UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 27, 2020

 

 

Histogen Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-36003   20-3183915

(State or other

jurisdiction of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

10655 Sorrento Valley Road, Suite 200, San Diego, CA   92121
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (858) 526-3100

(Former name or former address, if changed, since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

 

Title of each class:

 

Trading

symbol:

 

Name of each exchange

on which registered:

Common Stock, par value $0.0001 per share   HSTO   The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

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 13(a) of the Exchange Act.  ☐

 

 

 


Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The Board of Directors (the “Board”) of Histogen, Inc. (“Histogen”) appointed Susan A. Knudson as Executive Vice President and Chief Financial Officer of Histogen, effective as of May 27, 2020 (the “Effective Date”). Ms. Knudson will report to Histogen’s Chief Executive Officer.

Ms. Knudson, 56, served as Senior Vice President and Chief Financial Officer of Pfenex, Inc., from January 2018 to November 2019. Prior to joining Pfenex, Inc., Ms. Knudson served as the Chief Financial Officer of Neothetics, Inc., from July 2014 to January 2018 and Vice President, Finance and Administration from December 2009 to June 2014.

In connection with her appointment as Chief Financial Officer, Histogen entered into an employment agreement with Ms. Knudson (the “Knudson Employment Agreement”) setting forth the terms of her employment and compensation. Pursuant to the Knudson Employment Agreement, Ms. Knudson’s annual base salary will be $355,000, and she will be eligible for an annual incentive bonus with a target amount of forty percent (40%) of base salary, to be paid after the close of the applicable performance period, based upon performance metrics established by the Board. Except in the event of Ms. Knudson’s termination by Histogen without cause, or her resignation from Histogen for good reason, she will not be entitled to receive the annual incentive bonus for a particular fiscal year, if any, if she is not employed by Histogen at the time such bonus is paid.

The Knudson Employment Agreement provides that Ms. Knudson will receive under Histogen’s 2020 Incentive Award Plan (the “Plan”) a stock option grant to purchase shares of Histogen’s common stock representing one percent (1%) of Histogen’s fully diluted capitalization (the “Option”). The Option will vest as to one-fourth (1/4th) of the shares subject to the Option one year after the Effective Date, and as to one- thirty-sixth (1/36th) of the remaining shares subject to the Option monthly thereafter. The exercise price of the Option will be the fair market value of Histogen’s common stock on the date of grant. The Option, to the extent vested, shall be exercisable only for a term of ten (10) years, subject to earlier expiration as provided in the Plan. The grant of the Option to Ms. Knudson will be subject to the terms and conditions of the Plan and the Histogen Inc. Employee Stock Option Grant Notice and Option Agreement. Ms. Knudson will be eligible to receive such other long-term incentive awards as determined by the Board in its sole discretion. The foregoing description of the Histogen Inc. Employee Stock Option Grant Notice and Option Agreement is qualified in its entirety by reference to the Form of Stock Option Grant Notice and Option Agreement attached to this report as Exhibit 10.2.

In addition, Ms. Knudson will be entitled to receive personal time off (“PTO”) benefits and to participate in other employee benefit plans maintained by Histogen in a manner consistent with other similarly situated employees of Histogen. She will also be entitled to reimbursement of reasonable and necessary business-related expenses.

In the event that Histogen terminates Ms. Knudson for any reason other than cause, death or disability, or if Ms. Knudson resigns for good reason, then she shall be entitled to receive the following from Histogen: (i) payment, over a 12-month period (or, if Ms. Knudson was employed less than 12 months, the number of months she was employed, but no less than 6 months) (the “Continuation Period”) following the termination of her employment, of continuing compensation equal to the sum of (A) 12 months (or, if Ms. Knudson was employed less than 12 moths, the number of months she was employed, but no less than 6 months) of her base salary and (B) the product of the fraction where the numerator is the Continuation Period and the denominator is 12 and her target annual bonus, payable in equal installments in accordance with Histogen’s then-current payroll policies and practices; (ii) the annual cash bonus (if any) accrued and

 

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unpaid as of the date of termination for the calendar year prior to the calendar year in which the termination occurs; (iii) the pro-rata portion (100%, if such termination occurs following the one-year anniversary of the start date and within the one year period following Histogen’s change in control) of the target cash bonus for the calendar year in which the termination occurs; (iv) if Ms. Knudson elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for Ms. Knudson and her eligible dependents, Histogen will provide reimbursement of the COBRA premiums for such coverage (equal to the portion of the cost of Ms. Knudson’s medical benefit coverage paid for by Histogen at the coverage levels in effect immediately prior to Ms. Knudson’s termination) until the earlier of (A) the expiration of the Continuation Period or (B) the date upon which Ms. Knudson and/or her eligible dependents are no longer eligible for COBRA continuation coverage; and (v) if such termination occurs following the one-year anniversary of the start date, such portion of the then-unvested Option award as would have vested during the twelve (12) month period following the date of termination had Ms. Knudson remained in continuous service during such period shall vest effective as of the termination date; provided that if such termination occurs within 12 months following a Histogen change in control, 100% of the Option will vest..

To the extent that any of the payments or benefits provided for under the Knudson Employment Agreement or any other agreement or arrangement between Ms. Knudson and Histogen (collectively, the “Payments”) (a) constitute a “parachute payment” within the meaning of Section 280G (“Section 280G”) of the Internal Revenue Code of 1986, as amended and restated (the “Code”) and (b) would otherwise be subject to the excise tax imposed by Section 4999 of the Code (“Section 4999”), then (i) if immediately prior to a transaction that constitutes a “Change in Control” of Histogen under Treas. Reg. Section 1.280G which resulted in the Payments, the stock of Histogen is not publicly traded and the exemption described in Section 280G(b)(5) of the Code would apply to payments by Histogen to Ms. Knudson in connection with a Change in Control (as defined in Section 280G and the regulations promulgated thereunder), the Knudson Employment Agreement provides that Histogen and Ms. Knudson shall cooperate in good faith in connection with Histogen satisfying the shareholder approval exemption under Section 280G(b)(5) of the Code and the regulations thereunder, and (ii) if clause (i) does not apply, the Payments will be reduced to the extent necessary so that no portion of such Payments retained by Ms. Knudson will be subject to excise tax under Section 4999; provided, however, that such reduction will only occur if after taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, such reduction results in Ms. Knudson’s receipt on an after-tax basis, of the greatest amount of benefits under the Knudson Employment Agreement, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.

The Knudson Employment Agreement includes provisions requiring Ms. Knudson to maintain the confidentiality of confidential and proprietary information of Histogen, as defined in the company’s policies and to use such information only for permitted purposes. Ms. Knudson has also agreed that during the term of the Knudson Employment Agreement and until the first anniversary of the date of termination of her employment, she will not solicit either (a) any employee or consultant of Histogen or its affiliates for the purpose of inducing such persons to leave the employ of the Company; or (b) the business of any customer of Histogen or any of its affiliates on whom Ms. Knudson called or with whom she became acquainted during her employment, if she is using confidential or proprietary information of Histogen to effectuate the solicitation of such customer.

The foregoing description of Ms. Knudson’s compensation arrangements is qualified in its entirety by reference to the Knudson Employment Agreement[ which is attached as Exhibit 10.1 to this report.

 

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Ms. Knudson does not have any familial relationships, and is not involved in any related party transactions that are required to be disclosed herein pursuant to applicable SEC statutes, rules or regulations.

 

Item 8.01

Other Events

Histogen’s press release, dated May 28, 2020, announcing the appointment of Ms. Knudson as Histogen’s Chief Financial Officer is furnished as Exhibit 99.1 to this report.

 

Item 9.01

Financial Statements and Exhibits

(d) Exhibits

 

Exhibit Number

  

Exhibits

10.1    Employment Agreement between Histogen, Inc. and Susan A. Knudson dated May 27, 2020
10.2    Form of Stock Option Grant Notice and Option Agreement (2020 Incentive Award Plan)
99.1    Press Release, dated May 28, 2020

*         *         *

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Histogen Inc.
Date: May 28, 2020     By:  

/s/ Richard W. Pascoe

      Name: Richard W. Pascoe
      Title: Chief Executive Officer and President

 

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Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of May 27, 2020 (the “Effective Date”), by and between Histogen Inc., a Delaware corporation (“Employer”), and Susan A. Knudson (“Employee”).

RECITALS

WHEREAS, Employer desires to employ Employee as Executive Vice President and Chief Financial Officer of Employer on the terms and conditions hereinafter set forth; and

WHEREAS, Employee desires to be employed by Employer as Executive Vice President and Chief Financial Officer on the terms and conditions hereinafter set forth.

AGREEMENT

NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, Employee and Employer agree as follows:

1. Employment Term. The term of this Agreement (the “Employment Term) shall commence on the Effective Date, and will continue until terminated as provided in Section 7 below.

2. Scope of Employment.

(a) Position and Duties. Employee agrees that as of the Effective Date she shall become an employee of Employer with the titles of “Executive Vice President” and “Chief Financial Officer”. Employee further agrees that during the Employment Term, she shall use her best efforts and her skills and experiences in the best interests of Employer. Employee shall report to the Chief Executive Officer and, on a dotted line basis, to the Board of Directors (the “Board”) of Employer and perform the job duties and have the responsibilities and authority customarily performed and held by an employee in her position or as otherwise may be assigned or delegated to her by the Chief Executive Officer or the Board. Upon Employee’s cessation of service as Employer’s Executive Vice President and Chief Financial Officer, unless otherwise agreed between Employee and Employer in writing, Employee will be deemed to have voluntarily resigned as a member of the board of any subsidiary of Employer of which Employee is then a member and as an officer of Employer or any of its subsidiaries of which Employee is an officer, effective immediately. Except as may be mutually agreed between Employer and Employee, Employee shall be based at Employer’s headquarters in San Diego, California except for when business needs require Employee to travel.

(b) Exclusive Efforts. During Employee’s employment by Employer, Employee shall render services to Employer exclusively, and shall not render, directly or indirectly, any services or engage in business activities with any other person or entity, either as an employee, employer, consultant, agent, principal, partner, equityholder, corporate officer, director, or in any other individual or representative capacity, without the prior written consent of

 

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the Board. Employee agrees to serve Employer faithfully, to execute to the best of her abilities the duties of her position, and to devote her entire business time, attention, and efforts to the interests and business of Employer. Notwithstanding the foregoing, but subject at all times to the restrictions in Sections 4 and 5, and subject to approval of the Board, not to be unreasonably withheld, Employee shall not be restricted from participating as an advisor, director or in similar capacities with charitable or professional organizations, so long as such participation (i) complies with Employer’s written employment policies, and (ii) does not materially interfere with the satisfaction of Employee’s obligations hereunder. While employed by Employer, Employee shall not, without the prior written consent of the Board, directly or indirectly, whether as a partner, employee, creditor, shareholder, or otherwise, promote, participate or engage in any activity or other business competitive with Employer’s business. Notwithstanding the foregoing provisions of this Section 2(b), Employee may (A) make passive investments of not more than one percent (1%) of the outstanding shares of, or any other equity interest in, a company listed on a national securities exchange or in an over-the-counter securities market and Employee is not otherwise associated directly or indirectly with such company or with any affiliate of such company and (B) serve on the boards of directors of the companies and organizations set forth on Schedule 1 hereto, and such investments or service shall not constitute a breach of this Section 2(b).

(c) Compliance with Laws and Policies. Employee agrees at all times to strictly adhere to all applicable laws, rules and regulations and with the written policies and procedures of Employer in effect from time to time and provided to Employee (to the extent such written policies and procedures are not inconsistent with the terms of this Agreement).

(d) Representations and Covenants by Employee. Employee hereby represents and warrants that: (i) Employee’s execution, delivery and performance of this Agreement does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Employee is a party or by which Employee is bound, (ii) Employee is not a party to or bound by any agreement or understanding of any type, whether written or oral, or by any statutory or common law duty or obligation which, in any case, would in any way restrict her ability to be employed by Employer or any affiliate thereof, or Employee’s ability to compete freely with any other person, (iii) Employee is not subject to or in breach of any nondisclosure agreement, including any agreement concerning trade secrets or confidential information owned by any other party, and (iv) Employee has the legal capacity to execute this Agreement. There is no action or proceeding pending or, to Employee’s actual knowledge, threatened against Employee that would prevent, hinder or materially delay the performance by Employee of any of her obligations hereunder. Employee further acknowledges that Employer has a legitimate business interest in protecting the business, acquired goodwill, Trade Secrets, Records and other Confidential Information, each capitalized term as defined on Exhibit A hereto. Employee also acknowledges and recognizes the highly competitive nature of the business of Employer.

3. Compensation and Benefits.

(a) Base Salary. Employer shall pay to Employee an annual base salary of Three Hundred Fifty-Five Thousand Dollars ($355,000) (the “Base Salary”), minus taxes and applicable withholdings, payable in accordance with Employer’s regularly scheduled payroll policies. Base Salary will be subject to review and adjustment in accordance with Employer’s normal performance review practices, but no less frequently than annually. Effective as of the

 

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date of any change to Employee’s Base Salary, the Base Salary as so changed shall be considered the new Base Salary for all purposes of this Agreement.

(b) Cash Incentive Bonus. Employee is eligible to receive an annual discretionary bonus (“Cash Bonus”), paid after the close of the applicable performance period based upon performance metrics established by the Board (or any applicable committee thereof). The target amount of Employee’s Cash Bonus will be 40% of the Base Salary (the “Target Cash Bonus”). The Cash Bonus, if any, shall be paid to Employee but in no event shall the Cash Bonus be paid after the the fifteenth (15th) day of the third (3rd) month following the close of the Company’s fiscal year for which the Cash Bonus is payable. Except as set forth in Sections 8(b), 8(c) or 8(d) of this Agreement, Employee shall not be entitled to receive the Cash Bonus (and it shall not be deemed to be earned) if she is not employed at the time that such bonus is paid.

(c) Equity Awards.

(i) Option Award. On, or as soon as reasonably practicable after, the Effective Date, the Employer shall grant Employee under its 2020 Incentive Award Plan (the “Plan”) a stock option to purchase shares of Employer’s common stock representing one percent (1%) of Employer’s Fully Diluted Capitalization (the “Option Award”). The Option Award will vest as to one- fourth (1/4th) of the shares subject to the Option Award one (1) year after the Effective Date, and as to one thirty-sixth (1/36th) of the remaining shares subject to the Option Award monthly thereafter, in each case, subject to Employee continuing to provide services to Employer through the relevant vesting dates.

(ii) Terms of Option Award. The exercise price per share of the Option Award will be Fair Market Value, as defined in the Plan, of Employer’s common stock on the date of grant. The term of the Option Award shall be ten (10) years, subject to earlier expiration as provided in the Plan and Option Agreement. The Option Award shall be in all respects subject to the Plan and applicable award agreement, which Executive will be required to execute as a condition of receipt of the Option Award (the “Option Agreement”). The terms and conditions upon which the Option Award may be exercised, including, if at all, after termination of Employee’s employment or service, are governed by the Plan and the Option Agreement.

(iii) Future Awards. Employee will continue to be eligible to receive such other long-term incentive awards as determined by the Board in its sole discretion.

For purposes of this Agreement, “Fully Diluted Capitalization” includes all outstanding shares of Employer’s capital stock, on a fully-diluted basis, determined under the treasury stock method. For purposes of Section 3(c)(i), Fully Diluted Capitalization will be determined by the Board in its sole discretion.

(d) Paid Time Off and Benefits. During the Employment Term, Employee shall receive personal time off (“PTO”) benefits consistent with such benefits currently offered to Employer’s executives and any Employer’s policies as in effect from time to time. In addition, during the Employment Term, Employee shall be eligible to participate in the employee benefit plans maintained by Employer and generally available to similarly situated employees of Employer, subject in each case to the generally applicable terms and conditions of the plan in

 

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question and to the determinations of any person or committee administering such employee benefit plan. Employer reserves the right to cancel or change the employee benefit plans and programs it offers to its employees at any time.

(e) Expense Reimbursement. Employer shall reimburse Employee for reasonable and necessary actual out-of-pocket business expenses incurred by Employee in connection with the performance of her duties hereunder; provided, that (i) such expenses were incurred in accordance with Employer’s policies, including any required pre-approvals thereunder, and (ii) Employee timely provides proper documentation and receipts prior to being entitled to any reimbursement for such amounts.

4. Trade Secrets, Confidential Information.

(a) Employee acknowledges that, during her employment with Employer she will acquire Trade Secrets and other Confidential Information (as defined in Exhibit A attached hereto), including information relating to the business of Employer, business methods, customers and suppliers. Employer considers the identity of customers and suppliers of Employer’s business, the contact person for those customers and suppliers, and any other information related to business conducted between such persons and Employer to be Trade Secrets and, as such, the confidential, sole and exclusive property of Employer.

(b) Employee understands that all Records (as defined in Exhibit A hereto) also constitute Confidential Information (and may constitute Trade Secrets) of Employer, and that her obligations continue at all times during and after her employment. These Records do not become any less confidential or proprietary to Employer because Employee may commit some of them to memory or because she may otherwise maintain them outside of Employer’s offices.

(c) Employee shall not, at any time during the term of her employment or after the termination of her employment, disclose to others, either directly or indirectly, or take or use for Employee’s own purposes or the purposes of others, either directly or indirectly, any Trade Secret or any Confidential Information of Employer. Employee understands and acknowledges that this obligation applies not only to technical information and customer information, but also to any business information that Employer treats as confidential. Employee agrees that all Confidential Information of Employer is to be used by her solely and exclusively for the purpose of conducting business on behalf of Employer or its affiliated companies. If Employee resigns or is terminated from her employment for any reason, she agrees to immediately return all Confidential Information, including Confidential Information maintained by her in her office, personal electronic devices, and/or at home.

(d) Employee agrees to keep the terms of this Agreement confidential and shall not disclose any terms herein except to Employee’s spouse, if applicable, attorneys or tax preparer or other professional advisors to whom such disclosure is necessary to effectuate the purposes for which Employee has consulted such professional advisors, or as required by law. Employee shall inform all future employers that Employee is bound by this confidentiality provision.

(e) Notwithstanding anything to the contrary contained herein, this

 

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Agreement does not prohibit Employee from exercising her legal rights under applicable law, including but not limited to reporting what she reasonably and in good faith believes are possible violations of applicable law or regulation to any governmental agency or self-regulatory organization (such as but not limited to the Department of Justice, the Securities and Exchange Commission, the National Labor Relations Board, the Congress, and any agency Inspector General, or any other similar state agency), or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation. Employee does not need Employer’s prior authorization to make any such report or disclosure, nor is Employee required to notify Employer that Employee has made any such report or disclosure. Furthermore, nothing herein is intended to prohibit Employee from cooperating in an investigation conducted by such a governmental agency or to otherwise limit her right, if any, to receive an award for information provided to any governmental agency or entity. Notwithstanding anything to the contrary contained herein, Employee will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If Employee files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Employee may disclose Employer’s trade secrets to Employee’s attorney and use the trade secret information in the court proceeding if Employee: (x) files any document containing the trade secret under seal; and (y) does not disclose the trade secret, except pursuant to court order.

5. Nonsolicitation; Non-Disparagement.

(a) Nonsolicitation. To the fullest extent permitted under applicable law, during the period commencing on the date of this Agreement and continuing until the first anniversary of the date when Employee’s employment is terminated for any reason, Employee shall not directly or indirectly, personally or through others, solicit, recruit or attempt to solicit or recruit (on Employee’s own behalf or on behalf of any other person or entity) either (a) any employee or any consultant of Employer or any of Employer’s affiliates or (b) the business of any customer of Employer or any of Employer’s affiliates on whom Employee called or with whom Employee became acquainted during her employment, if Employee is using confidential or proprietary information of Employer to effectuate the solicitation of any such customer. Employee represents that she (i) is familiar with the foregoing covenant not to solicit, and (ii) is fully aware of her obligations hereunder, including, without limitation, the reasonableness of the length of time, scope and geographic coverage of these covenants.

(b) Non-Disparagement. For the consideration herein provided, Employee agrees not to intentionally make any such statements that disparage or defame in any manner, whether directly or indirectly, Employer, its affiliates, officers, directors, employees, products or services following termination of employment.

(c) Survival. Employee hereby acknowledges and agrees that given the knowledge she will acquire during her employment with Employer, including knowledge regarding the strategy, products, customers and goodwill of the business and assets of Employer, it is of paramount importance to Employer that this Agreement contains enforceable restrictive covenants, such that Employer is willing to provide Employee with the compensation and benefits described in this Agreement for her adherence to such covenants following the

 

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termination of her employment, regardless of the reason for her termination. Accordingly, Employee agrees that Sections 4, 5 and 6 shall survive the termination of this Agreement.

6. Remedies Upon Breach. Employee hereby acknowledges and agrees that the services to be rendered by her to Employer are of a special and unique character, which gives this Agreement a peculiar value to Employer. Employee further acknowledges and agrees that a breach or threatened breach by her of any of the provisions contained in Section 4 or Section 5 will cause irreparable injury to Employer. Employee therefore agrees that, in addition to any other right or remedy Employer may have, Employer shall be entitled to a temporary restraining order and to a preliminary and permanent injunction enjoining or restraining the breach or threatened breach of Section 4 or Section 5 by Employee, without the necessity of proving the inadequacy of monetary damages or the posting of any bond or security. Employee further agrees that Employer shall have the right to have the provisions of Section 4 and Section 5 specifically enforced and to require Employee to account for and pay over to Employer all compensation, profits, moneys, accruals, increments or other benefits derived or received by Employee as the result of any transactions constituting a breach of such provisions.

7. Termination.

(a) Employment at Will. Employee’s employment shall be “at will,” meaning that either Employee or Employer shall be entitled to terminate Employee’s employment at any time and for any reason, with or without Cause (as defined below) upon fifteen (15) days written notice. This Agreement shall constitute the full and complete agreement between Employee and Employer on the “at-will” nature of Employee’s employment, which may only be changed in an express written agreement signed by Employee and an authorized officer of Employer.

(b) Rights Upon Termination. Except as expressly provided in Section 8, upon the termination of Employee’s employment with Employer, Employee shall only be entitled to the accrued but unpaid Base Salary due to her through the date of termination, any earned but unused PTO through the date of termination in accordance with Employer’s PTO policy, any vested benefits under Employer’s welfare and pension benefit plans (other than any severance plans) pursuant to the terms of such plans, and any unreimbursed business expenses incurred by Employee in accordance with this Agreement and Employer’s expense policies.

8. Payments and Obligations Upon Termination

(a) Termination for Cause, Voluntary Termination, Death or Disability. If this Agreement terminates prior to the end of the Employment Term due to Employer’s termination of Employee for Cause, Employee’s resignation other than for Good Reason (as defined below), Employee’s death or Employee’s Disability (as defined below), then except as provided in Section 7(b), Employee agrees that she shall not be eligible for any additional compensation or benefits.

(b) Termination without Cause or Employees Resignation for Good Reason. If Employer terminates Employee for a reason other than Cause, death or Disability, or Employee resigns for Good Reason, then, subject to Section 8(f) on or following the first anniversary of the Effective Date, Employee shall be entitled to the payments set forth in Section 7(b) and the following from Employer:

 

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(i) Payment, over a 12-month period following termination of employment, of continuing compensation equal to twelve (12) months of the Base Salary and Target Cash Bonus, payable in equal installments in accordance with Employer’s then-current payroll policies and practices; and

(ii) the Cash Bonus (if any) accrued, and unpaid, as of the date of termination for the calendar year prior to the calendar year in which the termination occurs, payable when bonuses are otherwise payable by the Company; and

(iii) the pro rata portion (as determined based on the number of days that Employee was employed during a calendar year divided by 365) of Employee’s Target Cash Bonus for the calendar year in which the termination occurs (the “Pro Rata Bonus”), payable on the Payment Date (as defined below); and

(iv) if Employee elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, then the Company will provide Executive reimbursement of the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination) until the earlier of (A) an expiration of a period of twelve (12) months following the date of termination or (B) the date upon which Executive and/or Executive’s eligible dependents are no longer eligible for COBRA continuation coverage (it is specifically understood that: (1) such reimbursement will be equal to the portion of the cost of the Executive’s pre-termination medical benefit coverage paid for by the Employer prior to termination, and (2) if such reimbursement is prohibited by law or would result in any penalties to the Employer, Employee and Employer will negotiate in good faith for an alternative payment which is intended to provide Employee with substantially similar economic benefit, but is not prohibited by law or result in penalties for the Employer); and

(v) such portion of the then-unvested Option Award as would have vested during the twelve (12) month period following the date of termination had Employee remained in continuous service with Employer during such period shall vest effective as of the termination date.

(c) Termination Without Cause Within First Twelve Months of Employee’s Employment with Employer. Notwithstanding the foregoing, if Employer terminates Employee for a reason other than Cause, death or Disability, or Employee resigns for Good Reason within twelve months following the Effective Date, Employee shall be entitled to the payments set forth in Section 7(b) and the following from Employer:

(i) Payment, payable in equal installments in accordance with Employer’s then-current payroll policies and practices over the Employment Period, as defined below, following termination of employment, of continuing compensation equal the product of (1) the sum of the Employee’s annualized Base Salary and Target Cash Bonus, and (2) a fraction where the numerator is the Employment Period and the denominator is 12 (the payments under this Section 8(c)(i) or under Section 8(b)(i), “Compensation Continuation”); and

(ii) the Cash Bonus (if any) accrued, and unpaid, as of the date of

 

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termination for the calendar year prior to the calendar year in which the termination occurs, payable when bonuses are otherwise payable by the Company; and

(iii) the pro rata portion (as determined based on the number of days that Employee was employed during a calendar year divided by 365) of Employee’s Target Cash Bonus for the calendar year in which the termination occurs (the “Pro Rata Bonus”), payable on the Payment Date (as defined below); and

(iv) if Employee elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, then the Company will provide Executive reimbursement of the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Executive’s termination) until the earlier of (A) an expiration of the period equal to the Employment Period following the date of termination or (B) the date upon which Executive and/or Executive’s eligible dependents are no longer eligible for COBRA continuation coverage (it is specifically understood that: (1) such reimbursement will equal to the portion of the cost of the Executive’s pre-termination medical benefit coverage paid for by the Employer prior to termination, and (2) if such reimbursement is prohibited by law or would result in any penalties to the Employer, Employee and Employer will negotiate in good faith for an alternative payment which is intended to provide Employee with substantially similar economic benefit, but is not prohibited by law or result in penalties for the Employer).

(d) Termination without Cause or Resignation for Good Reason in Connection with a Change in Control. Notwithstanding the foregoing, if, during the Change in Control Period (as defined below), (x) Employer (or any parent or successor of Employer) terminates Employee’s employment for a reason other than Cause, death or Disability, or (y) Employee resigns for Good Reason, then, subject to Section 8(f), Employee shall be entitled to the benefits as provided in Section 8(b) and (i) additionally, 100% of the then-unvested Option Award shall immediately vest and (ii) instead of compensation described in Section 8(b)(iii), Employee’s Target Cash Bonus for the calendar year in which the termination occurs, payable on the Payment Date (as defined below).

(e) Definitions. For purposes of this Section 8, the following definitions apply:

(i) “Cause” means the occurrence of any of the following, as determined in the Board’s sole discretion: (A) Employee’s failure to materially perform her duties to the standards required by Employer or Employee’s repeated neglect of Employee’s duties under this Agreement (other than by reason of physical or mental illness or disability that constitutes a Disability), which failure remains uncured (if capable of cure as determined in good faith by the Board) for ten (10) business days following written notice thereof by Employer to Employee; provided, however, that, if such failure is not reasonably capable of cure without material cost or liability to Employer, then this provision will be triggered immediately upon such failure; (B) Employee’s willful misconduct, material breach of any of Employer’s written employment policies or gross insubordination, which act remains uncured (if capable of cure as determined in good faith by the Board) for ten (10) business days following written notice thereof by Employer to Employee; provided, however, that, if such failure is not reasonably capable of cure without material cost or liability to Employer, then this provision will be

 

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triggered immediately upon such failure; (C) Employee’s engagement in any illegal act, substance abuse or any other misconduct that has a material adverse effect on Employer’s reputation or business operations, assets, properties, results of operations or financial condition, as reasonably determined by the Board; (D) Employee’s (i) commission of an act involving dishonesty in the execution of Employee’s duties, fraud, embezzlement or theft; (ii) (x) indictment for, or plea of guilty or nolo contendere to, any crime constituting a felony or (y) conviction of, or plea of guilty or nolo contendere to, any crime (non-felony) involving moral turpitude; or (iii) engaging in any activity that constitutes sexual harassment or discrimination or a material violation of any written Employer policy applicable thereto; or (E) Employee’s material breach of this Agreement (which breach is not otherwise covered by the definition of Cause), which breach remains uncured (if capable of cure as determined by the Board) for ten (10) business days following written notice thereof by Employer to Employee; provided, however, that that, if such failure is not reasonably capable of cure without material cost or liability to Employer, then this provision will be triggered immediately upon such failure.

(ii) “Change in Control” shall have the meaning set forth in the Plan.

(iii) “Change in Control Period” means the period that commences upon a Change in Control and ends on the one (1) year anniversary following a Change in Control.

(iv) “Disability” shall mean if Employee is unable to perform the essential functions of Employee’s position, with or without reasonable accommodation, due to legal, physical or mental incapacity for a period beyond any leave to which Employee is entitled under applicable law or Employer’s policies. Any leaves of absence shall be unpaid unless otherwise required by applicable law. It is acknowledged and agreed that termination pursuant to this provision as defined herein shall not give rise to any right other than as expressly set forth herein.

(v) “Employment Period” means the period equal to the shorter of (1) the longer of (A) six months, and (B) the number of full months Employee was employed by the Employer following the Effective Date and (2) 12 months.

(vi) “Good Reason” means the occurrence of any of the following without Employee’s consent: (A) a material diminution in Employee’s duties and responsibilities or a material negative change in Employee’s reporting relationship (including any requirement that Employee stops reporting to the Chief Executive Officer), (B) a material reduction of Employee’s base compensation (other than in connection with a general decrease in base salaries for the officers of Employer or any successor corporation), (C) a requirement that Employee perform her services at a facility or location more than fifty (50) miles from Employer’s location as of the Effective Date, or (D) Employer’s material breach of this Agreement. No event or condition will constitute Good Reason unless and until Employee has provided Employer with written notice of the event or condition no later than sixty (60) days after the first occurrence and Employer has failed to fully remedy such event or condition within thirty (30) days of receiving such notice, and Employee must have terminated Employee’s employment with Employer within thirty (30) days after the expiration of the thirty (30)-day remedial period.

 

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(vii) A “termination of employment” shall mean the date that Employee permanently ceases performing services for Employer as an employee even though Employee may remain on Employer’s books and records as an employee so that Employer may fulfill its obligations under this Section 8. Termination of employment shall be deemed to occur when Employee experiences a “separation of service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended and restated (the “Code” and such Code section, “Section 409A”)

(f) Conditions to Receipt of Severance. Notwithstanding any other provision of this Agreement, the receipt of any termination benefits (not otherwise required to be provided to Employer under applicable law) pursuant to this Section 8 will be subject to Employee signing and not revoking a separation agreement and release of claims with Employer in substantially the form attached hereto as Exhibit C (the “Release”) and provided that such Release becomes effective and irrevocable no later than sixty (60) days following Employee’s termination of employment (the “Release Deadline”). Notwithstanding the foregoing, the termination benefits shall be paid or provided or shall commence on the first payroll period following the date the Release becomes effective (the “Payment Date”), and the first payment shall include all accrued amounts from the date of termination; provided, that if termination of employment occurs in one calendar year and the Release Deadline occurs in the next calendar year, then the Payment Date shall be no earlier than January 1 of year in which Release Deadline occurs. If the Release does not become effective and irrevocable by the Release Deadline, then Employee will forfeit any rights to termination benefits under this Agreement. In no event will termination benefits be paid or provided until and unless the Release becomes effective and irrevocable by the Release Deadline. In addition, in the event that Employee materially breaches (and fails to cure, within ten (10) business days of receipt of written notice from Employer of such material breach, if such breach is capable of cure) the provisions of Sections 4 and 5, all Compensation Continuation and benefits to which she may otherwise be entitled pursuant to this Section 8 will immediately cease.

9. Ownership of Work Product and Inventions.

(a) Ownership. Employer shall own all rights to “Work Product” (as defined below) created by Employee. Employee hereby assigns to Employer all copyright, trademark, trade secrecy, and patent rights in the Work Product. Employee will take all action reasonably requested by Employer to transfer rights to the Work Product to Employer and to permit Employer to obtain copyright, trademark, patent, or similar protection for the Work Product in its own name in any jurisdiction. Employee hereby waives in whole any moral rights which she may have in any such Work Product or any part or parts thereof. If Employee makes any “Invention” (as defined below) during the Employment Term that Employee believes does not belong to Employer under this Agreement, then Employee will promptly notify the Board and will supply a written explanation of the reasons for such belief. Employee is not the owner of any invention as of the date hereof. Employee agrees that even if her employment is terminated by Employer, Employee shall at all times provide reasonable cooperation with Employer in the prosecution or defense of any lawsuit related to Employer activities in connection with any copyright of Employer.

(b) Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

 

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(i) “Work Product” means written materials created by Employee, Inventions made by Employee, programs, fixes, routines, inventions, ideas, designs, manuals, improvements, discoveries, processes, and any other results or properties of Employee’s efforts, whether produced alone or with others, (A) relating to Employer’s actual or anticipated business or (B) made or conceived during working hours or developed with the aid of Employer’s personnel or assets.

(ii) “Invention” means any invention, including, without limitation, information, inventions, contributions, improvements, ideas, or discoveries, whether patentable or copyrightable or not, and whether or not conceived or made during work hours.

(c) Limitations. All provisions of this Agreement relating to the assignment by Employee of any invention or innovation are subject to the provisions of California Labor Code Sections 2870, 2871 and 2872. Employee understands that, in accordance with Section 2870 of the California Labor Code, the provisions of this Agreement requiring assignment to Employer, without payment, of any rights in any Inventions would not apply to any invention for which no equipment, supplies, facility, or trade secret information of Employer was used and which was developed entirely on Employee’s own time, unless (i) the invention relates (A) directly to the business of Employer, or (B) to Employer’s actual or demonstrably anticipated research or development, or (ii) the invention results from any work performed by Employee for Employer. A copy of California Labor Code Sections 2870, 2871 and 2872 is attached to this Agreement as Exhibit B.

10. Compliance with Internal Revenue Code Section 409A. In the event that any compensation or other payments payable under this Agreement are subject to Section 409A, then Employee acknowledges and agrees that Employer shall adhere to the provisions of Section 409A and any regulations or other guidance issued thereunder. Employee agrees that she has reviewed or been advised to review (and had ample opportunity to review) the provisions of this Agreement with applicable legal and tax counsel to ensure compliance with Section 409A and that Employer shall not be responsible for any adverse tax consequences experienced by Employee in connection with this Agreement. Employee’s right to receive any installment payments pursuant to this Agreement will be treated as a right to receive a series of separate payments. For purposes of this Agreement, references to “termination of employment” (and substantially similar phrases) will be interpreted to mean a “separation from service” within the meaning of Section 409A. If, as of the date of Employee’s “separation from service” from Employer, Employee is a “specified employee” (within the meaning of Section 409A), then: (a) each installment of the Compensation Continuation that, in accordance with the dates and terms set forth in this Agreement, will in all circumstances, regardless of when the “separation from service” occurs, be paid within the short-term deferral period (as defined in Section 409A) will be treated as a “short-term deferral” within the meaning of Treas. Reg. Section 1.409A- l(b)(4) to the maximum extent permissible under Section 409A and will be paid on the dates and terms set forth in this Agreement; and (b) each installment of the Compensation Continuation that is not described in clause (a) above and that would, absent this clause (b), be paid within the six-month period following Employee’s “separation from service” from Employer will not be paid until the date that is six months and one day after such “separation from service” (or, if earlier, Employee’s death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day

 

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following Employee’s “separation from service” and any subsequent installments, if any, being paid in accordance with the dates and terms set forth in this Agreement; provided, however, that the preceding provisions of this clause (b) will not apply to any installment of the Compensation Continuation if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treas. Reg. Section 1.409A-l(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). Any installments that qualify for the exception under Treas. Reg. Section 1.409A-l(b)(9)(iii) must be paid no later than the last day of Employee’s second taxable year following the taxable year in which the “separation from service” occurs. The determination of whether and when Employee’s “separation from service” from Employer has occurred will be made in a manner consistent with, and based on the presumptions set forth in, Treas. Reg. Section l.409A-1(h). Solely for purposes of this paragraph, “Employer” will include all persons with whom Employer would be considered a single employer under Section 414(b) and 414(c) of the Code. All reimbursements and in-kind benefits provided under this Agreement will be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during Employee’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of any eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

11. Section 280G. Notwithstanding anything to the contrary contained in this Agreement, to the extent that any of the payments and benefits provided for under this Agreement or any other agreement or arrangement between Employer and Employee (collectively, the “Payments”) (a) constitute a “parachute payment” within the meaning of Section 280G of the Code (“Section 280G”) and (b) but for this Section 11, would be subject to the excise tax imposed by Section 4999 of the Code (“Section 4999”), then (i) if immediately prior to transaction that constitutes a “Change in Control” of Employer under Treas. Reg. Section 1.280G which resulted in the Payments, the stock of Employer is not publicly traded and the exemption described in Section 280G(b)(5) of the Code would apply to payments by Employer to the Employee in connection with a Change in Control (as defined in Section 280G and the regulations promulgated thereunder), Employer and Employee shall cooperate in good faith in connection with Employer satisfying the shareholder approval exemption under Section 280G(b)(5) of the Code and the regulations thereunder, and (ii) if clause (i) does not apply, the Payments will be reduced to the extent necessary so that no portion of such Payments retained by Employee will be subject to excise tax under Section 4999; provided, however, such reduction will only occur if after taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999, such reduction results in Employee’s receipt on an after-tax basis, of the greatest amount of benefits under this Agreement, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code. To the extent permitted by applicable law, and not a violation of Sections 280G, 409A or 4999 of the Code, Employee will be entitled to elect the order in which payments will be reduced. If Employee electing the order in which payments will be reduced would result in violation of Section 409A or loss of the benefit of reduction under Sections 280G or 4999, payments will be reduced in the following order (1) severance payment based on multiple of Base Salary and/or Cash Bonus or

 

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Target Cash Bonus; (2) other cash payments; (3) any pro-rated Cash Bonus paid as severance; (4) acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of stock subject to the option, provided such options are not permitted to be valued under Treas. Reg. Section 1.280G-1 Q/A – 24(c); (5) any equity awards accelerated or otherwise valued at full value, provided such equity awards are not permitted to be valued under Treas, Reg. Section 1.280G-1 Q/A – 24(c); (6) acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of stock subject to the option, provided such options are permitted to be valued under Treas. Reg. Section 1.280G-1 Q/A – 24(c); (7) acceleration of vesting of all other stock options and equity awards; and (8) within any category, reductions will be from the last due payment to the first. All determinations regarding the application of this Section 11 shall be made by an accounting firm or consulting group with nationally recognized standing and substantial expertise and experience in performing calculations regarding the applicability of Section 280G of the Code retained by Employer prior to the date of the applicable change in control and reasonably acceptable to Employee (the “280G Firm”). The 280G Firm will be directed to submit its determination and detailed supporting calculations to both Employee and Employer within thirty (30) days after notification from either Employer or Employee that Employee may receive Payments which may be “parachute payments” within the meaning of Section 280G (or such earlier or later date as Employer and Employee may agree). Employee and Employer will each provide the 280G Firm access to and copies of any books, records, and documents in their possession as may be reasonably requested by the 280G Firm, and otherwise cooperate with the 280G Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this letter agreement. The fees and expenses of the 280G Firm for its services in connection with the determinations and calculations contemplated by this Section 11 will be borne by Employer. The costs of obtaining such determination and all related fees and expenses (including related fees and expenses incurred in any later audit) shall be borne by Employer.

12. Notices. All notices, requests, demands, claims, consents and other communications that are required or otherwise delivered hereunder shall be in writing and shall be deemed to have been duly given if (a) personally delivered, (b) sent by nationally recognized overnight courier, (c) mailed by registered or certified mail with postage prepaid, return receipt requested, or (d) transmitted by email, to the parties hereto at the following addresses (or at such other address for a party as shall be specified by like notice):

if to Employer, to:

Histogen Inc.

Attention: HR Department

10655 Sorrento Valley Road, Suite 200

San Diego, California 92121

Email:

With a copy to (which will not constitute notice):

Sheppard, Mullin, Richter & Hampton

LLP 333 South Hope Street, 48th Floor

Los Angeles, California 90071

Attention: Will Chuchawat

 

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Email: wchuchawat@sheppardmullin.com

if to Employee, to such address as set forth in Employer’s records, or to such other address as the party to whom such notice or other communication is to be given may have furnished to each other party in writing in accordance herewith. Any such notice or communication shall be deemed to have been received (i) when delivered, if personally delivered, (ii) when sent, if sent by e-mail during normal business hours on a business day (or, if not sent during normal business hours on a business day, on the next business day after the date sent by facsimile), (iii) on the next business day after dispatch, if sent by nationally recognized, overnight courier guaranteeing next business day delivery, and (iv) on the fifth business day following the date on which the piece of mail containing such communication is posted, if sent by mail.

13. Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of California without giving effect to any choice of law or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California.

14. Arbitration.

(a) Agreement to Arbitrate. Employee and Employer agree that any and all disputes, claims or controversies whatsoever between them (and their affiliates, if any) arising out of or related to (i) Employee’s employment with Employer, or the termination thereof, (ii) Employee’s performance of services for Employer, or (iii) this Agreement, will be settled by final and binding arbitration in accordance with the rules and procedures of the Judicial Arbitration and Mediation Services, Inc. (“JAMS”) applicable to the dispute. JAMS rules for Employment Arbitration are available at http://www.jamsadr.com/rules-employment-arbitration/.

(b) Claims Subject to Arbitration. Claims subject to arbitration shall include, but are not limited to, claims concerning the Employee’s employment with Employer, Employee’s performance of services for Employer, and this Agreement, including claims based on any federal, state, or local law, statute, or regulation, including, but not limited to, any claims of discrimination, harassment, retaliation or other conduct in violation of or arising under Title VII of the Civil Rights Act of 1964 (as amended by the Civil Rights Act of 1991), the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Family and Medical Leave Act, the California Fair Employment and Housing Act, and the California Family Rights Act, claims for unpaid wages, commissions, bonuses, stock options or other employment compensation, claims for breach of contract or breach of implied covenant (express or implied), claims of wrongful termination in violation of contract or public policy, promissory estoppel, claims arising under common law, and tort claims.

(c) Claims Not Subject to Arbitration. This arbitration provision does not apply to or cover the following claims: (i) claims by Employee for workers’ compensation benefits; (ii) claims by Employee for unemployment compensation benefits; and (iii) any claim that may not be compelled to arbitration as a matter of law. Further, either Employee or

 

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Employer, in a court of competent jurisdiction, may seek to compel arbitration under this Agreement, to enforce an arbitration award or to obtain preliminary injunctive and/or other equitable relief in support of claims to be prosecuted in an arbitration to the extent allowed by California Code of Civil Procedure Section 1281.8.

(d) Arbitration Procedures. The arbitration shall take place in San Diego County, California. The arbitration will be conducted before an arbitrator who is a member of JAMS and mutually selected by the parties from the JAMS Panel. In the event that the parties are unable to mutually agree upon an arbitrator, selection of an arbitrator shall be governed by the applicable JAMS rules. The arbitrator shall have the authority to grant all monetary or equitable relief (including, without limitation, injunctive relief, ancillary costs and fees and punitive damages) available under state and federal law. Either party shall have the right to appeal any adverse rulings or judgments to the JAMS Panel of Retired Appellate Court Justices. The arbitrator may grant any remedy or relief to which the parties would have otherwise been entitled had the matter been heard in a court of law, and shall not grant any remedy or relief that could not have been granted had the matter been heard in a court of law. The parties agree that the arbitrator shall not have the power to commit errors of law or legal reasoning, and that the award may be vacated or corrected on appeal to a California state court of competent jurisdiction for any such error. Judgment on any award rendered by the arbitrator may be entered and enforced by any court having jurisdiction thereof.

To the extent permitted by law, the hearing and all filings and other proceedings shall be treated in a private and confidential manner by the arbitrator and all parties and representatives, and shall not be disclosed except as necessary for any related judicial proceedings or as required by applicable law.

(e) Attorneys’ Fees and Costs. Except as provided by applicable law, Employer and Employee shall equally pay the arbitrator’s fees, arbitration expenses and any other costs unique to the arbitration proceeding. All other costs, expenses and attorneys’ fees shall be borne by the party incurring them. Any postponement or cancellation fee imposed by the arbitration service will be paid by the party requesting the postponement or cancellation, unless the arbitrator determines otherwise. Any other fees charged or imposed by JAMS or the arbitrator shall be paid as directed by JAMS or the arbitrator, as applicable. The arbitrator shall award attorneys’ fees, costs and other expenses of arbitration to the prevailing party in the manner and to the extent authorized by applicable law. At the conclusion of the arbitration, each party agrees to pay promptly any arbitration award imposed against that party.

(f) Remedy. Except as provided by the JAMS rules or this Agreement, arbitration shall be the sole, exclusive and final remedy for any dispute between Employee and Employer. Accordingly, except as provided for by the JAMS rules or this Agreement, neither Employee nor Employer will be permitted to pursue court action regarding claims that are subject to arbitration and THE PARTIES HEREBY WAIVE THEIR RIGHT TO HAVE ANY DISPUTE, CLAIM OR CONTROVERSY DECIDED BY A JUDGE OR JURY IN A COURT.

BY SIGNING THIS AGREEMENT, THE PARTIES FURTHER AGREE THAT EACH MAY BRING OR PURSUE CLAIMS AGAINST THE OTHER ONLY IN THEIR

 

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INDIVIDUAL CAPACITIES, AND MAY NOT BRING OR PURSUE CLAIMS OR ACT AS A PLAINTIFF, CLASS MEMBER OR REPRESENTATIVE IN ANY PURPORTED CLASS, REPRESENTATIVE OR COLLECTIVE PROCEEDING, SUBJECT TO AND CONSISTENT WITH APPLICABLE LAW. THE PARTIES FURTHER AGREE THAT THE ARBITRATOR MAY NOT PRESIDE OVER ANY FORM OF A REPRESENTATIVE OR CLASS PROCEEDING. NOTWITHSTANDING THE FORGOING, NOTHING IN THIS AGREEMENT PREVENTS EITHER PARTY FROM PURSUING A REPRESENTATIVE OR COLLECTIVE ACTION IN COURT THAT MAY NOT BE COMPELLED TO ARBITRATION AS A MATTER OF LAW.

15. Consent to Jurisdiction. In any proceeding seeking equitable relief, to enforce arbitration or an arbitral award, or in the event that arbitration cannot be enforced, each of the parties hereby irrevocably and unconditionally agrees to submit to the exclusive jurisdiction of the appropriate state and federal courts situated in San Diego, California in any dispute, controversy, suit or action arising out of or in connection with this Agreement or any associated agreement or document and hereby waives in advance any objection or defense to such jurisdiction, including any defense based on lack of personal jurisdiction or forum non conveniens. Each of the parties hereby acknowledges that it is the intent of all parties hereto that any judgment, order or decree of any such court may be enforced in any court or other tribunal of competent jurisdiction in the United States of America or any other jurisdiction throughout the world and hereby waives and agrees not to assert any defense to the enforcement of any such judgment, order or decree in any such court or tribunal.

16. Withholding Taxes. All payments made under this Agreement shall be subject to reduction to reflect taxes or other charges required to be withheld by law.

17. Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the law and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, in the event that any provision of this Agreement would be held in any jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

18. Amendments, Modifications and Waivers. The terms and provisions of this Agreement may not be modified or amended, nor may any of the provisions hereof be waived, temporarily or permanently, except pursuant to a written instrument in ink executed by the parties hereto. Any waiver shall not operate or be construed as a waiver of any subsequent breach by another party.

19. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns; provided, that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the written consent of each other party, except that Employer may assign and

 

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transfer all or any portion of its rights and obligations under this Agreement to any of its affiliates; provided, however, that no such assignment shall affect Employer’s obligations under this Agreement. Any attempted assignment in violation of this Section shall be void. This Agreement is personal in nature as to Employee and may not be assigned by her. The parties agree that this Agreement shall survive Employee’s employment by Employer and is binding upon Employee’s heirs and legal representatives, and that Employer is an express third party beneficiary of this Agreement.

20. Captions. The captions are included in this Agreement for convenience of reference only and shall be ignored in the construction or interpretation of this Agreement.

21. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if such signatures were upon the same instrument. A facsimile, photocopied signature (which may be delivered by facsimile) or email with scan attachment shall be deemed to be the functional equivalent of an original for all purposes. This Agreement shall become effective when each party has received a counterpart of this Agreement signed by the other party.

22. Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matters addressed herein and supersedes any prior understandings, agreements or representations, by or among such parties, whether written or oral.

23. Construction. The parties have participated jointly, with counsel of their own choosing, in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement.

24. Acknowledgment. Employee acknowledges that she has had the opportunity to consult with independent counsel of her own choice concerning this Agreement, and that she has taken advantage of that opportunity to the extent that she desires. Employee further acknowledges that she has read and understands this Agreement, is fully aware of its legal effect, and has entered into it voluntarily based on her own judgment.

[Signature page follows]

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first written above.

 

Susan A. Knudson                      Histogen Inc.

/s/ Susan A. Knudson

    By:  

/s/ Richard W. Pascoe

    Name:   Richard W. Pascoe
    Title:   Chief Executive Officer

Signature Page to Executive Employment Agreement


Schedule 1

Pre-Approved Boards

Freedom Dogs – a not for profit organization providing service dog support for our service men and women with PTSD

Schedule 1


EXHIBIT A

DEFINITIONS

For purposes of this Exhibit A only, “Employer” means Employer and its affiliates.

A. “Trade Secrets” are defined as information of Employer, including, but not limited to, a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use, and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

B. “Records” include, but are not limited to, all books and records of Employer and its subsidiaries, including all accounting (including accounting work papers), financial reporting, tax, business, marketing, environmental, legal, corporate and other files, documents, instruments and papers, whether originals, copies (including computer generated, recorded or stored records) or otherwise, customer lists, advertising and promotional materials, financial statements, budgets, projections, financial, tax and accounting records, personnel records, compliance records, ledgers, journals, deeds, legal documents, title policies, manuals, minute books, stock certificates and books, stock transfer ledgers, contracts, franchises, permits, licenses, reports, management information systems, computer tapes, discs and other files, retrieval programs, operating data or plans and environmental studies.

C. “Confidential Information” is defined as Employer’s Trade Secrets, Records and other proprietary information relating to Employer’s businesses, business methods, personnel and customers.

Notwithstanding anything to the contrary as set forth in this Exhibit A, Trade Secrets, Records or Confidential Information shall not include information that: (a) is already available to and known by third parties in the public domain through no fault of Employee, (b) becomes available to and known by third parties in the public domain through no fault of Employee, or (c) is obtained by Employee from a third party not under confidentiality obligations and without a breach of any obligations of confidentiality.

Exhibit A


EXHIBIT B

CALIFORNIA LABOR CODE SECTIONS

2870. (a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of her rights in an invention to her employer shall not apply to an invention that the employee developed entirely on her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

2871. No employer shall require a provision made void and unenforceable by Section 2870 as a condition of employment or continued employment. Nothing in this article shall be construed to forbid or restrict the right of an employer to provide in contracts of employment for disclosure, provided that any such disclosures be received in confidence, of all of the employee’s inventions made solely or jointly with others during the term of her employment, a review process by the employer to determine such issues as may arise, and for full title to certain patents and inventions to be in the United States, as required by contracts between the employer and the United States or any of its agencies.

2872. If an employment agreement entered into after January 1, 1980, contains a provision requiring the employee to assign or offer to assign any of her rights in any invention to her employer, the employer must also, at the time the agreement is made, provide a written notification to the employee that the agreement does not apply to an invention which qualifies fully under the provisions of Section 2870. In any suit or action arising thereunder, the burden of proof shall be on the employee claiming the benefits of its provisions.

Exhibit B


EXHIBIT C

RELEASE

See attached.

Exhibit C


CONFIDENTIAL SEVERANCE AGREEMENT AND GENERAL RELEASE

This Confidential Severance Agreement and General Release (the “Agreement”) is entered into by and between [Employee Name] (“Employee”) and Histogen Inc., a Delaware corporation (the “Company”) (each a “Party” and collectively the “Parties”).

WHEREAS, the Employee signed an Executive Employment Agreement with the Company on                 , 20[    ] (the “Employment Agreement”), the Employee has been employed by the Company on an at-will basis since on or about                 , 20[    ];

WHEREAS, the Employee’s employment, positions and offices with the Company have terminated effective                , 20[    ] (the “Separation Date”); and

WHEREAS, the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that the Employee may have against the Company and any of the Company Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to the Employee’s employment with or separation from the Company.

NOW, THEREFORE, the Company and the Employee, for good and valuable consideration receipt of which is hereby acknowledged, hereby agree as follows:

1. Separation of Employment; Stock Options; Benefits.

(a) Separation of Employment. The Employee’s employment with the Company ended, and the Employee shall be deemed to have separated from any and all offices and positions with the Company and with any of its related entities, for all purposes, on the Separation Date. The Employee acknowledges and represents that, other than the consideration set forth in this Agreement, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to the Employee.

(b) Stock Options. Employee was granted options to purchase shares of common stock of the Company as set forth on Exhibit A1 hereto (the “Option Awards”), pursuant to the Company’s [    ] Plan (the “Plan”) and the stock option agreement thereunder (the “Option Agreement”). The Employee acknowledges and agrees that the Option Awards are the only stock options or other capital stock of the Company that Employee has received. All vesting of the Option Awards ceased as of the Separation Date and all unvested stock options under the Option Awards were immediately forfeited on the Separation Date. Any vested, but unexercised, stock options under the Option Awards will continue to be subject to the Plan and the Option Agreement. The Employee further acknowledges that she may exercise any outstanding vested, and unexercised, stock options under the Option Awards at any time within her applicable post-

 

1 

NTD: Exhibit A to include list of each stock option grant, number of shares vested and unvested as of the Separation Date, and the post-termination exercise period. Section to be revised if accelerated vesting is part of severance.

 

Exhibit C

-1-


termination exercise period for each Option Award (which post-termination exercise period is set forth on Exhibit A). If the Employee does not exercise her vested stock options under the Option Awards by the end of the applicable post-termination exercise period, then any such unexercised stock options will terminate.

(c) Benefits. The Employee’s health insurance benefits shall cease on [            ]2, subject to the Employee’s right to continue her health insurance under COBRA (as defined herein), provided the Employee timely elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time period prescribed pursuant to COBRA. The Employee’s participation in all benefits and incidents of employment, including, but not limited to, vesting in stock options, and the accrual of bonuses, vacation, and paid time off, ceased as of the Separation Date. The Company will provide the Employee with a COBRA notice within the time period by law.

2. Severance. In consideration for Employee signing this Agreement, and subject to the conditions set forth below, provided Employee does not revoke Employee’s acceptance in the manner set forth in paragraph 5, Employee will receive the following severance benefits (“Severance”):

(a) Severance Payment. Employee will be paid the severance described in Section 8( ) of the Employment Agreement pursuant to the terms of the Employment Agreement.

(b) Conditions. Employee agrees that Employee’s full compliance in all respects with each and every term of this Agreement, including without limitation, the obligations set forth in paragraphs 4 and 5, is an express condition to the Company’s obligation to provide the Severance set forth herein.

3. Release. Employee, and Employee’s successors, heirs, agents, and assigns, release and forever discharge the Company and its current and former parent companies, subsidiaries, agents, employees, officers, directors, owners, executives, trustees, representatives, attorneys, related organizations, assigns, and successors (hereafter referred to collectively as the “Released Parties”), and each of them, from any and all liabilities, claims, causes of action, charges, complaints, commissions, obligations, costs, losses, damages, injuries, attorneys’ fees, and other legal responsibilities, of any form whatsoever, whether known or unknown, unforeseen, unanticipated, unsuspected or latent, that Employee has incurred or expects to incur, or now owns or holds, or has at any time heretofore owned or held, or may at any time own, hold, or claim to hold by reason of any matter or thing arising from any cause whatsoever prior to the date of Employee’s execution of this Agreement, including but not limited to Employee’s employment with the Company, and the termination of that employment.

This release extends to any and all claims including, but not limited to, any alleged: (a) violation of the California Fair Employment and Housing Act, the California Wage Orders, the Private Attorneys General Act, the Employee Retirement Income Security Act of 1974, Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Worker Adjustment and Retraining Notification Act, the California Labor Code, the California Government Code, the

 

2 

NTD: To be Separation Date or such other date in accordance with the Company health benefit plan.

 

Exhibit C

-2-


Fair Labor Standards Act, the Occupational Safety and Health Act, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Americans With Disabilities Act, the Family Medical Leave Act, the California Family Rights Act, the California Business and Professions Code, and/or state and federal False Claims acts; (b) discrimination, harassment, retaliation, breach of any express or implied employment contract or agreement, wrongful discharge, breach of the implied covenant of good faith and fair dealing, intentional or negligent infliction of emotional distress, misrepresentation, fraud, defamation, interference with prospective economic advantage, and/or failure to pay wages due or other monies owed; and (c) violation of any local, state or federal law, regulation, ordinance, and/or public policy, violation of any contract, or tort or common law claim having any bearing whatsoever on the terms and conditions and/or cessation of employment with any of the Released Parties. Notwithstanding the releases set forth above, this Agreement does not release any claim that is prohibited from being released as a matter of law.

Employee understands that nothing in this release prevents Employee from filing a charge or complaint with or from participating in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”), National Labor Relations Board, or any other federal, state, or local agency charged with the enforcement of any employment laws, although Employee understands that by signing this Agreement, Employee waives the right to recover any damages or to receive other relief in any claim or suit brought by or through the EEOC, or any other state or local deferral agency on Employee’s behalf. This Agreement also does not affect Employee’s right to report a violation of securities laws or participate in an investigation conducted by the U.S. Securities and Exchange Commission.

4. Section 1542. Employee expressly waives any and all rights that Employee may have under Section 1542 of the Civil Code of the State of California, which states, in part: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HER MUST HAVE MATERIALLY AFFECTED HER SETTLEMENT WITH THE DEBTOR.” Employee expressly waives and releases any and all right to benefits that Employee may have under California Civil Code § 1542, to the fullest extent Employee may do so lawfully. Employee further acknowledges that Employee may later discover facts different from or in addition to those facts now known to Employee or believed by Employee to be true with respect to any or all of the matters covered by this Agreement, and Employee agrees that this Agreement nevertheless shall remain in full and complete force and effect.

5. Older Worker’s Benefit Protection Act. This Agreement constitutes a knowing and voluntary waiver of any and all rights or claims that Employee has or may have under the Federal Age Discrimination In Employment Act, as amended by the Older Workers’ Benefit Protection Act of 1990, 29 U.S.C. §§ 621 et seq. This paragraph and this Agreement are written in a manner calculated to be understood by Employee. Employee is hereby advised in writing to consult with an attorney before signing this Agreement. Employee acknowledges that, in return for this Agreement, Employee will receive consideration beyond that which Employee was already entitled to receive before entering into this Agreement. Employee acknowledges that Employee has had a reasonable time of up to 21 days in which to consider this Agreement, as required by the Older Workers’ Benefits Protection Act. If Employee decides not to use all 21

 

Exhibit C

-3-


days, Employee knowingly and voluntarily waives any claims that Employee was not given the 21-day period or did not use the entire 21 days to consider this Agreement. Employee may revoke this Agreement at any time within the 7-day period following the date Employee signs this Agreement by providing written notice of revocation to the Company. This Agreement shall not become effective or enforceable until 12:01 a.m. on the 8th day after Employee signs the Agreement.

6. No Admissions. Neither this Agreement nor the furnishing of the consideration for this Agreement shall be deemed or construed as an admission of liability or wrongdoing on the part of the Released Parties, nor shall this Agreement or the furnishing of the consideration for this Agreement be admissible as evidence in any proceeding other than for the enforcement of this Agreement.

7. Indemnification. No Party or attorney for any Party has made any representations or warranties regarding the taxability of the monetary payment made herein. Employee will assume all risks regarding the tax consequences of the monetary payment to Employee, if any. Employee agrees to indemnify and hold harmless the Released Parties against any assessment of payroll, withholding, FICA, or other taxes or penalties to Employee on said payment, if any.

8. Further Claims. Employee has not and will not file any charges against any of the Released Parties based upon, arising out of, or relating to any claim, demand, or cause of action released herein. Employee has not and will not institute a lawsuit in any state or federal court, based upon, arising out of, or relating to any claim, demand, or cause of action released herein. Employee has not and will not participate, assist, or cooperate in any claim, charge, suit, complaint, action or proceeding against any of the Released Parties, unless and to the extent required or compelled by law. Employee has not and will not encourage and/or solicit any third party to file any claim, charge, suit, complaint, action or proceeding against any of the Released Parties. This provision does not apply to claims challenging the validity of the Agreement under the Age Discrimination in Employment Act or any other charges or rights that cannot be waived as a matter of law.

9. Further Payments. Employee acknowledges that the Company has already provided Employee with payment for any and all wages, compensation, commissions, vacation, sick leave, overtime, expenses, options, bonuses, profit sharing, benefits, insurance, and/or any other form of payment from the Released Parties arising out of or related in any way to Employee’s employment with the Company.

10. Workplace Injuries. Employee represents and acknowledges that Employee has not sustained any workplace injury of any kind during Employee’s employment with the Company, and Employee does not intend to file any claim or seek any benefits of any kind under workers’ compensation.

11. Prior Agreements. This Agreement does not alter, modify or impact the confidentiality provisions and the restrictive covenants set forth in any prior agreements between the Parties, including, without limitation, the provisions in the Employment Agreement regarding nondisclosure of the Company’s Trade Secrets and Confidential Information (as defined therein), ongoing nonsolicitation and nondisparagement obligations and all other ongoing or post-employment obligations therein or in any other agreement with or for the benefit of the Company, which shall continue in full force and effect, nor does it affect Employee’s obligation to comply with those provisions and covenants.

 

Exhibit C

-4-


12. Miscellaneous. Employee has full authority to enter into this Agreement and to be bound by it. Employee is voluntarily entering into this Agreement free of any duress or coercion. Employee was advised to and has had the opportunity to consult legal counsel of Employee’s own choosing with respect to the execution and legal effect of this Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes any and all other agreements or understandings, either oral or written, between the Parties with respect to the subject matter hereof, provided that Employee must continue to comply with the agreements referenced in Paragraph 11 herein. Each Party to this Agreement acknowledges that no representations, inducements, promises, or other agreements have been made by or on behalf of any Party except those covenants, agreements and promises embodied in this Agreement. This Agreement cannot be modified in any respect except in a written instrument signed by the Parties. In the event that any provision of this Agreement is held to be void, null or unenforceable, the remaining portions will remain in full force and effect. Any uncertainty or ambiguity in the Agreement will not be construed for or against any Party based on the attribution of drafting to any Party. This Agreement may be executed by the Parties in any number of counterparts, which are defined as duplicate originals, all of which taken together will be construed as one document. A faxed or .pdf copy of this Agreement may be deemed an original. This Agreement will be construed and governed by the laws of the State of California.

13. Attorneys’ Fees and Costs For Legal Proceedings. If any party to this Agreement is required to enforce any term of this Agreement in any proceeding, the prevailing party shall be entitled to all reasonable attorneys’ fees and costs expended to enforce this Agreement, in addition to any other relief to which the prevailing party may be entitled.

[Signature page follows]

 

Exhibit C

-5-


PLEASE READ CAREFULLY, THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

 

DATED:                         

         

               [Employee Name]
    Histogen Inc.
DATED:                           
    By  

         

      [Name]
    Title:  

             

 

Exhibit C

-6-

Exhibit 10.2

HISTOGEN INC.

STOCK OPTION GRANT NOTICE AND OPTION AGREEMENT

(2020 Incentive Award Plan)

As a key leader in our business, you are in a position to have significant influence on the performance and success of Histogen Inc. (the “Company”). I am pleased to inform you that, in recognition of the role you play in our collective success, you have been granted an option to purchase shares of the Company’s Common Stock. This award is subject to the terms and conditions of the Histogen Inc. 2020 Incentive Award Plan, this Grant Notice, and the following Stock Option Agreement. The details of this award are indicated below.

 

Optionee:    
Date of Grant:    
Number of Shares subject to the Option:    
Exercise Price Per Share:    
Term of Option:   Ten (10) years
Vesting:    

Name:_______

Title:________

Acknowledged and agreed as of the Date of Grant

 

 
Name:    

 

Exhibit A


STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (together with the above grant notice (the “Grant Notice”), the “Agreement”) is made and entered into as of the date set forth on the Grant Notice by and between Histogen Inc., a Delaware corporation (the “Company”), and the individual (the “Optionee”) set forth on the Grant Notice.

A.    Pursuant to the Histogen Inc. 2020 Incentive Award Plan (the “Plan”), the Administrator has determined that it is to the advantage and best interest of the Company to grant to the Optionee an option to purchase the number of Shares (the “Shares”) set forth on the Grant Notice, at the exercise price per Share set forth on the Grant Notice, and in all respects subject to the terms, definitions and provisions of the Plan, which is incorporated herein by reference, and this Agreement (the “Option”).

B.    Unless otherwise defined herein, capitalized terms used in this Agreement shall have the meanings set forth in the Plan. For purposes of this Agreement, the following definitions shall apply:

(i)     “Termination Date” shall mean the date of the Optionee’s Termination of Service.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Optionee and the Company hereby agree as follows:

1.    Acceptance of Agreement. Optionee has reviewed all of the provisions of the Plan and this Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator on questions relating to the Plan and this Agreement, and, solely as they relate to this Option, the applicable provisions (if any) contained in a written employment agreement between the Company or an Affiliate and the Optionee. The Optionee’s electronic signature of this Agreement shall have the same validity and effect as a signature affixed by hand.

2.    Grant and Terms of Stock Option.

2.1    Grant of Option. Pursuant to this Agreement, the Company has granted to the Optionee the right and option to purchase, subject to the terms and conditions set forth in the Plan and this Agreement, all or any part of the number of Shares set forth on the Grant Notice at a purchase price per Share equal to the exercise price per Share set forth on the Grant Notice. An Option granted pursuant to the Grant Notice and this Agreement shall be a Non-Qualified Stock Option.

2.2    Vesting and Term of Option. This Section 2.2 is subject to the provisions of the Plan and the other provisions of this Agreement.

2.2.1    This Option shall vest and become exercisable as described in the Grant Notice.

 

Exhibit A


2.2.2    The “Term” of this Option shall begin on the Date of Grant set forth in the Grant Notice and end on the expiration of the Term specified in the Grant Notice. No portion of this Option may be exercised after the expiration of the Term.

2.2.3    In the event of Optionee’s Termination of Service for any reason other than death, Disability, or Cause:

2.2.3.1    the portion of this Option that is not vested and exercisable as of the Termination Date shall not continue to vest and shall be immediately cancelled and terminated; and

2.2.3.2    the portion of this Option that is vested and exercisable as of the Termination Date shall terminate and be cancelled on the earlier of:

(a)    the expiration of the Term and

(b)    ninety (90) days after such Termination Date.

2.2.4    In the event of Termination due to death or Disability:

2.2.4.1    the portion of this Option that is not vested and exercisable as of the Termination Date shall not continue to vest and shall be immediately cancelled and terminated; and

2.2.4.2    the portion of this Option that is vested and exercisable as of the Termination Date shall terminate and be cancelled on the earlier of (a) the expiration of the Term and (b) the date that is twelve (12) months after the Termination Date.

2.2.5    In the event of Optionee’s Termination of Service for Cause, or if, after the Termination of Service, the Administrator determines that Cause existed before such Termination of Service, this entire Option shall not continue to vest, shall be cancelled and terminated as of the Termination Date, and shall no longer be exercisable as to any Shares, whether or not previously vested.

3.    Method of Exercise.

3.1    Method of Exercise. Each election to exercise the Option shall be subject to the terms and conditions of the Plan and shall be in writing, signed by the Optionee or by his or her executor, administrator, or permitted transferee (subject to any restrictions provided under the Plan), made pursuant to and in accordance with the terms and conditions set forth in the Plan and received by the Company at its principal offices, accompanied by payment in full as provided in the Plan or in this Agreement. Notwithstanding any of the foregoing, the Administrator shall have the right to specify all conditions of the manner of exercise. Upon the Company’s determination that the Option has been validly exercised as to any of the Shares, the Company may issue certificates in the Optionee’s name for such Shares. However, the Company shall not be liable to the Optionee for damages relating to any reasonable delays in issuing the

 

Exhibit A


certificates to the Optionee, any loss of the certificates, or any mistakes or errors in the issuance of the certificates or in the certificates themselves which it promptly undertakes to correct.

3.2    Restrictions on Exercise. No Shares will be issued pursuant to the exercise of this Option unless and until there shall have been full compliance with all applicable requirements of the Securities Act of 1933 (“Securities Act”), as amended (whether by registration or satisfaction of exemption conditions), all applicable listing requirements of any national securities exchange or other market system on which the Common Stock is then listed and all applicable requirements of any Applicable Laws and of any regulatory bodies having jurisdiction over such issuance. As a condition to the exercise of this Option, the Company may require the Optionee to make any representation and warranty to the Company as may be necessary or appropriate, in the judgment of the Administrator, to comply with any Applicable Law. In addition, Optionee shall not sell any Shares acquired upon exercise of this Option at a time when Applicable Laws, regulations or Company’s or underwriter trading policies prohibit such sale. Any other provision of this Agreement notwithstanding, the Company shall have the right to designate one or more periods of time, each of which shall not exceed 180 days in length, during which this Option shall not be exercisable if the Administrator determines (in its sole discretion) that such limitation on exercise could in any way facilitate a lessening of any restriction on transfer pursuant to the Securities Act or any state securities laws with respect to any issuance of securities by the Company, facilitate the registration or qualification of any securities by the Company under the Securities Act or any state securities laws, or facilitate the perfection of any exemption from the registration or qualification requirements of the Securities Act or any applicable state securities laws for the issuance or transfer of any securities. Such limitation on exercise shall not alter the vesting schedule set forth in this Agreement other than to limit the periods during which this Option shall be exercisable.

3.3    Method of Payment. Payment of the exercise price shall be made in full at the time of exercise (a) by the delivery of cash or check acceptable to the Administrator, including an amount to cover the withholding taxes (as provided in Section 7.11) with respect to such exercise, or (b) any other method, if any, approved by the Administrator, including (i) by means of consideration received under any cashless exercise procedure, if any, approved by the Administrator (including the withholding of Shares otherwise issuable upon exercise) or (ii) any other form of consideration approved by the Administrator and permitted by Applicable Laws.

3.4    No Rights as a Shareholder. Until the Shares are issued to the Optionee (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder will exist with respect to the Shares, notwithstanding the exercise of the Option.

4.    Non-Transferability of Option. Except as provided below, this Option may not be sold, assigned transferred in any manner, pledged or otherwise encumbered other than by will or by the laws of descent or distribution or to a beneficiary designated pursuant to the Plan, and may be exercised during the lifetime of Optionee only by Optionee or the Optionee’s guardian or legal representative. Subject to all of the other terms and conditions of this Agreement, following the death of Optionee, this Option may, to the extent it is vested and exercisable by Optionee in accordance with its terms on the Termination Date, be exercised by Optionee’s executor or administrator, or the person or persons to whom the Optionee’s rights under this

 

Exhibit A


Agreement shall pass by will or by the laws of descent and distribution as the case may be. Any heir or legatee of the Optionee shall take rights herein granted subject to the terms and conditions hereof.

5.    Restrictions; Restrictive Legends. Ownership and transfer of Shares issued pursuant to the exercise of this Option will be subject to the provisions of, including ownership and transfer restrictions contained in, the Company’s Certificate of Incorporation or Bylaws, as amended from time to time, restrictions imposed by Applicable Laws and restrictions set forth or referenced in legends imprinted on certificates representing such Shares.

6.    Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, to the extent that this Option had not been previously exercised, it will terminate immediately prior to the consummation of such proposed dissolution or liquidation. In such instance, the Administrator may, in the exercise of its sole discretion, declare that this Option will terminate as of a date fixed by the Administrator and give the Optionee the right to exercise this Option prior to such date as to all or any part of the optioned stock, including Shares as to which this Option would not otherwise be exercisable.

7.    General.

7.1    Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware applicable to agreements made and to be performed entirely in Delaware, without regard to the conflicts of law provisions of California or any other jurisdiction.

7.2    Community Property. Without prejudice to the actual rights of the spouses as between each other, for all purposes of this Agreement, the Optionee shall be treated as agent and attorney-in-fact for that interest held or claimed by his or her spouse with respect to this Option and the parties hereto shall act in all matters as if the Optionee was the sole owner of this Option. This appointment is coupled with an interest and is irrevocable.

7.3    No Employment Rights. Nothing herein contained shall be construed as an agreement by the Company or any of its Subsidiaries, express or implied, to employ the Optionee or contract for the Optionee’s services, to restrict the Company’s or such Subsidiary’s right to discharge the Optionee or cease contracting for the Optionee’s services or to modify, extend or otherwise affect in any manner whatsoever the terms of any employment agreement or contract for services which may exist between the Optionee and the Company or any Affiliate.

7.4    Application to Other Stock. In the event any capital stock of the Company or any other corporation shall be distributed on, with respect to, or in exchange for Shares as a stock dividend, stock split, reclassification or recapitalization in connection with any merger or reorganization or otherwise, all restrictions, rights and obligations set forth in this Agreement shall apply with respect to such other capital stock to the same extent as they are, or would have been applicable, to the Shares on or with respect to which such other capital stock was distributed, and references to “Company” in respect of such distributed stock shall be deemed to refer to the company to which such distributed stock relates.

 

Exhibit A


7.5    No Third-Party Benefits. Except as otherwise expressly provided in this Agreement, none of the provisions of this Agreement shall be for the benefit of, or enforceable by, any third-party beneficiary.

7.6    Successors and Assigns. Except as provided herein to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties, their respective successors and permitted assigns.

7.7    No Assignment. Except as otherwise provided in this Agreement, the Optionee may not assign any of his or her rights under this Agreement without the prior written consent of the Company, which consent may be withheld in its sole discretion. The Company shall be permitted to assign its rights or obligations under this Agreement so long as such assignee agrees to perform all of the Company’s obligations hereunder.

7.8    Severability. The validity, legality or enforceability of the remainder of this Agreement shall not be affected even if one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable in any respect.

7.9    Equitable Relief. The Optionee acknowledges that, in the event of a threatened or actual breach of any of the provisions of this Agreement, damages alone will be an inadequate remedy, and such breach will cause the Company great, immediate and irreparable injury and damage. Accordingly, the Optionee agrees that the Company shall be entitled to injunctive and other equitable relief, and that such relief shall be in addition to, and not in lieu of, any remedies it may have at law or under this Agreement.

7.10    Jurisdiction. Any suit, action or proceeding with respect to this Agreement, or any judgment entered by any court in respect of any thereof, shall be brought in any court of competent jurisdiction in the State of California, and the Company and the Optionee hereby submit to the exclusive jurisdiction of such courts for the purpose of any such suit, action, proceeding or judgment. The Optionee and the Company hereby irrevocably waive (i) any objections which it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any court of competent jurisdiction in the State of California, (ii) any claim that any such suit, action or proceeding brought in any such court has been brought in any inconvenient forum and (iii) any right to a jury trial.

7.11    Taxes. By agreeing to this Agreement, the Optionee represents that he or she has reviewed with his or her own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement and that he or she is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Company shall be entitled to require a cash payment by or on behalf of the Optionee and/or to deduct from the Shares or cash otherwise issuable hereunder or other compensation payable to the Optionee the minimum amount of any sums required by federal, state or local tax law to be withheld (or other such sums that will not cause adverse accounting consequences for the Company and is permitted under applicable withholding rules promulgated by the Internal Revenue Service or another applicable governmental entity) in respect of the Option, its exercise or any payment or transfer under or with respect to the Option.

 

Exhibit A


7.12    Headings. The section headings in this Agreement are inserted only as a matter of convenience, and in no way define, limit, extend or interpret the scope of this Agreement or of any particular section.

7.13    Number and Gender. Throughout this Agreement, as the context may require, (a) the masculine gender includes the feminine and the neuter gender includes the masculine and the feminine; (b) the singular tense and number includes the plural, and the plural tense and number includes the singular; (c) the past tense includes the present, and the present tense includes the past; (d) references to parties, sections, paragraphs and exhibits mean the parties, sections, paragraphs and exhibits of and to this Agreement; and (e) periods of days, weeks or months mean calendar days, weeks or months.

7.14    Data Privacy. Optionee agrees that all of Optionee’s information that is described or referenced in this Agreement and the Plan may be used by the Company, its affiliates and the designated broker and its affiliates to administer and manage Optionee’s participation in the Plan.

7.15    Acknowledgments of Optionee. Optionee has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement, fully understands all provisions of the Plan and this Agreement and, by accepting the Notice of Grant, acknowledges and agrees to all of the provisions of the Grant Notice, the Plan and this Agreement.

7.16    Complete Agreement. The Grant Notice, this Stock Option Agreement, the Plan, and the applicable provisions (if any) contained in a written employment agreement between the Company or an Affiliate and the Optionee constitute the parties’ entire agreement with respect to the subject matter hereof and supersede all agreements, representations, warranties, statements, promises and understandings, whether oral or written, with respect to the subject matter hereof. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

7.17    Waiver. The Optionee acknowledges that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Optionee.

7.18    Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

7.19    Amendments and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended, altered or terminated at any time or from time to time by the Administrator or the Board, but no amendment, alteration or termination shall be made that would materially impair the rights of an Optionee under the Option without such Optionee’s consent. If it is determined that the terms of this Agreement have been structured in a manner that would result in adverse tax treatment under Section 409A of the Code, the parties agree to cooperate in taking all reasonable measures to restructure the arrangement to minimize or avoid such adverse tax treatment without materially impairing Optionee’s economic rights.

 

Exhibit A


7.20    Waiver of Jury Trial. TO THE EXTENT EITHER PARTY INITIATES LITIGATION INVOLVING THIS AGREEMENT OR ANY ASPECT OF THE RELATIONSHIP BETWEEN US (EVEN IF OTHER PARTIES OR OTHER CLAIMS ARE INCLUDED IN SUCH LITIGATION), ALL OF THE PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY. THIS WAIVER WILL APPLY TO ALL CAUSES OF ACTION THAT ARE OR MIGHT BE INCLUDED IN SUCH ACTION, INCLUDING CLAIMS RELATED TO THE ENFORCEMENT OR INTERPRETATION OF THIS AGREEMENT, ALLEGATIONS OF STATE OR FEDERAL STATUTORY VIOLATIONS, FRAUD, MISREPRESENTATION, OR SIMILAR CAUSES OF ACTION, AND IN CONNECTION WITH ANY LEGAL ACTION INITIATED FOR THE RECOVERY OF DAMAGES BETWEEN OR AMONG US OR BETWEEN OR AMONG ANY OF OUR OWNERS, AFFILIATES, OFFICERS, EMPLOYEES OR AGENTS.

7.21    Electronic Delivery and Disclosure. The Company may, in its sole discretion, decide to deliver or disclose, as applicable, any documents related to this Award granted under the Plan, future awards that may be granted under the Plan, the prospectus related to the Plan, the Company’s annual reports or proxy statements by electronic means or to request Optionee’s consent to participate in the Plan by electronic means, including, but not limited to, the Securities and Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval system or any successor system (“EDGAR”). Optionee hereby consents to receive such documents delivered electronically or to retrieve such documents furnished electronically (including on EDGAR), as applicable, and agrees to participate in the Plan through any online or electronic system established and maintained by the Company or another third party designated by the Company.

7.22    Section 409A. The parties intend for the Option to be exempt from Section 409A of the Code or, if not so exempt, to be treated in a manner which complies with the requirements of such section, and intend that this Agreement be construed and administered in accordance with such intention. In the event that the parties determine that the terms of this Agreement or the Option needs to be modified in order to comply with Section 409A of the Code, the parties shall cooperate reasonably to do so in a manner intended to best preserve the economic benefits of this Agreement. Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A of the Code shall be paid under the applicable exception. For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Participant’s separation from service shall instead be paid on the first business day after the date that is six months following the Participant’s termination date (or death, if earlier).

 

Exhibit A

Exhibit 99.1

 

LOGO     

CONTACT: Eileen Brandt

Histogen Inc.

(858) 526-3106

ebrandt@histogen.com

Histogen Appoints Susan A. Knudson as Chief Financial Officer

SAN DIEGO, May 28, 2020 – Histogen Inc. (NASDAQ: HSTO), a regenerative medicine company with a novel biological platform that replaces and regenerates tissues in the body, announced today the appointment of Susan A. Knudson as Executive Vice President and Chief Financial Officer.

“We are proud to welcome Susan to serve as our Executive Vice President and Chief Financial Officer during this important time as we transition into a public company,” said Richard W. Pascoe, President and Chief Executive Officer of Histogen. “With over 20 years of experience in the biopharmaceutical industry, Susan brings a wealth of financial and corporate strategy expertise to Histogen as we evolve into a leading regenerative medicine focused company.”

Prior to coming to Histogen, Ms. Knudson most recently served as Senior Vice President and Chief Financial Officer of Pfenex Inc, where she successfully led fund raising efforts and executed on strategies to grow the business from development stage through commercialization.

Prior to Pfenex, Ms. Knudson held the position of Chief Financial Officer of Neothetics, Inc., an aesthetics focused pharmaceutical company, where she led the company’s strategic and corporate finance activities from pre-IPO through IPO. Among her previous roles, she served as Senior Director of Finance and Administration at Avera Pharmaceuticals, where she drove financing strategy, and was an integral part of the business development team interacting with multinational pharmaceutical companies.

“I am excited to join Histogen at this pivotal time, and I’m confident that my diverse background in healthcare will meaningfully complement the team as we move to execute on the Histogen pipeline of product candidates and overall corporate strategy,” said Ms. Knudson.

About Histogen

Histogen is a regenerative medicine company developing patented technologies that replace and regenerates tissues in the body. The company’s innovative technology platform utilizes cell conditioned media and extracellular matrix materials produced by hypoxia-induced multipotent cells, developing therapeutic products that address underserved, multi-billion US dollar global markets. For more information, please visit www.histogen.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. For example, we are using forward-looking statements when we discuss Histogen’s future operations and its ability to successfully initiate and complete clinical trials and achieve regulatory milestones and related timing; the nature, strategy and focus of Histogen’s business; and the development and commercial potential and potential benefits of any of Histogen’s product candidates. Histogen may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in the forward-looking statements and you should not place undue reliance on these forward-looking


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statements. Because such statements deal with future events and are based on Histogen’s current expectations, they are subject to various risks and uncertainties and actual results, performance or achievements of Histogen that could differ materially from those described in or implied by the statements in this press release, including: the uncertainties associated with the clinical development and regulatory approval of Histogen’s product candidates, including potential delays in the commencement, enrollment and completion of clinical trials; the potential that earlier clinical trials and studies of Histogen’s product candidates may not be predictive of future results; risks related to business interruptions, including the outbreak of COVID-19 coronavirus, which could seriously harm Histogen’s financial condition and increase its costs and expenses; and the requirement for additional capital to continue to advance these product candidates, which may not be available on favorable terms or at all. The foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere, including the those risks discussed in Histogen’s filings with the Securities and Exchange Commission. Except as otherwise required by law, Histogen disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date hereof, whether as a result of new information, future events or circumstances or otherwise.

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