EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), is made as of the 28th day of February, 2022 (the “Effective Date”), by and between Cyclo Therapeutics Inc., a Nevada corporation with its principal place of business at 0000 XX 00xx Xxxxxx, Xxxxx X, Xxxxxxxxxxx, XX 00000 (together with its subsidiaries, the “Company") and Xxxxxxx Xxxxxx (the “Executive”) (collectively, the “Parties”).
1. Term. Subject to the provisions of termination has hereinafter provided, the initial term of this Agreement shall begin on the date hereof (the “Start Date”) and shall terminate on the second anniversary of the date hereof (the “Initial Term”). After the Initial Term, this Agreement shall be automatically renewed for successive periods of one (1) year (each, a “Renewal Term”) on the same terms and conditions as set forth herein, unless either party provides at least sixty (60) days’ written notice of non-renewal prior to the expiration of the Initial Term or the Renewal Term. (The Initial Term together with each Renewal Term are sometimes referred to collectively herein as the “Term.”)
2. Position and Duties. The Company hereby continues to employ the Executive and the Executive hereby accepts continued employment with the Company, upon the terms and subject to the conditions set forth herein. The Executive shall continue to serve as Chief Regulatory Officer of the Company and such other office or offices to which Executive may be appointed or elected by the Board of Directors of the Company (the "Board” or “Board of Directors"). Subject to the direction and supervision of the Board of Directors, the Executive shall perform such duties as are customarily associated with the offices of Chief Regulatory Officer and such other offices to which Executive may be appointed or elected by the Board of Directors and such additional duties as the Board of Directors may determine. The Executive will diligently and conscientiously perform the duties of Chief Regulatory Officer and will devote the Executive 's best efforts and full time and attention during normal business hours to the business and affairs of the Company. The Executive will accept no other employment or contracting work during the Term, or serve as a member of the board of directors of any for-profit entity or as a member of any advisory board without the express written consent of the Board. Notwithstanding the general prohibition on the Executive accepting other employment or contracting work during the Term, the Executive shall be permitted to accept other employment or contracting work from the entities and/or ventures set forth in Exhibit A (the “Approved Endeavors”), provided that (i) any work performed for such Approved Endeavors does not materially interfere with the Executive’s duties and responsibilities to the Company, (ii) such work performed for such Approved Endeavors is not competitive with the Company’s Business Activities (as defined below). Upon termination of the Executive’s employment relationship with the Company for any reason, the Executive shall resign and relinquish any other position held as an officer and/or board member of the Company.
(i) Initial Option Grant. On the Effective Date, Executive shall be awarded a stock option under the Plan to purchase 31,141 shares of Common Stock at an exercise price equal to the closing price of the Common Stock on the Effective Date Such option shall be exercisable for a 10-year period commencing on the Effective Date, and shall vest over a four-year period in 48 equal monthly installments on the first day of each month following the Effective Date.
(ii) Annual Option Grant. The Executive shall be entitled to be awarded an annual stock option under the Plan targeted at 0.37% of the Company’s outstanding shares Common Stock on the date of grant. Such options shall be exercisable for a 10-year period commencing on the date of grant, have an exercise price equal to the closing price of the Common Stock on the date of grant, and shall vest in 48 equal monthly installments over the four-year period following the date of grant. Notwithstanding the foregoing, any options issued under this Section 3(c)(ii) shall be subject to the approval of the Board or the Compensation Committee.
(e) 401(k) Match. Subject to the requirements of applicable law and eligibility requirements for participation in the Company’s 401(k) plan (the “401(k) Plan”), the Company will match Executive’s contributions to the 401(k) Plan, provided that such matching contributions in any calendar year shall not exceed 4% of the Annual Base Salary as then in effect.
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(b) Termination by the Company For Cause.
(i) The Company may terminate the Executive’s employment relationship with the Company at any time for Cause (as defined below). Upon termination of the Executive’s employment relationship, the Company shall, thereafter, have no obligation to the Executive for unearned Annual Base Salary, PTO, or any other form of compensation or benefit, except as otherwise required by law. Reimbursement of appropriately documented expenses incurred by the Executive before the termination of employment, to the extent that the Executive would have been entitled to such reimbursement but for the termination of employment, shall be paid by the Company to the Executive.
(ii) For purposes of this Agreement the term “Cause” shall mean any one or more of the following:
(A) The Executive’s willful misconduct that is injurious to the Company or its affiliates, where such behavior shall be considered “willful” if done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Company; or
(B) the embezzlement or misappropriation of funds or property of the Company or its affiliates by the Executive.
(c) Termination by the Company Without Cause.
(i) Termination Without Cause Following a Change in Control:
(A) For the purposes of this Agreement, “Change in Control” shall mean a Change in Control as defined in the Company’s 2021 Equity Incentive Plan; provided, however, that a Change in Control shall not occur unless such transaction constitutes a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the Company's assets under Section 409A.
(B) If the Executive's employment with the Company shall be terminated by the Company without Cause during the Term of this Agreement within twelve (12) months following a Change in Control:
1. the Company shall pay to the Executive the Annual Base Salary earned through the Termination Date; and
2. subject to and contingent upon Executive’s execution of a customary separation and release agreement in favor of the Company, its affiliates, and their respective officers and directors the Company shall pay to the Executive:
a. an amount equal to the Executive's Base Salary, as in effect on the Termination Date, payable for a period of one (1) year from the Termination Date and on the same terms and with the same frequency as the Executive 's Base Salary was paid prior to such termination;
b. If the Executive timely and properly elects health plan continuation coverage under COBRA, the Company shall reimburse the Executive for the monthly COBRA premium paid by the Executive for the Executive and the Executive's dependents Such reimbursement shall be paid to the Executive on the last day of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be eligible to receive such reimbursement until the twelve (12) month anniversary of the Termination Date;
c. any bonus payment described in Section 3(b) previously earned by the Executive (but not paid), payable as provided in Section 3(b). For the avoidance of doubt, no bonus payment shall be “earned” within the meaning of the previous sentence unless the performance period applicable to such bonus has fully elapsed;
d. any unvested equity that may have been awarded to Executive shall immediately vest upon the Termination Date; and
e. if any of the payments or benefits received or to be received by the Executive in connection with Executive’s Termination Without Cause within twelve (12) months following a Change in Control, whether pursuant to the terms of this Agreement or any other plan, arrangement, or agreement, or otherwise) (all such payments collectively referred to herein as the "280G Payments") constitute “parachute payments” within the meaning of Section 280G of the Code and will be subject to the excise tax imposed under Section 4999 of the Code (the "Excise Tax"), the Company shall pay to the Executive, no later than the time such Excise Tax is required to be paid by the Executive or withheld by the Company, an additional amount equal to the sum of the Excise Tax payable by the Executive, plus the amount necessary to put the Executive in the same after-tax position (taking into account any and all applicable federal, state, and local excise, income, or other taxes at the highest applicable rates on such 280G Payments and on any payments under this Section 4(c)(i) or otherwise as if no Excise Tax had been imposed.
(ii) Termination Without Cause Absent a Change in Control
(A) If the Executive's employment with the Company shall be terminated by the Company without Cause during the Term of this Agreement and such termination does not occur within twelve (12) months following a Change in Control:
1. the Company shall pay to the Executive the Annual Base Salary earned through the Termination Date; and
2. subject to and contingent upon Executive’s execution of a customary separation and release agreement in favor of the Company, its affiliates, and their respective officers and directors the Company shall pay to the Executive:
a. If the Executive timely and properly elects health plan continuation coverage under COBRA, the Company shall reimburse the Executive for the monthly COBRA premium paid by the Executive for the Executive and the Executive's dependents Such reimbursement shall be paid to the Executive on the last day of the month immediately following the month in which the Executive timely remits the premium payment. The Executive shall be eligible to receive such reimbursement until the twelve (12) month anniversary of the Termination Date; and
b. an amount equal to the Executive's Base Salary, as in effect on the Termination Date, payable for a period of one (1) year from the Termination Date and on the same terms and with the same frequency as the Executive 's Base Salary was paid prior to such termination.
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Confidential Information, Intellectual Property Rights, and Non-Disparagement. |
However, notwithstanding the foregoing, Confidential Information does not include information: (i) which at the time of disclosure is generally known in the Company’s trade; (ii) which the recipient thereof (“Recipient”) can show by written records was already in its possession at the time of disclosure and not subject to an existing agreement of confidence between the parties; (iii) which is received from a third party without restriction who is not under obligation of confidentiality with respect to such information; (iv) which is independently developed by Recipient as evidenced by its written records and without violating any other obligation between the parties; or (v) which is disclosed to Recipient’s legal counsel, any applicable regulatory agency or other governmental body or any political subdivision thereof, or pursuant to a valid court order, provided, however, that when applicable, Recipient shall first have given notice to the Company and made a reasonable effort to obtain a protective order requiring that the Confidential Information be used only for the purposes for which the order was issued.
(c) The Executive recognizes that the Company’s Confidential Information and Intellectual Property Rights are extremely valuable to it and that disclosure or use of the Company’s Confidential Information and/or Intellectual Property Rights outside the Company could irreparably damage the Company. The Executive therefore agrees that Executive will not use any Confidential Information and/or Intellectual Property Rights for any purpose other than to benefit the Company. In furtherance of that commitment, the Executive agrees that Executive will preserve and protect the confidentiality of the Confidential Information and Intellectual Property Rights and will not use any Confidential Information and/or Intellectual Property Rights other than for a Company purpose. In addition, the Executive will not disclose Confidential Information and/or Intellectual Property Rights to any person outside the Company unless Executive first obtains the express written consent of a member of the Board of the Company and has secured the signature of such person on a Company-approved confidentiality agreement.
(d) The Executive understands and agrees that Executive’s confidentiality obligations under this Section 5 apply during Executive’s employment and continue after termination of employment with the Company, regardless of the reason for the termination.
(e) The Executive represents that Executive is aware of no confidentiality, non-compete, or other agreement that might in any way restrict the Executive’s employment/function with the Company that Executive has not provided to the Company, in writing, and confirms that Executive’s former employer has released Executive from any obligation Executive had with respect to the use of confidential information learned in Executive’s previous employment and which Executive was bound not to disclose.
(f) The Executive understands and agrees that any and all information described as Confidential Information and/or Intellectual Property Rights including, without limitation, records, documents, photographs, audio/visual works, correspondence, memoranda, notes, records, computers, computer disks, cell phones, smartphones, PDAs, files, keys and other documents or physical materials relating to the Company, whether received, retained, compiled or prepared by the Executive or otherwise coming into Executive’s possession through or as a result of Executive’s employment shall remain the Company’s sole and exclusive property, shall not be used by the Executive in any way whatsoever, and shall be returned to the Company immediately upon request. Without limiting the foregoing, while on working time the Executive shall not photograph, tape, film, copy or otherwise record any likenesses or activities of the Company as they relate to members, customers, vendors, suppliers, Company trade secrets, or Company intellectual property, or post or in any way disseminate any likenesses or activities of the Company as they relate to members, customers, vendors, suppliers, Company trade secrets, or Company intellectual property on any website or any social media outlet without prior written approval from the Company.
(g) Nothing in this Agreement shall prohibit the Executive from disclosing any trade secret pursuant to the Defend Trade Secrets Act of 2016: (i) (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, the Executive will not be deemed to be in violation of this Agreement if Executive files a lawsuit for retaliation for reporting a suspected violation of law and disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding, provided the Executive (1) files any document containing the trade secret under seal; and (2) does not publicly disclose the trade secret, except pursuant to court order.
6. Works Made for Hire and Inventions.
(i) The terms “work,” “trademark,” and “invention” include anything created for Company by the Executive, whether alone or with others, and whether created while an independent contractor, employee, or agent of Company.
(ii) The term “work” means any and all writings, documents, designs, models, drawings, photographs, audio/visual works, physical property, reports, etc., that are protectable under Title 17 of the U.S. Code.
(iii) The term “trademark” means any name, word, phrase, logo, design, or other graphic depiction generated during the performance of this Agreement which is or can be used to describe either a product or service of Company.
(iv) The term “invention” means any designs, processes, inventions, or discoveries that may be patentable or otherwise protectable under Title 35 of the U.S. Code.
(b) Title to Works, Trademarks, and Inventions.
(i) While employed by the Company, the Executive may create certain works for Company that may be copyrighted under the laws of the United States. To the extent that any such works are created, the Executive will be considered to have created a work made for hire as defined in 17 U.S.C. § 101, and the Company shall have the sole right to the copyright. In the event that any work created by the Executive does not qualify as a work for hire, the Executive agrees to assign Executive’s right in the work to Company, as provided below.
(ii) It is understood and agreed that the Intellectual Property Rights and entire right, title, and interest throughout the world to all works, trademarks, and/or inventions that are conceived of, prepared, procured, generated, or produced, whether or not reduced by practice, by the Executive, either solely or jointly with others, during the course of, in connection with, or as related to the performance of this Agreement, shall be and hereby are vested and assigned by the Executive to Company.
(iii) It is agreed that the Executive shall promptly disclose to the Company in writing all Works, including, but not limited to, inventions, discoveries, designs, developments, methods, modifications, improvements, processes, algorithms, databases, computer programs, formulae, recipes, techniques, trade secrets, ideas, concepts, methodologies, graphics or images, and audio/visual works and other works of authorship (collectively “Developments”), whether or not patentable or copyrightable, that are created, made, conceived or reduced to practice by the Executive (alone or jointly with others) or under the Executive’s direction during the Term. The Executive acknowledge that all work performed by Executive is on a “work for hire” basis, and the Executive hereby assigns and transfers and, to the extent any such assignment cannot be made at present, will assign and transfer, to the Company and its successors and assigns all of the Executive’s rights, title and interest in all Developments that (a) relate to the business of the Company (including any Developments that relate or could relate to the more generalized industry in which the Company operates or is proposing to operate, whether or not it is directly applicable to the business of the Company) or any of the products or services being researched, developed, manufactured, or sold by the Company or which may be used with such products or services; or (b) result from tasks assigned to the Executive by the Company; or (c) result from the use of premises or personal property (whether tangible or intangible) owned, leased, or contracted for by the Company (“Company-Related Developments”), and all related Intellectual Property Rights. To preclude any possible uncertainty, the Executive has set forth on Exhibit B attached hereto a complete list of Developments that Executive has, alone or jointly with others, conceived, developed, or reduced to practice prior to the commencement of the Executive’s employment with the Company that Executive considers to be Executive’s property or the property of third parties and that the Executive wishes to have excluded from the scope of this Agreement (“Prior Inventions”). The Executive has also listed on Exhibit B all patents and patent applications in which Executive is named as an inventor, other than those which have been assigned to the Company (“Other Patent Rights”). If no such disclosure is attached, the Executive represents that there are no Prior Inventions or Other Patent Rights.
(iv) If, in the course of the Executive’s employment with the Company, the Executive incorporates a Prior Invention into a Company product, process, or machine or other work done for the Company, Executive hereby grants to the Company a nonexclusive, royalty-free, paid-up, irrevocable, worldwide license (with the full right to sublicense) to make, have made, modify, use, sell, offer for sale and import such Prior Invention. Notwithstanding the foregoing, the Executive will not incorporate, or permit to be incorporated, Prior Inventions in any Company-Related Development without the Company’s prior written consent.
(v) This Agreement does not obligate the Executive to assign to the Company any Development which, in the sole judgment of the Company, reasonably exercised, is developed entirely on the Executive’s own time and does not relate to the Business Activities or research and development efforts in which, during the Term, the Company actually is engaged or reasonably would be engaged, and does not result from the use of premises or equipment owned or leased by the Company. However, the Executive will also promptly disclose to the Company any such Developments for the purpose of determining whether they qualify for such exclusion.
(vi) The Executive will cooperate fully with the Company, both during and after Executive’s employment with the Company, with respect to the procurement, maintenance, and enforcement of Intellectual Property Rights in Company-Related Developments. The Executive agrees to sign, both during and after the term of this Agreement, all papers, including without limitation copyright applications, patent applications, declarations, oaths, assignments of priority rights, and powers of attorney, which the Company may deem necessary or desirable in order to protect its rights and interests in any Company-Related Development. If the Company is unable, after reasonable effort, to secure the Executive’s signature on any such papers, the Executive hereby irrevocably designates and appoints each officer of the Company as Executive’s agent and attorney-in-fact to execute any such papers on Executive’s behalf, and to take any and all actions as the Company may deem necessary or desirable in order to protect its rights and interests in any Company-Related Development. The Executive hereby waives and irrevocably quitclaims to the Company or its designee any and all claims, of any nature whatsoever, which Executive now or hereafter has for infringement of any and all proprietary rights assigned to the Company or such designee.
(d) Notwithstanding anything to the contrary in this Agreement, the Executive may, directly or indirectly, own, solely as an investment, securities of any entity engaged in a Competitive Business which is publicly traded on an international, national, or regional stock exchange or on the over-the-counter market if the Executive does not, directly or indirectly, own five percent (5%) or more of any class of securities of such entity.
8. Breach. The Executive acknowledges and confirms that the restrictions contained in this Agreement including those set for in Section 5, 6, and 7, in view of the nature of the Company’s business, are reasonable and necessary in order to protect the legitimate business interests of the Company, and that any breach or threatened breach of the provisions of this Agreement shall cause irreparable injury to the Company, that money damages will not provide an adequate remedy, and that their enforcement will not impose a hardship on the Executive or significantly impair the Executive’s ability to earn a livelihood. Therefore, in addition to any other relief available to it, the Company shall be entitled to seek preliminary, temporary, and permanent injunctive relief without the necessity of proving irreparable harm or posting bond or other security. If any provisions of this Agreement are ever determined by a court of competent jurisdiction to exceed limitations permitted by law, then such provisions shall be reformed automatically to set forth the maximum limitations permissible by law. If the Executive violates any of the restrictions contained in this Agreement, the relevant restricted period shall be extended by a period equal to the length of time from the commencement of any such violation until such time as such violation shall be deemed, by the Company, to be cured. Nothing contained herein shall be considered as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including any recovery of damages from the Executive.
9. Return of Company Property. On the date that the Executive’s employment with the Company ends, the Executive will deliver to the Company all documents, electronic and other data (whether stored on devices in your possession or with any third-party vendors or on the “cloud”), notes, writings, customer and prospect lists, keys, credit cards, computer programs and all other documents or tangible materials whatsoever, including all copies or duplicates, concerning any part of the Company’s activities or concerning any activities as a Company employee. The Executive acknowledges and agrees that all such documents and tangible materials, and copies or duplicates thereof, including the Executive’s own notes, are the Company’s property which is only entrusted to the Executive on a temporary basis. After returning these documents, data, and other property, the Executive will immediately permanently delete from any electronic media in the Executive’s possession, custody, or control (such as computers, mobile phones, hand-held devices, back-up devices and zip drives) or to which the Executive has access (such as the cloud, remote e-mail exchange servers, back-up servers, off-site storage), all Company documents or electronically stored images, and other data or data compilations stored in any medium from which such information can be obtained. The Executive also agrees to provide the Company with list of any documents that the Executive created or is otherwise aware that are password-protected and the password(s) necessary to access such password-protected documents.
10. Indemnification. The Company shall indemnify the Executive to the fullest extent that would be permitted by law (including a payment of expenses in advance of final disposition of a proceeding) as in effect at the time of the subject act or omission, or by the Certificate of Incorporation of the Company as in effect at such time, or by the terms of any indemnification agreement between the Company and the Executive, whichever affords greatest protection to the Executive, and the Executive shall be entitled to the protection of any insurance policies the Company may elect to maintain generally for the benefit of its officers or, during the Executive's service in such capacity, directors (and to the extent the Company maintains such an insurance policy or policies, in accordance with its or their terms to the maxim um extent of the coverage available for any company officer or director), against all costs, charges and expenses whatsoever incurred or sustained by the Executive (including but not limited to any judgment entered by a court of law) at the time such costs, charges and expenses are incurred or sustained, in connection with any action, suit or proceeding to which the Executive may be made a party by reason of Executive’s being or having been an officer or employee of the Company, or serving as an officer or employee of an affiliate of the Company, at the request of the Company, other than any action, suit or proceeding brought against the Executive by or on account of Executive’s breach of the provisions of any employment agreement with a third party that has not been disclosed by the Executive to the Company. The provisions of this Section 10 shall specifically survive the expiration or earlier termination of this Agreement.
11. Representations of the Executive. The Executive represents and warrants that: (i) the Executive has no legal obligations to any other party that would be breached by signing this Agreement or otherwise fulfilling Executive’s obligations hereunder, including but not limited to any non-competition, non-solicitation, non-inducement, confidentiality, assignment of inventions, or other similar agreement; (ii) the Executive has not disclosed any third party’s confidential or proprietary information to the Company or its representatives or agents; (iii) if the Executive learns of any confidential or proprietary information that belongs to any third party, the Executive will not disclose such information to the Company or its representatives or agents, except as allowed by law or any agreement you have signed with such party; and (iv) the Executive is not in breach of any confidentiality or non-disclosure agreement that the Executive has signed.
12. Miscellaneous.
(g) Choice of Law. This Agreement will be governed by, and construed pursuant to, the laws of the State of Florida without regard to its conflict of laws principles. Any dispute under this Agreement shall be adjudicated by a court of competent jurisdiction in the County of Alachua, State of Florida and the Parties consent to such jurisdiction and agree that venue only in the County of Alachua, State of Florida would be proper and hereby waive any challenge thereto based on lack of personal jurisdiction or inconvenient forum.
If to the Executive:
At the address shown in the books and records of the Company, currently:
Xxxxxxx Xxxxxx
00 Xxxxxxxxx Xxx
Xxx Xxxxxxxxx, XX 00000
If to the Company:
Attn: X. Xxxxx Fine, CEO
0000 XX 00xx Xxxxxx, Xxxxx X
Xxxxxxxxxxx, XX 00000
13. Acknowledgement of Full Understanding. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT THE EXECUTIVE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT. THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT THE EXECUTIVE HAS BEEN REPRESENTED BY THE EXECUTIVE’S OWN COUNSEL OR HAS HAD AN OPPORTUNITY TO BE REPRESENTED BY AN ATTORNEY OF THE EXECUTIVE’S CHOICE BEFORE SIGNING THIS AGREEMENT.
Executive: |
|
/s/ Xxxxxxx Xxxxxx Xxxxxxx Xxxxxx |
By: /s/ X. Xxxxx Fine Name: X. Xxxxx Fine Title: Chief Executive Officer |
EXHIBIT A
LIST OF APPROVED ENDEAVORS
As set forth in Section 2 of the Agreement, notwithstanding the general prohibition on the Executive accepting other employment or contracting work during the Term, the Executive shall be permitted to accept other employment or contracting work from the following entities and/or ventures, provided that any work performed for the entities and/or ventures listed below does not interfere with the Executive’s duties and responsibilities to the Company.
Name of Entity or Venture |
Brief Description of Work to Be Performed |
EXHIBIT B
LIST OF PRIOR INVENTIONS OR OTHER PATENT RIGHTS
If you have Prior Inventions or Other Patent Rights, please list them in the space below. If you do not have any Prior Inventions or Other Patent Rights or you would like to include additional Prior Inventions or Other Patent Rights on separate pages, check the appropriate box at the bottom of the page.
Title |
Date |
Identifying Number or Brief Description |
||
Check the following as applicable:
____ I have no Prior Inventions/Other Patent Rights
____ All of my Prior Inventions/Other Patent Rights are listed above
____ I have attached additional sheets describing my Prior Inventions/Other Patent Rights
Signature of Executive:
Print Name of Executive:
Date: