Full Press Release Details
Biosciences Corporation
This Amendment to Offer
Letter Agreement (this "Amendment") is entered into by and between AmpliPhi Biosciences Corporation (the
"Company") and M. Scott Salka (hereinafter "Employee") effective as of April
1, 2017 (the "Effective Date"), and as of the Effective Date amends the terms of the Offer Letter Agreement
entered into by and between the Company and Employee dated April 24, 2015 (the "Agreement").
pursuant to the Agreement, and as more fully set forth therein, Employee is eligible for certain severance benefits, including,
but not limited to, salary continuation payments at Employee's then-current base salary over a period of 12 months (the "Employee
Severance Benefits"), in the event of a termination of Employee's employment with the Company under certain
circumstances specified in the "At-Will Employment; Severance" paragraph of the Agreement (a "Qualifying
the Company has determined that it is in the best interests of the Company and its stockholders to amend the terms of the Agreement
to provide that Employee will not be eligible to receive the Employee Severance Benefits in connection with a Qualifying Termination
that occurs in connection with certain events, as described herein, and to provide Employee with certain compensation in exchange
for entering into this Amendment.
the mutual promises and covenants herein, the parties hereto, each intending to be legally bound, agree as follows:
Rights to Employee Severance Benefits. Employee agrees that, as of the Effective Date, Employee will not be
eligible to receive the Employee Severance Benefits in connection with a Qualifying Termination if and only if such Qualifying
Termination occurs in connection with a Wind-Down Event (defined below) and such Qualifying Termination occurs prior to the earlier
of (i) January 1, 2018 and (ii) such time as the Company's Board of Directors has determined that the Company's cash
and cash equivalents (exclusive in any event of cash invested in or allocated to subsidiaries or companies in which the Company
is a stockholder) are sufficient to fund (A) the Company's operations for at least the 12 months following such determination
and (B) the payment of all potential Company liabilities under all then-outstanding obligations related to accrued salaries and
wages, accrued vacation (and unused sick days to the extent payment for unused sick days must be paid following the applicable
employee's termination pursuant to applicable law or a contractual agreement with the Company or any of its subsidiaries),
potential severance benefit payment obligations, both to the Employee and other service providers of the Company or any of its
subsidiaries, including but not limited to the Employee Severance Benefits (the foregoing (A) and (B), collectively, the "Cash
Reserve Milestone"). As used herein, a "Wind-Down Event" will be deemed to occur if the
Company files for protection under bankruptcy or insolvency laws, makes an assignment for the benefit of creditors, appoints or
suffers appointment of a receiver, administrator, manager, trustee or like official over its property, is a party to any dissolution,
winding-up or liquidation or has any such petition filed against it. Nothing in this Amendment will limit Employee's right
to receive the Employee Severance Benefits under the Agreement in connection with a Qualifying Termination that occurs on or after
January 1, 2018. Nothing in this Amendment limits Employee's right to receive the Employee Severance Benefits under the Agreement
in connection with a Qualifying Termination that does not occur in connection with a Wind-Down Event.
Conversion to Debt. In the event of a Qualifying Termination that occurs in connection with a Wind-Down Event
prior to the earlier of January 1, 2018 or the achievement of the Cash Reserve Milestone, the Employee Severance Benefits will
be an ordinary, unsecured, non-priority debt obligation of the Company. Such debt obligation will be subordinated in right of payment
to the Company's obligations related to: (i) accrued salary and wages, accrued vacation (and unused sick days to the extent
payment for unused sick days must be paid following the applicable employee's termination pursuant to applicable law or a
contractual agreement with the Company or any of its subsidiaries), severance obligations to employees who are not executive officers,
and other compensatory payments to which employees and consultants are entitled to receive by law; (ii) fees and expenses of attorneys
and auditors; (iii) payments due to insurance providers; and (iv) any senior creditors, including banks, lending institutions or
other third parties for money borrowed.
Bonus Opportunity. In consideration of Employee's agreements pursuant to this Amendment, Employee shall
be eligible to receive the following bonus payments in connection with the following capital raising milestones if such milestones
occur during Employee's employment with the Company: (A) if the Company raises, after the date hereof and on or before May
31, 2017, at least $4,000,000 in aggregate gross proceeds from the sale of its equity securities in one or more Financing Transactions
(defined below), Employee shall be entitled to receive a lump-sum cash bonus payment (subject to applicable withholdings and payable
as soon as reasonably practicable but no later than June 16, 2017) in an amount equal to (x) 38.8% multiplied by (y) 3.5% multiplied
by (z) the gross proceeds raised by the Company from such Financing Transaction(s) after the date hereof and on or before May 31,
2017; and (B) if the Company raises, after the date hereof and on or before December 31, 2017, at least $10,000,000 in aggregate
gross proceeds from the sale of its equity securities in one or more Financing Transactions, Employee shall be entitled to receive
a lump-sum cash bonus payment (subject to applicable withholdings and payable as soon as reasonably practicable but no later than
January 16, 2018) in an amount equal to (x) 38.8% multiplied by (y) 2% multiplied by (z) the gross proceeds raised by the
Company from such Financing Transaction(s) after May 31, 2017 and on or before December 31, 2017. As used herein, a "Financing
Transaction" means any transaction involving the sale of the Company's equity or convertible debt securities
that is principally for capital raising purposes, but shall not include any investment by the Company's Chairman of
the Board as of the date of this Amendment (or any affiliated entity) in any existing or newly created subsidiary of the Company
located in Australia. A Financing Transaction will also not include (i) any equipment loan or leasing arrangement or real property
leasing arrangement or (ii) any sale of the Company's capital stock pursuant to equity incentive arrangements with employees
or directors of or consultants to the Company or any of its subsidiaries.
Stock Option. In consideration of Employee's agreements pursuant to this Amendment, Employee shall also
be eligible to receive a stock option (the "Option") under the Company's 2016 Equity Incentive
Plan (the "Plan") exercisable for 214,214 shares of the Company's common stock. The Option shall
be fully vested as of the date of grant, shall expire on the fourth anniversary of the date of grant, will have a post-separation
exercise period that extends until the fourth anniversary of the date of grant, and will be subject to the terms of the Plan, an
option grant notice and an option agreement. The exercise price of the Option will be determined in accordance with the terms of
Equity Awards; Section 280G. In the event (i) the Company terminates Employee's employment without Cause
(as defined in the Agreement) or (ii) Employee resigns his employment for Good Reason (as defined in the Agreement) and provided
in either case of (i) or (ii) such termination or resignation constitutes a "separation from service" (as defined under
Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder) (such termination or resignation,
an "Involuntary Termination"), and such Involuntary Termination occurs within one month prior to, or
twelve months following, a Change in Control (as defined in the Plan), the vesting of all of Employee's outstanding equity
awards that are subject to time-based vesting requirements shall accelerate in full such that all such equity awards shall be deemed
fully vested as of the date of such Involuntary Termination (or Change in Control, if later). Reference is made to
the provisions set forth on Exhibit A hereto with regard to Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), which are incorporated herein by reference.
Agreement. The Company and Employee agree that the Agreement is hereby amended by this Amendment as of the
Effective Date. Except as expressly provided herein, nothing in this Amendment shall be deemed to modify any terms of the Agreement.
This Amendment (including the Exhibit hereto) and the Agreement constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof.
Further Assurances. Employee agrees to execute and/or cause to be delivered to the Company such instruments
and other documents, and shall take such other actions, as the Company may reasonably request for the purpose of carrying out or
evidencing this Amendment.
Legal Advice. Employee acknowledges and represents that Employee has had the opportunity to consult with a
legal advisor in connection with this Amendment and that Employee is not relying upon the Company or its outside legal counsel
for any legal advice.
Governing Law. This Amendment shall be governed in all respects by the laws of the State of California, without
regard to that State's conflicts of laws principles.
Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument. This Amendment may also be executed and delivered by facsimile signature,
PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000 (e.g., www.docusign.com).
[Signature page follows]
Witness Whereof, this Amendment has been executed by the parties as of the date first above written and is effective
| AmpliPhi Biosciences Corporation | ||
| By: | /s/ Michael S. Perry | |
| Name: | Dr. Michael S. Perry | |
| Title: | Member of Board of Directors | |
| Employee | ||
| /s/ M. Scott Salka | ||
| M. Scott Salka |
If any payment or benefit
Employee will or may receive from the Company or otherwise, including the Severance Pay (as defined in the Agreement) and the benefits
set forth under Section 5 of this Amendment (a "280G Payment"), would (i) constitute a "parachute
payment" within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed
by Section 4999 of the Code (the "Excise Tax"), then any such 280G Payment (a "Payment")
shall be equal to the Reduced Amount. The "Reduced Amount" shall be either (x) the largest portion of