[Date]
Joshua H. Bilenker
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Re:
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Amended and Restated Offer of Employment by Treeline Biosciences, Inc.
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Dear Josh:
On behalf of Treeline Biosciences, Inc. (the “Company”), the Board of Directors of the Company (the “Board”) is very pleased to offer you this amended and restated
employment agreement (the “Agreement”):
1.
Position; Chief Executive Officer. You shall continue to serve as the Company’s President and Chief Executive Officer with such duties, authority, and
responsibilities that are consistent with such position.
2.
Cash Compensation.
(a)
Base Salary. Your salary will be Five Hundred Forty Nine Thousand Three Hundred Twenty One Dollars ($549,321) per year, payable in accordance with the Company’s
standard payroll schedule and subject to adjustment pursuant to the Company’s employee compensation policies in effect from time to time.
(b)
Annual Bonus. You will be eligible for a bonus for each fiscal year that you remain employed with the Company with a target of sixty percent (60%) of your then
current base salary, subject to pro rata adjustment for any partial years worked (the “Bonus”). The Bonus will be based upon individual and Company achievement of milestones or goals agreed upon by you and the Board within 60 days following the
beginning of each new fiscal year. Any Bonus you earn for a fiscal year will be paid within 21/2 months after the close of that fiscal year. The determinations of
the Board with respect to your Bonus will be final, conclusive and binding.
3.
Benefits. You are eligible to participate in regular health insurance, bonus and other employee benefit plans established by the Company for its employees and
executives from time to time. Notwithstanding the Company’s formal travel policy, you may elect to travel business class, or if business class is not available, first class on any flight that has a scheduled duration of four hours or more.
4.
Equity.
(a)
You have previously received certain grants of Company equity, such grants remain governed by their applicable terms and conditions (including without limitation the
Company’s Equity Incentive Plan (the “Plan”) and the applicable award agreements governing such awards).
(b)
You will be eligible to participate in any and all plans providing for awards of stock options, restricted stock awards, restricted stock units or other stock based
awards, including but not limited to stock bonus awards, restricted stock, restricted stock units or stock appreciation rights (“Equity Awards”) adopted by the Company and applicable generally to other senior executives of the Company, including
without limitation the Plan). The grant and terms of any Equity Award is subject to the Board’s approval. Unless otherwise expressly set forth in the award agreement governing an Equity Award, if in connection with a Change of Control (as defined
below) the acquirer or the successor corporation in such Change of Control does not assume such Equity Award or replace such Equity Award with an equivalent equity-based incentive instrument, then such Equity Award will immediately become 100%
vested and no longer be subject to any forfeiture restrictions.
5.
Termination of Employment.
(a)
Accrued Compensation. In the event your employment with the Company terminates for any reason, you will receive any unpaid base salary, together with any accrued
but unused vacation, that is earned through the effective termination date (the “Accrued Compensation”).
(b)
Severance Not in Connection with a Change of Control. If your employment with the Company is terminated (X) by the Company for any reason other than (i) for Cause,
(ii) due to your death or (iii) due to your Disability (as defined below) or (Y) by you for Good Reason, in each case not in connection with the consummation of a Change of Control, you will receive the Accrued Compensation, and, conditioned on
your (A) delivering to the Company a signed settlement agreement and general release of claims in favor of the Company in a form to be provided by the Company (the “Release”) and satisfying all conditions to make the Release effective and
enforceable within sixty (60) days following your termination of employment, (B) complying with the non-competition provisions set forth in Section 6 below and (C) resigning from the Board (if applicable) on the date that your employment
terminates, you will also receive the following beginning on the Company’s first regular payroll date that is at least sixty (60) days following your termination of employment:
(i)
continuation of your then current base salary for eighteen (18) months beyond the effective termination date, payable in accordance with the regular payroll practices of
the Company, provided that the first installment will include a catch-up payment covering the amount that would have otherwise been paid during the period between your termination of employment and the first payment date and the balance of the
installments will be payable in accordance with the Company’s regular payroll schedule;
(ii)
eighteen (18) months of additional vesting for all of your then outstanding and unvested Equity Awards, including awards that would otherwise vest only upon satisfaction
of performance criteria at the target levels; and
(iii)
if you elect to continue your health insurance coverage pursuant to your rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”)
following the termination of your employment, then the Company shall pay you an amount equal to the monthly COBRA premium that you would be required to pay to continue your group health, dental and vision coverage in effect on the date the
termination of your employment becomes effective (which amount shall be based on the premium for the first month of COBRA coverage), including coverage for your eligible dependents, until the earlier of (x) eighteen (18) months following the
effective termination date, (y) the date upon which you become eligible to receive substantially similar coverage from another employer and (z) the date that you are no longer eligible to receive COBRA coverage.
Notwithstanding the foregoing, (1) if you do not agree to be bound by the post-termination non-competition provisions in Section 6(b) below, you will have no rights to the payments and benefits set forth in this
Section 5 and (2) if you agree to the terms and conditions in Section 6(b) below and you subsequently breach any such terms, you will have no further rights to payments or benefits set forth in this Section 5(b).
(c)
Severance in Connection with a Change of Control. If your employment with the Company is terminated by the Company for any reason other than (i) for Cause, (ii) due
to your death or (iii) due to your Disability (as defined below), or if your employment with the Company is terminated by you for Good Reason, in each case in connection with the consummation of a Change of Control, you will receive the Accrued
Compensation, and, conditioned on your (A) delivering to the Company a signed Release and satisfying all conditions to make the Release effective and enforceable within sixty (60) days following your termination of employment, (B) complying with
the non-competition provisions set forth in Section 6 below, (C) resigning from the Board (if applicable) on the date that your employment terminates, and (D) returning to the Company all of its property and confidential information that is in
your possession and/or control, you will also receive the following beginning on the Company’s first regular payroll date that is at least sixty (60) days following your termination of employment:
(i)
an amount equal to twenty-four (24) months of your current base salary, paid in a lump sum, payable on the first regular payroll date that is at least sixty (60) days
following your termination of employment;
(ii)
a lump sum payment equal to two times your target Bonus for the year in which the termination of your employment occurs, payable on the first regular payroll date that is
at least sixty (60) days following your termination of employment;
(iii)
100% of your then outstanding and unvested Equity Awards will immediately vest and no longer be subject to any forfeiture restrictions, including awards that would
otherwise vest at target only upon satisfaction of performance criteria; and
(iv)
if you elect to continue your health insurance coverage pursuant to your rights under COBRA following the termination of your employment, then the Company shall pay you an
amount equal to the monthly COBRA premium that you would be required to pay to continue your group health, dental and vision coverage in effect on the date the termination of your employment becomes effective (which amount shall be based on the
premium for the first month of COBRA coverage), including coverage for your eligible dependents, until the earlier of (x) twenty-four (24) months following the effective termination date, (y) the date upon which you become eligible to receive
substantially similar coverage from another employer and (z) the date that you are no longer eligible to receive COBRA coverage.
A termination of employment shall be considered to be in connection with consummation of a Change of Control if the termination occurs within twelve (12) months following a Change of Control or
within three (3) months preceding a Change of Control (if after a Potential Change of Control). A “Potential Change of Control” means the date of execution of a definitive agreement whereby the Company will consummate a Change of Control if such
transaction is consummated. In the case of a termination following a Potential Change of Control and before a Change of Control, solely for purposes of benefits under this Agreement, the date of your termination of employment will be deemed the
date the Change of Control is consummated.
(d)
Severance in Connection with Disability or Death. If your employment with the Company is terminated by the Company (i) due to your death or (ii) due to your
Disability, you or your estate will receive the Accrued Compensation, and, conditioned on you or your estate, as applicable (A) delivering to the Company a signed Release and satisfying all conditions to make the Release effective and enforceable
within sixty (60) days following your termination of employment, (B) complying with the non-competition provisions set forth in Section 6 below, (C) resigning from the Board (if applicable) on the date that your employment terminates, and (D)
returning to the Company all of its property and confidential information that is in your possession and/or control, you or your estate will also receive the following beginning on the Company’s first regular payroll date that is at least sixty
(60) days following your termination of employment:
(i)
if your death or termination of employment for Disability occurs on or within twelve (12) months following the consummation of a Change of Control, 100% of your then
outstanding and unvested Equity Awards will immediately vest and no longer be subject to any forfeiture restrictions, including awards that would otherwise vest only upon satisfaction of performance criteria; and
(ii)
if you, or in the event of your death, your eligible dependents elect to continue your health insurance coverage pursuant to your rights under COBRA following the
termination of your employment, then the Company shall pay you or your eligible dependents an amount equal to the monthly COBRA premium that you would be required to pay to continue your group health, dental and vision coverage in effect on the
date the termination of your employment becomes effective (which amount shall be based on the premium for the first month of COBRA coverage) until the earlier of (x) eighteen (18) months following the effective termination date, (y) the date upon
which you or your eligible dependents become eligible to receive substantially similar coverage from another employer and (z) the date that you or your eligible dependents are no longer eligible to receive COBRA coverage.
(e)
Definitions. As used in this Agreement:
(i)
“Cause” means any of the following: (A) you willfully engage in conduct that is in bad faith and materially injurious to the Company, including but not limited to,
misappropriation of trade secrets, fraud or embezzlement; (B) your material breach of any written employment or equity agreement between you and the Company that causes harm to the Company, which breach, if curable, is not cured within thirty
(30) days after receipt of written notice describing in detail such breach to you from the Company; (C) you willfully refuse to implement or follow a lawful directive by the Board, directly related to your duties, which breach, if curable, is not
cured within thirty (30) days after receipt of written notice describing in detail such breach to you from the Company; (D) you engage in material misfeasance or malfeasance demonstrated by a continued pattern of material failure to perform the
essential job duties associated with your position, which breach, if curable, is not cured within thirty (30) days after receipt of written notice describing in detail such breach to you from the Company; (E) your conviction of (including any
plea of no contest to) a felony or a crime involving moral turpitude; or (F) your material breach of the Employee Invention Assignment Confidentiality Agreement or similar agreement entered into between you and the Company.
(ii)
“Change of Control” means a “Corporate Transaction,” as such term is defined in the Plan, provided that with respect to any
compensation that constitutes non-qualified deferred compensation pursuant to Code Section 409A, the transaction (including any series of transactions) also qualifies as a change in control event under U.S. Treasury Regulation 1.409A-3(i)(5). .
(iii)
“Disability” shall have that meaning set forth in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”).
(iv)
“Good Reason” means any of the following actions by the Company without your written consent and provided (A) the Company receives, within sixty (60) days following the
occurrence of any of the events set forth in clauses (1) through (4) below, written notice from you specifying the specific basis for your belief that you are entitled to terminate employment for Good Reason, (B) the Company fails to cure the
event constituting Good Reason within thirty (30) days after receipt of such written notice thereof, and (C) you terminate your employment within thirty (30) days following expiration of such cure period: (1) you are not Chief Executive Officer
of the parent company following any Change of Control, (2) solely following a Change of Control, the requirement that you change your principal office to a facility that increases your one-way commute by more than thirty-five (35) miles, (3)
solely following a Change of Control, the Company’s material breach of this Agreement or another written agreement between you and the Company governing an Equity Award; or (4) a material reduction in your annual base salary in effect immediately
prior to such reduction.
6.
Confidentiality; Non-Competition.
(a)
Confidentiality. As an employee of the Company, you will have access to certain confidential information of the Company and you may, during the course of your
employment, develop certain information or inventions that will be the property of the Company. To protect the interests of the Company, you will continue to be bound by the terms of the Employee Invention Assignment and Confidentiality Agreement
that you and the Company previously executed. We wish to impress upon you that we do not want you to, and we hereby direct you not to, bring with you any confidential or proprietary material of any former employer or to violate any other
obligations you may have to any former employer.
(b)
Non-Competition. During the period that you render services to the Company, you agree to not engage in any employment, business or activity that is in any way
competitive with the business or proposed business of the Company. You will disclose to the Company in writing any other gainful employment, business or activity that you are currently associated with or participate in that competes with the
Company. You will not assist any other person or organization in competing with the Company or in preparing to engage in competition with the business or proposed business of the Company. In consideration of your employment with the Company, you
agree that during the period that is twelve (12) months following the termination of your employment either (x) for Cause or without Good Reason in connection with the consummation of a Change of Control or (y) without Cause or for Good Reason in
connection with the consummation of a Change of Control following which you accept the payments and benefits set forth in Section 5, you will not:
(i)
serve as an officer, director, stockholder, employee or consultant of any person, corporation, firm, partnership or other entity that is engaged in the Business within any
geographic area in which you, during any time within the last two (2) years of your employment, provided services to the Company or had material presence or influence; provided, however, that you may work for a private equity firm, venture
capital fund or other investment vehicle that makes investments in early stage companies so long as you do not participate in or influence the investment decision process of such fund or vehicle on transactions involving the Business;
(ii)
directly or indirectly, individually or with others solicit, induce, persuade or entice, or attempt to do so, or otherwise cause, or attempt to cause, any employee or
independent contractor of the Company (or any of its subsidiaries or affiliates) to terminate his employment or contracting relationship in order to become an employee, or independent contractor to or for any other person or entity.
For purposes of this Agreement, “Business” means any person or entity (including any business in planning or formation), that, as of the date of commencement of your work or
provision of services for such person or entity, currently does or intends to (directly or indirectly) develop, manufacture, produce, market or sell any compound directed to a Company Target, or any product containing such compound. “Company Target” means a target for which, as of the date of the termination of your employment, the Company or any of affiliates is developing, manufacturing, producing, marketing or selling
any compound directed to such target, or any product containing such compound.
Notwithstanding the foregoing, in the event of the termination of your employment by the Company without Cause, or your resignation for Good Reason in connection with the
consummation of a Change of Control, you may elect not to be bound by the post-termination non-competition provisions set forth herein and you will forfeit all rights to the payments and benefits set forth in Section 5.
7.
At Will Employment. With this Agreement, you will remain an at-will employee of the Company, which means the employment relationship can be terminated by either of
us for any reason, at any time, with or without prior notice and with or without cause. Any statements or representations to the contrary (and, indeed, any statements contradicting any provision in this Agreement) should be regarded by you as
ineffective. Further, your participation in any stock option or benefit program is not to be regarded as assuring you of continuing employment for any particular period of time. Any modification or change in your at will employment status may
only occur by way of a written employment agreement signed by you and the Board.
8.
Indemnification. During your employment and thereafter, the Company shall indemnify and hold you and your heirs and representatives harmless, to the maximum extent
permitted or required by the laws of the State of Delaware in effect on the date of this Agreement or as such laws may from time to time hereafter be amended to increase the scope of such permitted indemnification, against any and all damages,
costs, liabilities, losses and expenses (including reasonable attorneys’ fees) as a result of any claim or proceeding (whether civil, criminal, administrative or investigative), or any threatened claim or proceeding (whether civil, criminal,
administrative or investigative), against you that arises out of or relates to your service as an officer, director or employee, as the case may be, of the Company, or your service in any such capacity or similar capacity with any affiliate of
the Company or other entity at the Company’s request (collectively, “Claims”), both prior to and after the date of this Agreement. Notwithstanding the foregoing, you will not be entitled to indemnification under this Section in connection with
any Claim initiated by you against the Company or any director or officer of the Company unless the Company has joined in or consented to the initiation of that Claim. The Company will promptly advance to you or your heirs or representatives such
expenses, including litigation costs and attorneys’ fees, upon written request with appropriate documentation of such expenses upon receipt of an undertaking by you or on your behalf to repay such amount if it shall ultimately be determined that
you are not entitled to be indemnified by the Company. If you have any knowledge of any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative, as to which you may request indemnity under this
provision, you will notify the Company promptly in writing of the potential Claim; provided that the failure to give such notice shall not affect your right to indemnification. The Company shall be entitled to assume the defense of any such
proceeding and you will use reasonable efforts to cooperate with such defense. To the extent that you determine in good faith that there is an actual or potential conflict of interest between the Company and you in connection with the defense of
a proceeding, you will so notify the Company and will be entitled to separate representation at the Company’s expense by counsel selected by you (provided that the Company may reasonably object to the selection of counsel within ten (10) business
days after notification thereof) which counsel shall cooperate, and coordinate the defense, with the Company’s counsel and minimize the expense of such separate representation to the extent consistent with your separate defense.
9.
Arbitration. You and the Company agree to submit to mandatory binding arbitration any and all claims arising out of or related to your employment with the Company
and the termination thereof, including, but not limited to, claims for unpaid wages, wrongful termination, torts, stock or stock options or other ownership interest in the Company, and/or discrimination (including harassment) based upon any
federal, state or local ordinance, statute, regulation or constitutional provision. All arbitration hearings shall be conducted in the State of Connecticut. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO SUCH
CLAIMS. This Agreement does not restrict your right to file administrative claims you may bring before any government agency where, as a matter of law, the parties may not restrict the employee’s ability to file such claims (including, but not
limited to, the National Labor Relations Board, the Equal Employment Opportunity Commission and the Department of Labor). However, the parties agree that, to the fullest extent permitted by law, arbitration shall be the exclusive remedy for the
subject matter of such administrative claims. The arbitration shall be conducted through JAMS before a single neutral arbitrator, in accordance with the JAMS employment arbitration rules then in effect. The JAMS rules may be found and reviewed at
http://www.jamsadr.com/rules-employment-arbitration. If you are unable to access these rules, please let me know and I will provide you with a hardcopy.
The arbitrator shall issue a written decision that contains the essential findings and conclusions on which the decision is based.
10.
Tax Matters.
(a)
Withholding. All forms of compensation referred to in this Agreement are subject to reduction to reflect applicable withholding and payroll taxes and other
deductions required by law.
(b)
Tax Advice. You are encouraged to obtain your own tax advice regarding your compensation from the Company. You agree that the Company does not have a duty to design
its compensation policies in a manner that minimizes your tax liabilities, and you will not make any claim against the Company or the Board related to tax liabilities arising from your compensation.
(c)
Section 409A. To the extent (i) any payments or benefits to which you become entitled under this Agreement, or under any agreement or plan referenced herein, in
connection with your termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code and (ii) you are deemed at the time of such termination of employment to be a “specified employee” under Section
409A of the Code, then such payments shall not be made or commenced until the earliest of (x) the expiration of the six-month period measured from the date of your “separation from service” (as such term is at the time defined in Treasury
Regulations under Section 409A) from the Company; or (y) the date of your death following such separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to you,
including, without limitation, the additional twenty percent (20%) tax for which you would otherwise be liable under Section 409A(a)(1)(B) of the Code in the absence of such deferral. Upon the expiration of the applicable deferral period, any
payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid you or your beneficiary in one lump sum (without interest). Any termination of your
employment that would entitle you to receive the payments and benefits set forth in Sections 5(b) or (c) must also constitute a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1. If the termination of your
employment does constitute a separation from service, the payments and benefits provided under Sections 5(b) or (c) will be delayed until such time as you incur a “separation from service.” It is intended that each installment of the payments
provided hereunder constitute separate “payments” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). It is further intended that payments hereunder satisfy, to the greatest extent possible, the exemption from the application of Code
Section 409A (and any state law of similar effect) provided under Treasury Regulation Section 1.409A-1(b)(4) (as a “short-term deferral”) and that the installment severance payments set forth in Section 5(b)(i) of this Agreement be divided into
two portions: the first portion will include a number of installment payments commencing on the first payment date set forth in Section 5(b)(i) of this Agreement that are in the aggregate less than two times the applicable compensation limit
under Section 401(a)(17) of the Code for the year in which the termination of your employment occurs shall be payable in accordance with Treas. Reg. §1.409A-1(b)(9)(iii) as an involuntary separation plan. The remainder of the installments (if
any) will be paid consistent with the terms of this Section. Except as otherwise expressly provided herein, to the extent any expense reimbursement or the provision of any in-kind benefit under this Agreement is determined to be subject to
Section 409A of the Code, the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable year (except for any
lifetime or other aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which you incurred such expenses, and in no event shall
any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.
(d)
Section 280G. If (i) any amounts payable to you under this Agreement or otherwise are characterized as excess parachute payments pursuant to Section 4999 of the
Code, and (ii) you thereby would be subject to any United States federal excise tax due to that characterization, then your termination benefits hereunder will be payable either in full or in a lesser amount, whichever would result, after taking
into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, in your receipt on an after-tax basis of the greatest amount of termination and other benefits. The determination of any reduction
required pursuant to this section (including the determination as to which specific payments shall be reduced) shall be made by a nationally recognized accounting firm doing business in the United States which otherwise does not perform services
for the Company (which will be chosen by the mutual agreement of you and Company, such services to be paid by the Company), and such determination shall be conclusive and binding upon the Company or any related corporation for all purposes. If
required, the payments and benefits under this Agreement shall be reduced in the following order: (x) a pro rata reduction of (A) cash payments that are subject to Section 409A of the Code as deferred compensation and (B) cash payments not
subject to Section 409A of the Code; (y) a pro rata reduction of (A) employee benefits that are subject to Section 409A of the Code as deferred compensation and (B) employee benefits not subject to Section 409A of the Code; and (z) a pro rata
cancellation of (A) accelerated vesting of stock and other equity-based awards that are subject to Section 409A of the Code as deferred compensation and (B) stock and other equity-based awards not subject to Section 409A of the Code. In the event
that acceleration of vesting of stock and other equity-based award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of your stock and other equity-based awards unless you
elect in writing a different order for cancellation.
11.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut without reference to conflict of laws.
12.
Severability. If any provision of this Agreement shall be found by any arbitrator or court of competent jurisdiction
to be invalid or unenforceable, then the parties hereby waive such provision to the extent of its invalidity or unenforceability, and agree that all other provisions in this Agreement shall continue in full force and effect.
13.
Entire Agreement. This offer, once accepted, together with any Equity Awards previously granted to you and the Employee Invention Assignment and Confidentiality
Agreement constitutes the entire agreement between you and the Company with respect to the subject matter hereof and supersedes all prior offers, negotiations and agreements, if any, whether written or oral, including all prior employment offer
letters you entered into with the Company (including the prior offer letter executed on April 2, 2021 (the “Prior Offer Letter”) and any agreements referenced in the Prior Offer Letter, relating to such subject matter. You acknowledge that
neither the Company nor its agents have made any promise, representation or warranty whatsoever, either express or implied, written or oral, which is not contained in this Agreement for the purpose of inducing you to execute the Agreement, and
you acknowledge that you have executed this agreement in reliance only upon such promises, representations and warranties as are contained herein.
14.
Acceptance. If you decide to accept our offer, and I hope you will, please sign the enclosed copy of this Agreement in the space indicated and return it to me. Your
signature will acknowledge that you have read and understood and agreed to the terms and conditions of this offer letter and the attached documents, if any. Should you have anything else that you wish to discuss, please do not hesitate to call
me.
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Very truly yours,
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Director
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I have read and understood this Agreement, have been advised to consult with an attorney before signing this Agreement, and hereby acknowledge, accept and agree to the terms as set forth above and further
acknowledge that no other commitments were made to me as part of my employment offer except as specifically set forth herein.