the course of performing the Services.  Reimbursement payments are subject to Consultant’s compliance with Savara’s policies in effect from time to time regarding travel, entertainment, and other business expenses and the reporting and documentation of expenses.  Air travel will be economy plus (or similar class) within the continental United States and otherwise will be business class.

 

4.Term and Termination.  Consultant’s engagement under this Agreement commences on the Effective Date and will continue through August 31, 2017, unless extended as mutually agreed upon in writing by amendment to this Agreement.  This Agreement may be terminated at any time by either Party upon thirty (30) days prior written notice.  Upon the earlier termination of this Agreement for any reason, Savara will be liable only for payment of compensation for Services rendered and reimbursement of expenses properly incurred through the effective date of termination.  If this Agreement terminates during April or May 2017, Savara will be liable for payment of compensation for Services on a pro-rata basis.  For example, if this Agreement terminates on May 15, 2017, Savara would be liable for payment of $13,000 for Services rendered, plus any travel time and expenses properly incurred through May 15, 2017. The provisions of Sections 2, 3, and 6 through 10 will survive the expiration or termination of this Agreement.

 

5.Other Business Activities.  Consultant covenants, represents, and warrants to Savara that, as of the Effective Date, Consultant is not engaged, directly or indirectly, in any other business or activity that might materially interfere with the ability to render the Services. 

 

 

 

	
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6.Trade Secrets and Confidential Information.

 

6.1.Consultant acknowledges that Consultant will have access to, or become acquainted with, Confidential Information and Trade Secrets (as these terms are defined below).  As a material inducement to Savara to enter into this Agreement, and in acknowledgement of good and valuable consideration to be received by Consultant under this Agreement, Consultant agrees as follows:

 

(a)The Trade Secrets and Confidential Information are the sole and exclusive property of Savara (or a third party providing the information to Savara).  Savara (or the third party, if applicable) owns all worldwide rights to the information under patent, copyright, trade secret, confidential information or other property right.

 

(b)The disclosure of Trade Secrets and Confidential Information by Savara to Consultant does not confer upon Consultant any license, interest, or rights of any kind in or to the Trade Secrets or Confidential Information.  Consultant may use the Trade Secrets and Confidential Information solely to benefit Savara and only during the Term.

 

(c)Except to perform Services for Savara under this Agreement or with Savara’s prior written consent, Consultant:

 

(i)will not directly or indirectly or in any manner, divulge, disclose, or communicate any Confidential Information to any third party,

 

(ii)will hold Trade Secrets and Confidential Information in confidence,

 

(iii)will not use Trade Secrets or Confidential Information for any purpose other than solely to provide Services, and

 

(iv)will not, directly or indirectly, in any form, by any means, or for any purpose, reproduce, distribute, transmit, reverse engineer, de-compile, disassemble or transfer, or use, the Trade Secrets or the Confidential Information, or any portion of either, to benefit Consultant or any third party.

 

(d)Consultant will return or destroy (with written confirmation of destruction provided upon request) the Trade Secrets and Confidential Information that are in Consultant’s possession or control to Savara, together with all copies, documents, records, notebooks, programs and similar items, collections, and materials (in writing, electronic, or otherwise) that relate to the Confidential Information or Trade Secrets:

 

(i)upon Savara’s request, and

 

(ii)immediately upon expiration or termination of this Agreement.

 

6.2.For purposes of this Agreement, the following terms have the meanings set forth below:

 

(a)“Confidential Information” means information, other than Trade Secrets, that Savara treats as confidential.  Without limiting the generality of the foregoing, Confidential Information includes information regarding Savara’s equipment, products and product mix, prices and pricing policies, costs, future plans, business affairs and strategies, contracts and licenses, copyrights and patents, advertising and promotional 

 

	
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strategies and campaigns, distribution strategies, methods of doing business and the terms and conditions of this Agreement.  Confidential Information does not include information that is readily available to the public (other than because of Consultant’s unauthorized disclosure) or otherwise legally available to Consultant on a non-confidential basis.

 

(b)“Trade Secrets” means information, without regard to form, of Savara or its existing or prospective licensors, licensees, customers, or suppliers (including technical or nontechnical data, formulas, patterns, and customer purchasing practices), compilations (including compilations of customer information), programs (including computer programs and models), devices, methods, techniques, drawings, processes, financial data (including sales forecasts, sales histories, and budgets), financial plans, business plans, product plans, or lists of actual or potential licensors, licensees, customers, or suppliers (including identifying information about those licensors, licensees, customers, and suppliers), whether or not reduced to writing, that:

 

(i)derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, or

 

(ii)is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

 

6.3.Consultant obligations under this Agreement with regard to Trade Secrets will remain in effect for as long as that information remains a trade secret under applicable law.  Consultant’s obligations under this Agreement with regard to Confidential Information will remain in effect during the Term and for a period of three (3) years after the expiration or termination of this Agreement.

 

6.4.In connection with the Services, Savara may provide or Consultant may gain access to information about investigators or subjects in Savara clinical studies. This may include information that can be used by itself or in combination with other available information to identify a specific individual (“Personal Data”).  Consultant shall respect the privacy of the investigators and study subjects and covenants that: 

 

(a)In the performance of Services, Consultant will comply with all applicable national, regional, and local laws relating to information privacy.

 

(b)Consultant will comply with the obligations of confidentiality pursuant to this Section 6 with respect to all Personal Data.

 

(c)Consultant will use electronic, physical, and other safeguards appropriate to the nature of the information to prevent any use or disclosure of Personal Data in its possession other than as provided for by this Agreement.

 

(d)After completion of Services or termination of this Agreement, Consultant will, at Savara’s option, either destroy (with written confirmation of destruction provided upon request) or return any Personal Data in Consultant’s possession.

 

 

	
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7.Non-Solicitation.  As a material inducement to Savara to enter into this Agreement, and in acknowledgement of good and valuable consideration to be received by Consultant under this Agreement, Consultant agrees as follows:

 

7.2.Personal Solicitation.  During the Term and for one (1) year after the expiration or termination of this Agreement, Consultant will not, for any reason (whether on its own behalf or on behalf of any other person, corporation, partnership, venture, or any other entity or form of business), directly or indirectly, solicit or encourage any person who is an employee or independent contractor of Savara to leave Savara’s employment or service.

 

7.3.Disparagement.  Consultant will not, at any time during the Term or after the expiration or termination of this Agreement, make false or misleading statements about Savara or its products, management, employees, customers, or suppliers.

 

	
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8.Intellectual Property.

 

8.1.As a material inducement to Savara to enter into this Agreement, and in acknowledgement of good and valuable consideration to be received by Consultant under this Agreement, Consultant acknowledges and agrees that the provision of Services may provide the opportunity for conceiving or reducing to practice developments, discoveries, methods, processes, designs, inventions, ideas, or improvements related to the Business (collectively, “Work Product”).  Consultant will promptly report and disclose to Savara in writing all Work Product that Consultant conceives, makes, implements, or reduces to practice, whether alone or acting with others, during the Term, that are developed:

 

(a)while providing Services on Savara’s time, or

 

(b)while utilizing, directly or indirectly, Savara’s equipment, supplies, facilities, Confidential Information, Trade Secrets, or other assets.

 

8.2.Consultant acknowledges and agrees that all Work Product is Savara’s sole and exclusive property.  Consultant will assign, and automatically assigns, without further consideration or action, to Savara all rights, title, and interest in and to all Work Product.

 

8.3.Definitions.  “Business” means the business of developing and marketing pharmaceutical products in the Field, except that this definition will change, without further action by the Parties, to reflect any change in the nature of Savara’s business during the Term.  “Field” means inhalation therapies for patients with rare pulmonary conditions.

 

9.Equitable Relief.

 

9.1Consultant acknowledges and agrees that:

 

(a)it has carefully read and considered Sections 6 through 8 and, having done so, expressly acknowledges and agrees that the restrictions set forth in those Sections are fair and reasonable and are reasonably required to protect Savara’s interests and the confidential nature of the Confidential Information and the Trade Secrets,

 

(b)Sections 6 through 8 will not cause undue hardship or unreasonably interfere with Consultant’s ability to earn a livelihood,

 

(c)the Confidential Information and Trade Secrets are unique to Savara’s business, and Savara would not reveal them to Consultant but for Consultant's willingness to agree to the restrictions set forth in this Agreement,

 

(d)a breach of any of the provisions of Sections 6 through 8 might cause irreparable harm and damage to Savara,

 

(e)Sections 6 through 8 will be construed as agreements independent of any other provision of this Agreement or any other agreement between the Parties, and

 

(f)the existence of any claim or cause of action by Consultant against Savara, whether predicated upon this Agreement or any other agreement, will not constitute a defense to Savara’s enforcement of Sections 6 through 8.

 

9.2.If Consultant breaches any of the provisions of Sections 6 through 8, Savara will be entitled to injunctive relief, specific performance, or any other equitable remedy that a court of competent jurisdiction may provide (without posting any bond), in addition to any other remedies 

 

	
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available at law or in equity.  In this event, Consultant expressly waives the defense that a remedy in damages will be adequate.

 

9.3.The Parties intend that nothing contained in this Section 9 be construed to limit Savara’s right to any remedies at law or in equity, including the recovery of damages for Consultant’s breach of this Agreement.

 

10.Miscellaneous.

 

10.1.Expenses.  Savara and Consultant will each bear their own fees, costs, and expenses they incur with respect to the preparation, negotiation, and completion of this Agreement.

 

10.2.Assignment and Change of Control; Binding Effect.  This Agreement and its rights, privileges, and obligations may not be assigned or otherwise transferred by either Party without the prior written consent of the other Party; provided, however, that Savara may assign without consent this Agreement and its rights, privileges, and obligations (i) to an Affiliate (as defined in Section 10.2(a) below) (ii) in connection with a merger, consolidation, or sale of substantially all of its assets to an unrelated third party, or (iii) in connection with a Change of Control (as defined in Section 10.2(b) below).  In the event of a Change of Control, written notification shall be required but not consent.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.

 

(a)“Affiliate” shall mean any corporation, company, partnership, or other entity which controls, is controlled by, or is under common control with Savara.  An entity shall be regarded as in control of another entity if it directly or indirectly owns or controls fifty percent (50%) or more of the voting stock or other ownership interest of the other entity, or if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other entity or the power to elect or appoint fifty percent (50%) or more of the members of the governing body of the other entity.

 

(b)“Change of Control” shall mean acquisition by a third party of fifty percent (50%) or more of the voting equity interests of Savara, or transfer to a third party of Effective Control (as defined in the following sentence) of Savara as a result of any other transaction.  “Effective Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of voting securities, by contract, or otherwise.  Notwithstanding applicability of the foregoing, an entity which shall be consolidated pursuant to United States Generally Accepted Accounting Principles (GAAP), as they exist from time to time, consistently applied, with Savara shall be deemed under Effective Control for purposes of this Agreement.

 

10.3.Severability.  Whenever possible, the Parties intend that each provision of this Agreement be interpreted to be effective and valid under applicable law.  If a court of competent jurisdiction holds any provision to be prohibited by or invalid under applicable law, the provision will be ineffective only to the extent of the prohibition or invalidity, without affecting the rest of this Agreement.  But the Parties do not intend this severability if it would materially change the economic benefits of this Agreement to any Party.

 

10.4.Counterparts.  The Parties may execute this Agreement simultaneously in two or more counterparts (including facsimile copies), any one of which need not contain the signatures of more than one Party, but all the counterparts taken together will constitute one and the same Agreement.

 

 

	
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10.5.Descriptive Headings; Interpretation.  The descriptive headings of this Agreement exist for convenience only and do not constitute a substantive part of this Agreement. The use of the word “including” in this Agreement means by way of example rather than by limitation.

 

10.6.Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California.

 

10.7.Notices.  All notices, demands or other communications to be given or delivered under or by reason of this Agreement must be in writing and will be deemed to have been given when (a) delivered personally to the recipient, (b) sent to the recipient by reputable overnight courier service (charges prepaid), or (c) mailed to the recipient by certified or registered mail, return receipt requested, and postage prepaid.  These notices, demands and other communications will be sent to Savara and Consultant (to the attention of the individuals named below) at the addresses indicated above or another address as specified by the receiving Party in prior written notice to the sending Party.

 

10.8.No Strict Construction.  The Parties have participated jointly in the negotiation and drafting of this Agreement.  If any ambiguity or question of intent or interpretation arises, the Parties intend that (a) this Agreement be construed as if they had jointly drafted it and (b) no presumption or burden of proof arise favoring or disfavoring any Party by virtue of its role in drafting any provision of this Agreement.

 

10.9.Entire Agreement.  Schedule A and Schedule B attached to this Agreement are incorporated by reference.  This Agreement constitutes the full and entire understanding and agreement between the Parties concerning the subject matter set forth in this Agreement. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.  The Parties agree that this Agreement shall be considered signed and delivered when the signature of a Party is delivered by scanned image (e.g., portable document format (PDF)) or facsimile, which scanned image or facsimile shall be treated in all respects as having the same effect as an original signature.

 

10.10.Amendment.  No modification of this Agreement shall be effective unless made in writing and executed and delivered by a duly authorized representative of each Party.

 

10.11.Waivers, Delays, or Omissions.  Except as expressly provided in this Agreement: (a) no delay or omission to exercise any right, power or remedy accruing to any Party upon any breach or default of any other Party will (i) impair the non-defaulting Party’s rights, powers or remedies, or (ii) constitute a waiver of, or acquiescence in, the breach or default or any subsequent similar breach or default, and (b) no waiver of any breach or default will constitute a waiver of any previous or subsequent similar breach or default.  Any Party’s waiver, permit, consent or approval concerning any breach, default, provision or condition of or under this Agreement must be in writing and will be effective only to the extent specifically set forth in the writing.  All remedies, whether under this Agreement, applicable law, or otherwise, will be cumulative and not alternative.

 

10.12.General Indemnification.  Savara agrees to defend, indemnify, and hold harmless Consultant from any claims, demands, suits, and actions in law or in equity arising out of or in reference to the Services, including reasonable attorney’s fees incurred in connection therewith, except that Savara will not be so obligated nor liable to the extent of any claims arising out of or in reference to fraud or willful misconduct of Consultant.

 

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the Effective Date.

 

	
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SAVARA INC.

	
 

	
 

	
 

	
By:
	
/s/ David L. Lowrance

	
Name:
	
David L. Lowrance

	
Title:
	
CFO

	
Date:
	
April 24th, 2017

 

 

 

	
Brandi Roberts

	
 
	
 

	
 
	
 

	
 
	
 

	
/s/ Brandi Roberts

	
Name:
	
Brandi Roberts

	
Date:
	
4/24/17

 

 

 

	
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SCHEDULE A

 

DESCRIPTION OF CONSULTING SERVICES

 

Consultant will work closely with the CFO of Savara and his designees to provide consultation on assigned matters, as mutually agreed, as follows:

 

SEC Reporting

Q1 2017 Close

Accounting/General Ledger/Transition Activities

Supervision of onsite consultants

Other Items as Requested

 

Savara and Consultant acknowledge and agree that, notwithstanding anything to the contrary in this Agreement and regardless of the flat fee arrangement for the months of April and May 2017 as provided in Schedule B to this Agreement, Consultant shall have no obligation to provide any minimum amount of hours in performance of Services to Savara.  Consultant does not intend to devote more than 30 hours per week during the months of April and May 2017 to the performance of the Services.  After May 31, 2017, Consultant does not intend to devote more than 5 hours per week to the performance of the Services.  Consultant agrees that Consultant’s fees for Services rendered after May 31, 2017 will not exceed $5,000 per month without Savara’s prior written consent.

 

 

	
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SCHEDULE B

 

COMPENSATION FOR CONSULTING SERVICES

 

For Services provided under this Agreement Savara shall pay Consultant:  

 

	
 
	
•
	
A flat fee of $1,300 for the month of April 2017; 

	
 
	
•
	
A flat fee of $26,000 for the month of May 2017; and 

	
 
	
•
	
At the rate of $200 per hour for Services rendered after May 31, 2017.

Travel time for trips out of San Diego County, California requested by Savara will be billed at $100 per hour.  For clarity, travel time shall include only time in transit between Consultant’s principal office and destination.  Time spent during travel actively performing Services shall be billed at Consultant’s labor rate as set forth above.  Travel during the months of April and May 2017 will have travel time billed at $100 per hour, but Services performed during such travel are included in the flat fee for Services for such months.

 

Payments due to Consultant under this Agreement will be made by Savara as follows: 

 

	
 
	
•
	
The flat fee payment for April 2017 set forth above will be due on or before May 1, 2017; 

	
 
	
•
	
The flat fee payment for May 2017 set forth above will be due as to 50% of the amount on or before May 12, 2017 and as to the other 50% of the amount on or before May 31, 2017; 

	
 
	
•
	
After May 31, 2017, Consultant will submit invoices to Savara on a bi-weekly basis for Services performed, and payment will be due within ten (10) days of Savara’s receipt of such an invoice; and

	
 
	
•
	
Consultant will submit invoices and appropriate supporting documentation relating to travel time and expenses, if any, on a bi-weekly basis and payment will be due within ten (10) days of Savara’s receipt of any such invoice together with appropriate supporting documentation.

 

 

	
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Exhibit 10.15

SEPARATION AGREEMENT 

AND 

GENERAL RELEASE OF CLAIMS

THIS SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (hereinafter “Agreement”) is entered into by and between Edwin L. Parsley (hereinafter “Employee”) and Mast Therapeutics, Inc. (hereinafter “Mast” or the “Company”).  Employee and Mast hereinafter are collectively referred to as the “Parties” or individually referred to as a “Party.”

RECITALS

A.Mast is a corporation and is doing business in the State of California.

B.Employee’s employment with Mast as a Chief Medical Officer and Senior Vice President is expected to terminate as of the closing (the “Closing”) of the acquisition of Savara Inc. (the “Change of Control”), which is expected to occur on or about April 21, 2017 (such date of termination of employment the “Termination Date”).

C.In accordance with the terms of the Executive Severance Agreement, dated March 23, 2016, between Employee and Mast (the “Executive Severance Agreement”), Employee desires to settle and compromise any and all possible claims and disputes he/she has against any of the Releasees, as defined below, arising out of their relationship to date, and to provide for a general release of any and all such claims. 

AGREEMENT

1.Termination of Employment and Resignation of Positions.  Employee agrees that his/her employment with Mast will terminate as part of the Closing effective as of the Termination Date and he/she has complied, or will comply as of the Termination Date, as applicable, with the provisions of Section 1.3 of the Executive Severance Agreement.  Employee hereby resigns, effective as of the Termination Date, any and all other positions he/she holds with Mast and any of its subsidiaries, including positions as a director of Mast or any of its subsidiaries.  In the event that Employee’s employment with Mast is not terminated in connection with the Closing, this Agreement shall automatically terminate and no longer remain in force or effect without further obligation of either of the Parties. 

2.Separation Pay/Consideration.  In consideration of the covenants and releases given herein, upon termination of Employee’s employment on the Termination Date, and subject to non-revocation of this Agreement as set forth in Section 4.c. and execution of the Affirmation (as defined below), Employee will become eligible to receive the following consideration:

a.Separation Pay.  Mast will tender a check to Employee in an amount of Two Hundred Ninety-Seven Thousand, Eight Hundred Twenty-Two Dollars and Fifty-Four Cents ($297,822.54), less applicable federal and California payroll tax deductions, which is the equivalent of (i) nine (9) months of Employee’s base salary and (ii) the amount equal to the premiums necessary to continue Employee’s health insurance coverage in effect for Employee and Employee’s covered dependents under the Consolidated Omnibus Reconciliation Act of 1985, for a period of nine (9) months; and

b.Unemployment Insurance Claim.  Mast will not oppose Employee’s claim for unemployment insurance benefits, and, if asked, will inform the California Employment Development Department that Employee was laid off by Mast as part of the Change in Control.  

3.Release.  

a.Release.  Employee does hereby unconditionally, irrevocably and absolutely release and discharge Mast and its current and former officers, directors, employees, agents, investors, attorneys, shareholders, 

 

 

administrators, affiliates, benefit plans, plan administrators, professional employer organization or co-employer, insurers, trustees, divisions, and subsidiaries, and predecessor and successor corporations and assigns, (collectively, the “Releasees”) from any and all loss, liability, claims, demands, causes of action or suits of any type, whether in law and/or in equity, related directly or indirectly, or in any way connected with any transactions, affairs or occurrences between them to date, including, but not limited to, Employee’s employment with Mast and the termination of said employment.  Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Releasees, other than consideration to which Employee may be entitled in respect of (i) a Change of Control, and (ii) unpaid wages, accrued and unused vacation and reimbursement for business expenses validly incurred prior to termination.  This Agreement specifically applies, without limitation, to any and all disputed wage claims, claims for unpaid expenses, contract claims, tort claims, claims for wrongful termination, and claims arising under Title VII of the Civil Rights Act of 1991, the Americans with Disabilities Act, the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act, the Sarbanes-Oxley Act of 2002, the California Fair Employment and Housing Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the California Family Rights Act, the California Labor Code, the California Business and Professions Code, and any and all federal or state statutes or laws governing employment and/or discrimination in employment.  In addition, this Agreement specifically applies to any claims for age discrimination harassment or retaliation in employment, including any claims arising under the Age Discrimination in Employment Act or any other statutes or laws which govern age discrimination in employment.  Nothing in this Agreement shall be construed to mean that Employee is releasing or waiving claims to enforce this Agreement, workers’ compensation claims, claims for unemployment insurance benefits, claims for any vested retirement, any claim for indemnification (including under the Company’s organizational documents or insurance policies) arising in connection with an action instituted by a third party against the Company or Employee, or claims that, by law, cannot be waived.

b.Section 1542 Waiver.  Employee does expressly waive all of the benefits and rights granted to him/her pursuant to California Civil Code section 1542, which reads as follows:

A general release does not extend to claims which the creditor does not know of or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Employee does certify that he/she has read all of this Agreement, including the release provisions contained herein and the quoted Civil Code section, and that he/she fully understands all of the same.  Employee hereby expressly agrees that this Agreement shall extend and apply to all unknown, unsuspected and unanticipated injuries and damages, as well as those that are now disclosed.

c.No Further Action.  Except as set forth in Section 5, Employee irrevocably and absolutely agrees that he/she will not prosecute nor allow to be prosecuted on his/her behalf, in any administrative agency, whether federal or state, or in any court, whether federal or state, any claim or demand of any type related to the matters released above, it being the intention of the Parties that with the execution by Employee of this release, the Releasees will be absolutely, unconditionally and forever discharged of and from all obligations to or on behalf of Employee related in any way to the matters discharged herein. 

4.Additional Provisions Regarding Release of Age Claims/OWBPA Provisions.  

a.ADEA Claims.  This section of the Agreement exclusively addresses issues relating to Employee’s release of claims arising under federal law involving discrimination on the basis of age in employment (age forty and above).  This section is provided separately, in compliance with federal law, including but not limited to the Older Workers’ Benefit Protection Act of 1990 (“OWBPA”), to ensure that Employee clearly understands his rights so that any release of age discrimination claims under federal law (the ADEA) is knowing and voluntary on the part of Employee.

b.Review Period/OWBPA Provisions.  In accordance with the provisions of the OWBPA, Employee is aware of the following:  Employee represents, acknowledges and agrees that Mast has advised him/her, in writing, (i) to discuss this Agreement with an attorney and to that extent, if any, that Employee has desired, Employee has done so; (ii) that Mast has given Employee forty-five (45) days from receipt of this Agreement to review 

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and consider this Agreement before signing it, and Employee understands that he/she may use as much of this forty-five (45) day period as he/she wishes prior to signing; (iii) that no promise, representation, warranty or agreements not contained herein have been made by or with anyone to cause him/her to sign this Agreement; (iv) that he/she has read this Agreement in its entirety, and fully understands and is aware of its meaning, intent, content and legal effect; (v) that he/she is executing this release voluntarily and free of any duress or coercion; (vi) that this Agreement includes rights and claims under the federal Age Discrimination in Employment Act, as amended, and the federal OWBPA, as amended; and (vii) that this Agreement does not waive rights or claims that may arise after the date Employee signs this Agreement.

c.Effective Date of Agreement.  The Parties acknowledge that for a period of seven (7) days following the execution of this Agreement, Employee may revoke the Agreement, and the Agreement shall not become effective or enforceable until the revocation period has expired.  This Agreement shall become effective eight (8) days after it has been signed by Employee and Mast, and in the event the parties do not sign on the same date, then this Agreement shall become effective eight (8) days after the date it is signed by Employee.

5.Protected Rights.  Employee understands that nothing contained in this Agreement limits Employee’s ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission, or any other federal, state or local government agency or commission (“Government Agencies”), including an Age Discrimination in Employment Act charge or complaint, although Employee may have no right to relief by reason of the claims Employee has released herein.  Employee further understands that this Agreement does not limit Employee’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to Mast.  Nothing in this Agreement shall restrict or limit any right Employee may have to receive a whistleblower award or bounty for information provided to the Securities and Exchange Commission.  In addition, pursuant to the Defend Trade Secrets Act of 2016, Employee is notified that an individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made in confidence to a federal, state, or local government official (directly or indirectly) or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if (and only if) such filing is made under seal. In addition, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the individual’s attorney and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

6.No Cooperation.  Subject to Section 5 governing Employee’s Protected Rights, Employee agrees that he/she will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and its subsidiaries, and predecessor and successor corporations and assigns, unless under a subpoena or other court order to do so or as related directly to the ADEA waiver in this Agreement. Employee agrees both to promptly notify the Company and its successor corporations, upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or other court order. If approached by anyone for counsel or assistance in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints against the Company and its subsidiaries, and predecessor and successor corporations and assigns, Employee shall state no more than that Employee cannot provide counsel or assistance.

7.Acknowledgements/Affirmations.  Employee acknowledges and affirms that he/she has been paid and/or has received all wages, bonuses, incentive compensation, accrued vacation and benefits to which Employee may be entitled, except for such wages, bonuses, incentive compensation, accrued vacation and benefits to which Employee may be entitled as a result of the Change of Control and/or termination of employment.  Employee also acknowledges and affirms that he/she has been provided information regarding his/her inability to continue to receive health insurance benefits as COBRA benefits after the termination of his/her employment due to Mast’s termination, in connection with the Change in Control, of the health insurance plans in which Employee has participated.  Employee further acknowledges and affirms that he/she has returned all documents and other items provided to Employee by the Company (with the exception of a copy of the Employee Handbook and personnel documents specifically relating to 

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Employee), developed or obtained by Employee in connection with Employee’s employment with the Company, or otherwise belonging to the Company.

8.Confidentiality/Non-Disparagement.  Employee agrees that all matters relative to this Agreement shall remain confidential.  Accordingly, Employee hereby agrees that, with the exception of his/her spouse, counsel and tax advisors, he/she shall not discuss, disclose or reveal to any other persons, entities or organizations, whether within or outside of Mast, the terms and conditions of this Agreement.  The Parties acknowledge, however, that Mast may be required to file a copy of this Agreement with the Securities and Exchange Commission, in which case, the terms and conditions of this Agreement will be accessible for review by the public.  Nothing in this section prevents Employee from disclosing to any third party that his/her employment with Mast terminated in connection with the Change in Control.  Employee agrees not to make any derogatory or adverse statements, written or verbal, regarding the Releasees to anyone, and agrees to refrain from knowingly interfering in any tortious manner with the contracts and relationships of the Company.  Mast agrees not to make any derogatory or adverse statements, written or verbal, regarding Employee to anyone.  Employee understands that the Company’s obligations under this paragraph extend only to the Company’s current executive officers and members of its Board of Directors and only for so long as each officer or member is an employee or Director of the Company.

9.Affirmation of Release and Waiver.  Prior to receipt of the consideration set forth in Section 2, Employee shall execute and deliver the Affirmation in substantially the form set forth in Exhibit A (the “Affirmation”). 

10.Reference Requests.  Any reference requests concerning Employee will be referred to the Human Resources Department.  The only information that will be provided in response to such a request will be Employee’s dates of employment, his/her title, confirmation of his/her rate of pay, a statement that Employee was terminated in connection with the Change in Control and would not have been terminated but for that company action, and a statement that it is Mast’s policy to only provide that information.

11.Tax Consequences.  The Company makes no representations or warranties with respect to the tax consequences of the payments and any other consideration provided to Employee or made on Employee’s behalf under the terms of this Agreement.  Employee agrees and understands that Employee is responsible for payment, if any, of local, state, and/or federal taxes on the payments and any other consideration provided hereunder by the Company and any penalties or assessments thereon.  

12.Entire Agreement.  The Parties further declare and represent that no promise, inducement or agreement not herein expressed has been made to them and that this Agreement together with the Executive Severance Agreement contain the full and entire agreement between and among the Parties, and that the terms of this Agreement are contractual and not a mere recital.

13.Applicable Law.  The validity, interpretation, and performance of this Agreement shall be construed and interpreted according to the laws of the State of California.

14.Dispute Resolution.  Except as set forth in Section 5, any dispute arising out of or related to this Agreement shall be resolved through binding arbitration through JAMS in San Diego, California, under the then current applicable rules of JAMS.  The arbitrator may grant injunctions and other relief in such disputes.  The arbitrator shall administer and conduct any arbitration in accordance with California law, including the California Code of Civil Procedure, and the arbitrator shall apply substantive and procedural California law to any dispute or claim, without reference to any conflict-of-law provisions of any jurisdiction.  To the extent that the JAMS rules conflict with California law, California law shall take precedence.  The decision of the arbitrator shall be final, conclusive, and binding on the parties to the arbitration.  Each party shall be responsible for its or his or her own costs and attorneys’ fees in connection with the arbitration, as well as half of the costs of the arbitration.  THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY.  Notwithstanding the foregoing, this Section will not prevent either Party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute relating to this Agreement.

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15.Knowing and Voluntary Agreement.  Employee acknowledges that he/she has carefully read and fully understands all the provisions and effects of this Agreement.  Employee further acknowledges that he/she has been given the opportunity to consult with his/her own independent legal counsel and tax professional with respect to the matters referenced in this Agreement.  Employee acknowledges that he/she has fully discussed this Agreement with his/her attorney or has voluntarily chosen to sign this Agreement without consulting an attorney and/or tax professional, fully understanding the consequences of this Agreement.  Employee further acknowledges that he/she is entering into this Agreement without coercion or duress from any of the Releasees and that none of the Releasees have made any representations or promises concerning the terms or effects of this Agreement other than those set forth in this Agreement.

16.Complete Defense.  This Agreement may be pleaded as a full and complete defense and may be used as the basis for an injunction against any action, suit or proceeding which may be prosecuted, instituted or attempted by either party in breach thereof.

17.Counterparts.  This Agreement may be executed in counterparts and, if so executed, each such counterpart shall have the force and effect of an original.  A facsimile signature shall have the same force and effect as an original signature.

18.Severability.  If any provision of this Agreement, or part thereof, is held invalid, void or voidable as against public policy or otherwise, the invalidity shall not affect other provisions, or parts thereof, which may be given effect without the invalid provision or part.  To this extent, the provisions, and parts thereof, of this Agreement are declared to be severable.  

19.No Admission of Liability.  It is understood that this Agreement is not an admission of any liability by any person, firm, association or corporation but is in compromise of a disputed claim.

20.Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, legal representatives, successors and assigns.

IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates shown below.

 

	
Dated:
	
13 Apr 2017
	
 
	
/s/ Edwin L. Parsley

	
 
	
 
	
 
	
Edwin L. Parsley

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Mast Therapeutics, Inc.

	
 
	
 
	
 
	
 
	
 

	
Dated:
	
April 13, 2017
	
 
	
By:
	
/s/ Brandi Roberts

	
 
	
 
	
 
	
Name:
	
Brandi Roberts

	
 
	
 
	
 
	
Title:
	
Chief Financial Officer

 

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Affirmation

The undersigned hereby acknowledges his/her termination of employment with the Company as of April 27, 2017 (the “Termination Date”) and further affirms that terms of the Separation Agreement and General Release of Claims between the undersigned and Mast Therapeutics, Inc. (the “Agreement”) remain in full force and effect as of the Termination Date, including, but not limited to, the release, waivers and affirmations set forth in Sections 3, 4 and 6 of the Agreement.  

The undersigned acknowledges and affirms that he/she has been paid and/or has received all wages, bonuses, incentive compensation, accrued vacation and benefits to which the undersigned may be entitled, other than shares of the Company’s common stock pursuant to settlement of the restricted stock unit award granted to the undersigned in January 2017 pursuant to the Notice of Grant of Restricted Stock Units and Restricted Stock Units Award Agreement between the undersigned and the Company (the “RSUs Agreement”).  Upon receipt of 12,779 shares of the Company’s common stock (which is the amount granted under the RSUs Agreement as adjusted for the 70-for-1 reverse stock split implemented by the Company on April 27, 2017) in the undersigned’s E*Trade account, the undersigned acknowledges and affirms that he/she will have received all shares of Company common stock due to the undersigned pursuant to the RSUs Agreement.  

 

	
Dated:
	
April 27, 2017
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
/s/ Edwin L. Parsley

	
 
	
 
	
 
	
Edwin L. Parsley

 

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