As filed with the Securities and Exchange Commission on May 1, 2017.
Registration No. 333-217214
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Biohaven Pharmaceutical Holding Company Ltd.
(Exact name of registrant as specified in its charter)
British Virgin Islands |
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2834 |
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Not applicable |
(State or other jurisdiction of |
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(Primary Standard Industrial |
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(I.R.S. Employer |
incorporation or organization) |
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Classification Code Number) |
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Identification Number) |
c/o Biohaven Pharmaceuticals, Inc.
234 Church Street
New Haven, Connecticut 06510
(203) 404-0410
(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)
Vlad Coric, M.D.
Chief Executive Officer
Biohaven Pharmaceutical Holding Company Ltd.
234 Church Street
New Haven, Connecticut 06510
(203) 404-0410
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Darren K. DeStefano |
Patrick OBrien |
Brian F. Leaf |
Ropes & Gray LLP |
Divakar Gupta |
Prudential Tower |
Katie Kazem |
800 Boylston Street |
Cooley LLP |
Boston, MA 02199 |
11951 Freedom Drive |
(617) 951-7000 |
Reston, VA 20190-5656 |
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(703) 456-8000 |
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o |
Accelerated filer o |
Non-accelerated filer x |
Smaller reporting company o |
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(do not check if a smaller reporting company) |
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Emerging growth company x |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. x
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
EXPLANATORY NOTE
This Amendment No. 2 to the Registration Statement on Form S-1 (File No. 333-217214) of Biohaven Pharmaceutical Holding Company Ltd. is being filed solely to file Exhibits 3.3, 10.15, 10.16, 10.17, 10.18, 10.19, 10.20 and 10.21. This Amendment No. 2 does not modify any provision of the prospectus that forms a part of the Registration Statement. Accordingly, a preliminary prospectus has been omitted.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth all costs and expenses, other than underwriting discounts and commissions, payable by us in connection with this offering. All amounts shown are estimates except for the SEC registration fee, the Financial Industry Regulatory Authority, or FINRA, filing fee and the initial listing fee of the New York Stock Exchange.
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Amount to |
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be Paid |
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SEC registration fee |
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$ |
17,771 |
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FINRA filing fee |
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23,500 |
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New York Stock Exchange initial listing fee |
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150,000 |
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Printing and engraving expenses |
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315,000 |
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Legal fees and expenses |
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1,560,000 |
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Accountants fees and expenses |
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1,490,000 |
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Transfer agent and registrar fees and expenses |
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25,000 |
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Miscellaneous fees and expenses |
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48,729 |
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Total |
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$ |
3,630,000 |
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Item 14. Indemnification of Directors and Officers.
British Virgin Islands law does not limit the extent to which a companys articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Amended Memorandum and Articles of Association will provide for the indemnification of our directors against all losses or liabilities incurred or sustained by him or her as a director of our company in defending any proceedings, whether civil, criminal, administrative or investigative in which the director acted honestly and in good faith with a view to the best interest of the company and had no reasonable cause to believe that their conduct was unlawful.
Further, prior to the completion of this offering, we expect to enter into indemnification agreements with each of our directors and executive officers that may be broader than the specific indemnification provisions contained under British Virgin Islands law. These indemnification agreements will require us, among other things, to indemnify our directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements will also require us to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit, or proceeding. We believe that these agreements are necessary to attract and retain qualified individuals to serve as directors and executive officers.
The limitation of liability and indemnification provisions that are expected to be included in our memorandum and articles of association and in indemnification agreements that we enter into with our directors and executive officers may discourage shareholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other shareholders. Further, a shareholders investment may be harmed to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification provisions. At present, we are not aware of any pending litigation or proceeding involving any
person who is or was one of our directors, officers, employees or other agents or is or was serving at our request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.
We have obtained insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law.
The underwriting agreement filed as Exhibit 1.1 to this registration statement provides for indemnification by the underwriters of us and our officers and directors for certain liabilities arising under the Securities Act of 1933, as amended, or the Securities Act, and otherwise.
Item 15. Recent Sales of Unregistered Securities.
Issuances of Capital Stock
The following list sets forth information regarding all unregistered securities sold by us since January 1, 2014 through the date of the prospectus that forms a part of this registration statement.
1) In January 2014, we issued 5,752,000 common shares to one investor at a purchase price of $0.61 per share, for aggregate consideration of $3.5 million.
2) In July 2015, we issued an aggregate of 867,000 common shares to three investors at a purchase price of $5.60 per share, for aggregate consideration of $4.9 million.
3) In August 2015, we issued 50,000 common shares with a value of $0.3 million to a third party in partial settlement of amounts due under a license agreement.
4) In August 2015, as part of our license agreement, we issued ALS Biopharma, LLC warrants to purchase an aggregate of 600,000 of our common shares with an exercise price of $5.60 per share.
5) In February 2016, we issued an aggregate of 429,000 common shares to two investors at a purchase price of $7.00 per share, for aggregate consideration of $3.0 million.
6) In May 2016 and June 2016, we issued an aggregate of 1,090,500 common shares to 10 investors at a purchase price of $7.70 per share, for aggregate consideration of $8.4 million.
7) In October 2016, we issued an aggregate of 4,305,209 Series A preferred shares to 45 investors at a purchase price of $9.2911 per share, for aggregate consideration of $40.0 million, 538,150 Series A preferred shares with a value of $5.0 million to a third party in satisfaction of our obligations under a license agreement and 105,010 Series A preferred shares with a value of $1.0 million to two third parties in connection with their placement services with respect to the Series A preferred financing.
8) In December 2016, we issued promissory notes in the aggregate principal amount of $0.6 million to the stockholders of Biohaven Pharmaceuticals, Inc. in connection with our purchase of all of the outstanding capital stock of BPI.
9) In January 2017, we issued warrants to two of our directors, each to purchase 107,500 of our common shares with an exercise price of $9.2911 per share, in connection with the directors guaranties related to our credit agreement with Wells Fargo.
10) In February 2017, we issued an aggregate of 4,305,182 Series A preferred shares to 45 investors at a purchase price of $9.2911 per share, for aggregate consideration of $40.0 million and 105,009 Series A preferred shares with a value of $1.2 million to two third parties in connection with their placement services with respect to the Series A preferred financing.
11) In March 2017, we issued 32,500 common shares plus $249,750 in cash to one shareholder in exchange for 500,000 shares of common stock of Kleo Pharmaceuticals, Inc.
The offers, sales and issuances of the securities described in the paragraphs above were exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act. Each of the purchasers represented to us that they acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. The purchasers also represented to us that they were accredited investors as defined in Rule 501 promulgated under the Securities Act.
Stock Option Grants
From January 1, 2014 through the date of the prospectus that is a part of this registration statement, we have granted options under our 2014 Equity Incentive Plan to purchase an aggregate of 4,898,858 common shares to employees, consultants and directors, having exercise prices ranging from $0.61 to $10.82 per share. We have not issued any common shares upon the exercise of stock options.
The offers, sales and issuances of the securities described in the foregoing paragraph were exempt from registration under Rule 701 promulgated under the Securities Act in that the transactions were under compensatory benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of such securities were our employees, directors or consultants and received the securities under our 2014 Equity Incentive Plan. Appropriate legends were affixed to the securities issued in these transactions.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
The exhibits to the registration statement are listed in the Exhibit Index attached hereto and incorporated by reference herein.
(b) Financial Statement Schedules.
No financial statement schedules have been submitted because they are not required or are not applicable or because the information required is included in the consolidated financial statements or the notes thereto.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Amendment No. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New Haven, State of Connecticut, on the 1st day of May, 2017.
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BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD. |
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By: |
/s/ Vlad Coric |
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Vlad Coric |
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Chief Executive Officer |
Pursuant to the requirements of the Securities Act, this Amendment No. 2 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
*By: |
/s/ VLAD CORIC |
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Vlad Coric, Attorney-in-fact |
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EXHIBIT INDEX
Exhibit
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Description of Document |
1.1 |
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Form of Underwriting Agreement. |
3.1 |
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Memorandum and Articles of Association, as currently in effect. |
3.2 |
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Amendment to Memorandum and Articles of Association dated April 21, 2017. |
3.3 |
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Amended and Restated Memorandum and Articles of Association, to be in effect upon the closing of this offering. |
4.1 |
* |
Investor Rights Agreement, dated as of October 31, 2016, by and among the Registrant and certain of its shareholders. |
4.2 |
* |
Term Note, dated August 30, 2016, issued to Wells Fargo Bank, National Association. |
4.3 |
* |
Warrant, dated January 26, 2017, issued to John Childs. |
4.4 |
* |
Warrant, dated January 26, 2017, issued to Gregory Bailey. |
4.5 |
* |
Warrants, dated August 15, 2015, issued to ALS Biopharma, LLC. |
5.1 |
* |
Opinion of Maples and Calder, British Virgin Islands counsel as to legality. |
10.1 |
#* |
License Agreement, by and between the registrant and Bristol-Myers Squibb Company, dated as of July 8, 2016. |
10.2 |
#* |
ALS Biopharma Agreement, by and among the registrant, ALS Biopharma, LLC and Fox Chase Chemical Diversity Center Inc., dated as of August 10, 2015, as amended to date. |
10.3 |
#* |
License Agreement, by and between the registrant and AstraZeneca AB, dated as of October 5, 2016. |
10.4 |
#* |
Agreement, by and between the registrant and Yale University, dated as of September 30, 2013, as amended to date. |
10.5 |
#* |
Zydis® Development and License Agreement, by and between the registrant and Catalent U.K. Swindon Zydis Limited, dated as of March 9, 2015. |
10.6 |
#* |
Exclusive Patent License Agreement, by and between the registrant and The General Hospital Corporation d/b/a Massachusetts General Hospital, dated as of September 13, 2014. |
10.7 |
#* |
Exclusive License Agreement, by and between the registrant and Rutgers, the State University of New Jersey, dated as of June 15, 2016. |
10.8 |
* |
Credit Agreement, by and between the registrant and Wells Fargo Bank, National Association, dated as of August 30, 2016. |
10.9 |
+* |
2014 Equity Incentive Plan. |
10.10 |
+* |
Form of Share Option Agreement under 2014 Equity Incentive Plan. |
10.11 |
+* |
Form of 2017 Equity Incentive Plan. |
10.12 |
+* |
Form of Share Option Grant Notice and Share Option Agreement under 2017 Equity Incentive Plan. |
10.13 |
+* |
Form of Restricted Share Unit Grant Notice and Restricted Share Unit Award Agreement under 2017 Equity Incentive Plan. |
10.14 |
+* |
Form of 2017 Employee Share Purchase Plan. |
Exhibit
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Description of Document |
10.15 |
+ |
Form of Indemnification Agreement with non-employee directors. |
10.16 |
+ |
Employment Agreement between Biohaven Pharmaceuticals, Inc. and Vlad Coric to be in effect upon the closing of this offering. |
10.17 |
+ |
Employment Agreement between Biohaven Pharmaceuticals, Inc. and Robert Berman to be in effect upon the closing of this offering. |
10.18 |
+ |
Employment Agreement between Biohaven Pharmaceuticals, Inc. and James Engelhart to be in effect upon the closing of this offering. |
10.19 |
+ |
Employment Agreement between Biohaven Pharmaceutical Holding Company Ltd. and Vlad Coric. |
10.20 |
+ |
Employment Agreement between Biohaven Pharmaceutical Holding Company Ltd. and Robert Berman. |
10.21 |
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Employment Agreement between Biohaven Pharmaceutical Holding Company Ltd. and James Engelhart. |
21.1 |
* |
Subsidiaries of the Registrant. |
23.1 |
* |
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm. |
23.2 |
* |
Consent of Maples and Calder, British Virgin Islands counsel (included in Exhibit 5.1). |
24.1 |
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Power of Attorney (included on signature page of Registration Statement filed on April 7, 2017). |
+ |
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Indicates management contract or compensatory plan. |
# |
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Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and have been separately filed with the Securities and Exchange Commission. |
* |
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Previously filed. |
Exhibit 3.3
British Virgin Islands
The BVI Business Companies Act
(No. 16 of 2004)
Memorandum and Articles of Association
of
Biohaven Pharmaceutical Holding Company Ltd.
Incorporated this 25th day of September 2013
Amended and Restated this 20th day of January 2014
Amended and Restated this 28th day of June 2016
Amended and Restated this 28th day of October 2016
Amended this 21st day of April 2017
Amended and Restated this day of May 2017
Maples Corporate Services (BVI) Limited
Kingston Chambers
PO Box 173
Road Town, Tortola
British Virgin Islands
TERRITORY OF THE BRITISH VIRGIN ISLANDS
BVI BUSINESS COMPANIES ACT
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
Biohaven Pharmaceutical Holding Company Ltd.
1. NAME
The name of the Company is Biohaven Pharmaceutical Holding Company Ltd. (the Company).
2. STATUS
The Company is a company limited by shares.
3. REGISTERED OFFICE AND REGISTERED AGENT
(a) The first registered office of the Company is c/o Maples Corporate Services (BVI) Limited, Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands.
(b) The first registered agent of the Company is Maples Corporate Services (BVI) Limited of Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands.
4. CAPACITY AND POWERS
4.1 Subject to the Act and any other British Virgin Islands legislation, the Company has, irrespective of corporate benefit:
(a) full capacity to carry on or undertake any business or activity, do any act or enter into any transaction; and
(b) for the purposes of subparagraph (a), full rights, powers and privileges.
4.2 The Company shall not engage in Business Combinations with an Interested Member for three years, following the date such person became an Interested Member unless:
(a) Prior to such time the Board approved either the Business Combination or the transaction which resulted in the Member becoming an Interested Member;
(b) Upon consummation of the transaction which resulted in the Member becoming an Interested Member, the Interested Member owned at least 85% of the votes of shares in the Company outstanding at the time the transaction commenced, excluding for purposes of determining the outstanding shares (but not the outstanding shares owned by the Interested Member) those shares owned (i) by persons who are directors and also officers and (ii) employee share plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
(c) At or subsequent to such time the business combination is approved by the Board and authorized at an annual or special meeting of Members, and not by written consent, by the affirmative vote of at least 66 2/3% of the votes of shares not owned by the Interested Member.
5. NUMBER AND CLASSES OF SHARES
The Company is authorized to issue a maximum of 200,000,000 common shares of a single class of no par value (the Common Shares) in one or more series and a maximum of 10,000,000 preferred shares of a single class of no par value (the Preferred Shares) in one or more series. The Board may fix the rights preferences and restrictions of Preferred Shares as the Directors in their sole discretion deem fit in one or more series, and authorize their issuance.
6. RIGHTS ATTACHING TO THE SHARES
6.1 Rights Attaching to the Common Shares
Subject to the Articles, the terms of the issue of any Common Share, or any Resolution of Members to the contrary (and, for greater clarity, without prejudice to any special rights conferred thereby on the holders of any other shares), a Common Share of the Company confers on the holder:
(a) the right to one vote at a meeting of the Members or on any Resolution of Members;
(b) the right to an equal share in any Distribution paid by the Company; and
(c) the right to an equal share in the distribution of the surplus assets of the Company on a winding up.
6.2 Rights Attaching to the Preferred Shares
The Preferred Shares in the Company shall have such rights as specified by the Board pursuant to the Resolution of Directors approving the issue of such Preferred Share(s), and in any such Resolution of Directors the Board shall agree to amend and restate the Memorandum and Articles to fully set out such rights and instruct the registered agent of the Company to file the amended Memorandum and Articles with the Registrar. For the avoidance of doubt, the Directors shall not require any approval of the Members in respect of the issuance of Preferred Shares and the related amendments to the Memorandum and Articles.
7. VARIATION OF CLASS RIGHTS
The rights attached to any class or series of shares (unless otherwise provided by the terms of issue of the shares of that class or series), whether or not the Company is being wound-up, may be varied with the consent in writing of all the holders of the issued shares of that class or series or with the sanction of a resolution passed by a majority of the votes cast at a separate meeting of the holders of the shares of the class or series.
8. RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU OR SUPERIOR
Rights conferred upon the holders of the shares of any class or series issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class or series, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith or superior thereto.
9. REGISTERED SHARES
The Company shall issue registered shares only. The Company is not authorized to issue fractional shares or bearer shares, convert registered shares to bearer shares, or exchange registered shares for bearer shares.
10. AMENDMENT TO THIS MEMORANDUM AND THE ARTICLES OF ASSOCIATION
10.1 Subject to the provisions of the Act, these Memorandum and Articles, the Directors or Members may from time to time amend this Memorandum or the Articles by Resolution of Directors or Resolution of Members; provided, however , that any Resolution of Members to amend this Memorandum or the Articles shall require the affirmative vote of the holders of at least 75% of the then-outstanding shares of the Company. The Directors shall give notice of such resolution to the registered agent of the Company, for the registered agent to file with the Registrar a notice of the amendment to this Memorandum or the Articles, or a restated memorandum and articles of association incorporating the amendment(s) made, and any such amendment(s) to this Memorandum or the Articles will take effect from the date of the registration by the Registrar of the notice of amendment or restated memorandum and articles of association incorporating the amendment(s) made.
10.2 Notwithstanding any provision to the contrary in this Memorandum or the Articles, the Directors shall not have the power to amend this Memorandum or the Articles:
(a) to restrict the rights or powers of the Members to amend this Memorandum or the Articles; or
(b) to change the percentage of Members required to pass a resolution to amend this Memorandum or the Articles; or
(c) in circumstances where this Memorandum or the Articles cannot be amended by the Members.
10.3 A change of registered office or registered agent shall not constitute an amendment of this Memorandum or the Articles.
11. DEFINITIONS
The meanings of words in this Memorandum are as defined in the Articles annexed hereto.
We, Maples Corporate Services (BVI) Limited, registered agent of the Company, of Kingston Chambers, P.O. Box
173, Road Town, Tortola, British Virgin Islands, for the purpose of incorporating a BVI Business Company under the laws of the British Virgin Islands hereby sign this Memorandum of Association on this 18 th day of September 2013.
Incorporator
Sgd. Ruairi Bourke
Authorized Signatory
Maples Corporate Services (BVI) Limited
TERRITORY OF THE BRITISH VIRGIN ISLANDS
BVI BUSINESS COMPANIES ACT
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
Biohaven Pharmaceutical Holding Company Ltd.
(a company limited by shares)
INTERPRETATION
1. Definitions
1.1 In these Articles, the following words and expressions shall, where not inconsistent with the context, have the following meanings, respectively:
Act |
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BVI Business Companies Act, as from time to time amended or restated; |
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Articles |
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these Articles of Association as originally registered or as from time to time amended or restated; |
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Board |
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the board of directors appointed or elected pursuant to these Articles and acting by Resolution of Directors; |
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Business Combination |
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(i) any merger or consolidation of the Company or any direct or indirect majority-owned subsidiary of the Company with (A) the Interested Member, or (B) with any other company, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Member and as a result of such merger or consolidation under Section 4.2 of the Memorandum is not applicable to the surviving entity; |
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(ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in 1 transaction or a series of transactions), except proportionately as a Member of the Company, to or with the Interested Member, whether as part of a dissolution or otherwise, of assets of the Company or of any direct or indirect majority-owned subsidiary of the Company which assets have an aggregate market value equal to 10% or more of either the aggregate market value of all the assets of the Company determined on a consolidated basis or the aggregate market value of all the outstanding shares of the Company; |
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(iii) any transaction which results in the issuance or transfer by the Company or by any direct or indirect majority-owned subsidiary of the Company of any shares of the Company or of such subsidiary to the Interested Member, except: (A) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares of the Company or any such subsidiary which securities were outstanding prior to the time that the Interested Member became such; (B) pursuant to a parent-subsidiary merger; (C) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares of the Company or any such subsidiary which security is distributed, pro rata to all holders of a class or series of shares of the Company subsequent to the time the Interested Member became such; (D) pursuant to an exchange offer by the Company to purchase shares made on the same terms to all holders of said shares; or (E) any issuance or transfer of shares by the Company; provided however, that in no case under items (C)-(E) of this subparagraph shall there be an increase in the Interested Members proportionate share of the shares of any class or series of the Company or of the voting shares of the Company; |
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(iv) any transaction involving the Company or any direct or indirect majority-owned subsidiary of the Company which has the effect, directly or indirectly, of increasing the proportionate share of the shares of any class or series, or securities convertible into the shares of any class or series, of the Company or of any such subsidiary which is owned by the Interested Member, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares not caused, directly or indirectly, by the Interested Member; or |
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(v) any receipt by the Interested Member of the benefit, directly or indirectly (except proportionately as a Member of the Company), of any loans, advances, guarantees, pledges or other financial benefits (other than those expressly permitted in subparagraphs (i)-(iv) of this definition) provided by or through the Company or any direct or indirect majority-owned subsidiary; |
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Company |
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Biohaven Pharmaceutical Holding Company Ltd.; |
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Distribution |
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(a) the direct or indirect transfer of an asset, other than the Companys own shares, to or for the benefit of a Member; or |
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(b) the incurring of a debt to or for the benefit of a Member; |
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in relation to shares held by a Member and whether by means of the purchase of an asset, the purchase, redemption or other acquisition of shares, a transfer of indebtedness or otherwise, and includes a dividend; |
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Exchange Act |
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Securities Exchange Act of 1934, as amended; |
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Interested Member |
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means any person (other than the Company and any direct or indirect majority-owned subsidiary of the Company) that (i) is the owner of 15% or more of the outstanding voting shares of the Company, or (ii) is an affiliate or associate of the Company and was the owner of 15% or more of the outstanding voting shares of the Company at any time within the 3-year period immediately prior to the date on which it is sought to be determined whether such person is an Interested Member, and the affiliates and associates of such person; provided, however, that the term Interested Member shall not include (x) any person who (A) owned shares in excess of the 15% limitation set forth herein on or before the date of the completion of the Companys initial public offering of its Common Shares and either (I) continued to own shares in excess of such 15% limitation or would have but for action by the Company or (II) is an affiliate or associate of the Company and so continued (or so would have continued but for action by the Company) to be the owner of 15% or more of the outstanding voting shares of the Company at any time within the 3-year period immediately prior to the date on which it is sought to be determined whether such a person is an Interested Member or (B) acquired said |
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shares from a person described in item (A) of this paragraph by gift, inheritance or in a transaction in which no consideration was exchanged; or (y) any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of action taken solely by the Company; provided that such person shall be an Interested Member if thereafter such person acquires additional voting shares of the Company, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an Interested Member, the voting shares of the Company deemed to be outstanding shall include shares beneficially owned (as defined in Rule 13d-3 promulgated under the Exchange Act) by the person and such persons affiliates and associates (such terms are defined in Rule 12b-2 promulgated under the Exchange Act) but shall not include any other unissued shares of the Company which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise; |
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Member |
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a person whose name is entered in the register of members as the holder of one or more shares in the Company; |
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Memorandum |
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the Memorandum of Association of the Company as originally registered or as from time to time amended or restated; |
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NYSE |
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New York Stock Exchange; |
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Recognised Exchange |
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has the meaning given in the Act; |
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Resolution of Directors |
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(a) a resolution approved at a duly constituted meeting of directors or of a committee of directors of the Company by the affirmative vote of a simple majority of the directors present who voted and did not abstain or such other majority as may be specified in these Memorandum and Articles; or |
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(b) a resolution consented to in writing by a majority of the directors or such other majority as may be specified in these Memorandum and Articles, or of a majority of members of the committee, as the case may be; |
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Resolution of Members |
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a resolution approved at a duly constituted meeting of Members by the affirmative vote of a simple majority of the votes of those Members entitled to vote and voting on the resolution, unless a higher percentage is otherwise required by law, or by these Memorandum and Articles; |
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Seal |
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the common seal of the Company; |
Secretary |
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the person appointed to perform any or all of the duties of secretary of the Company and includes any deputy or assistant secretary and any person appointed by the Board to perform any of the duties of the Secretary; |
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Securities Act |
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the United States Securities Act of 1933, as amended; |
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shares |
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the Common Shares and any Preferred Shares; and |
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Treasury Share |
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a share of the Company that was previously issued but was repurchased, redeemed or otherwise acquired by the Company and not cancelled. |
1.2 In these Articles, where not inconsistent with the context:
(a) words denoting the plural number include the singular number and vice versa ;
(b) words denoting the masculine gender include the feminine and neuter genders;
(c) words importing persons include companies, associations or bodies of persons whether corporate or not;
(d) a reference to voting in relation to shares shall be construed as a reference to voting by Members holding the shares, except that it is the votes allocated to the shares that shall be counted and not the number of Members who actually voted and a reference to shares being present at a meeting shall be given a corresponding construction;
(e) a reference to money is, unless otherwise stated, a reference to the currency in which shares of the Company shall be issued;
(f) the words:-
(i) may shall be construed as permissive; and
(ii) shall shall be construed as imperative; and
(g) unless otherwise provided herein, words or expressions defined in the Act shall bear the same meaning in these Articles.
1.3 In these Articles expressions referring to writing or its cognates shall, unless the contrary intention appears, include facsimile, printing, lithography, photography, electronic mail and other modes of representing words in visible form.
1.4 Headings used in these Articles are for convenience only and are not to be used or relied upon in the construction hereof.
SHARES
2. Power to Issue Shares
Subject to the provisions of the Memorandum, the unissued shares of the Company shall be at the disposal of the Board which may, without limiting or affecting to any rights previously conferred on the holders of any existing shares or class or series of shares, offer, allot, grant options over or otherwise dispose of the shares to such persons, at such times and upon such terms and conditions as the Company may by Resolution of Directors determine.
3. Power of the Company to Purchase its Shares
3.1 Subject to the provisions of the Act (save that sections 60 and 61 of the Act shall not apply to the Company), the terms attached to shares, as specified in the Memorandum and the Articles, may provide for such shares to be redeemed or to be liable to be redeemed at the option of the Member or the Company on such terms as so specified.
3.2 Subject to the provisions of the Act (save that sections 60 and 61 of the Act shall not apply to the Company), the Company may purchase or otherwise acquire its own shares (including any redeemable shares) in such manner and on such other terms as the Board may agree with the relevant Member.
3.3 The Company may make a payment in respect of the redemption, purchase or other acquisition of its own shares in any manner permitted by the Act.
3.4 The Board may accept the surrender for no consideration of any fully paid share including, for the avoidance of doubt, a Treasury Share. Any such surrender shall be in writing and signed by the Member holding the share or shares.
4. Treatment of Purchased, Redeemed or Acquired Shares
4.1 Subject to Article 4.2, a share that the Company purchases, redeems or otherwise acquires may be cancelled or held by the Company as a Treasury Share.
4.2 The Company may only hold a share that has been purchased, redeemed or otherwise acquired as a Treasury Share if the number of shares purchased, redeemed or otherwise acquired, when aggregated with shares of the same class already held by the Company as Treasury Shares, does not exceed 50% of the shares of that class previously issued by the Company, excluding shares that have been cancelled.
5. Treasury Shares
5.1 Treasury Shares may be transferred by the Company and the provisions of the Act, the Memorandum and these Articles that apply to the issue of shares apply to the transfer of Treasury Shares.
5.2 All the rights and obligations attaching to a Treasury Share are suspended and shall not be exercised by or against the Company while it holds the share as a Treasury Share.
6. Consideration
6.1 A share may be issued for consideration, in any form or a combination of forms, including money, a promissory note or other written obligation to contribute money or property, real property, personal property (including goodwill and know-how), services rendered or a contract for future services.
6.2 No share may be issued for a consideration, which is in whole or part, other than money unless the Board passes a resolution stating:
(a) the amount to be credited for the issue of the share; and
(b) that, in its opinion, the present cash value of the non-money consideration and money consideration, if any, is not less than the amount to be credited for the issue of the share.
6.3 No share may be issued by the Company that:
(a) increases the liability of a person to the Company; or
(b) imposes a new liability on a person to the Company,
unless that person, or an authorized agent of that person, agrees in writing to becoming the holder of the share.
6.4 The consideration for a share with par value shall not be less than the par value of the share.
6.5 A bonus share issued by the Company shall be deemed to have been fully paid for on issue.
7. Forfeiture of Shares
7.1 Where a share is not fully paid for on issue, the Board may, subject to the terms on which the share was issued, at any time serve upon the Member a written notice of call specifying a date for payment to be made.
7.2 The written notice of call shall name a further date not earlier than the expiration of fourteen days from the date of service of the notice on or before which the payment required by the notice is to be made and shall contain a statement that in the event of non-payment at or before the time named in the notice, the share will be liable to be forfeited.
7.3 Where a notice complying with the foregoing provisions has been issued and the requirements of the notice have not been complied with, the Board by Resolution of Directors may, at any time before tender of payment, forfeit and cancel the share to which the notice relates and direct that the register of Members be updated.
7.4 Upon forfeiture and cancellation pursuant to Article 7.3, the Company shall be under no obligation to refund any moneys to that Member and that Member shall be discharged from any further obligation to the Company as regards the forfeited share.
8. Share Certificates
The Company is not required to issue certificates in respect of its shares to any Member.
9. Fractional Shares
The Company may not issue fractional shares.
REGISTRATION OF SHARES
10. Register of Members
10.1 The Board shall cause there to be kept a register of Members in which there shall be recorded the name and address of each Member, the number of each class and series of shares held by each Member, the date on which the name of each Member was entered in the register of Members and the date upon which any person ceased to be a Member.
10.2 The register of Members may be in such form as the Board may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Unless the Board otherwise determines, the magnetic, electronic or other data storage form shall be the original register of Members.
11. Registered Holder Absolute Owner
11.1 The entry of the name of a person in the register of Members as a holder of a share in the Company is prima facie evidence that legal title in the share vests in that person.
11.2 The Company may treat the holder of a registered share as the only person entitled to:
(a) exercise any voting rights attaching to the share;
(b) receive notices;
(c) receive a Distribution in respect of the share; and
(d) exercise other rights and powers attaching to the share.
12. Transfer of Registered Shares
12.1 Registered shares may be transferred by a written instrument of transfer signed by the transferor and containing the name of the transferee.
12.2 The Board is permitted to pass a Resolution of Directors refusing or delaying the registration of a transfer where it reasonably determines that it is in the best interest of the Company to do so. Without limiting the generality of the foregoing, the Board may refuse or delay the registration of a transfer of shares if the transferor has failed to pay an amount due in respect of those shares.
12.3 Where the Board passes a resolution to refuse or delay the registration of a transfer, the Company shall, as soon as practicable, send the transferor and the transferee a notice of the refusal or delay.
12.4 The transfer of a share is effective when the name of the transferee is entered in the register of Members and the Company shall not be required to treat a transferee of a share in the Company as a Member until the transferees name has been entered in the register of Members.
12.5 Where shares are listed on a Recognised Exchange, (a) Articles 12.1 to 12.4 shall not apply and (b) the shares may be transferred without the need for a written instrument of transfer if the transfer is carried out in accordance with the law, rules, procedures and other requirements applicable to shares listed on the Recognised Exchange.
13. Transmission of Registered Shares
13.1 The executor or administrator of the estate of a deceased Member, the guardian of an incompetent Member, the liquidator of an insolvent Member or the trustee of a bankrupt Member shall be the only person recognized by the Company as having any title to the Members share.
13.2 Any person becoming entitled by operation of law or otherwise to a share in consequence of the death, incompetence or bankruptcy of any Member may be registered as a Member upon such evidence being produced as may reasonably be required by the Board. An application by any such person to be registered as a Member shall for all purposes be deemed to be a transfer of the share of the deceased, incompetent or bankrupt Member and the Board shall treat it as such.
13.3 Any person who has become entitled to a share or shares in consequence of the death, incompetence or bankruptcy of any Member may, instead of being registered himself, request in writing that some person to be named by him be registered as the transferee of such share and such request shall likewise be treated as if it were a transfer.
ALTERATION OF SHARES
14. Power to Alter Shares
14.1 The Company may amend the Memorandum by Resolution of Directors to increase or reduce the maximum number of shares that the Company is authorized to issue, or to authorize the Company to issue an unlimited number of shares.
14.2 Subject to the Memorandum and these Articles, the Company, by Resolution of Directors, may:
(a) divide its shares, including issued shares, into a larger number of shares; or
(b) combine its shares, including issued shares, into a smaller number of shares;
provided that, where shares are divided or combined, the aggregate par value (if any) of the new shares must be equal to the aggregate par value (if any) of the original shares.
14.3 A division or combination of shares, including issued shares, of a class or series shall be for a larger or smaller number, as the case may be, of shares in the same class or series.
14.4 No fractional shares shall be issued upon any such division or combination of shares. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company shall pay cash equal to such fraction multiplied by the fair market value of the relevant class of share as determined by a Resolution of Directors.
15. Restrictions on the Division of Shares
The Company shall not divide its shares if it would cause the maximum number of shares that the Company is authorized to issue to be exceeded.
DISTRIBUTIONS
16. Distributions
16.1 The Board may, by Resolution of Directors, authorize a Distribution by the Company to Members at such time and of such an amount as it thinks fit if it is satisfied, on reasonable grounds, that immediately after the Distribution, the value of the Companys assets exceeds its liabilities and the Company is able to pay its debts as they fall due. The resolution shall include a statement to that effect.
16.2 Notice of any Distribution that may have been authorized shall be given to each Member entitled to the Distribution in the manner provided in Article 22 and all Distributions unclaimed for three years after having been authorized may be forfeited by Resolution of Directors for the benefit of the Company.
17. Power to Set Aside Profits
The Board may, before authorizing any Distribution, set aside out of the profits of the Company such sum as it thinks proper as a reserve fund, and may invest the sum so set apart as a reserve fund in such securities as it may select.
18. Unauthorized Distributions
18.1 If, after a Distribution is authorized and before it is made, the Board ceases to be satisfied on reasonable grounds that immediately after the Distribution the value of the Companys assets exceeds its liabilities and the Company is able to pay its debts as they fall due, such Distribution is deemed not to have been authorized.
18.2 A Distribution made to a Member at a time when, immediately after the Distribution, the value of the Companys assets did not exceed its liabilities and the Company was not able to pay its debts as they fell due, is subject to recovery in accordance with the provisions of the Act.
19. Distributions to Joint Holders of Shares
If two or more persons are registered as joint holders of any shares, any one of such persons may give an effectual receipt for any Distribution payable in respect of such shares.
MEETINGS AND CONSENT OF MEMBERS
20. Meetings and Location
The Board may convene meetings of the Members of the Company at such times and in such manner and places within or outside the British Virgin Islands as the Board considers necessary or desirable; provided that at least one meeting of Members must be held each year.
21. Special Meetings
Special meetings of the shareholders of the Company may be called, for any purpose as is a proper matter for shareholder action under applicable BVI law, by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, (iii) the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption) or (iv) by shareholders holding not less than 10% of the votes of the outstanding voting shares. The Board of Directors shall determine the time and place, if any, of such special meeting.
22. Notice
22.1 Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of Members shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each shareholder entitled to vote at such meeting, such notice to specify the place, if any, date and hour, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which shareholders and proxy holders may be deemed to be present in person and vote at any such meeting. If mailed, notice is deemed given when deposited in the U.S. mail, postage prepaid, directed to the Member at such Members address as it appears on the records of the Company. Notice of the time, place, if any, and purpose of any meeting of Members may be waived in writing, signed by the person entitled to notice thereof, or by electronic transmission by such person, either before or after such meeting, and will be waived by any shareholder by his, her or its attendance thereat in person, by remote communication, if applicable, or by proxy, except when the Member attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any Member so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
22.2 In order that the Company may determine the Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of shares or for the purpose of any other lawful action, the Board may fix a record date (the Record Date), which Record Date shall not precede the date upon which the resolution fixing the Record Date is adopted by the Board, and which Record Date: (a) in the case of determination of Members entitled to vote at any meeting of Members, shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting and (b) in the case of any other action, shall not be more than sixty (60) days prior to such other action. If no Record Date is fixed: (i) the Record Date for determining Members entitled to notice of or to vote at a meeting of Members shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (ii) the Record Date for determining Members for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
22.3 . A meeting of Members may be called on short notice:
(a) if Members holding not less than 90 percent of the total number of shares entitled to vote on all matters to be considered at the meeting, or 90 percent of the votes of each class or series of shares where Members are entitled to vote thereon as a class or series together with not less than a 90 percent majority of the remaining votes, have agreed to short notice of the meeting, or
(b) if all Members holding shares entitled to vote on all or any matters to be considered at the meeting have waived notice of the meeting, and for this purpose presence at the meeting shall be deemed to constitute waiver.
22.4 The inadvertent failure of the Board to give notice of a meeting to a Member, or the fact that a Member has not received a notice that has been properly given, shall not invalidate the meeting.
23. Instrument of Proxy
23.1 A Member may be represented at a meeting of Members by a proxy who may speak and vote on behalf of the Member.
23.2 The instrument appointing a proxy shall be produced at the place appointed for the meeting before the time for holding the meeting at which the person named in such instrument proposes to vote. The notice of the meeting may specify an alternative or additional place or time at which the proxy shall be presented.
23.3 An instrument appointing a proxy shall be in such other form as the Chairman of the meeting shall accept as properly evidencing the wishes of the Member appointing the proxy. A proxy need not be a Member, and a Member may appoint one or more than one person to act as his proxy. On a poll, votes may be given in person or by proxy, and a Member entitled to more than one vote need not, if he votes, use all of his votes or cast all the votes he uses in the same way. The appointment of a proxy does not prevent a Member from attending and voting in person at the meeting or an adjournment or on a poll. The appointment of a proxy is (unless the contrary is stated in such proxy) valid for an adjournment of the meeting as well as for the meeting or meetings to which it relates and is valid for 12 months following the date of execution unless terminated earlier.
24. Voting by Joint Holders of Shares
The following shall apply in respect of joint ownership of shares:
(a) if two or more persons hold shares jointly, each of them may be present in person or by proxy at a meeting of Members and may speak as a member;
(b) if only one of the joint owners is present in person or by proxy he or she may vote on behalf of all joint owners; and
(c) if two or more of the joint owners are present in person or by proxy they must vote as one.
25. Participating in Meetings by Telephone
Members shall not be entitled to attend or participate at a meeting of Members by telephone or other electronic means.
26. Quorum at General Meetings
26.1 A meeting of Members is duly constituted if, at the commencement of the meeting, there are present in person or by proxy at least 50 percent of the votes of the shares or class or series of shares entitled to vote on resolutions of Members to be considered at the meeting. If such a quorum be present, notwithstanding the fact that such quorum may be represented by only one person, then such person may resolve any matter, and a certificate signed by such person, accompanied where such person is a proxy by a copy of the proxy forms, shall constitute a valid resolution of Members. In the absence of a quorum, any meeting of Members may be adjourned, from time to time, either by the chairman of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. The Members present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough Members to leave less than a quorum.
26.2 Except as otherwise provided by statute or by applicable stock exchange rules, or by the Memorandum and Articles of Association, in all matters other than the election of directors, the affirmative vote of the majority of shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally on the subject matter shall be the act of the Members. Except as otherwise provided by statute or the Memorandum and Articles of Association, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except where otherwise provided by the statute or by the Memorandum and Articles of Association, a majority of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter. Except where otherwise provided by statute or by the Memorandum and Articles of Association, the affirmative vote of the majority (plurality, in the case of the election of directors) of shares of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series.
27. Chairman to Preside
At every meeting of Members, the Chairman of the Board shall preside as Chairman of the meeting. If there is no Chairman of the Board or if the Chairman of the Board of Directors is not present at the meeting, the
Members present shall choose someone of their number to be the Chairman. If the Members are unable to choose a Chairman for any reason, then the person representing the greatest number of voting shares present in person or by proxy at the meeting shall preside as Chairman, failing which the oldest individual member or representative of a Member present shall take the chair.
28. Adjournment of General Meetings
Any meeting of Members, whether annual or special, may be adjourned from time to time either by the Chairman of the meeting or by the vote of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Company may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.
29. Power to Demand a Poll
At any meeting of the Members, the Chairman shall be responsible for deciding in such manner as he or she shall consider appropriate whether any resolution has been carried or not, and the result of his or her decision shall be announced to the meeting and recorded in the minutes thereof. If the Chairman shall have any doubt as to the outcome of any resolution put to the vote, he or she shall cause a poll to be taken of all votes cast upon such resolution, but if the Chairman shall fail to take a poll then any Member present in person or by proxy who disputes the announcement by the Chairman of the result of any vote may immediately following such announcement demand that a poll be taken and the Chairman shall thereupon cause a poll to be taken. If a poll is taken at any meeting, the result thereof shall be duly recorded in the minutes of that meeting.
30. Representation of Members
30.1 Any person other than an individual shall be regarded as one Member and, subject to the specific provisions hereinafter contained for the appointment of representatives of such persons, the right of any individual to speak for or represent such Member shall be determined by the Law of the jurisdiction where, and by the documents by which, the person is constituted or derives its existence. If case of doubt, the Board may in good faith seek legal advice from any qualified person, and unless and until a court of competent jurisdiction shall otherwise rule, the Board may rely and act upon such advice without incurring any liability to any Member.
30.2 Any person other than an individual which is a Member of the Company may by resolution of its board of directors or other governing body authorize such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members of the Company, and the person so authorized shall be entitled to exercise the same power on behalf of the person which he represents as that person could exercise if it were an individual Member of the Company.
30.3 The Chairman of any meeting at which a vote is cast by proxy or on behalf of any person other than an individual may call for a notarized copy of such proxy or authority which shall be produced within seven days of the being so requested or the votes cast by such proxy or on behalf of such person shall be disregarded.
31. Directors Attendance at General Meetings
Directors of the Company may attend and speak at any meeting of Members of the Company and at any separate meeting of the holders of any class or series of shares in the Company.
32. No Action by Written Consent
A Resolution of Members is valid only if approved at a duly convened and constituted meeting of Members by the affirmative vote of a simple majority or such greater majority as may be provided for in these Articles of the votes of the shares entitled to vote thereon, that were present at the meeting in person or by proxy and were voted and not abstained, and no action may be taken by Members except at a duly convened and constituted meeting of Members, and no action may be taken by Members by written consent.
33. Annual General Meeting
A meeting of Members for the election of directors and other business shall be held annually at such date and time as may be designated by the Board from time to time.
NOTICE OF MEMBER BUSINESS AND NOMINATIONS
34. Intentionally Omitted
35. Annual Meetings of Members
35.1 Nominations of persons for election to the Board of the Company and the proposal of other business to be considered by the Members may be brought before an Annual Meeting (i) by or at the direction of the Board or (ii) by any Member of the Company who was a Member of record at the time of giving of notice provided for in this Article, who is entitled to vote at the meeting, who is present (in person or by proxy) at the meeting and who complies with the notice procedures set forth in this Article as to such nomination or business. For the avoidance of doubt, the foregoing clause (ii) shall be the exclusive means for a Member to bring nominations or business properly before an Annual Meeting (other than matters properly brought under Rule 14a-8 (or any successor rule) under the Exchange Act) and such Member must comply with the notice and other procedures set forth in this Article to bring such nominations or business properly before an Annual Meeting. In addition to the other requirements set forth in this Article, for any proposal of business to be considered at an Annual Meeting, it must be a proper subject for action by Members of the Company under British Virgin Islands law.
35.2 For nominations or other business to be properly brought before an Annual Meeting by a Member pursuant to this Article, the Member must (i) have given Timely Notice (as defined below) thereof in writing to the Secretary of the Company, (ii) have provided any updates or supplements to such notice at the times and in the forms required by this Article and (iii) together with the beneficial owner(s), if any, on whose behalf the nomination or business proposal is made, have acted in accordance with the representations set forth in the Solicitation Statement (as defined below) required by this Article. To be timely, a Members written notice shall be received by the Secretary at the principal executive offices of the Company not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the one-year anniversary of the preceding years Annual Meeting provided, however, that in the event the Annual Meeting is first convened more than thirty (30) days before or more than sixty (60) days after such anniversary date, or if no Annual Meeting were held in the preceding year, notice by the Member to be timely must be received by the Secretary of the Company not later than the close of business on the later of the ninetieth (90th) day prior to the scheduled date of such Annual Meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made (such notice within such time periods shall be referred to as Timely Notice). Such Members Timely Notice shall set forth:
(a) as to each person whom the Member proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such persons written consent to being named in the proxy statement as a nominee and to serving as a director if elected);
(b) as to any other business that the Member proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, and any material interest in such business of each Proposing Person (as defined below);
(c) (i) the name and address of the Member giving the notice, as they appear in the register of members of the Company, and the names and addresses of the other Proposing Persons (if any) and (ii) as to each Proposing Person, the following information: (a) the class or series and number of all shares of the Company which are, directly or indirectly, owned beneficially or of record by such Proposing Person or any of its affiliates or associates (as such terms are defined in Rule 12b-2 promulgated under the Exchange Act), including any shares of any class or series of the Company as to which such Proposing Person or any of its affiliates or associates has a right to acquire beneficial ownership at any time in the future, (b) all Synthetic Equity Interests (as defined below) in which such Proposing Person or any of its affiliates or associates, directly or indirectly, holds an interest including a description of the material terms of each such Synthetic Equity Interest, including without limitation, identification of the counterparty to each such Synthetic Equity Interest and disclosure, for each such Synthetic Equity Interest, as to (x) whether or not such Synthetic Equity Interest conveys any voting rights, directly or indirectly, in such shares to such Proposing Person, (y) whether or not such Synthetic Equity Interest is required to be, or is capable of being, settled through delivery of such shares and (z) whether or not such Proposing Person and/or, to the extent known, the counterparty to such Synthetic Equity Interest has entered into other transactions that hedge or mitigate the economic effect of such Synthetic Equity Interest, (c) any proxy (other than a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with, the Exchange Act), agreement, arrangement, understanding or relationship pursuant to which such Proposing Person has or shares a right to, directly or indirectly, vote any shares of any class or series of the Company, (d) any rights to dividends or other distributions on the shares of any class or series of the Company, directly or indirectly, owned beneficially by such Proposing Person that are separated or separable from the underlying shares of the Company, and (e) any performance-related fees (other than an asset based fee) that such Proposing Person, directly or indirectly, is entitled to based on any increase or decrease in the value of shares of any
class or series of the Company or any Synthetic Equity Interests (the disclosures to be made pursuant to the foregoing clauses (a) through (e) are referred to, collectively, as Material Ownership Interests) and (iii) a description of the material terms of all agreements, arrangements or understandings (whether or not in writing) entered into by any Proposing Person or any of its affiliates or associates with any other person for the purpose of acquiring, holding, disposing or voting of any shares of any class or series of the Company;
(d) (i) a description of all agreements, arrangements or understandings by and among any of the Proposing Persons, or by and among any Proposing Persons and any other person (including with any proposed nominee(s)), pertaining to the nomination(s) or other business proposed to be brought before the meeting of Members (which description shall identify the name of each other person who is party to such an agreement, arrangement or understanding), and (ii) identification of the names and addresses of other Members (including beneficial owners) known by any of the Proposing Persons to support such nominations or other business proposal(s), and to the extent known the class and number of all shares of the Company owned beneficially or of record by such other Member(s) or other beneficial owner(s); and
(e) a statement whether or not the Member giving the notice and/or the other Proposing Person(s), if any, will deliver a proxy statement and form of proxy to holders of, in the case of a business proposal, at least the percentage of voting power of all of the shares of the Company required under applicable law to approve the proposal or, in the case of a nomination or nominations, at least the percentage of voting power of all of the shares of the Company reasonably believed by such Proposing Person to be sufficient to elect the nominee or nominees proposed to be nominated by such Member (such statement, the Solicitation Statement).
35.3 For purposes of this Article, the term Proposing Person shall mean the following persons: (i) the Member of record providing the notice of nominations or business proposed to be brought before a Members meeting, and (ii) the beneficial owner(s), if different, on whose behalf the nominations or business proposed to be brought before a Members meeting is made. For purposes of this, the term Synthetic Equity Interest shall mean any transaction, agreement or arrangement (or series of transactions, agreements or arrangements), including, without limitation, any derivative, swap, hedge, repurchase or so-called stock borrowing agreement or arrangement, the purpose or effect of which is to, directly or indirectly: (a) give a person or entity economic benefit and/or risk similar to ownership of shares of any class or series of the Company, in whole or in part, including due to the fact that such transaction, agreement or arrangement provides, directly or indirectly, the opportunity to profit or avoid a loss from any increase or decrease in the value of any shares of any class or series of the Company, (b) mitigate loss to, reduce the economic risk of or manage the risk of share price changes for, any person or entity with respect to any shares of any class or series of the Company, (c) otherwise provide in any manner the opportunity to profit or avoid a loss from any decrease in the value of any shares of any class or series of the Company, or (d) increase or decrease the voting power of any person or entity with respect to any shares of any class or series of the Company.
35.4 A Member providing Timely Notice of nominations or business proposed to be brought before an Annual Meeting shall further update and supplement such notice, if necessary, so that the information (including, without limitation, the Material Ownership Interests information) provided or required to be provided in such notice pursuant to this Article shall be true and correct as of the record date for the meeting and as of the date that is ten (10) business days prior to such Annual Meeting, and such update and supplement shall be received by the Secretary at the principal executive offices of the Company not later than the close of business on the fifth (5th) business day after the record date for the Annual Meeting (in the case of the update and supplement required to be made as of the record date), and not later than the close of business on the eighth (8th) business day prior to the date of the Annual Meeting (in the case of the update and supplement required to be made as of ten (10) business days prior to the meeting).
36. General
36.1 Only such persons who are nominated in accordance with the provisions of this Article shall be eligible for election and to serve as directors and only such business shall be conducted at an Annual Meeting as shall have been brought before the meeting in accordance with the provisions of this Article. The Board or a designated committee thereof shall have the power to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the provisions of this Article. If neither the Board nor such designated committee makes a determination as to whether any Member proposal or nomination was made in accordance with the provisions of this Article, the presiding officer of the Annual Meeting shall have the power and duty to determine whether the Member proposal or nomination was made in accordance with the provisions of this Article. If the Board or a designated committee thereof or the presiding officer, as applicable, determines that any Member proposal or nomination was not made in accordance with the provisions of this Article, such proposal or nomination shall be disregarded and shall not be presented for action at the Annual Meeting.
36.2 Except as otherwise required by law, nothing in Article 35 shall obligate the Company or the Board to include in any proxy statement or other Member communication distributed on behalf of the Company or the Board information with respect to any nominee for director or any other matter of business submitted by
a Member.
36.3 Notwithstanding the provisions of Article 35, if the proposing Member (or a qualified representative of the Member) does not appear at the Annual Meeting to present a nomination or any business, such nomination or business shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Company. For purposes of this Article, to be considered a qualified representative of the proposing Member, a person must be authorized by a written instrument executed by such Member or an electronic transmission delivered by such Member to act for such Member as proxy at the meeting of Members and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, to the presiding officer at the meeting of the Members.
36.4 For purposes of this Article, public announcement shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Company with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
36.5 Notwithstanding the foregoing provisions of this Article, a Member shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Article. Nothing in this Article shall be deemed to affect any rights of Members to have proposals included in the Companys proxy statement pursuant to Rule 14a-8 (or any successor rule) under the Exchange Act and, to the extent required by such rule, have such proposals considered and voted on at an Annual Meeting.
37. Special Meetings
The Board may postpone or reschedule any previously scheduled special meeting of Members. Only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of Members of the Company. Nominations of persons for election to the Board of the Company and Member proposals of other business shall not be brought before a special meeting of Members to be considered by the Members unless such special meeting is held in lieu of an annual meeting of Members in accordance with Article 35, in which case such special meeting in lieu thereof shall be deemed an Annual Meeting for purposes of these Articles and the provisions of Article 35 shall govern such special meeting.
DIRECTORS AND OFFICERS
38. Election of Directors
38.1 The directors shall be elected by a Resolution at the annual meeting of Members, except for situations in which the Board fills a vacancy pursuant to Article 42 below.
38.2 No person shall be appointed as a director or nominated as a reserve director unless he or she has consented in writing to act as a director or to be nominated as a reserve director.
38.3 The Members and Directors (as appropriate) shall only be permitted to nominate and/or appoint individual persons to be a director of the Company. No company, corporation, undertaking or other vehicle shall be appointed as a director of the Company.
39. Number of Directors
The authorized number of directors of the Company shall be fixed by the Board from time to time in accordance with the Memorandum and Articles of Association. Directors need not be shareholders unless so required by the Memorandum and Articles of Association. If for any cause, the directors shall not have been elected at an annual meeting of Members, they may be elected as soon thereafter as convenient at a special meeting of the Members called for that purpose in the manner provided in the Memorandum and Articles of Association.
40. Term of Office of Directors
The Board shall be divided into three classes, as nearly equal in number as possible, designated Class I, Class II and Class III. Class I directors shall initially serve until the first annual meeting of Members following the closing of the Companys initial public offering of its Common Shares; Class II directors shall initially serve until the second annual meeting of Members following the closing of the Companys initial public offering of its Common Shares; and Class III directors shall initially serve until the third annual meeting of Members following the closing of the Companys initial public offering of its Common Shares. Commencing with the first annual meeting of Members following the closing of the Companys
initial public offering of its Common Shares, directors of each class the term of which shall then expire shall be elected to hold office for a three-year term and until the election and qualification of their respective successors in office. In case of any increase or decrease, from time to time, in the number of directors, the number of directors in each class shall be apportioned as nearly equal as possible. No decrease in the number of directors shall shorten the term of any incumbent directors.
41. Removal of Directors
41.1 Subject to the rights of holders of any series of Preferred Shares to elect additional directors under specified circumstances, no director may be removed without cause. Subject to any limitation imposed by law, any individual director or directors may be removed with cause by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66 2/3%) of the votes of all then outstanding Common Shares of the Company entitled to vote generally at a meeting for the election of directors.
41.2 Notice of a meeting called under Article 41.1 shall state that the purpose of the meeting is, or the purposes of the meeting include, the removal of a director.
42. Vacancy in the Office of Director
42.1 Notwithstanding Article 38, and subject to the rights of the holders of any series of Preferred Shares, any vacancies on the Board resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall, unless the Board determines by resolution that any such vacancies or newly created directorships shall be filled by the Members, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board, or by a sole remaining director, and not by the Members, provided, however, that whenever the holders of any class or classes of shares or series thereof are entitled to elect one or more directors by the provisions of the Memorandum and Articles of Association, vacancies and newly created directorships of such class or classes or series shall, unless the Board determines by resolution that any such vacancies or newly created directorships shall be filled by the Members, be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected, and not by the Members. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such directors successor shall have been elected and qualified.
42.2 A vacancy in the Board shall be deemed to exist under this Article 42 in the case of the death, removal or resignation of any director.
42.3 The term of any appointment under this Article 42 may not exceed the term that remained when the person who has ceased to be a director left or otherwise ceased to hold office.
43. Compensation of Directors
Directors shall be entitled to such compensation for their services as may be approved by the Board, including, if so approved, by Resolution of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board and at any meeting of a committee of the Board. Nothing herein contained shall be construed to preclude any director from serving the Company in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.
44. Resignation of Directors
Any director may resign at any time by delivering his or her notice in writing to the Secretary in accordance with the Companys Corporate Governance Guidelines, such resignation to specify whether it will be effective at a particular time. If no such specification is made, it shall be deemed effective at the time it is received in writing by the Secretary. When one or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term of the director whose place shall be vacated and until his or her successor shall have been duly elected and qualified.
45. Directors to Manage Business
45.1 The business and affairs of the Company shall be managed by, or under the direction or supervision of, the Board.
45.2 The Board has all the powers necessary for managing, and for directing and supervising, the business and affairs of the Company.
45.3 The Board may authorize the payment of all expenses incurred preliminary to and in connection with the formation and registration of the Company and may exercise all such powers of the Company as are not by
the Act or by the Memorandum or these Articles required to be exercised by the Members of the Company, subject to any delegation of such powers as may be authorized by these Articles. Subject to the provisions of the Act, all checks, promissory notes, draft, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as shall from time to time be determined by Resolution of Directors.
46. Committees of Directors
46.1 The Board may, by a Resolution of Directors, designate one or more committees of directors, including an executive committee, each consisting of one or more directors.
46.2 Each committee of directors has such powers and authorities of the Board, including the power and authority to affix the Seal, as are set forth in these Articles or the Resolution of Directors establishing the committee, except that the Board has no power to delegate the following powers to a committee of directors:
(a) to further delegate powers to a committee of directors;
(b) to amend the Memorandum or these Articles;
(c) to designate committees of directors;
(d) to appoint or remove directors;
(e) to appoint or remove an agent;
(f) to approve a plan of merger, consolidation or arrangement;
(g) to make a declaration of solvency or approve a liquidation plan;
(h) to make a determination that the Company will, immediately after a proposed Distribution, meet the solvency test set out in the Act; or
(i) to approve or adopt, or recommend to the Members, any action or matter (other than the election or removal of directors) expressly required by the Act to be submitted to the Members for approval.
46.3 A committee of directors, where authorized by the Board, may appoint a sub-committee.
46.4 The meetings and proceedings of each committee of directors consisting of two or more directors shall be governed mutatis mutandis by the provisions of these Articles regulating the proceedings of directors so far as the same are not superseded by any provisions in the resolution establishing the committee.
46.5 The Board, subject to any requirements of any outstanding series of Preferred Shares and the provisions of the other subsections of this Article 46, may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his or her death or voluntary resignation from the committee or from the Board. The Board may at any time for any reason remove any individual committee member and the Board may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee.
46.6 Unless the Board shall otherwise provide, regular meetings of the executive committee or any other committee appointed pursuant to this Article 46 shall be held at such times and places as are determined by the Board, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any Director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of the time and place of special meetings of the Board. Notice of any special meeting of any committee may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.
47. Officers and Agents
47.1 The Board may, by a Resolution of Directors, appoint any person, including a person who is a director to be an officer or agent of the Company. Such officers may consist of a chairman of the Board (provided that notwithstanding anything to the contrary contained in these Articles, the chairman of the Board shall not be deemed an officer of the Company unless so designated by the Board), a president and one or more vice presidents, secretaries and treasurers, a chief executive officer and a chief financial officer. The Board may also appoint one or more assistant secretaries and assistant treasurers and such other officers and agents with such powers and duties as it shall deem necessary. The Board may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the Company at any one time unless specifically prohibited therefrom by law.
47.2 Each officer or agent has such powers and authorities of the Board, including the power and authority to affix the Seal, as are set forth in these Articles or the Resolution of Directors appointing the officer or agent, except that no officer or agent has any power or authority with respect to the following:
(a) to amend the Memorandum or these Articles;
(b) to change the registered office or agent;
(c) to designate committees of directors;
(d) to delegate powers to a committee of directors;
(e) to appoint or remove directors;
(f) to appoint or remove an agent;
(g) to fix compensation of directors;
(h) to approve a plan of merger, consolidation or arrangement;
(i) to make a declaration of solvency or approve a liquidation plan;
(j) to make a determination that the Company will, immediately after a proposed distribution, meet the solvency test set out in the Act; or
(k) to authorize the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.
48. Removal and Resignation of Officers and Agents
48.1 The officers and agents of the Company shall hold office until their successors are duly elected and qualified, but any officer or agent elected or appointed by the Board may be removed at any time, with or without cause, by Resolution of Directors or by any committee or by the Chief Executive Officer or other superior officers upon whom such power of removal may have been conferred by the Board. Any vacancy occurring in any office of the Company may be filled by Resolution of Directors.
48.2 Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board or to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the Company under any contract with the resigning officer.
49. Duties of Officers
49.1 Duties of Chief Executive Officer . The Chief Executive Officer shall preside at all meetings of the Members and at all meetings of the Board, unless the Chairman of the Board has been appointed and is present, in which case the Chairman of the Board shall preside. Unless an officer has been appointed Chief Executive Officer of the Company, the President shall be the chief executive officer of the Company and shall, subject to the control of the Board, have general supervision, direction and control of the business and officers of the Company. To the extent that a Chief Executive Officer has been appointed and no President has been appointed, all references in these Articles to the President shall be deemed references to the Chief Executive Officer. The Chief Executive Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board shall designate from time to time.
49.2 Duties of President . The President shall preside at all meetings of the Members and at all meetings of the Board, unless the Chairman of the Board of Directors or the Chief Executive Officer has been appointed and is present. Unless another officer has been appointed Chief Executive Officer of the Company, the President shall be the chief executive officer of the Company and shall, subject to the control of the Board,
have general supervision, direction and control of the business and officers of the Company. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board shall designate from time to time.
49.3 Duties of Vice Presidents . The Vice Presidents may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. The Vice Presidents shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer, or, if the Chief Executive Officer has not been appointed or is absent, the President shall designate from time to time.
49.4 Duties of Secretary . The Secretary shall attend all meetings of the Members and of the Board and shall record all acts and proceedings thereof in the minute book of the Company. The Secretary shall give notice in conformity with these Articles of all meetings of the Members and of all meetings of the Board and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Articles and other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board shall designate from time to time. The President may direct any Assistant Secretary or other officer to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board or the President shall designate from time to time.
49.5 Duties of Chief Financial Officer . The Chief Financial Officer shall keep or cause to be kept the books of account of the Company in a thorough and proper manner and shall render statements of the financial affairs of the Company in such form and as often as required by the Board or the President. The Chief Financial Officer, subject to the order of the Board, shall have the custody of all funds and securities of the Company. The Chief Financial Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board or the President shall designate from time to time. To the extent that a Chief Financial Officer has been appointed and no Treasurer has been appointed, all references in these Articles to the Treasurer shall be deemed references to the Chief Financial Officer. The President may direct the Treasurer, if any, or any Assistant Treasurer, or a controller or any assistant controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each controller and assistant controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board or the President shall designate from time to time.
49.6 Duties of Treasurer . Unless another officer has been appointed Chief Financial Officer of the Company, the Treasurer shall be the chief financial officer of the Company and shall keep or cause to be kept the books of account of the Company in a thorough and proper manner and shall render statements of the financial affairs of the Company in such form and as often as required by the Board or the President, and, subject to the order of the Board, shall have the custody of all funds and securities of the Company. The Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board or the President shall designate from time to time.
49.7 Execution of Corporate Instruments . The Board may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the Company any corporate instrument or document, or to sign on behalf of the Company the corporate name without limitation, or to enter into contracts on behalf of the Company, except where otherwise provided by law or these Articles, and such execution or signature shall be binding upon the Company. All checks and drafts drawn on banks or other depositaries on funds to the credit of the Company or in special accounts of the Company shall be signed by such person or persons as the Board shall authorize so to do. Unless authorized or ratified by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Company by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
49.8 Voting of Securities Owned by the Company . All stock, shares and other securities of other corporations owned or held by the Company for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by Resolution of Directors, or, in the absence of such authorization, by the Chairman of the Board, the Chief Executive Officer, the President, or any Vice President.
50. Compensation of Officers
The salaries and other compensation of the officers of the Company shall be fixed by or in the manner designated by the Board.
51. Standard of Care
A director, when exercising powers or performing duties as a director, shall exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances taking into account, but without limitation, (a) the nature of the Company, (b) the nature of the decision, and (c) the position of the director
and the nature of the responsibilities undertaken by him or her.
52. Conflicts of Interest
52.1 A director shall, forthwith after becoming aware of the fact that he or she is interested in a transaction entered into or to be entered into by the Company, disclose the interest to the Board, unless the transaction or proposed transaction (a) is between the director and the Company and (b) is to be entered into in the ordinary course of the Companys business and on usual terms and conditions.
52.2 A transaction entered into by the Company in respect of which a director is interested is voidable by the Company unless the director complies with Article 52.1 or (a) the material facts of the interest of the director in the transaction are known by the Members entitled to vote at a meeting of Members and the transaction is approved or ratified by a Resolution of Members or (b) the Company received fair value for the transaction.
52.3 For the purposes of this Article 52, a disclosure is not made to the Board unless it is made or brought to the attention of every director on the Board.
52.4 A director who is interested in a transaction entered into or to be entered into by the Company may vote on a matter relating to the transaction, attend a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purposes of a quorum and sign a document on behalf of the Company, or do any other thing in his capacity as director that relates to the transaction.
53. Indemnification
53.1 Subject to Article 53.2, the Company shall indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with any proceedings any person who:
(a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director, an officer or a liquidator of the Company; or
(b) is or was, at the request of the Company, serving as a director or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise.
provided, however , that the Company may modify the extent of such indemnification by individual contracts with its directors; and, provided, further, that the Company shall not be required to indemnify any director in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board, (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under applicable law or (iv) such indemnification is required to be made under Article 53.9.
53.2 Article 53.1 does not apply to a person referred to in that article unless the person acted honestly and in good faith and in what he or she believed to be the best interests of the Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that his or her conduct was unlawful.
53.3 The decision of the Board as to whether the person acted honestly and in good faith and in what he or she believed to be the best interests of the Company and as to whether the person had no reasonable cause to believe that his or her conduct was unlawful is, in the absence of fraud, sufficient for the purposes of these Articles, unless a question of law is involved.
53.4 The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonable cause to believe that his or her conduct was unlawful.
53.5 If a person referred to in this article has been successful in defense of any proceedings referred to therein, the person is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection with the proceedings.
53.6 Expenses, including legal fees, incurred by a director (or former director) in defending any legal, administrative or investigative proceedings shall be paid by the Company in advance of the final disposition of such proceedings upon receipt of an undertaking by or on behalf of the director (or former director, as the case may be) to repay the amount if it shall ultimately be determined that the director (or former director, as the case may be) is not entitled to be indemnified by the Company. Expenses, including legal fees, incurred by an officer (or former officer) in defending any legal, administrative or investigative proceedings may be paid by the Company in advance of the final disposition of such proceedings upon receipt of an undertaking
by or on behalf of the officer (or former officer, as the case may be) to repay the amount if it shall ultimately be determined that the officer (or former officer, as the case may be) is not entitled to be indemnified by the Company.
53.7 The indemnification and advancement of expenses provided by, or granted under, these Articles are not exclusive of any other rights to which the person seeking indemnification or advancement of expenses may be entitled under any agreement, Resolution of Members, resolution of disinterested directors or otherwise, both as to acting in the persons official capacity and as to acting in another capacity while serving as a director of the Company.
53.8 The Company may purchase and maintain insurance in relation to any person who is or was a director, an officer or a liquidator of the Company, or who at the request of the Company is or was serving as a director, an officer or a liquidator of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability under Article 53.1.
53.9 Without the necessity of entering into an express contract, all rights to indemnification and advances to directors under this Article 53 shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the Company and the director. Any right to indemnification or advances granted by this Article 53 to a director shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. To the extent permitted by law, the claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the Company shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under applicable law for the Company to indemnify the claimant for the amount claimed. Neither the failure of the Company (including its Board, independent legal counsel or its shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because the director has met the applicable standard of conduct set forth in applicable law, nor an actual determination by the Company (including its Board, independent legal counsel or its shareholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director is not entitled to be indemnified, or to such advancement of expenses, under this Article or otherwise shall be on the Company.
53.10 The rights conferred on any person by this Article 53 shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Memorandum, Articles, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office. The Company is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by applicable law.
53.11 Any repeal or modification of this Article 53, or any portion hereof, shall only be prospective and shall not affect the rights under this Article 53 in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the Company.
53.12 If this Article 53, or any portion hereof, shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify each director to the full extent not prohibited by any applicable portion of this section that shall not have been invalidated, or by any other applicable law. If this section shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the Company shall indemnify each director to the full extent under any other applicable law.
53.13 For the purposes of this Article 53, the following definitions shall apply:
(a) The term proceeding shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
(b) The term expenses shall be broadly construed and shall include, without limitation, court costs, attorneys fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
(c) The term the Company shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this section with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.
(d) References to a director, officer, employee, or agent of the Company shall include, without limitation, situations where such person is serving at the request of the Company as, respectively, a director, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.
(e) References to other enterprises shall include employee benefit plans; references to fines shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to serving at the request of the Company shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the Company as referred to in this section.
MEETINGS OF THE BOARD OF DIRECTORS
54. Board Meetings
The Board or any committee thereof may meet at such times and in such manner and places within or outside the British Virgin Islands as it may determine to be necessary or desirable.
55. Notice of Board Meetings
A director shall be given reasonable notice of a Board meeting, but a Board meeting held without reasonable notice having been given to all directors shall be valid if, either before or after the meeting, all the directors entitled to vote at the meeting waive notice of the meeting, and for this purpose, the presence of a director at the meeting shall be deemed to constitute waiver on his or her part (except where a director attends a meeting for the express purpose of objecting to the transaction of business on the grounds that the meeting is not properly called). The inadvertent failure to give notice of a meeting to a director, or the fact that a director has not received the notice, does not invalidate the meeting. Reasonable notice for purposes of this Article 55 shall mean notice that is given in person, by telephone, or by facsimile, electronic mail or other form of electronic communication, sent to such directors business or home address, at least twenty-four (24) hours in advance of the meeting, or by written notice mailed to such directors business or home address, at least forty-eight (48) hours in advance of the meeting.
56. Participation in Meetings by Telephone
A director shall be deemed to be present at a meeting of directors if he or she participates by telephone or other electronic means and all directors participating in the meeting are able to hear each other.
57. Quorum at Board Meetings
Except with respect to questions related to indemnification arising under Article 53 herein for which a quorum shall be one-third of the exact number of directors fixed from time to time, the quorum necessary for the transaction of business at a meeting of directors shall be a majority of the exact number of directors fixed from time to time, but if less than a quorum is present at a meeting, a majority of the directors present may adjourn the meeting from time to time, and the meeting may be held as adjourned without further notice. Any business which might have been transacted at the meeting as originally noticed may be transacted at such adjourned meeting at which a quorum is present. For purposes of this Article, the total number of directors includes any unfilled vacancies on the Board.
58. Board to Continue in the Event of Vacancy
The continuing directors may act notwithstanding any vacancy in their body, save that if their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum for a Board meeting, the continuing directors or director may act only for the purpose of appointing directors to fill any vacancy that has arisen or summoning a meeting of Members.
59. Chairman to Preside
At every Board meeting the chairman of the Board shall preside as chairman of the meeting. If there is not a chairman of the Board or if the chairman of the Board is not present at the meeting, the directors present shall choose one of their number to be chairman of the meeting.
60. Powers of Sole Director
If the Company shall have only one director, the provisions herein contained for Board meetings shall not apply except that such sole director shall have full power to represent and act for the Company in all matters as are not by the Act or the Memorandum or these Articles required to be exercised by the Members of the Company. If the Company shall have only one director, in lieu of minutes of a meeting the director shall record in writing and sign a note or memorandum (or adopt a resolution in writing) concerning all matters requiring a Resolution of Directors and such note, memorandum or resolution in writing shall be kept in the minute book. Such a note, memorandum or resolution in writing shall constitute sufficient evidence of such resolution for all purposes.
61. Action Without Meeting
Unless otherwise restricted by the Act or the Memorandum or these Articles, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
CORPORATE RECORDS
62. Documents to be Kept
62.1 The Company shall keep the following documents at the office of its registered agent:
(a) the Memorandum and these Articles;
(b) the register of Members or a copy of the register of Members;
(c) the register of directors or a copy of the register of directors;
(d) the register of charges or a copy of the register of charges; and
(e) copies of all notices and other documents filed by the Company in the previous ten years.
62.2 Where the Company keeps a copy of its register of Members or register of directors at the office of its registered agent, it shall within 15 days of any change in the register, notify the registered agent, in writing, of the change, and it shall provide the registered agent with a written record of the physical address of the place or places at which the original register of Members or the original register of directors is kept.
62.3 Where the place at which the original register of Members or the original register of directors is changed, the Company shall provide the registered agent with the physical address of the new location of the records within 14 days of the change of location.
62.4 The Company shall keep the following records at the office of its registered agent or at such other place or places, within or outside the British Virgin Islands, as the Board may determine:
(a) the minutes of meetings and Resolutions of Members and of classes of Members; and
(b) the minutes of meetings and Resolutions of Directors and committees of directors.
62.5 Where any of the minutes or resolutions described in the previous article are kept at a place other than at the office of the Companys registered agent, the Company shall provide the registered agent with a written record of the physical address of the place or places at which the records are kept.
62.6 Where the place at which any of the records described in Article 62.4 is changed, the Company shall provide the registered agent with the physical address of the new location of the records within 14 days of the change of location.
62.7 The Companys records shall be kept in written form or either wholly or partly as electronic records.
63. Inspection of Records
63.1 A director of the Company is entitled, upon giving reasonable notice, to inspect the documents and records of the Company:
(a) in written form;
(b) without charge;
(c) at a reasonable time specified by the directors during normal business hours; and
(d) to make copies or take extracts from the documents and records.
63.2 Subject to Article 63.3, a Member of the Company is entitled, upon giving written notice to the Company, to inspect:
(a) the memorandum and articles;
(b) the register of members;
(c) the register of directors; and
(d) minutes of meetings and Resolutions of Members and of those classes of members of which he or she is a member, and to make copies of or take extracts from the documents and records.
63.3 The directors may, if they are satisfied that it will be contrary to the Companys interest to allow a Member to inspect a new document, or part of a document, specified in Article 63.2, (b), (c) or (d), refuse to permit the Member to inspect the document or limit the inspection of the document, including limiting the making of copies or taking the extracts form the records.
63.4 The directors shall as reasonably practicable notify a Member of any exercise of their powers under Article 63.3.
64. Form and Use of Seal
The Board shall provide for the safe custody of the Seal. An imprint thereof shall be kept at the office of the registered agent of the Company. The Seal when affixed to any written instrument shall be witnessed by any one director, the Secretary or Assistant Secretary, or by any person or persons so authorized from time to time by Resolution of Directors.
ACCOUNTS
65. Books of Account
The Company shall keep records and underlying documentation that (a) are sufficient to show and explain the Companys transactions and (b) will, at any time, enable the financial position of the Company to be determined with reasonable accuracy.
66. Form of Records
66.1 The records required to be kept by the Company under the Act, the Mutual Legal Assistance (Tax Matters Act), 2003, the Memorandum or these Articles shall be kept in written form or either wholly or partly as electronic records complying with the requirements of the Electronic Transactions Act (British Virgin Islands).
66.2 The records and underlying documentation shall be kept for a period of at least five years from the date of completion of the relevant transaction or the date the Company terminates the business relationship to which the records and underlying documentation relate.
JURISDICTION
67. Exclusive Jurisdiction of the Courts of the British Virgin Islands
Unless the Company consents in writing to the selection of an alternative forum, the courts of the British Virgin Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Companys Members, or (iii) any action asserting a claim arising pursuant to any provision of British Virgin Islands law or the Memorandum or these Articles, or (iv) any action asserting a claim against the Company governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of the Company shall be deemed to have notice of and consented to the provisions of this Article 67.
LITIGATION COSTS
68. Costs of Claim
In the event that (i) any Member or prior Member or anyone on its behalf (Claiming Party) initiates or
asserts any claim or counterclaim (Claim) or joins, offers substantial assistance to or has a direct financial interest in any Claim against the Company or its subsidiaries, directors or Members (including any Claim purportedly filed on behalf of the Company or any Member), and (ii) the Claiming Party (or the third party that received substantial assistance from the Claiming Party or in whose Claim the Claiming Party had a direct financial interest) does not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought, then each Claiming Party shall be obligated, jointly and severally, to reimburse the Company and any such Member or Members for all fees, costs and expenses of every kind and description (including, but not limited to, all reasonable attorneys fees and other litigation expenses) that the parties may incur in connection with such Claim.
VOLUNTARY LIQUIDATION
69. Liquidation
The Company may be liquidated in accordance with the Act only if (a) it has no liabilities; or (b) it is able to pay its debts as they fall due and the value of its assets equals or exceeds its liabilities. The Board shall be permitted to pass a Resolution of Directors for the appointment of an eligible individual as a voluntary liquidator (or two or more eligible individuals as joint voluntary liquidators) of the Company if the Members have, by a Resolution of Members, approved the liquidation plan in accordance with the Act.
FUNDAMENTAL CHANGES
70. Changes
Section 175 of the Act shall not apply to the Company.
71. Continuation under Foreign Law
The Company may, by Resolution of Members or by Resolution of Directors, continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.
MISCELLANEOUS
72. Loans to Officers or Employees
Except as otherwise prohibited by applicable law, including the Sarbanes-Oxley Act of 2002, the Company may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the Company or of its subsidiaries, including any officer or employee who is a director of the Company or its subsidiaries, whenever, in the judgment of the Board, such loan, guarantee or assistance may reasonably be expected to benefit the Company. The loan, guarantee or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board shall approve, including, without limitation, a pledge of shares of the Company. Nothing in these Articles shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the Company at common law or under any statute.
EXHIBIT 10.15
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the Agreement ) is made and entered into as of May [ ], 2017 between Biohaven Pharmaceutical Holding Company Ltd., a BVI business company formed under the laws of the Territory of the British Virgin Islands (the Company ), and [ FULL NAME ] ( Indemnitee ).
WITNESSETH THAT:
WHEREAS , highly competent persons have become more reluctant to serve corporations as [directors/officers] or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;
WHEREAS , the Amended and Restated Memorandum and Articles of Association ( Articles ) of the Company require indemnification of the officers and directors of the Company and Indemnitee may also be entitled to indemnification pursuant to the BVI Business Companies Act, 2004 of the British Virgin Islands ( BVICL );
WHEREAS , the Articles and the BVICL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company [and][,officers,] members of the Board of Directors of the Company (the Board ) and other persons with respect to indemnification;
WHEREAS , the Company desires to provide Indemnitee with specific contractual assurance of Indemnitees rights to full indemnification against litigation risks and expenses (regardless, among other things, of any amendment to or revocation of the Articles); and
NOW, THEREFORE , in consideration of Indemnitees agreement to serve as [a director/ an officer] from and after the date hereof, the parties hereto agree as follows:
1. Indemnity of Indemnitee . The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to time. In furtherance of the foregoing indemnification, and without limiting the generality thereof:
(a) Proceedings Other Than Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a) if, by reason of his Corporate Status (as hereinafter defined), the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a) , Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if the Indemnitee acted honestly and in good faith and in a manner the Indemnitee believed to be in the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitees conduct was unlawful.
(b) Proceedings by or in the Right of the Company . Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company. Pursuant to this Section 1(b) , Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee, or on the Indemnitees behalf, in connection with such Proceeding if the Indemnitee acted honestly and in good faith and in a manner the Indemnitee believed to be in the best interests of the Company; provided , however , if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the courts of the British Virgin Islands shall determine that such indemnification may be made.
(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
2. Indemnification for Expenses of a Witness . Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.
3. Advancement of Expenses . Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitees Corporate Status within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 3 shall be unsecured and interest free.
4. Procedures and Presumptions for Determination of Entitlement to Indemnification . It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the BVICL and public policy of the Territory of the British Virgin Islands. Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the Company, or to provide such a request in a timely fashion, shall not relieve the Company of any liability that it may have to Indemnitee unless, and to the extent that, such failure actually and materially prejudices the interests of the Company.
(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 4(a) hereof, a determination with respect to Indemnitees entitlement thereto shall be made in the specific case by one of the following four methods, which shall be at the election of the Board (1) by a majority vote of the disinterested directors, even though less than a quorum, (2) by a committee of disinterested directors designated by a majority vote of the disinterested directors, even though less than a quorum, (3) if there are no disinterested directors or if the disinterested directors so direct, by independent legal counsel in a written opinion to the Board, a copy of which shall be delivered to the Indemnitee, or (4) if so directed by the Board, by the stockholders of the Company. For purposes hereof, disinterested directors are those members of the Board who are not parties to the action, suit or proceeding in respect of which indemnification is sought by Indemnitee.
(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 4(b) hereof, the Independent Counsel shall be selected as provided in this Section 4(c) . The Independent Counsel shall be selected by the Board. Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of Independent Counsel as defined in Section 11 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 4(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the applicable court in the Territory of the British Virgin Islands or other court of competent jurisdiction for resolution of any objection which shall have been made by the Indemnitee to the Companys selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 4(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 4(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 4(c) , regardless of the manner in which such Independent Counsel was selected or appointed.
(d) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(e) Indemnitee shall be deemed to have acted honestly and in good faith if Indemnitees action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. Whether or not the foregoing provisions of this Section 4(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.
(f) If the person, persons or entity empowered or selected under Section 4 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitees statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided , however , that such sixty (60) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided further , that the foregoing provisions of this Section 4(f) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 4(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.
(g) Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitees entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitees entitlement to indemnification under this Agreement. Any costs or expenses (including attorneys fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitees entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.
(h) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act honestly and in good faith and in a manner which he reasonably believed to be in the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.
5. Remedies of Indemnitee .
(a) In the event that (i) a determination is made pursuant to Section 4 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 3 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 4(b) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 4 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the Territory of the British Virgin Islands, or in any other court of competent jurisdiction, of Indemnitees entitlement to such indemnification. Indemnitee shall commence such proceeding seeking an adjudication within one hundred eighty (180) days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 5(a) . The Company shall not oppose Indemnitees right to seek any such adjudication.
(b) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
6. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification; Subrogation .
(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Articles, any agreement, a vote of stockholders, a resolution of directors of
the Company, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the BVICL, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Articles and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors and officers liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.
(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(e) The Companys obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.
7. Exception to Right of Indemnification . Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision, provided, that the foregoing shall not affect the rights of Indemnitee; or
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or
(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation, or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
8. Duration of Agreement . All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 5 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement.
9. Security . To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Companys obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.
10. Enforcement .
(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director of the Company.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.
(c) The Company shall not seek from a court, or agree to, a bar order which would have the effect of prohibiting or limiting the Indemnitees rights to receive advancement of expenses under this Agreement.
11. Definitions . For purposes of this Agreement:
(a) Corporate Status describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.
(b) Disinterested Director means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.
(c) Enterprise shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.
(d) Expenses shall include all reasonable attorneys fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, including without limitation the premium, security for, and other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.
(e) Independent Counsel means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitees rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(f) Proceeding includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of his or her Corporate
Status, by reason of any action taken by him or of any inaction on his part while acting in his or her Corporate Status; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 5 of this Agreement to enforce his rights under this Agreement.
12. Severability . The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws. In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.
13. Modification and Waiver . No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
14. Notice By Indemnitee . Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.
15. Notices . All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent:
(a) To Indemnitee at the address set forth below Indemnitee signature hereto.
(b) To the Company at:
Biohaven Pharmaceutical Holding Company Ltd.
c/o 234 Church Street, Suite 304
New Haven, CT 06510
Attention: Vladimir Coric
or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.
16. Counterparts . This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g. , www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
17. Headings . The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
18. Governing Law and Consent to Jurisdiction. This Agreement shall be governed by the internal law of the Territory of the British Virgin Islands, without regard to its conflict of laws rules. Any unresolved controversy or claim arising out of or relating to this Agreement, except as (i) otherwise provided in this Agreement, or (ii) any such controversies or claims arising out of either partys intellectual property rights for which a provisional remedy or equitable relief is sought, shall be submitted to arbitration by one arbitrator mutually agreed upon by the parties, and if no agreement can be reached within thirty (30) days after names of potential arbitrators have been proposed by the American Arbitration Association (the AAA ), then by one arbitrator having reasonable experience in corporate finance transactions of the type provided for in this Agreement and who is chosen by the AAA. The arbitration shall take place in New York, New York, in accordance with the AAA rules then in effect, and judgment upon any award rendered in such arbitration will be binding and may be entered in any court having jurisdiction thereof. There shall be limited discovery prior to the arbitration hearing as follows: (a) exchange of witness lists and copies of documentary evidence and documents relating to or arising out of the issues to be arbitrated, (b) depositions of all party witnesses and (c) such other depositions as may be allowed by the arbitrators upon a showing of good cause. Depositions shall be conducted in accordance with the New York Code of Civil Procedure, the arbitrator shall be required to provide in writing to the parties the basis for the award or order of such arbitrator, and a court reporter shall record all hearings, with such record constituting the official transcript of such proceedings. Each party will bear its own costs in respect of any disputes arising under this Agreement. Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the Southern District of New York or any court of the State of New York having subject matter jurisdiction.
SIGNATURE PAGE TO FOLLOW
IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of the day and year first above written.
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BIOHAVEN PHARMACEUTICAL
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By: |
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Vladimir Coric |
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Chief Executive Officer |
EXHIBIT 10.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the Agreement ) is effective as of , by and between BIOHAVEN PHARMACEUTICALS, INC. , a Delaware corporation (the Company ), and VLADIMIR CORIC , an individual resident of the State of Connecticut (the Executive ).
WHEREAS , the Company and Executive desire to enter into this Agreement pursuant to which the Company will continue to employ Executive in the capacity, for the period and on the terms and conditions set forth herein;
NOW, THEREFORE , in consideration of the premises and mutual covenants and agreements herein contained, the parties hereby agree as follows:
1. EMPLOYMENT BY THE COMPANY.
(a) EMPLOYMENT AND DUTIES. The Company hereby continues to employ Executive and Executive hereby accepts such continued employment in the capacity of Chief Executive Officer of the Company to act in accordance with the terms and conditions hereinafter set forth. During the Term (as defined below), Executive agrees that he will devote time, attention and skills to the operation of the Business (as defined below) of the Company and that he will perform such duties, functions, responsibilities and authority in connection with the foregoing as are from time to time delegated to Executive by the Board of Directors of the Company (the Board ). These duties shall include, but shall not be limited to, overall responsibility for the Companys development of pharmaceutical drugs and strategic and operational planning, representing the Company in dealings with investors and the public, as well as setting the budget, executing deliverables and an operating plan and other tasks delegated by the Board of Directors from time to time required to be made by the Company, and providing minutes to all Director meetings. For purposes of this Agreement, the Business of the Company shall be defined as the development and commercialization of neuropsychiatric drug candidates and related technology based products. Executive is not bound by the terms of any agreement with any previous employer or other party which would limit his abilities to perform his duties and obligations hereunder.
(b) TERM. The term of this Agreement shall commence on the date hereof and shall continue for a period of three (3) years (the Initial Term ). Thereafter, this Agreement shall be automatically renewed for one year periods, unless otherwise terminated by the Executive upon written notice to the other given not less than ninety (90) days prior to the next anniversary of the Agreement. The Initial Term and any renewals thereof shall be referred to herein as the Term.
2. COMPENSATION . In consideration of all the services to be rendered by Executive to the Company hereunder, the Company hereby agrees to pay or otherwise provide Executive the following compensation and benefits. It is furthermore understood that the Company shall have the right to deduct or withhold under any provision of applicable law (including but not limited
to Social Security payments, income tax withholding and other required deductions not in effect or which may become effective by law any time during the Term) from:
(a) SALARY. Executive shall receive an initial annual salary of Four Hundred Fifty Thousand Dollars ($450,000), plus annual cost of living salary increases ( Base Salary ). The applicable Base Salary shall be reviewed by the Board each year prior to the anniversary of this Agreement to determine the annual increase to the applicable years Base Salary; provided, however, that in no event shall such annual increase be less than cost of living increase. The applicable Base Salary will be paid in equal installments not less frequently than bi-monthly in accordance with the Companys salary payment practices in effect from time to time for senior executives of the Company
(b) BONUS PAYMENT. In addition to the Base Salary then in effect, Executive shall be eligible to receive a bonus payment (the Bonus Payment ) with a target of fifty percent (50%) of the applicable years Base Salary (the Bonus Percentage ) based upon Executive achieving performance objectives as determined each year by the Board of Directors. The Bonus Payment will be paid in accordance with the Companys bonus payment practices in effect from time to time for senior executives of the Company, but no later than March 15 of the calendar year immediately following the calendar year for which the bonus is being measured. The Board shall review the Executives Bonus Percentage annually and may, in the Boards sole discretion, increase the Bonus Percentage based upon the Companys and Executives performance.
(c) EQUITY. In November 2014, Executive was granted an option to purchase 250,000 common shares (the First Option ) of Biohaven Pharmaceutical Holding Company Ltd. (the Parent ). In October 2015, Executive was granted an option to purchase 175,000 shares of the Parent (the Second Option ). In December 2016, Executive was granted an option to purchase 50,000 shares of the Parent (the Third Option ). In April 2017, Executive was granted an option to purchase 40,000 shares of the Parent (the Fourth Option ). Each of the First Option, Second Option, Third Option, and Fourth Option (together, the Options ) are governed by the Parents relevant equity plan and/or award agreement, unless specifically stated otherwise in this Agreement.
(d) FRINGE BENEFITS. The Company shall spend up to the equivalent of 20% of the Executives Base Salary on health, dental, welfare plans and retirement plans selected by the Executive pursuant to Company-sponsored employee benefit plans, subject to any applicable deductions and withholding requirements and the terms and requirements of such plans ( Benefits Cost ). The Benefits Cost is in addition to the Base Salary, Bonus and other compensation to which Executive from time to time may be entitled hereunder. Executives right to be reimbursed for business-related expenses is separate and Executive is not required to apply the Benefits Cost to any such expenses.
(e) EXPENSES. Executive shall be entitled to be reimbursed for all reasonable expenses incurred by him in connection with the fulfillment of his duties hereunder, including all necessary continuing education and certification costs and related expenses; provided, however, that Executive has obtained the Companys prior written approval of such expenses and has complied with all policies and procedures related to the reimbursement of such expenses as shall, from time to time, be established by the Company. For the avoidance of doubt, to the extent that
any reimbursements payable to Executive under this subsection 2(e) are subject to the provisions of Section 409A of the Code: (a) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.
(f) VACATIONS AND SICK LEAVE. Executive shall be entitled to four (4) weeks paid vacation annually to be taken in accordance with the Companys vacation policy in effect from time to time and at such time or times as may be mutually agreed upon by the Company and Executive; provided, however, that if for any reason Executive does not take the full four (4) weeks vacation in any given year, Executive shall be entitled to accrue and carry over such vacation time according to the policy established by the Company. Executive shall also be entitled to sick leave according to the sick leave policy which the Company many adopt from time to time.
3. INDEMNIFICATION .
(a) COMPANYS OBLIGATION TO INDEMNIFY. To the maximum extent allowable for the law of Delaware and the Bylaws and Certificates of Incorporation of the Company, the Company shall at all times during the Term and thereafter, indemnify and defend and hold Executive harmless from and against all liability, loss, costs, claims, damages, expenses, judgments, awards, and settlements as well as attorneys fees and expenses, personal or otherwise, whether in tort or in contract, law or equity, that the Company or the Executive may incur by reason of or arising out of any claim made by any third party (together, the Losses ), with respect to Executives employment with Company in accordance with this Agreement; provided, however, that the Companys foregoing indemnification obligations shall not apply to Losses incurred by the Company as a result of the Executives willful misconduct, gross negligence, conviction of a felony (including entry of a plea of nolo contendere) for illegal or criminal behavior or engagement in activities beyond the scope of his employment hereunder. Indemnification shall include all costs, including actual attorneys fees and expenses reasonably incurred in pursuing indemnity claims under or enforcement of this Agreement.
(b) EXECUTIVES OBLIGATION TO INDEMNIFY. To the maximum extent allowable for the law of Delaware, Executive shall also at all times during the term of this Agreement and thereafter, indemnify and defend and hold Company, its founders, owners, directors, officers, employees, advisors, agents, partners, service providers and affiliates harmless from and against all Losses with respect to the Executives willful misconduct, gross negligence, conviction of a felony (including entry of a plea of nolo contendere ) for illegal or criminal behavior or engagement in activities beyond the scope of his employment hereunder during the Executives employment with Company in accordance with this Agreement. Indemnification shall include all costs, including reasonable attorneys fees and expenses reasonably incurred in pursuing indemnity claims under or enforcement of this Agreement.
4. LIMITATION OF LIABILITY . EXECUTIVE AGREES THAT REGARDLESS OF THE FORM OF ANY CLAIM, EXECUTIVES SOLE REMEDY AND COMPANY OBLIGATION WITH RESPECT TO ANY CLAIMS MADE RELATED TO OR ARISING
OUT OF THIS AGREEMENT SHALL BE GOVERNED BY THIS AGREEMENT, AND IN ALL CASES EXECUTIVES REMEDIES SHALL BE LIMITED SPECIFICALLY TO COMPANY AND NOT TO ASSETS OR PERSONAL AND BUSINESS INTERESTS OF COMPANY FOUNDERS, OWNERS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS, PARTNERS AND AFFILIATES. IT IS EXPRESSLY AGREED THAT IN NO EVENT SHALL COMPANY, ITS FOUNDERS, OWNERS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS, PARTNERS AND AFFILIATES BE LIABLE FOR PERSONAL, INCIDENTAL, DIRECT, INDIRECT, OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS REGARDLESS OF WHETHER COMPANY SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY.
5. INSURANCE . The Company may secure, in its own name, or otherwise, and at its own expense, life, health, accident and other insurance covering Executive or Executive and others. Executive agrees to assist the Company in procuring such insurance by submitting to the usual and customary medical and other examinations and by signing, as the insured, such applications and other instruments in writing as may be reasonably requires by the insurance companies to which application is made pursuant to such insurance. Executive agrees that he shall have no right, title, or interest in or to any insurance policies or to the proceeds thereof which the Company many so elect to take out or to continue on the Executives life.
6. TERMINATION OF EMPLOYMENT.
(a) TERMINATION BY THE COMPANY WITHOUT JUST CAUSE, BY VIRTUE OF DEATH OR DISABILITY OF THE EXECUTIVE, OR RESIGNATION BY THE EXECUTIVE FOR GOOD REASON.
(i) The Company shall have the right to terminate Executives employment with the Company pursuant to this Section 6(a) at any time, in accordance with Section 6(d), without Just Cause (as defined in Section 6(c)(ii) below) or by virtue of the Executives death or Disability (as defined herein) by giving notice as described in Section 9(a) of this Agreement. The executive shall have the right to terminate his employment for Good Reason in accordance with Section 6(a)(vi).
(ii) If the Company terminates Executives employment at any time without Just Cause or by virtue of the death or Disability of the Executive or Executive terminates his employment with the Company for Good Reason (as defined in Section 6(a)(vi) below) and provided that such termination constitutes a separation from service (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a Separation from Service ), then Executive shall be entitled to receive the Accrued Obligations (defined in 6(a)(iv) below). If Executive complies with the obligations in Section 6(a)(iii) below, Executive shall also be eligible to receive the following Severance Benefits:
(1) The Company will pay Executive an amount equal to Executives then current Base Salary for fifteen (15) months (the Severance Period ), less all applicable withholdings and deductions, paid in equal installments beginning on the first day of the month following the Release Effective Date (as defined in Section 6(a)(iii) below), with the remaining
installments occurring on the first day of each remaining month of the Severance Period thereafter.
(2) If Executive timely elects continued coverage under COBRA or, if applicable, state insurance laws, for himself and his covered dependents under the Companys group health plans following such termination, then the Company shall pay the COBRA premiums or, if applicable, premiums for continuation coverage under state insurance laws, necessary to continue Executives and his covered dependents health insurance coverage in effect for himself (and his covered dependents) on the termination date until the earliest of: (i) fifteen (15) months following the termination date (the COBRA Severance Period ); (ii) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; or (iii) the date Executive ceases to be eligible for COBRA or state continuation coverage (or, with respect to his covered dependents, the date they cease to be eligible for COBRA or state continuation coverage) for any reason, including plan termination (such period from the termination date through the earlier of (i)-(iii), (the COBRA Payment Period ). Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums or, if applicable, premiums for continuation coverage under state insurance laws, on Executives behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying such premiums pursuant to this Section, the Company shall pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium or, if applicable, premiums for continuation coverage under state insurance laws, for such month, subject to applicable tax withholding (such amount, the Special Severance Payment ), for the remainder of the COBRA Payment Period. Nothing in this Agreement shall deprive Executive of his rights under COBRA or ERISA for benefits under plans and policies arising under his employment by the Company.
(3) The Company shall pay to the Executive the premiums for the continuation of the Executives life insurance benefits for a period of fifteen (15) months (the Life Insurance Period ) from the date of termination, subject to any applicable withholdings and deductions, in monthly installments commencing on the Companys first regular payroll date that is more than sixty (60) days following the date of termination.
(4) Notwithstanding anything to the contrary set forth in any applicable equity incentive plans or award agreements, effective as of Executives employment termination date, the vesting and exercisability of all unvested shares subject to the Options shall accelerate such that all shares subject to the Options shall become immediately vested and exercisable by Executive upon such termination and the Options shall remain exercisable, if applicable, for twenty-four months following Executives termination.
(iii) Executive will be paid all of the Accrued Obligations on the Companys first payroll date after Executives date of termination from employment or earlier if required by law. Executive shall receive the Severance Benefits pursuant to Section 6(a)(ii) or Change in Control Severance Benefits pursuant to Section 6(b)(i) of this Agreement if by the 60th day following the date of Executives Separation from Service, he has signed and delivered to the Company a reasonable separation agreement that includes a general release in favor of the
Company (the Release ), which cannot be revoked in whole or part by such date (the date that the Release can no longer be revoked is referred to as the Release Effective Date ) .
(iv) For purposes of this Agreement, Accrued Obligations are any accrued but unpaid portion of the applicable Base Salary, plus any accrued but unused vacation time and unpaid expenses (in accordance with Section 2(d) and hereof) that have been earned by the Executive as the date of such termination.
(v) For purposes of this Agreement, and subject to applicable state and federal law, termination by the Company on account of the Executives Disability shall mean termination because the Executive is unable due to a physical or mental condition to perform the essential functions of his position with or without reasonable accommodation for six (6) months in the aggregate during any twelve (12) month period or based on the written certification by two licensed physicians of the likely continuation of such condition for such period. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law. Whenever Severance Benefits or Change in Control Severance Benefits are payable to Executive hereunder during a time when Executive is partially or totally disabled, and such Disability would entitle him to disability income payments according to the terms of any plan or policy now or hereafter provided by the Company, the Severance Benefits or Change in Control Severance Benefits payable to Executive hereunder shall be inclusive of any such disability income and shall not be in addition thereto, even if such disability income is payable directly to Executive by an insurance company under a policy paid for by the Company.
(vi) For purposes of this Agreement, Good Reason shall mean the occurrence of any of the following events without Executives consent: (1) a material reduction in Executives Base Salary; (2) a material reduction in the Executives duties, authority and responsibilities relative to the Executives duties, authority, and responsibilities in effect immediately prior to such reduction; (3) the relocation of Executives principal place of employment, without Executives consent, in a manner that lengthens his one-way commute distance by fifty (50) or more miles from his then-current principal place of employment immediately prior to such relocation; (4) any material breach of the Agreement by the Company or its successors; or (5) the liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or a significant portion of its business and/or assets, unless the successor or successors shall have assumed all duties and obligations of the Company under the Agreement; provided, however, that, any such termination by Executive shall only be deemed for Good Reason pursuant to this definition if: (a) Executive gives the Company written notice of his intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that he believes constitute(s) Good Reason, which notice shall describe such condition(s); (b) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the Cure Period ); (c) the Company has not, prior to receiving such notice from Executive, already informed Executive that his employment with the Company is being terminated and (d) Executive voluntarily terminates his employment within thirty (30) days following the end of the Cure Period.
(b) TERMINATION BY THE COMPANY WITHOUT JUST CAUSE OR RESIGNATION BY THE EXECUTIVE FOR GOOD REASON COINCIDENT WITH A CHANGE IN CONTROL.
(i) If Executives employment by the Company is terminated by the Company or any successor entity without Just Cause (as defined in Section 6(c)(ii)) (not including termination by virtue of death or Disability) or by Executive for Good Reason within twelve (12) months following the effective date of a Change in Control (as defined below), provided that such termination constitutes a Separation from Service, without regard to any alternative definition thereunder, then in addition to paying or providing Executive with the Accrued Obligations and subject to compliance with Section 6(a)(iii), the Company will provide the following Change in Control Severance Benefits :
(1) The Company will pay the benefit as described in Section 6(a)(ii)(1), except that the Severance Period in Section 6(a)(ii)(1) shall instead be eighteen (18) months;
(2) The Company will pay the benefit as described in Section 6(a)(ii)(2), except that the COBRA Severance Period in Section 6(a)(ii)(2) shall instead be eighteen (18) months;
(3) The Company will pay the benefit as described in Section 6(a)(ii)(3), except that the Life Insurance Period in Section 6(a)(ii)(3) shall instead be eighteen (18) months;
(4) The Company will pay an additional amount equivalent to 1.5 multiplied by Executives full Bonus Percentage, for the performance year in which Executives termination occurs. This bonus will be payable subject to standard federal and state payroll withholding requirements and paid in equal installments beginning on the first day of the month following the Release Effective Date (as defined in Section 6(a)(iii)), with the remaining installments occurring on the first day of the month for the seventeen (17) months thereafter; and
(5) Notwithstanding anything to the contrary set forth in any applicable equity incentive plans or award agreements, effective as of Executives employment termination date, the vesting and exercisability of all unvested time-based vesting equity awards then held by Executive shall accelerate such that all shares become immediately vested and exercisable, if applicable, by Executive upon such termination and all stock options held by Executive shall remain exercisable, if applicable, for twelve (12) months following Executives termination. With respect to any performance-based vesting equity award, such award shall continue to be governed in all respects by the terms of the applicable equity award documents.
(ii) For purposes of this Agreement, a Change in Control means the occurrence of any of the events set forth in clauses (i), (ii) or (iii) with respect to either of the Company or the Parent, or the event set forth in clause (v) with respect to the Company, in each case of the definition of Change in Control set forth in the Companys 2017 Equity Incentive Plan, as may be amended from time to time.
(c) TERMINATION FOR JUST CAUSE OR VOLUNTARY TERMINATION.
(i) If Executives employment is terminated prior to the expiration of the Term for just cause or if Executives employment is terminated as set forth in Section 6(d)(ii) or (iii) hereof (not including a resignation for Good Reason), Executive shall NOT be entitled to receive any Severance Benefits (as defined in Section 6(a)(ii)) or Change in Control Severance Benefits (defined in Section 6(b)(i)) and will only be entitled to receive any accrued but unpaid portion of the applicable Base Salary, plus any accrued but unused vacation time and unpaid expenses (in accordance with Section 2(d) and hereof) that have been earned by the Executive as the date of such termination.
(ii) For the purposes hereof, the Company shall have Just Cause to terminate Executives employment hereunder as a result of Executives gross negligence, willful misconduct, conviction of a felony (including the entry of a plea of nolo contendere) for illegal or criminal behavior in carrying out his duties as required pursuant to the terms of the Agreement. Notwithstanding any other provision contained herein, the Company shall have the right to terminate the agreement and Executives employment without just cause, and Executives remedies hereunder in the event of such termination shall be limited to the Severance Benefits or Change in Control Severance Benefits, as applicable, set forth in Section 6(a)(ii) and 6(b)(i) hereof.
(d) EVENTS OF TERMINATION. This Agreement shall terminate on the earliest to occur of the following events:
(i) the expiration of the Term;
(ii) the mutual written agreement of the Company and the Executive;
(iii) the voluntary termination of the Executive other than as a result of a resignation for Good Reason (as defined in Section 6(a)(vi));
(iv) the death of Executive or Executives retirement;
(v) termination on account of a Disability (as defined above);
(vi) the termination of the Executive by the Company with or without Just Cause (as defined in Section 6(c)(ii)) upon giving written notice to Executive; or
(vii) for a termination for Good Reason, immediately upon Executives full satisfaction of the requirements of Section 6(a)(vi)
(e) SECTION 409A.
(i) Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided herein are subject to Section 409A of the Internal Revenue Code (the Code ) and the regulations and other guidance thereunder and any state law of similar effect (collectively Section 409A ). Severance benefits shall not commence until the Executive has a separation from service (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a separation from service). Each installment of severance benefits is a separate payment for purposes of Treas.
Reg. Section 1.409A-2(b)(2)(i), and the severance benefits are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if such exemptions are not available and the Executive is, upon separation from service, a specified employee for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after the Executives separation from service, (ii) the Executives death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Section 409A period, all payments deferred pursuant to this paragraph shall be paid in a lump sum to Executive, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred. The parties acknowledge that the exemptions from application of Section 409A to severance benefits are fact specific, and any later amendment of this Agreement to alter the timing, amount or conditions that will trigger payment of severance benefits may preclude the ability of severance benefits provided under this Agreement to qualify for an exemption. To the extent that any severance payments or benefits are deferred compensation under Section 409A, and are not otherwise exempt from the application of Section 409A, then, if the period during which Executive may consider and sign the Release spans two calendar years, the payment of such severance payments and benefits will not be made or begin until the later calendar year.
(ii) It is intended that this Agreement shall comply with the requirements of Section 409A, and any ambiguity contained herein shall be interpreted in such manner so as to avoid adverse personal tax consequences under Section 409A. Notwithstanding the foregoing, the Company shall in no event be obligated to indemnify the Executive for any taxes or interest that may be assessed by the Internal Revenue Service pursuant to Section 409A of the Code to payments made pursuant to this Agreement.
7. RESTRICTIVE COVENANTS .
(a) CIIA. As a condition of continued employment, Executive agrees to abide by the Confidential Information and Invention Assignment Agreement, attached as Exhibit A, that he previously executed (the CIIA ). The CIIA may be amended from time to time without regard to this Agreement. The CIIA contains provisions that are intended by the parties to survive and do survive termination of this Agreement.
(b) NON-SOLICITATION AND NON-COMPETITION. Executive and the Company agree that the Company would suffer irreparable harm and incur substantial damage if Executive were to enter into Competition (as defined herein) with the Company. Therefore, in order for the Company to protect its legitimate business interests, Executive agrees as follows:
(i) Without the prior written consent of the Company, Executive shall not, during the period of employment with the Company, directly or indirectly, invest or engage in any business that is Competitive (as defined herein) with the Business of the Company or accept employment or render services to a Competitor (as defined herein) of the Company as a director, officer, agent, employee or consultant or solicit or attempt to solicit or accept business that is Competitive with the Business of the Company, except that Executive may own up to five
percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended; provided, however, the Company acknowledges that Executive currently engages in a number of activities set forth on Exhibit B as long as such permitted activities do not have a material adverse effect on the Executives performance or this Agreement.
(ii) Without the prior written consent of the Company and upon any termination of Executives employment with the Company and for a period of twelve (12) months thereafter, Executive shall not, either directly or indirectly, (x) invest or engage in any business that is Competitive (as defined herein) with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended, (y) accept employment with or render services to a Competitor of the Company as a director, officer, agent, employee or consultant unless he is serving in a capacity that has no relationship to that portion of the Competitors business that is Competitive with the Business of the Company, or (z) solicit, attempt to solicit or accept business Competitive with the Business of the Company from any of the customers of the Company at the time of his termination or within twelve (12) months prior thereto or from any person or entity whose business the Company was soliciting at such time.
(iii) Upon termination of his employment with the Company, and for a period of twelve (12) months thereafter, Executive shall not, either directly or indirectly, engage, hire, employ or solicit in any manner whatsoever the employment of an employee of the Company.
(iv) For purposes of this Agreement, a business or activity is in Competition or Competitive with the Business of the Company if it involves, and a person or entity is a Competitor, if that person or entity is engaged in, or about to become engaged in, the research, development, design, manufacturing, marketing or selling of a specific product or technology that resembles, competes, or is designed to compete, with, or has applications similar to any product or technology for which the Company has obtained or applied for a patent or made disclosures, or any product or technology involving any other proprietary research or development engaged in or conducted by the Company during the Term of Executives employment with the Company.
8. SECTION 280G; LIMITATIONS ON PAYMENT.
(a) If any payment or benefit Executive will or may receive from the Company or otherwise (a 280G Payment ) would (i) constitute a parachute payment within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax ), then any such 280G Payment provided pursuant to this Agreement (a Payment ) shall be equal to the Reduced Amount. The Reduced Amount shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executives receipt, on an after-tax basis, of the greater economic benefit
notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the Reduction Method ) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the Pro Rata Reduction Method ).
(b) Notwithstanding any provision of Section 8(a) to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events ( e.g. , being terminated without Just Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are deferred compensation within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(c) Unless Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the change in control transaction shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change in control transaction, the Company shall appoint a nationally recognized accounting or law firm to make the determinations required by this Section 8. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executives right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.
(d) If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 8(a) and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees to promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 8(a)) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of Section 8(a), Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.
9. GENERAL PROVISIONS .
(a) NOTICES . Any notices required hereunder to be in writing shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by electronic mail, telex or confirmed facsimile if sent during normal business hours of the recipient, and if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at its primary office location and to Executive at Executives address as listed on the Company payroll or Executives company-provided email address, or at such other address as the Company or the Executive may designate by ten (10) days advance written notice to the other.
(b) ENTIRE AGREEMENT . This Agreement, together with Exhibit A, constitutes the entire agreement between the parties hereto relating to the subject matter hereof, and supersedes all prior agreements and understandings, whether oral or written, with respect to the same, including the Executives prior Employment Agreement effective October 1, 2015. No modification, alteration, amendment or revision of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by both parties hereto.
(c) GOVERNING LAW . This Agreement and the rights and duties of the parties hereunder shall be governed by, construed under and enforced in accordance with the laws of the State of Connecticut.
(d) ASSIGNMENT . The rights and obligations of the parties under this Agreement shall not be assignable without written permission of the other party.
(e) SEVERABILITY . The invalidity of any provision of this Agreement under the applicable laws of the State of Connecticut or any other jurisdiction, shall not affect the other provisions hereby declared to be severable from all other provisions. The intention of the parties, as expressed in any provision held to be void or ineffective shall be given such full force and effect as may be permitted by law.
(f) SURVIVAL . The obligations under Sections 3, 4, 6, 7, 8 and 9 shall survive the termination of this Agreement.
(g) REMEDIES . Executive and the Company recognize that the services to be rendered under this Agreement by Executive are special, unique, and of extraordinary character, and that in the event of the breach by Executive of the terms and conditions of Sections 3, 4, and 7 hereof the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, to obtain damages for any breach thereof.
(h) DISPUTE RESOLUTION . Except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims, disputes or controversies arising under, out of, or in connection with the Agreement, including any dispute relating to production, use or commercialization, which the parties shall be unable to resolve within sixty (60) days shall be mediated in good faith. The party raising such dispute shall promptly advise the other party of such claim, dispute or controversy in a writing, which
describes in reasonable detail the nature of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party shall have selected for itself a representative who shall have the authority to bind such party, and shall additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) business days after the date of such notice of dispute, the party against whom the dispute shall be raised shall select a mediation firm in Connecticut and such representatives shall schedule a date with such firm for a mediation hearing. The parties shall enter into good faith mediation and shall share the costs equally. If the representatives of the parties have not been able to resolve the dispute within fifteen (15) business days after such mediation hearing, the parties shall have the right to pursue any other remedies legally available to resolve such dispute in either the Courts of the State of Connecticut or in the United States District Court for the District of Connecticut, to whose jurisdiction for such purposes Company and Executive each hereby irrevocably consents and submits .
[signatures to follow on next page]
IN WITNESS WHEREOF , the parties have executed this Agreement as of the day and year first above written.
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Biohaven Pharmaceuticals, Inc . |
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By: |
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Name: Dr. Declan Doogan |
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Title: Executive Chairman |
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Dr. Vladimir Coric |
EXHIBIT 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the Agreement ) is effective as of , by and between BIOHAVEN PHARMACEUTICALS, INC. , a Delaware corporation (the Company ), and ROBERT M. BERMAN, M.D. , an individual resident of the State of Connecticut (the Executive ).
WHEREAS , the Company and Executive desire to enter into this Agreement pursuant to which the Company will continue to employ Executive in the capacity, for the period and on the terms and conditions set forth herein;
NOW, THEREFORE , in consideration of the premises and mutual covenants and agreements herein contained, the parties hereby agree as follows:
1. EMPLOYMENT BY THE COMPANY.
(a) EMPLOYMENT AND DUTIES. The Company hereby continues to employ Executive and Executive hereby accepts such continued employment in the capacity of Chief Medical Officer of the Company to act in accordance with the terms and conditions hereinafter set forth. During the Term (as defined below), Executive will report to the Chief Executive Officer (the CEO ) and agrees that he will devote time, attention and skills to the operation of the Business (as defined below) of the Company and that he will perform such duties, functions, responsibilities and authority in connection with the foregoing as are from time to time delegated to Executive by the CEO. These duties shall include, but shall not be limited to, responsibility for the Companys development of pharmaceutical drugs and strategic research and development planning, execution and design of clinical trials, medical oversight and safety monitoring of clinical trials, preparing for drug approvals that are in compliance with global regulatory and health agencies, assuring that trials are conducted within good clinical practices and high quality data, obtaining institutional review board approval of studies, representing the Company in dealings with investors and the public, executing deliverables and an operating plan, and other tasks delegated by the CEO. For purposes of this Agreement, the Business of the Company shall be defined as the development and commercialization of neuropsychiatric drug candidates and related technology based products. Executive is not bound by the terms of any agreement with any previous employer or other party which would limit his abilities to perform his duties and obligations hereunder.
(b) TERM. The term of this Agreement shall commence on the date hereof and shall continue for a period of three (3) years (the Initial Term ). Thereafter, this Agreement shall be automatically renewed for one year periods, unless otherwise terminated by the Executive upon written notice to the other given not less than ninety (90) days prior to the next anniversary of the Agreement. The Initial Term and any renewals thereof shall be referred to herein as the Term.
2. COMPENSATION . In consideration of all the services to be rendered by Executive to the Company hereunder, the Company hereby agrees to pay or otherwise provide Executive the following compensation and benefits. It is furthermore understood that the Company shall have
the right to deduct or withhold under any provision of applicable law (including but not limited to Social Security payments, income tax withholding and other required deductions not in effect or which may become effective by law any time during the Term) from:
(a) SALARY. Executive shall receive an initial annual salary of Three Hundred Forty Thousand Dollars ($340,000), plus annual cost of living salary increases ( Base Salary ). The applicable Base Salary shall be reviewed by the Board each year prior to the anniversary of this Agreement to determine the annual increase to the applicable years Base Salary; provided, however, that in no event shall such annual increase be less than cost of living increase. The applicable Base Salary will be paid in equal installments not less frequently than bi-monthly in accordance with the Companys salary payment practices in effect from time to time for senior executives of the Company
(b) BONUS PAYMENT. In addition to the Base Salary then in effect, Executive shall be eligible to receive a bonus payment (the Bonus Payment ) with a target of thirty-five percent (35%) of the applicable years Base Salary (the Bonus Percentage ) based upon Executive achieving performance objectives as determined each year by the Board of Directors. The Bonus Payment will be paid in accordance with the Companys bonus payment practices in effect from time to time for senior executives of the Company, but no later than March 15 of the calendar year immediately following the calendar year for which the bonus is being measured. The Board shall review the Executives Bonus Percentage annually and may, in the Boards sole discretion, increase the Bonus Percentage based upon the Companys and Executives performance.
(c) EQUITY. In November 2014, Executive was granted an option to purchase 225,000 common shares (the First Option ) of Biohaven Pharmaceutical Holding Company Ltd. (the Parent ). In October 2015, Executive was granted an option to purchase 150,000 shares of the Parent (the Second Option ). In December 2016, Executive was granted an option to purchase 27,000 shares of the Parent (the Third Option ). In April 2017, Executive was granted an option to purchase 20,000 shares of the Parent (the Fourth Option ). Each of the First Option, Second Option, Third Option, and Fourth Option (together, the Options ) are governed by the Parents relevant equity plan and/or award agreement, unless specifically stated otherwise in this Agreement.
(d) FRINGE BENEFITS. The Company shall spend up to the equivalent of 20% of the Executives Base Salary on health, dental, welfare plans and retirement plans selected by the Executive pursuant to Company-sponsored employee benefit plans, subject to any applicable deductions and withholding requirements and the terms and requirements of such plans ( Benefits Cost ). The Benefits Cost is in addition to the Base Salary, Bonus and other compensation to which Executive from time to time may be entitled hereunder. Executives right to be reimbursed for business-related expenses is separate and Executive is not required to apply the Benefits Cost to any such expenses.
(e) EXPENSES. Executive shall be entitled to be reimbursed for all reasonable expenses incurred by him in connection with the fulfillment of his duties hereunder, including all necessary continuing education and certification costs and related expenses; provided, however, that Executive has obtained the Companys prior written approval of such expenses and has
complied with all policies and procedures related to the reimbursement of such expenses as shall, from time to time, be established by the Company. For the avoidance of doubt, to the extent that any reimbursements payable to Executive under this subsection 2(e) are subject to the provisions of Section 409A of the Code: (a) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.
(f) VACATIONS AND SICK LEAVE. Executive shall be entitled to four (4) weeks paid vacation annually to be taken in accordance with the Companys vacation policy in effect from time to time and at such time or times as may be mutually agreed upon by the Company and Executive; provided, however, that if for any reason Executive does not take the full four (4) weeks vacation in any given year, Executive shall be entitled to accrue and carry over such vacation time according to the policy established by the Company. Executive shall also be entitled to sick leave according to the sick leave policy which the Company many adopt from time to time.
3. INDEMNIFICATION .
(a) COMPANYS OBLIGATION TO INDEMNIFY. To the maximum extent allowable for the law of Delaware and the Bylaws and Certificates of Incorporation of the Company, the Company shall at all times during the Term and thereafter, indemnify and defend and hold Executive harmless from and against all liability, loss, costs, claims, damages, expenses, judgments, awards, and settlements as well as attorneys fees and expenses, personal or otherwise, whether in tort or in contract, law or equity, that the Company or the Executive may incur by reason of or arising out of any claim made by any third party (together, the Losses ), with respect to Executives employment with Company in accordance with this Agreement; provided, however, that the Companys foregoing indemnification obligations shall not apply to Losses incurred by the Company as a result of the Executives willful misconduct, gross negligence, conviction of a felony (including entry of a plea of nolo contendere) for illegal or criminal behavior or engagement in activities beyond the scope of his employment hereunder. Indemnification shall include all costs, including actual attorneys fees and expenses reasonably incurred in pursuing indemnity claims under or enforcement of this Agreement.
(b) EXECUTIVES OBLIGATION TO INDEMNIFY. To the maximum extent allowable for the law of Delaware, Executive shall also at all times during the term of this Agreement and thereafter, indemnify and defend and hold Company, its founders, owners, directors, officers, employees, advisors, agents, partners, service providers and affiliates harmless from and against all Losses with respect to the Executives willful misconduct, gross negligence, conviction of a felony (including entry of a plea of nolo contendere ) for illegal or criminal behavior or engagement in activities beyond the scope of his employment hereunder during the Executives employment with Company in accordance with this Agreement. Indemnification shall include all costs, including reasonable attorneys fees and expenses reasonably incurred in pursuing indemnity claims under or enforcement of this Agreement.
4. LIMITATION OF LIABILITY . EXECUTIVE AGREES THAT REGARDLESS OF THE FORM OF ANY CLAIM, EXECUTIVES SOLE REMEDY AND COMPANY OBLIGATION WITH RESPECT TO ANY CLAIMS MADE RELATED TO OR ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY THIS AGREEMENT, AND IN ALL CASES EXECUTIVES REMEDIES SHALL BE LIMITED SPECIFICALLY TO COMPANY AND NOT TO ASSETS OR PERSONAL AND BUSINESS INTERESTS OF COMPANY FOUNDERS, OWNERS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS, PARTNERS AND AFFILIATES. IT IS EXPRESSLY AGREED THAT IN NO EVENT SHALL COMPANY, ITS FOUNDERS, OWNERS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS, PARTNERS AND AFFILIATES BE LIABLE FOR PERSONAL, INCIDENTAL, DIRECT, INDIRECT, OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS REGARDLESS OF WHETHER COMPANY SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY.
5. INSURANCE . The Company may secure, in its own name, or otherwise, and at its own expense, life, health, accident and other insurance covering Executive or Executive and others. Executive agrees to assist the Company in procuring such insurance by submitting to the usual and customary medical and other examinations and by signing, as the insured, such applications and other instruments in writing as may be reasonably requires by the insurance companies to which application is made pursuant to such insurance. Executive agrees that he shall have no right, title, or interest in or to any insurance policies or to the proceeds thereof which the Company many so elect to take out or to continue on the Executives life.
6. TERMINATION OF EMPLOYMENT.
(a) TERMINATION BY THE COMPANY WITHOUT JUST CAUSE, BY VIRTUE OF DEATH OR DISABILITY OF THE EXECUTIVE, OR RESIGNATION BY THE EXECUTIVE FOR GOOD REASON.
(i) The Company shall have the right to terminate Executives employment with the Company pursuant to this Section 6(a) at any time, in accordance with Section 6(d), without Just Cause (as defined in Section 6(c)(ii) below) or by virtue of the Executives death or Disability (as defined herein) by giving notice as described in Section 9(a) of this Agreement. The executive shall have the right to terminate his employment for Good Reason in accordance with Section 6(a)(vi).
(ii) If the Company terminates Executives employment at any time without Just Cause or by virtue of the death or Disability of the Executive or Executive terminates his employment with the Company for Good Reason (as defined in Section 6(a)(vi) below) and provided that such termination constitutes a separation from service (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a Separation from Service ), then Executive shall be entitled to receive the Accrued Obligations (defined in 6(a)(iv) below). If Executive complies with the obligations in Section 6(a)(iii) below, Executive shall also be eligible to receive the following Severance Benefits:
(1) The Company will pay Executive an amount equal to Executives then current Base Salary for nine (9) months (the Severance Period ), less all applicable withholdings and deductions, paid in equal installments beginning on the first day of the month following the Release Effective Date (as defined in Section 6(a)(iii) below), with the remaining installments occurring on the first day of each remaining month of the Severance Period thereafter.
(2) If Executive timely elects continued coverage under COBRA or, if applicable, state insurance laws, for himself and his covered dependents under the Companys group health plans following such termination, then the Company shall pay the COBRA premiums or, if applicable, premiums for continuation coverage under state insurance laws, necessary to continue Executives and his covered dependents health insurance coverage in effect for himself (and his covered dependents) on the termination date until the earliest of: (i) nine (9) months following the termination date (the COBRA Severance Period ); (ii) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; or (iii) the date Executive ceases to be eligible for COBRA or state continuation coverage (or, with respect to his covered dependents, the date they cease to be eligible for COBRA or state continuation coverage) for any reason, including plan termination (such period from the termination date through the earlier of (i)-(iii), (the COBRA Payment Period ). Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums or, if applicable, premiums for continuation coverage under state insurance laws, on Executives behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying such premiums pursuant to this Section, the Company shall pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium or, if applicable, premiums for continuation coverage under state insurance laws, for such month, subject to applicable tax withholding (such amount, the Special Severance Payment ), for the remainder of the COBRA Payment Period. Nothing in this Agreement shall deprive Executive of his rights under COBRA or ERISA for benefits under plans and policies arising under his employment by the Company.
(3) The Company shall pay to the Executive the premiums for the continuation of the Executives life insurance benefits for a period of nine (9) months (the Life Insurance Period ) from the date of termination, subject to any applicable withholdings and deductions, in monthly installments commencing on the Companys first regular payroll date that is more than sixty (60) days following the date of termination.
(4) Notwithstanding anything to the contrary set forth in any applicable equity incentive plans or award agreements, effective as of Executives employment termination date, the vesting and exercisability of all unvested shares subject to the Options shall accelerate such that all shares subject to the Options shall become immediately vested and exercisable by Executive upon such termination and the Options shall remain exercisable, if applicable, for twenty-four months following Executives termination.
(iii) Executive will be paid all of the Accrued Obligations on the Companys first payroll date after Executives date of termination from employment or earlier if required by
law. Executive shall receive the Severance Benefits pursuant to Section 6(a)(ii) or Change in Control Severance Benefits pursuant to Section 6(b)(i) of this Agreement if by the 60th day following the date of Executives Separation from Service, he has signed and delivered to the Company a reasonable separation agreement that includes a general release in favor of the Company (the Release ), which cannot be revoked in whole or part by such date (the date that the Release can no longer be revoked is referred to as the Release Effective Date ) .
(iv) For purposes of this Agreement, Accrued Obligations are any accrued but unpaid portion of the applicable Base Salary, plus any accrued but unused vacation time and unpaid expenses (in accordance with Section 2(d) and hereof) that have been earned by the Executive as the date of such termination.
(v) For purposes of this Agreement, and subject to applicable state and federal law, termination by the Company on account of the Executives Disability shall mean termination because the Executive is unable due to a physical or mental condition to perform the essential functions of his position with or without reasonable accommodation for six (6) months in the aggregate during any twelve (12) month period or based on the written certification by two licensed physicians of the likely continuation of such condition for such period. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law. Whenever Severance Benefits or Change in Control Severance Benefits are payable to Executive hereunder during a time when Executive is partially or totally disabled, and such Disability would entitle him to disability income payments according to the terms of any plan or policy now or hereafter provided by the Company, the Severance Benefits or Change in Control Severance Benefits payable to Executive hereunder shall be inclusive of any such disability income and shall not be in addition thereto, even if such disability income is payable directly to Executive by an insurance company under a policy paid for by the Company.
(vi) For purposes of this Agreement, Good Reason shall mean the occurrence of any of the following events without Executives consent: (1) a material reduction in Executives Base Salary; (2) a material reduction in the Executives duties, authority and responsibilities relative to the Executives duties, authority, and responsibilities in effect immediately prior to such reduction; (3) the relocation of Executives principal place of employment, without Executives consent, in a manner that lengthens his one-way commute distance by fifty (50) or more miles from his then-current principal place of employment immediately prior to such relocation; (4) any material breach of the Agreement by the Company or its successors; or (5) the liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or a significant portion of its business and/or assets, unless the successor or successors shall have assumed all duties and obligations of the Company under the Agreement; provided, however, that, any such termination by Executive shall only be deemed for Good Reason pursuant to this definition if: (a) Executive gives the Company written notice of his intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that he believes constitute(s) Good Reason, which notice shall describe such condition(s); (b) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the Cure Period ); (c) the Company has not, prior to receiving such notice from Executive, already informed Executive that his employment with the Company
is being terminated and (d) Executive voluntarily terminates his employment within thirty (30) days following the end of the Cure Period.
(b) TERMINATION BY THE COMPANY WITHOUT JUST CAUSE OR RESIGNATION BY THE EXECUTIVE FOR GOOD REASON COINCIDENT WITH A CHANGE IN CONTROL.
(i) If Executives employment by the Company is terminated by the Company or any successor entity without Just Cause (as defined in Section 6(c)(ii)) (not including termination by virtue of death or Disability) or by Executive for Good Reason within twelve (12) months following the effective date of a Change in Control (as defined below), provided that such termination constitutes a Separation from Service, without regard to any alternative definition thereunder, then in addition to paying or providing Executive with the Accrued Obligations and subject to compliance with Section 6(a)(iii), the Company will provide the following Change in Control Severance Benefits :
(1) The Company will pay the benefit as described in Section 6(a)(ii)(1), except that the Severance Period in Section 6(a)(ii)(1) shall instead be twelve (12) months;
(2) The Company will pay the benefit as described in Section 6(a)(ii)(2), except that the COBRA Severance Period in Section 6(a)(ii)(2) shall instead be twelve (12) months;
(3) The Company will pay the benefit as described in Section 6(a)(ii)(3), except that the Life Insurance Period in Section 6(a)(ii)(3) shall instead be twelve (12) months;
(4) The Company will pay an additional amount equivalent to Executives full Bonus Percentage, for the performance year in which Executives termination occurs. This bonus will be payable subject to standard federal and state payroll withholding requirements and paid in equal installments beginning on the first day of the month following the Release Effective Date (as defined in Section 6(a)(iii)), with the remaining installments occurring on the first day of the month for the eleven (11) months thereafter; and
(5) Notwithstanding anything to the contrary set forth in any applicable equity incentive plans or award agreements, effective as of Executives employment termination date, the vesting and exercisability of all unvested time-based vesting equity awards then held by Executive shall accelerate such that all shares become immediately vested and exercisable, if applicable, by Executive upon such termination and all stock options held by Executive shall remain exercisable, if applicable, for twelve (12) months following Executives termination. With respect to any performance-based vesting equity award, such award shall continue to be governed in all respects by the terms of the applicable equity award documents.
(ii) For purposes of this Agreement, a Change in Control means the occurrence of any of the events set forth in clauses (i), (ii) or (iii) with respect to either of the Company or the Parent, or the event set forth in clause (v) with respect to the Company, in each
case of the definition of Change in Control set forth in the Companys 2017 Equity Incentive Plan, as may be amended from time to time.
(c) TERMINATION FOR JUST CAUSE OR VOLUNTARY TERMINATION.
(i) If Executives employment is terminated prior to the expiration of the Term for just cause or if Executives employment is terminated as set forth in Section 6(d)(ii) or (iii) hereof (not including a resignation for Good Reason), Executive shall NOT be entitled to receive any Severance Benefits (as defined in Section 6(a)(ii)) or Change in Control Severance Benefits (defined in Section 6(b)(i)) and will only be entitled to receive any accrued but unpaid portion of the applicable Base Salary, plus any accrued but unused vacation time and unpaid expenses (in accordance with Section 2(d) and hereof) that have been earned by the Executive as the date of such termination.
(ii) For the purposes hereof, the Company shall have Just Cause to terminate Executives employment hereunder as a result of Executives gross negligence, willful misconduct, conviction of a felony (including the entry of a plea of nolo contendere) for illegal or criminal behavior in carrying out his duties as required pursuant to the terms of the Agreement. Notwithstanding any other provision contained herein, the Company shall have the right to terminate the agreement and Executives employment without just cause, and Executives remedies hereunder in the event of such termination shall be limited to the Severance Benefits or Change in Control Severance Benefits, as applicable, set forth in Section 6(a)(ii) and 6(b)(i) hereof.
(d) EVENTS OF TERMINATION. This Agreement shall terminate on the earliest to occur of the following events:
(i) the expiration of the Term;
(ii) the mutual written agreement of the Company and the Executive;
(iii) the voluntary termination of the Executive other than as a result of a resignation for Good Reason (as defined in Section 6(a)(vi));
(iv) the death of Executive or Executives retirement;
(v) termination on account of a Disability (as defined above);
(vi) the termination of the Executive by the Company with or without Just Cause (as defined in Section 6(c)(ii)) upon giving written notice to Executive; or
(vii) for a termination for Good Reason, immediately upon Executives full satisfaction of the requirements of Section 6(a)(vi)
(e) SECTION 409A.
(i) Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided herein are subject to Section 409A of the Internal
Revenue Code (the Code ) and the regulations and other guidance thereunder and any state law of similar effect (collectively Section 409A ). Severance benefits shall not commence until the Executive has a separation from service (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a separation from service). Each installment of severance benefits is a separate payment for purposes of Treas. Reg. Section 1.409A-2(b)(2)(i), and the severance benefits are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if such exemptions are not available and the Executive is, upon separation from service, a specified employee for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after the Executives separation from service, (ii) the Executives death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Section 409A period, all payments deferred pursuant to this paragraph shall be paid in a lump sum to Executive, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred. The parties acknowledge that the exemptions from application of Section 409A to severance benefits are fact specific, and any later amendment of this Agreement to alter the timing, amount or conditions that will trigger payment of severance benefits may preclude the ability of severance benefits provided under this Agreement to qualify for an exemption. To the extent that any severance payments or benefits are deferred compensation under Section 409A, and are not otherwise exempt from the application of Section 409A, then, if the period during which Executive may consider and sign the Release spans two calendar years, the payment of such severance payments and benefits will not be made or begin until the later calendar year.
(ii) It is intended that this Agreement shall comply with the requirements of Section 409A, and any ambiguity contained herein shall be interpreted in such manner so as to avoid adverse personal tax consequences under Section 409A. Notwithstanding the foregoing, the Company shall in no event be obligated to indemnify the Executive for any taxes or interest that may be assessed by the Internal Revenue Service pursuant to Section 409A of the Code to payments made pursuant to this Agreement.
7. RESTRICTIVE COVENANTS .
(a) CIIA. As a condition of continued employment, Executive agrees to abide by the Confidential Information and Invention Assignment Agreement, attached as Exhibit A, that he previously executed (the CIIA ). The CIIA may be amended from time to time without regard to this Agreement. The CIIA contains provisions that are intended by the parties to survive and do survive termination of this Agreement.
(b) NON-SOLICITATION AND NON-COMPETITION. Executive and the Company agree that the Company would suffer irreparable harm and incur substantial damage if Executive were to enter into Competition (as defined herein) with the Company. Therefore, in order for the Company to protect its legitimate business interests, Executive agrees as follows:
(i) Without the prior written consent of the Company, Executive shall not, during the period of employment with the Company, directly or indirectly, invest or engage in any business that is Competitive (as defined herein) with the Business of the Company or accept employment or render services to a Competitor (as defined herein) of the Company as a director, officer, agent, employee or consultant or solicit or attempt to solicit or accept business that is Competitive with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended; provided, however, the Company acknowledges that Executive currently engages in a number of activities set forth on Exhibit B as long as such permitted activities do not have a material adverse effect on the Executives performance or this Agreement.
(ii) Without the prior written consent of the Company and upon any termination of Executives employment with the Company and for a period of twelve (12) months thereafter, Executive shall not, either directly or indirectly, (x) invest or engage in any business that is Competitive (as defined herein) with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended, (y) accept employment with or render services to a Competitor of the Company as a director, officer, agent, employee or consultant unless he is serving in a capacity that has no relationship to that portion of the Competitors business that is Competitive with the Business of the Company, or (z) solicit, attempt to solicit or accept business Competitive with the Business of the Company from any of the customers of the Company at the time of his termination or within twelve (12) months prior thereto or from any person or entity whose business the Company was soliciting at such time.
(iii) Upon termination of his employment with the Company, and for a period of twelve (12) months thereafter, Executive shall not, either directly or indirectly, engage, hire, employ or solicit in any manner whatsoever the employment of an employee of the Company.
(iv) For purposes of this Agreement, a business or activity is in Competition or Competitive with the Business of the Company if it involves, and a person or entity is a Competitor, if that person or entity is engaged in, or about to become engaged in, the research, development, design, manufacturing, marketing or selling of a specific product or technology that resembles, competes, or is designed to compete, with, or has applications similar to any product or technology for which the Company has obtained or applied for a patent or made disclosures, or any product or technology involving any other proprietary research or development engaged in or conducted by the Company during the Term of Executives employment with the Company.
8. SECTION 280G; LIMITATIONS ON PAYMENT.
(a) If any payment or benefit Executive will or may receive from the Company or otherwise (a 280G Payment ) would (i) constitute a parachute payment within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax ), then any such 280G Payment provided pursuant to this Agreement (a Payment ) shall be equal to the Reduced Amount. The Reduced
Amount shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executives receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the Reduction Method ) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the Pro Rata Reduction Method ).
(b) Notwithstanding any provision of Section 8(a) to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events ( e.g. , being terminated without Just Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are deferred compensation within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(c) Unless Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the change in control transaction shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change in control transaction, the Company shall appoint a nationally recognized accounting or law firm to make the determinations required by this Section 8. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executives right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.
(d) If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 8(a) and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees to promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 8(a)) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of Section
8(a), Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.
9. GENERAL PROVISIONS .
(a) NOTICES . Any notices required hereunder to be in writing shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by electronic mail, telex or confirmed facsimile if sent during normal business hours of the recipient, and if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at its primary office location and to Executive at Executives address as listed on the Company payroll or Executives company-provided email address, or at such other address as the Company or the Executive may designate by ten (10) days advance written notice to the other.
(b) ENTIRE AGREEMENT . This Agreement, together with Exhibit A, constitutes the entire agreement between the parties hereto relating to the subject matter hereof, and supersedes all prior agreements and understandings, whether oral or written, with respect to the same, including the Executives prior Employment Agreement effective October 1, 2015. No modification, alteration, amendment or revision of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by both parties hereto.
(c) GOVERNING LAW . This Agreement and the rights and duties of the parties hereunder shall be governed by, construed under and enforced in accordance with the laws of the State of Connecticut.
(d) ASSIGNMENT . The rights and obligations of the parties under this Agreement shall not be assignable without written permission of the other party.
(e) SEVERABILITY . The invalidity of any provision of this Agreement under the applicable laws of the State of Connecticut or any other jurisdiction, shall not affect the other provisions hereby declared to be severable from all other provisions. The intention of the parties, as expressed in any provision held to be void or ineffective shall be given such full force and effect as may be permitted by law.
(f) SURVIVAL . The obligations under Sections 3, 4, 6, 7, 8 and 9 shall survive the termination of this Agreement.
(g) REMEDIES . Executive and the Company recognize that the services to be rendered under this Agreement by Executive are special, unique, and of extraordinary character, and that in the event of the breach by Executive of the terms and conditions of Sections 3, 4, and 7 hereof the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, to obtain damages for any breach thereof.
(h) DISPUTE RESOLUTION . Except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims,
disputes or controversies arising under, out of, or in connection with the Agreement, including any dispute relating to production, use or commercialization, which the parties shall be unable to resolve within sixty (60) days shall be mediated in good faith. The party raising such dispute shall promptly advise the other party of such claim, dispute or controversy in a writing, which describes in reasonable detail the nature of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party shall have selected for itself a representative who shall have the authority to bind such party, and shall additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) business days after the date of such notice of dispute, the party against whom the dispute shall be raised shall select a mediation firm in Connecticut and such representatives shall schedule a date with such firm for a mediation hearing. The parties shall enter into good faith mediation and shall share the costs equally. If the representatives of the parties have not been able to resolve the dispute within fifteen (15) business days after such mediation hearing, the parties shall have the right to pursue any other remedies legally available to resolve such dispute in either the Courts of the State of Connecticut or in the United States District Court for the District of Connecticut, to whose jurisdiction for such purposes Company and Executive each hereby irrevocably consents and submits .
[signatures to follow on next page]
IN WITNESS WHEREOF , the parties have executed this Agreement as of the day and year first above written.
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Biohaven Pharmaceuticals, Inc . |
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By: |
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Name: Vlad Coric, M.D. |
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Title: Chief Executive Officer |
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Robert M. Berman, M.D. |
EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the Agreement ) is effective as of , by and between BIOHAVEN PHARMACEUTICALS, INC. , a Delaware corporation (the Company ), and JAMES ENGELHART , an individual resident of the State of Connecticut (the Executive ).
WHEREAS , the Company and Executive desire to enter into this Agreement pursuant to which the Company will continue to employ Executive in the capacity, for the period and on the terms and conditions set forth herein;
NOW, THEREFORE , in consideration of the premises and mutual covenants and agreements herein contained, the parties hereby agree as follows:
1. EMPLOYMENT BY THE COMPANY.
(a) EMPLOYMENT AND DUTIES. The Company hereby continues to employ Executive and Executive hereby accepts such continued employment in the capacity of Chief Financial Officer of the Company to act in accordance with the terms and conditions hereinafter set forth. During the Term (as defined below), Executive will report to the Chief Executive Officer (the CEO ) and agrees that he will devote time, attention and skills to the operation of the Business (as defined below) of the Company and that he will perform such duties, functions, responsibilities and authority in connection with the foregoing as are from time to time delegated to Executive by the CEO. These duties shall include, but shall not be limited to, responsibility for the Companys financial matters including asset and liability management, developing strategies for sustainable value creation, implementing and monitoring effective internal control systems ensuring relevant and useful internal and external business reporting, and perform such duties, functions, responsibilities and authority in connection with the foregoing as are from time to time delegated to Executive by the CEO. For purposes of this Agreement, the Business of the Company shall be defined as the development and commercialization of neuropsychiatric drug candidates and related technology based products. Executive is not bound by the terms of any agreement with any previous employer or other party which would limit his abilities to perform his duties and obligations hereunder.
(b) TERM. The term of this Agreement shall commence on the date hereof and shall continue for a period of three (3) years (the Initial Term ). Thereafter, this Agreement shall be automatically renewed for one year periods, unless otherwise terminated by the Executive upon written notice to the other given not less than ninety (90) days prior to the next anniversary of the Agreement. The Initial Term and any renewals thereof shall be referred to herein as the Term.
2. COMPENSATION . In consideration of all the services to be rendered by Executive to the Company hereunder, the Company hereby agrees to pay or otherwise provide Executive the following compensation and benefits. It is furthermore understood that the Company shall have the right to deduct or withhold under any provision of applicable law (including but not limited
to Social Security payments, income tax withholding and other required deductions not in effect or which may become effective by law any time during the Term) from:
(a) SALARY. Executive shall receive an initial annual salary of Three Hundred Forty Thousand Dollars ($340,000), plus annual cost of living salary increases ( Base Salary ). The applicable Base Salary shall be reviewed by the Board each year prior to the anniversary of this Agreement to determine the annual increase to the applicable years Base Salary; provided, however, that in no event shall such annual increase be less than cost of living increase. The applicable Base Salary will be paid in equal installments not less frequently than bi-monthly in accordance with the Companys salary payment practices in effect from time to time for senior executives of the Company
(b) BONUS PAYMENT. In addition to the Base Salary then in effect, Executive shall be eligible to receive a bonus payment (the Bonus Payment ) with a target of thirty-five percent (35%) of the applicable years Base Salary (the Bonus Percentage ) based upon Executive achieving performance objectives as determined each year by the Board of Directors. The Bonus Payment will be paid in accordance with the Companys bonus payment practices in effect from time to time for senior executives of the Company, but no later than March 15 of the calendar year immediately following the calendar year for which the bonus is being measured. The Board shall review the Executives Bonus Percentage annually and may, in the Boards sole discretion, increase the Bonus Percentage based upon the Companys and Executives performance.
(c) EQUITY. In November 2014, Executive was granted an option to purchase 62,500 common shares (the First Option ) of Biohaven Pharmaceutical Holding Company Ltd. (the Parent ). In October 2015, Executive was granted an option to purchase 25,000 shares of the Parent (the Second Option ). In December 2016, Executive was granted an option to purchase 31,225 shares of the Parent (the Third Option ). In January 2017, Executive was granted an option to purchase 118,792 shares of the Parent (the Fourth Option ). In April 2017, Executive was granted an option to purchase 40,000 shares of the Parent (the Fifth Option ). Each of the First Option, Second Option, Third Option, Fourth Option, and Fifth Option (together, the Options ) are governed by the Parents relevant equity plan and/or award agreement, unless specifically stated otherwise in this Agreement.
(d) FRINGE BENEFITS. The Company shall spend up to the equivalent of 20% of the Executives Base Salary on health, dental, welfare plans and retirement plans selected by the Executive pursuant to Company-sponsored employee benefit plans, subject to any applicable deductions and withholding requirements and the terms and requirements of such plans ( Benefits Cost ). The Benefits Cost is in addition to the Base Salary, Bonus and other compensation to which Executive from time to time may be entitled hereunder. Executives right to be reimbursed for business-related expenses is separate and Executive is not required to apply the Benefits Cost to any such expenses.
(e) EXPENSES. Executive shall be entitled to be reimbursed for all reasonable expenses incurred by him in connection with the fulfillment of his duties hereunder, including all necessary continuing education and certification costs and related expenses; provided, however, that Executive has obtained the Companys prior written approval of such expenses and has
complied with all policies and procedures related to the reimbursement of such expenses as shall, from time to time, be established by the Company. For the avoidance of doubt, to the extent that any reimbursements payable to Executive under this subsection 2(e) are subject to the provisions of Section 409A of the Code: (a) any such reimbursements will be paid no later than December 31 of the year following the year in which the expense was incurred, (b) the amount of expenses reimbursed in one year will not affect the amount eligible for reimbursement in any subsequent year, and (c) the right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.
(f) VACATIONS AND SICK LEAVE. Executive shall be entitled to four (4) weeks paid vacation annually to be taken in accordance with the Companys vacation policy in effect from time to time and at such time or times as may be mutually agreed upon by the Company and Executive; provided, however, that if for any reason Executive does not take the full four (4) weeks vacation in any given year, Executive shall be entitled to accrue and carry over such vacation time according to the policy established by the Company. Executive shall also be entitled to sick leave according to the sick leave policy which the Company many adopt from time to time.
3. INDEMNIFICATION .
(a) COMPANYS OBLIGATION TO INDEMNIFY. To the maximum extent allowable for the law of Delaware and the Bylaws and Certificates of Incorporation of the Company, the Company shall at all times during the Term and thereafter, indemnify and defend and hold Executive harmless from and against all liability, loss, costs, claims, damages, expenses, judgments, awards, and settlements as well as attorneys fees and expenses, personal or otherwise, whether in tort or in contract, law or equity, that the Company or the Executive may incur by reason of or arising out of any claim made by any third party (together, the Losses ), with respect to Executives employment with Company in accordance with this Agreement; provided, however, that the Companys foregoing indemnification obligations shall not apply to Losses incurred by the Company as a result of the Executives willful misconduct, gross negligence, conviction of a felony (including entry of a plea of nolo contendere) for illegal or criminal behavior or engagement in activities beyond the scope of his employment hereunder. Indemnification shall include all costs, including actual attorneys fees and expenses reasonably incurred in pursuing indemnity claims under or enforcement of this Agreement.
(b) EXECUTIVES OBLIGATION TO INDEMNIFY. To the maximum extent allowable for the law of Delaware, Executive shall also at all times during the term of this Agreement and thereafter, indemnify and defend and hold Company, its founders, owners, directors, officers, employees, advisors, agents, partners, service providers and affiliates harmless from and against all Losses with respect to the Executives willful misconduct, gross negligence, conviction of a felony (including entry of a plea of nolo contendere ) for illegal or criminal behavior or engagement in activities beyond the scope of his employment hereunder during the Executives employment with Company in accordance with this Agreement. Indemnification shall include all costs, including reasonable attorneys fees and expenses reasonably incurred in pursuing indemnity claims under or enforcement of this Agreement.
4. LIMITATION OF LIABILITY . EXECUTIVE AGREES THAT REGARDLESS OF THE FORM OF ANY CLAIM, EXECUTIVES SOLE REMEDY AND COMPANY OBLIGATION WITH RESPECT TO ANY CLAIMS MADE RELATED TO OR ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY THIS AGREEMENT, AND IN ALL CASES EXECUTIVES REMEDIES SHALL BE LIMITED SPECIFICALLY TO COMPANY AND NOT TO ASSETS OR PERSONAL AND BUSINESS INTERESTS OF COMPANY FOUNDERS, OWNERS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS, PARTNERS AND AFFILIATES. IT IS EXPRESSLY AGREED THAT IN NO EVENT SHALL COMPANY, ITS FOUNDERS, OWNERS, DIRECTORS, OFFICERS, EMPLOYEES, ADVISORS, PARTNERS AND AFFILIATES BE LIABLE FOR PERSONAL, INCIDENTAL, DIRECT, INDIRECT, OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS REGARDLESS OF WHETHER COMPANY SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY.
5. INSURANCE . The Company may secure, in its own name, or otherwise, and at its own expense, life, health, accident and other insurance covering Executive or Executive and others. Executive agrees to assist the Company in procuring such insurance by submitting to the usual and customary medical and other examinations and by signing, as the insured, such applications and other instruments in writing as may be reasonably requires by the insurance companies to which application is made pursuant to such insurance. Executive agrees that he shall have no right, title, or interest in or to any insurance policies or to the proceeds thereof which the Company many so elect to take out or to continue on the Executives life.
6. TERMINATION OF EMPLOYMENT.
(a) TERMINATION BY THE COMPANY WITHOUT JUST CAUSE, BY VIRTUE OF DEATH OR DISABILITY OF THE EXECUTIVE, OR RESIGNATION BY THE EXECUTIVE FOR GOOD REASON.
(i) The Company shall have the right to terminate Executives employment with the Company pursuant to this Section 6(a) at any time, in accordance with Section 6(d), without Just Cause (as defined in Section 6(c)(ii) below) or by virtue of the Executives death or Disability (as defined herein) by giving notice as described in Section 9(a) of this Agreement. The executive shall have the right to terminate his employment for Good Reason in accordance with Section 6(a)(vi).
(ii) If the Company terminates Executives employment at any time without Just Cause or by virtue of the death or Disability of the Executive or Executive terminates his employment with the Company for Good Reason (as defined in Section 6(a)(vi) below) and provided that such termination constitutes a separation from service (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a Separation from Service ), then Executive shall be entitled to receive the Accrued Obligations (defined in 6(a)(iv) below). If Executive complies with the obligations in Section 6(a)(iii) below, Executive shall also be eligible to receive the following Severance Benefits:
(1) The Company will pay Executive an amount equal to Executives then current Base Salary for twelve (12) months (the Severance Period ), less all applicable withholdings and deductions, paid in equal installments beginning on the first day of the month following the Release Effective Date (as defined in Section 6(a)(iii) below), with the remaining installments occurring on the first day of each remaining month of the Severance Period thereafter.
(2) If Executive timely elects continued coverage under COBRA or, if applicable, state insurance laws, for himself and his covered dependents under the Companys group health plans following such termination, then the Company shall pay the COBRA premiums or, if applicable, premiums for continuation coverage under state insurance laws, necessary to continue Executives and his covered dependents health insurance coverage in effect for himself (and his covered dependents) on the termination date until the earliest of: (i) twelve (12) months following the termination date (the COBRA Severance Period ); (ii) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; or (iii) the date Executive ceases to be eligible for COBRA or state continuation coverage (or, with respect to his covered dependents, the date they cease to be eligible for COBRA or state continuation coverage) for any reason, including plan termination (such period from the termination date through the earlier of (i)-(iii), (the COBRA Payment Period ). Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums or, if applicable, premiums for continuation coverage under state insurance laws, on Executives behalf would result in a violation of applicable law (including, but not limited to, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying such premiums pursuant to this Section, the Company shall pay Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium or, if applicable, premiums for continuation coverage under state insurance laws, for such month, subject to applicable tax withholding (such amount, the Special Severance Payment ), for the remainder of the COBRA Payment Period. Nothing in this Agreement shall deprive Executive of his rights under COBRA or ERISA for benefits under plans and policies arising under his employment by the Company.
(3) The Company shall pay to the Executive the premiums for the continuation of the Executives life insurance benefits for a period of twelve (12) months from the date of termination, subject to any applicable withholdings and deductions, in monthly installments commencing on the Companys first regular payroll date that is more than sixty (60) days following the date of termination.
(4) Notwithstanding anything to the contrary set forth in any applicable equity incentive plans or award agreements, effective as of Executives employment termination date, the vesting and exercisability of all unvested shares subject to the Options shall accelerate such that all shares subject to the Options shall become immediately vested and exercisable by Executive upon such termination and the Options shall remain exercisable, if applicable, for twenty-four months following Executives termination.
(iii) Executive will be paid all of the Accrued Obligations on the Companys first payroll date after Executives date of termination from employment or earlier if required by
law. Executive shall receive the Severance Benefits pursuant to Section 6(a)(ii) or Change in Control Severance Benefits pursuant to Section 6(b)(i) of this Agreement if by the 60th day following the date of Executives Separation from Service, he has signed and delivered to the Company a reasonable separation agreement that includes a general release in favor of the Company (the Release ), which cannot be revoked in whole or part by such date (the date that the Release can no longer be revoked is referred to as the Release Effective Date ) .
(iv) For purposes of this Agreement, Accrued Obligations are any accrued but unpaid portion of the applicable Base Salary, plus any accrued but unused vacation time and unpaid expenses (in accordance with Section 2(d) and hereof) that have been earned by the Executive as the date of such termination.
(v) For purposes of this Agreement, and subject to applicable state and federal law, termination by the Company on account of the Executives Disability shall mean termination because the Executive is unable due to a physical or mental condition to perform the essential functions of his position with or without reasonable accommodation for six (6) months in the aggregate during any twelve (12) month period or based on the written certification by two licensed physicians of the likely continuation of such condition for such period. This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law. Whenever Severance Benefits or Change in Control Severance Benefits are payable to Executive hereunder during a time when Executive is partially or totally disabled, and such Disability would entitle him to disability income payments according to the terms of any plan or policy now or hereafter provided by the Company, the Severance Benefits or Change in Control Severance Benefits payable to Executive hereunder shall be inclusive of any such disability income and shall not be in addition thereto, even if such disability income is payable directly to Executive by an insurance company under a policy paid for by the Company.
(vi) For purposes of this Agreement, Good Reason shall mean the occurrence of any of the following events without Executives consent: (1) a material reduction in Executives Base Salary; (2) a material reduction in the Executives duties, authority and responsibilities relative to the Executives duties, authority, and responsibilities in effect immediately prior to such reduction; (3) the relocation of Executives principal place of employment, without Executives consent, in a manner that lengthens his one-way commute distance by fifty (50) or more miles from his then-current principal place of employment immediately prior to such relocation; (4) any material breach of the Agreement by the Company or its successors; or (5) the liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or a significant portion of its business and/or assets, unless the successor or successors shall have assumed all duties and obligations of the Company under the Agreement; provided, however, that, any such termination by Executive shall only be deemed for Good Reason pursuant to this definition if: (a) Executive gives the Company written notice of his intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that he believes constitute(s) Good Reason, which notice shall describe such condition(s); (b) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (the Cure Period ); (c) the Company has not, prior to receiving such notice from Executive, already informed Executive that his employment with the Company
is being terminated and (d) Executive voluntarily terminates his employment within thirty (30) days following the end of the Cure Period.
(b) TERMINATION BY THE COMPANY WITHOUT JUST CAUSE OR RESIGNATION BY THE EXECUTIVE FOR GOOD REASON COINCIDENT WITH A CHANGE IN CONTROL.
(i) If Executives employment by the Company is terminated by the Company or any successor entity without Just Cause (as defined in Section 6(c)(ii)) (not including termination by virtue of death or Disability) or by Executive for Good Reason within twelve (12) months following the effective date of a Change in Control (as defined below), provided that such termination constitutes a Separation from Service, without regard to any alternative definition thereunder, then in addition to paying or providing Executive with the Accrued Obligations and subject to compliance with Section 6(a)(iii), the Company will provide the following Change in Control Severance Benefits :
(1) The Company will pay the benefits as described in Sections 6(a)(ii)(1), 6(a)(ii)(2), and 6(a)(ii)(3).
(2) The Company will pay an additional amount equivalent to Executives full Bonus Percentage, for the performance year in which Executives termination occurs. This bonus will be payable subject to standard federal and state payroll withholding requirements and paid in equal installments beginning on the first day of the month following the Release Effective Date (as defined in Section 6(a)(iii)), with the remaining installments occurring on the first day of the month for the eleven (11) months thereafter; and
(3) Notwithstanding anything to the contrary set forth in any applicable equity incentive plans or award agreements, effective as of Executives employment termination date, the vesting and exercisability of all unvested time-based vesting equity awards then held by Executive shall accelerate such that all shares become immediately vested and exercisable, if applicable, by Executive upon such termination and all stock options held by Executive shall remain exercisable, if applicable, for twelve (12) months following Executives termination. With respect to any performance-based vesting equity award, such award shall continue to be governed in all respects by the terms of the applicable equity award documents.
(ii) For purposes of this Agreement, a Change in Control means the occurrence of any of the events set forth in clauses (i), (ii) or (iii) with respect to either of the Company or the Parent, or the event set forth in clause (v) with respect to the Company, in each case of the definition of Change in Control set forth in the Companys 2017 Equity Incentive Plan, as may be amended from time to time.
(c) TERMINATION FOR JUST CAUSE OR VOLUNTARY TERMINATION.
(i) If Executives employment is terminated prior to the expiration of the Term for just cause or if Executives employment is terminated as set forth in Section 6(d)(ii) or (iii) hereof (not including a resignation for Good Reason), Executive shall NOT be entitled to receive any Severance Benefits (as defined in Section 6(a)(ii)) or Change in Control Severance Benefits (defined in Section 6(b)(i)) and will only be entitled to receive any accrued but unpaid
portion of the applicable Base Salary, plus any accrued but unused vacation time and unpaid expenses (in accordance with Section 2(d) and hereof) that have been earned by the Executive as the date of such termination.
(ii) For the purposes hereof, the Company shall have Just Cause to terminate Executives employment hereunder as a result of Executives gross negligence, willful misconduct, conviction of a felony (including the entry of a plea of nolo contendere) for illegal or criminal behavior in carrying out his duties as required pursuant to the terms of the Agreement. Notwithstanding any other provision contained herein, the Company shall have the right to terminate the agreement and Executives employment without just cause, and Executives remedies hereunder in the event of such termination shall be limited to the Severance Benefits or Change in Control Severance Benefits, as applicable, set forth in Section 6(a)(ii) and 6(b)(i) hereof.
(d) EVENTS OF TERMINATION. This Agreement shall terminate on the earliest to occur of the following events:
(i) the expiration of the Term;
(ii) the mutual written agreement of the Company and the Executive;
(iii) the voluntary termination of the Executive other than as a result of a resignation for Good Reason (as defined in Section 6(a)(vi));
(iv) the death of Executive or Executives retirement;
(v) termination on account of a Disability (as defined above);
(vi) the termination of the Executive by the Company with or without Just Cause (as defined in Section 6(c)(ii)) upon giving written notice to Executive; or
(vii) for a termination for Good Reason, immediately upon Executives full satisfaction of the requirements of Section 6(a)(vi)
(e) SECTION 409A.
(i) Notwithstanding anything to the contrary herein, the following provisions apply to the extent severance benefits provided herein are subject to Section 409A of the Internal Revenue Code (the Code ) and the regulations and other guidance thereunder and any state law of similar effect (collectively Section 409A ). Severance benefits shall not commence until the Executive has a separation from service (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a separation from service). Each installment of severance benefits is a separate payment for purposes of Treas. Reg. Section 1.409A-2(b)(2)(i), and the severance benefits are intended to satisfy the exemptions from application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if such exemptions are not available and the Executive is, upon separation from service, a specified employee for purposes of Section 409A, then, solely to the extent necessary to avoid adverse personal tax consequences under
Section 409A, the timing of the severance benefits payments shall be delayed until the earlier of (i) six (6) months and one day after the Executives separation from service, (ii) the Executives death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Section 409A period, all payments deferred pursuant to this paragraph shall be paid in a lump sum to Executive, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred. The parties acknowledge that the exemptions from application of Section 409A to severance benefits are fact specific, and any later amendment of this Agreement to alter the timing, amount or conditions that will trigger payment of severance benefits may preclude the ability of severance benefits provided under this Agreement to qualify for an exemption. To the extent that any severance payments or benefits are deferred compensation under Section 409A, and are not otherwise exempt from the application of Section 409A, then, if the period during which Executive may consider and sign the Release spans two calendar years, the payment of such severance payments and benefits will not be made or begin until the later calendar year.
(ii) It is intended that this Agreement shall comply with the requirements of Section 409A, and any ambiguity contained herein shall be interpreted in such manner so as to avoid adverse personal tax consequences under Section 409A. Notwithstanding the foregoing, the Company shall in no event be obligated to indemnify the Executive for any taxes or interest that may be assessed by the Internal Revenue Service pursuant to Section 409A of the Code to payments made pursuant to this Agreement.
7. RESTRICTIVE COVENANTS .
(a) CIIA. As a condition of continued employment, Executive agrees to abide by the Confidential Information and Invention Assignment Agreement, attached as Exhibit A, that he previously executed (the CIIA ). The CIIA may be amended from time to time without regard to this Agreement. The CIIA contains provisions that are intended by the parties to survive and do survive termination of this Agreement.
(b) NON-SOLICITATION AND NON-COMPETITION. Executive and the Company agree that the Company would suffer irreparable harm and incur substantial damage if Executive were to enter into Competition (as defined herein) with the Company. Therefore, in order for the Company to protect its legitimate business interests, Executive agrees as follows:
(i) Without the prior written consent of the Company, Executive shall not, during the period of employment with the Company, directly or indirectly, invest or engage in any business that is Competitive (as defined herein) with the Business of the Company or accept employment or render services to a Competitor (as defined herein) of the Company as a director, officer, agent, employee or consultant or solicit or attempt to solicit or accept business that is Competitive with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended; provided, however, the Company acknowledges that Executive currently engages in a number of activities set forth on Exhibit B as long as such permitted activities do not have a material adverse effect on the Executives performance or this Agreement.
(ii) Without the prior written consent of the Company and upon any termination of Executives employment with the Company and for a period of twelve (12) months thereafter, Executive shall not, either directly or indirectly, (x) invest or engage in any business that is Competitive (as defined herein) with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended, (y) accept employment with or render services to a Competitor of the Company as a director, officer, agent, employee or consultant unless he is serving in a capacity that has no relationship to that portion of the Competitors business that is Competitive with the Business of the Company, or (z) solicit, attempt to solicit or accept business Competitive with the Business of the Company from any of the customers of the Company at the time of his termination or within twelve (12) months prior thereto or from any person or entity whose business the Company was soliciting at such time.
(iii) Upon termination of his employment with the Company, and for a period of twelve (12) months thereafter, Executive shall not, either directly or indirectly, engage, hire, employ or solicit in any manner whatsoever the employment of an employee of the Company.
(iv) For purposes of this Agreement, a business or activity is in Competition or Competitive with the Business of the Company if it involves, and a person or entity is a Competitor, if that person or entity is engaged in, or about to become engaged in, the research, development, design, manufacturing, marketing or selling of a specific product or technology that resembles, competes, or is designed to compete, with, or has applications similar to any product or technology for which the Company has obtained or applied for a patent or made disclosures, or any product or technology involving any other proprietary research or development engaged in or conducted by the Company during the Term of Executives employment with the Company.
8. SECTION 280G; LIMITATIONS ON PAYMENT.
(a) If any payment or benefit Executive will or may receive from the Company or otherwise (a 280G Payment ) would (i) constitute a parachute payment within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax ), then any such 280G Payment provided pursuant to this Agreement (a Payment ) shall be equal to the Reduced Amount. The Reduced Amount shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executives receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the Reduction Method ) that results in the greatest economic benefit for Executive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the Pro Rata Reduction Method ).
(b) Notwithstanding any provision of Section 8(a) to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events ( e.g. , being terminated without Just Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are deferred compensation within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
(c) Unless Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the change in control transaction shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change in control transaction, the Company shall appoint a nationally recognized accounting or law firm to make the determinations required by this Section 8. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executives right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.
(d) If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 8(a) and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees to promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 8(a)) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of Section 8(a), Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.
9. GENERAL PROVISIONS .
(a) NOTICES . Any notices required hereunder to be in writing shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by electronic mail, telex or confirmed facsimile if sent during normal business hours of the recipient, and if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at its primary office location and to Executive at Executives address as listed on the Company payroll or Executives
company-provided email address, or at such other address as the Company or the Executive may designate by ten (10) days advance written notice to the other .
(b) ENTIRE AGREEMENT . This Agreement, together with Exhibit A, constitutes the entire agreement between the parties hereto relating to the subject matter hereof, and supersedes all prior agreements and understandings, whether oral or written, with respect to the same, including the Executives prior Employment Agreement effective October 1, 2015. No modification, alteration, amendment or revision of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by both parties hereto.
(c) GOVERNING LAW . This Agreement and the rights and duties of the parties hereunder shall be governed by, construed under and enforced in accordance with the laws of the State of Connecticut.
(d) ASSIGNMENT . The rights and obligations of the parties under this Agreement shall not be assignable without written permission of the other party.
(e) SEVERABILITY . The invalidity of any provision of this Agreement under the applicable laws of the State of Connecticut or any other jurisdiction, shall not affect the other provisions hereby declared to be severable from all other provisions. The intention of the parties, as expressed in any provision held to be void or ineffective shall be given such full force and effect as may be permitted by law.
(f) SURVIVAL . The obligations under Sections 3, 4, 6, 7, 8 and 9 shall survive the termination of this Agreement.
(g) REMEDIES . Executive and the Company recognize that the services to be rendered under this Agreement by Executive are special, unique, and of extraordinary character, and that in the event of the breach by Executive of the terms and conditions of Sections 3, 4, and 7 hereof the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, to obtain damages for any breach thereof.
(h) DISPUTE RESOLUTION . Except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims, disputes or controversies arising under, out of, or in connection with the Agreement, including any dispute relating to production, use or commercialization, which the parties shall be unable to resolve within sixty (60) days shall be mediated in good faith. The party raising such dispute shall promptly advise the other party of such claim, dispute or controversy in a writing, which describes in reasonable detail the nature of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party shall have selected for itself a representative who shall have the authority to bind such party, and shall additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) business days after the date of such notice of dispute, the party against whom the dispute shall be raised shall select a mediation firm in Connecticut and such representatives shall schedule a date with such firm for a mediation hearing. The parties shall enter into good faith mediation and shall share the costs equally. If the representatives of the parties have not been
able to resolve the dispute within fifteen (15) business days after such mediation hearing, the parties shall have the right to pursue any other remedies legally available to resolve such dispute in either the Courts of the State of Connecticut or in the United States District Court for the District of Connecticut, to whose jurisdiction for such purposes Company and Executive each hereby irrevocably consents and submits .
[signatures to follow on next page]
IN WITNESS WHEREOF , the parties have executed this Agreement as of the day and year first above written.
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Biohaven Pharmaceuticals, Inc . |
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By: |
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Name: Vlad Coric, M.D. |
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Title: Chief Executive Officer |
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James Engelhart |
Exhibit 10.19
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement ) is effective as of October 1, 2015, by and between Biohaven Pharmaceutical Holding Company Ltd., a company formed under the laws of the Territory of the British Virgin Islands (the Company ), and Vladimir Coric, an individual resident of the State of Connecticut (the Executive ).
WHEREAS, the Company and Executive desire to enter into this Agreement pursuant to retain Executive in the capacity of Chief Executive Officer, for the period and on the terms and conditions set forth herein;
NOW, THEREFORE , in consideration of the premises and mutual covenants and agreements herein contained, the parties hereby agree as follows:
1. EMPLOYMENT AND DUTIES . The Company hereby retains Executive to be its Chief Executive Officer to help the Company raise funds to further develop pharmaceutical products and perform such duties, functions, responsibilities and authority in connection with the foregoing as are from time to time delegated to Executive by the Board of Directors of the Company (the Board ). Executive shall be free to continue the activities disclosed on Exhibit A attached hereto.
2. TERM . The term of this Agreement shall commence on the date hereof and shall continue for a period of three (3) years (the Initial Term ). Thereafter, this Agreement shall be automatically renewed for one year periods, unless otherwise terminated by the Executive upon written notice not less than ninety (90) days prior to the next anniversary of the Agreement. The Initial Term and any renewals thereof shall be referred to herein as the Term .
3. COMPENSATION. In consideration of all the services to be rendered by Executive to the Company hereunder, the Company hereby agrees to grant Executive an appropriate number of options to purchase shares of its Common Shares under its 2014 Option Plan vesting ratably over the Initial Term. The number of shares will be determined no later than the date of the upcoming board meeting on October 13, 2015. Executive shall be entitled to be reimbursed for all reasonable out of pocket expenses incurred by him in connection with the fulfillment of his duties hereunder.
4. INDEMNIFICATION . The Company shall at all times during the Term and thereafter, indemnify and defend and hold Executive harmless from and against all liability, loss, costs, claims, damages, expenses, judgments, awards, and settlements as well as attorneys fees and expenses, personal or otherwise, whether in tort or in contract, law or equity, that the Company or the Executive may incur by reason of or arising out of any claim made by any third party (together, the Losses ), with respect to Executives employment with Company in accordance with this Agreement; provided, however, that the Companys foregoing indemnification obligations shall not apply to Losses incurred by the Company as a result of the Executives willful misconduct, gross negligence, conviction of a felony (including entry of a plea of nolo contendere ) for illegal or criminal behavior or engagement in activities beyond the scope of his employment hereunder. Indemnification shall include all costs, including actual attorneys fees
and expenses reasonably incurred in pursuing indemnity claims under or enforcement of this Agreement.
5. TERMINATION .
EVENTS OF TERMINATION. This Agreement shall terminate on the earliest to occur of the following events:
(i) the expiration of the Term;
(ii) the mutual written agreement of the Company and the Executive;
(iii) the voluntary termination of the Executive;
(iv) the death of Executive or Executives retirement;
(v) Executive becoming completely unable to perform his duties as described herein due to injury, illness or disability (mental or physical), as determined by an independent physician selected with the approval of the Company and Executive, for a period of three (3) consecutive months ( Disability ); or
(vi) the termination of the Executive by the Company.
6. SEVERANCE PAYMENT . If the Company terminates Executives employment or fails to elect Executive as the Chief Executive Officer or if Executives employment is terminated due to Disability or Death, Executive shall be entitled to receive as of the date of such termination ( Termination Date ), the following severance payments (the Severance Payments ):
(i) $$350,000; and
(ii) all stock options held by the Executive will be deemed fully vested and exercisable on the Termination Date and the exercise period for such stock options will be increased by a period of two years from the Termination Date.
7. RESTRICTIVE COVENANTS . Executive and the Company agree that the Company would suffer irreparable harm and incur substantial damage if Executive were to enter into Competition (as defined herein) with the Company. Therefore, in order for the Company to protect its legitimate business interests, Executive agrees as follows:
(a) Without the prior written consent of the Company, Executive shall not, during the period of employment with the Company, directly or indirectly, invest or engage in any business that is Competitive (as defined herein) with the Business of the Company or accept employment or render services to a Competitor (as defined herein) of the Company as a director, officer, agent, employee or consultant or solicit or attempt to solicit or accept business that is Competitive with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended; provided, however, the Company acknowledges that Executive currently engages in a number of activities set forth on Exhibit A
as long as such permitted activities do not have a material adverse effect on the Executives performance or this Agreement.
(b) Without the prior written consent of the Company and upon any termination of Executives employment with the Company and for a period of twelve (12) months thereafter, Executive shall not, either directly or indirectly, (i) invest or engage in any business that is Competitive (as defined herein) with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended, (ii) accept employment with or render services to a Competitor of the Company as a director, officer, agent, employee or consultant unless he is serving in a capacity that has no relationship to that portion of the Competitors business that is Competitive with the Business of the Company, or (iii) solicit, attempt to solicit or accept business Competitive with the Business of the Company from any of the customers of the Company at the time of his termination or within twelve (12) months prior thereto or from any person or entity whose business the Company was soliciting at such time.
(c) Upon termination of his employment with the Company, and for a period of twelve (12) months thereafter, Executive shall not, either directly or indirectly, engage, hire, employ or solicit in any manner whatsoever the employment of an employee of the Company.
(d) For purposes of this Agreement, a business or activity is in Competition or Competitive with the Business of the Company if it involves, and a person or entity is a Competitor , if that person or entity is engaged in, or about to become engaged in, the research, development, design, manufacturing, marketing or selling of a specific product or technology that resembles, competes, or is designed to compete, with, or has applications similar to any product or technology for which the Company has obtained or applied for a patent or made disclosures, or any product or technology involving any other proprietary research or development engaged in or conducted by the Company during the term of Executives employment with the Company.
8. DISCOVERIES AND INVENTIONS. Executive hereby assigns to the Company all his right, title, and interest in and to any and all inventions, discoveries, developments, improvements, techniques, designs and data related to the technology which Executive conceives of, reduces to practice, or otherwise creates, either alone or jointly with others, in the course of his employment hereunder and in which the law recognizes any protectable interest.
9. CONFIDENTIALITY . Executive shall not use, or disclose any of the Confidential Information and Trade Secrets, either during the Term of his employment or at any time thereafter, except as required in the course of his employment. For purposes of this Agreement, Confidential Information and Trade Secrets shall mean all information, know how, trade secrets, processes, computer software or programs and related documentation, methods, practices, fabricated techniques, marketing plans, and other compilations of information which relate to the Business of, and are owned by the Company which were not known generally to others engaged in the Business of the Company and which the Company has taken affirmative actions to protect from public disclosure or which do not exist in the public domain. All Confidential Information and Trade Secrets relating to the Business of the Company shall remain the exclusive property of the Company unless owned by Executive.
10. NOTICES . Any notice or other communication required or permitted to be given hereunder shall be in writing and deemed to have been given when delivered in person or when dispatched by telegram, electronic mail, or electronic facsimile transfer (confirmed in writing by mail, registered or certified, return receipt requested, postage prepaid, simultaneously dispatched) to the addressees at the addresses specified below.
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If to Executive: |
Dr. Vladimir Coric |
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*** |
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*** |
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email: *** |
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with a copy to: |
Michael Satti, Esq. |
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Satti Law |
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185 South Broad, Suite 301 |
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Pawcatuck, CT 06379 |
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email: msatti@satti-law.com |
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If to the Company: |
Dr. Declan Doogan |
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Biohaven Pharmaceutical Holding Co. |
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email: declan.doogan@gmail.com |
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with a copy to: |
Douglas G. Gray |
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Locke Lord LLP |
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2800 Financial Plaza |
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Providence, RI 02903 |
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email: douglas.gray@lockelord.com |
or to such other address or fax number as either party may from time to time designate in writing to the other.
11. ENTIRE AGREEMENT AND GOVERNING LAW. This Agreement, together with Exhibit A, constitutes the entire agreement between the parties hereto relating to the subject matter hereof, and supersedes all prior agreements and understandings, whether oral or written, with respect to the same. No modification, alteration, amendment or revision of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by both parties hereto.. This Agreement and the rights and duties of the parties hereunder shall be governed by, construed under and enforced in accordance with the laws of the Territory of the British Virgin Islands.
12. ASSIGNMENT AND SEVERABILITY . The rights and obligations of the parties under this Agreement shall not be assignable without written permission of the other party. The invalidity of any provision of this Agreement under the applicable laws of the State of Connecticut or any other jurisdiction, shall not affect the other provisions hereby declared to be severable from all other provisions. The intention of the parties, as expressed in any provision
held to be void or ineffective shall be given such full force and effect as may be permitted by law.
13. SURVIVAL AND REMEDIES . The obligations of the Company or its successor to pay any Severance Payments required hereunder subsequent to the termination of this Agreement and the obligations of Executive under Sections 6, 7 and 8 hereof shall survive the termination of this Agreement. Executive and the Company recognize that the services to be rendered under this Agreement by Executive are special, unique, and of extraordinary character, and that in the event of the breach by Executive of the terms and conditions of Sections 4, 5, 8, 9 and 10 hereof the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, to obtain damages for any breach thereof.
14. DISPUTE RESOLUTION . Except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims, disputes or controversies arising under, out of, or in connection with the Agreement, including any dispute relating to production, use or commercialization, which the parties shall be unable to resolve within sixty (60) days shall be mediated in good faith. The party raising such dispute shall promptly advise the other party of such claim, dispute or controversy in a writing, which describes in reasonable detail the nature of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party shall have selected for itself a representative who shall have the authority to bind such party, and shall additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) business days after the date of such notice of dispute, the party against whom the dispute shall be raised shall select a mediation firm in London and such representatives shall schedule a date with such firm for a mediation hearing. The parties shall enter into good faith mediation and shall share the costs equally. If the representatives of the parties have not been able to resolve the dispute within fifteen (15) business days after such mediation hearing, the parties shall have the right to pursue any other remedies legally available to resolve such dispute in either the courts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
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Biohaven Pharmaceutical Holding Company Ltd. |
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By: |
/s/ Dr. Declan Doogan |
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Name: Dr. Declan Doogan |
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Title: Executive Chairman |
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/s/ Dr. Vladimir Coric |
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Dr. Vladimir Coric |
Exhibit 10.20
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement ) is effective as of November 1, 2015, by and between Biohaven Pharmaceutical Holding Company Ltd., a company formed under the laws of the Territory of the British Virgin Islands (the Company ), and Robert M. Berman M.D., an individual resident of the State of Connecticut (the Executive ).
WHEREAS, the Company and Executive desire to enter into this Agreement pursuant to retain Executive in the capacity of Chief Medical Officer, for the period and on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements herein contained, the parties hereby agree as follows:
1. EMPLOYMENT AND DUTIES . The Company hereby retains Executive to be its Chief Medical Officer to help the Company raise funds to further develop pharmaceutical products and perform such duties, functions, responsibilities and authority in connection with the foregoing as are from time to time delegated to Executive by the CEO. Executive shall be free to continue the activities disclosed on Exhibit A attached hereto.
2. TERM . The term of this Agreement shall commence on the date hereof and shall continue for a period of three (3) years (the Initial Term ). Thereafter, this Agreement shall be automatically renewed for one year periods, unless otherwise terminated by the Executive upon written notice not less than ninety (90) days prior to the next anniversary of the Agreement. The Initial Term and any renewals thereof shall be referred to herein as the Term .
3. COMPENSATION. In consideration of all the services to be rendered by Executive to the Company hereunder, the Company hereby agrees to grant Executive an option to purchase 150 shares of its Common Shares vesting ratably over the Initial Term. Executive shall be entitled to be reimbursed for all reasonable expenses incurred by him in connection with the fulfillment of his duties hereunder.
4. INDEMNIFICATION . The Company shall at all times during the Term and thereafter, indemnify and defend and hold Executive harmless from and against all liability, loss, costs, claims, damages, expenses, judgments, awards, and settlements as well as attorneys fees and expenses, personal or otherwise, whether in tort or in contract, law or equity, that the Company or the Executive may incur by reason of or arising out of any claim made by any third party (together, the Losses ), with respect to Executives employment with Company in accordance with this Agreement; provided, however, that the Companys foregoing indemnification obligations shall not apply to Losses incurred by the Company as a result of the Executives willful misconduct, gross negligence, conviction of a felony (including entry of a plea of nolo contendere) for illegal or criminal behavior or engagement in activities beyond the scope of his employment hereunder. Indemnification shall include all costs, including actual attorneys fees and expenses reasonably incurred in pursuing indemnity claims under or enforcement of this Agreement.
5. TERMINATION .
EVENTS OF TERMINATION. This Agreement shall terminate on the earliest to occur of the following events:
(i) the expiration of the Term;
(ii) the mutual written agreement of the Company and the Executive;
(iii) the voluntary termination of the Executive;
(iv) the death of Executive or Executives retirement;
(v) Executive becoming completely unable to perform his duties as described herein due to injury, illness or disability (mental or physical), as determined by an independent physician selected with the approval of the Company and Executive, for a period of three (3) consecutive months ( Disability ); or
(vi) the termination of the Executive by the Company.
6. SEVERANCE PAYMENT . If the Company terminates Executives employment or fails to elect Executive as the Chief Medical Officer or if Executives employment is terminated due to Disability or Death, Executive shall be entitled to receive as of the date of such termination ( Termination Date ), the following severance payments (the Severance Payments ):
(i) $$157,500; and
(ii) all stock options held by the Executive will be deemed fully vested and exercisable on the Termination Date and the exercise period for such stock options will be increased by a period of two years from the Termination Date.
7. RESTRICTIVE COVENANTS . Executive and the Company agree that the Company would suffer irreparable harm and incur substantial damage if Executive were to enter into Competition (as defined herein) with the Company. Therefore, in order for the Company to protect its legitimate business interests, Executive agrees as follows:
(a) Without the prior written consent of the Company, Executive shall not, during the period of employment with the Company, directly or indirectly, invest or engage in any business that is Competitive (as defined herein) with the Business of the Company or accept employment or render services to a Competitor (as defined herein) of the Company as a director, officer, agent, employee or consultant or solicit or attempt to solicit or accept business that is Competitive with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended; provided, however, the Company acknowledges that Executive currently engages in a number of activities set forth on Exhibit A as long as such permitted activities do not have a material adverse effect on the Executives performance or this Agreement.
(b) Without the prior written consent of the Company and upon any termination of Executives employment with the Company and for a period of six (6) months thereafter, Executive shall not, either directly or indirectly, (i) invest or engage in any business that is Competitive (as defined herein) with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended, (ii) accept employment with or render services to a Competitor of the Company as a director, officer, agent, employee or consultant unless he is serving in a capacity that has no relationship to that portion of the Competitors business that is Competitive with the Business of the Company, or (iii) solicit, attempt to solicit or accept business Competitive with the Business of the Company from any of the customers of the Company at the time of his termination or within twelve (12) months prior thereto or from any person or entity whose business the Company was soliciting at such time.
(c) Upon termination of his employment with the Company, and for a period of six (12) months thereafter, Executive shall not, either directly or indirectly, engage, hire, employ or solicit in any manner whatsoever the employment of an employee of the Company.
(d) For purposes of this Agreement, a business or activity is in Competition or Competitive with the Business of the Company if it involves, and a person or entity is a Competitor , if that person or entity is engaged in, or about to become engaged in, the research, development, design, manufacturing, marketing or selling of a specific product or technology that resembles, competes, or is designed to compete, with, or has applications similar to any product or technology for which the Company has obtained or applied for a patent or made disclosures, or any product or technology involving any other proprietary research or development engaged in or conducted by the Company during the term of Executives employment with the Company.
8. DISCOVERIES AND INVENTIONS. Executive hereby assigns to the Company all his right, title, and interest in and to any and all inventions, discoveries, developments, improvements, techniques, designs and data related to the technology which Executive conceives of, reduces to practice, or otherwise creates, either alone or jointly with others, in the course of his employment hereunder and in which the law recognizes any protectable interest.
9. CONFIDENTIALITY . Executive shall not use, or disclose any of the Confidential Information and Trade Secrets, either during the Term of his employment or at any time thereafter, except as required in the course of his employment. For purposes of this Agreement, Confidential Information and Trade Secrets shall mean all information, know how, trade secrets, processes, computer software or programs and related documentation, methods, practices, fabricated techniques, marketing plans, and other compilations of information which relate to the Business of, and are owned by the Company which were not known generally to others engaged in the Business of the Company and which the Company has taken affirmative actions to protect from public disclosure or which do not exist in the public domain. All Confidential Information and Trade Secrets relating to the Business of the Company shall remain the exclusive property of the Company unless owned by Executive.
10. NOTICES . Any notice or other communication required or permitted to be given hereunder shall be in writing and deemed to have been given when delivered in person or when
dispatched by telegram, electronic mail, or electronic facsimile transfer (confirmed in writing by mail, registered or certified, return receipt requested, postage prepaid, simultaneously dispatched) to the addressees at the addresses specified below.
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If to Executive: |
Robert M. Berman, M.D. |
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*** |
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*** |
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email: *** |
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If to the Company: |
Dr. Declan Doogan |
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Biohaven Pharmaceutical Holding Co. |
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email: declan.doogan@gmail.com |
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with a copy to: |
Douglas G. Gray |
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Locke Lord LLP |
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2800 Financial Plaza |
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Providence, RI 02903 |
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email: douglas.gray@lockelord.com |
or to such other address or fax number as either party may from time to time designate in writing to the other.
11. ENTIRE AGREEMENT AND GOVERNING LAW. This Agreement, together with Exhibit A, constitutes the entire agreement between the parties hereto relating to the subject matter hereof, and supersedes all prior agreements and understandings, whether oral or written, with respect to the same. No modification, alteration, amendment or revision of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by both parties hereto.. This Agreement and the rights and duties of the parties hereunder shall be governed by, construed under and enforced in accordance with the laws of the Territory of the British Virgin Islands.
12. ASSIGNMENT AND SEVERABILITY . The rights and obligations of the parties under this Agreement shall not be assignable without written permission of the other party. The invalidity of any provision of this Agreement under the applicable laws of the State of Connecticut or any other jurisdiction, shall not affect the other provisions hereby declared to be severable from all other provisions. The intention of the parties, as expressed in any provision held to be void or ineffective shall be given such full force and effect as may be permitted by law.
13. SURVIVAL AND REMEDIES . The obligations of the Company or its successor to pay any Severance Payments required hereunder subsequent to the termination of this Agreement and the obligations of Executive under Sections 6, 7 and 8 hereof shall survive the termination of this Agreement. Executive and the Company recognize that the services to be rendered under this Agreement by Executive are special, unique, and of extraordinary character, and that in the event of the breach by Executive of the terms and conditions of Sections 4, 5, 8, 9 and 10 hereof the
Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, to obtain damages for any breach thereof.
14. DISPUTE RESOLUTION . Except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims, disputes or controversies arising under, out of, or in connection with the Agreement, including any dispute relating to production, use or commercialization, which the parties shall be unable to resolve within sixty (60) days shall be mediated in good faith. The party raising such dispute shall promptly advise the other party of such claim, dispute or controversy in a writing, which describes in reasonable detail the nature of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party shall have selected for itself a representative who shall have the authority to bind such party, and shall additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) business days after the date of such notice of dispute, the party against whom the dispute shall be raised shall select a mediation firm in London and such representatives shall schedule a date with such firm for a mediation hearing. The parties shall enter into good faith mediation and shall share the costs equally. If the representatives of the parties have not been able to resolve the dispute within fifteen (15) business days after such mediation hearing, the parties shall have the right to pursue any other remedies legally available to resolve such dispute in either the courts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
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Biohaven Pharmaceutical Holding Company Ltd. |
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By: |
/s/ Vlad Coric, M.D. |
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Name: Vlad Coric, M.D. |
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Title: CEO |
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/s/ Robert Berman |
10/31/15 |
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Dr. Robert Berman |
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Exhibit 10.21
EMPLOYMENT AGREEMENT
This Employment Agreement (the Agreement ) is effective as of May 2, 2016 by and between Biohaven Pharmaceutical Holding Company Ltd., a company formed under the laws of the Territory of the British Virgin Islands (the Company ), and James Engelhart an individual resident of the State of Connecticut (the Executive ).
WHEREAS, the Company and Executive desire to enter into this Agreement pursuant to retain Executive in the capacity of Chief Financial Officer, for the period and on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements herein contained, the parties hereby agree as follows:
1. EMPLOYMENT AND DUTIES . The Company hereby retains Executive to be its Chief Financial Officer to help the Company raise funds to further develop pharmaceutical products, to lead the companys financial matters including asset and liability management, developing strategies for sustainable value creation implementing and monitoring effective internal control systems ensuring relevant and useful internal and external business reporting, and perform such duties, functions, responsibilities and authority in connection with the foregoing as are from time to time delegated to Executive by the CEO. Executive shall be free to continue the activities disclosed on Exhibit A attached hereto.
2. TERM . The term of this Agreement shall commence on the date hereof and shall continue for a period of three (3) years (the Initial Term ). Thereafter, this Agreement shall be automatically renewed for one year periods, unless otherwise terminated by the Executive upon written notice not less than ninety (90) days prior to the next anniversary of the Agreement. The Initial Term and any renewals thereof shall be referred to herein as the Term .
3. COMPENSATION. In consideration of all the services to be rendered by Executive to the Company hereunder, the Company hereby agrees to grant Executive an option to purchase 200 shares of its Common Shares at a $3,500/share stock price vesting ratably over the Initial Term. Executive shall be entitled to be reimbursed for all reasonable expenses incurred by him in connection with the fulfillment of his duties hereunder.
4. INDEMNIFICATION . The Company shall at all times during the Term and thereafter, indemnify and defend and hold Executive harmless from and against all liability, loss, costs, claims, damages, expenses, judgments, awards, and settlements as well as attorneys fees and expenses, personal or otherwise, whether in tort or in contract, law or equity, that the Company or the Executive may incur by reason of or arising out of any claim made by any third party (together, the Losses ), with respect to Executives employment with Company in accordance with this Agreement; provided, however, that the Companys foregoing indemnification obligations shall not apply to Losses incurred by the Company as a result of the Executives willful misconduct, gross negligence, conviction of a felony (including entry of a plea of nolo contendere) for illegal or criminal behavior or engagement in activities beyond the scope of his employment hereunder. Indemnification shall include all costs, including actual attorneys fees
and expenses reasonably incurred in pursuing indemnity claims under or enforcement of this
5. TERMINATION .
EVENTS OF TERMINATION. This Agreement shall terminate on the earliest to occur of the following events:
(i) the expiration of the Term;
(ii) the mutual written agreement of the Company and the Executive;
(iii) the voluntary termination of the Executive;
(iv) the death of Executive or Executives retirement;
(v) Executive becoming completely unable to perform his duties as described herein due to injury, illness or disability (mental or physical), as determined by an independent physician selected with the approval of the Company and Executive, for a period of three (3) consecutive months ( Disability ); or
(vi) the termination of the Executive by the Company.
6. SEVERANCE PAYMENT . If the Company terminates Executives employment or fails to elect Executive as the Chief Financial Officer or if Executives employment is terminated due to Disability or Death, Executive shall be entitled to receive as of the date of such termination ( Termination Date ), the following severance payments (the Severance Payments ):
(i) $290,000; and
(ii) all stock options held by the Executive will be deemed fully vested and exercisable on the Termination Date and the exercise period for such stock options will be increased by a period of two years from the Termination Date.
7. RESTRICTIVE COVENANTS . Executive and the Company agree that the Company would suffer irreparable harm and incur substantial damage if Executive were to enter into Competition (as defined herein) with the Company. Therefore, in order for the Company to protect its legitimate business interests, Executive agrees as follows:
(a) Without the prior written consent of the Company, Executive shall not, during the period of employment with the Company, directly or indirectly, invest or engage in any business that is Competitive (as defined herein) with the Business of the Company or accept employment or render services to a Competitor (as defined herein) of the Company as a director, officer, agent, employee or consultant or solicit or attempt to solicit or accept business that is Competitive with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended; provided, however, the Company acknowledges that Executive currently engages in a number of activities set forth on Exhibit A
as long as such permitted activities do not have a material adverse effect on the Executives performance or this Agreement.
(b) Without the prior written consent of the Company and upon any termination of Executives employment with the Company and for a period of six (6) months thereafter, Executive shall not, either directly or indirectly, (i) invest or engage in any business that is Competitive (as defined herein) with the Business of the Company, except that Executive may own up to five percent (5%) of any outstanding class of securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as amended, (ii) accept employment with or render services to a Competitor of the Company as a director, officer, agent, employee or consultant unless he is serving in a capacity that has no relationship to that portion of the Competitors business that is Competitive with the Business of the Company, or (iii) solicit, attempt to solicit or accept business Competitive with the Business of the Company from any of the customers of the Company at the time of his termination or within twelve (12) months prior thereto or from any person or entity whose business the Company was soliciting at such time.
(c) Upon termination of his employment with the Company, and for a period of six (6) months thereafter, Executive shall not, either directly or indirectly, engage, hire, employ or solicit in any manner whatsoever the employment of an employee of the Company.
(d) For purposes of this Agreement, a business or activity is in Competition or Competitive with the Business of the Company if it involves, and a person or entity is a Competitor , if that person or entity is engaged in, or about to become engaged in, the research, development, design, manufacturing, marketing or selling of a specific product or technology that resembles, competes, or is designed to compete, with, or has applications similar to any product or technology for which the Company has obtained or applied for a patent or made disclosures, or any product or technology involving any other proprietary research or development engaged in or conducted by the Company during the term of Executives employment with the Company.
8. DISCOVERIES AND INVENTIONS. Executive hereby assigns to the Company all his right, title, and interest in and to any and all inventions, discoveries, developments, improvements, techniques, designs and data related to the technology which Executive conceives of, reduces to practice, or otherwise creates, either alone or jointly with others, in the course of his employment hereunder and in which the law recognizes any protectable interest.
9. CONFIDENTIALITY . Executive shall not use, or disclose any of the Confidential Information and Trade Secrets, either during the Term of his employment or at any time thereafter, except as required in the course of his employment. For purposes of this Agreement, Confidential Information and Trade Secrets shall mean all information, know how, trade secrets, processes, computer software or programs and related documentation, methods, practices, fabricated techniques, marketing plans, and other compilations of information which relate to the Business of, and are owned by the Company which were not known generally to others engaged in the Business of the Company and which the Company has taken affirmative actions to protect from public disclosure or which do not exist in the public domain. All Confidential Information and Trade Secrets relating to the Business of the Company shall remain the exclusive property of the Company unless owned by Executive.
10. NOTICES . Any notice or other communication required or permitted to be given hereunder shall be in writing and deemed to have been given when delivered in person or when dispatched by telegram, electronic mail, or electronic facsimile transfer (confirmed in writing by mail, registered or certified, return receipt requested, postage prepaid, simultaneously dispatched) to the addressees at the addresses specified below.
If to Executive: |
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James Engelhart |
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*** |
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*** |
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email: |
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jim.engelhart@biohavenpharma.com |
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If to the Company: |
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Dr. Vladimir Coric |
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Biohaven Pharmaceutical Holding Co. |
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email: vIad.coric@bio.havenpharma.com |
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with a copy to: |
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Douglas G. Gray |
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Locke Lord LLP |
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|
2800 Financial Plaza |
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|
Providence, RI 02903 |
|
|
email: douglas.gray@lockeiord.com |
or to such other address or fax number as either party may from time to time designate in writing to the other.
11. ENTIRE AGREEMENT AND GOVERNING LAW. This Agreement, together with Exhibit A, constitutes the entire agreement between the parties hereto relating to the subject matter hereof, and supersedes all prior agreements and understandings, whether oral or written, with respect to the same. No modification, alteration, amendment or revision of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed by both parties hereto.. This Agreement and the rights and duties of the parties hereunder shall be governed by, construed under and enforced in accordance with the laws of the Territory of the British Virgin Islands.
12. ASSIGNMENT AND SEVERABILITY . The rights and obligations of the parties under this Agreement shall not be assignable without written permission of the other party. The invalidity of any provision of this Agreement under the applicable laws of the State of Connecticut or any other jurisdiction, shall not affect the other provisions hereby declared to be severable from all other provisions. The intention of the parties, as expressed in any provision held to be void or ineffective shall be given such full force and effect as may be permitted by law.
13. SURVIVAL AND REMEDIES . The obligations of the Company or its successor to pay any Severance Payments required hereunder subsequent to the termination of this Agreement and
the obligations of Executive under Sections 6, 7 and 8 hereof shall survive the termination of this Agreement. Executive and the Company recognize that the services to be rendered under this Agreement by Executive are special, unique, and of extraordinary character, and that in the event of the breach by Executive of the terms and conditions of Sections 4, 5, 8, 9 and 10 hereof the Company shall be entitled, if it so elects, to institute and prosecute proceedings in any court of competent jurisdiction, to obtain damages for any breach thereof.
14. DISPUTE RESOLUTION . Except for the right of either party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims, disputes or controversies arising under, out of, or in connection with the Agreement, including any dispute relating to production, use or commercialization, which the parties shall be unable to resolve within sixty (60) days shall be mediated in good faith. The party raising such dispute shall promptly advise the other party of such claim, dispute or controversy in a writing, which describes in reasonable detail the nature of such dispute. By not later than five (5) business days after the recipient has received such notice of dispute, each party shall have selected for itself a representative who shall have the authority to bind such party, and shall additionally have advised the other party in writing of the name and title of such representative. By not later than ten (10) business days after the date of such notice of dispute, the party against whom the dispute shall be raised shall select a mediation firm in London and such representatives shall schedule a date with such firm for a mediation hearing. The parties shall enter into good faith mediation and shall share the costs equally. If the representatives of the parties have not been able to resolve the dispute within fifteen (15) business days after such mediation hearing, the parties shall have the right to pursue any other remedies legally available to resolve such dispute in either the courts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.
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Biohaven Pharmaceutical Holding Company Ltd. |
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By: |
/s/ Vladimir Coric, M.D. |
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Name: Vladimir Coric, M.D. |
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Title: Chief Executive Officer |
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/s/ James Engelhart |
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James Engelhart |
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