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Delaware
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45-4744083
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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26 Technology Drive Irvine, California
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92618
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(Address of principal executive offices)
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(Zip Code)
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(949) 396-6322
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(Registrant’s telephone number, including area code)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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ý
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Smaller reporting company
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ý
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Emerging growth company
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ý
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Title of class
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Trading symbol
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Name of exchange on which registered
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Common stock, par value $0.0001 per share
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AXNX
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Nasdaq Global Select Market
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Page
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•
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announcements of regulatory approval or disapproval of our proprietary rechargeable sacral neuromodulation (“SNM”) system (“r-SNM System”) and any future enhancements to our r-SNM System;
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•
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adverse results from or delays in clinical studies of our r-SNM System;
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•
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unanticipated safety concerns related to the use of our r-SNM System;
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•
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U.S. Food and Drug Administration (“FDA”) or other U.S. or foreign regulatory or legal actions or changes affecting us or our industry;
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•
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any termination or loss of intellectual property rights;
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•
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any voluntary or regulatory mandated product recalls;
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•
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adverse developments concerning our manufacturers or suppliers or any future strategic partnerships;
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•
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introductions and announcements of new technologies by us, any commercialization partners or our competitors, and the timing of these introductions and announcements;
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•
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variations in our financial results or those of companies that are perceived to be similar to us;
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•
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success or failure of competitive products or therapies in the SNM market;
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•
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changes in the structure of healthcare payment of our r-SNM System;
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•
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announcements by us or our competitors of significant acquisitions, licenses, strategic partnerships, joint ventures or capital commitments;
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•
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market conditions in the medical technology industry and issuance of securities analysts’ reports or recommendations;
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•
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rumors and market speculation involving us or other companies in our industry;
|
•
|
sales of substantial amounts of our stock by directors, officers or significant stockholders, or the expectation that such sales might occur;
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•
|
general economic, industry and market conditions, including the size and growth, if any, of the market;
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•
|
additions or departures of key personnel;
|
•
|
intellectual property, product liability or other litigation against us, our third-party manufacturers or other parties on which we rely or litigation against our general industry;
|
•
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changes in our capital structure, such as future issuances of securities and the incurrence of additional debt; and
|
•
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the results of any future legal proceedings.
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|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
82,680
|
|
|
$
|
98,306
|
|
Short-term investments
|
43,001
|
|
|
59,218
|
|
||
Accounts receivable
|
1,286
|
|
|
427
|
|
||
Inventory
|
7,975
|
|
|
3,673
|
|
||
Prepaid expenses and other current assets
|
3,074
|
|
|
3,716
|
|
||
Total current assets
|
138,016
|
|
|
165,340
|
|
||
Property and equipment, net
|
3,000
|
|
|
2,784
|
|
||
Intangible asset, net
|
368
|
|
|
426
|
|
||
Other assets
|
5,068
|
|
|
3,356
|
|
||
Total assets
|
$
|
146,452
|
|
|
$
|
171,906
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
3,185
|
|
|
$
|
3,436
|
|
Accrued liabilities
|
3,630
|
|
|
1,683
|
|
||
Lease liability, current portion
|
588
|
|
|
768
|
|
||
Debt, net of unamortized debt issuance costs, current portion
|
3,897
|
|
|
—
|
|
||
Total current liabilities
|
11,300
|
|
|
5,887
|
|
||
Lease liability, net of current portion
|
4,739
|
|
|
3,281
|
|
||
Debt, net of unamortized debt issuance costs, net of current portion
|
16,000
|
|
|
19,463
|
|
||
Total liabilities
|
32,039
|
|
|
28,631
|
|
||
Stockholders’ equity
|
|
|
|
||||
Preferred stock, par value $0.0001 per share; 10,000,000 shares authorized, no shares issued and outstanding at June 30, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
||
Common stock, par value $0.0001, 50,000,000 shares authorized at June 30, 2019 and December 31, 2018; 28,480,743 and 27,806,934 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
246,706
|
|
|
243,337
|
|
||
Accumulated deficit
|
(131,827
|
)
|
|
(99,649
|
)
|
||
Accumulated other comprehensive loss
|
(469
|
)
|
|
(416
|
)
|
||
Total stockholders’ equity
|
114,413
|
|
|
143,275
|
|
||
Total liabilities and stockholders’ equity
|
$
|
146,452
|
|
|
$
|
171,906
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net revenue
|
$
|
1,488
|
|
|
$
|
12
|
|
|
$
|
2,565
|
|
|
$
|
12
|
|
Cost of goods sold
|
772
|
|
|
5
|
|
|
1,320
|
|
|
5
|
|
||||
Gross profit
|
716
|
|
|
7
|
|
|
1,245
|
|
|
7
|
|
||||
Operating Expenses
|
|
|
|
|
|
|
|
||||||||
Research and development
|
4,874
|
|
|
6,178
|
|
|
9,093
|
|
|
10,721
|
|
||||
General and administrative
|
4,362
|
|
|
1,636
|
|
|
8,377
|
|
|
3,071
|
|
||||
Sales and marketing
|
10,750
|
|
|
811
|
|
|
16,664
|
|
|
1,359
|
|
||||
Total operating expenses
|
19,986
|
|
|
8,625
|
|
|
34,134
|
|
|
15,151
|
|
||||
Loss from operations
|
(19,270
|
)
|
|
(8,618
|
)
|
|
(32,889
|
)
|
|
(15,144
|
)
|
||||
Other Income (Expense)
|
|
|
|
|
|
|
|
||||||||
Interest income
|
839
|
|
|
205
|
|
|
1,873
|
|
|
276
|
|
||||
Interest and other expense
|
(629
|
)
|
|
(234
|
)
|
|
(1,161
|
)
|
|
(383
|
)
|
||||
Other income (expense), net
|
210
|
|
|
(29
|
)
|
|
712
|
|
|
(107
|
)
|
||||
Loss before income tax expense
|
(19,060
|
)
|
|
(8,647
|
)
|
|
(32,177
|
)
|
|
(15,251
|
)
|
||||
Income tax expense
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Net loss
|
(19,061
|
)
|
|
(8,648
|
)
|
|
(32,178
|
)
|
|
(15,252
|
)
|
||||
Foreign currency translation adjustment
|
(43
|
)
|
|
(2
|
)
|
|
(53
|
)
|
|
(3
|
)
|
||||
Comprehensive loss
|
$
|
(19,104
|
)
|
|
$
|
(8,650
|
)
|
|
$
|
(32,231
|
)
|
|
$
|
(15,255
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share, basic and diluted (see Note 1)
|
$
|
(0.68
|
)
|
|
$
|
(3.07
|
)
|
|
$
|
(1.15
|
)
|
|
$
|
(5.43
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share (see Note 1)
|
27,945,393
|
|
|
2,819,270
|
|
|
27,887,121
|
|
|
2,811,183
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||||||||
|
|
|
|
|
Additional
|
|
|
|
Other
|
|
|
|||||||||||
|
Common Stock
|
|
Paid-in
|
|
Accumulated
|
|
Comprehensive
|
|
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Loss
|
|
Total
|
|||||||||||
Balance at December 31, 2018
|
27,806,934
|
|
|
$
|
3
|
|
|
$
|
243,337
|
|
|
$
|
(99,649
|
)
|
|
$
|
(416
|
)
|
|
$
|
143,275
|
|
Issuance of common stock for employee stock option exercises for cash
|
41,740
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|||||
Restricted Shares Award (“RSA”) and stock option issuances and forfeitures for terminations, net
|
352,417
|
|
|
—
|
|
|
977
|
|
|
—
|
|
|
—
|
|
|
977
|
|
|||||
Restricted Stock Units (“RSU”) issuances and forfeitures for terminations, net
|
—
|
|
|
—
|
|
|
165
|
|
|
—
|
|
|
—
|
|
|
165
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,117
|
)
|
|
—
|
|
|
(13,117
|
)
|
|||||
Balance at March 31, 2019
|
28,201,091
|
|
|
3
|
|
|
244,523
|
|
|
(112,766
|
)
|
|
(426
|
)
|
|
131,334
|
|
|||||
Issuance of common stock for employee stock option exercises for cash
|
136,164
|
|
|
—
|
|
|
308
|
|
|
—
|
|
|
—
|
|
|
308
|
|
|||||
RSA and stock option issuances and forfeitures for terminations, net
|
112,417
|
|
|
—
|
|
|
1,629
|
|
|
—
|
|
|
—
|
|
|
1,629
|
|
|||||
RSU issuances and forfeitures for terminations, net
|
—
|
|
|
—
|
|
|
246
|
|
|
—
|
|
|
—
|
|
|
246
|
|
|||||
Issuance of common stock for warrant exercise
|
31,071
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
(43
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,061
|
)
|
|
—
|
|
|
(19,061
|
)
|
|||||
Balance at June 30, 2019
|
28,480,743
|
|
|
$
|
3
|
|
|
$
|
246,706
|
|
|
$
|
(131,827
|
)
|
|
$
|
(469
|
)
|
|
$
|
114,413
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||||||||||
|
|
|
|
|
Additional
|
|
Stock
|
|
|
|
Other
|
|
|
|||||||||||||
|
Common Stock
|
|
Paid-in
|
|
Subscriptions
|
|
Accumulated
|
|
Comprehensive
|
|
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Receivable
|
|
Deficit
|
|
Loss
|
|
Total
|
|||||||||||||
Balance at December 31, 2017
|
2,776,583
|
|
|
$
|
—
|
|
|
$
|
2,900
|
|
|
$
|
(1,753
|
)
|
|
$
|
(67,166
|
)
|
|
$
|
(402
|
)
|
|
$
|
(66,421
|
)
|
Issuance of common stock for employee stock option exercises for promissory notes
|
39,720
|
|
|
—
|
|
|
56
|
|
|
(56
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock option issuances and forfeitures for terminations, net
|
—
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,604
|
)
|
|
—
|
|
|
(6,604
|
)
|
||||||
Balance at March 31, 2018
|
2,816,303
|
|
|
—
|
|
|
3,024
|
|
|
(1,809
|
)
|
|
(73,770
|
)
|
|
(403
|
)
|
|
(72,958
|
)
|
||||||
Issuance of common stock for employee stock option exercises for promissory notes
|
9,000
|
|
|
—
|
|
|
15
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock option issuances and forfeitures for terminations, net
|
—
|
|
|
—
|
|
|
190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,648
|
)
|
|
—
|
|
|
(8,648
|
)
|
||||||
Balance at June 30, 2018
|
2,825,303
|
|
|
$
|
—
|
|
|
$
|
3,229
|
|
|
$
|
(1,824
|
)
|
|
$
|
(82,418
|
)
|
|
$
|
(405
|
)
|
|
$
|
(81,418
|
)
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net loss
|
$
|
(32,178
|
)
|
|
$
|
(15,252
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities
|
|
|
|
||||
Depreciation and amortization
|
570
|
|
|
428
|
|
||
Stock-based compensation
|
3,017
|
|
|
258
|
|
||
Amortization of debt issuance costs
|
434
|
|
|
118
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable
|
(859
|
)
|
|
(14
|
)
|
||
Inventory
|
(4,302
|
)
|
|
(372
|
)
|
||
Prepaid expenses and other current assets
|
891
|
|
|
(642
|
)
|
||
Other assets
|
(5
|
)
|
|
(41
|
)
|
||
Accounts payable
|
(881
|
)
|
|
472
|
|
||
Accrued liabilities
|
1,947
|
|
|
1,121
|
|
||
Lease liability
|
(48
|
)
|
|
(48
|
)
|
||
Net cash used in operating activities
|
(31,414
|
)
|
|
(13,972
|
)
|
||
Cash Flows from Investing Activities
|
|
|
|
||||
Purchases of property and equipment
|
(729
|
)
|
|
(299
|
)
|
||
Purchases of short-term investments
|
(33,231
|
)
|
|
(15,152
|
)
|
||
Proceeds from sales and maturities of short-term investments
|
49,449
|
|
|
—
|
|
||
Net cash provided by (used in) investing activities
|
15,489
|
|
|
(15,451
|
)
|
||
Cash Flows from Financing Activities
|
|
|
|
||||
Payment of debt issuance costs
|
—
|
|
|
(142
|
)
|
||
Proceeds from debt
|
—
|
|
|
10,000
|
|
||
Proceeds from exercise of stock options
|
352
|
|
|
—
|
|
||
Proceeds from issuance of preferred stock and noncontrolling interest
|
—
|
|
|
20,098
|
|
||
Payment of preferred stock issuance costs
|
—
|
|
|
(199
|
)
|
||
Net cash provided by financing activities
|
352
|
|
|
29,757
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(53
|
)
|
|
(3
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
(15,626
|
)
|
|
331
|
|
||
Cash and cash equivalents, beginning of year
|
98,306
|
|
|
24,398
|
|
||
Cash and cash equivalents, end of period
|
$
|
82,680
|
|
|
$
|
24,729
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
||||
Cash paid for interest
|
$
|
730
|
|
|
$
|
205
|
|
Cash paid for taxes
|
$
|
1
|
|
|
$
|
1
|
|
Noncash Investing and Financing Activities
|
|
|
|
||||
Common stock issuance on stock option exercises for promissory notes
|
$
|
—
|
|
|
$
|
71
|
|
Warrants issued as debt issuance costs
|
$
|
—
|
|
|
$
|
240
|
|
Accrued loan fees as debt issuance costs
|
$
|
—
|
|
|
$
|
750
|
|
•
|
Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs are quoted prices for similar assets and liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
|
•
|
Level 3: Inputs are unobservable inputs based on the Company’s assumptions and valuation techniques used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.
|
|
Fair Value Measurements at June 30, 2019
|
||||||||||||||
Assets:
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
26,117
|
|
|
$
|
—
|
|
|
$
|
26,117
|
|
Corporate notes
|
9,728
|
|
|
—
|
|
|
—
|
|
|
9,728
|
|
||||
U.S. government and agency securities
|
7,156
|
|
|
—
|
|
|
—
|
|
|
7,156
|
|
||||
|
$
|
16,884
|
|
|
$
|
26,117
|
|
|
$
|
—
|
|
|
$
|
43,001
|
|
|
Fair Value Measurements at December 31, 2018
|
||||||||||||||
Assets:
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Commercial paper
|
$
|
—
|
|
|
$
|
32,163
|
|
|
$
|
—
|
|
|
$
|
32,163
|
|
Corporate notes
|
12,606
|
|
|
3,156
|
|
|
—
|
|
|
15,762
|
|
||||
U.S. government and agency securities
|
11,293
|
|
|
—
|
|
|
—
|
|
|
11,293
|
|
||||
|
$
|
23,899
|
|
|
$
|
35,319
|
|
|
$
|
—
|
|
|
$
|
59,218
|
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Research and development equipment
|
$
|
970
|
|
|
$
|
885
|
|
Computer hardware and software
|
1,144
|
|
|
811
|
|
||
Tools and molds
|
1,259
|
|
|
1,110
|
|
||
Leasehold improvements
|
1,500
|
|
|
1,500
|
|
||
Furniture and fixtures
|
598
|
|
|
462
|
|
||
Construction in progress
|
26
|
|
|
—
|
|
||
|
5,497
|
|
|
4,768
|
|
||
Less: accumulated depreciation and amortization
|
(2,497
|
)
|
|
(1,984
|
)
|
||
|
$
|
3,000
|
|
|
$
|
2,784
|
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Debt, principal
|
$
|
20,000
|
|
|
$
|
20,000
|
|
Accrued loan fees
|
1,500
|
|
|
1,500
|
|
||
Debt, total
|
21,500
|
|
|
21,500
|
|
||
Less: unamortized debt issuance costs
|
(1,603
|
)
|
|
(2,037
|
)
|
||
Debt, net of unamortized debt issuance costs
|
19,897
|
|
|
19,463
|
|
||
Less: debt, net of unamortized debt issuance costs, current portion
|
(3,897
|
)
|
|
—
|
|
||
Debt, net of unamortized debt issuance costs, net of current portion
|
$
|
16,000
|
|
|
$
|
19,463
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Research and development
|
$
|
472
|
|
|
$
|
62
|
|
|
$
|
693
|
|
|
$
|
97
|
|
General and administrative
|
776
|
|
|
124
|
|
|
1,421
|
|
|
156
|
|
||||
Sales and marketing
|
627
|
|
|
4
|
|
|
903
|
|
|
5
|
|
||||
|
$
|
1,875
|
|
|
$
|
190
|
|
|
$
|
3,017
|
|
|
$
|
258
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Expected term (in years)
|
5.07 - 6.08
|
|
5.00 - 6.96
|
|
5.07 - 6.16
|
|
5.00 - 6.96
|
Stock volatility
|
70.02% - 71.38%
|
|
76.01% - 77.03%
|
|
70.02% - 71.38%
|
|
76.01% - 77.03%
|
Risk-free interest rate
|
1.76% - 2.36%
|
|
2.26% - 2.78%
|
|
1.76% - 2.56%
|
|
2.26% - 2.81%
|
Dividend rate
|
—
|
|
—
|
|
—
|
|
—
|
|
Number of Options
|
|
Weighted-Average Exercise Price Per Share
|
|
Aggregate Intrinsic Value
|
|
|||||
Outstanding at December 31, 2018
|
1,514,347
|
|
|
$
|
2.22
|
|
|
|
|
||
Options granted
|
1,327,273
|
|
|
19.37
|
|
|
|
|
|||
Options exercised
|
(177,904
|
)
|
|
1.98
|
|
|
$
|
4,080
|
|
(1)
|
|
Options forfeited
|
(11,938
|
)
|
|
11.02
|
|
|
|
|
|||
Outstanding at June 30, 2019
|
2,651,778
|
|
|
$
|
10.80
|
|
|
$
|
79,997
|
|
(2)
|
(1)
|
Represents the total difference between our closing stock price at the time of exercise and the stock option exercise price, multiplied by the number of options exercised.
|
(2)
|
Represents the total difference between our closing stock price on the last trading day of the
second
quarter of
2019
and the stock option exercise price, multiplied by the number of in-the-money options as of
June 30, 2019
. The amount of intrinsic value will change based on the fair market value of our stock.
|
|
Number of Restricted Shares Awards
|
|
Weighted-Average Fair Value Per Share at Grant Date
|
|||
Outstanding at December 31, 2018
|
50,000
|
|
|
$
|
14.48
|
|
Restricted shares awards granted
|
418,001
|
|
|
22.22
|
|
|
Restricted shares awards vested
|
(13,333
|
)
|
|
14.80
|
|
|
Restricted shares awards forfeited
|
(3,167
|
)
|
|
17.94
|
|
|
Outstanding at June 30, 2019
|
451,501
|
|
|
$
|
21.61
|
|
|
Number of Restricted Stock Units
|
|
Weighted-Average Fair Value Per Share at Grant Date
|
|||
Outstanding at December 31, 2018
|
—
|
|
|
$
|
—
|
|
Restricted stock units granted
|
92,672
|
|
|
14.19
|
|
|
Outstanding at June 30, 2019
|
92,672
|
|
|
$
|
14.19
|
|
(i)
|
urinary and fecal dysfunction in humans through the application of electrical energy anywhere in or on the human body;
|
(ii)
|
chronic pain in humans through the application of electrical energy to the nervous system; and
|
(iii)
|
inflammatory conditions of the human body through the application of electrical energy to the vagus nerve,
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Personnel related
|
$
|
2,726
|
|
|
$
|
1,949
|
|
|
$
|
5,257
|
|
|
$
|
3,784
|
|
Clinical development
|
462
|
|
|
2,109
|
|
|
895
|
|
|
2,881
|
|
||||
Contract fabrication and manufacturing
|
704
|
|
|
1,346
|
|
|
1,225
|
|
|
2,394
|
|
||||
Contract R&D and consulting
|
737
|
|
|
457
|
|
|
1,110
|
|
|
1,114
|
|
||||
Other R&D expenses
|
245
|
|
|
317
|
|
|
606
|
|
|
548
|
|
||||
Total R&D expenses
|
$
|
4,874
|
|
|
$
|
6,178
|
|
|
$
|
9,093
|
|
|
$
|
10,721
|
|
|
Three Months Ended June 30,
|
|
Period to Period Change
|
|
Six Months Ended June 30,
|
|
Period to Period Change
|
||||||||||||||||
|
2019
|
|
2018
|
|
|
|
2019
|
|
2018
|
|
|
||||||||||||
Net revenue
|
$
|
1,488
|
|
|
$
|
12
|
|
|
$
|
1,476
|
|
|
$
|
2,565
|
|
|
$
|
12
|
|
|
$
|
2,553
|
|
Cost of goods sold
|
772
|
|
|
5
|
|
|
767
|
|
|
1,320
|
|
|
5
|
|
|
1,315
|
|
||||||
Gross profit
|
716
|
|
|
7
|
|
|
709
|
|
|
1,245
|
|
|
7
|
|
|
1,238
|
|
||||||
Gross Margin
|
48.1
|
%
|
|
56.3
|
%
|
|
|
|
|
48.5
|
%
|
|
56.3
|
%
|
|
|
|
||||||
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Research and development
|
4,874
|
|
|
6,178
|
|
|
(1,304
|
)
|
|
9,093
|
|
|
10,721
|
|
|
(1,628
|
)
|
||||||
General and administrative
|
4,362
|
|
|
1,636
|
|
|
2,726
|
|
|
8,377
|
|
|
3,071
|
|
|
5,306
|
|
||||||
Sales and marketing
|
10,750
|
|
|
811
|
|
|
9,939
|
|
|
16,664
|
|
|
1,359
|
|
|
15,305
|
|
||||||
Total operating expenses
|
19,986
|
|
|
8,625
|
|
|
11,361
|
|
|
34,134
|
|
|
15,151
|
|
|
18,983
|
|
||||||
Loss from operations
|
(19,270
|
)
|
|
(8,618
|
)
|
|
(10,652
|
)
|
|
(32,889
|
)
|
|
(15,144
|
)
|
|
(17,745
|
)
|
||||||
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
839
|
|
|
205
|
|
|
634
|
|
|
1,873
|
|
|
276
|
|
|
1,597
|
|
||||||
Interest and other expense
|
(629
|
)
|
|
(234
|
)
|
|
(395
|
)
|
|
(1,161
|
)
|
|
(383
|
)
|
|
(778
|
)
|
||||||
Other income (expense), net
|
210
|
|
|
(29
|
)
|
|
239
|
|
|
712
|
|
|
(107
|
)
|
|
819
|
|
||||||
Loss before income tax expense
|
(19,060
|
)
|
|
(8,647
|
)
|
|
(10,413
|
)
|
|
(32,177
|
)
|
|
(15,251
|
)
|
|
(16,926
|
)
|
||||||
Income tax expense
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
||||||
Net loss
|
(19,061
|
)
|
|
(8,648
|
)
|
|
(10,413
|
)
|
|
(32,178
|
)
|
|
(15,252
|
)
|
|
(16,926
|
)
|
||||||
Foreign currency translation adjustment
|
(43
|
)
|
|
(2
|
)
|
|
(41
|
)
|
|
(53
|
)
|
|
(3
|
)
|
|
(50
|
)
|
||||||
Comprehensive loss
|
$
|
(19,104
|
)
|
|
$
|
(8,650
|
)
|
|
$
|
(10,454
|
)
|
|
$
|
(32,231
|
)
|
|
$
|
(15,255
|
)
|
|
$
|
(16,976
|
)
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Net cash provided by (used in)
|
|
|
|
||||
Operating activities
|
$
|
(31,414
|
)
|
|
$
|
(13,972
|
)
|
Investing activities
|
15,489
|
|
|
(15,451
|
)
|
||
Financing activities
|
352
|
|
|
29,757
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(53
|
)
|
|
(3
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
(15,626
|
)
|
|
$
|
331
|
|
•
|
pay cash dividends on, make any other distributions in respect of, or redeem, retire or repurchase, any shares of our capital stock;
|
•
|
convey, sell, lease, transfer, assign, or otherwise dispose of all or any part of our business or property;
|
•
|
effect certain changes in our business, management, ownership or business locations;
|
•
|
merge or consolidate with, or acquire all or substantially all of the capital stock or property of any other company;
|
•
|
create, incur, assume, or be liable for any additional indebtedness, or create, incur, allow, or permit to exist any additional liens;
|
•
|
make certain investments; and
|
•
|
enter into transactions with our affiliates.
|
|
|
|
Exhibit Number
|
|
Exhibit Title
|
10.1*
|
|
|
10.2+
|
|
|
10.3+
|
|
|
10.4+
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1#
|
|
|
32.2#
|
|
|
101.INS**
|
|
XBRL Instance Document.
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
+
|
Indicates management contract or compensatory plan.
|
#
|
The information in Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act (including this Quarterly Report on Form 10-Q), unless the Registrant specifically incorporates the foregoing information into those documents by reference.
|
*
|
Previously filed
|
**
|
In accordance with Rule 402 of Regulation S-T, this interactive data file is deemed not filed or part of this Quarterly Report on Form 10-Q for purposes of Sections 11 or 12 of the Securities Act or Section 18 of the Exchange Act and otherwise is not subject to liability under these sections.
|
|
AXONICS MODULATION TECHNOLOGIES, INC.
|
||
Date: August 5, 2019
|
By:
|
|
/s/ Raymond W. Cohen
|
|
|
|
Raymond W. Cohen
|
|
|
|
Chief Executive Officer and Director
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date: August 5, 2019
|
By:
|
|
/s/ Dan L. Dearen
|
|
|
|
Dan L. Dearen
|
|
|
|
President and Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
1.
|
DEFINED TERMS
.
Exhibit A
to this Agreement sets forth defined terms for purposes of this Agreement.
|
2.
|
EMPLOYMENT/TERM
. The Company hereby employs Executive to perform the duties and responsibilities set forth below under Section 3 of this Agreement, and Executive hereby accepts such employment, in each case on the terms and conditions set forth in this Agreement. This Agreement shall commence on the Effective Date and remain in effect for five (5) years, unless earlier terminated pursuant to Section 5 of this Agreement (the “
Term
”).
|
3.
|
POSITION AND DUTIES
.
|
a.
|
Description of Executive’s Position, Duties, Authorities, and Responsibilities
. Executive shall serve as the Chief Executive Officer and a director of the Company, subject to the direction of the Board. In such capacity, Executive shall (i) report to the Board, (ii) devote Executive’s full professional time and attention, best efforts, energy and skills to the services required of Executive as an employee of the Company, except for paid time off taken in accordance with the Company’s policies and practices, and subject to the Company’s policies pertaining to reasonable periods of absence due to sickness, personal injury or other disability; (iii) use Executive’s best efforts to promote the interests of the Company; (iv) comply with all applicable governmental laws, rules and regulations and with all of the Company’s policies, rules and regulations applicable to employees of the Company; (v) participate in, and comply with all Company directives regarding, workplace investigations; and (vi) discharge Executive’s responsibilities in a diligent and faithful manner, consistent with sound business practices and in accordance with the Board’s directives.
|
b.
|
Outside Boards
. It is acknowledged that Executive currently serves on two public company boards; Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) and BioLife Solutions, Inc. NASDAQ: BLFS). In the event that Executive wishes to join any additional boards, Executive shall obtain the prior written consent of the Board. This Section 3.b shall not be construed as preventing Executive from serving on any civic or charitable boards or committees; provided that in no event shall any such service or business activity require substantial services by Executive such that it would interfere with the performance of Executive’s duties hereunder or cause a conflict of interest to the interests of the Company.
|
4.
|
COMPENSATION AND BENEFITS
.
|
a.
|
Base Salary
. As of the Effective Date, Executive’s Base Salary shall be five hundred thousand dollars ($500,000) per year payable in periodic installments in accordance with the Company’s regular payroll practices as in effect from time to time. The Board or a duly authorized committee thereof will review the Base Salary on an annual basis and may increase the Base Salary from time to time based on merit or such other considerations as the Board or a duly authorized committee thereof may deem appropriate.
|
b.
|
Bonus
. Executive shall be eligible to receive an annual cash bonus in an amount up to seventy percent (70%) of Executive’s Base Salary for the calendar year for which the annual cash bonus is being paid, as determined in the discretion of the Board or a duly authorized committee thereof, based on the performance of the Company and Executive relative to performance objectives or other metrics as the Board or a duly authorized committee thereof may deem appropriate. The Board shall establish performance objectives or other metrics within 90 days after the beginning of each new calendar year.
|
c.
|
Benefits and Vacation
. Executive shall be eligible to participate in and receive the benefits under any deferred compensation plan, health, life, accident and disability insurance plans or programs, and any other employee benefit or fringe benefit plans or arrangements that the Company makes available generally to other senior executives of the Company, pursuant to the provisions of such plans, programs or arrangements as in effect from time to time. Executive shall be entitled to four week’s paid vacation and additional sick days in accordance with the policies of the Company for its employees generally, as in effect from time to time.
|
d.
|
Equity Incentive Compensation
. Executive shall be eligible to receive grants, at the discretion of the Board or a duly authorized committee thereof, under any long-term equity-based incentive compensation plans established or maintained by the Company for its senior executive officers, in each case subject to the terms and conditions of the applicable plans and award documents with respect to such grants.
|
e.
|
Expenses
. The Company shall pay or reimburse Executive for all reasonable, ordinary and necessary business expenses incurred or paid by Executive during the Term in the performance of Executive’s services under this Agreement in accordance with the applicable policies and procedures of the Company as in effect from time to time, upon the presentation of proper expense statements or such other supporting documentation as the Company may reasonably require.
|
f.
|
Auto Allowance.
Company shall pay an automotive allowance of one thousand two hundred ($1,250) per month.
|
5.
|
TERMINATION OF EMPLOYMENT
.
|
a.
|
General
. Executive’s employment may be terminated by either party at any time and for any reason; and upon termination of Executive’s employment, the Term shall end.
|
b.
|
Resignation without Good Reason
. Executive may resign from employment with the Company without Good Reason by providing the Company with at least 60 days’ advance written notice. During the Resignation Notice Period, the Company, in its sole discretion, may elect to accelerate Executive’s date of termination of employment, it being understood that any such termination shall still be treated as a voluntary resignation without Good Reason for purposes of this Agreement. Even if Executive’s date of termination is accelerated, Executive shall be paid Executive’s Base Salary, and shall receive Benefits capable of being provided to persons who are not actively employed by the Company, as if Executive had worked through the end of the Resignation Notice Period. The Company reserves the right to require Executive not to be in the offices of the Company or any of its affiliates and/or not to undertake all or any of Executive’s duties and/or not to contact clients, colleagues or advisors of the Company or any of its affiliates during all or part of the Resignation Notice Period. During the
|
c.
|
Death
. Executive’s employment hereunder shall terminate automatically on the date of Executive’s death.
|
d.
|
Disability
. At the option of the Company, Executive’s employment hereunder may be terminated immediately upon Disability.
|
e.
|
Termination for Cause
. Notwithstanding any other provision of this Agreement, the Company may, at any time, immediately terminate Executive’s employment for Cause. The Company’s lack of immediate action with respect to conduct of Executive that would constitute Cause hereunder shall not preclude the Company from taking later action on such act or taking action with respect to another such act committed by Executive.
|
f.
|
Termination Without Cause
. The Company may, at any time, immediately terminate Executive’s employment without Cause.
|
6.
|
COMPENSATION UPON TERMINATION (OTHER THAN A CHANGE IN CONTROL TERMINATION)
. Following any termination of Executive’s employment, the obligations of the Company to pay or provide Executive with compensation and benefits under Section 4 shall immediately cease, and the Company shall have no further obligations to Executive under this Agreement, except to provide (i) the Accrued Obligations, (ii) any additional amounts specifically provided by this Section 6, subject to the applicable terms and conditions of this Section 6, and (iii) any other amounts otherwise required by law.
|
a.
|
Death or Disability
. If, during the Term, Executive’s employment is terminated (x) by reason of Executive’s death or (y) by the Company for Disability, in addition to the Accrued Obligations, Executive shall receive the following compensation:
|
i.
|
The Company shall pay to Executive (or to Executive’s estate or designated beneficiary in the event of Executive’s death) a lump sum amount equal to (A) one (1) year of Base Salary in effect as of the Termination Date, plus (B) the annual bonus earned based on performance for the year immediately preceding the year in which the Termination Date occurs, to the extent such bonus had not been paid as of the Termination Date, plus (C) if the Termination Date occurs during the second, third or fourth quarter of a year, the Pro-Rata Bonus for that year. Such payment shall be made in a single cash payment on the Cash Severance Commencement Date, provided that on or before the Cash Severance Commencement Date, Executive has executed, and delivered a general waiver and release agreement in the form of
Exhibit B
, attached, or in a form and with substance satisfactory to the Company, that is no longer subject to revocation. If Executive is unable to execute and deliver such waiver and release agreement due to death or Disability, then the waiver and release agreement shall be executed and delivered by an authorized agent or representative of Executive and/or Executive’s estate.
|
ii.
|
As to any outstanding, unvested Equity Incentive Compensation awards on the Termination Date that are not Performance-Based Awards, except to the extent that the applicable award agreement or equity compensation plan provides for better treatment and notwithstanding the terms of any applicable award agreements entered into after the Effective Date (unless such award agreements expressly reference this Agreement), Executive shall immediately vest in such award. For any such awards that are Performance-Based Awards, vesting shall be based on the terms of the applicable equity compensation
|
b.
|
For Cause or Without Good Reason
. If, during the Term, Executive’s employment is terminated (i) by the Company for Cause or (ii) by Executive for any reason other than for Good Reason, the Company shall pay to Executive the Accrued Obligations.
|
c.
|
Without Cause or for Good Reason (Other than a Change in Control Termination)
. If, during the Term, Executive’s employment with the Company terminates by reason of a Qualifying Termination (other than a Change in Control Termination), in addition to the Accrued Obligations, Executive shall receive the following compensation:
|
i.
|
Executive shall receive cash severance in an amount equal to the sum of (A) one (1) year of Base Salary as in effect on the Termination Date plus (B) the amount of the prior-year annual bonus. Such payment shall be made in a single cash payment on the Cash Severance Commencement Date.
|
ii.
|
Executive shall be paid the annual bonus earned based on performance for the year immediately preceding the year in which the Termination Date occurs, to the extent such bonus had not been paid as of the Termination Date. Such bonus shall be paid at the same time bonuses are paid to other employees.
|
iii.
|
If the Termination Date occurs during the second, third or fourth quarter of a year, Executive shall be paid the Pro-Rata Bonus for that year, made in a single cash payment on the Cash Severance Commencement Date.
|
iv.
|
Executive shall be paid an amount equal to twelve (12) months of COBRA premiums based on the terms of Company’s group health plan and Executive’s coverage under such plan as of the Termination Date (regardless of any COBRA election actually made by Executive or the actual COBRA coverage period under the Company’s group health plan), payable in a single cash payment on the Cash Severance Commencement Date.
|
v.
|
As to any outstanding, unvested Equity Incentive Compensation awards on the Termination Date, except to the extent that the applicable award agreement or equity compensation plan provides for better treatment and notwithstanding the terms of any applicable award agreements entered after the Effective Date (unless such award agreements expressly reference this Agreement), (A) for any such awards that are not Performance-Based Awards, Executive shall vest on the Cash Severance Payment Date in the portion of the award that was otherwise scheduled to vest within 12 months following the Termination Date; and (B) for any such awards that are Performance-Based Awards, the award shall vest at the end of the applicable performance period based on actual performance results and prorated for the portion of the performance period worked through the Termination Date.
|
d.
|
Equity Incentive Compensation
. Except as otherwise expressly provided herein, upon termination of Executive’s employment during the Term, any outstanding Equity Incentive Compensation awards shall be forfeited or vest
|
e.
|
Benefits
. Notwithstanding anything in this Section 6 to the contrary, the Benefits to which Executive is entitled upon or by reason of the termination of Executive’s employment with the Company shall be subject to, and shall be governed by, the terms and conditions of the applicable plans, programs and arrangements maintained by the Company with respect to such Benefits. Nothing in this Agreement shall be construed to be a waiver by the Executive of any benefits accrued for or due to the Executive under any employee benefit plan (as such term is defined in the Employee Retirement Income Security Act of 1974, as amended) maintained by the Company, if any, except that the Executive shall not be entitled to any severance benefits pursuant to any severance plan or program of the Company other than as provided herein.
|
f.
|
D&O Insurance, and Indemnification
. Through at least the sixth anniversary of the Termination Date, the Company shall maintain coverage for the Executive as a named insured on all directors’ and officers’ insurance maintained by the Company for the benefit of its directors and officers on at least the same basis as all other covered individuals and provide the Executive with at least the same corporate indemnification as it provides to other senior executives.
|
g.
|
Expiration of Term
. Notwithstanding anything in this Section 6 to the contrary, the expiration of the Term by itself shall not entitle Executive to receipt of any payments under this Section 6.
|
7.
|
CHANGE IN CONTROL.
|
a.
|
Treatment of Equity Incentive Compensation
. As to any outstanding, unvested Equity Incentive Compensation awards immediately before a Change in Control, except to the extent that the applicable award agreement or equity compensation plan provides for better treatment and notwithstanding the terms of any applicable award agreements entered after the Effective Date (unless such award agreements expressly reference this Agreement):
|
i.
|
For any such awards that are not Performance-Based Awards, (A) the awards shall vest in full immediately upon the Change in Control, and (B) any vested stock options shall remain exercisable during the periods provided in the applicable plans and award agreement.
|
ii.
|
For any such awards that are Performance-Based Awards, the award shall be fully vested based on the greater of (A) assumed target performance or (B) performance as determined by the Board immediately before the Change in Control.
|
b.
|
Change in Control Severance
. If, during the Term, Executive’s employment with the Company terminates by reason of a Change in Control Termination, in addition to the Accrued Obligations, Executive shall receive the following compensation:
|
i.
|
Executive shall receive cash severance in an amount equal to the sum of (A) two (2) years of Base Salary as in effect on the Termination Date plus (B) the amount of the prior-year annual bonus. Such amount shall be payable in a single cash payment on the Cash Severance Commencement Date.
|
ii.
|
Executive shall be paid the annual bonus earned based on performance for the year immediately preceding the year in which the Termination Date occurs, to the extent such bonus had not been paid as of the Termination Date. Such bonus shall be paid at the same time bonuses are paid to other employees.
|
iii.
|
Executive shall be paid the Pro-Rata Bonus in a single cash payment on the Cash Severance Commencement Date.
|
iv.
|
Executive shall be paid an amount equal to 18 months of COBRA premiums based on the terms of Company’s group health plan and Executive’s coverage under such plan as of the Termination Date (regardless of any COBRA election actually made by Executive or the actual COBRA coverage period under the Company’s group health plan), payable in a single cash payment on the Cash Severance Commencement Date.
|
8.
|
NONSOLICITATION COVENANT.
Executive agrees that Executive shall not directly or indirectly during the Term and for one (1) year after termination of Executive’s employment, either alone or through or in conjunction with any other person or entity employ, solicit, induce, or recruit, any person employed by any member of the Company Group at any time within the one (1) year period immediately preceding such employment, solicitation, inducement or recruitment.
|
9.
|
ADJUSTMENTS TO PAYMENTS.
Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to Executive or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (the “
Payments
”) would be subject to the excise tax imposed by Section 4999 (or any successor provisions) of the Code, or any interest or penalty is incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, is hereinafter collectively referred to as the “
Excise Tax
”), then the Payments shall be reduced (but not below zero) if and to the extent that such reduction would result in Executive retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the imposition of the Excise Tax), than if Executive received all of the Payments. The Company shall reduce or eliminate the Payments, by first reducing or eliminating the portion of the Payments which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the determination. All determinations required to be made under this Section, including whether and when an adjustment to any Payments is required and, if applicable, which Payments are to be so adjusted, shall be made by an independent accounting firm selected by the Company from among the four (4) largest accounting firms in the United States or any nationally recognized financial planning and benefits consulting company (the “
Accounting Firm
”) which shall provide detailed supporting calculations both to the Company and to Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive's
|
10.
|
COOPERATION
. Upon the receipt of reasonable notice from the Company (including outside counsel), Executive agrees that while employed by the Company and thereafter, Executive will respond and provide information with regard to matters in which Executive has knowledge as a result of Executive’s employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of all claims that may be made against the Company or its affiliates, and will assist the Company and its affiliates in the prosecution of all claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of Executive’s employment with the Company. Executive agrees to promptly inform the Company if Executive becomes aware of any lawsuit involving such claims that may be filed or threatened against the Company or its affiliates. Executive also agrees to promptly inform the Company (to the extent that Executive is legally permitted to do so) if Executive is asked to assist in any investigation of the Company or its affiliates (or their actions), regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not provide such assistance unless legally required. Upon presentation of appropriate documentation, the Company shall pay or reimburse Executive for all reasonable out-of-pocket travel, duplicating or telephonic expenses incurred by Executive in complying with this Section 10. For the first five hours of cooperation in any calendar month during the period of cooperation, Executive shall provide the specified cooperation services without hourly reimbursement. For each hour of cooperation or part thereof after five hours, in any calendar month, Company shall reimburse Executive at the hourly rate determined by this fraction: (final Base Salary / 2,080 hours).
|
11.
|
ARBITRATION.
The parties hereby agree to submit all disputes, claims and controversies (“
Claims
”) between the parties or related to or arising out of their employment relationship by and between the Company and Executive to final, binding arbitration to the fullest extent permitted by law. The Federal Arbitration Act., 9 U.S.C. § 1
et seq.
, shall govern the interpretation and enforcement of this Section 11. The court and not the arbitrator will determine matters of enforceability of this Section 11.
|
a.
|
Statute of Limitations
. The statutory limitations period applicable to a Claim asserted in a civil action shall apply to any such Claim asserted in any arbitration proceeding under this Section 11. Arbitration is commenced for limitations purposes by submitting the matter to the arbitral forum.
|
b.
|
Individual Basis
. All Claims that are subject to arbitration under this Section 11 must and will take place on an individual basis only.
|
c.
|
Venue
. Binding arbitration under this Section 11 shall be conducted in California unless required by law to be conducted elsewhere, in which case it shall be conducted where required by law.
|
d.
|
Applicable Rules
. The arbitration proceeding, including discovery, shall be conducted in accordance with the Federal Arbitration Act, the JAMS Policy on Employment Arbitration Minimum Standards and the JAMS Employment Arbitration Rules and Procedures then in effect (the “
JAMS Rules
”). Executive understands that if Executive wishes to receive a copy of the JAMS Rules currently in effect, Executive may inform the Company in writing, and the Company will provide them to Executive before Executive executes this Agreement. Executive also understand that JAMS Rules are available online at http://www.jamsadr.com/rules-employment-arbitration/.
|
e.
|
Arbitrator Selection
. The arbitration shall be conducted before a neutral arbitrator selected by all parties in accordance with JAMS Rules.
|
f.
|
Cost Allocation
. If required by applicable law, the Company shall pay all additional costs peculiar to the arbitration to the extent such costs would not otherwise be incurred in a court proceeding (for instance, the Company shall pay the arbitrator’s fees, and the JAMS administration and filing fees, to the extent such fees exceed court filing fees).
|
g.
|
Attorneys’ Fees and Costs
. Each party shall pay such party’s own costs and attorneys’ fees except that the arbitrator shall award costs and attorneys’ fees to the prevailing party.
|
h.
|
Written Decision
. The arbitrator shall follow applicable substantive law and, within 30 days after the conclusion of the arbitration, issue a written opinion setting forth the factual and legal bases for his or her decision.
|
i.
|
Acknowledgement
. EXECUTIVE UNDERSTANDS THAT EXECUTIVE IS GIVING UP EXECUTIVE’S RIGHT TO A JURY TRIAL BY ENTERING INTO THIS AGREEMENT. EXECUTIVE UNDERSTANDS THAT EXECUTIVE IS GIVING UP EXECUTIVE’S RIGHT TO COMMENCE OR PARTICIPATE IN A CLASS OR COLLECTIVE ACTION AND INSTEAD AGREES TO ARBITRATE ANY EMPLOYMENT-RELATED DISPUTE ON AN INDIVIDUAL BASIS ONLY TO THE MAXIMUM EXTENT PERMITTED BY LAW.
|
12.
|
CODE SECTION 409A
.
|
a.
|
This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“
Section 409A
”), including the exceptions thereto, and shall be construed and administered in accordance with such intent. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each separate payment or installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement in connection with a termination of employment shall only be made if such termination of employment constitutes a “separation from service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Executive on account of non-compliance with Section 409A.
|
b.
|
Notwithstanding any other provision of this Agreement, if at the time of Executive’s termination of employment, Executive is a “specified employee,” determined in accordance with Section 409A, any payments and benefits provided under this Agreement that constitute “nonqualified deferred compensation” subject to Section 409A that are provided to Executive on account of Executive’s separation from service shall not be paid until the first payroll date to occur following the six-month anniversary of Executive’s termination date (“
Specified Employee Payment Date
”). The aggregate amount of any payments that would otherwise have been made during such six-month period shall be paid in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. If Executive dies before the Specified Employee Payment Date, any delayed payments shall be paid to Executive’s estate in a lump sum within one week of Executive’s death.
|
c.
|
To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following: (i) the amount of expenses eligible for reimbursement, or
|
d.
|
Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed, and all revocation periods shall have expired within 60 days after the Termination Date; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes “nonqualified deferred compensation” subject to Section 409A, and if such 60-day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the release becomes irrevocable in the first such calendar year.
|
13.
|
GENERAL PROVISIONS
.
|
a.
|
Notices
. All notices, requests, demands, statements, reports and other communications provided for by this Agreement shall be in writing (email being sufficient) and shall be sent by (i) certified mail, return receipt requested, postage prepaid, (ii) nationally recognized overnight delivery service, (iii) personal delivery or (iv) email. A notice shall be deemed to be given (x) if notice is delivered by certified mail or nationally recognized overnight delivery service, on the business day following the date of its mailing, (y) if such notice is delivered personally, upon delivery, or (z) if such notice is sent by email, upon sending. Each party may change such party’s address for notices by giving notice in accordance herewith. All notices shall be addressed and mailed or delivered to the following addresses:
|
If to the COMPANY:
|
|
Attn: Chairman of the Board
|
Axonics Modulation Technologies, Inc.
|
26 Technology Drive
|
Irvine, CA 92618
|
|
|
If to EXECUTIVE:
|
|
Raymond W. Cohen
|
|
|
|
b.
|
Entire Agreement
. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, representations and understandings (whether written or oral) of the parties with respect to the subject matter hereof, including the Original Employment Agreement, and any other agreement between Executive and the Company or any of its affiliates and subsidiaries.
|
c.
|
Modification and Waiver
. No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by Executive and a duly authorized representative of the Company (other than Executive).
|
d.
|
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its conflict of law principles, and any dispute in the meaning, effect or validity of this Agreement shall be resolved in accordance with the laws of the State of California.
|
e.
|
Assignment; Binding Effect
. This Agreement is fully assignable and transferable by the Company, but any purported assignment or transfer by Executive is void. It is hereby agreed that Executive’s rights and obligations under this Agreement are personal and not assignable by Executive. This Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and permitted assigns of the parties.
EXECUTIVE HAS READ THIS AGREEMENT CAREFULLY AND UNDERSTANDS AND ACCEPTS THE OBLIGATIONS WHICH IT IMPOSES UPON EXECUTIVE WITHOUT RESERVATION. NO PROMISES OR REPRESENTATIONS HAVE BEEN MADE TO EXECUTIVE TO INDUCE EXECUTIVE TO SIGN THIS AGREEMENT. EXECUTIVE SIGNS THIS AGREEMENT VOLUNTARILY AND FREELY, IN DUPLICATE, WITH THE UNDERSTANDING THAT THE COMPANY WILL RETAIN ONE COUNTERPART AND THE OTHER COUNTERPART WILL BE RETAINED BY EXECUTIVE.
|
f.
|
Injunctive Relief
. Executive agrees that any breach of this Agreement will cause irreparable harm to the Company for which damages would not be an adequate remedy, and, therefore, to the fullest extent permitted by applicable law, the Company will be entitled to injunctive relief with respect thereto in addition to any other remedies and without any requirement to post bond.
|
g.
|
Survival
. This Agreement shall terminate upon the expiration of the Term; provided that the provisions of Section 1 and Sections 6 through 13 shall survive termination of this Agreement and termination of Executive’s employment regardless of the reason for such termination.
|
h.
|
Withholding
. The Company may withhold from any and all amounts payable under this Agreement or otherwise such federal, state and local taxes as may be required to be withheld pursuant to applicable law.
|
COMPANY:
|
|
|
|
Axonics Modulation Technologies, Inc.
|
|
|
|
|
|
By:
|
/s/ Raphael Wisniewski
|
|
Raphael Wisniewski
|
|
Chairman, Board of Directors
|
|
|
|
|
EXECUTIVE:
|
|
|
|
/s/ Raymond W. Cohen
|
|
Raymond W. Cohen
|
|
|
|
1.
|
DEFINED TERMS
.
Exhibit A
to this Agreement sets forth defined terms for purposes of this Agreement.
|
2.
|
EMPLOYMENT/TERM
. The Company hereby employs Executive to perform the duties and responsibilities set forth below under Section 3 of this Agreement, and Executive hereby accepts such employment, in each case on the terms and conditions set forth in this Agreement. This Agreement shall commence on the Effective Date and remain in effect for five (5) years, unless earlier terminated pursuant to Section 5 of this Agreement (the “
Term
”).
|
3.
|
POSITION AND DUTIES
.
|
a.
|
Description of Executive’s Position, Duties, Authorities, and Responsibilities
. Executive shall serve as the President and Chief Financial Officer of the Company. In such capacity, Executive shall (i) report to the Chief Executive Officer, (ii) devote Executive’s full professional time and attention, best efforts, energy and skills to the services required of Executive as an employee of the Company, except for paid time off taken in accordance with the Company’s policies and practices, and subject to the Company’s policies pertaining to reasonable periods of absence due to sickness, personal injury or other disability; (iii) use Executive’s best efforts to promote the interests of the Company; (iv) comply with all applicable governmental laws, rules and regulations and with all of the Company’s policies, rules and regulations applicable to employees of the Company; (v) participate in, and comply with all Company directives regarding, workplace investigations; and (vi) discharge Executive’s responsibilities in a diligent and faithful manner, consistent with sound business practices and in accordance with the Board’s directives.
|
b.
|
Outside Boards
. Executive shall obtain the written consent of the Board prior to serving on corporate, civic or charitable boards or committees. This Section 3.b shall not be construed as preventing Executive from serving on the corporate, civic or charitable boards or committees on which Executive serves as of the Effective Date and which have been previously disclosed to the Board in writing; provided that in no event shall any such service or business activity require the provision of substantial services by Executive to the operations or the affairs of such businesses or enterprises such that the provision thereof would interfere in any respect with the performance of Executive’s duties hereunder or cause a conflict of interest to the interests of the Company.
|
4.
|
COMPENSATION AND BENEFITS
.
|
a.
|
Base Salary
. As of the Effective Date, Executive’s Base Salary shall be four hundred ten thousand dollars ($410,000) per year payable in periodic installments in accordance with the Company’s regular payroll practices as in effect from time to time. The Board or a duly authorized committee thereof will review the Base Salary on an annual basis and may increase the Base Salary from time to time based on merit or such other considerations as the Board or a duly authorized committee thereof may deem appropriate.
|
b.
|
Bonus
. Executive shall be eligible to receive an annual cash bonus in an amount up to fifty percent (50%) of Executive’s Base Salary for the calendar year for which the annual cash bonus is being paid, as determined in the discretion of the Board or a duly authorized committee thereof, based on the performance of the Company and Executive relative to performance objectives or other metrics as the Board or a duly authorized committee thereof may deem appropriate. The Board shall establish performance objectives or other metrics within 90 days after the beginning of each new calendar year.
|
c.
|
Benefits and Vacation
. Executive shall be eligible to participate in and receive the benefits under any deferred compensation plan, health, life, accident and disability insurance plans or programs, and any other employee benefit or fringe benefit plans or arrangements that the Company makes available generally to other senior executives of the Company, pursuant to the provisions of such plans, programs or arrangements as in effect from time to time. Executive shall be entitled to four weeks’ paid vacation and additional sick days in accordance with the policies of the Company for its employees generally, as in effect from time to time.
|
d.
|
Equity Incentive Compensation
. Executive shall be eligible to receive grants, at the discretion of the Board or a duly authorized committee thereof, under any long-term equity- based incentive compensation plans established or maintained by the Company for its senior executive officers, in each case subject to the terms and conditions of the applicable plans and award documents with respect to such grants.
|
e.
|
Expenses
. The Company shall pay or reimburse Executive for all reasonable, ordinary and necessary business expenses incurred or paid by Executive during the Term in the performance of Executive’s services under this Agreement in accordance with the applicable policies and procedures of the Company as in effect from time to time, upon the presentation of proper expense statements or such other supporting documentation as the Company may reasonably require.
|
f.
|
Auto Allowance.
Company shall pay an automotive allowance of one thousand two hundred ($1,250) per month.
|
5.
|
TERMINATION OF EMPLOYMENT
.
|
a.
|
General
. Executive’s employment may be terminated by either party at any time and for any reason; and upon termination of Executive’s employment, the Term shall end.
|
b.
|
Resignation without Good Reason
. Executive may resign from employment with the Company without Good Reason by providing the Company with at least 60 days’ advance written notice. During the Resignation Notice Period, the Company, in its sole discretion, may elect to accelerate Executive’s date of termination of employment, it being understood that any such termination shall still be treated as a voluntary resignation without Good Reason for purposes of this Agreement. Even if Executive’s date of termination is accelerated,
|
c.
|
Death
. Executive’s employment hereunder shall terminate automatically on the date of Executive’s death.
|
d.
|
Disability
. At the option of the Company, Executive’s employment hereunder may be terminated immediately upon Disability.
|
e.
|
Termination for Cause
. Notwithstanding any other provision of this Agreement, the Company may, at any time, immediately terminate Executive’s employment for Cause. The Company’s lack of immediate action with respect to conduct of Executive that would constitute Cause hereunder shall not preclude the Company from taking later action on such act or taking action with respect to another such act committed by Executive.
|
f.
|
Termination Without Cause
. The Company may, at any time, immediately terminate Executive’s employment without Cause.
|
6.
|
COMPENSATION UPON TERMINATION (OTHER THAN A CHANGE IN CONTROL TERMINATION)
. Following any termination of Executive’s employment, the obligations of the Company to pay or provide Executive with compensation and benefits under Section 4 shall immediately cease, and the Company shall have no further obligations to Executive under this Agreement, except to provide (i) the Accrued Obligations, (ii) any additional amounts specifically provided by this Section 6, subject to the applicable terms and conditions of this Section 6, and (iii) any other amounts otherwise required by law.
|
a.
|
Death or Disability
. If, during the Term, Executive’s employment is terminated (x) by reason of Executive’s death or (y) by the Company for Disability, in addition to the Accrued Obligations, Executive shall receive the following compensation:
|
i.
|
The Company shall pay to Executive (or to Executive’s estate or designated beneficiary in the event of Executive’s death) a lump sum amount equal to (A) one (1) year of Base Salary in effect as of the Termination Date, plus (B) the annual bonus earned based on performance for the year immediately preceding the year in which the Termination Date occurs, to the extent such bonus had not been paid as of the Termination Date, plus (C) if the Termination Date occurs during the second, third or fourth quarter of a year, the Pro-Rata Bonus for that year. Such payment shall be made in a single cash payment on the Cash Severance Commencement Date, provided that on or before the Cash Severance Commencement Date, Executive has executed, and delivered a general waiver and release agreement in the form of
Exhibit B
, attached, or in a form and with substance satisfactory to the Company, that is no longer subject to revocation. If Executive is unable to execute and deliver such waiver and release
|
ii.
|
As to any outstanding, unvested Equity Incentive Compensation awards on the Termination Date that are not Performance-Based Awards, except to the extent that the applicable award agreement or equity compensation plan provides for better treatment and notwithstanding the terms of any applicable award agreements entered into after the Effective Date (unless such award agreements expressly reference this Agreement), Executive shall immediately vest in such award. For any such awards that are Performance-Based Awards, vesting shall be based on the terms of the applicable equity compensation plan and award agreement in accordance with Section 6.d. Vested stock options shall remain exercisable during the periods provided in the applicable plan and award agreement.
|
b.
|
For Cause or Without Good Reason
. If, during the Term, Executive’s employment is terminated (i) by the Company for Cause or (ii) by Executive for any reason other than for Good Reason, the Company shall pay to Executive the Accrued Obligations.
|
c.
|
Without Cause or for Good Reason (Other than a Change in Control Termination)
. If, during the Term, Executive’s employment with the Company terminates by reason of a Qualifying Termination (other than a Change in Control Termination), in addition to the Accrued Obligations, Executive shall receive the following compensation:
|
i.
|
Executive shall receive cash severance in an amount equal to one year of Base Salary as in effect on the Termination Date. Such payment shall be made in a single cash payment on the Cash Severance Commencement Date.
|
ii.
|
Executive shall be paid the annual bonus earned based on performance for the year immediately preceding the year in which the Termination Date occurs, to the extent such bonus had not been paid as of the Termination Date. Such bonus shall be paid at the same time bonuses are paid to other employees.
|
iii.
|
If the Termination Date occurs during the second, third or fourth quarter of a year, Executive shall be paid the Pro-Rata Bonus for that year, made in a single cash payment on the Cash Severance Commencement Date.
|
iv.
|
Executive shall be paid an amount equal to 12 months of COBRA premiums based on the terms of Company’s group health plan and Executive’s coverage under such plan as of the Termination Date (regardless of any COBRA election actually made by Executive or the actual COBRA coverage period under the Company’s group health plan), payable in a single cash payment on the Cash Severance Commencement Date.
|
v.
|
As to any outstanding, unvested Equity Incentive Compensation awards on the Termination Date, except to the extent that the applicable award agreement or equity compensation plan provides for better treatment and notwithstanding the terms of any applicable award agreements entered after the Effective Date (unless such award agreements expressly reference this Agreement), (A) for any such awards that are not Performance-Based Awards, Executive shall vest on the Cash Severance Payment Date in the portion of the award that was otherwise scheduled to vest within 12 months following the
|
d.
|
Equity Incentive Compensation
. Except as otherwise expressly provided herein, upon termination of Executive’s employment during the Term, any outstanding Equity Incentive Compensation awards shall be forfeited or vest in accordance with the terms of the applicable plan and award agreement, and shall be subject to such other terms and conditions of such plan and award agreement that may apply as a result of such termination.
|
e.
|
Benefits
. Notwithstanding anything in this Section 6 to the contrary, the Benefits to which Executive is entitled upon or by reason of the termination of Executive’s employment with the Company shall be subject to, and shall be governed by, the terms and conditions of the applicable plans, programs and arrangements maintained by the Company with respect to such Benefits. Nothing in this Agreement shall be construed to be a waiver by the Executive of any benefits accrued for or due to the Executive under any employee benefit plan (as such term is defined in the Employee Retirement Income Security Act of 1974, as amended) maintained by the Company, if any, except that the Executive shall not be entitled to any severance benefits pursuant to any severance plan or program of the Company other than as provided herein.
|
f.
|
D&O Insurance, and Indemnification
. Through at least the sixth anniversary of the Termination Date, the Company shall maintain coverage for the Executive as a named insured on all directors’ and officers’ insurance maintained by the Company for the benefit of its directors and officers on at least the same basis as all other covered individuals and provide the Executive with at least the same corporate indemnification as it provides to other senior executives.
|
g.
|
Expiration of Term
. Notwithstanding anything in this Section 6 to the contrary, the expiration of the Term by itself shall not entitle Executive to receipt of any payments under this Section 6.
|
7.
|
CHANGE IN CONTROL.
|
a.
|
Treatment of Equity Incentive Compensation
. As to any outstanding, unvested Equity Incentive Compensation awards immediately before a Change in Control, except to the extent that the applicable award agreement or equity compensation plan provides for better treatment and notwithstanding the terms of any applicable award agreements entered after the Effective Date (unless such award agreements expressly reference this Agreement):
|
i.
|
For any such awards that are not Performance-Based Awards, (A) the awards shall vest in full immediately upon the Change in Control, and (B) any vested stock options shall remain exercisable during the periods provided in the applicable plans and award agreement.
|
ii.
|
For any such awards that are Performance-Based Awards, the award shall be fully vested based on the
|
b.
|
Change in Control Severance
. If, during the Term, Executive’s employment with the Company terminates by reason of a Change in Control Termination, in addition to the Accrued Obligations, Executive shall receive the following compensation:
|
i.
|
Executive shall receive cash severance in an amount equal to the sum of (A) one year of Base Salary as in effect on the Termination Date plus (B) the amount of the prior-year annual bonus. Such amount shall be payable in a single cash payment on the Cash Severance Commencement Date.
|
ii.
|
Executive shall be paid the annual bonus earned based on performance for the year immediately preceding the year in which the Termination Date occurs, to the extent such bonus had not been paid as of the Termination Date. Such bonus shall be paid at the same time bonuses are paid to other employees.
|
iii.
|
Executive shall be paid the Pro-Rata Bonus in a single cash payment on the Cash Severance Commencement Date.
|
iv.
|
Executive shall be paid an amount equal to 12 months of COBRA premiums based on the terms of Company’s group health plan and Executive’s coverage under such plan as of the Termination Date (regardless of any COBRA election actually made by Executive or the actual COBRA coverage period under the Company’s group health plan), payable in a single cash payment on the Cash Severance Commencement Date.
|
8.
|
NONSOLICITATION COVENANT.
Executive agrees that Executive shall not directly or indirectly during the Term and for one (1) year after termination of Executive’s employment, either alone or through or in conjunction with any other person or entity employ, solicit, induce, or recruit, any person employed by any member of the Company Group at any time within the one (1) year period immediately preceding such employment, solicitation, inducement or recruitment.
|
9.
|
ADJUSTMENTS TO PAYMENTS.
Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to Executive or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (the “
Payments
”) would be subject to the excise tax imposed by Section 4999 (or any successor provisions) of the Code, or any interest or penalty is incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, is hereinafter collectively referred to as the “
Excise
Tax
”), then the Payments shall be reduced (but not below zero) if and to the extent that such reduction would result in Executive retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the imposition of the Excise Tax), than if Executive
|
10.
|
COOPERATION
. Upon the receipt of reasonable notice from the Company (including outside counsel), Executive agrees that while employed by the Company and thereafter, Executive will respond and provide information with regard to matters in which Executive has knowledge as a result of Executive’s employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of all claims that may be made against the Company or its affiliates, and will assist the Company and its affiliates in the prosecution of all claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of Executive’s employment with the Company. Executive agrees to promptly inform the Company if Executive becomes aware of any lawsuit involving such claims that may be filed or threatened against the Company or its affiliates. Executive also agrees to promptly inform the Company (to the extent that Executive is legally permitted to do so) if Executive is asked to assist in any investigation of the Company or its affiliates (or their actions), regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not provide such assistance unless legally required. Upon presentation of appropriate documentation, the Company shall pay or reimburse Executive for all reasonable out-of-pocket travel, duplicating or telephonic expenses incurred by Executive in complying with this Section 10. For the first five hours of cooperation in any calendar month during the period of cooperation, Executive shall provide the specified cooperation services without hourly reimbursement. For each hour of cooperation or part thereof after five hours, in any calendar month, Company shall reimburse Executive at the hourly rate determined by this fraction: (final Base Salary / 2,080 hours).
|
11.
|
ARBITRATION.
The parties hereby agree to submit all disputes, claims and controversies (“
Claims
”) between the parties or related to or arising out of their employment relationship by and between the Company and Executive to final, binding arbitration to the fullest extent permitted by law. The Federal Arbitration Act., 9 U.S.C. § 1
et seq.
, shall govern the interpretation and enforcement of this Section 11. The court and not the arbitrator will determine matters of enforceability of this Section 11.
|
a.
|
Statute of Limitations
. The statutory limitations period applicable to a Claim asserted in a civil action shall apply to any such Claim asserted in any arbitration proceeding under this Section 11. Arbitration is commenced
|
b.
|
Individual Basis
. All Claims that are subject to arbitration under this Section 11 must and will take place on an individual basis only.
|
c.
|
Venue
. Binding arbitration under this Section 11 shall be conducted in California unless required by law to be conducted elsewhere, in which case it shall be conducted where required by law.
|
d.
|
Applicable Rules
. The arbitration proceeding, including discovery, shall be conducted in accordance with the Federal Arbitration Act, the JAMS Policy on Employment Arbitration Minimum Standards and the JAMS Employment Arbitration Rules and Procedures then in effect (the “
JAMS Rules
”). Executive understands that if Executive wishes to receive a copy of the JAMS Rules currently in effect, Executive may inform the Company in writing, and the Company will provide them to Executive before Executive executes this Agreement. Executive also understand that JAMS Rules are available online at http://www.jamsadr.com/rules-employment-arbitration/.
|
e.
|
Arbitrator Selection
. The arbitration shall be conducted before a neutral arbitrator selected by all parties in accordance with JAMS Rules.
|
f.
|
Cost Allocation
. If required by applicable law, the Company shall pay all additional costs peculiar to the arbitration to the extent such costs would not otherwise be incurred in a court proceeding (for instance, the Company shall pay the arbitrator’s fees, and the JAMS administration and filing fees, to the extent such fees exceed court filing fees).
|
g.
|
Attorneys’ Fees and Costs
. Each party shall pay such party’s own costs and attorneys’ fees except that the arbitrator shall award costs and attorneys’ fees to the prevailing party.
|
h.
|
Written Decision
. The arbitrator shall follow applicable substantive law and, within 30 days after the conclusion of the arbitration, issue a written opinion setting forth the factual and legal bases for his or her decision.
|
i.
|
Acknowledgement
. EXECUTIVE UNDERSTANDS THAT EXECUTIVE IS GIVING UP EXECUTIVE’S RIGHT TO A JURY TRIAL BY ENTERING INTO THIS AGREEMENT. EXECUTIVE UNDERSTANDS THAT EXECUTIVE IS GIVING UP EXECUTIVE’S RIGHT TO COMMENCE OR PARTICIPATE IN A CLASS OR COLLECTIVE ACTION AND INSTEAD AGREES TO ARBITRATE ANY EMPLOYMENT-RELATED DISPUTE ON AN INDIVIDUAL BASIS ONLY TO THE MAXIMUM EXTENT PERMITTED BY LAW.
|
12.
|
CODE SECTION 409A
.
|
a.
|
This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“
Section 409A
”), including the exceptions thereto, and shall be construed and administered in accordance with such intent. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each separate payment or installment payment provided under this Agreement shall be treated as a separate payment. Any
|
b.
|
Notwithstanding any other provision of this Agreement, if at the time of Executive’s termination of employment, Executive is a “specified employee,” determined in accordance with Section 409A, any payments and benefits provided under this Agreement that constitute “nonqualified deferred compensation” subject to Section 409A that are provided to Executive on account of Executive’s separation from service shall not be paid until the first payroll date to occur following the six-month anniversary of Executive’s termination date (“
Specified Employee Payment Date
”). The aggregate amount of any payments that would otherwise have been made during such six-month period shall be paid in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. If Executive dies before the Specified Employee Payment Date, any delayed payments shall be paid to Executive’s estate in a lump sum within one week of Executive’s death.
|
c.
|
To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) any reimbursement of an eligible expense shall be paid to Executive on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit. Any tax gross-up payments provided under this Agreement shall be paid to Executive on or before December 31 of the calendar year immediately following the calendar year in which Executive remits the related taxes.
|
d.
|
Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed, and all revocation periods shall have expired within 60 days after the Termination Date; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes “nonqualified deferred compensation” subject to Section 409A, and if such 60-day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the release becomes irrevocable in the first such calendar year.
|
13.
|
GENERAL PROVISIONS
.
|
a.
|
Notices
. All notices, requests, demands, statements, reports and other communications provided for by this Agreement shall be in writing (email being sufficient) and shall be sent by (i) certified mail, return receipt requested, postage prepaid, (ii) nationally recognized overnight delivery service, (iii) personal delivery or (iv) email. A notice shall be deemed to be given (x) if notice is delivered by certified mail or nationally recognized overnight delivery service, on the business day following the date of its mailing, (y) if such notice is delivered personally, upon delivery, or (z) if such notice is sent by email, upon sending. Each party may change such party’s address for notices by giving notice in accordance herewith. All notices shall be addressed and mailed
|
If to the COMPANY:
|
|
Attn: Chief Executive Officer
|
Axonics Modulation Technologies, Inc.
|
26 Technology Drive
|
Irvine, CA 92618
|
|
|
If to EXECUTIVE:
|
|
Dan L. Dearen
|
|
|
|
b.
|
Entire Agreement
. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, representations and understandings (whether written or oral) of the parties with respect to the subject matter hereof, including the Original Employment Agreement, and any other agreement between Executive and the Company or any of its affiliates and subsidiaries.
|
c.
|
Modification and Waiver
. No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by Executive and a duly authorized representative of the Company (other than Executive). A waiver of any term or condition of this Agreement shall not be construed as a general waiver by the Company. If one or more provisions of this Agreement are held to be illegal or unenforceable under applicable law, such illegal or unenforceable provision(s) shall be limited or excluded from this Agreement to the minimum extent required so that this Agreement shall otherwise remain in full force and effect and enforceable in accordance with its terms.
|
d.
|
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its conflict of law principles, and any dispute in the meaning, effect or validity of this Agreement shall be resolved in accordance with the laws of the State of California.
|
e.
|
Assignment; Binding Effect
. This Agreement is fully assignable and transferable by the Company, but any purported assignment or transfer by Executive is void. It is hereby agreed that Executive’s rights and obligations under this Agreement are personal and not assignable by Executive. This Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and permitted assigns of the parties.
|
f.
|
Injunctive Relief
. Executive agrees that any breach of this Agreement will cause irreparable harm to the Company for which damages would not be an adequate remedy, and, therefore, to the fullest extent permitted by applicable law, the Company will be entitled to injunctive relief with respect thereto in addition to any other remedies and without any requirement to post bond.
|
g.
|
Survival
. This Agreement shall terminate upon the expiration of the Term; provided that the provisions of Section 1 and Sections 6 through 13 shall survive termination of this Agreement and termination of Executive’s employment regardless of the reason for such termination.
|
h.
|
Withholding
. The Company may withhold from any and all amounts payable under this Agreement or otherwise such federal, state and local taxes as may be required to be withheld pursuant to applicable law.
|
COMPANY:
|
|
|
|
Axonics Modulation Technologies, Inc.
|
|
|
|
|
|
By:
|
/s/ Raymond W. Cohen
|
|
Raymond W. Cohen
|
|
Chief Executive Officer
|
|
|
|
|
EXECUTIVE:
|
|
|
|
/s/ Dan L. Dearen
|
|
Dan L. Dearen
|
|
|
|
1.
|
DEFINED TERMS
.
Exhibit A
to this Agreement sets forth defined terms for purposes of this Agreement.
|
2.
|
EMPLOYMENT/TERM
. The Company hereby employs Executive to perform the duties and responsibilities set forth below under Section 3 of this Agreement, and Executive hereby accepts such employment, in each case on the terms and conditions set forth in this Agreement. This Agreement shall commence on the Effective Date and remain in effect for five (5) years, unless earlier terminated pursuant to Section 5 of this Agreement (the “
Term
”).
|
3.
|
POSITION AND DUTIES
.
|
a.
|
Description of Executive’s Position, Duties, Authorities, and Responsibilities
. Executive shall serve as the Chief Operating Officer of the Company. In such capacity, Executive shall (i) report to the President & Chief Financial Officer, (ii) devote Executive’s full professional time and attention, best efforts, energy and skills to the services required of Executive as an employee of the Company, except for paid time off taken in accordance with the Company’s policies and practices, and subject to the Company’s policies pertaining to reasonable periods of absence due to sickness, personal injury or other disability; (iii) use Executive’s best efforts to promote the interests of the Company; (iv) comply with all applicable governmental laws, rules and regulations and with all of the Company’s policies, rules and regulations applicable to employees of the Company; (v) participate in, and comply with all Company directives regarding, workplace investigations; and (vi) discharge Executive’s responsibilities in a diligent and faithful manner, consistent with sound business practices and in accordance with the Board’s directives.
|
b.
|
Outside Boards
. It is acknowledged that Executive currently serves on a chartiable board. Executive shall obtain the written consent of the Board prior to serving on a public company or other corporate board. This Section 3.b shall not be construed as preventing Executive from serving on the corporate, civic or charitable boards or committees on which Executive serves as of the Effective Date which has been previously disclosed to the CEO of the Company; provided that in no event shall any such service or business activity require the provision of substantial services by Executive to the operations or the affairs of such businesses or enterprises such that the provision thereof would interfere in any respect with the performance of Executive’s duties hereunder or
|
4.
|
COMPENSATION AND BENEFITS
.
|
a.
|
Base Salary
. As of the Effective Date, Executive’s Base Salary shall be three hundred fifty dollars ($350,000) per year payable in periodic installments in accordance with the Company’s regular payroll practices as in effect from time to time. The Board or a duly authorized committee thereof will review the Base Salary on an annual basis and may increase the Base Salary from time to time based on merit or such other considerations as the Board or a duly authorized committee thereof may deem appropriate.
|
b.
|
Bonus
. Executive shall be eligible to receive an annual cash bonus in an amount up to fifty percent (50%) of Executive’s Base Salary for the calendar year for which the annual cash bonus is being paid, as determined in the discretion of the Board or a duly authorized committee thereof, based on the performance of the Company and Executive relative to performance objectives or other metrics as the Board or a duly authorized committee thereof may deem appropriate. The Board shall establish performance objectives or other metrics within 90 days after the beginning of each new calendar year.
|
c.
|
Benefits and Vacation
. Executive shall be eligible to participate in and receive the benefits under any deferred compensation plan, health, life, accident and disability insurance plans or programs, and any other employee benefit or fringe benefit plans or arrangements that the Company makes available generally to other senior executives of the Company, pursuant to the provisions of such plans, programs or arrangements as in effect from time to time. Executive shall be entitled to four weeks’ paid vacation and additional sick days in accordance with the policies of the Company for its employees generally, as in effect from time to time.
|
d.
|
Equity Incentive Compensation
. Executive shall be eligible to receive grants, at the discretion of the Board or a duly authorized committee thereof, under any long-term equity- based incentive compensation plans established or maintained by the Company for its senior executive officers, in each case subject to the terms and conditions of the applicable plans and award documents with respect to such grants.
|
e.
|
Expenses
. The Company shall pay or reimburse Executive for all reasonable, ordinary and necessary business expenses incurred or paid by Executive during the Term in the performance of Executive’s services under this Agreement in accordance with the applicable policies and procedures of the Company as in effect from time to time, upon the presentation of proper expense statements or such other supporting documentation as the Company may reasonably require.
|
5.
|
TERMINATION OF EMPLOYMENT
.
|
a.
|
General
. Executive’s employment may be terminated by either party at any time and for any reason; and upon termination of Executive’s employment, the Term shall end.
|
b.
|
Resignation without Good Reason
. Executive may resign from employment with the Company without Good Reason by providing the Company with at least 60 days’ advance written notice. During the Resignation Notice Period, the Company, in its sole discretion, may elect to accelerate Executive’s date of termination of employment, it being understood that any such termination shall still be treated as a voluntary resignation without Good Reason for purposes of this Agreement. Even if Executive’s date of termination is accelerated, Executive shall be paid Executive’s Base Salary, and shall receive Benefits capable of being provided to persons
|
c.
|
Death
. Executive’s employment hereunder shall terminate automatically on the date of Executive’s death.
|
d.
|
Disability
. At the option of the Company, Executive’s employment hereunder may be terminated immediately upon Disability.
|
e.
|
Termination for Cause
. Notwithstanding any other provision of this Agreement, the Company may, at any time, immediately terminate Executive’s employment for Cause. The Company’s lack of immediate action with respect to conduct of Executive that would constitute Cause hereunder shall not preclude the Company from taking later action on such act or taking action with respect to another such act committed by Executive.
|
f.
|
Termination Without Cause
. The Company may, at any time, immediately terminate Executive’s employment without Cause.
|
6.
|
COMPENSATION UPON TERMINATION (OTHER THAN A CHANGE IN CONTROL TERMINATION)
. Following any termination of Executive’s employment, the obligations of the Company to pay or provide Executive with compensation and benefits under Section 4 shall immediately cease, and the Company shall have no further obligations to Executive under this Agreement, except to provide (i) the Accrued Obligations, (ii) any additional amounts specifically provided by this Section 6, subject to the applicable terms and conditions of this Section 6, and (iii) any other amounts otherwise required by law.
|
a.
|
Death or Disability
. If, during the Term, Executive’s employment is terminated (x) by reason of Executive’s death or (y) by the Company for Disability, in addition to the Accrued Obligations, Executive shall receive the following compensation:
|
i.
|
The Company shall pay to Executive (or to Executive’s estate or designated beneficiary in the event of Executive’s death) a lump sum amount equal to (A) one (1) year of Base Salary in effect as of the Termination Date, plus (B) the annual bonus earned based on performance for the year immediately preceding the year in which the Termination Date occurs, to the extent such bonus had not been paid as of the Termination Date, plus (C) if the Termination Date occurs during the second, third or fourth quarter of a year, the Pro-Rata Bonus for that year. Such payment shall be made in a single cash payment on the Cash Severance Commencement Date, provided that on or before the Cash Severance Commencement Date, Executive has executed, and delivered a general waiver and release agreement in the form of
Exhibit B
, attached, or in a form and with substance satisfactory to the Company, that is no longer subject to revocation. If Executive is unable to execute and deliver such waiver and release agreement due to death or Disability, then the waiver and release agreement shall be executed and
|
ii.
|
As to any outstanding, unvested Equity Incentive Compensation awards on the Termination Date that are not Performance-Based Awards, except to the extent that the applicable award agreement or equity compensation plan provides for better treatment and notwithstanding the terms of any applicable award agreements entered into after the Effective Date (unless such award agreements expressly reference this Agreement), Executive shall immediately vest in such award. For any such awards that are Performance-Based Awards, vesting shall be based on the terms of the applicable equity compensation plan and award agreement in accordance with Section 6.d. Vested stock options shall remain exercisable during the periods provided in the applicable plan and award agreement.
|
b.
|
For Cause or Without Good Reason
. If, during the Term, Executive’s employment is terminated (i) by the Company for Cause or (ii) by Executive for any reason other than for Good Reason, the Company shall pay to Executive the Accrued Obligations.
|
c.
|
Without Cause or for Good Reason (Other than a Change in Control Termination)
. If, during the Term, Executive’s employment with the Company terminates by reason of a Qualifying Termination (other than a Change in Control Termination), in addition to the Accrued Obligations, Executive shall receive the following compensation:
|
i.
|
Executive shall receive cash severance in an amount equal to one (1) year of Base Salary as in effect on the Termination Date. Such payment shall be made in a single cash payment on the Cash Severance Commencement Date.
|
ii.
|
Executive shall be paid the annual bonus earned based on performance for the year immediately preceding the year in which the Termination Date occurs, to the extent such bonus had not been paid as of the Termination Date. Such bonus shall be paid at the same time bonuses are paid to other employees.
|
iii.
|
If the Termination Date occurs during the second, third or fourth quarter of a year, Executive shall be paid the Pro-Rata Bonus for that year, made in a single cash payment on the Cash Severance Commencement Date.
|
iv.
|
Executive shall be paid an amount equal to 12 months of COBRA premiums based on the terms of Company’s group health plan and Executive’s coverage under such plan as of the Termination Date (regardless of any COBRA election actually made by Executive or the actual COBRA coverage period under the Company’s group health plan), payable in a single cash payment on the Cash Severance Commencement Date.
|
v.
|
As to any outstanding, unvested Equity Incentive Compensation awards on the Termination Date, for any such awards that are Performance-Based Awards, the award shall vest at the end of the applicable performance period based on actual performance results and prorated for the portion of the performance period worked through the Termination Date.
|
d.
|
Equity Incentive Compensation
. Except as otherwise expressly provided herein, upon termination of Executive’s employment during the Term, any outstanding Equity Incentive Compensation awards shall be forfeited or vest in accordance with the terms of the applicable plan and award agreement, and shall be subject to such other terms and conditions of such plan and award agreement that may apply as a result of such termination.
|
e.
|
Benefits
. Notwithstanding anything in this Section 6 to the contrary, the Benefits to which Executive is entitled upon or by reason of the termination of Executive’s employment with the Company shall be subject to, and shall be governed by, the terms and conditions of the applicable plans, programs and arrangements maintained by the Company with respect to such Benefits. Nothing in this Agreement shall be construed to be a waiver by the Executive of any benefits accrued for or due to the Executive under any employee benefit plan (as such term is defined in the Employee Retirement Income Security Act of 1974, as amended) maintained by the Company, if any, except that the Executive shall not be entitled to any severance benefits pursuant to any severance plan or program of the Company other than as provided herein.
|
f.
|
D&O Insurance, and Indemnification
. Through at least the sixth anniversary of the Termination Date, the Company shall maintain coverage for the Executive as a named insured on all directors’ and officers’ insurance maintained by the Company for the benefit of its directors and officers on at least the same basis as all other covered individuals and provide the Executive with at least the same corporate indemnification as it provides to other senior executives.
|
g.
|
Expiration of Term
. Notwithstanding anything in this Section 6 to the contrary, the expiration of the Term by itself shall not entitle Executive to receipt of any payments under this Section 6.
|
7.
|
CHANGE IN CONTROL.
|
a.
|
Treatment of Equity Incentive Compensation
. As to any outstanding, unvested Equity Incentive Compensation awards immediately before a Change in Control, except to the extent that the applicable award agreement or equity compensation plan provides for better treatment and notwithstanding the terms of any applicable award agreements entered after the Effective Date (unless such award agreements expressly reference this Agreement):
|
i.
|
For any such awards that are not Performance-Based Awards, (A) the awards shall vest in full immediately upon the Change in Control, and (B) any vested stock options shall remain exercisable during the periods provided in the applicable plans and award agreement.
|
ii.
|
For any such awards that are Performance-Based Awards, the award shall be fully vested based on the greater of (A) assumed target performance or (B) performance as determined by the Board immediately before the Change in Control.
|
b.
|
Change in Control Severance
. If, during the Term, Executive’s employment with the Company terminates by reason of a Change in Control Termination, in addition to the Accrued Obligations, Executive shall receive the following compensation:
|
i.
|
Executive shall receive cash severance in an amount equal to one year of Base Salary as in effect on the Termination Date. Such amount shall be payable in a single cash payment on the Cash Severance Commencement Date.
|
ii.
|
Executive shall be paid the annual bonus earned based on performance for the year immediately preceding the year in which the Termination Date occurs, to the extent such bonus had not been paid as of the Termination Date. Such bonus shall be paid at the same time bonuses are paid to other employees.
|
iii.
|
Executive shall be paid the Pro-Rata Bonus in a single cash payment on the Cash Severance Commencement Date.
|
iv.
|
Executive shall be paid an amount equal to 12 months of COBRA premiums based on the terms of Company’s group health plan and Executive’s coverage under such plan as of the Termination Date (regardless of any COBRA election actually made by Executive or the actual COBRA coverage period under the Company’s group health plan), payable in a single cash payment on the Cash Severance Commencement Date.
|
8.
|
NONSOLICITATION COVENANT.
Executive agrees that Executive shall not directly or indirectly during the Term and for one (1) year after termination of Executive’s employment, either alone or through or in conjunction with any other person or entity employ, solicit, induce, or recruit, any person employed by any member of the Company at any time within the one (1) year period immediately preceding such employment, solicitation, inducement or recruitment.
|
9.
|
ADJUSTMENTS TO PAYMENTS.
Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to Executive or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (the “
Payments
”) would be subject to the excise tax imposed by Section 4999 (or any successor provisions) of the Code, or any interest or penalty is incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, is hereinafter collectively referred to as the “
Excise
Tax
”), then the Payments shall be reduced (but not below zero) if and to the extent that such reduction would result in Executive retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the imposition of the Excise Tax), than if Executive received all of the Payments. The Company shall reduce or eliminate the Payments, by first reducing or eliminating the portion of the Payments which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the determination. All determinations required to be made under this Section, including whether and when an adjustment to any Payments is required and, if applicable, which Payments are to be so adjusted, shall be made by an independent accounting firm selected by the Company from among the four (4) largest accounting firms in the United States or any nationally recognized financial planning and benefits consulting company (the “
Accounting Firm
”) which shall provide detailed
|
10.
|
COOPERATION
. Upon the receipt of reasonable notice from the Company (including outside counsel), Executive agrees that while employed by the Company and thereafter, Executive will respond and provide information with regard to matters in which Executive has knowledge as a result of Executive’s employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of all claims that may be made against the Company or its affiliates, and will assist the Company and its affiliates in the prosecution of all claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of Executive’s employment with the Company. Executive agrees to promptly inform the Company if Executive becomes aware of any lawsuit involving such claims that may be filed or threatened against the Company or its affiliates. Executive also agrees to promptly inform the Company (to the extent that Executive is legally permitted to do so) if Executive is asked to assist in any investigation of the Company or its affiliates (or their actions), regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not provide such assistance unless legally required. Upon presentation of appropriate documentation, the Company shall pay or reimburse Executive for all reasonable out-of-pocket travel, duplicating or telephonic expenses incurred by Executive in complying with this Section 10. For the first five hours of cooperation in any calendar month during the period of cooperation, Executive shall provide the specified cooperation services without hourly reimbursement. For each hour of cooperation or part thereof after five hours, in any calendar month, Company shall reimburse Executive at the hourly rate determined by this fraction: (final Base Salary / 2,080 hours).
|
11.
|
ARBITRATION.
The parties hereby agree to submit all disputes, claims and controversies (“
Claims
”) between the parties or related to or arising out of their employment relationship by and between the Company and Executive to final, binding arbitration to the fullest extent permitted by law. The Federal Arbitration Act., 9 U.S.C. § 1
et seq.
, shall govern the interpretation and enforcement of this Section 11. The court and not the arbitrator will determine matters of enforceability of this Section 11.
|
a.
|
Statute of Limitations
. The statutory limitations period applicable to a Claim asserted in a civil action shall apply to any such Claim asserted in any arbitration proceeding under this Section 11. Arbitration is commenced for limitations purposes by submitting the matter to the arbitral forum.
|
b.
|
Individual Basis
. All Claims that are subject to arbitration under this Section 11 must and will take place on an individual basis only.
|
c.
|
Venue
. Binding arbitration under this Section 11 shall be conducted in California unless required by law to be conducted elsewhere, in which case it shall be conducted where required by law.
|
d.
|
Applicable Rules
. The arbitration proceeding, including discovery, shall be conducted in accordance with the
|
e.
|
Arbitrator Selection
. The arbitration shall be conducted before a neutral arbitrator selected by all parties in accordance with JAMS Rules.
|
f.
|
Cost Allocation
. If required by applicable law, the Company shall pay all additional costs peculiar to the arbitration to the extent such costs would not otherwise be incurred in a court proceeding (for instance, the Company shall pay the arbitrator’s fees, and the JAMS administration and filing fees, to the extent such fees exceed court filing fees).
|
g.
|
Attorneys’ Fees and Costs
. Each party shall pay such party’s own costs and attorneys’ fees except that the arbitrator shall award costs and attorneys’ fees to the prevailing party.
|
h.
|
Written Decision
. The arbitrator shall follow applicable substantive law and, within 30 days after the conclusion of the arbitration, issue a written opinion setting forth the factual and legal bases for his or her decision.
|
i.
|
Acknowledgement
. EXECUTIVE UNDERSTANDS THAT EXECUTIVE IS GIVING UP EXECUTIVE’S RIGHT TO A JURY TRIAL BY ENTERING INTO THIS AGREEMENT. EXECUTIVE UNDERSTANDS THAT EXECUTIVE IS GIVING UP EXECUTIVE’S RIGHT TO COMMENCE OR PARTICIPATE IN A CLASS OR COLLECTIVE ACTION AND INSTEAD AGREES TO ARBITRATE ANY EMPLOYMENT-RELATED DISPUTE ON AN INDIVIDUAL BASIS ONLY TO THE MAXIMUM EXTENT PERMITTED BY LAW.
|
12.
|
CODE SECTION 409A
.
|
a.
|
This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“
Section 409A
”), including the exceptions thereto, and shall be construed and administered in accordance with such intent. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each separate payment or installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement in connection with a termination of employment shall only be made if such termination of employment constitutes a “separation from service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Executive on account of non-compliance with Section 409A.
|
b.
|
Notwithstanding any other provision of this Agreement, if at the time of Executive’s termination of employment,
|
c.
|
To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) any reimbursement of an eligible expense shall be paid to Executive on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit. Any tax gross-up payments provided under this Agreement shall be paid to Executive on or before December 31 of the calendar year immediately following the calendar year in which Executive remits the related taxes.
|
d.
|
Whenever in this Agreement a payment or benefit is conditioned on Executive’s execution of a release of claims, such release must be executed, and all revocation periods shall have expired within 60 days after the Termination Date; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes “nonqualified deferred compensation” subject to Section 409A, and if such 60-day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the release becomes irrevocable in the first such calendar year.
|
13.
|
GENERAL PROVISIONS
.
|
a.
|
Notices
. All notices, requests, demands, statements, reports and other communications provided for by this Agreement shall be in writing (email being sufficient) and shall be sent by (i) certified mail, return receipt requested, postage prepaid, (ii) nationally recognized overnight delivery service, (iii) personal delivery or (iv) email. A notice shall be deemed to be given (x) if notice is delivered by certified mail or nationally recognized overnight delivery service, on the business day following the date of its mailing, (y) if such notice is delivered personally, upon delivery, or (z) if such notice is sent by email, upon sending. Each party may change such party’s address for notices by giving notice in accordance herewith. All notices shall be addressed and mailed or delivered to the following addresses:
|
If to the COMPANY:
|
|
Attn: Chief Executive Officer
|
Axonics Modulation Technologies, Inc.
|
26 Technology Drive
|
Irvine, CA 92618
|
|
|
If to EXECUTIVE:
|
|
Rinda Sama
|
|
|
|
b.
|
Entire Agreement
. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, representations and understandings (whether written or oral) of the parties with respect to the subject matter hereof, including the Original Employment Agreement, and any other agreement between Executive and the Company or any of its affiliates and subsidiaries.
|
c.
|
Modification and Waiver
. No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by Executive and a duly authorized representative of the Company (other than Executive). A waiver of any term or condition of this Agreement shall not be construed as a general waiver by the Company. If one or more provisions of this Agreement are held to be illegal or unenforceable under applicable law, such illegal or unenforceable provision(s) shall be limited or excluded from this Agreement to the minimum extent required so that this Agreement shall otherwise remain in full force and effect and enforceable in accordance with its terms.
|
d.
|
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its conflict of law principles, and any dispute in the meaning, effect or validity of this Agreement shall be resolved in accordance with the laws of the State of California.
|
e.
|
Assignment; Binding Effect
. This Agreement is fully assignable and transferable by the Company, but any purported assignment or transfer by Executive is void. It is hereby agreed that Executive’s rights and obligations under this Agreement are personal and not assignable by Executive. This Agreement shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and permitted assigns of the parties.
|
f.
|
Injunctive Relief
. Executive agrees that any breach of this Agreement will cause irreparable harm to the Company for which damages would not be an adequate remedy, and, therefore, to the fullest extent permitted
|
g.
|
Survival
. This Agreement shall terminate upon the expiration of the Term; provided that the provisions of Section 1 and Sections 6 through 13 shall survive termination of this Agreement and termination of Executive’s employment regardless of the reason for such termination.
|
h.
|
Withholding
. The Company may withhold from any and all amounts payable under this Agreement or otherwise such federal, state and local taxes as may be required to be withheld pursuant to applicable law.
|
COMPANY:
|
|
|
|
Axonics Modulation Technologies, Inc.
|
|
|
|
|
|
By:
|
/s/ Raymond W. Cohen
|
|
Raymond W. Cohen
|
|
Chief Executive Officer
|
|
|
|
|
EXECUTIVE:
|
|
|
|
/s/ Rinda Sama
|
|
Rinda Sama
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Axonics Modulation Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
[Omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)];
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 5, 2019
|
By:
|
|
/s/ Raymond W. Cohen
|
|
|
|
Raymond W. Cohen
|
|
|
|
Chief Executive Officer and Director
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Axonics Modulation Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
[Omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)];
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 5, 2019
|
By:
|
|
/s/ Dan L. Dearen
|
|
|
|
Dan L. Dearen
|
|
|
|
President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 5, 2019
|
By:
|
|
/s/ Raymond W. Cohen
|
|
|
|
Raymond W. Cohen
|
|
|
|
Chief Executive Officer and Director
|
|
|
|
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 5, 2019
|
By:
|
|
/s/ Dan L. Dearen
|
|
|
|
Dan L. Dearen
|
|
|
|
President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|