Offer Letter and Employment Agreement by and between the Registrant and Sunil Agarwal, M.D., dated as of May 20, 2019
SANA BIOTECHNOLOGY, INC.
1616 Eastlake Avenue East, Suite 360
Seattle, Washington 98102
Dr. Sunil Agarwal
Re: Employment Terms
Sana Biotechnology, Inc. (the Company), is pleased to offer you fulltime employment in the exempt position of EVP, Chief Development Officer, effective as of September 4, 2018 (the date you actually commenced employment, your Commencement Date), in which you will be responsible for such duties as are normally associated with such position or other duties of at least equivalent level as determined by the Chief Executive Officer of the Company. You will report directly to Steven Harr, the Chief Executive Officer of the Company, or such other senior officer as the Company may designate, and will be headquartered in our South San Francisco offices, or such other location as the Company may designate, except for such reasonable travel as may be necessary to fulfill your responsibilities. In the course of your employment with Company, you will be subject to and required to comply with all company policies, and applicable laws and regulations.
You will be paid a base salary at the monthly rate of $33,333.33 (subject to required tax withholding and other authorized deductions), equivalent to $400,000.00 on an annualized basis. Your base salary will be payable in accordance with the Companys standard payroll policies and subject to adjustment pursuant to the Companys policies as in effect from time to time.
In addition to your base salary, you will be eligible for an annual cash bonus, at the discretion of the Board of Directors of the Company (the Board). Your target annual bonus shall be 40% of your base salary, but the actual amount of your annual bonus may be more or less (and may equal zero). Any annual bonus awarded to you shall be paid within two and a half months following the year to which the annual bonus relates and will be contingent upon your continued employment through the applicable payment date. You hereby acknowledge and agree that nothing contained herein confers upon you any right to an annual bonus in any year, and that whether the Company pays you an annual bonus and the amount of any such annual bonus will be determined by the Company in its sole discretion.
In contemplation of you entering into this offer letter, on July 23, 2018, the Company issued you 6,440,000 shares (on a post-split basis) of the Companys common stock (the Restricted Shares), all of which are, initially, subject to a risk of forfeiture in the event you terminate employment with the Company. The Restricted Shares will vest, and the risk of forfeiture thereon lapse, in respect of 25% of the total number of Restricted Shares on the first anniversary of July 30, 2018 and 1/48th of the total number of Restricted Shares will vest, and the
risk of forfeiture thereon lapse, on each monthly anniversary thereafter, in each case, subject to your continued employment through the vesting date unless otherwise provided herein. The Restricted Shares remain subject to the restricted stock agreement entered into between you and the Company, dated July 27, 2018.
You will be eligible to receive future stock options and other equity awards in the discretion of the Board.
You will be eligible to participate in all of the employee benefits and benefit plans that the Company generally makes available to its regular fulltime employees. You will be eligible for paid time off, vacation and/or paid sick leave in accordance with applicable law and Company policy.
The Company requires that, as a full-time employee, you devote your full business time, attention, skill, and efforts to the tasks and duties of your position as assigned by the Company. If you wish to request consent to provide services (for any or no form of compensation) to any other person or business entity while employed by the Company, please discuss that with me in advance of accepting another position.
As a condition of employment, you will be required (1) to sign and comply with an At-Will Employment Agreement, a copy of which is attached hereto as Exhibit A, which, among other things, prohibits unauthorized use or disclosure of Company proprietary information; (2) to sign and return a satisfactory I-9 Immigration form attached hereto as Exhibit B and provide sufficient documentation establishing your employment eligibility in the United States of America (enclosed is a list of acceptable INS Form I-9 documentation); and (3) to provide satisfactory proof of your identity as required by U.S. law.
By signing below, you represent that your performance of services to the Company will not violate any duty which you may have to any other person or entity (such as a present or former employer), including obligations concerning providing services (whether or not competitive) to others, confidentiality of proprietary information and assignment of inventions, ideas, patents or copyrights, and you agree that you will not do anything in the performance of services hereunder that would violate any such duty.
Notwithstanding any of the above, your employment with the Company is at will. This means that it is not for any specified period of time and can be terminated by you or by the Company at any time, with or without advance notice, and for any or no particular reason or cause. It also means that your job duties, title and responsibility and reporting level, work schedule, compensation and benefits, as well as the Companys personnel policies and procedures, may be changed with prospective effect, with or without notice, at any time in the sole discretion of the Company.
Without limiting the foregoing, if at any time other than during a Change in Control Period (as defined below) your employment with the Company is terminated by the Company without Cause (other than due to your death or disability) or you resign for Good Reason (each, as defined herein) and you deliver to the Company a general release of all claims against the Company and its affiliates in a form reasonably acceptable to the Company (a Release) that becomes effective and irrevocable within 60 days following such termination of employment, then you shall be
entitled to receive (i) continuing payments of severance pay (less applicable withholding taxes) for a period of nine (9) months to be paid periodically in accordance with the Companys normal payroll policies at a rate equal to the sum of your monthly base salary rate and one-twelfth of your target annual bonus, in each case as in effect immediately prior to your termination (but without taking into account any reduction of your base salary or target annual bonus in breach of this letter), less applicable withholdings, with such installments to commence on the first payroll date following the date the Release becomes effective and irrevocable, with the first installment to include any amount that would have been paid had the Release been effective and irrevocable on your termination date and (ii) direct payment or reimbursement for premiums for continued health, vision and dental benefit coverage through COBRA for you, your spouse and dependents at the same level of coverage as in effect for you on the day immediately preceding the day of termination of employment for a period ending on the earlier of (a) nine (9) months after the date of termination of employment and (b) the date you are eligible to receive health, vision and dental benefits through a new employer. In addition, concurrent with the termination of your employment with the Company, you may (at the Companys sole discretion) be provided the opportunity to enter into a consulting agreement (the Consulting Agreement) with the Company with a nine (9) month term (the Consulting Term, and the last day of the Consulting Term, the Final Consulting Date), which would: (x) provide for annual consulting fees equal to your annual salary as in effect on the date of your termination of your employment, (y) require that you provide, or be available to provide, services to the Company in your areas of expertise on an exclusive basis within the Companys industry during the Consulting Term, and (z) provide that the vesting (and lapse of any repurchase or forfeiture restrictions) of each equity award held by you will be accelerated effective as of the date of your employment termination in respect of that number of shares of Company common stock that would have vested (and repurchase or forfeiture restrictions lapsed) had you remained employed for the nine (9) months immediately following your employment termination date and (iv) each stock option held by you that is vested on your employment termination date (after giving effect to any accelerated vesting and lapse of repurchase or forfeiture restrictions provided in connection with your termination of employment) will remain exercisable until the earlier of 90 days after the Final Consulting Date or the original expiration date thereof. All other terms and conditions of the Consulting Agreement will be mutually agreed between you and the Company.
Further notwithstanding the foregoing, if at any time during a Change in Control Period your employment with the Company is terminated by the Company without Cause (other than due to your death or disability) or you resign for Good Reason and you deliver to the Company a Release that becomes effective and irrevocable within 60 days following such termination of employment, then, in lieu of the benefits provided in the preceding paragraph, you shall be entitled to receive (i) your base salary at the rate in effect immediately prior to your date of termination during the period of time commencing on the termination date and ending on the twelve (12) month anniversary of your date of termination plus your target annual bonus, paid in a single cash lump sum, less applicable withholdings, on the first payroll date following the date the Release becomes effective and irrevocable, with the first installment to include any amount that would have been paid had the Release been effective and irrevocable on your termination date, (ii) direct payment or reimbursement for up to twelve (12) months of premiums for continued health, vision and dental benefit coverage through COBRA for you, your spouse and dependents at the same level of coverage as in effect for you on the day immediately preceding the day of termination of
employment for a period ending on the earlier of (a) twelve (12) months after the date of termination of employment and (b) the date you are eligible to receive health, vision and dental benefits through a new employer, (iii) the vesting (and lapse of any repurchase or forefeiture restrictions) of each equity award held by you will be accelerated in respect of all of the shares of Company common stock subject thereto effective immediately prior to the Change in Control, and (iv) each stock option held by you that is vested on your termination date (after giving effect to any accelerated vesting provided in connection with your termination of employment) will remain exercisable until the earlier of the 90 days after your termination date or the original expiration date thereof.
The Release referenced herein will not will not waive any of your rights, or obligations of the Company, regarding: (1) any right to indemnification and/or contribution, advancement or payment of related expenses that you may have pursuant to the Companys Bylaws, Certificate of Incorporation or other organizing documents, under any written indemnification or other agreement between the parties, and/or under applicable law; (2) any rights you may have to insurance coverage under any directors and officers liability insurance, other insurance policies of the Company, COBRA or any similar state law; (3) any claims for workers compensation, state disability or unemployment insurance benefits, or any other claims that cannot be released as a matter of applicable law; (4) rights to any vested benefits under any equity, compensation or other employee benefit plan or agreement with the Company; (5) rights to any applicable severance benefits; (6) your rights as a stockholder of the Company, if applicable, and (7) any claims arising after the date you sign the Release.
For purposes of this offer letter, the term Cause means: (i) a willful act of dishonesty made by you in connection with your responsibilities as an employee; (ii) your conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or a material violation of federal or state law by you, any of which that the Board reasonably determines in good faith has had or will have a material detrimental effect on the Companys reputation or business; (iii) your willful and material unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other party to whom you owe an obligation of nondisclosure as a result of your relationship with the Company; (iv) your willful and material breach of any obligations under any written agreement or covenant with the Company; or (v) your continued substantial failure to perform your employment duties (other than as a result of your physical or mental incapacity). No termination for Cause under (iv) or (v) shall be effectuated until after you have received a written demand of performance from the CEO that specifically sets forth the factual basis for the CEOs determination that you have not substantially performed your duties and have failed to cure such non-performance to the CEOs reasonable satisfaction within thirty (30) business days after receiving such notice. For purposes of this definition, no act or failure to act shall be considered willful unless it is done in bad faith and without reasonable intent that the act or failure to act was in the best interest of the Company. Any act, or failure to act, based upon authority or instructions given to you pursuant to a resolution duly adopted by the Board or based on the advice of counsel for the Company will be conclusively presumed to be done or omitted to be done by you in good faith and in the best interest of the Company.
For purposes of this offer letter, the term Good Reason means your resignation within 30 days following expiration of any Cure Period (as defined below) following the occurrence of one or more of the following, without your written consent: (i) a material reduction in your base salary or target annual bonus; (ii) a material diminution of your title, duties, responsibilities or reporting lines; (iii) a change in the principal location of your employment of more than 50 miles; or (iv) a directive or requirement to engage in any conduct in conflict with professional medical ethics or obligations or otherwise in violation of any law or regulation applicable to the Companys business. No event will be considered Good Reason unless (a) you have given written notice to the Company of your intention to terminate your employment for Good Reason, describing the grounds for such action, no later than 90 days after the first occurrence of such circumstances, (b) you have provided the Company with at least 30 days in which to cure the circumstances (the Cure Period), and (c) if the Company is not successful in curing the circumstance, you end your employment within thirty days after the end of the Cure Period.
For purposes of this offer letter, the term Change in Control shall have the meaning ascribed such term in the Companys 2018 Equity Incentive Plan, provided, that such event constitutes a change in control event within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the Code).
For purposes of this offer letter, the term Change in Control Period shall mean the period commencing three (3) months prior to a Change in Control and ending twelve (12) months after the Change in Control.
No amount deemed deferred compensation subject to Section 409A of the Code shall be payable pursuant to this offer letter unless your termination of employment constitutes a separation from service with the Company within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the Department of Treasury regulations and other guidance promulgated thereunder. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), your right to receive any installment payments under this offer letter shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment. To the extent that any reimbursements payable pursuant to this offer letter are subject to the provisions of Section 409A of the Code, any such reimbursements payable to you pursuant to this offer letter shall be paid to you no later than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and your right to reimbursement under this offer letter will not be subject to liquidation or exchange for another benefit. If either you or the Company reasonably determines that any payment or benefit provided to you will violate Section 409A, you and the Company will use best efforts to restructure the payment in a manner that is either exempt from or compliant with Section 409A. You and the Company will execute any and all amendments to this agreement as may be necessary to ensure compliance with the distribution provisions of Section 409A in an effort to avoid or minimize, to the extent allowable by law, the tax (and any interest or penalties thereon) associated with Section 409A. If it is determined that a payment under this agreement was (or may be) made in violation of Section 409A, the Company will cooperate reasonably with any effort by you to mitigate the tax consequences of such violation, including cooperation with your participation in any IRS voluntary compliance program or other correction procedure under Section 409A that may be available to you.
You are not required to seek other employment or otherwise mitigate the value of any severance benefits contemplated by this offer letter, nor will any such benefits be reduced by any earnings or benefits that you may receive from any other source, except as otherwise expressly set forth above with respect to continued group life, health, vision and dental benefits.
In addition to any indemnification provided by the Companys organizational documents, the Company will enter into an indemnification agreement with you as an officer in the form used for other officers.
If you accept this offer, this letter and any agreements referenced herein, including the At-Will Employment Agreement, shall constitute the complete agreement between you and Company with respect to the terms and conditions of your employment and supersedes any prior or contemporaneous representations (whether oral or written) as to such matters. In the event of any conflict between any of the terms in this letter and the terms of any other agreement between the parties, the terms of this letter will control. The terms of this letter will inure to the benefit of, be binding on and enforceable by the successors, heirs and assigns of the parties. The Company will require any successors or assigns to expressly assume and agree to perform this letter in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place.
This offer letter shall be interpreted and construed in accordance with the laws of the State of California without regard to any conflicts of laws principles. Except as otherwise expressly provided herein, the terms of this letterincluding the at-will nature of your employment, may not be changed, except in a subsequent letter or written agreement, signed by you and the Chief Executive Officer of the Company.
(Signature Page Follows)
Please sign and date this letter and the At-Will Employment Agreement, and return it to me by email at ***@*** by May 14, 2019 if you wish to accept employment at the Company under the terms described above, after which time this offer of employment will expire. If you accept our offer, we would like you to commence your employment with us as soon as practicable.
If you have any questions, regarding this letter or employment with the Company, please feel free to contact me by phone at ###-###-#### or by email at ***@***. We look forward to your favorable reply and to a productive and enjoyable work relationship.
|SANA BIOTECHNOLOGY, INC.|
|By:||/s/ Robin Andrulevich|
|Title:||Chief People Officer|
|/s/ Sunil Agarwal|
|May 14, 2019|
SANA BIOTECHNOLOGY, INC.
AT-WILL EMPLOYEE AGREEMENT
As a condition of my employment with Sana Biotechnology, Inc. (the Company), and in consideration of my employment with the Company and my receipt of the compensation paid to me by the Company now and in the future, I agree to the following:
|SANA BIOTECHNOLOGY, INC.||EMPLOYEE|
|By: /s/ Robin Andrulevich||/s/ Sunil Agarwal|
|Title: Chief People Officer||Print Name: Sunil Agarwal|
|Date: May 20, 2019||Date: May 14, 2019|