EMPLOYMENT AGREEMENT
Exhibit 10.33
This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into effective as of October 23, 2013 (the “Effective Date”), by and between PURE BIOSCIENCE, INC., a Delaware corporation (the “Company”), and XXXXX X. XXXXXXX (the “Executive”). The Company and the Executive are hereinafter collectively referred to as the “Parties”, and individually referred to as a “Party”.
RECITALS
A. The Company desires assurance of the continued association and services of the Executive in order to retain the Executive’s experience, skills, abilities, background and knowledge, and is willing to engage the Executive’s services on the terms and conditions set forth in this Agreement.
B. The Executive desires to continue to be in the employ of the Company, and is willing to accept such continued employment on the terms and conditions set forth in this Agreement.
C. The Company and the Executive desire to, among other things, provide for severance benefits payable to the Executive upon certain qualifying terminations and reflect the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) to the severance benefits that may be provided to the Executive.
AGREEMENT
In consideration of the foregoing Recitals and the mutual promises and covenants herein contained, and for other good and valuable consideration, the Parties, intending to be legally bound, agree as follows:
1. EMPLOYMENT.
1.1 Term. The Company hereby employs the Executive, and the Executive hereby accepts employment by the Company, upon the terms and conditions set forth in this Agreement, until the termination of the Executive’s employment in accordance with this Section 1.1 (the “Term”). Executive’s start date shall be September 10, 2013. The Executive shall be employed at will, subject to the following provisions:
(a) Termination by Executive. The Executive may terminate this Agreement and his employment at any time, for any reason or no reason, with or without Cause (as defined below), by providing the Company with 30-days advance written notice. Thereafter, all obligations of the Company under this Agreement shall cease except that Executive will be entitled to wages earned through the effective date of such termination as well as the severance compensation and benefits provided in Sections 4 and 5 below, if applicable.
(b) Termination by the Company. The Company may terminate this Agreement and Executive’s employment at any time, for any reason or no reason, with or without Cause (as defined below), by providing Executive with 30-days advance written notice.
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Thereafter, all obligations of the Company under this Agreement shall cease except that Executive will be entitled to wages earned through the effective date of such termination as well as the severance compensation and benefits provided in Sections 4 and 5 below, if applicable.
(c) Termination by the Company For Cause. The Company may terminate this Agreement and Executive’s employment at any time for Cause (as defined below) at any time without prior notice (unless specifically provided for to the contrary), without liability to the Executive except for wages earned through the effective date of such termination as well as the severance compensation and benefits provided in Sections 4 and 5, as applicable.
(d) Termination Due to Death or Complete Disability. If Executive dies or suffers a Complete Disability (as defined below) during the Term, Executive’s employment with the Company shall automatically terminate upon such death or Complete Disability. Thereafter, all obligations of the Company under this Agreement shall cease except that Executive will be entitled to wages earned through the effective date of such termination as well as the severance compensation and benefits provided in Sections 4 and 5 below, if applicable.
1.2 Title. The Executive shall have the title of Chief Executive Officer (“CEO”) and shall serve in such other capacity or capacities as the Board of Directors of the Company (the “Board”) may from time to time prescribe with the Executive’s consent.
1.3 Duties. The Executive shall do and perform all services, acts or things necessary or advisable to manage and conduct the business of the Company and which are normally associated with the positions of CEO of a public company, consistent with the Bylaws of the Company and as required by the Board. As CEO, Executive shall employ and terminate key employees, subject only to policies set by and with the approval of the Board, and shall sign agreements and otherwise commit the Company, subject only to such policies and such approval, and subject to the provisions of such operating budget or budgets as may be approved from time to time by the Board. During the Term, the Executive shall report directly to the Board.
1.4 Policies and Practices. The employment relationship between the Parties shall be governed by the policies and practices established from time to time by the Company and the Board.
1.5 Location. Unless the Parties otherwise agree in writing, during the term of this Agreement, the Executive shall perform the services the Executive is required to perform pursuant to this Agreement at the Company’s offices, located in El Cajon, California, or, with the consent of the Company and the Executive, at any other place at which the Company maintains an office; provided, however, that the Company may from time to time require the Executive to travel temporarily to other locations in connection with the Company’s business.
1.6 Appointment to the Board. During and throughout the Term, the Board agrees to appoint Executive as a non-compensated member of the Board and to nominate Executive to continue to serve on the Board at each meeting of stockholders in which directors are to be elected. In consideration for the Company’s agreements and obligations under this Agreement, Executive agrees to immediately deliver his resignation from the Board upon the termination of
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his employment with the Company or his removal or resignation from his role as the Company’s CEO.
2. LOYAL AND CONSCIENTIOUS PERFORMANCE.
During the Executive’s employment by the Company, the Executive shall devote the Executive’s full business energies, interests, abilities and productive time to the proper and efficient performance of his duties under this Agreement. Notwithstanding the foregoing, the Executive may engage in personal, investment, civic, and charitable activities to the extent they do not unreasonably interfere with the Executive’s performance of his duties under this Agreement or violate the Confidentiality Agreement (as defined below).
3. COMPENSATION OF THE EXECUTIVE.
3.1 Base Salary. The Company shall pay the Executive a base salary of Three Hundred Fifty Thousand Dollars ($350,000) per year, less payroll deductions and all required withholdings payable in regular periodic payments in accordance with Company’s policy (the “Base Salary”). Such Base Salary shall be prorated for any partial year of employment on the basis of a 365 day fiscal year. The Board, or its Compensation Committee, will review the Executive’s rate of Base Salary on an annual basis and may, in its sole discretion, increase the rate then in effect.
3.2 Annual Discretionary Bonus. In addition to the Executive’s Base Salary, the Executive will be eligible to receive an annual incentive bonus for each fiscal year. The Executive’s initial target annual incentive bonus for each fiscal year during the Term shall be 50% of his annual Base Salary amount, subject to any discretionary increase or decrease in such amount by the Board or its Compensation Committee. The incentive bonus amount the Executive will actually receive, if any, shall be determined in the sole discretion of the Compensation Committee by evaluating the Executive’s and the Company’s performance against milestones and targets established by the Compensation Committee or the Board. Any annual incentive bonus shall be paid to the Executive no later than the fifteenth day of the third month following the fiscal year for which such bonus was earned.
3.3 Reductions to Compensation. The Executive’s compensation may be reduced only by mutual agreement of the Executive and the Company.
3.4 Employment Taxes. All of the Executive’s compensation shall be subject to customary withholding taxes and any other employment taxes as are commonly required to be collected or withheld by the Company.
3.5 Benefits. The Executive shall, in accordance with Company policy and the terms of the applicable plan documents, be eligible to participate in benefits under any employee benefit plan or arrangement that may be in effect from time to time and is made generally available to the Company’s executive or key management employees, including but not limited to paid vacation and medical insurance, provided that, the Executive shall be entitled to (i) four (4) weeks paid vacation per year in accordance with applicable policies of the Company; and, (ii) forty (40) hours of paid sick leave per calendar year.
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3.6 Stock Awards.
(a) Restricted Stock Unit Grant. As an inducement to Executive’s commencement of employment Executive will be granted a restricted stock unit (“RSU”) for five hundred thousand (500,000) shares of the Company’s common stock. The terms and conditions for the RSU are contained in the RSU Agreement attached hereto as Exhibit A and incorporated herein by reference.
(b) Additional Stock Awards. In addition, the Company may grant the Executive additional stock awards at such times and on such terms as may be decided from time to time by the Board or its Compensation Committee, in their sole discretion.
3.7 Expenses.
(a) Ordinary Business Expenses. The Executive is authorized to incur reasonable expenses in the conduct of the business of the Company, including expenses for meals, travel, and other similar items. The Company shall prepay or reimburse the Executive for all such expenses.
(b) Expense Prepayment and Reimbursement Procedures. All prepayments and reimbursements of the Executive’s expenses pursuant to this Section 3.7 are subject to the Executive’s provision of invoices, an itemized accounting or other appropriate documentation evidencing such expenses no later than three (3) months following the date such expenses were incurred. Any reimbursement payment shall be made by the Company as soon as practicable following its receipt of such documentation, but in no event later than the end of the Executive’s taxable year following the year in which the Executive incurred such expenses.
3.8 Indemnification. Company shall indemnify the Executive to the fullest extent permitted by applicable Delaware law against all costs, expenses, liabilities and losses (including, without limitation, attorneys’ fees, judgments, fines, penalties, ERISA excise taxes, penalties and amounts paid in settlement) reasonably incurred by Employee in connection with a Proceeding. For the purposes of this Section 3.8, a “Proceeding” shall mean any action, suit or proceeding, whether civil, criminal, administrative or investigative, in which Executive is made, or is threatened to be made, a party to, or a witness in, such action, suit or proceeding by reason of the fact that Employee is or was an officer, director or employee of Company or is or was serving as an officer, director, member, employee, trustee or agent of any other entity at the request of Company. Additional indemnification provisions are contained in the Indemnification Agreement attached hereto as Exhibit B and incorporated herein by reference.
4. TERMINATION BENEFITS.
4.1 Termination By Executive. If the Executive’s employment is terminated by the Executive without Good Reason (as defined below), then the Company shall pay to the Executive or the Executive’s heirs the Executive’s Base Salary, any bonus awarded under Section 3.2 not previously paid, and any accrued and unused vacation benefits, each as earned through the date of termination at the rate then in effect, less standard deductions and withholdings, and the Company shall thereafter have no further obligations to the Executive
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and/or the Executive’s heirs under this Agreement, except as expressly otherwise provided in Sections 4 and 5. If the Executive’s employment terminates due to the Executive’s death or Complete Disability (as defined below), the Company shall provide to the Executive (or the Executive’s beneficiaries, as applicable) the severance benefits described in Section 4.2 below.
4.2 Benefits Upon Termination Without Cause or for Good Reason. In the event the Executive’s employment with the Company is terminated by the Company without Cause (as defined below) or the Executive terminates his employment for Good Reason (as defined below), then subject to the Executive’s delivery to the Company of a Release and Waiver in the form attached hereto as Exhibit C within the applicable time period set forth therein, but in no event later than forty-five (45) days following termination of Executive’s employment, and permitting such Release and Waiver to become fully effective in accordance with its terms (the date the Executive’s Release becomes fully effective, the “Release Effective Date”), the Company shall provide the Executive with the following severance benefits hereunder, as applicable:
(a) the Executive shall be entitled to severance pay in the form of continued payment of the Executive’s annual Base Salary then in effect for a period of six (6) months. Such continued payments shall be subject to standard deductions and withholdings and paid in accordance with the Company’s regular payroll policies and practices in the first payroll period following the Release Effective Date.
(b) should the Executive elect to continue group health and dental insurance benefits in accordance with the provisions of COBRA following the date of termination, the Company shall pay the full premium for such health and dental insurance continuation benefits for the Executive and the Executive’s eligible dependents for a period of six (6) months after the termination date (the “Continuation Period”). If the Company ceases to provide group health and dental benefits and the Executive converts to an individual policy or policies that provide a substantially similar level of coverage as the Company’s benefit plans did prior to their termination, the Company shall reimburse the Executive’s actual premium costs for such continued health and dental coverage under the individual policy or policies for the duration of the Continuation Period. If such reimbursement is not exempt from application of Section 409A of the Code, such reimbursement shall occur strictly in accordance with the procedures established under Section 3.7(b). Notwithstanding the foregoing, if the Company determines, in its sole discretion, that the Company cannot provide the COBRA premium benefits or individual policy premium benefits without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company shall in lieu thereof pay Executive a taxable cash amount, which payment shall be made regardless of whether Executive or Executive’s eligible family members elect group health insurance or individual policy continuation coverage (the “Health Care Benefit Payment”). The Health Care Benefit Payment shall be paid in monthly installments on the same schedule that the COBRA premiums would otherwise have been paid to the insurer, or would have been paid by the Executive for an individual policy, as applicable. The Health Care Benefit Payment shall be equal to the amount that the Company would have otherwise paid for COBRA insurance premiums (which amount shall be calculated based on the premium for the first month of coverage), or would have otherwise paid for the individual policy premium reimbursement, as applicable, and shall be paid until the expiration of the Continuation Period.
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4.3 Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
(a) Good Reason. “Good Reason” for the Executive to terminate his employment shall mean the occurrence of any of the following events without the Executive’s consent; provided however, that any resignation by the Executive due to any of the following conditions shall only be deemed for Good Reason if: (i) the Executive gives the Company written notice of his intent to terminate for Good Reason within ninety (90) days following the first occurrence of the condition(s) that the Executive believes constitutes Good Reason, which notice shall describe such condition(s); (ii) the Company fails to remedy, if remediable, such condition(s) within thirty (30) days following receipt of the written notice (the “Cure Period”) of such condition(s) from the Executive; and (iii) the Executive actually resigns his employment within the first ninety (90) days after expiration of the Cure Period; (A) a material reduction by the Company of the Executive’s Base Salary or target bonus percentage as initially set forth herein or as the same may be increased from time to time (unless reductions comparable in amount and duration are concurrently made for all other executive officers of the Company); (B) a material reduction by the Company of the Executive’s authority, duties or responsibilities or the assignment to the Executive of any duties substantially inconsistent with the Executive’s positions, duties and responsibilities with the Company; (C) the material relocation of the Company’s offices that requires an increase in the Executive’s one-way driving distance by more than fifty (50) miles, except for required travel on the Company’s business to an extent substantially consistent with the Executive’s duties and responsibilities; or (D) a material breach by the Company of this Agreement or any other agreement between the Company and the Executive.
(b) Cause. “Cause” shall mean that one or more of the following has occurred: (i) the Executive has been convicted for, or entered a plea of guilty or nolo contendere to, a felony crime involving fraud, dishonesty or violence (under the laws of the United States or any relevant state, in the circumstances, thereof); (ii) the Executive has intentionally or willfully engaged in material acts of fraud, dishonesty or gross misconduct that have a material adverse effect on the Company; (iii) the willful failure or refusal of Executive to carry out the lawful directions of the Board or the duties assigned to Executive by the Board; or (iv) any material violation of any written Company policy applicable to the Executive; or (v) any material breach by Executive of any provision of this Agreement or any other agreement between the Company and Executive. Notwithstanding the foregoing, the Company’s termination of Executive shall not constitute a termination for Cause, unless the Company first provides Executive with written notice of the basis for the termination and, with respect to a termination based on clauses (iii), (iv) and/or (v) above, a fifteen (15) day period to correct the breach or failure or refusal. During this 15 day notice period, the Executive will be afforded the opportunity to make a presentation to the Board regarding the matters referred to in the notice.
(c) Complete Disability. “Complete Disability” shall mean the inability of the Executive to perform the Executive’s duties under this Agreement because the Executive has become permanently disabled within the meaning of any policy of disability income insurance covering employees of the Company then in force. In the event the Company has no policy of disability income insurance covering employees of the Company in force when the Executive becomes disabled, the term Complete Disability shall mean the inability of the Executive to
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perform the Executive’s duties under this Agreement by reason of any incapacity, physical or mental, which the Board, based upon medical advice or an opinion provided by a licensed physician acceptable to the Board, determines to have incapacitated the Executive from satisfactorily performing the Executive’s usual services for the Company for a period of at least one hundred twenty (120) consecutive days during any 12-month period.
5. CHANGE OF CONTROL TERMINATION BENEFITS.
5.1 Change of Control Severance. In the event that within twelve (12) months following a Change of Control either: (A) the Executive’s employment with the Company is terminated by the Company without Cause (as defined above) or (B) a condition arises that triggers the Executive’s right to give notice of resignation for Good Reason (as defined above), and the Executive actually terminates his employment for Good Reason, within the applicable time periods thereafter as provided under Section 4.3, in either case subject to fulfillment of the Release and Waiver requirements of Section 4.2, the Company shall provide the Executive with the following severance benefits:
(a) A single lump sum payment equal to one hundred percent (100%) of Executive’s annual Base Salary then in effect.
(b) Notwithstanding any vesting terms of any stock option or other equity-based awards, the vesting of all outstanding stock options or other equity-based awards held by the Executive will automatically accelerate and any outstanding stock options and equity-based awards held by the Executive as of the date of such termination shall continue to be exercisable for twelve (12) months following such termination, but in no event beyond the maximum permitted expiration date of such stock options or equity-based awards, as applicable.
5.2 Change in Control Defined. For purposes of this Agreement, “Change of Control” shall mean the occurrence of any of the following events: (i) the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets or the exclusive license of substantially all of the intellectual property of the Company material to the business of the Company resulting in the Company being unable to continue its business as in effect prior to such license; provided, however, that a mortgage, pledge or grant of a security interest to a bona fide lender shall not by itself constitute a Change of Control; (ii) the consummation of a merger or consolidation of the Company with or into another entity in which the stockholders of the Company exchange their shares of capital stock of the Company for cash, stock, property or other consideration (except one in which the stockholders of the Company as constituted immediately prior to such transaction continue to hold after the transaction at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity or parent entity of the surviving or acquiring entity); (iii) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (the “Exchange Act”) (other than (a) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, (b) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company or (c) any current beneficial stockholder or group, as defined by Rule 13d-5 of the Exchange Act, including the heirs, assigns and successors thereof, of beneficial ownership, within the meaning of Rule 13d 3 of the Exchange Act, of securities
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possessing more than 20% of the total combined voting power of the Company’s outstanding securities) hereafter becomes the “beneficial owner,” as defined in Rule 13d 3 of the Exchange Act, directly or indirectly, of securities of the Company representing 35% or more of the total combined voting power represented by the Company’s then outstanding voting securities; or (iv) individuals who, as of sixty (60) days after the Effective Date of this Agreement are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Agreement, be considered as a member of the Incumbent Board; provided further, however, that a transaction under clauses (ii) or (iii) above shall not constitute a Change of Control: (A) if its primary purpose is to change the state of the Company’s incorporation, (B) if its primary purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately prior to such transaction, or (C) if it is a bona fide equity financing in which the Company is the surviving corporation.
6. TAX TREATMENT.
6.1 Notwithstanding anything contained in this Agreement to the contrary, to the extent that any payment or benefit (within the meaning of Section 280G(b)(2) of the Code) to the Executive or for the Executive’s benefit, paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, the Executive’s employment with the Company or a Change of Control (a “Payment” or “Payments”), would be subject to the excise tax imposed under Code Section 4999, or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), the Payments shall be reduced (but not below zero) if and to the extent that a reduction in the Payments would result in the Executive retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if the Executive received all of the Payments (any such reduced amount is hereinafter referred to as the “Limited Payment Amount”). The Company shall reduce or eliminate the Payments by (i) first reducing or eliminating those payments which are payable in cash and then (ii) by reducing or eliminating acceleration of stock options, in reverse order beginning with the options that but for the acceleration would have vested the farthest in time from the Determination (as hereinafter defined). Any notice given by the Executive pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive’s rights and entitlements to any benefits or compensation.
6.2 An initial determination as to whether the Payments shall be reduced to the Limited Payment Amount and the amount of such Limited Payment Amount shall be made, at the Company’s expense, by the accounting firm that is the Company’s independent accounting firm as of the date of the Change of Control (the “Accounting Firm”). The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation, to the Company and the Executive within five (5) days of the Termination Date, if applicable, or such other time as requested by the Company or by the Executive (provided the Executive reasonably believes that any of the Payments may be subject to the Excise Tax) and, if the Accounting Firm determines that no Excise Tax is payable by the
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Executive with respect to a Payment or Payments, it shall furnish the Executive with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to any such Payment or Payments. Within ten (10) days of the delivery of the Determination to the Executive, the Executive shall have the right to dispute the Determination (the “Dispute”). If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and the Executive, subject to the application of Section 6.3 below.
6.3 As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that the Payments to be made to, or provided for the benefit of, the Executive either will be greater (an “Excess Payment”) or less (an “Underpayment”) than the amounts provided for by the limitations contained in Section 6.1.
(a) If it is established, pursuant to a final determination of a court or an Internal Revenue Service (the “IRS”) proceeding which has been finally and conclusively resolved, that an Excess Payment has been made, the Executive must repay such Excess Payment to the Company; provided, that no Excess Payment will be repaid by the Executive to the Company unless, and only to the extent that, the repayment would either reduce the amount on which the Executive is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999.
(b) In the event that it is determined, by (i) the Accounting Firm, the Company (which shall include the position taken by the Company, or together with its consolidated group, on its federal income tax return) or the IRS, (ii) pursuant to a determination by a court, or (iii) upon the resolution to the Executive’s satisfaction of the Dispute, that an Underpayment has occurred, the Company shall pay an amount equal to the Underpayment to the Executive within ten (10) days of such determination or resolution, together with interest on such amount at the applicable federal rate under Code Section 7872(f)(2) from the date such amount would have been paid to the Executive until the date of payment.
7. APPLICATION OF INTERNAL REVENUE CODE SECTION 409A.
7.1 Notwithstanding anything to the contrary set forth herein, any payments and benefits provided under this Agreement (the “Severance Benefits”) that constitute “deferred compensation” within the meaning of Section 409A of the Code and the regulations and other guidance thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in connection with the Executive’s termination of employment unless and until the Executive has also incurred a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From Service”).
7.2 For the avoidance of doubt, it is intended that payments of the Severance Benefits set forth in this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the Company (or, if applicable, the successor entity thereto) determines that the Severance Benefits constitute “deferred compensation” under Section 409A and the Executive is, on the termination of the Executive’s service, a “specified employee” of the Company or any successor entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of the
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adverse personal tax consequences under Section 409A, the timing of the Severance Benefit payment shall be delayed until the earlier to occur of: (i) the date that is six months and one day after the Executive’s Separation From Service”) or (ii) the date of the Executive’s death (such applicable date, the “Specified Employee Initial Payment Date”), the Company (or the successor entity thereto, as applicable) shall pay to the Executive a lump sum amount equal to the Severance Benefit payment that the Executive would otherwise have received through the Specified Employee Initial Payment Date if the payment of the Severance Benefits had not been so delayed pursuant to this Section.
7.3 The Severance Benefits are intended to qualify for an exemption from application of Section 409A or comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities herein shall be interpreted accordingly.
8. CONFIDENTIAL AND PROPRIETARY INFORMATION; NONSOLICITATION.
As a condition of continued employment the Executive agrees to execute and abide by the Employee Proprietary Information and Inventions Agreement in the form attached hereto as Exhibit D.
9. ASSIGNMENT AND BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the Executive and the Executive’s heirs, executors, personal representatives, assigns, administrators and legal representatives. Because of the unique and personal nature of the Executive’s duties under this Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be assignable by the Executive. This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns and legal representatives. As a condition to entering into an acquisition agreement, the Company will require any acquiror or successor to assume its obligations under this Agreement.
10. CHOICE OF LAW.
This Agreement will be governed by the laws of the State of California, without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises under this Agreement, the parties hereby submit to and consent to the jurisdiction of the State of California, and agree that such litigation will be conducted in the courts of San Diego County, California, or the federal courts for the United States for the Southern District of California, and no other courts, where this Agreement is made and/or to be performed.
11. INTEGRATION.
This Agreement, including all Exhibits attached hereto, contains the complete, final and exclusive agreement of the Parties relating to the terms and conditions of the Executive’s employment and the termination of the Executive’s employment, and supersedes all prior and contemporaneous oral and written employment agreements or arrangements between the Parties and between the Executive and the Company.
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12. AMENDMENT.
This Agreement cannot be amended or modified except by a written agreement signed by the Executive and the Board representative specifically authorized by the Board to execute any such amendment or modification to this Agreement on behalf of the Company.
13. SURVIVAL OF CERTAIN PROVISIONS.
Sections 1, 3.4, 3.7, 4 through 12, 13 through 17, 19 and 21 shall survive the termination of this Agreement.
14. WAIVER.
No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of the Party against whom the wavier is claimed, and any waiver or any such term, covenant, condition or breach shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other term, covenant, condition or breach.
15. SEVERABILITY.
The finding by a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid or illegal. Such court shall have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision which most accurately represents the Parties’ intention with respect to the invalid or unenforceable term or provision. Any such invalid or unenforceable term or provision shall be revised to the minimum extent necessary to make any such term or provision valid or enforceable in accordance with the Parties’ intentions with respect to such term or provision.
16. INTERPRETATION; CONSTRUCTION.
The headings set forth in this Agreement are for convenience of reference only and shall not be used in interpreting this Agreement. The Parties acknowledge that each Party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.
17. REPRESENTATIONS AND WARRANTIES.
The Executive represents and warrants that the Executive is not restricted or prohibited, contractually or otherwise, from entering into and performing each of the terms and covenants contained in this Agreement, and that Executive’s execution and performance of this Agreement will not violate or breach any other agreements between the Executive and any other person or entity.
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18. COUNTERPARTS.
This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall contribute one and the same instrument. In the event that any signature is delivered by fax or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
19. ADVERTISING WAIVER.
During the Term the Executive agrees to permit the Company and/or its affiliates, and persons or other organizations authorized by the Company and/or its affiliates, to use, publish and distribute advertising or sales promotional literature concerning the products and/or services of the Company and/or its affiliates, or the machinery and equipment used in the provision thereof, in which the Executive’s name and/or pictures of the Executive taken in the course of the Executive’s provision of services to the Company and/or its affiliates, appear. The Executive hereby waives and releases any claim or right the Executive may otherwise have arising out of such use, publication or distribution.
20. SPECIFIC ENFORCEMENT.
If necessary and where appropriate, the Company shall have the right to enforce the provisions of the Confidentiality Agreement and the Employee Proprietary Information and Inventions Agreement by injunction, specific performance or other equitable relief without bond and without prejudice to any other rights and remedies the Company may have for a breach of such Sections of this Agreement.
21. NOTICE.
21.1 Method and Delivery. All notices, requests and demands hereunder shall be in writing and delivered by hand, by Electronic Transmission, by mail, or by recognized commercial overnight delivery service (such as Federal Express, UPS, or DHL), and shall be deemed given (a) if by hand delivery, upon such delivery; (b) if by Electronic Transmission, upon confirmation of receipt of same; (c) if by mail, forty eight (48) hours after deposit in the United States mail, first class, registered or certified mail, postage prepaid; or, (d) if by recognized commercial overnight delivery service, upon such delivery.
22.2 Consent to Electronic Transmissions. Each Party hereby expressly consents to the use of Electronic Transmissions for communications and notices under this Agreement. For purposes of this Agreement, “Electronic Transmissions” means a communication (i) delivered by facsimile telecommunication or electronic mail when directed to the facsimile number or electronic mail address, respectively, for that recipient on record with the sending Party and (ii) that creates a record that is capable of retention, retrieval, and review, and that may thereafter be rendered into clearly legible tangible form.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the 23rd day of October 2013.
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| EXECUTIVE: | COMPANY:
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| /s/ Xxxxx Xxxxxxx XXXXX XXXXXXX |
/s/ Xxxx Xxxxxxxxxx | |||
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XXXX XXXXXXXXXX, Chairman of the Board | ||||
13
EXHIBIT A
RSU AGREEMENT
EXHIBIT B
INDEMNIFICATION AGREEMENT
EXHIBIT C
RELEASE AND WAIVER OF CLAIMS
In consideration of the payments and other benefits set forth in the Employment Agreement, dated October 23, 2013 (the “Employment Agreement”), to which this form is attached, I, XXXXX XXXXXXX, hereby furnish PURE BIOSCIENCE, INC. (the “Company”), with the following release and waiver (“Release and Waiver”).
In exchange for the consideration provided to me by the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, Affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring relating to my employment or the termination thereof prior to my signing this Release and Waiver. This general release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including, but not limited to, salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including, but not limited to, claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including, but not limited to, claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended). Notwithstanding the foregoing, this Release and Waiver, shall not release or waive my rights: to indemnification under the articles and bylaws of the Company or applicable law, including without limitations, California Labor Code Sections 2800 and 2802; to payments under Section 4.2 of the Employment Agreement; under any provision of the Employment Agreement that survives the termination of that agreement; under the California Workers’ Compensation Act; under any option, restricted share or other agreement concerning any equity interest in the Company; as a shareholder of the Company or any other right that is not waivable under applicable law.
I also acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “A general release does not extend to claims which the creditor does not know 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.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any claims I may have against the Company.
I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration
given for this Release and Waiver is in addition to anything of value to which I was already entitled as an executive of the Company. If I am 40 years of age or older upon execution of this Release and Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; and (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired unexercised.
This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated herein. This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.
| Date: | By: | |||||
| XXXXX XXXXXXX | ||||||
2
EXHIBIT D
PURE BIOSCIENCE, INC.
EMPLOYEE PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by PURE BIOSCIENCE, INC. (the “Company”), and the compensation now and hereafter paid to me, I hereby agree as follows, effective as of September 10, 2013:
1.
2.
3.
4.
EXHIBIT A
LIMITED EXCLUSION NOTIFICATION
THIS IS TO NOTIFY you in accordance with Section 2872 of the California Labor Code that the foregoing Agreement between you and the Company does not require you to assign or offer to assign to the Company any invention that you developed entirely on your own time without using the Company’s equipment, supplies, facilities or trade secret information except for those inventions that either:
| 1. | 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 of the Company; |
| 2. | Result from any work performed by you for the Company. |
To the extent a provision in the foregoing Agreement purports to require you to assign an invention otherwise excluded from the preceding paragraph, the provision is against the public policy of this state and is unenforceable.
This limited exclusion does not apply to any patent or invention covered by a contract between the Company and the United States or any of its agencies requiring full title to such patent or invention to be in the United States.
I ACKNOWLEDGE RECEIPT of a copy of this notification.
| By: | /s/ Xxxxx Xxxxxxx | |
| Xxxxx Xxxxxxx | ||
| Date: October 23, 2013 | ||
WITNESSED BY:
| /s/ Xxxxx Xxxxx |
| (PRINTED NAME OF REPRESENTATIVE) |
1.
EXHIBIT B
| TO: | PURE BIOSCIENCE, INC. | |||
| FROM: |
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| DATE: |
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| SUBJECT: | Previous Inventions | |||
1. Except as listed in Section 2 below, the following is a complete list of all inventions or improvements relevant to the subject matter of my employment by PURE BIOSCIENCE, INC. (the “Company”) that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company:
| ¨ | No inventions or improvements. |
| ¨ | See below: |
| ¨ | Additional sheets attached. |
2. Due to a prior confidentiality agreement, I cannot complete the disclosure under Section 1 above with respect to inventions or improvements generally listed below, the proprietary rights and duty of confidentiality with respect to which I owe to the following party(ies).
| Invention or Improvement | Party(ies) | Relationship | ||||
| 1. |
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| 2. |
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| 3. |
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| ¨ | Additional sheets attached. |
