UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date of Report (Date of earliest event reported): June 1,
2018
Tenax Therapeutics, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-34600
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26-2593535
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(State
or other jurisdiction of incorporation)
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(CommissionFile
Number)
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(IRS
EmployerIdentification No.)
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ONE Copley Parkway, Suite 490
Morrisville, NC 27560
(Address
of principal executive offices) (Zip Code)
919-855-2100
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (17 CFR
230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17
CFR 240.12b-2).
Emerging
growth company
☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Item
5.02
Departure
of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
Appointment of CEO and Employment Agreement
On
June 1,
2018, the Board of
Directors (the “Board”) of Tenax Therapeutics, Inc.
(the “Company”) appointed Anthony A. DiTonno, a current
member of the Board, as the Company’s Chief Executive
Officer, effective June 1, 2018. While Mr. DiTonno will retain his
position as a member of the Board, he relinquished his membership
on the Company’s Compensation Committee as of June 1, 2018
and for the duration of his service as Chief Executive Officer as
he is no longer an independent director under the Nasdaq Listing
Rules. Michael Jebsen, the Company’s prior Interim Chief
Executive Officer through the effective date of Mr. DiTonno’s
appointment, will continue serving as the Company’s President
and Chief Financial Officer.
Mr.
DiTonno, age 69, has served as a director of the Company since
December 2011. From January 2013 until May 31, 2018, Mr. DiTonno
served as Chief Executive Officer of Avantis Medical Systems, Inc.,
a medical device company that develops and manufactures
catheter-based endoscopic devices. From April 2003 until
December 2011, Mr. DiTonno was President and Chief Executive
Officer of Neurogesx Inc., a biopharmaceutical company based in the
San Francisco Bay area (“Neurogesx”). During his time
at Neurogesx, Mr. DiTonno also served on its board of
directors. Mr. DiTonno has funded companies through a
variety of financial arrangements including private and public
financings, partnerships and debt. He has also been successful in
gaining regulatory approvals in both the United States and European
Union. Previously, he was Executive Vice President of Marketing and
Sales at Enteric Medical Technologies Inc., which was acquired by
Boston Scientific Company; President and Chief Executive Officer of
Lifesleep Systems, Inc.; and Vice President and General Manager of
Olcassen Pharmaceuticals, which was sold to Watson Laboratories.
Early in his career, he held a variety of positions of increasing
responsibility at Rorer Group, Inc. (Rhône Poulenc Rorer) and
Wyeth Laboratories. Mr. DiTonno received an M.B.A. from Drexel
University and a B.S. in Business Administration from St.
Joseph’s University.
While
serving as Chief Executive Officer, Mr. DiTonno will not receive
compensation for his service as a member of the Board. Effective
June 1
,
2018, the Company
entered into an employment agreement with Mr. DiTonno (the
“Employment Agreement”). Under the Employment
Agreement, Mr. DiTonno will receive an annual base salary of
$430,000. Mr. DiTonno will also receive participation in medical
insurance, dental insurance, and other benefit plans on the same
basis as the Company’s other officers. Under the Employment
Agreement, Mr. DiTonno will also receive an annual cash bonus
consisting of 50% of his base salary, based on 100% achievement of
annual goals (with no cap on the bonus for greater than 100%
achievement of goals). The Employment Agreement also provides for a
one-time non-statutory stock option grant of 50,000 shares of
common stock. The Employment Agreement states that the Company will
pay Mr. DiTonno up to $30,000 to cover costs associated with
relocation expenses.
The
Employment Agreement is effective for a one-year term, and
automatically renews for additional one-year terms, unless the
Employment Agreement is terminated in advance of renewal or either
party gives notice at least 90 days prior to the end of the then
current term of an intention not to renew. If Mr. DiTonno is
terminated without cause, if he terminates his employment for good
reason, or if the Company elects not to renew the Employment
Agreement, Mr. DiTonno would be entitled to receive (i) one-year of
base salary, (ii) a pro-rated amount of the annual bonus that he
would have received had 100% of goals been achieved, and (iii)
one-year of COBRA reimbursements or benefits payments, as
applicable. Mr. DiTonno’s entitlement to these payments is
conditioned upon execution of a release of claims.
For
purposes of the Employment Agreement: (i) “cause”
includes (a) a willful material breach of the Agreement by Mr.
DiTonno, (b) material misappropriation of Company property, (c)
material failure to comply with Company policies, (d) abuse of
illegal drugs or abuse of alcohol in a manner that interferes with
the performance of Mr. DiTonno’s duties, (e) dishonest or
illegal action that is materially detrimental to the Company, and
(f) failure to disclose material conflicts of interest, and (ii)
“good reason” includes (a) a material reduction in base
salary, (b) a material reduction of Mr. DiTonno’s authority,
duties or responsibility, (c) certain changes in geographic
location of Mr. DiTonno’s employment, or (d) a material
breach of the Employment Agreement by the Company.
The
Employment Agreement and a copy of the press release announcing the
appointment of Mr. DiTonno as the Company’s Chief Executive
Officer are filed as Exhibits 10.1 and 99.1 to this Current Report
on Form 8-K. The foregoing summaries of the terms of these
documents are subject to, and qualified in their entirety by, such
documents, which are incorporated herein by reference.
Item
9.01
Financial
Statements and Exhibits.
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Exhibit No.
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Description
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Employment
Agreement with Anthony A. DiTonno dated June 1, 2018.
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Press
Release dated June 5, 2018.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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Date: June 5, 2018
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Tenax Therapeutics, Inc.
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By:
/
s
/
Michael B. Jebsen
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Michael
B. Jebsen
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Chief
Financial Officer
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EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT
(this “
Agreement
”), is made as of June 1,
2018, by and between Tenax Therapeutics, Inc., a Delaware
corporation, with its principal place of business in North Carolina
(the “
Company
”),
and Anthony A. DiTonno (the “
Executive
”).
W I T N E S S E T H:
WHEREAS
, the Company desires to employ
the Executive as its Chief Executive Officer and provide adequate
assurances to the Executive and the Executive desires to accept
such employment on the terms set forth below.
NOW, THEREFORE
, in consideration of the
foregoing, of the mutual promises herein, and of other good and
valuable consideration, the receipt and sufficiency of which the
parties acknowledge, the Company and the Executive agree as
follows:
1.
Employment
. Effective as of
June 1, 2018 (the “
Effective
Date
”)
,
the
Company hereby employs the Executive and the Executive hereby
accepts employment as Chief Executive Officer of the Company upon
the terms and conditions of this Agreement.
2.
Duties
. The Executive will have
such authority, and will faithfully perform all of the duties,
normally associated with the position of Chief Executive Officer,
including but not limited to all duties set forth in this
Agreement, and all additional duties consistent with such position
that are reasonably prescribed from time to time by the Board of
Directors of the Company (the “
Board
”). The Executive shall
devote such business time and attention as reasonably necessary to
perform his duties and responsibilities on behalf of the Company
and in furtherance of its best interests; provided, however, that
he, subject to his obligations hereunder, shall be permitted to
make personal investments, perform reasonable volunteer services
and serve on the boards of directors (or similar governing bodies)
of nonprofit entities and/or for profit entities that are not in
competition with the Company. The Executive shall comply with all
Company policies, standards, rules and regulations (the
“
Company
Policies
”) as may exist from
time-to-time and all applicable government laws, rules and
regulations that are now or hereafter in effect.
3.
Term
. Unless earlier terminated
as provided herein, the initial term of this Agreement shall
commence on the Effective Date and
shall continue until the one-year
anniversary of the Effective Date (the “
Initial Term
”). After the Initial
Term, this Agreement shall automatically renew for successive
one-year terms on the same terms and conditions set forth herein
unless: (a) earlier terminated or amended as provided herein; or
(b) either party gives the other written notice of non-renewal at
least ninety (90) days prior to the end of the Initial Term or any
renewal term of this Agreement, in which case, this Agreement shall
terminate on the expiration of the then-current Term. The Initial
Term of this Agreement and all applicable renewals thereof are
referred to herein as the “
Term
.”
4.
Compensation
. During the Term,
as compensation for the services rendered by the Executive under
this Agreement, the Executive shall be entitled to receive the
following (all payments are subject to applicable
withholdings):
(a)
Base
Salary
. The Executive shall receive an annual salary of Four
Hundred Thirty Thousand Dollars and 00/100 Dollars ($430,000.00)
(less applicable withholdings) (“
Base Salary
”) payable in
accordance with the payroll policies of the Company as such
policies may exist from time to time or as otherwise agreed upon by
the parties. The Board shall review, on an annual basis, the
Executive’s salary and may increase or decrease such salary
as the Board deems appropriate; provided, however, that any
decrease shall only be effective if it is a result of an
across-the-board decrease affecting all senior executives as a
group.
(b)
Bonuses
. Each fiscal year
during the Term, the Executive shall be entitled to an annual bonus
the amount of which is based on percentage achievement of annual
goals set by the Company, after consultation with the Executive, at
the beginning of each fiscal year for such fiscal year
(“
Annual
Bonus
”), which achievement shall be determined as of
the last day of such fiscal year. If the Executive achieves one
hundred percent (100%) of the annual goals, the Annual Bonus shall
be fifty percent (50%) of his Base Salary (“
Target Bonus
”). There is no cap on
the Annual Bonus for exceeding one hundred percent (100%) of annual
goals; for example, an achievement of two hundred percent (200%) of
annual goals would result in an Annual Bonus equal to one hundred
percent (100%) of his Base Salary. The Annual Bonus shall be paid
in accordance with the Company’s regular bonus payment
procedures, and, in all
events, will be paid no later than
sixty (60) days following the end of the fiscal year in which the
Annual Bonus was earned. Except as otherwise set forth in Section
5(d)(ii)(C), in order to be eligible to receive the Annual Bonus,
the Executive must be employed by the Company on the last day of
the fiscal year in which the Annual Bonus was earned.
(c)
Benefits
. The Executive shall
be entitled to receive those benefits provided from time to time to
other executive employees of the Company
,
in accordance with the terms and
conditions of the applicable plan documents, provided that the
Executive meets the eligibility requirements thereof. All such
benefits are subject to amendment or termination from time to time
by the Company without the consent of the Executive or any other
employee of the Company.
(d)
Business Expenses
. The Company
shall pay, or reimburse the Executive for, all reasonable expenses
incurred by the Executive directly related to conduct of the
business of the Company; provided that the Executive complies with
the Company’s policies for the reimbursement or advancement
of business expenses that are now or hereafter in effect. The
Company shall provide such payments or reimbursements within thirty
(30) days following the Executive’s incurrence of the
expense.
(e)
Option Award
. The Board has
approved a [nonstatutory] stock option entitling the Executive to
purchase up to 50,000 shares of Company Common Stock (the
“
Option
”) at the
fair market value as of the date of grant as determined by the
Board in its sole discretion. The terms and conditions, including
vesting, for the Option will be set forth in a [Nonstatutory] Stock
Option Agreement between the Executive and the Company in the form
set forth on
Exhibit
A
.
(f)
Relocation Expenses
. The
Company shall pay, or reimburse the Executive for, all reasonable
relocation expenses incurred by the Executive directly related to
his relocation to North Carolina, up to $30,000
(“
Relocation
Expenses
”). If the Executive is terminated for Cause,
or leaves the Company without Good Reason, within twelve (12)
months of the Effective Date, the Executive must repay the costs of
Relocation Expenses paid on his behalf prior to his termination
date. If the Executive becomes obligated to repay the Relocation
Expenses to the Company, the Executive hereby authorizes the
Company to deduct the Relocation Expenses from any paycheck owed to
the Executive. The Company shall provide such payments or
reimbursements within thirty (30) days following the
Executive’s incurrence of the expense.
5.
Termination
and Obligations of the Company upon Termination
. This
Agreement and the Executive’s employment by the Company shall
or may be terminated, as the case may be, as set forth
below.
(a)
Termination upon Expiration of the
Term
. This Agreement and the Executive’s employment by
the Company shall terminate upon the expiration of the
Term.
(b)
Termination by the Executive
.
The Executive may terminate this Agreement and his employment with
the Company as follows:
(i)
Voluntary Resignation
. For any
reason other than Good Reason thirty (30) days after written notice
of the Executive’s resignation is received by the Company
(“
Voluntary
Resignation
”).
(ii)
For
Good Reason
. For purposes of this Agreement, the
Executive’s termination of his employment will be deemed to
have been for “
Good
Reason
” if the Executive resigns within six (6) months
after any of the following conditions having arisen without his
prior written consent and after having given the Company written
notice of the existence of such condition within ninety (90) days
of the Executive’s knowledge of the existence of the
condition and providing the Company with thirty (30) days to remedy
the condition:
(A)
a material
diminution in the Executive’s base salary;
(B)
a material
diminution in the Executive’s authority, duties, or
responsibility by the assignment to him of authority, duties, or
responsibilities materially inconsistent with his position as Chief
Executive Officer;
(C)
the
Executive’s place of employment is relocated by more than
fifty (50) miles; or
(D)
any breach by the
Company of any material provision of this Agreement or any other
written agreement with the Executive.
(c)
Termination by the Company
. The
Company may terminate this Agreement and the Executive’s
employment by the Company immediately upon written notice to the
Executive (or his personal representative):
(i)
Without Cause
. At any time and
for any reason other than reasons set forth in Sections 5(c)(ii)
(Death), (iii) (Disability) or (iv) (Cause)
(“Without
Cause”)
;
(ii)
Death
.
Upon the death of the Executive, in which case this Agreement shall
terminate immediately; provided that, such termination shall not
prejudice any benefits payable to the Executive’s spouse or
beneficiaries which are fully vested as of the date of death
(“
Death
”);
(iii)
Disability
.
If the Executive is “permanently disabled” (as defined
herein), in which case this Agreement shall terminate immediately;
provided that, such termination shall not prejudice any benefits
payable to the Executive, the Executive’s spouse or
beneficiaries which are fully vested as of the date of the
termination of this Agreement. For purposes of this Agreement, the
Executive shall be considered “permanently disabled”
when a qualified medical doctor mutually acceptable to the Company
and the Executive or the Executive’s personal representative
shall have certified in writing that the Executive has been unable,
because of a medically determinable physical or mental disability,
to perform substantially all of the Executive’s duties, with
or without a reasonable accommodation, for more than one hundred
eighty (180) calendar days measured from the last full day of work
(“
Disability
”);
(iv)
For
“Cause”
. The term “
Cause
”, as used herein, shall
mean:
(A)
Any willful
material breach of the terms of this Agreement, or of any other
written agreement with the Executive, by the Executive, which
breach is not cured by the Executive within thirty (30) days after
the Company provides the Executive with written notice specifying
the nature of such breach;
(B)
The
Executive’s material misappropriation of the Company’s
tangible or intangible property, or material and intentional breach
of the Confidentiality Agreement (provided, however, that for this
purpose, the Executive will not be deemed to have breached the
Confidentiality Agreement in connection with any disclosure made
pursuant to a court order, subpoena or other legal
obligation);
(C)
The
Executive’s material failure to comply with the Company
Policies or any other reasonable policies and/or directives of the
Board, which failure is not cured by the Executive within thirty
(30) days after the Company provides the Executive with written
notice specifying the nature of such failure;
(D)
The
Executive’s abuse of illegal drugs or any illegal substance,
or the Executive’s abuse of alcohol in any manner that
materially interferes with the performance of the Executive’s
duties under this Agreement;
(E)
Any dishonest or
illegal action (including, without limitation, embezzlement) by the
Executive which is detrimental to the interest and well-being of
the Company, including, without limitation, harm to its reputation;
or
(F)
The
Executive’s failure to disclose any conflict of interest
known to the Executive that the Executive may have with the Company
in a transaction between the Company and any third party which
failure is detrimental to the interest and well-being of the
Company.
(d)
Obligations upon
Termination
.
(i)
Upon the
termination of this Agreement and the Executive’s employment
with the Company pursuant to the expiration of the Term following
the Executive’s notice of non-renewal pursuant to Section 3,
by the Executive pursuant to Section 5(b)(i) (Voluntary
Resignation), or by the Company pursuant to Section 5(c)(ii)
(Death), (iii) (Disability) or (iv) (Cause), the Company shall have
no further obligations hereunder other than the payment of all
compensation and other benefits payable to the Executive (or his
estate or heirs) through the date of such termination in accordance
with the Company’s normal payroll cycle and terms of the
applicable benefit plans and programs in existence at the time the
Executive’s employment is terminated.
(ii)
Upon
termination of this Agreement and the Executive’s employment
with the Company by the Company pursuant to Section 5(c)(i)
(Without Cause), upon expiration of the Term following the
Company’s notice of non-renewal pursuant to Section 3, or by
the Executive pursuant to Section 5(b)(ii) (Good Reason), the
Executive shall be entitled to the following, with those benefits
described in Sections 5(d)(ii)(B), (C) and (D) specifically
conditioned upon Executive’s execution and nonrevocation of a
valid release under Section 6 and compliance with his obligations
under Section 7:
(A)
payment of all
compensation and other benefits payable to the Executive through
the date of such termination in accordance with the Company’s
normal payroll cycle and terms of the applicable benefit plans and
programs in existence at the time the Executive’s employment
is terminated;
(B)
payment of an
amount equal to twelve (12)
months of his then current Base
Salary (less applicable withholdings), payable in a lump sum on the
sixtieth (60
th
) day following the
date of the Executive’s separation from service (the
“
Severance Payment
Date
”);
(C)
a lump sum payment
in an amount equal to the Target Bonus for the fiscal year in which
such termination occurred, multiplied by a fraction, the numerator
of which is the number of days during which the Executive was
employed by the Company in the fiscal year of his termination and
the denominator of which is 365 (less applicable withholdings),
with such payment to be made on the Severance Payment
Date;
and
(D)
reimbursement for
premium payments the Executive makes under the Consolidated Budget
Reconciliation Act (“
COBRA
”) to continue the Executive
and, if applicable, the Executive’s family’s health
insurance coverage under the Company’s group health insurance
plan for twelve (12) months from the date of termination.
Reimbursements for COBRA premium payments shall begin on the
Severance Payment Date and shall be made as soon as possible
following the Executive’s submission to the Company of proof
of timely payments, but not later than thirty (30) days after the
Executive’s submission of proof of timely payments; provided,
however, all such claims for reimbursement shall be submitted by
the Executive and paid by the Company no later than fifteen (15)
months following the termination of the Executive’s
employment. Any obligation for the Company to make payments for
COBRA reimbursement under this Agreement shall immediately cease
when the Executive becomes eligible for health insurance from a
subsequent employer, and the Executive shall promptly notify the
Company of such subsequent eligibility. If the Executive desires
COBRA coverage, the Executive shall bear full responsibility for
applying for COBRA coverage and nothing herein shall constitute a
guarantee of COBRA benefits. Under no circumstances will the
Executive be entitled to a cash payment or other benefit in lieu of
reimbursements for the actual costs of premiums for COBRA
continuation hereunder. The amount of expenses eligible for
reimbursement during any calendar year shall not be affected by the
amount of expenses eligible for reimbursement in any other calendar
year.
6.
Release of Claims
.
Notwithstanding any provision of this Agreement to the contrary
(other than the last sentence of this Section 6), the
Company’s obligation to provide the payments and benefits
under Section 5(d)(ii)(B),(C) and (D) of this Agreement is
conditioned upon the Executive’s execution and non-revocation
of an enforceable release of claims and his compliance with his
obligations under Section 7 of this Agreement. If the Executive
chooses not to execute such a release, timely revokes his execution
of the release, or fails to comply with his obligations under
Section 7 of this Agreement, then the Company’s obligation to
compensate him ceases upon the termination of his employment except
as to amounts due at the time pursuant to Section 5(d)(ii)(A). The
Company shall provide the release of claims to the Executive within
seven (7) days of his separation from service, and the Executive
must execute it within the time period specified in the release
(which shall not be longer than forty five (45) days from the date
of receipt). Such release shall not be effective until any
applicable revocation period has expired.
7.
Confidential Information and
Competitive Business Activities
. [The Executive acknowledges
that by virtue of his employment and position with the Company, he
has or will have access to confidential information of the Company,
including valuable information about its business operations and
entities with which it does business in various locations, and has
developed or will develop relationships with parties with whom it
does business in various locations. The Executive also acknowledges
that the confidential information and competitive business
activities provisions set forth in the Employee Non-Disclosure,
Invention Assignment Agreement executed by the Executive, Effective
June 1, 2018 (the “
Confidentiality Agreement
”), are
reasonably necessary to protect the Company’s legitimate
business interests, are reasonable as to the time, territory and
scope of activities which are restricted, do not interfere with
public policy or public interest and are described with sufficient
accuracy and definiteness to enable him to understand the scope of
the restrictions imposed on him. The Executive acknowledges that
his failure to abide by the provisions set forth in the
Confidentiality Agreement would cause irreparable harm to the
Company for which legal remedies would be inadequate. Therefore, in
addition to any legal or other relief to which the Company may be
entitled by virtue of the Executive’s failure to abide by the
provisions set forth in the Confidentiality Agreement: (i) the
Company will be released of its obligations under this Agreement to
make any post-termination payments; (ii) the Company may seek legal
and equitable relief, including but not limited to preliminary and
permanent injunctive relief, for the Executive’s actual or
threatened failure to abide by these provisions; (iii) the
Executive will return all post-termination payments received
pursuant to this Agreement; and (iv) the Executive will indemnify
the Company for all reasonable and documented expenses, including
attorneys’ fees, incurred by it in successfully enforcing
these provisions. In the event that the Company exercises its right
to discontinue payments under this provision and/or the Executive
returns all post-termination payments received pursuant to this
Agreement, the Executive shall remain obligated to abide by the
provisions set forth in Section 3 in the Confidentiality
Agreement.
8.
Representations and
Warranties
.
(a)
The Executive
represents and warrants to the Company that the Executive’s
performance of this Agreement and as an employee of the Company
does not and will not breach any noncompetition agreement or any
agreement to keep in confidence proprietary information acquired by
the Executive in confidence or in trust prior to the Executive's
employment by the Company. The Executive represents and warrants to
the Company that the Executive has not entered into, and agrees not
to enter into, any agreement that conflicts with or violates this
Agreement.
(b)
The Executive
represents and warrants to the Company that the Executive has not
brought and shall not bring with the Executive to the Company, or
use in the performance of the Executive's responsibilities for the
Company, any materials or documents of a former employer which are
not generally available to the public or which did not belong to
the Executive prior to the Executive’s employment with the
Company, unless the Executive has obtained written authorization
from the former employer or other owner for their possession and
use and provided the Company with a copy thereof.
9.
Notices
. All notices, requests,
consents, approvals, and other communications to, upon, and between
the parties shall be in writing and shall be deemed to have been
given, delivered, made, and received when: (a) personally
delivered; (b) deposited for next day delivery by Federal Express,
or other similar overnight courier services; (c) transmitted via
telefacsimile or other similar device to the attention of the
Company’s Chief Financial Officer with receipt acknowledged;
or (d) three (3) days after being sent or mailed by certified mail,
postage prepaid and return receipt requested, addressed as
follows:
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If to
the Company:
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Tenax
Therapeutics, Inc.
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Attn:
Chief Financial Officer
One
Copley Parkway
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Suite
490
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Morrisville,
NC 27560
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If to
the Executive:
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Anthony
A. DiTonno
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1673
sugarloaf drive
San
Mateo CA 94403
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10.
Indemnification, Liability
Insurance
. The Company shall indemnify and hold the
Executive harmless to the fullest extent permitted by the laws of
the Company’s state of incorporation in effect at the time
against and in respect of any and all actions, suits, proceedings,
claims, demands, judgments, costs, expenses (including advancement
of reasonable attorney’s fees), losses, and damages resulting
from the Executive’s performance of the Executive’s
duties and obligations with the Company. The Executive will be
entitled to be covered, both during and, while potential liability
exists, by the insurance policies that the Company maintains
generally for the benefit of officers and directors of the Company
against all costs, charges and expenses incurred in connection with
any action, suit or proceeding to which the Executive may be made a
party by reason of being an officer or director of the Company in
the same amount and to the same extent as the Company covers its
other officers and directors. These obligations shall survive the
termination of the Executive’s employment with the
Company.
11.
Effect/Assignment
. This
Agreement shall be binding on and inure to the respective benefit
of the Company and its successors and assigns and the Executive and
his personal representatives. The Company shall require any
successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially
all of the business or assets of the Company, within fifteen (15)
days of such succession, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent as the
Company would be required to perform if no such succession had
taken place. The Executive may not assign this Agreement or
delegate his obligations hereunder. As used in this Agreement,
“Company” shall mean the Company and any such successor
which assumes and agrees to perform the duties and obligations of
the Company under this Agreement by operation of law or
otherwise.
12.
Entire Agreement
. Except as
expressly provided in this Agreement and except for the
Confidentiality Agreement, this Agreement: (i) supersedes all other
understandings and agreements, oral or written, between the parties
with respect to the subject matter of this Agreement; and (ii)
constitutes the sole agreement between the parties with respect to
this subject matter. Each party acknowledges that: (A) no
representations, inducements, promises or agreements, oral or
written, have been made by any party or by anyone acting on behalf
of any party, which are not embodied in this Agreement; and (B) no
agreement, statement or promise not contained in this Agreement
shall be valid. No change or modification of this Agreement shall
be valid or binding upon the parties unless such change or
modification is in writing and is signed by the
parties.
13.
Severability
. If a court of
competent jurisdiction holds that any provision or sub-part thereof
contained in this Agreement is invalid, illegal or unenforceable,
that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement.
14.
Amendment and Waiver
. No
provision of this Agreement, including the provisions of this
Section, may be amended, modified, deleted, or waived in any manner
except by a written agreement executed by the parties. Further, the
Company’s or the Executive’s waiver of any breach of a
provision of this Agreement shall not waive any subsequent breach
by the other party.
15.
Governing Law
. This Agreement
and the employment relationship created by it shall be governed by
North Carolina law without giving effect to North Carolina choice
of law provisions.
16.
Consent to Jurisdiction and
Venue
. Each of the parties agrees that any suit, action, or
proceeding arising out of this Agreement may be instituted against
it in the Superior Court of Wake County, North Carolina or in the
United States District Court for the Eastern District of North
Carolina (assuming that such court has subject matter jurisdiction
over such suit, action or proceeding). Each of the parties hereby
waives any objection that it may have to the venue of any such
suit, action, or proceeding, and each of the parties hereby
irrevocably consents to the personal jurisdiction of any such court
in any such suit, action, or proceeding.
17.
Counterparts
. This Agreement
may be executed in more than one counterpart, each of which shall
be deemed an original, and all of which shall be deemed a single
agreement.
18.
Headings
. The headings herein
are for convenience only and shall not affect the interpretation of
this Agreement.
19.
Taxes
.
(a)
Section 409A of the Internal Revenue
Code
.
(i)
Parties’
Intent
.
The
parties intend that the provisions of this Agreement comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the
“
Code
”), and the
regulations thereunder (collectively, “
Section 409A
”), or an exemption,
and all provisions of this Agreement shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties
under Section 409A. If any provision of this Agreement (or of any
award of compensation, including equity compensation or benefits)
would cause the Executive to incur any additional tax or interest
under Section 409A, the Company shall, upon the specific
request of the Executive, use its reasonable business efforts to in
good faith reform such provision to comply with Code
Section 409A;
provided
, that to the maximum
extent practicable, the original intent and economic benefit to the
Executive and the Company of the applicable provision shall be
maintained. The Company shall timely use its reasonable business
efforts to amend any plan or program in which the Executive
participates to bring it in compliance with Section
409A.
(ii)
Separation
from Service
. A termination of employment shall not be
deemed to have occurred for purposes of any provision of this
Agreement relating to the payment of any amounts or benefits upon
or following a termination of employment unless such termination
also constitutes a “Separation from Service” within the
meaning of Section 409A and, for purposes of any such provision of
this Agreement, references to a “termination,”
“termination of employment,” “separation from
service” or like terms shall mean Separation from
Service.
(iii)
Separate
Payments
. Each installment payment required under this
Agreement shall be considered a separate payment for purposes of
Section 409A.
(iv)
Delayed
Distribution to Specified Employees
. If the Company
determines in accordance with Sections 409A and 416(i) of the Code
and the regulations promulgated thereunder, in the Company’s
sole discretion, that the Executive is a specified employee of the
Company, determined in accordance with Section 409A, any payments
and/or benefits provided under this Agreement that constitute
”nonqualified deferred compensation” subject to Section
409A that are provided to Executive on account of his Separation
from Service shall not be provided until the day after 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 to Executive during
such six-month period shall be paid in a lump sum to Executive on
the Specified Employee Payment Date without interest and,
thereafter, any remaining
reimbursements shall be paid without delay in
accordance with their original schedule.
(b)
Withholdings
. The Company shall
withhold any amounts required from any payment due the Executive
hereunder in accordance with state and federal tax law
requirements.
[Signatures on following page]
IN WITNESS WHEREOF
, the parties have
executed this Employment Agreement as of the day and year first
above written.
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Tenax Therapeutics, Inc.
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By:
/s/Michael
Jebsen
Name:
Michael Jebsen
Title:
President/CFO
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Anthony A. DiTonno
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/s/ Tony
DiTonno
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[Signature Page to Executive Employment Agreement]
Exhibit A
[Nonstatutory] Stock Option Agreement
TENAX THERAPEUTICS INC.
2016 STOCK INCENTIVE PLAN
AWARD AGREEMENT
(Awarding Nonqualified Stock Option to Employees and
Contractors)
THIS
AWARD AGREEMENT (this “Agreement”) is made by and
between Tenax Therapeutics, Inc., a Delaware corporation (the
“Company”), and [
Insert
Name of Grantee]
(the “Optionee”) pursuant
to the provisions of the Tenax Therapeutics, Inc. 2016 Stock
Incentive Plan (the “Plan”), which is incorporated
herein by reference. Capitalized terms not defined in this
Agreement shall have the meanings given to them in the
Plan.
WITNESSETH:
WHEREAS, the
Optionee is providing, or has agreed to provide, services to the
Company, or Affiliate or a Subsidiary of the Company, as an
Employee or Third Party Service Provider; and
WHEREAS, the
Company considers it desirable and in its best interests that the
Optionee be given a personal stake in the Company’s growth,
development and financial success through the grant of an option to
purchase shares of the $0.0001 par value common stock of the
Company (the “Shares”).
NOW,
THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as
follows:
1.
Grant of Option
. Effective as
of
[Insert Grant
Date]
(the “Date of Grant”), the Company
hereby grants to the Optionee, an option (the “Option”)
to purchase
[Insert Number of
Shares]
Shares at the Option Price per Share of
[Insert Option
Price]
(the “Option Price”), subject to the
terms and conditions of the Plan and this Agreement. The future
value of such Shares is unknown and cannot be predicted with
certainty. If such Shares do not increase in value, the Option will
have no value.
2.
Term of Option
. Subject to
earlier termination under Section 4 hereof, the term of the
Option shall be ten (10) years (the
“Term”).
3.
Vesting Schedule
. The Option
shall vest and become exercisable as to
[Insert Vesting Schedule]
.
In no
event will any portion of the Option that is not vested and
exercisable at the time of the termination of the Optionee’s
service relationship become vested and exercisable following such
termination. Further, notwithstanding any provision of the Plan or
this Agreement to the contrary, in no event will any portion of the
Option that is not vested and exercisable immediately prior to the
time of a Sale of the Company become vested and exercisable because
of such event.
4.
Termination of Option
. Except
as otherwise provided herein, the Option shall terminate on the
earliest to occur of the following:
(a)
The expiration of
the Term of the Option.
(b)
The 91
st
day after
termination of the Optionee’s service relationship for any
reason other than one specified in (c) or
(d) below.
(c)
The 366
th
day after
termination of the Optionee’s service relationship as a
result of the Optionee’s death, or a disability, retirement
or redundancy that is approved by the Committee for this
purpose.
(d)
Termination of the
Optionee’s employment relationship by the Company for Cause,
or of the Optionee’s service relationship by the Company for
reasons that would constitute Cause if the Optionee were an
employee.
5.
Exercise of Option
.
The vested portion of the Option
may be exercised in whole or in part by delivery of an exercise
notice in the form attached as
Exhibit A
(the
“Exercise Notice”) which shall state the election to
exercise the Option and set forth the number of Shares with respect
to which the Option is being exercised. The Exercise Notice shall
be accompanied by payment of an amount equal to the aggregate
Option Price as to all exercised Shares. Payment of such amount
shall be by any of the following methods, or combination thereof,
at the election of the Optionee: (a) in cash or its
equivalent; (b) by tendering (either by actual delivery or
attestation) previously acquired Shares having an aggregate Fair
Market Value at the time of exercise equal to the Option Price;
(c) by a cashless (broker-assisted) exercise; or (d) any
other method approved or accepted by the Committee in its sole
discretion
.
The Option
shall be deemed to be exercised upon receipt by the Company of such
fully executed Exercise Notice accompanied by the aggregate Option
Price.
In
connection with such exercise, the Company shall have the right to
require that the Optionee make such provision, or furnish the
Company such authorization, as may be necessary or desirable so
that the Company may satisfy any obligation it has under applicable
income tax laws to withhold for income or other taxes due upon or
incident to such exercise. The Committee may, in its discretion,
permit such withholding obligation to be satisfied through the
withholding of Shares that would otherwise be delivered upon
exercise of the Option.
6.
Non-Transferability of Option
.
This Option may not be transferred in any manner otherwise than by
will or the laws of descent and distribution and, during the
Optionee’s lifetime, may only be exercised by the
Optionee.
7.
Restrictions on Shares
. This
Agreement shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or
stock exchange as may be required. The Optionee agrees to take all
steps the Committee determines are necessary to comply with all
applicable provisions of federal and state securities law in
exercising his or her rights under this Agreement. The Committee
may impose such restrictions on any Shares acquired pursuant to the
exercise of this Option as it deems advisable, including, without
limitation, minimum holding period requirements, restrictions under
applicable federal securities laws, under the requirements of any
stock exchange or market upon which such Shares are then listed
and/or traded, or under any blue sky or state securities laws
as may be applicable to such Shares.
8.
Forfeiture
.
Where an Optionee engages in certain competitive
activity or is terminated by the Company for Cause, his or her
Option and Shares are subject to forfeiture conditions under
Section 11.3 of the Plan.
Upon the occurrence of any of the
events set forth in Section 11.3 of the Plan, in addition to the
remedies provided in Section 11.3, the Company shall be entitled to
issue a stop transfer order and other documents implementing the
forfeiture to its transfer agent, the depository or any of its
nominees, and any other person with respect to this Option and the
Shares.
9.
Successors and Assigns
. The
Company may assign any of its rights under this Agreement to single
or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, the terms and
conditions of the Plan and this Agreement shall be binding upon the
Optionee and his or her heirs, executors, administrators,
successors and assigns.
10.
Interpretation
. Any dispute
regarding the interpretation of this Agreement shall be submitted
by the Optionee or by the Company forthwith to the Committee, which
shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Committee shall be final and
binding on all parties.
11.
Tax Consequences
. The exercise
of this Option and the subsequent disposition of the Shares may
cause the Optionee to be subject to federal, state and/or foreign
taxation. The Optionee should consult a tax advisor before
exercising this Option or disposing of the Shares purchased
hereunder.
12.
Acknowledgement
. The Optionee
acknowledges and agrees: (i) that the Plan is discretionary in
nature and may be suspended or terminated by the Company at any
time; (ii) that the grant of the Option does not create any
contractual or other right to receive future grants of options or
any right to continue an employment or other relationship with the
Company (for the vesting period or otherwise); (iii) that the
Optionee remains subject to discharge from such relationship to the
same extent as if the Option had not been granted; (iv) that
all determinations with respect to any such future grants,
including, but not limited to, when and on what terms they shall be
made, will be at the sole discretion of the Committee;
(v) that participation in the Plan is voluntary;
(vi) that the value of the Option is an extraordinary item of
compensation that is outside the scope of the Optionee’s
employment contract if any; and (vii) that the Option is not
part of normal or expected compensation for purposes of calculating
any severance, resignation, redundancy, end of service payments,
bonuses, long-service awards, pension or retirement benefits or
similar benefits.
13.
Employee Data Privacy
. As a
condition of the grant of this Option, the Optionee consents to the
collection, use and transfer of personal data as described in this
paragraph. The Optionee understands that the Company and its
Affiliates hold certain personal information about the Optionee,
including but not limited to the Optionee’s name, home
address and telephone number, date of birth, social security
number, salary, nationality, job title, shares of common stock or
directorships held in the Company, details of all Options or other
entitlement to shares of common stock awarded, cancelled,
exercised, vested, unvested or outstanding in the Optionee’s
favor for the purpose of managing and administering the Plan
(“Data”). The Optionee further understands that the
Company and/or its Affiliates will transfer Data amongst themselves
as necessary for the purposes of implementation, administration and
management of the Optionee’s participation in the Plan, and
that the Company and/or any of its Affiliates may each further
transfer Data to any third parties assisting the Company in the
implementation, administration and management of the Plans. The
Optionee understands that these recipients may be located in the
Optionee’s country of residence or elsewhere. The Optionee
authorizes them to receive, possess, use, retain and transfer Data
in electronic or other form, for the purposes of implementing,
administering and managing the Optionee’s participation in
the Plan, including any requisite transfer of such Data as may be
required for the administration of the Plan and/or the subsequent
holding shares of common stock on the Optionee’s behalf to a
broker or other third party with whom the shares acquired on
exercise may be deposited. The Optionee understands that the
Optionee may, at any time, view the Data, require any necessary
amendments to it or withdraw the consent herein in writing by
contacting the local human resources representative.
14.
Confidentiality
. The Optionee
agrees not to disclose the terms of this offer to anyone other than
the members of the Optionee’s immediately family or the
Optionee’s counsel or financial advisors and agrees to advise
such persons of the confidential nature of this offer.
15.
Entire Agreement; Governing
Law
. The Plan is incorporated herein by reference. The Plan
and this Agreement constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and
the Optionee with respect to the subject matter hereof, and may not
be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee. This
Agreement is governed by the internal substantive laws but not the
choice of law rules of Delaware.
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OPTIONEE
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TENAX THERAPEUTICS, INC.
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By:
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Signature
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Name:
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Title:
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Exhibit A
FORM OF
EXERCISE NOTICE FOR 2016 STOCK INCENTIVE PLAN
Tenax
Therapeutics, Inc.
One
Copley Parkway, Suite 490
Morrisville,
North Carolina 27560
Attention:
Stock
Plan Administrator
1.
Exercise of Option
. Effective
as of today,
,
20
, the
undersigned (the “Optionee”) hereby elects to exercise
the Optionee’s option (the “Option”) to
purchase
shares
of the Common Stock (the “Shares”) of Tenax
Therapeutics, Inc. (the “Company”) under and pursuant
to the Tenax Therapeutics, Inc. 2016 Stock Incentive Plan (the
“Plan”) and the Award Agreement with a grant date
of
,
20
(the
“Award”). The Grant Number of the Option
is
,
and the per share exercise price is $
.
2.
Delivery of Payment
. The
Optionee herewith delivers to the Company the aggregate exercise
price of the Option, as set forth in the Award, by means
of
(check
one)
:
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☐
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a check
in U.S. dollars made payable to Tenax Therapeutics, Inc. or bank
transfer;
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or
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(i) a
share certificate (or certificates) representing previously
acquired shares and (ii) a check in U.S. Dollars made payable to
Tenax Therapeutics, Inc. or bank transfer that, in combination,
have an aggregate value (the Fair Market Value of the shares
delivered plus the check or bank transfer amount) equal to the
aggregate exercise price of the Option.
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3.
Representations of Optionee
.
The Optionee acknowledges that the Optionee has received, read and
understood the Plan and the Award and agrees to abide by and be
bound by their terms and conditions. In making the decision to
exercise the option(s) the Optionee has relied upon his or her own
independent investigations or those made by his or her
representatives, if any (including professional, financial, tax,
legal and other advisors). The Optionee (and his or her
representatives, if any) has had an opportunity to review
information with respect to the Company, desires no further
additional information concerning the Company or its operations,
and deems such information reviewed adequate to evaluate the merits
and risks of the Optionee’s investment in the
Company.
The
Optionee acknowledges that the Company is relying upon each of the
above representations in connection with the exercise of the option
and the issuance of the underlying Shares.
4.
Rights as Shareholder
. Until
the issuance of the Shares (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent
of the Company), no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option. The Shares shall be
issued to the Optionee as soon as practicable after the Option is
exercised. No adjustment shall be made for a dividend or other
right for which the record date is prior to the date of issuance
except as provided in the Plan.
5.
Tax Consultation and
Withholding
. The Optionee understands that the Optionee may
suffer adverse tax consequences as a result of the Optionee’s
purchase or disposition of the Shares. The Optionee represents that
the Optionee has consulted with any tax consultants the Optionee
deems advisable in connection with the purchase or disposition of
the Shares and that the Optionee is not relying on the Company for
any tax advice. The Optionee further understands that the
Optionee’s purchase of the Shares may give rise to an
obligation on the part of the Company to withhold for income or
other taxes due and agrees to make a payment to the Company in the
amount necessary to allow the Company to satisfy any withholding
obligations.
6.
Restrictive Legends
. The
Optionee understands and agrees that the Company shall cause the
legends set forth below or legends substantially equivalent
thereto, to be placed upon any certificate(s) evidencing ownership
of the Shares together with any other legends that may be required
by the Company or by state or federal securities laws:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TENAX
THERAPEUTICS, INC. 2016 STOCK INCENTIVE PLAN, AS SUCH PLAN MAY BE
ALTERED, AMENDED, RESTATED OR MODIFIED FROM TIME TO TIME, AND ANY
TRANSFEREE OF THESE SECURITIES SHALL BE SUBJECT TO THE TERMS OF
SUCH PLAN. COPIES OF THE FOREGOING PLAN ARE MAINTAINED WITH THE
CORPORATE RECORDS OF THE ISSUER AND ARE AVAILABLE FOR INSPECTION AT
THE PRINCIPAL OFFICES OF THE ISSUER.
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO AN
AWARD AGREEMENT BETWEEN THE ISSUER AND THE HOLDER, AS SUCH
AGREEMENT MAY BE AMENDED, RESTATED OR MODIFIED FROM TIME TO TIME,
AND ANY TRANSFEREE OF THESE SECURITIES SHALL BE SUBJECT TO THE
TERMS OF SUCH AGREEMENT. COPIES OF THE FOREGOING AGREEMENT ARE
MAINTAINED WITH THE CORPORATE RECORDS OF THE ISSUER AND ARE
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF THE
ISSUER.
7.
Governing Law
. This Agreement
shall be governed by the internal substantive laws but not the
choice of law rules of Delaware.
8.
Entire Agreement
. The Plan and
Award are incorporated herein by reference. This Agreement, the
Plan, and the Award constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and
the Optionee with respect to the subject matter hereof, and may not
be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and the
Optionee.
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Submitted
by:
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Accepted
by:
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OPTIONEE
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TENAX THERAPEUTICS, INC.
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By:
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Signature
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Name:
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Name:
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Title:
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Date:
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