EXHIBIT 10.17
EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“Agreement”) is made as of the 18th day of February,
2009, by and between ImmunoCellular Therapeutics, Ltd., a Delaware
corporation (the “Corporation”), and Dr. Manish
Singh (hereinafter called “Executive”).
W I T N E S S E T
H:
WHEREAS, the Corporation previously
employed Executive as its President and Chief Executive Officer
under an Employment Agreement dated as of February 18, 2008
(he “Prior Agreement”);
WHEREAS, the Corporation desires to
continue to employ Executive as its President and Chief Executive
Officer under a new employment pursuant to the terms of this
Agreement, and Executive is willing to accept such employment on
the terms and subject to the conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of
the mutual covenants hereinafter set forth, the parties hereto
agree as follows:
1. Employment by Corporation
. The Corporation hereby agrees to employ Executive to continue to
perform the duties on behalf of the Corporation as the
Corporation’s full-time President and Chief Executive Officer
of the Corporation. As President and Chief Executive Officer,
Executive will report to the Corporation’s Chairman of the
Board, and shall have such duties consistent with that of a
President and Chief Executive Officer that may from time to time be
designated or assigned to Executive pursuant to the directives of
the Corporation’s Board of Directors (the
“Board”), including without limitation the overseeing
and implementation of the Corporation’s business plan as
adopted by the Board. Executive will perform his duties under this
Agreement at the Corporation’s corporate headquarters in the
metropolitan Los Angeles area, with such office currently
contemplated to be in the Woodland Hills, California area, or at
such other location as shall be mutually agreed upon by the
Corporation and Executive; and he will do such traveling as may be
required of him in the performance of his duties as the President
and Chief Executive Officer. The Corporation will use its
commercially reasonable efforts to have Executive serve as a member
of the Board during the term of this Agreement.
2. Executive’s Acceptance
of Employment . Executive hereby accepts such employment and
agrees that throughout the period of his employment hereunder: he
will devote his full time, attention, knowledge and skills,
faithfully, diligently and to the best of his ability, in
furtherance of the business of the Corporation, and he will perform
the duties assigned to him pursuant to Section 1 hereof,
subject, at all times, to the direction and control of the
Board.
Executive shall at all times be
subject to, observe and carry out such reasonable rules,
regulations, policies, directions and restrictions as the
Corporation shall from time to time establish. During the period of
his employment by the Corporation, Executive agrees to be bound by
the Corporation’s Code of Ethics and any amendments adopted
thereto, copies of which Executive hereby
acknowledges he has received and read, and
Executive agrees that he shall not, without the prior written
approval of the Chairman of the Board, directly or indirectly,
accept employment or compensation from or perform services of any
nature for, any business enterprise other than the Corporation,
other than as explicitly set forth herein.
3. Term . Executive shall be
employed for a term of one year commencing on February 18,
2009 (the “Commencement Date”), and ending on
February 17, 2010 unless his employment is terminated prior
thereto pursuant to the provisions hereof. The term of this
Agreement may be extended for an additional year, if both the
Corporation and the Executive deliver a written extension notice to
each other no later than the 60th calendar day prior to the
expiration of the term of this Agreement. This Agreement shall
automatically expire on February 17, 2010 and shall not be
extended or renewed except in a writing signed by an authorized
officer of the Corporation following approval by the Board.
Executive hereby acknowledges and agrees that, except in the case
of the Corporation and Executive agreeing in writing to extend the
term of the Agreement beyond the expiration date of this Agreement,
his employment by the Corporation, if any, beyond the expiration
date of this Agreement shall be terminable by either party at will
and shall not, under any circumstances, be deemed to expressly or
impliedly renew the terms of this Agreement.
4. Compensation/Benefits
.
4.1 The Corporation will pay to
Executive as compensation for his services hereunder an initial
base salary of $250,000 per annum, payable in equal biweekly
installments. In addition, the Board of Directors of the
Corporation shall annually review Executive’s performance and
base salary to determine whether an increase in the amount thereof
is warranted. Executive acknowledges that he has been paid by the
Corporation all amounts owing under the Prior Agreement through the
date hereof.
4.2 The Corporation also shall pay
Executive lump sum cash milestone bonuses of (i) $50,000 if
during the term of this Agreement the Corporation completes a
financing, a strategic alliance or a merger or acquisition (each of
these a “Liquidity Event”) that generates at least
$2,500,000 of net proceeds (after commissions) for the Corporation
(the merger or acquisition proceeds for purposes of this
Section 4.2 to be calculated based on the value of the net
proceeds (after commissions) received or paid by the Corporation),
(ii) $100,000 if during the term of this Agreement a Liquidity
Event that generates at least $5,000,000 of net proceeds (after
commissions) for the Corporation and (iii) $200,000 if during
the term of this Agreement a Liquidity Event that generates at
least $10,000,000 of net proceeds (after commissions) for the
Corporation. Only one of the foregoing milestone bonuses shall be
paid for each Liquidity Event (i.e., a Liquidity Event valued at
$8,000,000 results in a $100,000 bonus rather than a $150,000
bonus), and the total bonuses payable under this Section 4.2
shall not exceed $200,000. Any Liquidity Event shall be undertaken
and the terms of such Liquidity Event shall be at the discretion of
the Board. The bonuses, if any, shall be paid to Executive
immediately following the Corporation’s or its
securityholders’ receipt of the Liquidity Event proceeds or
payment of the merger consideration by the Corporation where it is
the survivor in the Liquidity Event.
2
4.3 The Corporation shall grant the
Executive on February 18, 2009 under the Corporation’s
2006 Equity Incentive Plan (the “Plan”) a nonqualified
stock option (the “Option”) to purchase 700,000 shares
of the Corporation’s common stock (“Common
Stock”) having an exercise price per share equal to the
closing market price on the date of grant and having a term of
seven years from the date of grant. The option shall vest
(i) as to 300,000 shares in twelve equal monthly
installments of 25,000 shares each over the twelve month period
from and immediately following the grant date, (ii) as
to 200,000 shares if the Corporation achieves during term of
this Agreement either (a) a volume weighted average trading
price for the Common Stock of greater than $1.00 for any 30-day
period during the term of this Agreement on average daily trading
volume of at least 10,000 shares, or (b) working capital at
end of the term of this Agreement of at least $5,000,000; and
(iii) as to 200,000 shares if the Corporation achieves during
term of this Agreement either (a) a volume weighted average
trading price for the Common Stock of greater than $1.50 for any
30-day period during the term of this Agreement on average daily
trading volume of at least 10,000 shares or (b) working
capital at end of the term of this Agreement of at least
$8,000,000.
The Option will be exercisable
within the seven year term of the option during the period that
Executive provides services to the Corporation and for 24 months
after termination for any reason except termination for cause by
the Corporation, provided that such exercise is effected within the
seven-year term of the option. In the event of a Corporate
Transaction (as such term is defined in the Plan), vesting of the
Option (and any other options granted to Executive) shall be
governed by the provisions contained in the Corporation’s
standard stock option agreement under the Plan for the
Corporation’s officers and directors, except that the portion
of the Option that is to vest in monthly installments will fully
vest if the Corporation is not the surviving entity in the
Corporate Transaction. The Option will have such other terms and
conditions as are included in the Corporation’s standard
stock option agreement under the Plan. If the term of this
Agreement is extended beyond February 17, 2010, or if
Executive’s employment hereunder continues at-will beyond
February 17, 2010, the Board of Directors of the Corporation
shall review the aggregate number of stock options granted to the
Executive promptly following such date (and thereafter not less
frequently than annually) in order to determine whether an increase
in the number thereof is warranted. Any such option shall have
substantially the same terms and conditions as the Option
contemplated hereunder. Within thirty (30) days following the
grant of the Option to Executive, the Corporation shall file with
the U.S. Securities and Exchange Commission a registration
statement on Form S-8 covering the shares of the
Corporation’s common stock issuable pursuant to any options
issued to Executive and then-outstanding, to the extent the shares
so issuable are not covered by an existing Form S-8 registration
statement.
5. Business Expenses . The
Corporation will promptly reimburse Executive for all business
expenses incurred by Executive in connection with the business of
the Corporation in accordance with the Corporation’s policy
regarding the nature and amount of expenses and the maintenance and
submission of receipts and records necessary for the Corporation to
document them as proper business expenses.
3
6. Vacation . In addition to
holidays observed by the Corporation, Executive shall be entitled
to paid vacation of three (3) weeks per year or such greater
amount of vacation as is approved by the Chairman of the Board. Any
such vacations are to be taken at times mutually agreeable to
Executive and the Chairman of the Board. Executive shall not be
entitled to accrue more than six (6) weeks of accrued vacation
time at any given time. In the event that Executive has accrued the
maximum of six (6) weeks accrued and unused vacation time,
Executive shall cease accruing further vacation time until such
time as Executive’s accrued and unused vacation time is less
than such maximum amount.
7. Benefits . Executive shall
be entitled to all rights and benefits for which he shall be
eligible under any benefit or other plans (including, without
limitation, dental, medical, medical reimbursement and hospital
plans, pension plans, employee stock purchase plans, profit sharing
plans, bonus plans and other so-called “fringe”
benefits) as the Corporation shall make available to its executive
officers from time to time.
Executive will be offered
participation in a 401K plan and the Corporation will make a
minimum match of base salary to meet the safe harbor provisions of
the Internal Revenue Service (but not to exceed 3-4% of base
salary).
8. Termination .
8.1 In addition to all other rights
and remedies which the parties may have under applicable law, the
Corporation may terminate this Agreement and the services of
Executive, effective upon the occurrence of any of the following
events, any of which shall constitute a termination for
“cause” under this Agreement: (i) a failure by
Executive to perform any of his material obligations under this
Agreement; (ii) the death of Executive or his disability
resulting in his inability to perform his reasonable duties
assigned hereunder for a period of three consecutive months;
(iii) Executive’s theft, dishonesty, or falsification of
any Corporation documents or records; (iv) Executive’s
improper use or disclosure of the Corporation’s confidential
or proprietary information; or (v) Executive’s
conviction (including any plea of guilty or nolo contendere) of any
criminal act which impairs Executive’s ability to perform his
or her duties hereunder or which in the Board’s judgment may
materially damage the business or reputation of the Corporation;
provided, however, that prior to termination for cause arising
under clause (i), Executive shall have a period of ten
(10) days after written notice from Corporation to cure the
event or grounds constituting such cause. Any notice of termination
provided by Corporation to Executive under this Section 8
shall identify the events or conduct constituting the grounds for
termination with sufficient specificity so as to enable Executive
to take steps to cure the same if such default is a failure by
Executive to perform any of his material obligations under this
Agreement. In the event Corporation terminates Executive for cause,
(i) Executive shall be entitled as of the termination date to
no further base salary other than such portion of Executive’s
base salary as shall have accrued but remain unpaid as of the
termination date, which shall be due immediately upon termination,
(ii) Executive shall be entitled to receive payment of any
earned but unpaid bonus, as well as any expense reimbursement
amounts owed by the Corporation to the Executive through the date
of termination and (iii) any then unexercised but outstanding
stock options granted to Executive shall be cancelled. The
Corporation shall have no further obligations to Executive under
this Agreement.
4
8.2 The Corporation may terminate
Executive without cause upon sixty (60) days written notice
delivered to Executive. In the event the Corporation terminates
Executive’s employment without cause (including a failure by
the Corporation upon the expiration of the original term of this
Agreement to extend the term of Executive’s employment for an
additional one year beginning February 18, 2010) all of the
following will apply: (i) immediately upon termination, the
Corporation will pay to Executive any base salary as shall have
accrued but remain unpaid as of the termination date, any earned
but unpaid bonus and any expense reimbursement amounts owed by the
Corporation to the Executive through the date of termination;
(ii) immediately upon termination, the Corporation will pay to
Executive severance compensation in a lump sum cash payment equal
to Executive’s then effective base salary for a period of six
(6) months; (iii) any stock options granted to Executive,
to the extent vested, will be retained by the Executive and will be
exercisable as detailed in Section 4.3 above, the Plan and
related stock option agreement (which shall reflect the terms set
forth in Section 4.3 above); and (iv) the vesting of an
additional number of shares subject to all options granted to
Executive equal to fifty percent (50%) of all such shares
subject to such options that have not already vested shall
immedi
