UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
General Release and Severance Agreement with Teofilo Raad
On July 15, 2024, the Board of Directors (the “Board”) of Pulmatrix, Inc. (the “Company”) approved a General Release and Severance Agreement (the “Raad Severance Agreement”), by and between the Company and Teofilo Raad, dated as of July 19, 2024, and effective as of the same date (the “Separation Date”). Effective as of the Separation Date, Mr. Raad’s employment with the Company shall cease and Mr. Raad shall relinquish all positions, offices, and authority with the Company and any affiliates, including as a member of the Board and all committees thereto, and the Amended and Restated Employment Agreement by and between the Company and Mr. Raad, dated as of June 28, 2019, shall be terminated.
Pursuant to the terms of the Raad Severance Agreement, the Company will provide to Mr. Raad (i) severance pay of $567,294, less all lawful and authorized withholdings and deductions, (ii) payment of a pro-rated bonus in the amount of $156,310.85, less all lawful and authorized withholdings and deductions (equal to a pro-rated portion of Mr. Raad’s target bonus for 2024), and (iii) payment of a separation bonus in the amount of $283,647, less all lawful and authorized withholdings and deductions (equal to 100% of Mr. Raad’s target bonus for 2024). The Company shall additionally pay to Mr. Raad $170,000, less all lawful and authorized withholdings and deductions pursuant to that certain Retention Bonus Opportunity Letter dated as of January 6, 2024, by and between the Company and Mr. Raad, and pay the portion of Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) premiums paid by Mr. Raad for the continuation of health, dental, and vision benefits coverage under the Company’s group benefit plans, for up to 12 months and subject to certain exceptions if Mr. Raad timely elects to receive coverage under COBRA. Any outstanding equity awards granted to Mr. Raad under the Company’s equity compensation plans and that would have vested during the 12-month period following the Separation Date shall become fully vested as of the Separation Date.
Pursuant to the Raad Severance Agreement, Mr. Raad has agreed to waive and release any claims in connection with Mr. Raad’s employment, separation and departure from the Company. The Raad Severance Agreement also provides for certain customary covenants regarding confidentiality. Mr. Raad’s separation from the Company was not the result of any disagreement regarding any matter relating to the Company’s operations, policies, or practices.
Appointment of Interim Chief Executive Officer; Amendment to Consulting Agreement and Retention Letter Agreement
On July 15, 2024, the Board approved the appointment of Peter Ludlum as the Interim Chief Executive Officer (the “Interim CEO”), effective as of July 20, 2024 (the “Effective Date”), pursuant to an amendment (the “Ludlum Amendment”) to the Consulting Agreement, by and between the Company and Danforth Advisors, LLC (“Danforth”), dated as of November 29, 2021, and amended on April 8, 2022, and October 20, 2022 (the “Consulting Agreement”). Pursuant to the terms of the Ludlum Amendment, Mr. Ludlum shall provide services to the Company under the Consulting Agreement, as amended, as an independent contractor and employee of Danforth and serve as the Interim CEO of the Company as of the Effective Date with Danforth receiving cash compensation at a rate of $700 per hour for Mr. Ludlum’s services, which shall cover both Mr. Ludlum’s roles as Interim CEO and Interim Chief Financial Officer (“Interim CFO”) of the Company.
Additionally, pursuant to the terms of a retention letter agreement (the “Ludlum Retention Agreement”), dated as of July 15, 2024, and effective as of July 20, 2024, by and between the Company and Mr. Ludlum, Mr. Ludlum shall be entitled to (i) $30,000, payable within 14 days following the Effective Date and (ii) $20,000 (provided that Mr. Ludlum provides services to the Company through the completion of the Company’s annual meeting of stockholders in the fourth quarter of 2024 (such date, the “Retention Date”)) payable within 14 days following the Retention Date (each, a “Retention Bonus”).
Notwithstanding the foregoing, if Mr. Ludlum’s service with the Company is terminated by the Company without Cause (as defined in the Ludlum Retention agreement) prior to the Retention Date, or due to death or disability, then the Company shall pay to Mr. Ludlum the any Retention Bonus not previously paid to Mr. Ludlum, subject to the receipt of a release of claims by the Company (the “Release”). The Company shall not be obligated to pay any not previously paid Retention Bonus if (i) Mr. Ludlum terminates his service with the Company prior to the Retention Date, (ii) the Company terminates Mr. Ludlum’s service prior to the Retention Date for Cause, or (iii) Mr. Ludlum’s service is terminated due to his death, disability or by the Company without Cause, and a Release has not been received.
Prior to his appointment as Interim CEO, Mr. Ludlum served as the Company’s Interim CFO, principal accounting officer and principal financial officer since April 2022, and since December 2021, he has served as the Company’s Strategic Advisor – Finance, both pursuant to a consulting agreement between the Company and Danforth, dated as of November 30, 2021. Mr. Ludlum has served as an employee with Danforth, a provider of strategic and operational finance and accounting for life science companies, since December 2021. Prior to Danforth, Mr. Ludlum worked as an independent financial consultant. Previously, Mr. Ludlum served in several executive roles at Emmaus Life Sciences, Inc. (n/k/a EMI Holding, Inc.), a commercial-stage biopharmaceutical company, including Co-President, Chief Business Officer, Executive Vice President and Chief Financial Officer, during his tenure from April 2012 until May 2017. Mr. Ludlum previously served as the Chief Financial Officer of Energy and Power Solutions, Inc., an energy intelligence company, from April 2008 to December 2011. Mr. Ludlum received a B.S. in Business and Economics with a major in accounting from Lehigh University and an MBA with a concentration in Finance from California State University, Fullerton.
There is no family relationship between Mr. Ludlum and any director or executive officer of the Company. There are no transactions between Mr. Ludlum and the Company that would be required to be reported under Item 404(a) of Regulation S-K of the Securities Exchange Act of 1934, as amended.
The foregoing is only a summary of the material terms of the Raad Severance Agreement, the Ludlum Amendment and the Ludlum Retention Agreement and does not purport to be complete. The foregoing summary is qualified in its entirety by reference to the complete text of the Raad Severance Agreement, the Ludlum Amendment and the Ludlum Retention Agreement, which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 10.1 | General Release and Severance Agreement, dated as of July 19, 2024, by and between Pulmatrix, Inc. and Teofilo Raad | |
| 10.2 | Amendment No. 3 to Consulting Agreement, dated as of July 15, 2024, by and between Pulmatrix, Inc. and Danforth Advisors, LLC | |
| 10.3 | Letter Agreement, dated as of July 15, 2024, by and between Pulmatrix, Inc. and Peter Ludlum | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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.
| PULMATRIX, INC. | ||
| Date: July 19, 2024 | By: | /s/ Teofilo Raad |
| Teofilo Raad | ||
| Chief Executive Officer | ||
Exhibit 10.1
GENERAL RELEASE AND SEVERANCE AGREEMENT
This General Release and Severance Agreement (this “Agreement”), dated as of July 19, 2024, is made and entered into by and between Teofilo Raad (“Employee”) and Pulmatrix, Inc. (the “Company”).
WHEREAS, Employee’s employment with the Company shall terminate as of the Separation Date (defined below), the Company desires to provide Employee with the severance benefits as described herein, subject to the terms and conditions of this Agreement.
Now, Therefore, for good and valuable consideration, receipt of which is hereby acknowledged, in order to effect a mutually satisfactory and amicable separation of employment from the Company and to resolve and settle finally, fully and completely all matters and disputes that now or may exist between them, as set forth below, Employee and the Company agree as follows:
1. Separation from Employment. Effective July 19, 2024 (the “Separation Date”), Employee’s employment with the Company shall cease and Employee shall relinquish all positions, offices, and authority with the Company and any affiliates, including as a member of the Board of Directors of the Company. Employee acknowledges and agrees, except for (i) the payments and benefits described hereunder; (ii) payment of a retention bonus equal to $170,000, less all lawful and authorized withholdings and deductions, pursuant to the Retention Bonus Opportunity letter, dated January 6, 2024, to be paid in a lump sum on the Company’s first regular payroll date on or following the Separation Date; and (iii) payment for any accrued but unused vacation determined as of the Separation Date, less all lawful and authorized withholdings and deductions, Employee has no rights to any other wages and other compensation or remuneration of any kind due or owed from the Company, including, but not limited, to all wages, reimbursements, bonuses (including, but not limited to, discretionary, performance, and retention bonuses), advances, vacation pay, severance pay, vested or unvested equity or stock options, awards, and any other incentive-based compensation or benefits to which Employee was or may become entitled or eligible.
2. Continuing Obligations. The amended and restated employment agreement between the parties, dated June 28, 2019, has terminated forever and no party shall have any further obligation or liability thereunder. Employee shall remain bound by, and agrees to comply with, any obligations that survive an employment termination as set forth in any other agreement or employee policy to which Employee became subject during and in connection with Employee’s employment with the Company, including without limitation Employee’s continuing obligation to maintain the confidentiality of the Company’s confidential information and all other restricted covenants under the Confidentiality, Assignment of Inventions and Non-Competition Agreement (the “Confidentiality Agreement”).
3. Consideration. In consideration of this Agreement and the release herein, and Employee’s compliance with Employee’s obligations hereunder, the Company will provide Employee with the following:
(i) severance pay of $567,294, less all lawful and authorized withholdings and deductions, which Employee agrees and acknowledges is equal to Employee’s base salary for a period of 12 months, to be paid in a lump sum on the Company’s first regular payroll date following the Effective Date (defined below);
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(ii) payment of a pro-rated bonus in the amount of $156,310.85, less all lawful and authorized withholdings and deductions, which Employee agrees and acknowledges is equal to a pro-rated portion of Employee’s target bonus for 2024, to be paid in a lump sum on the Company’s first regular payroll date following the Effective Date;
(iii) payment of a separation bonus in the amount of $283,647, less all lawful and authorized withholdings and deductions, which Employee agrees and acknowledges is equal to 100% of Employee’s target bonus for 2024, to be paid in a lump sum on the Company’s first regular payroll date following the Effective Date;
(iv) after Employee’s insurance coverage under the Company’s group benefit plans cease as of the Separation Date, if Employee timely elects to receive coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay directly the portion of COBRA premiums paid by Employee for Employee’s continuation of health, dental, and vision benefits coverage under the Company’s group benefit plans, for up to 12 months (less all lawful and authorized withholdings and deductions); provided, however, that Employee shall notify the Company if Employee participates in another group health, dental, or vision benefits from another employer, in which case, such COBRA subsidy shall terminate effective as of the first date Employee participates in such other group coverage; and
(v) any outstanding equity awards granted to Employee under the Company’s equity compensation plans and that would have vested during the 12-month period following the Separation Date shall become fully vested as of the Separation Date and otherwise treated in accordance with the terms and conditions of the applicable equity compensation plan and corresponding award agreements.
4. Transition Services. Employee agrees to assist with the execution of all documents and all other instruments which the Company shall deem necessary to accomplish any transition of Employee’s responsibilities as well as cooperating with the Company in the future in relation to any queries or requests from any regulators, taxation or governmental authorities relating to the activities of the Company and its affiliates in the period prior to the Separation Date.
5. Cooperation. Employee further agrees to cooperate fully and make Employee reasonably available to the Company (and its representatives and advisors) in any pending or future governmental or regulatory investigation, inquiry, or request for information, or civil, criminal, or administrative proceeding or arbitration, in each case involving the Company. Employee agrees that, upon reasonable notice and without the necessity of the Company’s obtaining a subpoena or court order, Employee shall reasonably respond to all reasonable inquiries of the Company about any matters concerning the Company or its affairs that occurred or arose during Employee’s employment by the Company, of which matters Employee has knowledge or information.
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6. Release of Claims. For and in consideration of the right to receive the consideration described in Paragraph 3 of this Agreement, Employee fully and irrevocably releases and discharges the Company, including all of its affiliates, parent companies, subsidiary companies, employees, owners, directors, officers, principals, agents, insurers, and attorneys (collectively, the “Releasees”) from any and all actions, causes of action, suits, debts, sums of money, attorneys’ fees, costs, accounts, covenants, controversies, agreements, promises, damages, claims, grievances, arbitrations, and demands whatsoever, known or unknown, at law or in equity, by contract (express or implied), in tort, or pursuant to statute, or otherwise (collectively, “Claims”) arising or existing on, or at any time prior to, the date this Agreement is signed by Employee. Such released Claims include, without limitation, Claims relating to or arising out of: (i) Employee’s hiring, compensation, benefits and employment with the Company, (ii) Employee’s separation from employment with the Company, and (iii) all Claims known or unknown or which could or have been asserted by Employee against the Company, at law or in equity, or sounding in contract (express or implied) or tort, including claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, disability, religion, veteran, military status, pregnancy, sexual orientation, or any other form of discrimination, harassment, or retaliation, including, without limitation, age discrimination claims under the Age Discrimination in Employment Act; the Older Workers Benefit Protection Act; the Americans with Disabilities Act; claims under Title VII of the Civil Rights Act of 1964; the Rehabilitation Act; the Equal Pay Act; the Family and Medical Leave Act, 42 U.S.C. §1981; the Civil Rights Act of 1991; the Civil Rights Act of 1866 and/or 1871; the Sarbanes Oxley Act; the Employee Polygraph Protection Act; the Uniform Services and Employment and Re-Employment Rights Act; the Worker Adjustment Retraining Notification Act; the National Labor Relations Act and the Labor Management Relations Act; the Massachusetts Fair Employment Practices Act, Mass. Gen. Laws ch. 151B, § 1 et seq., the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, § 148 et seq. (Massachusetts law regarding payment of wages and overtime), the Massachusetts Civil Rights Act, Mass. Gen. Laws ch. 12, §§ 11H and 11I, the Massachusetts Equal Rights Act, Mass. Gen. Laws. ch. 93, § 102 and Mass. Gen. Laws ch. 214, § 1C, the Massachusetts Labor and Industries Act, Mass. Gen. Laws ch. 149, § 1 et seq., Mass. Gen. Laws ch. 214, § 1B (Massachusetts right of privacy law), the Massachusetts Maternity Leave Act, Mass. Gen. Laws ch. 149, § 105D, and the Massachusetts Small Necessities Leave Act, Mass. Gen. Laws ch. 149, § 52D and any other similar or equivalent state laws; and any other federal, state, local, municipal or common law whistleblower protection claim, discrimination or anti-retaliation statute or ordinance; claims arising under the Employee Retirement Income Security Act of 1974, as amended; claims arising under the Fair Labor Standards Act; or any other statutory, contractual or common law claims. Employee does not release Employee’s right to enforce the terms of this Agreement.
7. No Legal Actions. Employee represents that Employee has not filed or caused to be filed any lawsuit, complaint, or charge against any Releasees in any court, any municipal, state, or federal agency, or any other tribunal. To the fullest extent permitted by law, Employee agrees that Employee will not sue or file a complaint in any court, or file or pursue a demand for arbitration, pursuing any Claims released under this Agreement, or assist or otherwise participate in any such proceeding. Employee represents and warrants further that Employee has not assigned or conveyed to any other person or entity any of Employee’s rights vis-à-vis the Releasees, including any of the Claims released in this Agreement. Employee further expressly waives any claim to any monetary or other damages or any other form of recovery in connection with any proceeding made by Employee in violation of this Agreement.
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8. No Interference. Nothing in this Agreement is intended to interfere with Employee’s right to report possible violations of federal, state or local law or regulation to any governmental or law enforcement agency or entity (including, without limitation, the Securities and Exchange Commission), or to make other disclosures that are protected under the whistleblower provisions of federal or state law or regulation. Employee further acknowledges that nothing in this Agreement is intended to interfere with Employee’s right to file a claim or charge with, or testify, assist, or participate in an investigation, hearing, or proceeding conducted by, the Equal Employment Opportunity Commission (the “EEOC”), any state human rights commission, or any other government agency or entity. However, by executing this Agreement, Employee hereby waives the right to recover any damages or benefits in any proceeding Employee may bring before the EEOC, any state human rights commission, or any other government agency or in any proceeding brought by the EEOC, any state human rights commission, or any other government agency on Employee’s behalf with respect to any claim released in this Agreement; provided, however, for purposes of clarity, Employee does not waive any right to any whistleblower award pursuant to Section 21F of the Securities Exchange Act of 1934 or any other similar provision.
9. Review. Employee acknowledges that: (i) this Agreement is written in terms and sets forth conditions in a manner which Employee understands; (ii) Employee has carefully read and understands all of the terms and conditions of this Agreement; (iii) Employee agrees with the terms and conditions of this Agreement; and (iv) Employee enters into this Agreement knowingly and voluntarily. Employee acknowledges that Employee does not waive rights or claims that may arise after the date this Agreement is executed, that Employee has been given 21 days from receipt of this Agreement in which to consider whether Employee wanted to sign it, that any modifications, material or otherwise made to this Agreement do not restart or affect in any manner the original 21 day consideration period, and that the Company advises Employee to consult with an attorney before Employee signs this Agreement. The Company agrees, and Employee represents that Employee understands, that Employee may revoke Employee’s acceptance of this Agreement at any time for 7 days following Employee’s execution of this Agreement and must provide notice of such revocation by giving written notice to the Company. If not revoked by written notice received on or before the 8th day following the date of Employee’s execution of this Agreement, this Agreement shall be deemed to have become enforceable and on such eighth (8th) day (the “Effective Date”).
10. Return of Property. Employee represents that prior to the Separation Date, Employee shall have returned to the Company property, documents, and information as required by the Confidentiality Agreement. Notwithstanding the foregoing, Employee may retain Employee’s Company-provided laptop after (i) removal of all Company information and programming; and (ii) the Company’s review and inspection of such laptop.
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11. Non-Disparagement. Employee agrees that Employee will not, directly or indirectly, disclose, communicate, or publish any disparaging, reckless or maliciously untrue information concerning Employer’s products, services, customers, or business policies. Nothing in this Agreement is intended to prevent Employee from testifying truthfully in any legal proceeding, and nothing in this provision is intended to interfere with Employee’s right to engage in the conduct set forth in Paragraph 8, nor is it intended to interfere with any rights afforded to Employee under Section 7 of the National Labor Relations Act.
12. No Further Services. Employee agrees that Employee will not seek, apply for, accept, or otherwise pursue employment, engagement, or arrangement to provide further services with or for the Company, as an employee, independent contractor or otherwise, except as provided herein or as otherwise directed by the Chief Executive Officer or Board of Directors of the Company.
13. Confidentiality of Agreement. Employee agrees to keep the amount of the consideration completely confidential. However, Employee may disclose the monetary terms of this Agreement to Employee’s spouse, CPA or tax advisor, attorney, or as required by law, including for any public filings, but agrees to instruct any person to whom disclosure is authorized that Employee must keep this Agreement and its terms completely confidential. Nothing in this provision is intended to interfere with Employee’s right to engage in the conduct set forth in Paragraph 8, nor is it intended to interfere with any rights afforded to Employee under Section 7 of the National Labor Relations Act.
14. Governing Law/Venue. The parties agree that this Agreement shall be governed by and construed under the laws of the Commonwealth of Massachusetts. In the event of any dispute regarding this Agreement or Employee’s employment, the parties hereby irrevocably agree to submit to the federal and state courts situated in Massachusetts, and Employee agrees that Employee shall not challenge personal or subject matter jurisdiction in such courts. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH, OR RELATED OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, OR IN EQUITY, OR OTHERWISE.
15. Voluntary. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the parties hereto.
16. Acknowledgment. Employee acknowledges and agrees that the payments and other consideration provided herein are consideration to which Employee is not otherwise entitled except pursuant to the terms of this Agreement, and are being provided in exchange for Employee’s compliance with Employee’s obligations set forth hereunder.
17. No Admission of Liability. This Agreement shall not in any way be construed as an admission by the Company or Employee of any acts of wrongdoing or violation of any statute, law or legal right.
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18. No Third-Party Beneficiaries. Except as expressly provided to the contrary in this Agreement, no third party is intended to be, and no third party shall be deemed to be, a beneficiary of any provision of this Agreement. Employee agrees that all Releasees shall be express third-party beneficiaries of this Agreement (and the release of Claims contained herein), and shall be permitted to enforce the terms of this Agreement as if they were parties hereto.
19. Sole Agreement and Severability. Except as set forth herein, this Agreement is the sole, entire and complete agreement of the parties relating in any way to the subject matter hereof. No statements, promises or representations have been made by any party to any other party, or relied upon, and no consideration has been offered, promised, expected or held out other than as expressly set forth herein, provided only that the release of claims in any prior agreement or release shall remain in full force and effect. The covenants contained in this Agreement are intended by the parties hereto as separate and divisible provisions, and in the event that any or all of the covenants expressed herein shall be determined by a court of competent jurisdiction to be invalid or unenforceable, the remaining parts, terms or provisions of this Agreement shall not be affected and such provisions shall remain in full force and effect.
[SIGNATURE PAGE FOLLOWS]
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PLEASE READ CAREFULLY. THIS GENERAL RELEASE AND SEVERANCE AGREEMENT INCLUDES A RELEASE OF ANY AND ALL CLAIMS, KNOWN OR UNKNOWN, AGAINST PULMATRIX, INC.
| PULMATRIX, INC. | EMPLOYEE | |||
| By: | /s/ Michael J. Higgins | By: | /s/ Teofilo Raad | |
| Title: | Chairman | Date: | July 19, 2024 | |
| Date: | July 19, 2024 | |||
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Exhibit 10.2
AMENDMENT NO. 3 TO CONSULTING AGREEMENT
This Amendment No. 3 to Consulting Agreement (this “Amendment No. 3”) is made effective as of July 20, 2024, by and between Pulmatrix, Inc., a Delaware corporation, with its principal place of business being 945 Concord Street, Suite 1217, Framingham, MA 01701 (the “Company”) and Danforth Advisors, LLC, a Massachusetts limited liability company, with a principal place of business being 91 Middle Road, Southborough, MA 01772 (“Danforth”). Capitalized terms used but not defined herein shall have the respective meaning set forth in the Consulting Agreement by and between Danforth and the Company dated as of November 29, 2021, as may be amended from time to time (the “Agreement”).
WHEREAS, Danforth is engaged by the Company under the terms and conditions of the Agreement and the Parties hereto desire to revise the terms of the Agreement on the terms and conditions set forth more fully herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained and for the other good and valuable consideration, receipt of which is hereby acknowledge, the Parties hereby agree as follows:
1. Exhibit A to the Agreement is hereby modified to allow Danforth to add the services of various Danforth employees to perform the Services required and approved, such approval to be provided verbally or by email, by the Company at each such Danforth employee’s billable rate in effect at the time they are added to the Agreement. The billable rates in effect as of the date of this Amendment No. 3 are as described in Exhibit A-2. Effective January 1 of each year, Exhibit A-2 shall be automatically updated to the then published rate card for Danforth.
2. Except as specifically provided for in this Amendment No. 3, the terms of the Agreement shall be unmodified and shall remain in full force and effect.
3. This Amendment No. 3 may be executed in one or more counterparts, each of which shall be considered an original instrument, but all of which shall be considered one and the same amendment, and shall become binding when one or more counterparts have been signed by each of the Parties and delivered to the other.
4. This Amendment No. 3 shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, excluding choice of law principles.
IN WITNESS WHEREOF, this Amendment No. 3 has been executed by the parties to be effective as of the date first above written.
| DANFORTH ADVISORS, LLC | PULMATRIX, INC. | |||
| By: | /s/ Chris Connors | By: | /s/ Michael J. Higgins | |
| Name: | Chris Connors | Print Name: | Michael J. Higgins | |
| Title: | Chief Executive Officer | Title: | Chairman | |
| Date: | July 15, 2024 | Date: | July 15, 2024 | |
| 1 |
Exhibit A-2
1. Description of Services and Schedule of Fees
Danforth will perform mutually agreed upon finance and accounting functions which are necessary to support the management and operations of the Company including, but not limited to, the functions set forth below:
| F&A | ||
| Role | Hourly Rate | Function |
| Interim CEO | $700/hour | Principal Executive Officer |
Peter Ludlum, currently serving as Interim CFO, will also serve as interim CEO effective as of July 20, 2024. The billing rate of $700 per hour shall cover Peter Ludlum’s roles as interim CEO and interim CFO collectively. Additional personnel will be added in accordance with Section 1 of the Agreement.
| 2 |
Exhibit 10.3
| To: | Peter Ludlum |
| From: | Pulmatrix, Inc. |
| Date: | July 15, 2024 |
| Subject: | Retention Bonus Opportunity |
Pulmatrix, Inc. (the “Company”) is in a period of transition. You are a valued member of our team, and we need you to help the Company meet the challenges ahead. To recognize your service to the Company, and to retain your ongoing and future services relationship with the Company, we are pleased to present you with a retention bonus opportunity, subject to the terms and conditions set forth below.
We appreciate your commitment to the Company. To accept this retention bonus opportunity, please sign, date and return this letter.
TERMS AND CONDITIONS
| 1. | Retention Bonus. | |
| a. | You agree to take on a new dual role with the Company, effective July 20, 2024 (the “Effective Date”), and to continue to provide services to the Company through the completion of the Company’s annual meeting in the fourth quarter of 2024 (the “Retention Date”). As consideration for your agreement, the Company agrees to pay you two retention bonuses (each, a “Retention Bonus” and collectively, the “Retention Bonuses”) as follows (i) $30,000 payable in a lump sum within 14 days following the Effective Date (the “First Payment Date”) for taking on the new dual role; and (ii) $20,000 payable in a lump sum within 14 days following the Retention Date. Except as otherwise provided by Section 1.b. below, you must be providing services to the Company on the First Payment Date to receive the first Retention Bonus and on the Retention Date to receive the second Retention Bonus. You agree that any tax consequences or liability arising from the Company’s payments to you shall be your sole responsibility. | |
| b. | Notwithstanding the foregoing, if your services relationship with the Company is terminated prior to the Retention Date by the Company without Cause (as defined below) or due to your death or Disability (as defined below), then the Company shall pay any Retention Bonus not previously paid to you (or to your estate) on the Company’s next regularly scheduled payroll date following the date you (or your estate or legal representative) return a validly executed, irrevocable release of claims in the form provided by the Company at the time of your termination (the “Release”) and such Release becomes effective; provided, however, that in the event the time period for signing the Release, plus the expiration of any applicable revocation period, begins in one taxable year and ends in a second taxable year, payment of a Retention Bonus will not be made until the second taxable year. | |
| c. | The Company shall have no obligation to pay you a Retention Bonus not previously paid to you if (i) you terminate your services relationship with the Company prior to the Retention Date, (ii) the Company terminates your services relationship with Cause prior to the Retention Date, or (iii) your services relationship terminates prior to the Retention Date due to your death or Disability or the Company’s termination of your services relationship without Cause and you (or your estate or legal representative) refuse to sign the Release (or revoke the Release). | |
| d. | For purposes of this letter: | ||
| i. | “Cause” means (1) willful misconduct with respect to your duties as a service provider of the Company; (2) indictment for a felony; (3) commission of fraud, embezzlement, theft or other act involving dishonesty, or a crime constituting moral turpitude, in any case whether or not involving the Company, that, in the opinion of the Company, renders your continued services relationship harmful to the Company; (4) your breach of any of the Company’s policies; (5) your violation of the terms of any confidentiality, non-competition, non-disclosure or similar agreement with respect to the Company to which you are a party; and/or (6) your failure and/or refusal to perform or your intentional disregard of your duties and responsibilities. | ||
| ii. | “Disability” means permanent and total disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended. | ||
| 2. | Right to Continued Services. Please note that your eligibility for the Retention Bonuses does not in any way alter, modify, or amend your relationship with the Company, nor does it guarantee you the right to continue in the service of the Company. | ||
| 3. | Other Benefits. The Retention Bonuses are special incentive payments to you and will not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, severance, pension, retirement, death or other benefit under any other bonus, incentive, pension, retirement, insurance, or other benefit plans of the Company, unless such plan or agreement expressly provides otherwise. | ||
| 4. | Governing Law. All questions concerning the construction, validity, and interpretation of this letter will be governed by the laws of the State of Massachusetts, without giving effect to conflict of laws principles thereof. | ||
| 5. | Entire Agreement. This letter constitutes the entire agreement between you and the Company with respect to the Retention Bonuses and supersedes any and all prior agreements or understandings between you and the Company with respect to the Retention Bonuses, whether written or oral. This letter may be amended or modified only by a written instrument executed by you and the Company. | ||
We ask that you acknowledge your receipt of this letter and your acceptance of its terms and conditions by signing and dating the Acknowledgement and Acceptance section below and returning it to me promptly for the Company’s records.
| Very truly yours, | |
| /s/ Michael J. Higgins | |
| Michael J. Higgins, Chairman |
[SIGNATURE PAGE BELOW]
| Page 2 |
ACKNOWLEDGEMENT AND ACCEPTANCE
I hereby acknowledge receipt of this letter setting forth the terms and conditions governing the opportunity to receive the Retention Bonuses. I have carefully read the letter and hereby agree to and accept all those terms and conditions, and agree that my entitlement to any Retention Bonus described in the letter shall be determined solely by the terms and conditions described herein.
| /s/ Peter Ludlum | |
| Signature | |
| Printed Name: Peter Ludlum | |
| Dated: July 15, 2024 |
| Page 3 |
Cover |
Jul. 15, 2024 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Jul. 15, 2024 |
| Entity File Number | 001-36199 |
| Entity Registrant Name | PULMATRIX, INC. |
| Entity Central Index Key | 0001574235 |
| Entity Tax Identification Number | 46-1821392 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 945 Concord Street |
| Entity Address, Address Line Two | Suite 1217 |
| Entity Address, City or Town | Framingham |
| Entity Address, State or Province | MA |
| Entity Address, Postal Zip Code | 01701 |
| City Area Code | (888) |
| Local Phone Number | 355-4440 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, par value $0.0001 per share |
| Trading Symbol | PULM |
| Security Exchange Name | NASDAQ |
| Entity Emerging Growth Company | false |
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