Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On
January 1, 2023, Vicapsys Life Sciences, Inc. (the “Company”) entered into that certain Employment Agreement (the “Pier
Agreement”), dated as of January 1, 2023, by and between the Company and Federico Pier, the Company’s Chief Executive Officer
and Executive Chairman of the Board.
Pursuant
to the terms of the Pier Agreement, the Company agreed to pay Mr. Pier an annual base salary of $250,000 for his services as Chief Executive
Officer. Mr. Pier’s base salary is subject to review annually by the Company’s Board of Directors (the “Board”)
and may be increased, but not decreased. Mr. Pier will not receive any compensation for his services as a member of the Board.
In
addition, Mr. Pier is eligible to receive an annual cash bonus of up to 100% of his annual base salary upon achievement of performance
objectives to be determined by the Board or its compensation committee in consultation with Mr. Pier.
Also,
Mr. Pier will have earned and will be paid a one-time cash bonus in a gross amount equal to $100,000 if either of the following triggering
events occurs during the Term (as hereinafter defined):
| ● | The
Company’s common stock is listed on The Nasdaq Stock Market or the New York Stock Exchange;
or |
| ● | The
Company secures and receives financing of at least $8 million. |
Pursuant
to the terms of the Pier Agreement, the Company also agreed to issue to Mr. Pier a restricted stock unit award containing the following
terms: Mr. Pier will receive shares of common stock of the Company (i) representing 1% of the Company’s fully diluted equity as
of the payment date (the “Initial Equity Payment”) if the Company achieves a market capitalization of at least $250 million
for 60 consecutive days during the term of the Pier Agreement (the “Initial Market Capitalization Target”); and (ii) representing
the difference between 2% of the Company’s fully diluted equity as of the payment date and the amount of Initial Equity Payment
(the “Subsequent Equity Payment”) and, together with Initial Equity Payment, “Equity Payments”) if the Company
achieves a market capitalization of at least $500 million for 60 consecutive days during the Term (the “Subsequent Market Capitalization
Target” and, together with Initial Market Capitalization Target, “Market Capitalization Targets”), such that Mr. Pier
has, in the aggregate, received shares of common stock of the Company representing 2% of the Company’s fully diluted equity as
of the date of payment of Subsequent Equity Payment.
Mr.
Pier is also eligible to receive additional equity-based compensation awards as the Company may grant from time to time.
The
Pier Agreement has a five-year term and will be automatically renewed for successive one-year periods until either party delivers a written
notice of non-renewal at least 30 days prior to the then-effective term (the “Term”); provided that the Term will terminate
prior to any such date (i) immediately upon Mr. Pier’s death or Disability (as defined in the Pier Agreement), (ii) on a date of
termination set forth in the Company’s written notice of termination for any reason (whether for Cause (as defined in the Pier
Agreement) or without Cause), or (iii) on a date of termination set forth in a written notice of Mr. Pier’s resignation.
If
the Term is terminated by the Company without Cause (other than as a result of Mr. Pier’s death or Disability) or by Mr. Pier for
Good Reason (as defined in the Pier Agreement), Mr. Pier will be entitled to receive, among other things:
| (i) | his
base salary through the date of termination; |
| (ii) | reimbursement
of reimbursable expenses incurred on or prior to the termination date in accordance with
the terms of the Pier Agreement; |
| (iii) | vested
or accrued compensation and benefits under any Company compensation plan, subject to the
terms and conditions of such plans or agreements (“Accrued Compensation”); |
| (iv) | an
amount equal to 12 months of Mr. Pier’s base salary; |
| (v) | any
annual bonus previously earned by, but not yet paid to, Mr. Pier, in respect of the performance
year that ended on or prior to the termination date (the “Prior Bonus”); |
| (vi) | an
annual bonus for the performance year in which the termination of employment occurs in an
amount equal to the annual bonus that would have been payable on actual performance with
respect to the year of termination in the absence of Mr. Pier’s termination multiplied
by a fraction, the numerator of which is the number of days that Mr. Pier remained employed
during the applicable performance year, and the denominator of which is 365 (the “Pro
Rata Bonus”); and |
| (vii) | if
Mr. Pier’s employment is terminated within 12 months prior to the date the Company
achieves any Market Capitalization Target, then, in each case, Mr. Pier will be deemed to
have remained employed through the date of achievement of such Market Capitalization Target
and will be entitled to receive the applicable Equity Payment pursuant to the terms of the
Pier Agreement (“Equity Bonus”). |
If
the Term is terminated (x) by the Company for Cause, (y) by Mr. Pier’s resignation without Good Reason, or (z) due to Mr. Pier’s
death, Disability, then Mr. Pier will be entitled to receive only the Accrued Compensation, and Mr. Pier will not be entitled to any
other salary, bonuses, benefits or other compensation after termination, except as otherwise expressly required under applicable law.
Notwithstanding the immediately prior sentence, if the Term is terminated due to Mr. Pier’s death or Disability, then Mr. Pier
(or Mr. Pier’s estate, as applicable) will also be entitled to receive (i) the Prior Bonus, (ii) the Pro Rata Bonus, and (iii)
the Equity Benefit.
The
Pier Agreement contains representations, warranties and covenants customary for an agreement of this type.
The
above description of the Pier Agreement is qualified in its entirety by reference to the complete text of the Pier Agreement, a copy
of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.