SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event
reported): February 19, 2016 (February 15, 2016)
Neuralstem, Inc.
(Exact name of registrant as specified
in Charter)
Delaware |
|
001-33672 |
|
52-2007292 |
(State or other jurisdiction of
incorporation or organization) |
|
(Commission File No.) |
|
(IRS Employee Identification No.) |
20271 Goldenrod Lane, 2 nd
Floor, Germantown, Maryland 20876
(Address of Principal Executive Offices)
(301) 366-4960
(Issuer Telephone number)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 3.02. Unregistered Sale of Equity Securities.
The disclosure in Item 5.02 of this Current
Report on Form 8-K regarding the issuance of an inducement grant in the form of an option to purchase shares of the Neuralstem,
Inc. (the “Company”) common stock, par value $0.01 (“Common Stock”) to Richard Daly is incorporated by
reference into this Item. The inducement grant is exempt from the registration requirements of the Securities Act of 1933
by virtue of Section 4(a)(2) thereof and/or Regulation D promulgated thereunder.
Item 5.02. Departure of Directors
or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of Richard Garr as the
Company’s Chief Executive Officer
On February 15, 2016, in connection
with the hiring of Mr. Daly as discussed herein, Richard Garr ceased to serve as the Company’s Chief Executive
Officer, President and General Counsel. Mr. Garr will continue to serve on the Company’s board and will continue to
assist the Company through a transition period.
Appointment of Richard Daly as Chief
Executive Officer, President and Board Member.
On February 16, 2016, the Company announced
that Richard Daly has been appointed Chief Executive Officer, President, and as a member of the Company’s board of directors
(“Board”) effective February 15, 2016 (“Effective Date”). Mr. Daly will serve as a Class III member of
the Company’s Board and will be up for re-election at the Company’s 2017 annual shareholders meeting. Pursuant to Mr.
Daly’s appointment as a member of the Board, the Board expanded the number of directors from seven (7) to eight (8). Mr.
Garr will continue to serve as a member of the Board.
Mr. Daly, age 54, has over 25 years of
commercial pharmaceutical experience working in positions of progressive responsibility in sales, marketing and operations. From
November 2015 until February 2016, Mr. Daly was a managing partner at Ravine Rock Partners, LLC, a bio-pharmaceutical consulting
company. Prior to that, from August 2013 until November 2014, Mr. Daly was the President of U.S. Diabetes, a subsidiary of
AstraZeneca Pharmaceutical LP. From October 2011 until November 2012, Mr. Daly was a founding partner, board member and investor
in SagePath Partners LLC, a commercial outsourcing provider to the pharmaceutical industry. Between July 2008 and October
2011, Mr. Daly was executive vice president of North and South America for Takeda NA, the north American subsidiary of Takeda Pharmaceuticals
(TSE: TYO). Since June 2015, Mr. Daly has served on the board of directors and on the Compensation and Commercial Committees
for Synergy Pharmaceuticals (NASDAQ: SGYP). Since February 2015, Mr. Daly has also served on the board of directors and on the
Compensation Committee of Catalyst Pharmaceuticals (NASDAQ: CPRX). Mr. Daly holds a BS in Microbiology from The University
of Notre Dame and an MBA from Northwestern University's Kellogg Graduate School of Management. In evaluating Mr. Daly’s specific
experience, qualifications, attributes and skills in connection with his appointment to our board, we took into account his prior
work with both public and private organizations, including his experience in building biopharmaceutical organizations, his strong
business development background and his past experience and relationships in the biopharma and biotech fields.
There is no arrangement or understanding between Mr. Daly and
any other person pursuant to which Mr. Daly was selected as the Company’s Chief Executive Officer, President, or as a Board
member. Except as described herein, there are no existing or currently proposed transactions to which the Company or any of its
subsidiaries is a party and in which Mr. Daly has a direct or indirect material interest. There are no family relationships between
Mr. Daly and any of the directors or officers of the Company or any of its subsidiaries.
Employment Related Contracts
On February 15, 2016, in connection with
Mr. Daly’s employment, we entered into an at-will employment agreement (the “Employment Agreement”). Pursuant
to the terms of the Employment Agreement, Mr. Daly will receive a base salary of $440,000 per year and will be eligible to receive
an annual cash bonus based on achievement of certain performance goals with a target of 50% of his base salary. In addition, as
an inducement to Mr. Daly’s employment, we issued him an inducement option to purchase 2,750,000 shares of Common Stock (“Inducement
Option”) on February 15, 2016 (“Grant Date”). The Inducement Option has a term of ten (10) years, and vests as
follows: (i) 687,500 options vest on the six (6) month anniversary of the Grant Date, (ii) 687,500 options vest on the one (1)
year anniversary of the Grant Date and the remaining 1,375,000 options vesting quarterly over the subsequent three (3) year period
such that the Inducement Option will be fully vested on the four (4) year anniversary of the Grant Date.
Pursuant to the Employment Agreement if
the Company terminates Mr. Daly’s employment without Cause or Mr. Daly resigns with Good Reason, as each term is defined
in the Employment Agreement, Mr. Daly will be eligible for (a) payment of his accrued but unpaid base salary, any unpaid or
unreimbursed expenses and any accrued but unused vacation through the date of termination; and (b) continued payment of his
base salary for (i) 18 months following the termination date if termination occurs within 12 months of the Effective Date, (ii)
12 months following the termination date if termination occurs within between 12 and 24 months of the Effective Date, or (iii)
9 months following the termination date if termination occurs 24 months after the Effective Date (collectively, the “Severance
Benefits”). Further, if within 18 months following a Sale Event (as defined in the Company’s Inducement Plan) Mr. Daly’s
employment is (a) terminated by the Company for any reason (other than as a result of his death or disability or a with Cause
termination) or (b) terminated by Mr. Daly with Good Reason, then Mr. Daly will be eligible to receive, in addition to the
Severance Benefits: (i) acceleration of the vesting of 100% of Mr. Daly’s then outstanding unvested equity awards and
(ii) payment of a pro rata portion of Mr. Daly’s target annual bonus for the year in which the termination of employment
occurs.
In addition, pursuant to the Employment
Agreement, the Company will: (a) provide Mr. Daly with a housing allowance of up to $5,000 per month for rental of an apartment
near the Company’s headquarters until the earlier of (i) 12 months from the Effective Date or (ii) such time as Mr. Daly
relocates to where the Company is headquartered; (b) reimburse Mr. Daly for reasonable commuting expenses between the Chicago,
Illinois area and the Washington, D.C. area, including air travel; (c) offset any tax liability of Mr. Daly associated
with such housing allowance and commuting expense reimbursements; (d) reimburse Mr. Daly for incurrence of fees for tax and
financial planning up to $5,000 on an annual basis, subject to the Company’s receipt of appropriate documentation, and (e)
reimbursement of reasonable legal and accounting expenses incurred in connection with his employment.
Mr. Daly also entered into a confidential
information and invention assignment agreement (“Assignment Agreement”) governing the ownership of any inventions and
confidential information. Mr. Daly also entered into the Company’s standard indemnification agreement which is entered into
by the Company’s officers and directors.
The foregoing summary of certain terms
of the Employment Agreement and Assignment Agreement are qualified in their entirety by the terms of the Employment Agreement and
Assignment Agreement, which are attached to this report as Exhibits 10.01 and 10.02, respectively.
On February 16, 2016, the Company issued
a press release announcing Mr. Daly’s appointment, which is attached to this report as Exhibit 99.01.
Adoption of Inducement Plan; Grant
of Inducement Award.
On February 15, 2016, the Board adopted
the Neuralstem, Inc. Inducement Award Stock Option Plan (“Plan”) and the Form of Inducement Award Non-Qualified Stock
Option Grant (“Form of Grant”). The Plan and Form of Grant are attached to this report as Exhibits 4.01 and 4.02, respectively.
In accordance with NASDAQ Listing Rule 5635(c)(4), the Company did not seek approval of the Plan by our stockholders. Pursuant
to the Plan, the Company may grant stock options for up to a total of 6,000,000 (less the grant to Mr. Daly) shares of common stock
to new employees of the Company.
The foregoing description of the Plan and
Form of Grant are qualified in their entirety by the terms of the Plan and Form of Grant, attached to this report as Exhibits 4.01
and 4.02, respectively.
Item 5.03. Amendments to Articles
of Incorporation or Bylaws: Change in Fiscal Year.
The information provided in Item 5.02 of
this Current Report on Form 8-K is incorporated by reference into this Item 5.03.
|
Item 9.01 |
Financial Statement and Exhibits. |
Exhibit
No. |
|
Description |
4.01 |
|
Inducement Award Stock Option Plan adopted on February 15, 2016 |
4.02 |
|
Form of Inducement Award Non-Qualified Stock Option Grant |
10.01 |
|
Richard Daly Employment Agreement |
10.02 |
|
Confidential Information and Invention Assignment Agreement |
99.01 |
|
Press Release dated February 16, 2016 |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: |
February 19, 2016 |
Neuralstem, Inc. |
|
|
|
|
|
/s/ Richard Daly |
|
|
By: Richard Daly |
|
|
Chief Executive Officer |
INDEX OF EXHIBITS
Exhibit
No. |
|
Description |
4.01 |
|
Inducement Award Stock Option Plan adopted on February 15, 2016 |
4.02 |
|
Form of Inducement Award Non-Qualified Stock Option Grant |
10.01 |
|
Richard Daly Employment Agreement |
10.02 |
|
Confidential Information and Invention Assignment Agreement |
99.01 |
|
Press Release dated February 16, 2016 |
Exhibit 4.01
NEURALSTEM, INC.
INDUCEMENT AWARD
STOCK OPTION PLAN
SECTION 1. GENERAL
PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan
is the Neuralstem, Inc. Inducement Award Stock Option Plan (the “Plan”). The purpose of the Plan is to provide
non-qualified stock options to individuals not previously employees or non-employee directors of Neuralstem, Inc. (the “Company”)
(or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’
entry into employment with the Company within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules. It is anticipated that
providing such persons with a direct stake in the Company’s welfare will assure a closer identification of their interests
with those of the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening
their desire to remain with the Company.
The following terms
shall be defined as set forth below:
“Act”
means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
“Administrator”
means either the Board or the compensation committee of the Board or a similar committee performing the functions of the compensation
committee and which is comprised of not less than two Non-Employee Directors who are independent.
“Board”
means the Board of Directors of the Company.
“Code”
means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.
“Covered
Employee” means an employee who is a “Covered Employee” within the meaning of Section 162(m) of the
Code.
“Effective
Date” means February 15, 2016.
“Eligible
Individual” means any individual who was not previously an employee or a non-employee director of the Company or any
of its Subsidiaries (or who has had a bona fide period of non-employment with the Company and its Subsidiaries) who is hired by
the Company or one of its Subsidiaries.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
“Fair Market
Value” of the Stock on any given date means the fair market value of the Stock determined in good faith by the Administrator;
provided, however, that if the Stock is admitted to quotation on the National Association of Securities Dealers Automated Quotation
System (“NASDAQ”), NASDAQ Capital Market or another national securities exchange, the determination shall be
made by reference to market quotations. If there are no market quotations for such date, the determination shall be made by reference
to the last date preceding such date for which there are market quotations; provided further, however, that if the date for which
Fair Market Value is determined is the first day when trading prices for the Stock are reported on a national securities exchange,
the Fair Market Value shall be the “Price to the Public” (or equivalent) set forth on the cover page for the final
prospectus relating to the Company’s Initial Public Offering.
“Non-Employee
Director” means a member of the Board who is not also an employee of the Company or any Subsidiary.
“Non-Qualified
Stock Option” means a stock option that is not intended to be an “incentive stock option” under Section 422
of the Code.
“Option Certificate”
means a written or electronic document setting forth the terms and provisions applicable to a Non-Qualified Stock Option granted
under the Plan. Each Option Certificate is subject to the terms and conditions of the Plan.
“Sale Event”
shall mean (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person
or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding
voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the resulting or successor
entity (or its ultimate parent, if applicable) immediately upon completion of such transaction, or (iii) the sale of all of
the Stock of the Company to an unrelated person or entity.
“Sale Price”
means the value as determined by the Administrator of the consideration payable, or otherwise to be received by stockholders, per
share of Stock pursuant to a Sale Event.
“Section
409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
“Stock”
means the common stock, par value $0.01 per share, of the Company, subject to adjustments pursuant to Section 3.
“Subsidiary” means any
corporation or other entity (other than the Company) in which the Company has at least a fifty (50) percent interest, either directly
or indirectly.
SECTION 2. ADMINISTRATION
OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE NON-QUALIFIED STOCK OPTIONS
(a) Administration
of Plan. The Plan shall be administered by the Administrator.
(b) Powers
of Administrator. The Administrator shall have the power and authority to grant Non-Qualified Stock Options consistent with
the terms of the Plan, including the power and authority:
(i) to
select the individuals to whom Non-Qualified Stock Options may from time to time be granted;
(ii) to
determine the time or times of grant;
(iii) to
determine the number of shares of Stock to be covered by Non-Qualified Stock Options;
(iv) to
determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the
Plan, of Non-Qualified Stock Options, which terms and conditions may differ among individual Non-Qualified Stock Options and grantees,
and to approve the form of Option Certificates;
(v) to
accelerate at any time the exercisability or vesting of all or any portion of Non-Qualified Stock Options;
(vi) subject
to the provisions of Section 5(b), to extend at any time the period in which a Non-Qualified Stock Option may be exercised;
and
(vii) at
any time to adopt, alter and repeal such rules, guidelines and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and provisions of the Plan and any Non-Qualified Stock Option (including
related written instruments); to make all determinations it deems advisable for the administration of the Plan; to decide all disputes
arising in connection with the Plan; and to otherwise supervise the administration of the Plan.
All decisions and interpretations
of the Administrator shall be binding on all persons, including the Company and Plan grantees.
(c) Delegation
of Authority to Grant Options. Subject to applicable law, the Administrator, in its discretion, may delegate to the Chief Executive
Officer of the Company all or part of the Administrator’s authority and duties with respect to the granting of Non-Qualified
Stock Options. Any such delegation by the Administrator shall include specific limitations as to the number of Non-Qualified Stock
Options that may be granted during the period of the delegation and shall contain specific guidelines as to the number of Non-Qualified
Stock Options that can be made to an Eligible Individual, determination of the exercise price and the vesting criteria. The Administrator
may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Administrator’s
delegate or delegates that were consistent with the terms of the Plan.
(d) Option
Certificate. Non-Qualified Stock Options under the Plan shall be evidenced by Option Certificates that set forth the terms,
conditions and limitations for each Option which may include, without limitation, the term of a Non-Qualified Stock Option and
the provisions applicable in the event employment or service terminates.
(e) Indemnification.
Neither the Board nor the Administrator, nor any member of either or any delegate thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection with the Plan, and the members of the Board and
the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense (including, without limitation, reasonable attorneys’ fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under the Company’s articles or bylaws or any directors’ and
officers’ liability insurance coverage which may be in effect from time to time and/or any indemnification agreement between
such individual and the Company.
(f) Foreign
Non-Qualified Stock Option Recipients. Notwithstanding any provision of the Plan to the contrary, in order to comply with the
laws in other countries in which the Company and its Subsidiaries operate or have employees or other individuals eligible for Non-Qualified
Stock Options, the Administrator, in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries
shall be covered by the Plan; (ii) determine which individuals outside the United States are eligible to participate in the
Plan; (iii) modify the terms and conditions of any Non-Qualified Stock Option granted to individuals outside the United States
to comply with applicable foreign laws; (iv) establish subplans and modify exercise procedures and other terms and procedures,
to the extent the Administrator determines such actions to be necessary or advisable (and such subplans and/or modifications shall
be attached to this Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share
limitations contained in Section 3(a) hereof; and (v) take any action, before or after an Non-Qualified Stock Option
is made, that the Administrator determines to be necessary or advisable to obtain approval or comply with any local governmental
regulatory exemptions or approvals. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no
Non-Qualified Stock Options shall be granted, that would violate the Exchange Act or any other applicable United States securities
law, the Code, or any other applicable United States governing statute or law.
SECTION 3. STOCK
ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock
Issuable. The maximum number of shares of Stock reserved and available for issuance under the Plan shall be Six Million (6,000,000)
shares (the “Initial Limit”), subject to adjustment as provided in Section 3(c). For purposes of this limitation,
the shares of Stock underlying any Non-Qualified Stock Options that are forfeited, canceled, held back upon exercise of a Non-Qualified
Stock Option or settlement of a Non-Qualified Stock Option to cover the exercise price or tax withholding, reacquired by the Company
prior to vesting, satisfied without the issuance of Stock or otherwise terminated (other than by exercise) shall be added back
to the shares of Stock available for issuance under the Plan. In the event the Company repurchases shares of Stock on the open
market, such shares shall not be added to the shares of Stock available for issuance under the Plan. The shares available for issuance
under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the Company.
(b) Changes
in Stock. Subject to Section 3(c) hereof, if, as a result of any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or other similar change in the Company’s capital stock, the outstanding shares
of Stock are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company,
or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with
respect to such shares of Stock or other securities, or, if, as a result of any merger or consolidation, sale of all or substantially
all of the assets of the Company, the outstanding shares of Stock are converted into or exchanged for securities of the Company
or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an appropriate or proportionate adjustment
in (i) the maximum number of shares reserved for issuance under the Plan, (ii) the number and kind of shares or other
securities subject to any then outstanding Non-Qualified Stock Options under the Plan, and (iii) the exercise price for each
share subject to any then outstanding Non-Qualified Stock Options, without changing the aggregate exercise price (i.e., the exercise
price multiplied by the number of Non-Qualified Stock Options) as to which such Non-Qualified Stock Options remain exercisable.
The Administrator shall also make equitable or proportionate adjustments in the number of shares subject to outstanding Non-Qualified
Stock Options and the exercise price and the terms of outstanding Non-Qualified Stock Options to take into consideration cash dividends
paid other than in the ordinary course or any other extraordinary corporate event. The adjustment by the Administrator shall be
final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan resulting from any such adjustment,
but the Administrator in its discretion may make a cash payment in lieu of fractional shares.
(c) Mergers
and Other Transactions. Except as the Administrator may otherwise specify with respect to particular Non-Qualified Stock Options
in the relevant Option Certificate, in the case of and subject to the consummation of a Sale Event, all Non-Qualified Stock Options
that are not exercisable immediately prior to the effective time of the Sale Event shall become fully exercisable as of the effective
time of the Sale Event unless the parties to the Sale Event agree that Non-Qualified Stock Options will be assumed or continued
by the successor entity. Upon the effective time of the Sale Event, the Plan and all outstanding Non-Qualified Stock Options granted
hereunder shall terminate, unless provision is made in connection with the Sale Event in the sole discretion of the parties thereto
for the assumption or continuation of Non-Qualified Stock Options theretofore granted by the successor entity, or the substitution
of such Non-Qualified Stock Options with new Non-Qualified Stock Options of the successor entity or parent thereof, with appropriate
adjustment as to the number and kind of shares and, if appropriate, the per share exercise prices, as such parties shall agree
(after taking into account any acceleration hereunder). In the event of such termination, (i) the Company shall have the option
(in its sole discretion) to make or provide for a cash payment to the grantees holding Non-Qualified Stock Options, in exchange
for the cancellation thereof, in an amount equal to the difference between (A) the Sale Price multiplied by the number of
shares of Stock subject to outstanding Non-Qualified Stock Options (to the extent then exercisable (after taking into account any
acceleration hereunder) at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding
Non-Qualified Stock Options; or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation
of the Sale Event as determined by the Administrator, to exercise all outstanding Non-Qualified Stock Options held by such grantee,
including those that will become exercisable upon the consummation of the Sale Event; provided, however, that the exercise of the
Non-Qualified Stock Options not exercisable prior to the Sale Event shall be subject to the consummation of the Sale Event.
(d) Substitute
Non-Qualified Stock Options. The Administrator may grant Non-Qualified Stock Options under the Plan in substitution for stock
and stock based awards held by employees, directors or other key persons of another corporation in connection with the merger or
consolidation of the employing corporation with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Administrator may direct that the substitute awards be granted on such terms
and conditions as the Administrator considers appropriate in the circumstances. Any substitute Non-Qualified Stock Options granted
under the Plan shall not count against the share limitation set forth in Section 3(a).
SECTION 4. ELIGIBILITY
Grantees under the
Plan will be such Eligible Individuals as are selected from time to time by the Administrator in its sole discretion.
SECTION 5. NON-QUALIFIED
STOCK OPTIONS
Any Non-Qualified
Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve. Non-Qualified Stock
Options granted pursuant to this Plan shall be subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable.
(a) Exercise
Price. The exercise price per share for the Stock covered by a Non-Qualified Stock Option shall be determined by the Administrator
at the time of grant but shall not be less than one hundred (100) percent of the Fair Market Value on the date of grant.
(b) Option
Term. The term of each Non-Qualified Stock Options shall be fixed by the Administrator, but no Stock Option shall be exercisable
more than ten years after the date the Stock Option is granted.
(c) Exercisability;
Rights of a Stockholder. Non-Qualified Stock Options shall become exercisable at such time or times, whether or not in installments,
as shall be determined by the Administrator at or after the grant date. The Administrator may at any time accelerate the exercisability
of all or any portion of any Non-Qualified Stock Option. A grantee shall have the rights of a stockholder only as to shares acquired
upon the exercise of a Non-Qualified Stock Option and not as to unexercised Non-Qualified Stock Options.
(d) Method
of Exercise. Non-Qualified Stock Options may be exercised in whole or in part, by giving written or electronic notice of exercise
to the Company, specifying the number of shares to be purchased. Payment of the purchase price may be made by one or more of the
following methods to the extent provided in the Option Certificate:
(i) In
cash, by certified or bank check or other instrument acceptable to the Administrator;
(ii) Through
the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the grantee on the open market or
that have been beneficially owned by the grantee for at least six months and that are not then subject to restrictions under any
Company plan. Such surrendered shares shall be valued at Fair Market Value on the exercise date;
(iii) By
the grantee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable to the Company for the purchase price; provided that in
the event the grantee chooses to pay the purchase price as so provided, the grantee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment
procedure; or
(iv) By
a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Stock issuable upon
exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price.
Payment instruments will be received subject
to collection. The transfer to the grantee on the records of the Company or of the transfer agent of the shares of Stock to be
purchased pursuant to the exercise of a Non-Qualified Stock Option will be contingent upon receipt from the grantee (or a purchaser
acting in his stead in accordance with the provisions of the Non-Qualified Stock Option) by the Company of the full purchase price
for such shares and the fulfillment of any other requirements contained in the Option Certificate or applicable provisions of laws
(including the satisfaction of any withholding taxes that the Company is obligated to withhold with respect to the grantee). In
the event a grantee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number
of shares of Stock transferred to the grantee upon the exercise of the Non-Qualified Stock Option shall be net of the number of
attested shares. In the event that the Company establishes, for itself or using the services of a third party, an automated system
for the exercise of Non-Qualified Stock Options, such as a system using an internet website or interactive voice response, then
the paperless exercise of Non-Qualified Stock Options may be permitted through the use of such an automated system.
SECTION 6. TRANSFERABILITY
(a) Transferability.
Except as provided in Section 6(b) below, during a grantee’s lifetime, his or her Non-Qualified Stock Options shall
be exercisable only by the grantee, or by the grantee’s legal representative or guardian in the event of the grantee’s
incapacity. No Non-Qualified Stock Options shall be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee
other than by will or by the laws of descent and distribution or pursuant to a domestic relations order. No Non-Qualified Stock
Options shall be subject, in whole or in part, to attachment, execution, or levy of any kind, and any purported transfer in violation
hereof shall be null and void.
(b) Administrator
Action. Notwithstanding Section 6(a), the Administrator, in its discretion, may provide either in the Option Certificate
regarding a given Non-Qualified Stock Option or by subsequent written approval that the grantee may transfer his or her Non-Qualified
Stock Options to his or her immediate family members, to trusts for the benefit of such family members, or to partnerships in which
such family members are the only partners, provided that the transferee agrees in writing with the Company to be bound by all of
the terms and conditions of this Plan and the applicable Non-Qualified Stock Option. In no event may a Non-Qualified Stock Option
be transferred by a grantee for value.
(c) Family
Member. For purposes of Section 6(b), “family member” shall mean a grantee’s child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the grantee’s household (other than
a tenant of the grantee), a trust in which these persons (or the grantee) have more than 50 percent of the beneficial interest,
a foundation in which these persons (or the grantee) control the management of assets, and any other entity in which these persons
(or the grantee) own more than 50 percent of the voting interests.
(d) Designation
of Beneficiary. Each grantee to whom a Non-Qualified Stock Option has been made under the Plan may designate a beneficiary
or beneficiaries to exercise any Non-Qualified Stock Option or receive any payment under any Non-Qualified Stock Option payable
on or after the grantee’s death. Any such designation shall be on a form provided for that purpose by the Administrator
and shall not be effective until received by the Administrator. If no beneficiary has been designated by a deceased grantee, or
if the designated beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.
SECTION 7. TAX
WITHHOLDING
(a) Payment
by Grantee. Each grantee shall, no later than the date as of which the value of a Non-Qualified Stock Option or of any Stock
or other amounts received thereunder first becomes includable in the gross income of the grantee for Federal income tax purposes,
pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local taxes
of any kind required by law to be withheld by the Company with respect to such income. The Company and its Subsidiaries shall,
to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the grantee.
The Company’s obligation to deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned
on tax withholding obligations being satisfied by the grantee.
(b) Payment
in Stock. Subject to approval by the Administrator, a grantee may elect to have the Company’s minimum required tax withholding
obligation satisfied, in whole or in part, by authorizing the Company to withhold from shares of Stock to be issued pursuant to
any Non-Qualified Stock Option a number of shares with an aggregate Fair Market Value (as of the date the withholding is effected)
that would satisfy the withholding amount due.
SECTION 8. SECTION 409A
AWARDS
To the extent that
any Non-Qualified Stock Option is determined to constitute “nonqualified deferred compensation” within the meaning
of Section 409A (a “409A Award ”), the Non-Qualified Stock Option shall be subject to such additional rules
and requirements as specified by the Administrator from time to time in order to comply with Section 409A. In this regard,
if any amount under a 409A Award is payable upon a “separation from service” (within the meaning of Section 409A)
to a grantee who is then considered a “specified employee” (within the meaning of Section 409A), then no such
payment shall be made prior to the date that is the earlier of (i) six months and one day after the grantee’s separation
from service, or (ii) the grantee’s death, but only to the extent such delay is necessary to prevent such payment from
being subject to interest, penalties and/or additional tax imposed pursuant to Section 409A. Further, the settlement of any
such Non-Qualified Stock Option may not be accelerated except to the extent permitted by Section 409A.
SECTION 9. TRANSFER,
LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following
events shall not be deemed a termination of employment:
(a) a
transfer to the employment of the Company from a Subsidiary or from the Company to a Subsidiary, or from one Subsidiary to another;
or
(b) an
approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the employee’s
right to re-employment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence
was granted or if the Administrator otherwise so provides in writing.
SECTION 10. AMENDMENTS
AND TERMINATION
The Board may, at any
time, amend or discontinue the Plan and the Administrator may, at any time, amend or cancel any outstanding Non-Qualified Stock
Option for the purpose of satisfying changes in law or for any other lawful purpose, but no such action shall adversely affect
rights under any outstanding Non-Qualified Stock Option without the holder’s consent. Except as provided in Section 3(c)
or 3(d), without prior stockholder approval, in no event may the Administrator exercise its discretion to reduce the exercise price
of outstanding Non-Qualified Stock Options or effect repricing through cancellation and re-grants or cancellation of Non-Qualified
Stock Options in exchange for cash. To the extent required under the rules of any securities exchange or market system on which
the Stock is listed, Plan amendments shall be subject to approval by the Company stockholders entitled to vote at a meeting of
stockholders. Nothing in this Section 10 shall limit the Administrator’s authority to take any action permitted pursuant
to Section 3(c) or 3(d).
SECTION 11. STATUS
OF PLAN
With respect to the
portion of any Non-Qualified Stock Option that has not been exercised and any payments in cash, Stock or other consideration not
received by a grantee, a grantee shall have no rights greater than those of a general creditor of the Company unless the Administrator
shall otherwise expressly determine in connection with any Non-Qualified Stock Option or Non-Qualified Stock Options. In its sole
discretion, the Administrator may authorize the creation of trusts or other arrangements to meet the Company’s obligations
to deliver Stock or make payments with respect to Non-Qualified Stock Options hereunder, provided that the existence of such trusts
or other arrangements is consistent with the foregoing sentence.
SECTION 12. GENERAL
PROVISIONS
(a) No
Distribution. The Administrator may require each person acquiring Stock pursuant to a Non-Qualified Stock Option to represent
to and agree with the Company in writing that such person is acquiring the shares without a view to distribution thereof.
(b) Delivery
of Stock Certificates. Stock certificates to grantees under this Plan shall be deemed delivered for all purposes when the Company
or a stock transfer agent of the Company shall have mailed such certificates in the United States mail, addressed to the grantee,
at the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed delivered for all purposes
when the Company or a Stock transfer agent of the Company shall have given to the grantee by electronic mail (with proof of receipt)
or by United States mail, addressed to the grantee, at the grantee’s last known address on file with the Company, notice
of issuance and recorded the issuance in its records (which may include electronic “book entry” records). Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock
pursuant to the exercise of any Non-Qualified Stock Option, unless and until the Administrator has determined, with advice of counsel
(to the extent the Administrator deems such advice necessary or advisable), that the issuance and delivery of such certificates
is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any
exchange on which the shares of Stock are listed, quoted or traded. All Stock certificates delivered pursuant to the Plan shall
be subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with
federal, state or foreign jurisdiction, securities or other laws, rules and quotation system on which the Stock is listed, quoted
or traded. The Administrator may place legends on any Stock certificate to reference restrictions applicable to the Stock. In addition
to the terms and conditions provided herein, the Administrator may require that an individual make such reasonable covenants, agreements,
and representations as the Administrator, in its discretion, deems necessary or advisable in order to comply with any such laws,
regulations, or requirements. The Administrator shall have the right to require any individual to comply with any timing or other
restrictions with respect to the settlement or exercise of any Non-Qualified Stock Option, including a window-period limitation,
as may be imposed in the discretion of the Administrator.
(c) Stockholder
Rights. Until Stock is deemed delivered in accordance with Section 12(b), no right to vote or receive dividends or any
other rights of a stockholder will exist with respect to shares of Stock to be issued in connection with a Non-Qualified Stock
Option, notwithstanding the exercise of a Non-Qualified Stock Option or any other action by the grantee with respect to a Non-Qualified
Stock Option.
(d) Other
Compensation Arrangements; No Employment Rights. Nothing contained in this Plan shall prevent the Board from adopting other
or additional compensation arrangements, including trusts, and such arrangements may be either generally applicable or applicable
only in specific cases. The adoption of this Plan and the grant of Non-Qualified Stock Options do not confer upon any employee
any right to continued employment with the Company or any Subsidiary.
(e) Trading
Policy Restrictions. Option exercises and other Non-Qualified Stock Options under the Plan shall be subject to the Company’s
insider trading policies and procedures, as in effect from time to time.
(f) Company
Documents and Policies. This Plan and all Non-Qualified Stock Options granted hereunder are subject to the corporate articles
and by-laws of the Company, as they may be amended from time to time, and all other Company policies duly adopted by the Board
or the Administrator and as in effect from time to time regarding the acquisition, ownership or sale of Stock by employees, including
without limitation policies intended to limit the potential for insider trading and to avoid or recover compensation payable or
paid on the basis of inaccurate financial results or statements, employee conduct, and other similar events.
SECTION 13. EFFECTIVE
DATE OF PLAN
This Plan shall become effective upon the
Effective Date.
SECTION 14. GOVERNING
LAW
This Plan and all
Non-Qualified Stock Options and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the
State of Delaware, applied without regard to conflict of law principles.
DATE APPROVED BY BOARD OF DIRECTORS: February 15, 2016
Exhibit 4.02
NEURALSTEM. INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Name of Optionee: [*]
No. of Option Shares: [*]
Option Exercise Price per Share: [*]
Grant Date: [*]
Expiration Date: [*]
Neuralstem, Inc., (the
“Company”) hereby grants to the Optionee named above a non-qualified option (the “Stock Option”)
to purchase on or prior to the Expiration Date specified above all or part of the number of shares of Common Stock, par value $0.01
per share (the “Stock”), of the Company specified above at the Option Exercise Price per Share. This Stock Option
is granted to Optionee in connection with his or her entry into employment with the Company and is an inducement material to the
Optionee’s entry into employment within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules.
1. Applicable
Equity Plan. This Stock Option is being awarded under the Company’s Inducement Award Stock Option Plan (the “Plan”).
Notwithstanding the foregoing and anything in this Agreement to the contrary, this Stock Option shall be subject to and governed
by the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.
Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified in this
Agreement.
2. Exercisability
Schedule. No portion of this Stock Option may be exercised until such portion shall have become exercisable according to the
vesting schedule below or in accordance with Section 4. Except as set forth in Section 4, and subject to the discretion
of the Administrator to accelerate the exercisability schedule, this Stock Option shall become exercisable as follows:
[Insert Vesting Schedule]
Once exercisable, this Stock Option shall
continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions
hereof and of the Plan.
3. Manner
of Exercise.
(a) The
Optionee may exercise this Stock Option from time to time on or prior to the Expiration Date of this Stock Option by giving written
notice to the Company of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice.
This notice shall specify the number of Option Shares to be purchased.
Payment of the purchase
price for the Option Shares may be made by one or more of the following methods: (i) in cash, by certified or bank check or
other instrument acceptable to the Administrator; (ii) through the delivery (or attestation to the ownership) of shares of
Stock that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then
subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Administrator;
(iii) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions
to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase
price, provided that in the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker
shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe
as a condition of such payment procedure; or (iv) a combination of (i), (ii) and (iii) above. Payment instruments
will be received subject to collection.
The transfer to the
Optionee on the records of the Company or of the transfer agent of the Option Shares will be contingent upon (i) the Company’s
receipt from the Optionee of the full purchase price for the Option Shares, as set forth above, (ii) the fulfillment of any
other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (iii) the receipt by
the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock
to be purchased pursuant to the exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will
be in compliance with applicable laws and regulations. In the event the Optionee chooses to pay the purchase price by previously-owned
shares of Stock through the attestation method, the number of shares of Stock transferred to the Optionee upon the exercise of
the Stock Option shall be net of the shares attested to.
(b) The
shares of Stock purchased upon exercise of this Stock Option shall be transferred to the Optionee on the records of the Company
or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or
regulations in connection with such issuance and with the requirements hereof and of the Plan. The determination of the Administrator
as to such compliance shall be final and binding on the Optionee. The Optionee shall not be deemed to be the holder of, or to have
any of the rights of a holder with respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option
shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to
the Optionee, and the Optionee’s name shall have been entered as the stockholder of record on the books of the Company. Thereupon,
the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Stock.
(c) The
minimum number of shares with respect to which this Stock Option may be exercised at any one time shall be 100 shares, unless the
number of shares with respect to which this Stock Option is being exercised is the total number of shares subject to exercise under
this Stock Option at the time.
(d) Notwithstanding
any other provision of this Agreement or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration
Date of this Agreement.
4. Termination
of Employment.
(a) Termination
Due to Death. If the Optionee’s employment terminates by reason of the Optionee’s death, any portion of this Stock
Option outstanding on such date shall become fully exercisable and may thereafter be exercised by the Optionee’s legal representative
or legatee for a period of 12 months from the date of death or until the Expiration Date, if earlier.
(b) Termination
Due to Disability. If the Optionee’s employment terminates by reason of the Optionee’s Disability (as defined by
the Administrator), any portion of this Stock Option outstanding on such date shall become fully exercisable and may thereafter
be exercised by the Optionee for a period of 12 months from the date of termination or until the Expiration Date, if earlier.
(c) Termination
for Cause. If the Optionee’s employment terminates for Cause, any portion of this Stock Option outstanding on such date
shall terminate immediately and be of no further force and effect. For purposes hereof, “Cause” shall mean, unless
otherwise provided in an employment agreement between the Company and the Optionee, a determination by the Administrator that the
Optionee shall be dismissed as a result of (i) any material breach by the Optionee of any agreement between the Optionee and
the Company; (ii) the conviction of, indictment for or plea of nolo contendere by the Optionee to a felony or a crime involving
moral turpitude; or (iii) any material misconduct or willful and deliberate non-performance (other than by reason of disability)
by the Optionee of the Optionee’s duties to the Company.
(d) Other
Termination. If the Optionee’s employment terminates for any reason other than in the circumstances set forth above,
and unless otherwise determined by the Administrator, any portion of this Stock Option outstanding on such date may be exercised,
to the extent exercisable on the date of termination, for a period of three months from the date of termination or until the Expiration
Date, if earlier. Any portion of this Stock Option that is not exercisable on the date of termination shall terminate immediately
and be of no further force or effect. The Administrator’s determination of the reason for termination of the Optionee’s
employment shall be conclusive and binding on the Optionee and his or her representatives or legatees.
5. Transferability.
This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise,
other than by will or the laws of descent and distribution. This Stock Option is exercisable, during the Optionee’s lifetime,
only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.
6. Tax
Withholding. The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes a taxable event
for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal,
state, and local taxes required by law to be withheld on account of such taxable event. The Company shall have the authority to
cause the minimum required tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock
to be issued to the Optionee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding
amount due.
7. No
Obligation to Continue Employment. Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this
Agreement to continue the Optionee in employment and neither the Plan nor this Agreement shall interfere in any way with the right
of the Company or any Subsidiary to terminate the employment of the Optionee at any time.
8. Notices.
Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered
to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently
furnish to the other party in writing.
The foregoing Agreement is hereby accepted and the terms and
conditions thereof hereby agreed to by the undersigned.
Exhibit 10.01
EMPLOYMENT AGREEMENT
This Employment Agreement
(this “Agreement”) is made and entered into as of this [*]th day of February 2016, by and between Neuralstem,
Inc., a Delaware corporation (the “Company”), and Richard Daly (the “Employee”).
WITNESSETH :
WHEREAS, the Company
desires to employ Employee as its Chief Executive Officer and Employee desires to accept such employment; and
WHEREAS, the Company
desires to enter into this Agreement regarding the terms of Employee’s employment, and Employee desires to enter into this
Agreement and to accept the terms and provisions of such employment, as embodied in this Agreement.
Section 1. Definitions.
(a) “Accelerated
Equity Benefit” shall have the meaning ascribed to it in Section 7(g)(iii) hereof.
(b) “Accrued
Obligations” shall mean (i) all accrued but unpaid Base Salary through the Date of Termination, (ii) subject to
any conditions contain in this Agreement, all bonuses that have been awarded but remain unpaid as of the Date of Termination, (iii) any
unpaid or unreimbursed expenses incurred in accordance with Section 6 hereof, and (iii) any accrued but unused vacation
time through the Date of Termination.
(c) “Base
Salary” shall mean the salary provided for in Section 4(a) hereof.
(d) “Board”
shall mean the Board of Directors of the Company.
(e) “Common
Stock” shall have the meaning ascribed to in in Section 4(d) hereof.
(f) “Confidentiality
Agreement” shall mean the Company’s Confidentiality Information and Assignment Agreement attached hereto as Exhibit
B.
(h) “Cause”
shall mean (i) Employee’s failure (except where due to a Disability), neglect, or refusal to perform in any material
respect Employee’s duties and responsibilities, (ii) any intentional or grossly negligent act of Employee that has,
or could reasonably be expected to have, the effect of injuring the business of the Company or its subsidiaries in any material
respect, (iii) Employee’s conviction of, or plea of guilty or no contest to: (x) a felony, (y) any material
violation of federal or state securities laws or (z) any other criminal charge that has, or could be reasonably expected to
have, a material adverse impact on the performance of Employee’s duties to the Company or otherwise result in material injury
to the business of the Company or its subsidiaries , (iv) the commission by Employee of an act of fraud or embezzlement against
the Company or its subsidiaries; (v) any material violation by Employee of the policies of the Company or its subsidiaries
, including but not limited to those relating to sexual harassment or business conduct, and those otherwise set forth in the manuals
or statements of policy of the Company or its subsidiaries, or (vi) Employee’s breach of this Agreement or breach of
the Confidentiality Agreement.
(i) “Code”
shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
(j) “Date
of Termination” shall mean the date on which Employee’s employment as Chief Executive Officer of the Company terminates.
(k) “Disability”
shall mean any physical or mental disability or infirmity of Employee that prevents the performance of Employee’s duties
for a period of (i) ninety (90) consecutive days or (ii) one hundred twenty (120) non-consecutive days during
any twelve (12) month period. Any question as to the existence, extent, or potentiality of Employee’s Disability upon
which Employee and the Company cannot agree shall be determined by a qualified, independent physician selected by the Company and
approved by Employee or, if applicable, his guardian (which approval shall not be unreasonably withheld). The determination of
any such physician shall be final and conclusive for all purposes of this Agreement.
(l) “Effective Date”
shall mean February [*], 2016.
(m) “Good
Reason” shall mean, without Employee’s consent, (i) (A) a material diminution in Employee’s duties,
or responsibilities, (B) adverse change in Employee’s title, position, or person or entity to whom Employee reports or (C)
assignment to Employee of duties not commensurate with his position, (ii) a reduction in Base Salary as set forth in Section 4(a)
hereof , (iii) provided that Employee has previously relocated to the Washington D.C. Metropolitan Area, any requirement by
or directive from the Company, which is not recommended by Employee, that Employee permanently relocate his principal residence
or change in the primary place of the Company’s business outside of the Washington D.C. Metropolitan Area, or (iv) any
other material breach of a provision of this Agreement by the Company (other than a provision that is covered by clause (i), (ii) or
(iii) above). Employee acknowledges and agrees that Employee’s exclusive remedy in the event of any breach of this Agreement
shall be to assert Good Reason pursuant to the terms and conditions of Section 7(e) hereof. Notwithstanding the foregoing,
during the Term, in the event that the Company reasonably believes that Employee may have engaged in conduct that could constitute
Cause hereunder, the Company may, in its sole and absolute discretion, suspend Employee from performing Employee’s duties
hereunder for a period not to exceed 90 days, and in no event shall any such suspension constitute an event pursuant to which Employee
may terminate employment with Good Reason or otherwise constitute a breach hereunder; provided , that no such suspension
shall alter the Company’s obligations under this Agreement during such period of suspension.
(n) “Housing
Allowance” shall have the meaning ascribed to it in Section 4(e) hereof.
(o) “Inducement
Plan” shall have the meaning ascribed to it in Section 4(d) hereof.
(p) “Option
Award” shall have the meaning ascribed to it in Section 4(d) hereof.
(q) “Payment
Date” shall have the meaning ascribed to it in Section 7(h) hereof.
(r) “Pro
Rata Bonus Payment” shall have the meaning ascribed to it in Section 7(g)(iv) hereof.
(s) “Reimbursement
Period” shall have the meaning ascribed to it in Section 4(e) hereof.
(t) “Release
of Claims” shall mean a release of claims made by the Employee in favor of the Company and its subsidiaries in the form
attached hereto as Exhibit A (with any updates reasonably determined by the Company to be necessary to comply with applicable
law) and the execution of which is a condition precedent to Employee’s eligibility for Severance Benefits, the Accelerated
Equity Benefit and the Pro-Rata Bonus Payment in the event his employment is terminated by the Company without Cause or by Employee
for Good Reason, as described in Sections 7(d) and 7(e), or following a Sale Event, as described in Section 7(g).
(u) “Severance
Benefits” shall mean continued payment of Base Salary during the Severance Term, payable in accordance with the Company’s
regular payroll practices.
(v) “Severance
Term” shall mean (i) the eighteen (18) month period, which commences on the first day following the Date of
Termination following termination by the Company without Cause or by Employee for Good Reason if such termination occurs within
the twelve (12) month anniversary of the Effective Date, or (ii) the twelve (12) month period, which commences on the first day
following the Date of Termination following termination by the Company without Cause or by Employee for Good Reason if such termination
occurs after the twelve (12) month anniversary but before the twenty four (24) month anniversary of the Effective Date, or (iii)
the nine (9) month period, which commences on the first day following the Date of Termination following termination by the Company
without Cause or by the Employee for Good Reason if such termination occurs at any time after the twenty four (24) month anniversary
of the Effective Date, or (iv) if the Date of Termination occurs within eighteen (18) months after a Sale Event, the
eighteen (18) month period, which commences on the first day following the Date of Termination by the Company without Cause
or by Employee for Good Reason.
(w) “Target
Cash Bonus” shall have the meaning ascribed to it in Section 4(b) hereof.
(x) “Term”
shall have the meaning ascribed to it in Section 2 hereof.
(y) “Travel
Allowance” shall have the meaning ascribed to it in Section 4(e) hereof.
Section 2. Acceptance and Term. Commencing on the Effective Date, the Company agrees to employ Employee on an at-will basis (subject
to the terms of Sections 7(d) and 7(e) hereof), and Employee agrees to accept such employment and serve the Company, in accordance
with the terms and conditions set forth herein. The term of employment shall commence on the Effective Date and continue until
terminated by either party at any time, subject to the provisions herein (referred to herein as the “Term”).
Section 3. Position,
Duties, and Responsibilities; Place of Performance.
(a) Position,
Duties, and Responsibilities. During the Term, Employee shall be employed and serve as Chief Executive Officer of the Company
(together with such other position or positions consistent with Employee’s title or as the Company shall specify from time
to time) and shall have such duties and responsibilities commensurate therewith, and such other duties as may be assigned and/or
prescribed from time to time by the Board or a committee thereof. On the Effective Date, the Board will appoint Employee to serve
as a member of the Board in such class or classes of the Board as determined by the Board. During the Term, the Board will nominate
Employee for election to the Board by the Company’s stockholders; provided that Employee hereby will submit written notice
of resignation of his directorship to the Board, effective as of the date on which Employee ceases to serve as Chief Executive
Officer.
(b) Performance.
Employee shall devote his full business time, attention, skill, and best efforts to the performance of his duties under this Agreement
and shall not engage in any other business or occupation during the Term, including, without limitation, any activity that (x) conflicts
with the interests of the Company, (y) interferes with the proper and efficient performance of Employee’s duties for
the Company, or (z) interferes with Employee’s exercise of judgment in the Company’s best interests. Notwithstanding
the foregoing, nothing herein shall preclude Employee from: (i) continuing to serve on existing boards of directors as of
the Effective Date until Employee’s current term on those boards expires or (ii) serving, with the prior consent and
approval of the Board, (which shall not be unreasonably withheld or delayed) as a member of no more than two other board of directors
provided that service on any such board complies with the factors contained in (x), (y) and (z) above or advisory boards
(or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations; (iii) engaging
in charitable activities and community affairs; and (iv) managing Employee’s personal investments and affairs; provided,
however, that the activities set out in clauses (i), (ii), (iii) and (iv) herein shall be limited by Employee so
as not to interfere in any material respect, individually or in the aggregate, with the performance of Employee’s duties
and responsibilities hereunder, or pose a conflict of interest or violate any provision of this Agreement such determinations to
be made at the reasonable good faith discretion of the Board. Employee represents that he has provided the Company with a comprehensive
list of all outside professional activities with which he is currently involved or reasonably expects to become involved at the
current time. In the event that, during his employment by the Company, the Employee desires to engage in other outside professional
activities, not included on such list, Employee will, prior to engaging in any such activities, first seek written approval from
the Chairman of the Board and such approval shall not be unreasonably withheld.
Section 4. Compensation.
(a) Base Salary.
In exchange for Employee’s performance of his duties and responsibilities, Employee initially shall be paid an annual base
salary of $440,000 (“Base Salary”), payable in accordance with the regular payroll practices of the Company.
All payments referenced in this Agreement are on a gross, pre-tax basis and shall be subject to all applicable federal, state and
local withholding, payroll and other taxes.
(b) Target
Cash Bonus. In addition to the Base Salary, Employee will be eligible to earn an annual target bonus of up to 50% of his
Base Salary (the “Target Cash Bonus”). The actual amount of such bonus, if any, will be determined by the Board
(or a committee thereof) based upon Company performance and any other factors that the Board (or a committee thereof), in its reasonable
good faith discretion following reasonable consultation with Employee, deems appropriate. Employee’s achievement of such
milestones, as well as the amount of any bonus, shall be determined by the Board in its reasonable good faith discretion. Bonuses,
if any, shall be paid out no later than March 15 of the year following the applicable bonus year. Except as otherwise provided
in Section 7 of this Agreement, Employee must be employed by the Company at the time the bonus is awarded and through the
end of the calendar year in which any bonus may be earned in order to be eligible for any such payment.
(c) Annual
Stock Option Award. In addition to the Base Salary and Target Cash Bonus, Employee will be eligible to receive an annual market
based stock option grant (the “Annual Stock Option Grant”) issued pursuant to the terms of one of the Company’s
equity compensation plans. The actual amount of such grant, if any, will be determined by the Board (or a committee thereof) based
upon Company performance and any other factors that the Board (or a committee thereof), in its reasonable good faith discretion,
deems appropriate. Employee’s achievement of such milestones, as well as the amount of any Annual Stock Option Grant, if
any, shall be determined by the Board (or a committee thereof) in its reasonable good faith discretion. In connection with such
grants, the Employee shall enter into the Company’s standard stock option agreement which will incorporate the vesting schedule
and other terms as determined by the Board (or a committee thereof).
(d) Inducement
Stock Options/Equity Grants. On the day following the Effective Date, the Company will grant Employee an option to purchase
2,750,000 shares of the Company’s common stock, $0.01 par value per share (the “Common Stock”), issued
pursuant to the terms of the Company’s Inducement Award Stock Option Plan (or a successor plan, if any) (the “Inducement
Plan”) and subject to the terms of a stock option agreement thereunder (the “Option Award”). The options
subject to the Option Award shall have a term of 10 years from the date of grant, and an exercise price equal to the closing trading
price of the Common Stock on the date of grant. The Option Award will be subject to vesting in accordance with the terms of the
Inducement Plan, Section 7(g) of this Agreement and the stock option agreement(s); specifically the Option Award will vest
over four years, with twenty-five percent (25%) vesting on the six month anniversary of the grant date, twenty-five percent
(25%) vesting on the one-year anniversary of the grant date and the remaining options vesting in equal quarterly installments over
the following three (3) years; provided, however, Employee must remain continuously employed through the applicable
vesting date. The Option Award shall be subject to the terms set forth in the Option Award, the terms of the Inducement Plan, any
applicable shareholder and/or option holder agreements and other restrictions and limitations generally applicable to Common Stock
of the Company or equity awards held by Company executives and/or employees or otherwise imposed by law.
(e) Housing
Allowance/Commuting Costs. Employee will continue to maintain his permanent residence in the Chicago, Illinois area. Until
the earlier of twelve (12) months from the Effective Date, or such time as Employee relocates to where the Company is headquartered
(“Reimbursement Period”), Employee will receive a monthly housing allowance of up to $5,000.00 per month for
the rental of an apartment in the area of the Company’s headquarters (“Housing Allowance”). The amount
of the monthly housing allowance will be grossed up by the Company in order to fully offset the tax liability of the Employee for
such allowance. During the Reimbursement Period, Employee will also be reimbursed for airfare and related travel expenses for commuting-related
travel to and from the Chicago, Illinois area and the area in which the Company is located (“Travel Allowance”).
The Company agrees to purchase an American Airlines Airpass (or a comparable pass on another airline selected by the Employee)
for Employee for use during the term of this Agreement. If, prior to the 12-month anniversary of the Effective Date, Employee resigns
without Good Reason or the Company terminates Employee’s employment for Cause, then Employee agrees to repay to the Company
the net amount of the housing allowance provided through the Date of Termination and all airfare and travel related expenses reimbursed
under this Subsection provided through the Date of Termination within 30 days of such Date of Termination. For avoidance of doubt,
no additional Housing Allowance or Travel Allowance payments will be made subsequent to the Reimbursement Period.
(f) Annual
Tax and Financial Planning Stipend. During the Term, the Company will, subject to the receipt of appropriate documentation,
reimburse Employee up to $5,000 on an annual basis for Employee’s out of pocket costs spent on tax and financial planning,
prorated for any partial year of employment.
Section 5. Employee
Benefits. During the Term, Employee shall be eligible to participate in health insurance and other benefits provided generally
to similarly situated employees of the Company, subject to the terms and conditions of the applicable benefit plans (which shall
govern). In addition to holidays recognized by the Company, Employee also shall receive four (4) weeks of paid vacation per
year, prorated for any partial year of employment, of which up to two (2) weeks may roll-over year to year for a maximum of six
(6) weeks at any given time. Nothing contained herein shall be construed to limit the Company’s ability to amend, suspend,
or terminate any employee benefit plan or policy at any time without providing Employee notice, and the right to do so is expressly
reserved.
Section 6. Reimbursement
of Business Expenses. During the Term, the Company shall pay (or promptly reimburse Employee) for documented, out-of-pocket
expenses reasonably incurred by Employee in the course of performing his duties and responsibilities hereunder, which are consistent
with the Company’s policies in effect and as amended from time to time, with respect to business expenses, subject to the
Company’s requirements with respect to documentation and reporting of such expenses.
Section 7. Termination
of Employment.
(a) General.
Employee’s employment with the Company shall terminate upon the earliest to occur of: (i) Employee’s death, (ii) a
termination by reason of Employee’s Disability, (iii) a termination by the Company with or without Cause, or (iv) a
termination by Employee with or without Good Reason.
(b) Termination
Due to Death or Disability. Employee’s employment under this Agreement shall terminate automatically upon Employee’s
death. The Company also may terminate Employee’s employment immediately upon the occurrence of a Disability, such termination
to be effective upon Employee’s receipt of written notice of such termination. In the event of Employee’s termination
as a result of Employee’s death or Disability, except as otherwise provided in Section 7(g), Employee’s or Employee’s
estates or beneficiaries, as the case may be, sole and exclusive remedy shall be receipt of the Accrued Obligations, and Employee
shall have no further rights to any compensation or any other benefits under this Agreement.
(c) Termination by the Company with
Cause.
(i) The Company may
terminate Employee’s employment at any time with Cause, effective upon Employee’s receipt of written notice of such
termination; provided, however, that with respect to any Cause termination relying on clause (i), (ii), (v), or (vi) of
the definition of Cause set forth in Section 1(h) hereof, to the extent that such act or acts or failure or failures to act
are curable, as determined by the Board in its reasonable good faith discretion, Employee shall be given thirty (30) days’
written notice by the Company of its intention to terminate his employment with Cause, such notice to state the act or acts or
failure or failures to act that constitute the grounds on which the proposed termination with Cause is based, and such termination
shall be effective at the expiration of such thirty (30) day notice period unless Employee has fully cured such act or acts
or failure or failures to act, to the Company’s complete satisfaction, that give rise to Cause during such period.
(ii) In the event
that the Company terminates Employee’s employment with Cause, Employee shall be entitled only to the Accrued Obligations.
Following such termination of Employee’s employment with Cause, except as set forth in this Section 7(c)(ii) or as otherwise
provided in Section 7(g), Employee shall have no further rights to any compensation or any other benefits under this Agreement.
For the avoidance of doubt, Employee’s sole and exclusive remedy upon a termination of employment by the Company with Cause
shall be receipt of the Accrued Obligations.
(d) Termination
by the Company without Cause. The Company may terminate Employee’s employment at any time without Cause, effective upon
Employee’s receipt of written notice of such termination. In the event that Employee’s employment is terminated by
the Company without Cause (other than due to death or Disability) and provided that he fully executes and does not revoke an effective
Release of Claims as described in Section 7(h), Employee shall be eligible for:
(i) The
Accrued Obligations; and
(ii) The
Severance Benefits.
Notwithstanding the foregoing, the Severance
Benefits shall immediately terminate, and the Company shall have no further obligations to Employee with respect thereto, in the
event that Employee is found by a court of competent jurisdiction to have breached this Agreement, any provision of the Confidentiality
Agreement or the Release of Claims. Any such termination of payment or benefits shall have no effect on the Release of Claims or
any of Employee’s post-employment obligations to the Company. Following such termination of Employee’s employment by
the Company without Cause, except as set forth in this Section 7(d) or 7(g), Employee shall have no further rights to any
compensation or any other benefits under this Agreement. For the avoidance of doubt, except as otherwise provided in Section 7(g),
Employee’s sole and exclusive remedy upon a termination of employment by the Company without Cause shall be receipt of (i) the
Severance Benefits, subject to his execution of the Release of Claims, and (ii) the Accrued Obligations. If the Company makes
overpayments of Severance Benefits, Employee promptly shall return any such overpayments to the Company and/or hereby authorizes
deductions from future Severance Benefit amounts so long as such deduction does not violate Section 409A of the Code.
(e) Termination
by Employee with Good Reason. Employee may terminate his employment with Good Reason by providing the Company thirty (30) days’
written notice setting forth in reasonable specificity the event that constitutes Good Reason, which written notice, to be effective,
must be provided to the Company on the later of: (i) within thirty (30) days of the occurrence of such event, (ii) or promptly
upon Employee’s actual knowledge of such event. During such notice period, the Company shall have a cure right (if curable),
and if not cured within such period, Employee’s termination will be effective upon the expiration of such cure period, and
Employee shall be entitled to the same payments and benefits as provided in Section 7(d) hereof, subject to the same conditions
on payment and benefits as described in Section 7(d) hereof. Following such termination of Employee’s employment by
Employee with Good Reason, except as set forth in this Section 7(e) or as otherwise provided in Section 7(g) or under
any Company benefit plan (other than severance plans that are broad based), Employee shall have no further rights to any compensation
or any other benefits under this Agreement. For the avoidance of doubt, except as otherwise provided in Section 7(g) or under
any Company benefit plan (other than severance plans that are broad based), Employee’s sole and exclusive remedy upon a termination
of employment with Good Reason shall be receipt of the Severance Benefits, subject to his execution of the Release of Claims, and
(ii) the Accrued Obligations.
(f) Termination
by Employee without Good Reason. Employee may terminate his employment without Good Reason by providing the Company sixty (60) days’
written notice of such termination. In the event of a termination of employment by Employee under this Section 7(f), Employee
shall be entitled only to the Accrued Obligations. In the event of termination of Employee’s employment under this Section 7(f),
the Company may, in its sole and absolute discretion, by written notice accelerate such date of termination without changing the
characterization of such termination as a termination by Employee without Good Reason. Following such termination of Employee’s
employment by Employee without Good Reason, except as set forth in this Section 7(f) or as otherwise provided in Section 7(g)
or under any Company benefit plan (other than severance plans that are broad based), Employee shall have no further rights to any
compensation or any other benefits under this Agreement. For the avoidance of doubt, except as otherwise provided in Section 7(g)
or under any Company benefit plan (other than severance plans that are broad based), Employee’s sole and exclusive remedy
upon a termination of employment by Employee without Good Reason shall be receipt of the Accrued Obligations.
(g) Termination
following a Sale Event. In the event Employee’s employment is terminated within eighteen (18) months following
a Sale Event (using the most expansive meaning given to such term in the Inducement Plan and/or the Company’s incentive equity
plans, that have been approved by the Company’s shareholders and pursuant to which any applicable equity grants have been
made to Employee, as the case may be): (a) by the Company for any reason other than as a result of Employee’s
death or Disability pursuant to Section 7(b) or a with Cause termination as definition in Section 1(h) hereof or (b) by
Employee with Good Reason pursuant to Section 7(e), Employee shall be eligible for (in lieu of, and not in addition
to, any payments described in Section 7(c), (d), or (e) of this Agreement):
(i) The
Accrued Obligations;
(ii) The
Severance Benefits, provided that he fully executes and does not revoke an effective Release of Claims as described in Section 7(h)
and continues to comply with the Confidentiality Agreement;
(iii) To
the extent not otherwise accelerated and vested in connection with a Sale Event in accordance with the Inducement Plan, acceleration
of the vesting of 100% of Employee’s then outstanding unvested equity awards, such that all unvested equity awards vest and
become fully exercisable or non-forfeitable as of the Date of Termination (the “Accelerated Equity Benefit”),
in which case Employee shall have ninety (90) days from the Date of Termination to exercise the vested equity awards; and
(iv) payment of a
pro rata portion of Employee’s Target Cash Bonus for the year in which the Date of Termination occurs, the amount of which
is calculated based on the number of days he is employed by the Company in the year of the Date of Termination and based upon the
determination by the Board of achievement of the Company against the Company’s corporate goals for such year pursuant to
Section 4(b) of this Agreement (the “Pro Rata Bonus Payment”).
Notwithstanding the foregoing, the Severance
Benefits shall immediately terminate, and the Company shall have no further obligations to Employee with respect thereto, in the
event that Employee is found by a court of competent jurisdiction to have breached this Agreement, any provision of the Confidentiality
Agreement or the Release of Claims. Any such termination of payment or benefits shall have no effect on the Release of Claims or
any of Employee’s post-employment obligations to the Company. If the Company makes overpayments of Severance Benefits, Employee
promptly shall return any such overpayments to the Company and/or hereby authorizes deductions from future Severance Benefit amounts.
(h) Release.
Notwithstanding any provision herein to the contrary, the payment of the Severance Benefits and the Pro Rata Bonus Payment, and
the provision of the Accelerated Equity Benefit, pursuant to subsection (d), (e) or (g) of this Section 7, shall
be conditioned upon Employee’s execution, delivery to the Company, and non-revocation of the Release of Claims (and the expiration
of any revocation period contained in such Release of Claims) in accordance with the time limits set forth therein (and, in all
events, within sixty (60) days following the Date of termination). If Employee fails to execute the Release of Claims in such
a timely manner, or timely revokes Employee’s acceptance of such release following its execution, Employee shall not be entitled
to any of the Severance Benefits, the Pro Rata Bonus Payment, or the Accelerated Equity Benefit. Payment of the Severance Benefits
will commence on the first regular Company payday that is at least five (5) business days following the date the Company receives
a timely, effective and non-revocable Release of Claims (the “Payment Date”); provided, however, that the first
payment will be retroactive to the day immediately following the Date of Termination. Payment of the Pro Rata Bonus Payment will
also be made on the Payment Date. Notwithstanding the foregoing, to the extent that any portion of the Severance Benefits or Pro
Rata Bonus Payment constitutes “non-qualified deferred compensation” subject to Section 409A of the Code, any
payment of such portion scheduled to occur prior to the sixtieth (60th) day following the date of Employee’s termination
of employment hereunder, but for the condition on executing the Release of Claims as set forth herein, shall not be made until
the first regularly scheduled payroll date following such sixtieth (60th) day unless otherwise permitted by Section 409A of
the Code, after which any remaining such benefits shall thereafter be provided to Employee according to the applicable schedule
set forth herein.
Section 8. Confidentiality Agreement;
Cooperation.
(a) Confidentiality
Agreement. As a condition of Employee’s employment with the Company under the terms of this Agreement, Employee has executed
and delivered to the Company a Confidentiality Agreement. The parties hereto acknowledge and agree that this Agreement and the
Confidentiality Agreement shall be considered separate contracts. In addition, Employee represents and warrants that he shall be
able to and will perform the duties of this position without utilizing any confidential and/or proprietary information that Employee
may have obtained in connection with employment with any prior employer, and that he shall not (i) disclose any such information
to the Company, or (ii) induce any Company employee to use any such information, in either case in violation of any confidentiality
obligation, whether by agreement or otherwise.
(b) Litigation
and Regulatory Cooperation. During and after Employee’s employment, Employee shall cooperate fully with the Company in
the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf
of the Company which relate to events or occurrences that transpired while the Company employed Employee, provided, that the Employee
will not have an obligation under this paragraph with respect to any claim in which the Employee has filed directly against the
Company or related persons or entities or if such cooperation would be materially adverse to his own legal interests. The Employee’s
full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel
to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after
Employee’s employment, Employee also shall cooperate fully with the Company in connection with any investigation or review
of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired
while Employee was employed by the Company, provided Employee will not have any obligation under this paragraph with respect to
any claim in which Employee has filed directly against the Company or related persons or entities. The Company shall reimburse
Employee for any reasonable out-of-pocket expenses incurred in connection with Employee’s performance of obligations pursuant
to this Section 8(b).
Section 9. Taxes. The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited
to income, employment, and social insurance taxes, as shall be required by law. Employee acknowledges and represents that the Company
has not provided any tax advice to him in connection with this Agreement and that Employee has been advised by the Company to seek
tax advice from Employee’s own tax advisors regarding this Agreement and payments that may be made to him pursuant to this
Agreement, including specifically, the application of the provisions of Section 409A of the Code to such payments. The Company
shall have no liability to Employee or to any other person if any of the provisions of this Agreement are determined to constitute
deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section,
except in the event of the Company’s or its subsidiaries’ gross negligence or bad faith.
Section 10. Additional Section 409A Provisions. Notwithstanding any provision in this Agreement to the contrary:
(a) If at the
time of the Employee’s separation from service within the meaning of Section 409A of the Code, the Company determines
that the Employee is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to
the extent any payment or benefit that the Employee becomes entitled to under this Agreement on account of the Employee’s
separation from service is “non-qualified deferred compensation” subject to Section 409A of the Code and not otherwise
exempt, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (i) six
months and one day after the Employee’s separation from service, or (ii) the Employee’s death. If any such delayed
cash payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts
that would otherwise have been paid during the six-month period but for the application of this provision, and the balance of the
installments shall be payable in accordance with their original schedule.
(b) Each payment
in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of the Code. Neither
the Company nor Employee shall have the right to accelerate or defer the delivery of any such payments except to the extent specifically
permitted or required by Section 409A.
(c) To the extent
that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred
compensation (within the meaning of Section 409A of the Code), (i) any such expense reimbursement or payment shall be
made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred
by Employee, (ii) the right to reimbursement, payment or in-kind benefits shall not be subject to liquidation or exchange
for another benefit, and (iii) the amount of expenses eligible for reimbursement, payment or in-kind benefits provided during
any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable
year; provided , that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement
covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement
is in effect.
(d) To the extent
that any payment or benefit described in this Agreement constitutes “non-qualified deferred compensation” under Section 409A
of the Code, and to the extent that such payment or benefit is payable upon the Employee’s termination of employment, then
such payments or benefits shall be payable only upon the Employee’s “separation from service.” The determination
of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Treasury
Regulation Section 1.409A-1(h).
(e) The parties
intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision
of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner
so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may be amended,
as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related
rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.
While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty
taxes under Section 409A of the Code, in no event whatsoever shall the Company or any of its subsidiaries be liable for any
additional tax, interest, or penalties that may be imposed on Employee as a result of Section 409A of the Code or any damages
for failing to comply with Section 409A of the Code (other than for withholding obligations or other obligations applicable
to employers, if any, under Section 409A of the Code) , except in the event of the Company’s or its subsidiaries’
gross negligence or bad faith.
Section 11. Successors and Assigns.
(a) The Company.
This Agreement shall inure to the benefit of the Company and its respective successors and assigns. This Agreement may not be assigned
by the Company without Employee’s prior consent.
(b) Employee.
Employee’s rights and obligations under this Agreement shall not be transferable by Employee by assignment or otherwise,
without the prior written consent of the Company; provided, however, that if Employee shall die, all cash amounts
then payable to Employee hereunder shall be paid in accordance with the terms of this Agreement to Employee’s devisee, legatee,
or other designee, or if there be no such designee, to Employee’s estate.
Section 12. Waiver
and Amendments. Any waiver, alteration, amendment, or modification of any of the terms of this Agreement shall be valid only
if made in writing and signed by each of the parties hereto; provided, however, that any such waiver, alteration,
amendment, or modification must be consented to on the Company’s behalf by the Board. No waiver by either of the parties
hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions
hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.
Section 13. Severability.
If any covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination
of a court of competent jurisdiction, (a) the remaining terms and provisions hereof shall be unimpaired, and (b) the
invalid or unenforceable term or provision hereof shall be deemed replaced by a term or provision that is valid and enforceable
and that comes closest to expressing the intention of the invalid or unenforceable term or provision hereof.
Section 14. Governing
Law and Jurisdiction. This is a Maryland contract and shall be construed under and be governed in all respects by the laws
of Maryland without giving effect to the conflict of laws principles of such state. With respect to any disputes concerning federal
law, such disputes shall be determined in accordance with the law as it would be interpreted and applied by the United States
Court of Appeals for the Fourth Circuit. To the extent that any court action is initiated to enforce this Agreement, the parties
hereby consent to the non-exclusive jurisdiction of the state and federal courts of Maryland. Accordingly, with respect to any
such court action, Employee (a) submits to the personal jurisdiction of such courts; (b) consents to service of process;
and (c) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction
or service of process.
Section 15. Notices.
(a) Place of
Delivery. Every notice or other communication relating to this Agreement shall be in writing, and shall be mailed to or delivered
to the party for whom or which it is intended at such address as may from time to time be designated by it in a notice mailed or
delivered to the other party as herein provided; provided, that unless and until some other address be so designated, all
notices and communications by Employee to the Company shall be mailed or delivered to the Company at its principal executive office,
and all notices and communications by the Company to Employee may be given to Employee personally or may be mailed to Employee
at Employee’s last known address, as reflected in the Company’s records.
(b) Date of
Delivery. Any notice so addressed shall be deemed to be given or received (i) if delivered by hand, on the date of such
delivery, (ii) if mailed by courier or by overnight mail, on the first business day following the date of such mailing, and
(iii) if mailed by registered or certified mail, on the third business day after the date of such mailing.
Section 16. Section Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall
not be deemed to constitute a part thereof or affect the meaning or interpretation of this Agreement or of any term or provision
hereof.
Section 17. Entire Agreement. This Agreement, together with Confidentiality Agreement, the Inducement Plan, and any stock option agreement
entered into between the Company and Employee thereunder, constitute the entire understanding and agreement of the parties hereto
regarding the employment of Employee. This Agreement supersedes all prior negotiations, discussions, correspondence, communications,
understandings, and agreements between the parties (including without limitation that certain Term Sheet offer letter given to
Employee) relating to the subject matter of this Agreement.
Section 18. Survival of Operative Sections. Upon any termination of Employee’s employment, the provisions of Section 7 through
Section 19 of this Agreement (together with any related definitions set forth in Section 1 hereof) shall survive to the
extent necessary to give effect to the provisions thereof.
Section 19. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but
all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile
signature.
Section 20. Gender Neutral. Wherever used herein, a pronoun in the masculine gender shall be considered as including the feminine gender
unless the context clearly indicates otherwise.
Section 21. Expenses.
The Company agrees to pay (i) Employee’s reasonable legal, accounting and other expenses incurred in connection with the
negotiation and execution of this Agreement and the consummation of the transactions contemplated by and related to this Agreement
and (ii) any reasonable legal fees incurred in connection with any amendment, modification or waiver of any of the provisions
of this Agreement or any other agreement between Employee and the Company; provided, that the aggregate amount of the expenses
to be reimbursed pursuant to clause (i) and (ii) shall not exceed $15,000 in the aggregate.
IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date first above written.
NEURALSTEM, INC. |
|
|
|
|
/s/ |
By: Dr. Karl Johe |
|
|
Title: Chairman of the Board |
|
|
EMPLOYEE |
|
|
|
|
/s/ |
By: Richard Daly |
|
|
EXHIBIT A
General Release and Waiver of Claims
In exchange for the
severance benefits to be provided to me under the Employment Agreement between me and Neuralstem, Inc. (the “Company”),
dated as of February [*], 2016 (the “Employment Agreement”), to which I would not otherwise be entitled, on my own
behalf and that of my heirs, executors, administrators, beneficiaries, personal representatives and assigns, I agree that this
General Release and Waiver of Claims (the “Release of Claims”) shall be in complete and final settlement of any and
all causes of action, rights and claims, whether known or unknown, accrued or unaccrued, contingent or otherwise, that I have had
in the past, now have, or might now have, in any way related to, connected with or arising out of my employment or its termination,
under the Employment Agreement, or pursuant to Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,
the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, the Worker Adjustment and Retraining
Notification Act, the Employee Retirement Income Security Act, the wage and hour, wage payment and fair employment practices laws
and statutes of the State of Maryland (each as amended from time to time), and/or any other federal, state or local law, regulation
or other requirement (collectively, the “ Claims ”), and I hereby release and forever discharge the Company,
its subsidiaries and all of their respective past, present and future directors, shareholders, officers, members, managers, general
and limited partners, employees, employee benefit plans, administrators, trustees, agents, representatives, successors and assigns,
and all others connected with any of them, both individually and in their official capacities, from, and I hereby waive, any and
all such Claims. This release shall not apply to (a) any claims that arise after I sign this Release of Claims, including
my right to enforce the terms of this Release of Claims; (b) any claims that may not be waived pursuant to applicable law;
(c) any right to indemnification that I may have under the certificate of incorporation or by-laws of the Company, and any
Indemnification Agreement between me and the Company or any insurance policies maintained by the Company; or (d) any right
to receive any vested benefits under the terms of any employee benefit plans and my award agreements thereunder.
Nothing contained in this Release of Claims
shall be construed to prohibit me from filing a charge with or participating in any investigation or proceeding conducted by the
federal Equal Employment Opportunity Commission or a comparable state or local agency, provided, however, that I hereby agree to
waive my right to recover monetary damages or other individual relief in any charge, complaint or lawsuit filed by me or by anyone
else on my behalf.
In signing this Release of Claims, I acknowledge
my understanding that I may consider the terms of this Release of Claims for up to [twenty-one (21)/forty-five (45)]1
days from the date I receive it and that I may not sign this Release of Claims until after the date my employment with the Company
terminates. I also acknowledge that I am hereby advised by the Company to seek the advice of an attorney prior to signing this
Release of Claims; that I have had sufficient time to consider this Release of Claims and to consult with an attorney, if I wished
to do so, or to consult with any other person of my choosing before signing; and that I am signing this Release of Claims voluntarily
and with a full understanding of its terms.
I further acknowledge that, in signing
this Release of Claims, I have not relied on any promises or representations, express or implied, that are not set forth expressly
in the Release of Claims. I understand that I may revoke this Release of Claims at any time within seven (7) days of the date
of my signing by written notice to the Chairman of the Company’s Board of Directors and that this Release of Claims will
take effect only upon the expiration of such seven-day revocation period and only if I have not timely revoked it.
1To be determined by the Company
at the time of termination.
Intending to be legally bound, I have signed this Release of
Claims under seal as of the date written below.
Signature |
|
|
|
|
|
Name |
|
|
|
|
|
Date Signed |
|
|
EXHIBIT B
Confidentiality Information and Assignment
Agreement
Exhibit 10.02
nEURALSTEM,
INC.
CONFIDENTIAL
INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
Employee Name: Richard Daly
Effective Date: February 15, 2016
As a condition of
my becoming employed (or my employment being continued) by Neuralstem, Inc. a Delaware corporation, or any of its current or future
subsidiaries, affiliates, successors or assigns (collectively, the “Company”), and in consideration of my employment
with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following:
1. Relationship.
This Agreement will apply to my employment relationship with the Company. If that relationship ends and the Company, within
a year thereafter, either re-employs me or engages me as a consultant, I agree that this Agreement will also apply to such later
employment or consulting relationship, unless the Company and I otherwise agree in writing. Any such employment or consulting
relationship between the Company and me, whether commenced prior to, upon or after the date of this Agreement, is referred to
herein as the “Relationship.”
2. Duties.
I will perform for the Company such duties as may be designated by the Company from time to time or that are otherwise within
the scope of the Relationship and not contrary to instructions from the Company. During the Relationship, I will devote my entire
best business efforts to the interests of the Company and will not engage in other employment or in any activities detrimental
to the best interests of the Company without the prior written consent of the Company.
3. Confidential
Information.
(a) Protection
of Information. I agree, at all times during the term of the Relationship and thereafter, to hold in strictest confidence,
and not to use, except for the benefit of the Company to the extent necessary to perform my obligations to the Company under the
Relationship, and not to disclose to any person, firm, corporation or other entity, without written authorization from the Company
in each instance, any Confidential Information (as defined below) that I obtain, access or create during the term of the Relationship,
whether or not during working hours, until such Confidential Information becomes publicly and widely known and made generally
available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved.
I further agree not to make copies of such Confidential Information except as authorized by the Company.
(b) Confidential
Information. I understand that “Confidential Information” means information and physical material not
generally known or available outside the Company and information and physical material entrusted to the Company in confidence
by third parties. Confidential Information includes, without limitation: (i) Company Inventions (as defined below); (ii) technical
data, trade secrets, know-how, research, product or service ideas or plans, software codes and designs, developments, inventions,
laboratory notebooks, processes, formulas, techniques, biological materials, mask works, engineering designs and drawings, hardware
configuration information, lists of, or information relating to, suppliers and customers (including, but not limited to, customers
of the Company on whom I called or with whom I became acquainted during the Relationship), price lists, pricing methodologies,
cost data, market share data, marketing plans, licenses, contract information, business plans, financial forecasts, historical
financial data, budgets or other business information disclosed to me by the Company either directly or indirectly, whether in
writing, electronically, orally, or by observation.
(c) Third
Party Information. My agreements in this Section 3 are intended to be for the benefit of the Company and any third
party that has entrusted information or physical material to the Company in confidence.
(d) Other
Rights. This Agreement is intended to supplement, and not to supersede, any rights the Company may have in law or equity
with respect to the protection of trade secrets or confidential or proprietary information.
4. Ownership
of Inventions.
(a) Inventions
Retained and Licensed. I have attached hereto, as Exhibit A, a complete list describing with particularity all
Inventions (as defined below) that, as of the Effective Date, belong solely to me or belong to me jointly with others, and that
relate in any way to any of the Company’s proposed businesses, products or research and development, and which are not assigned
to the Company hereunder; or, if no such list is attached, I represent that there are no such Inventions at the time of signing
this Agreement.
(b) Use
or Incorporation of Inventions. If in the course of the Relationship, I use or incorporate into a product, process or
machine any Invention not covered by Section 4(d) of this Agreement in which I have an interest, I will promptly so inform
the Company. Whether or not I give such notice, I hereby irrevocably grant to the Company a nonexclusive, fully paid-up, royalty-free,
assumable, perpetual, worldwide license, with right to transfer and to sublicense, to practice and exploit such Invention and
to make, have made, copy, modify, make derivative works of, use, sell, import, and otherwise distribute under all applicable intellectual
properties without restriction of any kind.
(c) Inventions.
I understand that “Inventions” means discoveries, developments, concepts, designs, ideas, know how, improvements,
inventions, trade secrets and/or original works of authorship, whether or not patentable, copyrightable or otherwise legally protectable.
I understand this includes, but is not limited to, any new product, machine, article of manufacture, biological material, method,
procedure, process, technique, use, equipment, device, apparatus, system, compound, formulation, composition of matter, design
or configuration of any kind, or any improvement thereon. I understand that “Company Inventions” means any
and all Inventions that I may solely or jointly author, discover, develop, conceive, or reduce to practice during the period of
the Relationship, except as otherwise provided in Section 4(g) below.
(d) Assignment
of Company Inventions. I agree that I will promptly make full written disclosure to the Company, will hold in trust for
the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title and interest
throughout the world in and to any and all Company Inventions. I further acknowledge that all Company Inventions that are made
by me (solely or jointly with others) within the scope of and during the period of the Relationship are “works made for
hire” (to the greatest extent permitted by applicable law) and are compensated by my salary. I hereby waive and irrevocably
quitclaim to the Company or its designee any and all claims, of any nature whatsoever, that I now have or may hereafter have for
infringement of any and all Company Inventions.
(e) Maintenance
of Records. I agree to keep and maintain adequate and current written records of all Company Inventions made by me (solely
or jointly with others) during the term of the Relationship. The records may be in the form of notes, sketches, drawings, flow
charts, electronic data or recordings, laboratory notebooks, or any other format. The records will be available to and remain
the sole property of the Company at all times. I agree not to remove such records from the Company’s place of business except
as expressly permitted by Company policy which may, from time to time, be revised at the sole election of the Company for the
purpose of furthering the Company’s business. I agree to deliver all such records (including any copies thereof) to the
Company at the time of termination of the Relationship as provided for in Sections 5 and 6.
(f) Patent
and Copyright Rights. I agree to assist the Company, or its designee, at its expense, in every proper way to secure the
Company’s, or its designee’s, rights in the Company Inventions and any copyrights, patents, trademarks, mask
work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure
to the Company or its designee of all pertinent information and data with respect thereto, the execution of all applications,
specifications, oaths, assignments, recordations, and all other instruments which the Company or its designee shall deem necessary
in order to apply for, obtain, maintain and transfer such rights, or if not transferable, waive such rights, and in order to assign
and convey to the Company or its designee, and any successors, assigns and nominees the sole and exclusive right, title and interest
in and to such Company Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating
thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument
or papers shall continue during and at all times after the end of the Relationship and until the expiration of the last such intellectual
property right to expire in any country of the world. I hereby irrevocably designate and appoint the Company and its duly
authorized officers and agents as my agent and attorney-in-fact, to act for and in my behalf and stead to execute and file any
such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance
or transfer of letters of patents, copyright, mask work and other registrations related to such Company Inventions. This power
of attorney is coupled with an interest and shall not be affected by my subsequent incapacity.
(g) Exception
to Assignments. I understand that the Company Inventions will not include, and the provisions of this Agreement requiring
assignment of inventions to the Company do not apply to, any invention which qualifies fully for exclusion under the provisions
of applicable state law or federal laws, if any. In order to assist in the determination of which inventions qualify for such
exclusion, I will advise the Company promptly in writing, during and after the term of the Relationship, of all Inventions solely
or jointly conceived or developed or reduced to practice by me during the period of the Relationship.
5. Company
Property; Returning Company Documents. I acknowledge and agree that I have no expectation of privacy with respect to the
Company’s telecommunications, networking or information processing systems (including, without limitation, files, e-mail
messages, and voice messages) and that my activity and any files or messages on or using any of those systems may be monitored
at any time without notice. I further agree that any property situated on the Company’s premises and owned by the Company,
including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at
any time with or without notice. I agree that, at the time of termination of the Relationship, I will deliver to the Company (and
will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals,
lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, materials, flow charts, equipment,
other documents or property, or reproductions of any of the aforementioned items developed by me pursuant to the Relationship
or otherwise belonging to the Company, its successors or assigns.
6. Termination
Certification. In the event of the termination of the Relationship, I agree to sign and deliver the “Termination
Certification” attached hereto as Exhibit B; however, my failure to sign and deliver the Termination Certification
shall in no way diminish my continuing obligations under this Agreement.
7. Notice
to Third Parties. I understand and agree that the Company may, with or without prior notice to me and during or after
the term of the Relationship, notify third parties of my agreements and obligations under this Agreement.
8. Solicitation
of Employees, Consultants and Other Parties. I agree that during the term of the Relationship, and for a period of twenty-four
(24) months immediately following the termination of the Relationship for any reason, whether with or without cause, I shall not
either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate
their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of
the Company, either for myself or for any other person or entity. Further, during the Relationship and at any time following the
termination of the Relationship for any reason, whether with or without cause, I shall not use any Confidential Information of
the Company to negatively influence any of the Company’s clients or customers from purchasing Company products or services
or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct
any purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the
business of the Company.
9. At-Will
Relationship. I understand and acknowledge that, except as may be otherwise explicitly provided in a separate written
agreement between the Company and me, my Relationship with the Company is and shall continue to be at-will, as defined under applicable
law, meaning that either I or the Company may terminate the Relationship at any time for any reason or no reason, without further
obligation or liability, other than those provisions of this Agreement that explicitly survive the termination of the Relationship.
10. Representations
and Covenants.
(a) Facilitation
of Agreement. I agree to execute promptly, both during and after the end of the Relationship, any proper oath, and to
verify any proper document, required to carry out the terms of this Agreement, upon the Company’s written request to do
so.
(b) No
Conflicts. I represent that my performance of all the terms of this Agreement does not and will not breach any agreement
I have entered into, or will enter into, with any third party, including without limitation any agreement to keep in confidence
proprietary information or materials acquired by me in confidence or in trust prior to or during the Relationship. I will not
disclose to the Company or use any inventions, confidential or non-public proprietary information or material belonging to any
previous client, employer or any other party. I will not induce the Company to use any inventions, confidential or non-public
proprietary information, or material belonging to any previous client, employer or any other party. I acknowledge and agree that
I have listed on Exhibit A all agreements (e.g., non-competition agreements, non-solicitation of customers agreements, non-solicitation
of employees agreements, confidentiality agreements, inventions agreements, etc.), if any, with a current or former client, employer,
or any other person or entity, that may restrict my ability to accept employment with the Company or my ability to recruit or
engage customers or service providers on behalf of the Company, or otherwise relate to or restrict my ability to perform my duties
for the Company or any obligation I may have to the Company. I agree not to enter into any written or oral agreement that conflicts
with the provisions of this Agreement.
(c) Voluntary
Execution. I certify and acknowledge that I have carefully read all of the provisions of this Agreement, that I understand
and have voluntarily accepted such provisions, and that I will fully and faithfully comply with such provisions.
11. General
Provisions.
(a) Governing
Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the
State of Maryland, without giving effect to the principles of conflict of laws.
(b) Entire
Agreement. This Agreement, along with the employment agreement between myself and the Company of even date herewith (“Employment
Agreement”) sets forth the entire agreement and understanding between the Company and me relating to its subject matter
and merges all prior discussions between us. No amendment to this Agreement will be effective unless in writing signed by both
parties to this Agreement. The Company shall not be deemed hereby to have waived any rights or remedies it may have in law or
equity, nor to have given any authorizations or waived any of its rights under this Agreement, unless, and only to the extent,
it does so by a specific writing signed by a duly authorized officer of the Company, it being understood that, even if I am an
officer of the Company, I will not have authority to give any such authorizations or waivers for the Company under this Agreement
without specific approval by the Board of Directors. Any subsequent change or changes in my duties, obligations, rights or compensation
will not affect the validity or scope of this Agreement.
(c) Severability.
If one or more of the provisions in this Agreement are deemed void or unenforceable to any extent in any context, such provisions
shall nevertheless be enforced to the fullest extent allowed by law in that and other contexts, and the validity and force of
the remainder of this Agreement shall not be affected.
(d) Successors
and Assigns. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives,
and my successors and assigns, and will be for the benefit of the Company, its successors, and its assigns.
(e) Remedies.
I acknowledge and agree that violation of this Agreement by me may cause the Company irreparable harm, and therefore agree
that the Company will be entitled to seek extraordinary relief in court, including, but not limited to, temporary restraining
orders, preliminary injunctions and permanent injunctions without the necessity of posting a bond or other security (or, where
such a bond or security is required, I agree that a $1,000 bond will be adequate), in addition to and without prejudice
to any other rights or remedies that the Company may have for a breach of this Agreement.
(f) ADVICE
OF COUNSEL. I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT
LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED
AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.
The parties have executed
this Agreement on the respective dates set forth below, to be effective as of the Effective Date first above written.
COMPANY: |
|
EMPLOYEE: |
|
|
|
NEURALSTEM, iNC. |
|
Richard Daly, an Individual |
|
|
|
By: |
|
|
|
|
|
|
|
Name: Dr. Karl Johe |
|
|
|
Title: Chairman of the Board |
|
|
(Signature) |
|
Date: |
|
|
Date: |
|
|
|
|
|
|
Address: |
20271 Goldenrod Lane, 2nd Floor |
|
Address: |
|
|
Germantown, MD 20876 |
|
|
|
EXHIBIT
A
LIST OF
PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
EXCLUDED UNDER SECTION 4(a)
Title | | |
Date | | |
Identifying Number or Brief Description | |
| | | |
| | | |
| | |
| | | |
| | | |
| | |
| | | |
| | | |
| | |
___ No inventions, improvements, or original works of authorship
___ Additional sheets attached
Signature of Employee: |
|
|
|
|
|
Print Name of Employee: |
|
|
|
|
|
Date: |
|
|
EXHIBIT
B
TERMINATION
CERTIFICATION
This is to certify
that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, flow charts, materials, equipment, other
documents or property, or copies or reproductions of any aforementioned items belonging to Neuralstem, Inc., a Delaware corporation,
its subsidiaries, affiliates, successors or assigns (collectively, the “Company”).
I further certify
that I have complied with all the terms of the Company’s Confidential Information and Invention Assignment Agreement signed
by me, including the reporting of any Inventions (as defined therein), conceived or made by me (solely or jointly with others)
covered by that agreement.
I further agree that,
in compliance with the Confidential Information and Invention Assignment Agreement, I will preserve as confidential all trade
secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas,
developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business
plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients,
consultants or licensees.
I further agree that
for twenty-four (24) months from the date of this Certification, I shall not either directly or indirectly solicit, induce, recruit
or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt
to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other
person or entity. Further, I shall not at any time use any Confidential Information of the Company to negatively influence any
of the Company’s clients or customers from purchasing Company products or services or to solicit or influence or attempt
to influence any client, customer or other person either directly or indirectly, to direct any purchase of products and/or services
to any person, firm, corporation, institution or other entity in competition with the business of the Company.
Exhibit 99.01
Neuralstem Appoints Richard Daly as President
and Chief Executive Officer
GERMANTOWN, MD, February 16, 2016 —
Neuralstem, Inc. (Nasdaq: CUR), a biopharmaceutical company focused on the development of central nervous system therapies based
on its neuronal stem cell technology, announced the appointment of Richard J. Daly to the position of President and Chief Executive
Officer, effective February 15, 2016. Mr. Daly brings to the position over 25 years of commercial pharmaceutical leadership experience
encompassing strategy, sales, marketing, and operations. Mr. Daly is also being appointed to the company’s Board of Directors.
Mr. Daly succeeds Richard Garr, J.D., who
served as President and Chief Executive Office since co-founding Neuralstem with the Chairman and Chief Scientific Officer, Karl
Johe, Ph.D., in 1996. Mr. Garr will continue to serve on the Board of Directors and will assist in the transition period to maintain
the momentum of the company’s corporate and clinical development initiatives.
“I have been extremely proud to be
a part of this dedicated team of exceptional scientific and medical professionals bringing this breakthrough science from the laboratory
through the clinic,” said Mr. Garr. “With Mr. Daly’s strong leadership and distinguished 25-year track record
across many areas of pharma expertise, I believe the company’s clinical and corporate strategies are poised for future commercialization
and potential partnerships.”
"Neuralstem's neurogenic platform
is an exciting and novel technology. We are focused on advancing the clinical programs toward commercialized therapies and creating
stakeholder value," commented Richard Daly.
Mr. Daly most recently served as Managing
Director of Ravine Rock Partners, LLC; a healthcare commercial performance acceleration firm where his expertise was leveraged
as the Interim Chief Commercial Officer of Catalyst Pharma until September 2015. Moreover, he led the turnaround initiatives of
Bristol-Myers Squibb – AstraZeneca Diabetes Alliance when serving as the President of the U.S. Diabetes subsidiary from 2013
through the AstraZeneca integration completion in 2014. Under Mr. Daly’s leadership the Alliance team successfully launched
two major products, Farxiga and Myalept.
From 2011-2013, Mr. Daly was
a founding Partner and Board Member of SagePath Partners LLC, a commercial outsourcing provider to the pharmaceutical industry.
SagePath was sold to Ashfield Commercial & Medical Services in 2013.
Mr. Daly was also part of the executive
leadership team that executed the formation and growth of Takeda North America. During his 13-year tenure, he served as Executive
Vice President, U.S., where he was responsible for new affiliates and business development for the Americas. His achievements include
building three new companies in the region and launching multiple products including Actos and Dexilant in the U.S
and Dexilant, Edarbi, and Mepact in new affiliate regions of Mexico and Canada. Earlier in his career, he
served as the Vice President of Commercial Strategy at TAP Pharmaceuticals, an Abbott Labs and Takeda joint-venture, and
Senior Vice President of Marketing at Takeda North America.
He currently serves on the boards of Catalyst
Pharmaceuticals and Synergy Pharmaceuticals. Mr. Daly earned an M.B.A. from Northwestern University’s Kellogg Graduate
School of Management and holds a B.S. in Microbiology from The University of Notre Dame.
Inducement Grant
In connection with Mr. Daly’s appointment
as President and CEO, on February 15, 2016, the Compensation Committee of the company's Board of Directors approved the grant
of non-qualified stock option to purchase 2,750,000 shares of the company’s common stock. The option has an exercise price
of the closing price of $0.69, a term of 10 years and vests as follows: 25% of the stock options vest on the six month anniversary
of Mr. Daly’s appointment; 25% of the stock options vest on the one year anniversary of Mr. Daly’s employment, and
the remaining options vest quarterly over a three year period thereafter. The grant was made as an inducement material to Mr.
Daly’s acceptance of employment with the Company in accordance with NASDAQ Listing Rule 5635(c)(4).
About Neuralstem
Neuralstem is a clinical development company
focused on the development of novel treatments for central nervous system disorders based on its proprietary neuronal stem cell
technology. This technology enables a dual platform to develop therapies in both small molecule compounds and stem cell therapies.
Neuralstem’s lead neurogenic small
molecule compound, NSI-189, is a novel therapy for the treatment of major depressive disorder. The company has completed Phase
1a and 1b trials and is expecting to initiate a Phase 2 efficacy study for MDD.
Neuralstem's ability to generate neural
stem cell lines from human hippocampus, which were used for systematic chemical screening for neurogenesis effect, has led to the
discovery and patenting of molecules that Neuralstem believes may stimulate the brain's capacity to generate new neurons, potentially
reversing pathophysiologies associated with certain central nervous system (CNS) conditions.
Neuralstem's patented technology enables
the commercial-scale production of multiple types of central nervous system stem cells, which are being developed as potential
therapies for many central nervous system diseases and conditions.
Neuralstem's first stem cell product candidate,
NSI-566, a spinal cord-derived neural stem cell line, is under development for treatment of amyotrophic lateral sclerosis (ALS).
Neuralstem has completed two clinical studies, in a total of thirty patients, which met primary safety endpoints. In addition to
ALS, NSI-566 is also being tested in a Phase 1 study to treat paralysis due to chronic spinal cord injury, as well as in a Phase
1 study to treat paralysis from ischemic stroke.
Neuralstem's next generation stem cell
product, NSI-532.IGF, consists of human cortex-derived neural stem cells that have been engineered to secrete human insulin-like
growth factor 1 (IGF-1) protein. The treatment is currently in preclinical investigation for Alzheimer's disease (AD). In animal
study reported at the 2015 Annual Meeting of the American Neurological Association, the cells improved cognition and reduced amyloid
beta (Aβ) plaque load in AD mice.
For more information, please visit www.neuralstem.com
or connect with us on Twitter, Facebook and LinkedIn.
Cautionary Statement Regarding Forward
Looking Information:
This news release contains "forward-looking
statements" made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements relate to future, not past, events and may often be identified by words such as "expect,"
"anticipate," "intend," "plan," "believe," "seek" or "will." Forward-looking
statements by their nature address matters that are, to different degrees, uncertain. Specific risks and uncertainties that could
cause our actual results to differ materially from those expressed in our forward-looking statements include risks inherent in
the development and commercialization of potential products, uncertainty of clinical trial results or regulatory approvals or clearances,
need for future capital, dependence upon collaborators and maintenance of our intellectual property rights. Actual results may
differ materially from the results anticipated in these forward-looking statements. Additional information on potential factors
that could affect our results and other risks and uncertainties are detailed from time to time in Neuralstem's periodic reports,
including the Annual Report on Form 10-K for the year ended December 31, 2014, and Form 10-Q for the three and nine months ended
September 30, 2015, filed with the Securities and Exchange Commission (SEC), and in other reports filed with the SEC.
# # #
Neuralstem (NASDAQ:CUR)
Historical Stock Chart
From May 2024 to Jun 2024
Neuralstem (NASDAQ:CUR)
Historical Stock Chart
From Jun 2023 to Jun 2024