EMPLOYMENT AGREEMENT
Exhibit 10.21
This Employment Agreement (the
“Agreement”) is entered into as of December 1, 2020
(“Effective Date”), by and between Xxxxx Xxxxxxxxxxx (
“Employee”) and Edesa Biotech USA, Inc. (formerly
Stellar Biotechnologies, Inc.), a California corporation (
“Company” or “Employer”). For good and
valuable consideration, the sufficiency of which is hereby
acknowledged, Employee and the Company agree as
follows:
1. Title and Duties. Employee
shall continue to hold the title of Chief Financial Officer
(“CFO”) of Employer, its parent entity Edesa Biotech
Inc. (“Edesa”), a company organized
under the laws of British Columbia, and its affiliated
entity Edesa Biotech Research,
Inc. (“Edesa Research”), an Ontario corporation
(collectively, the “Edesa Entities”). Employee will be
responsible for performing such duties as the CEO of the Edesa
Entities or his designee may assign, including all duties usually
and customarily rendered by and required of the CFO of a publicly
traded company, and including such duties as are described in any
written job description that may be provided to Employee and
amended from time to time, provided that in no event may such an
amendment of duties assigned to the Employee materially diminish
the Employee’s level of responsibilities, title, and stature
as CFO of the Edesa Entities. Employee will devote Employee’s
full business time and attention to performing Employee’s
duties diligently and with undivided loyalty toward the Company and
the other Edesa Entities. While employed by the Company, Employee
will not compete with or take steps to compete with the Edesa
Entities, assist any other person or entity to compete with or
prepare to compete with the Edesa Entities, or engage in any other
conduct that creates a conflict of interest with Employee’s
duty of loyalty to the Company and the other Edesa
Entities.
2. Required Licenses. The CFO of
the Company must be a Certified Public Accountant
(“CPA”) licensed by the State of California. Employee
represents and warrants that Employee is a California CPA and that
Employee has never been the subject of public or private discipline
by the California Board of Accountancy or any other comparable
state or federal licensing entity. Employee agrees to maintain and
keep current all professional licenses and certifications necessary
for the performance of Employee’s duties under this
Agreement. The Company will reimburse Employee for all associated
costs, including license fees, AICPA dues and continuing education
courses necessary to maintain Employee’s CPA license and
competency.
3. Location. Employee will perform
Employee’s duties from Employee’s principal residence
or other reasonable location of Employee’s choice. Employee
agrees to undertake such travel as may be reasonably necessary in
connection with Employee’s position from time to
time.
4. At-Will Employment.
Employee’s employment will be “at will,” which
means that Employee or the Company may terminate the employment
relationship at any time, for or without Cause (as defined in
Section 7), and with or without advance notice. This at-will
employment arrangement cannot be modified in any way except in
writing signed by Employee and the CEO or President of the Edesa
Entities.
5. Compensation and
Benefits.
5.1 Base Salary. As compensation
for Employee’s services, provided Employee is not in default
of any material obligation to the Edesa Entities, the Company shall
pay Employee wages in the gross amount of Two Hundred and Seventy
Five Thousand Dollars ($275,000) per year (the “Base
Salary”) retroactive to June 1, 2020, subject to legally
required withholding and payable in accordance with the
Company’s usual payroll policies and
practices.
5.2 Discretionary Bonus. Employee
shall be eligible for an annual discretionary bonus (the
“Discretionary Bonus”), subject to legally required
withholding. The target for the Discretionary Bonus shall be 40% of
Employee’s Base Salary; however, the amount of the
Discretionary Bonus shall be based on Employee’s performance
and the performance of the Edesa Entities, in the sole discretion
of the Board of Directors of Edesa. Employee shall be evaluated
for, and paid (where applicable), the prior calendar year’s
Discretionary Bonus no later than March 31 each calendar year.
Notwithstanding whether a bonus has been anticipated or budgeted,
no entitlement to any portion of any bonus shall accrue prior to
the date on which the bonus is actually approved by the Board of
Directors of Edesa and on the date Employee’s employment ends
Employee will immediately cease to be eligible to receive any
discretionary bonus except as provided in Section
7.
5.3 Option Grant. Employee shall be
eligible for future share and/or option grants commensurate with
Employee’s position and any personal and business milestones
which may be established by the Company in accordance with the
Company’s executive compensation policy as in effect from
time to time as determined by Edesa’s Board of Directors
subject to availability of shares and/or options for grant under
the Company’s Equity Incentive Compensation
Plan.
5.4 Compensation Review.
Compensation, including base salary, the target for discretionary
bonuses, and potential share or option grants, will be reviewed
annually, no later than March 31 of each calendar year, on the
basis of such factors as, but not limited to, merit, market
performance, job grade and potential. However, any increase to the
Employee's Base Salary is in the sole discretion of the Board of
Directors of Edesa.
5.5 Other Benefits. Employee shall
be eligible for such other employee benefits and executive
perquisites as are generally provided to similarly situated
executives of the Edesa Entities subject to any waiting time
periods or other limitations set forth in the policy or plan
document governing each benefit. At present, the Company offers the
following benefits:
●
Group
health insurance (the full premium for Employee’s choice of
any ACA Gold or Platinum plan paid by the
Company)
●
Group
dental and vision insurance (the full premium paid by the
Company)
●
Vacation (accrued on a pro-rated
basis at the rate of 208 hours per year; accrual is capped at 312
hours; unused vacation is paid upon termination of
employment)
●
Paid
Sick Leave (48 hours provided on January 1 of each calendar year;
unused sick leave does not carry-over from year-to-year; unused
sick leave is not paid upon termination of
employment)
●
Six
Paid Holidays (New Year’s Day, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, and Christmas
Day)
●
401K
(the Company will make a non-elective employer contribution of 3%
of Employee’s Base Salary)
●
Coverage under the Company’s
D&O Insurance.
Benefits, coverages, policies and
plans may be amended or terminated by the Company at any time,
without advance notice or other obligation, provided however that
in the event of such amendment or termination, the Company will
either make available to the Employee benefits coverage
substantially comparable in scope to the preceding coverage, or
reimburse the Employee for the cost of obtaining private coverage
substantially comparable in scope to the preceding
coverage.
5.6 Expenses. The Company shall
reimburse Employee for reasonable and documented expenses actually
and necessarily incurred by Employee in the performance of
Employee’s duties, in accordance with California law and the
Company’s policies and procedures. These expenses shall
include all reasonable expenses related to business travel, as well
as all reasonable expenses related to working remotely including,
but not limited to, computer, cell phone and monthly service plan,
and monthly internet service plan.
6. Policies and Procedures. As a
term and condition of employment, Employee agrees to comply with,
and be bound by, Employer’s Employee Handbook and other
employment policies and procedures. From time to time, the Employee
Handbook and other policies and procedures may be changed by the
Company, in its sole discretion, without advance notice. It is the
sole responsibility of the Employee to review and understand any
changes to the Employee Handbook or other policies and
procedures.
7. Termination. The parties may
terminate their employment relationship and this Agreement as
follows:
7.1 Termination
by Company for Cause. The Company may terminate
Employee’s employment at any time for “Cause.” For the purpose of this
Agreement, Cause means: (a) Employee
has performed (or failed to perform) any act in bad faith to the
detriment of any Edesa Entity’s business or reputation;
(b) Employee has habitually
neglected the duties of her position; (c) Employee has engaged in
dishonesty, gross negligence, or intentional misconduct in
connection with her employment; (d) Employee has materially
breached any written policy of an Edesa Entity applicable to her,
or any written agreement with an Edesa Entity; or (e) Employee has
been convicted of, or pled no contest to, any crime involving
dishonesty or breach of trust. If the Company terminates
Employee’s employment for Cause, the Company’s only
obligations shall be to provide Employee with: (i) Employee’s
accrued salary and accrued and unused vacation pay through and
including Employee’s last day of employment (the
“Separation Date”); (ii) reimbursement of any
reimbursable expenses Employee has properly incurred through and
including the Separation Date; and (iii) any benefit required under
applicable law (including but not limited to compliance with COBRA
and/or Cal-COBRA).
7.2 Resignation by Employee.
Employee may resign her employment at any time. If Employee resigns
her employment, the Company’s only obligation shall be to
provide Employee with the same payments and benefits as would be
provided in case of a termination of Employee’s employment by
the Company for Cause.
7.3 Termination
by Company without Cause. The Company may terminate
Employee’s employment at any time without Cause. If
the Company terminates Employee’s employment without Cause,
the Company’s only obligations shall be: (a) to provide
Employee with the same payments and benefits as would be provided
if the Company had terminated Employee’s employment for
Cause; and (b) if Employee executes a general release of claims in
a form reasonably required by the Company (“Release
Agreement”) within sixty (60) days after Employee’s
Separation Date, payment of “Severance” which shall be
equal to the following:
(i) a lump sum payment of Twelve
(12) months of Employee’s Base Salary at Employee’s
then-current rate, plus one additional month of Employee’s
Base Salary for every year of service completed since June 7, 2019,
not to exceed a total of twenty-four (24)
months;
(ii) a lump sum payment of any
Discretionary Bonus for the prior calendar year already determined
by the Board of Directors of Edesa, but not yet
paid;
(iii) a lump sum payment for
Employee’s potential Discretionary Bonus for the current
calendar year (and the prior calendar year if no Discretionary
Bonus for the prior calendar year has already been determined by
the Board of Directors of Edesa), prorated over the
Employee’s length of service in the calendar year in which
her employment was terminated, based on an average of the
Discretionary Bonuses paid or payable for the two years immediately
preceding the termination (or based on the last Discretionary Bonus
determined by the Board of Directors where such bonus has only been
determined for one calendar year).
Severance shall be
paid no later than 14 calendar days after the date on which the
Release Agreement becomes effective; except that, Company shall not
be obligated to pay Severance before Employee complies with her
obligations under Section 7.5.
7.4 Termination
Related to Change of Control. In the event that the employment of
the Employee is terminated or constructively terminated by the
Employer upon or within a 12 month period following a Change of
Control, the Company shall be obligated to provide Employee
with the same payments and benefits as would be provided in case of
a termination of Employee’s employment by the Company without
Cause, except that the portion of Severance established by Section
7.3(i) shall be equal to twenty-four (24) months of
Employee’s Base Salary.
(i) For the purpose of this Agreement,
“Change of Control” shall mean a transaction or series
of transactions whereby directly or indirectly: (i) a plan
of arrangement, amalgamation, merger or consolidation in which more
than 50% of the total combined voting power of Edesa’s voting
securities, on a fully diluted basis, are transferred or issued to
a person or persons different from those persons holding such
securities immediately prior to such transaction; (ii) the direct
or indirect acquisition by a person or related group of persons
acting jointly or in concert of the beneficial ownership of voting
securities of Edesa representing more than 50% of the total
combined voting power of Edesa’s then outstanding securities,
on a fully diluted basis; (iii) the exercise of the voting power of
all voting or other securities of Edesa so as to cause or result in
the election of a majority of the board of directors of Edesa who
were not previously incumbent directors thereof; or (iv) the sale,
transfer or disposition of all or substantially all of the assets
of the Edesa Entities.
(ii) For the purpose of this Agreement,
a “constructive termination” shall mean a
material change in Employee’s title, responsibilities,
authority or status, and/or a reduction of Employee’s Base
Salary (except when all executives are subject to the same
reduction or a salary deferral), or the Company requires Employee
to primarily perform her duties at a site more than thirty (30)
miles from Employee’s current principal residence (other than
when Employee is traveling as may be reasonably necessary in
connection with her job duties).
7.5 Resignation Upon Termination.
Employee agrees that, upon the cessation of Employee’s
employment (for any reason, including termination for or without
cause, constructive termination, resignation or otherwise), if she
is a member of the Board of any of the Edesa Entities she shall
resign from the Board(s), to be effective no later than the
Separation Date (or such other date as requested by the
Board).
8. Proprietary Information and Inventions
Assignment Agreement. As a condition of Employee’s
continued employment, if requested by the Company, Employee shall
sign a Proprietary Information and Inventions Assignment Agreement
from time to time in a form acceptable to the
Company.
9. Arbitration. As a condition of
employment, or continued employment, with the Company, Employee may
be required to sign arbitration agreements that the Company may
issue from time to time.
10. Non-Solicitation. While
Employee is employed by the Company and for a period of one year
after Employee’s employment ends for any reason, Employee
will not solicit for employment by Employee or by any person or
entity other than an Edesa Entity, any individual who is then
employed by an Edesa Entity or who was employed by an Edesa Entity
during the preceding 12 months.
11. Non-Interference. At no time
during or after Employee’s employment by the Company shall
Employee engage in any of the following conduct: (a) make use of
any Edesa Entity trade secret to solicit or attempt to solicit, on
Employee’s own behalf or on behalf of any person or entity
other than an Edesa Entity, business from any customer of an Edesa
Entity; or (b) induce or attempt to induce, on Employee’s own
behalf or on behalf of any person or entity other than an Edesa
Entity, any consultant, independent contractor, licensee or other
third party to sever any existing contractual relationship with an
Edesa Entity.
12. Construction of Agreement. The
language of all parts of this Agreement shall be construed as a
whole according to its fair meaning, and not strictly for or
against any party. All parties have cooperated in the drafting and
preparation of this Agreement, and the Agreement shall not be
construed more favorably for or against any party by reason of
which party drafted the Agreement. The headings contained in this
Agreement are for reference purposes only, and shall not affect the
meaning or interpretation of this Agreement.
13. Severability. If any portion of
this Agreement shall be held to be void, voidable or unenforceable,
such portion shall be modified only to the minimum extent required
to render it enforceable, and the remaining portions of the
Agreement shall remain in full force and
effect.
14. Amendments. This Agreement
cannot be altered or amended except in writing signed by Employee
and the CEO or President of the Edesa Entities.
15. Governing Law. This Agreement
shall be construed in accordance with and governed by the laws of
the State of California without regard to conflict-of-law
principles.
16. Successors and Assigns. This
Agreement is personal to Employee and cannot be assigned by
Employee, and any purported assignment by Employee shall be null
and void from the outset. This Agreement cannot be assigned by the
Company other than to another Edesa Entity.
17. Waiver. No waiver of any
provision of this Agreement is effective unless it is in writing
and signed by the party against whom it is being enforced. No
waiver by any party to this Agreement on one occasion shall be
deemed a waiver of any provision on any other
occasion.
18. Entire Agreement. This
Agreement constitutes the entire and complete understanding between
Employee and the Company concerning the subject matter hereof. All
prior representations, agreements, arrangements and understandings
between the parties, whether oral or written, have been fully and
completely merged herein and are fully superseded by this
Agreement. To the extent that any provision of this Agreement
conflicts with any provision of any general policy of the Company,
including policies in the Company’s Employee Handbook, this
Agreement shall control.
19. Counterparts; Signatures. This
Agreement may be executed in counterparts, each of which is deemed
to be an original, but such counterparts together shall constitute
one and the same document. Electronic signatures and copies of
executed signature pages, including copies conveyed via fax or
email, shall be valid and binding for all purposes to the same
extent as
original executed
signature pages.
IN
WITNESS WHEREOF, the parties have executed this
Agreement.
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EDESA BIOTECH
USA, INC.
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XXXXX
XXXXXXXXXXX
|
|
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/s/ Xxxxx
Xxxxxxxxxxx
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Its: Chief Executive
Officer
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Date: December 1,
2020
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Date: December 1,
2020
