EX-10.5 10 exhibit105form10.htm EXHIBIT 10.5
Exhibit 10.5
EMP L OYMENT AGREEMEN T
EM P L O Y ME N T A GR EEM EN T ("Agreemen t") made t his 16th day o f J une, 2016 by and be tw een D Y ADIC IN TER N AT I O N A L, I N C., a De l awa r e co rp oration (t he "Company"), and MA R K A. EMAL F A RB, a r esident of t he State of Florida (the "Executi v e").
Recital:
The Board of Di r ectors of the Company (the "Board") has determined that it is in the best interests of the Company and its stockho l ders to continue to employ the E x ecut i ve as Presiden t an d C hief Ex ec utive Offi c e r, and t he Executive des i res to conti n ue t o serve i n tha t capacity, on the te rm s a nd co n d i tions set forth h ere i n.
N OW, THEREFORE, it is hereby agreed as follows:
1. Emp l oyme n t Period. The Company shall cont i nue to employ the Executive, and t he E x ecu t ive shall cont i n u e to serve the Company, on the t e rm s and cond i t i ons se t f ort h in thi s Agr e e me nt, for the pe ri od beginning o n the date hereof (t he "Commencemen t Da t e") and endin g o n th e third (3r d) anniversary of the Commencement Da t e (the "Initial Term") w hich per i od shall aut o matic ally renew continuously for additional periods of two (2) years (each, a "Renewal Term") unless one party gives written notice of termination to the othe r at least sixty (60) days prior to the end of the then current term except as otherwise specifically provided below (the In i tial Term and the Renewa l Term(s), if any, shall hereinafter collec t i v ely be re f er r ed to as, t h e "Em p loyment Period").
2. Pos it ion a n d D u ti es. During the Emp l oymen t Per i od, th e E x ecu tiv e s h a ll con t i n u e to be employed as the President and Chief Executive Officer of the Company, and the Company shall cause the Executive t o be elected as a member of the Board. During the Employment Period, the Executive shall have authority to make operating decisions, plan the strategic direction of the Company, and hire, promote, and terminate the emp l oyment of pe r son n el, subjec t to the direc t ion o f the Boa r d. During the Emp l oyment Period, the Executive sha ll have such re asona bl e a n d cu st o m ary po w e r s as are g enerally assoc i ated wi t h t h e positions of P r esident a n d Chie f Exec u tive Offic er. During the Employment Period, the Executive shall devote his principal attention and time to the business and affairs of the Company and use his reasonable efforts to carry out suc h responsibilities faithful l y and efficiently. It shall not be considered a vio l ation of the foregoing for t he Exec u tive to serve on co r pora te, civ ic or charitable b o a r ds of d ir ectors or committees t hereof (excl udi ng thos e whic h w o u ld create a confl i ct of i nteres t) and manage his perso n a l investments, so l ong as s u ch ac ti vit i es do not m a t e r ia ll y i n t erfere wi th the p erfo rm a n ce o f t he E x ecu tiv e's respo n sibi li t i e s a s an emp l oyee of the Company in accordance with this Agreemen t.
3. C ompensat i on.
(a) Base Salary. During the Employm e nt Per i od, t he E x ecu t i v e s ha l l r ecei v e an a n n u a l base salary (th e "Annual Base Salary") of three h u ndred seventy five thousand dollars ($3 7 5,000), payab l e in ac c orda n ce w it h the reg u lar payro l l p r act i ces o f the Co mpany. Dur ing the E m p loyment Period, the Annual Base Salary may be reviewed by the Board for possible increases.
(b) Annual Bonus. In addition to the Annual Base Salary, the Company may a w ard the E x ecut iv e an a n nua l bo n us, with the timing a n d amount o f any s u ch bo n us deter m i n e d in t he s o l e di scret i o n o f th e Compensation Comm i ttee of the Boa r d (the "Co m pe n satio n C o m m i tt ee").
(c) Performance Stock Options. The Executive shall have the opportunity to be awarded three (3) annual incentive stock options, each such annual i ncentive stock option will be to purchase u p to t hree h u nd r ed thousand (300,000) sha r es o f c ommon s toc k (the "M a x imum Option Bo n u s") b ase d on performan c e achievements in 2016, 20 1 7 and 20 1 8 as prov i ded belo w:
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(i) For 20 1 6, the Board has approved an aggregate grant to the Execu t ive of options to purchase up to three hundred thousand (300,000) shares, and will gran t upon the mutual execution hereof a first option to the Executive to purchase one hund r ed thousand (100,00 0) sha r es of the above r eferenc e d t h r ee hundred thousa n d (300,000) sha r e s a t a n e x ercise price equal to the price of t h e C omp a ny's pub l ic l y-t raded s h a r es on Ju ne 3, 2 0 1 6, w h ic h shall v est i mmed i ate l y. I n D ecem b er 2 016 the Co m pensa t ion Comm i tte e w ill asses s the achievement of the 2016 performance objectives that have been established and agreed u pon between the Company and the Executive and then g r ant a second option to purchase up to two hundred thousand (200,000) shares or a portion thereof, w h ich opt i on shall be p r iced at an exer c i s e price equal to the p ri ce o f t he C o mpany's public l y-tr a d ed share s on the fi rst b u siness da y o f 2017, and shall vest on January 2, 2 017.
(ii) On the first business day of each of 2018 and 2019, the Company shall gran t the Executive an option to purchase up to three hundred thousand (300,000) shares based on the Compensation Comm i ttee's evaluation of the Executive's prior year performance o bj ectives es t abl i she d and agreed upon by t he Com p any and t he E x ecut ive. In e a ch case, t h e o p t i on s h a l l be pri ced at an exercise price equal to the pri c e of th e Com p a ny's publ ic ly tr aded s ha res on the first bu s i n e s s day of each of 2 01 8 and 2019, respec ti vel y, and shall vest on the gran t date.
Pe rf o rm ance i ncentives for the t i me period running from January 2019 through May 2019 will be ag r eed t o by t he Boar d and the Execu t i v e. S ho ul d the Employmen t Per io d t erm i na te a t th e en d of the Initi al Te r m f or an y o t her r eason t han Ca u se (a s de fined in Sec. 5(b)), p erfo r manc e s tock o pti o n i n cen t ives fo r t he t ime period J anuary 2019 throug h Ma y 20 1 9 w ill be b a se d s olely on t h e Compe n sat i on Committee's evaluation of the Executive's performance during this period and will be awa r ded, pr i ced and will vest on the first business day of 20 1 9.
(d) St oc k Ex chan g e S t ock Option. U po n the e x ecution o f th i s Ag reemen t, th e E x e cu t ive s h all be g ra n ted a five (5) year s toc k option to purchase fo ur h un dred t hou san d (4 0 0,00 0) shares of t h e Compan y's common s t o c k at a n exe r c i se price equa l to t h e J u ne 3, 20 1 6 publ i cl y-tra d e d price, which option grant shall vest and become exercisable if the Company's shares of common stock commence trad i ng on the Nasdaq Capital Market or other stock e x change appro v ed by the Board. I n the event that t here is a Change of Control or sa l e of the Company (as defined in Sec. 5(d) below), or in t he even t of passage o f a forma l B o a rd r esol u t i o n d ete rm in in g no t t o pu rs u e s u ch an u p-listi ng, t his option sha l l automaticall y v es t and b e e x erc i sab l e a t suc h t i me.
(e) Licensing/Collaboration Transaction Stock Options. Upon the execution of this A greement, t he Company sha l l cause the Compensation Committee to authorize for the Executive stock options that are each exercisable for not l ess than five (5) years from their effective dates to p u r ch a se up to six hundred t housan d (600,00 0) shares of the C o m pa n y's common st ock w h ic h s h all b e a w arded t o t he E x ecu t i v e and exe rci sable as f ollows.
F o r purposes of th i s Agreement a Bona Fide transaction is defined as a l icense, joint venture or o ther collaboration for development of a specific biologic with the i n tent to commercialize and/or a l i cense ag r eemen t that generates a cumulative five million dollars ($5,000,000) in non-r efundable cash, o r w he n eit h er t h e v accine o r biologic pha rm ace u t i cal busines s ca t egory i s s ol d.
(i) a fi rs t opt i on f o r two hundred th o u sand (2 00,000) shares a t a n exe r ci se pr i ce equal t o t h e J une 3, 2016 publicly-traded price of the common stock (t he "First Option") will be awarded and vest when the Company shall have entered into a Bona Fide licensing agreement or other form of collaboration with Sanofi or another biotech/pharmaceutical company approved by the Board providing for the Company's grant of a license or other form of collaboration to such party to the Company's C1 technology for use in developing or manufacturing vaccines, antibodies or other biologics (the "First License/Collaboration");
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(ii) a second option for two hundred thousand (200,000) shares at an exercise price equal to the June 3, 2016 publicly-traded price of the common stock (the "Second Option") will be awarded and vest when the Company shall have entered into a second such Bona Fide licensing agreement or other form of collaboration with Sanofi or another biotech/pharmaceutical company approved by the Board providing for the Company's grant of a license or other form of collaboration to such party to the Company's C1 technology for use in developing or manufacturing vaccines, anti-bodies or other biologics (the "Second License/Collaboration");
(iii) on the date when the Company shall have entered into a second such Bona Fide licensing agreement or other form of collaboration with another biotech/pharmaceutical company as approved by the Board providing for the Company's grant of a license or other form of collaboration to such party to the Company's C1 technology for use in developing or manufacturing vaccines, antibodies or other biologics (the "Third License/Collaboration), a third option will be awarded to the Executive, exercisable for five (5) years, to purchase an additional two hundred thousand (200,000) shares of the Company's common stock at an exercise price equal to the price of the Company's publicly-traded shares on the date the Second License/Collaboration Agreement is executed by both parties. This option award will vest when the Company shall have entered into a Third License/Collaboration agreement.
(iv) All awarded options will vest upon Change of Control as defined in Sec. 5(d) below.
(f) Other Benefits. During the Employment Period, the Executive shall be entitled to participate in all benefit plans, practices, policies and programs provided by the Company (including without limitation, vacation, medical, prescription, dental, disability, retirement, salary continuance, employee life insurance, group life insurance, and accidental death and travel accident insurance plans and programs) that are commensurate with the Executive's position as chief executive officer and that are not less favorable than benefits provided to other executives of the Company.
(g) Vacation. In respect of each twelve (12) month period falling within the Employment Period, the Executive shall be entitled to an aggregate of six (6) weeks of vacation, which sha l l be deemed vested and earned by the Executive in advance at the rate of three (3) weeks per each six (6) month period of the Employment Period, with no entitlement to acceleration of the aggregate in the event of a Change of Control or sale of the Company (as defined in Sec. 5(d) below). For each twelve (12) month period a total of three (3) weeks' vacation may be carried forward with no more than six (6) weeks carried forward at any point in time.
(h) Expenses. During the Employment Period, the Executive shall receive reimbursement for all reasonable expenses incurred by the Executive in carrying out the Executive's duties under this Agreement, provided that the Executive complies with the generally applicable policies and procedures of the Company for submission of expense reports, receipts or similar documentation of such expenses. The Company shall pay directly, or reimburse the Executive for, automobile expenses in amounts similar to the payments provided to him in 2015.
4. Covenants of Execu ti ve
(a) Proprietary Rights.
(i) Ownership of Intel l ectual Property. The Executive hereby exp r essly agrees that a l l r esearch, biological mater i als, discoveries, inventions and innovations (whether or not r educed to practice or documented), improvements, developme n ts, methods, designs, analyses, drawings, reports and a ll s imi l a r or r e l ated i n f orm a t io n (w h et h er p at en t a b le or no t, a n d whe t he r or no t red uce d to writing), t r ade se crets (b eing in f o rmatio n ab o ut the b u s in es s o f t he Company wh i c h i s co n si d e r ed by th e Com pa ny t o be confiden ti al and is pr oprietary to th e Co mp a ny) and confidentia l inform a ti on, copy ri g ht a bl e works, and similar and related information (in whatever form or medium), which (x) either (A) relate to the
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Company's actual or anticipated business, research and developmen t o r e x isting or fu t ure pr o duc t s or services or (B) result from any work performed by the Executive for the Company and (y) a r e co n cei v e d, d e v e l o p ed, made or con trib uted to i n whole or i n part b y th e E x ecu t ive d ur i ng th e E mpl o ym e nt Per i od ('W o rk Product") shall be and remain the so l e and excl u s i ve pr ope rty o f t h e Co mp a ny. The Exe c uti v e s hall co mm unicate prom p tl y and fully all Work P ro d uct to th e Compa ny.
(i i) Work Made for Hire. The Executive ac k nowledges tha t, unless othe rw ise agreed i n w riting by the Company, al l Work Product eligible for any form of copyright protection made or contributed to in whole or in part by the Executive w i thin the scope of the Executive's employment b y th e Co m pany durin g th e E m ployme n t Period s h all be deemed a "w ork m ad e f o r hir e" und e r th e c opy ri g ht la ws a n d sh a ll be o w ned exclusivel y by the C o mpan y.
(iii) Assignment of Proprietary Rights. The E x ecutive hereby assigns, t r ansfe rs and conv e ys to the Company, and s h all assign, transfe r and convey to the Company, all right, ti t le an d interes t i n and to all inventions, ideas, improvements, des i gns, p r ocesses, tradema rk s, service marks, t r ad e na m es, t ra de s e crets, t r ad e d r e ss, da ta, dis coveries a nd o t he r pr o pr ie t a ry asse t s a n d p r opriet a ry r igh ts in a nd o f the Wo rk Produc t (th e "Prop ri etary Rig h ts") f o r th e C o mp a ny's e x clus iv e ownership a n d use, to g et h er with all rig hts t o s u e a n d re cove r f or p as t a nd fu tur e infring eme n t or m isa pp r opri a ti o n t hereof, which sha ll enjoy exclusive ownership and use, together with all rig h ts to s u e and reco v e r for past and future infringement or misappropriation thereof.
(i v) Fu rth er I nstru m en t s. At the r e q u es t o f the C om pa ny, at a ll t imes du rin g the E m ploy m ent Pe r io d an d the r eaft e r, th e Executive wi l l pr o m ptl y a nd fully a ss i st th e C om p an y i n eff e cting t h e p u rp ose of t he forego i n g assignme n t, i ncl ud in g but n o t limit ed t o th e fu rt h e r a ct s o f e x ec uting a ny and all documents necessary to secure for the Co m pany such Proprietary Rights and other rig h ts to all W ork Product and al l confidential information related thereto, providing cooperation and giving testi m ony.
(v) I na pp licab ili ty o f Sec. 4(a) in Certa i n C i rcumstances. The Com pa n y e xpressly ac kn owle d ges and ag r ees that, and the E x ecu t ive is hereby a d vi se d th a t, this S e c. 4(a) d o es not apply t o any i n ve n tion f or w hic h n o eq ui pmen t, supp l ies, f ac i li t ies or tr a d e se cre t info rmatio n of th e Co mpany was used and which w as developed entirely on the Executive's own time, unless (A) the in vention r e l a t es to the business of the Company or to the Company's actual or demonst r ably anticipated research o r development or (B) the invention results from any work perfo r med b y t he E x ecutive f o r th e Compan y.
(b) O wn e rsh ip and Cove n an t t o Retu r n Documents. T h e E x ecu tiv e ag r ees t h at a ll W o rk P r oduct and a l l docume n ts or other tangible materials (whether orig i nals, copies o r abstracts), i nclud i ng w it hout limitation, price lists, quotation guides, ou t standing quotations, books, records, ma n uals, files, sales l iteratu r e, tra i ning materials, customer records, correspondence, compute r disks or p rint-out documen t s, contracts, o r ders, messages, phone an d address l i sts, invoices a n d receipts, and all o b jec t s a ss o c iated therewith, which in a ny way relat e t o the bus i ne s s or affairs of the C ompany, e i ther fu r n i shed to t he Executive by the Compa n y o r prepared, compiled or otherwise acqu ir ed by t he E x e cut i v e du r in g the Emp l oyment Pe r iod, shall be the so l e and exclus i ve property of the Compa n y. T he Executi v e sha l l no t use, copy o r duplicate any of the afo r ementioned documents or ob j ects, nor r emove them from th e f ac il i t ie s of the Co m pa ny, n o r u se a n y i nforma t ion con cern in g th e m exce p t for the benefit o f the Company, eith e r during th e E mpl o yment P eriod or thereafter. Th e E x e cutive ag r ees that he will deliver all of the a fo rementioned docum e nts and o bj e cts th a t may b e in his po ss e ss ion to th e Company o n th e term in ation of his employment with the Company, or at any other time upon the Company's req u est, t og• ether with h i s written certification of comp l iance with the provisions o f this Sec. 4(b).
(c) No n-Di scl o s u re Covenant. T he Executive sh a l l not, a t any ti me, eith e r dir e c tl y or ind i rect l y, d isclose t o any "un a uthorized person" o r u s e f o r the be n e fi t of th e Exe c ut i ve or any per so n oth e r than th e Company an y W o rk P r oduct or any kn o wl e dg e or confi de ntial information which th e E xecutive may acquire whi l e employed by the Company (whether be f ore or after t he date of t his Agreemen t) r e l ating to (i) t he financial, marketing, sa l es and business plans and affa i rs, financial
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statemen t s, analyse s, f orecasts and p r ojections, books, account s, records, opera t ing costs and expenses and other fi nanc i a l inf o rmation of th e C ompany, (ii) int e rna l m a nag e m e nt to ols and syst e m s, c o s ting poli c ie s and me thods, pricing policies a nd m e thods and oth e r m e thods of d o ing bu s in es s, of the C ompany, (iii) customers, sales, cus t o mer requir e m e nts and usages an d distr i butor lis ts, o f the Comp a ny, (iv) a greements with customers, vendors, i ndepende n t contractors, employees a n d others, of the Company, (v) e x isting an d future products or services an d p roduct development p l ans, d esigns, analyse s a n d reports, of th e C o m pany, (vi) computer software and databases deve l oped for the Company, trade sec r ets, resear c h, r ecords of r esear ch, mod el s, d es igns, d r awi n gs, tec h nical d a ta an d r e po rts of th e Comp a ny, and (vii) correspondence or othe r privat e or confid e ntial matters, in f ormati o n o r data whe th er wr i tten, or al o r e l ectronic, which i s proprietary t o the Company and not g e ne ra lly k no wn t o the publ i c (individually and collectively "Confidential I nformation"), w i thou t the Company's prior written permission. For purposes of th i s Sec. 4(c) the term "unauthorized person" shall mean any person wh o is not (i) an officer or di r ector of the Company or an employee of the Company f or whom the disclosure of the know l edge or i nformatio n ref e rr e d t o h e r ei n i s nece ss ary for his perform a nce of h is assign ed du ti es, or (ii) a pe r so n e x pre s sly authorized by the Comp a ny t o r e ceive di s cl o su r e o f su c h know l edge o r inform a tion. The C o mpany express l y a cknowle d ge s an d agree s t ha t the t e rm "C o nfid e ntial I nformation" excludes i nformation wh i ch i s (i) in the public domain or otherwise general l y known to the trade, or (ii) d isclosed to third pa rti es oth er than by reason of the Executive's breach of his confidentiality ob l igations here u nder, or (i ii) learned o f b y the E xecutive subsequent to the termination of his employment hereunder from any other party not the n under an obligat io n of c o nfid en tiality to t h e Company. Further, the E xe c ut i ve c ovenan t s to the Compan y that in the E x e cu ti ve's p e rformance o f h is duties her e under, he wil l n o t viol a te a ny confid e ntial i ty obligations he m a y h a v e t o a ny third parties.
(d) N on-Interference Covenants. The Executive covenants to the Company t hat w hile he i s emp l oyed by or otherwise renders serv i ces to the Company and for a three (3) year period therea ft e r (the "Restrictive Period"), he will not, for any reason, directly or indirec tl y: (i) so l icit, induce, or o t herwise do any act or th ing whi c h may ca u s e an y oth e r emp l oyee of the Comp an y to l e a ve the employ or otherwise interfere with or ad v e rsely affect th e relat i ons h ip (contra c tual or o t h e rwise) of the Company with any p e rson who is th e n or ther e aft e r bec o mes a n e mpl oyee o f th e Comp a ny; (i i) d o any a ct or thing which may interfere with or adversely affect the relationship (contractua l o r otherwise) of the Com p an y with any vendor of goods or services to the Company or induce any such vendo r to cease do i ng bu s iness with the Company; or (iii) except for Competitive Activities (as defined in Sec. 4(e) hereof) engaged in b y th e E x e cutiv e aft e r t he e x p i ra tion of th e R estri c t i ve Peri o d, d o a n y act or thing wh i c h may interfer e with o r adver s ely affect the rela ti on shi p (contractual or o therwi s e) of th e C omp a ny with any customer o f the Comp a ny or indu ce a ny such c us tomer to ce ase d o ing bu si n es s w i th th e C o mpany. The Executive agrees that, othe r than re l ated to events that occurred p r io r to June 20, 2008, he w il l never make or publish any sta te ment or communication which is dispa r agi n g, negat i ve or u nflattering with respect to Company and/or its direct or indirect stockholders, officers, di r ectors, employees, agents or affiliates. PROVIDED, HOWEVER, that in the event the Company is sold, or there is a Change of Control, the Re s trictive Period shall be one (1) year from the sale or Change of Control.
(e) Covenant Not To Compete. The Executive expressly acknowledges that (i) the performance of his services for the Company hereunder will afford him access to and cause him to become highly knowledgeable about the Company's Confidential Information; (ii) the agreements and covenants contained in th i s Sec. 4(e) are essential to protect the Confidential Information, business and goodwill of the Company and the restraints on the Executive imposed by the provisions of this Sec. 4(e) are justified by these legitimate business interests of the Company; and (iii) his covenants to the Company set forth in this Sec. 4(e) are being made both in consideration of the Company's employment of the Executive and other financial benefits of this Agreement. Accordingly, the Executive hereby agrees that during the Restrictive Period he shall not, directly or indirectly, own any interest in, invest in, lend to, borrow from, manage, control, participate in, consult with, become employed by, render services to, or in any other manner whatsoever engage in, any business which is competitive with any lines of bus i ness engaged in by the Company (collectively, "Compet i tive Activities"). The preceding to the contrary notwithstanding, the Executive shall be free to make investments in the publicly-traded securities of any
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corporation, provided that such investments do not amount to more than ten percent (10%) of the outstanding securities of any class of such corporation. As provided in Sec. 4(d), the Restrictive Period in the event of a sale of the Company or a Change of Control shall be one (1) year.
(f) Rationale for and Scope of Covenants. If any of the covenants contained in this Sec. 4 is held to be invalid or unenforceable because of the unreasonableness of the time, geographic area, or range of activities covered thereby, such covenant and the other covenants shall nevertheless be enforced to the maximum extent permitted by law and effective for such period of time, over such geographical area or for such range of activities as may be determined to be reasonable by a court of competent jurisdiction and the parties hereby consent and agree that the scope of such covenants may be judicially modified, accordingly, in any proceeding brought to enforce such covenants. The Executive agrees that his services hereunder are of a special, unique, extraordinary and intellectual character, and his position with the Company places him in a position of confidence and trust with the customers, suppliers and employees of the Company. The Executive and the Company agree that in the course of employment hereunder, the Executive has and will continue to develop a personal relationship with the Company's customers, and a knowledge of these customers' affairs and requirements as well as confidential and proprietary information developed by the Company after the date of this Agreement. The Executive acknowledges that the Company's relationships with its established clientele may therefore be placed in the Executive's hands in confidence and trust. The Executive consequently agrees that it is reasonable and necessary for the protection of the goodwill, confidential and proprietary information, and legitimate business interests of the Company and its affiliates that the Executive make the covenants contained herein, that the covenants are a material inducement for the Company to continue to employ the Executive and to enter into this Agreement, and that the covenants are given as an integra l part of and are incident to this Agreement.
(g) Remedies for Breach. The restrictive covenants set forth in this Sec. 4 shall be construed as agreements independent of any other provision in this Agreement, and the existence of any claim or cause of action of the Executive against the Company, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any restrictive covenant. The Company has fully performed all obligations entitling it to the restrictive covenants, and the restrictive covenants therefore are not executory or otherwise subject to rejection under the Federal Bankruptcy Code. If the Executive commits a breach, or threatens to commit a breach, of any of the provisions of th i s Sec. 4, the Company shall have the right and remedy, in addition to any other remedy that may be available at law or in equity, to have the provisions of this Sec. 4 specifically enforced by any court having equity jurisdiction, by the entry of temporary, preliminary and permanent injunctions and orders of spec i fic performance, t o g e ther with an accou n ting t h e re fo r, it being expressly acknowledged and agreed by the E x ec utive that any s uch bre ac h or th re at e ned breach wil l cause irreparable in j ury to the Company and that money damages will not provide an ad e quate rem e dy to the Company. A ny such i njunction shall be availab l e without the pos ti ng of any bond o r other security, and t he E xe c u tive hereby consents to the issuance of such in j unction. The Executive further agrees t h a t an y such injun ctiv e relief obtained by the Company shall be i n ad d ition to, a n d not i n lieu of, monetary da m ages a n d any other remedi es to which the Company may be entitled. Furt he r, in the event of an alleged breach or violati o n by the Ex e cu t ive of a n y of th e pr o visio n s of Section s 4(c), 4(d) or 4(e) hereof, the Restrictive Period sh a ll be tolled until such br e ach or v i olation has b e en cured.
(h) Survival. Notwithstanding anyth i ng to t he contrary set forth herein, the pro v isions o f this Sec. 4 shall su rv ive the termination or cessation of this Ag r eement or the Executive's e m p l o y men t, i rrespecti v e of the reason for such termination or cessa ti on. T he Executive sh all disclose the r est ric t ions se t forth in this S ec. 4 to an y subsequ e nt employer or pot e n t i a l em p loyer dur in g t h e Re s trictive Period.
5. Termination of Employment.
(a) Dea t h or Disability. The Executive's employment a n d t he Em p loyment P eri od sh al l terminate automa t ical l y upon the Executive's death d ur i n g the Employment Period. The C omp a ny sha l l
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be entitled t o terminate the Executive's employment in the even t o f th e Execu t ive's D i sab ility duri n g the Employment Pe r i o d. "Disabi l ity" m e ans tha t th e Exe c utiv e ha s bee n unab l e, for a period of n inety (90) consecuti v e days or one hu n dred twenty (120) day s during any tw e lv e (12) mon t h period to perform th e Execu ti ve's dut ie s under thi s Agre e ment as a re s u l t of phys i cal or mental i llness or inj u ry, and that the Company has rece i ved an independent medica l report a n d op i nio n t h a t t he Executive is disabled.
(b) By the Comp a ny. The Company may termi na te the E xecutive's employment during the Employment Period for Cause or without C a u s e. "Caus e" means:
(i) The continued failure of the Execut i ve subs t antially to perfo rm hi s d ut i e s under th i s Agr e emen t (other than as a resu l t of physical or mental i llness or injury), w h ich has not been cured by the Ex e cutive after be i ng gi v en specific wr i tt e n details of t he alleged breac h a n d the Executiv e has been given r e as o n a ble opportun i ty wi t hin thirty (30) days of re c eivi n g written notice of such bre a ch from the Compa n y to c ur e t h e all e ged breac h by s ubst a nt i a l p e rformanc e of the specified duties;
(i i) a material breach of a materia l provision of t his Agreement wh i ch has no t been cured by the Execu t i v e after being given specific written details of the al l eged breach and th e Exec u tive has been given thirty (30) d ays after receiving written no t ice of suc h breach f r o m the Company t o c ure th e al l eged brea c h;
(iii) a mat e rial b re ac h of a material provi s ion of the C o nfidential I nformat i on and Inventions Assignment Ag r eement between the Company and the Executive wh i c h has not bee n cured by t he Executive after be i ng g iv en specific w r itten deta i ls of the alleged breach a nd the E x ecutive has been given thirty (30) days after receiving w r itten notice o f such breach from the Compan y to cure the all e ged breach;
(i v) i l legal or g r os s misconduct by the Ex e cutive, as it solely r e l a t e s to the Company's affairs, in e i ther case, that is willful and in the Boa r d's disc r etion may result i n materia l damage to the business or reputat i on of the Company and which has not been stopped and cured b y the Executive afte r being g i ven th i rty (30) days' wr i tten notice of the specific illegal o r g r oss m i scon du ct a s serted by the Company;
(v) conviction of or plea of no contest to a felony or any crime committed by the Executive involving theft, fraud, or dishonesty whether or not committed in the course of performing services for the Company;
(vi) habitual abuse of drugs or alcohol by the Executive, after ten (10) days prior warning from the Company;
(vii) intentional act(s) of disloyalty, deliberate dishonesty, fraud, or breach of fiduciary duty by the Executive to the Company or any of its affiliates after adjudication of such alleged acts; or
(viii) material non-compliance by the Executive with the Company's written policies which has not been cured by the Executive after being given specific written details of the alleged non-compliance and the Executive has been given thirty (30) days of written notice of such breach from the Company to cure the alleged breach.
A termination of the Executive's employment by the Company shall be effected by giving him written notice of termination following any cure period set forth herein if the alleged act has not been cured by the Executive. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause without an opportunity for the Executive (together with counsel, if requested) to be heard in person by the Board after being provided with all of the specific facts and circumstances in writing relating to the proposed termination at least twenty (20) days in advance of such meeting of the Board, and a good faith
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best efforts determination by the Board thereafter that the Executive's conduct was of such a substantial or continuing nature which has gone uncured that it would justify a termination for Cause.
(c) Good Reason. The Executive may, at his sole option, terminate his employment for Good Reason or without Good Reason. "Good Reason" means:
(i) the assignment to the Executive of duties materially inconsistent with Sec. 2 of this Agreement, other than an action that is not taken in bad faith and is remedied by the Company within twenty (20) days after receipt of written notice thereof from the Executive; and
(ii) any material failure by the Company to comply with Sec. 3 of this Agreement, other than a failure that is not taken in bad faith and is remedied by the Company within thirty (30) days after receipt of written notice thereof from the Executive.
(d) Change of Control. In the sole discretion of the Compensation Committee, Executive may be awarded an additional bonus on or before the occurrence of a Change of Control. For purposes of this Agreement, Change of Control is defined as a merger. acquisition or sale of assets resu l ting in the number of shares of all existing Company stockholders with voting power immediately prior to such transaction being reduced to less than fifty percent (50%) voting power following such transaction or if both the vaccine and biopharmaceutical business categories are sold.
Any termination of the Executive's employment by the Executive shall be effected by giving the Company at least thirty (30) days' prior written notice of the termination.
6. Obligations of the Company upon Termination.
(a) By the Company Other Than for Cause. I f (i) the Company terminates the Execut i ve's employmen t during the E mp l oyment Period o t he r than f o r Cause or (ii) the Execu t i v e te r minates his employment for Good Reason or (iii) in the case of t he Execu t ive's Death or D isab i l i ty d u r ing the Employment Per i od, then t he Company shall fulfill its obligations as to Ann u a l Base Sa l a ry under Sec. 3(a) hereof through t h e effective date of termination (the "Termination Date"), and the Executive sha l l be entitled to receive his Annual Base Salary and accrued but unpaid vacation t hrough the dat e the r eof plus, in the s ole dis c r etion of the Compensation Comm i ttee, the 2016 and 2017 Maxi mum Optio n Bonus sha l l be payable in accordance w i th t he Com p any's no r ma l pa yr ol l pract i ces.
I n addition, all of the Execut i ve's unvested incentive options set forth in Sections 3(d) and 3(e) will vest immediately in the event milestones for which the options have been awarded are achieved within one (1) year from the dat e of termination or upon a Change in Control.
As a conditio n to recei v i n g such payment o f acc r ued bu t unpaid v aca t ion time and t he a gree m en t for such contingent opt i on accele r at i on f ol l owing the Term i natio n Da t e, the Exec u ti v e shal l sign a R e l ease co v ering all ma tt e r s relat i ng to his empl oy ment i n favo r of the Co mp any an d i ts affi li a t e s, i n such form as the Company shall reasonably request. The Release w i ll not however release the Executive's post-termination rights to severance benefits described above in this subsection.
(b) Cause: O t her than for Good Reason. If the E xe cutive's emp loy ment is term i nat ed by the Company f or Cause du r ing the Employment Period or if t he E x ecu t i ve r esigns o t he r t h a n fo r Goo d Rea s on, the Company shall pa y the Execut i ve the An n ual B a se S a l ary a n d al l oth er be nefi ts and expenses provided under Sec. 3 above that have been accrued or earned through the Termination Date and the Company sha ll have no further obligations under this Ag r eement other than for any entit l ements under the terms of any other plans or programs of the Company in which the Execu t ive part i cipated and under w hich the Execu t ive has accrued a benefit.
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7. Co m p lian ce wit h C o de Sec ti o n 409A. It is t h e inten t ion of bo t h t he Com pan y a nd the Execut i ve that the benefits and righ t s to which the Executive could be entitled pursuant t o this Agreement comply with Sec. 409A of the Internal Revenue Code of 1986, as amended f rom time to time, and its implementing regulations and guidance ("Sec. 409A"), to the extent that the r equirements o f Sec. 409A are applicable the r eto, and t he prov i s i ons of t h is Agreement s h all be c o nst rued i n a manner co n sis t ent wi th that in t en t ion. I f the Executi v e or the Company be l ie v e s, a t any t im e, that any such benefit or righ t that i s sub j ect to Sec. 4 09A does no t s o comp ly, i t s h al l promp tly adv i se the other and sha l l negotiate reasonably and in good faith to amend the terms of such benefits and rights such that they comply with Sec. 409A (with the most limited possi b le eco n omic effect on the Executive and on the Company). Such p r ovisions include:
(a) D i st r ibu ti ons on Account of Separa t io n from Se rv ice. If a n d t o th e extent requ i r e d to com pl y w i t h Sec. 409A, any payment or be n efit requ i red to b e paid u n de r this Ag r ee m en t o n a c co un t of termination of the Execu t ive's e m p l oyment, serv i ce (or any o t her s i m i lar te rm) s h al l be made onl y in connection with a "separation from service" with respect to Executive within the meaning of Sec. 409A.
(b) N o Accelera ti on of Paymen t s. N e i t h er t h e C ompany nor the Executive, i nd i v idu al ly or in combina t ion, may accele r ate any payment or benefit that is sub j e ct to Sec. 409A, e x c e pt i n compliance with Sec. 409A and t he p r ov i sions o f th i s Agreement, and no amoun t t ha t is su b je ct to Sec. 409A shall be paid prior to the earliest date on which it may be paid without violating Sec. 409A.
(c) Expense Reimbursements. Notwithstanding anything herein to t he contrary or othe r- wise, except to the extent any expense o r reimbursement provided pursuant to this Agreement does not constitute a "deferral of compensation" within the meaning of Sec. 409A, (i) the amount o f expenses eligible for reimbursement provided to the Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to the Executive i n any other calendar year, (ii) the reimbursements for expenses for which the Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred, (iii) the right to payment or reimbu r sement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefi t, and (iv) the reimbursements shall be made pursuant to objectively determinable and nondiscretionary Company's pol i cies and procedures regarding such reimbursement of expenses.
8. No Mitigation. In no event shal l the Executive be ob l igated to see k other employment or take any other action by way of mitigation of the amounts payab l e to the Executive u nder any of the provisions of this Agreement and such amounts shall not be reduced, regar d less of whether the Executive obtains other employment.
9. Successors. This Agreement is personal to the Executive and, without the prior written consent of the Company, shall no t be assignable by the Executive. Sub j ect to the preceding sen t ence, this Agreement shall inure to the benefit of, be binding upon and be enforceable b y the Executive's successors, assigns and lega l representatives. This Agreement shall inure to the benefi t of and be binding upon the Company and its successors and assigns.
10. Miscellaneous.
(a) This Agreement shall be governed by, and construed in accordance with the laws of the State of Florida, without reference to pr i nciples of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may no t be amended or modified except by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b) Whe n a refe r ence is made in this Agreement to a section or schedule, such reference shall be deemed to be to this Agreement unless otherwise indicated. Wheneve r t h e wo r ds "include,"
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"includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without l imitation." As used herein, words in the singular will be held to include the plural and vice versa (unless the context otherwise requires), words of one gender shall be held to include the other gender (or the neuter) as the context requires, and the terms "hereof", "herein", and "herewith" and words of s i milar import will, unless otherwise stated, be construed to refer to th i s Agreement as a whole and not to any particular provision of this Agreement.
(c) The parties agree and acknowledge that they have jointly participated in the negotiation and drafting of this Agreement. In the event of an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumptions or burdens of proof shall arise favoring any party by virtue of the authorship of any of the provis i o n s of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promu l gated thereunder, unless the context requ i res otherwise.
(d) All notices and other communications under this Agreement shall be in w ri ting a n d shall be given by hand to the other party or by certified mail or overnight courier service, addressed as follows, or by email or fax as follows:
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If to the Executive: | Mark A. Emalfarb

193 Spyglass Court
Jupiter, FL 33477
mark@emalfarb.com
Fax: 561-747-9522

With a required copy to: | Thomas Earl Patton, Esq.

Butzel Long
1747 Pennsylvania Ave., NW #300
Washington DC 2006
pattont@butzel.com
Fax: 202-454-2805

If to the Company: | Dyadic International, Inc.

140 lntracoastal Pointe Drive #404
Jupiter, FL 33477
Attn: Board of Directors
Thomas Dubinski
Corporate Secretary
tdubinski@dyadic.com
Fax: 561-743-8343

With a required copy to: | Mark H. Mirkin, Esq.

Rimon Law P.A.
112 Via Castilla
Jupiter, FL 33458
Mark.mirkin@rimonlaw.com
Fax: 561-935-9678
or to such other address as either party furnishes to the other in writing in accordance with this section. Any such notice or communication shall be deemed to have been received (i) when delivered, if pe r sonally delivered, (ii) on the next business day after dispatch, if sent postage pre-paid by a nationally recognized, overnight courier guaranteeing next business day delivery, and (iii) on the fifth (5 th) business day following the date on which the envelope containing such communication is posted, if sent by certified mail, postage prepaid, return receipt requested.
(e) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. If any provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Agreement, shall remain valid and enforceable and cont i nue in full force and effect to the fullest extent consistent with law.
(f) The Executive's or the Company's failure to insist upon strict compliance with any provision of, or to assert any right under, this Agreement shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement.
(g) Except as otherwise provided herein, no remedy herein conferred upon a party hereto is intended to be exclusive of any other remedy. No single or partial exercise by a party hereto of any right, power or remedy hereunder shall preclude any other or further exercise thereof. All remedies under this Agreement or otherwise afforded to any party shall be cumulative and not alternative.
(h) The Executive hereby agrees tha t any suit, action or p ro ceeding rela ting i n an y w a y t o this Agreement shall be b r ought and enforced in the Circuit Co u rt of Palm Beach County of the State of Florida or in the federal District Court for t he Southern Distr i ct of Florida, and in either case, the Executive hereby submits to
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the jurisdiction of each such court. The Execut i ve hereby waives and ag r ees no t t o assert, by way of motion or o t he rwi se, in any such su i t, action or p roceedi n g, a ny c l a im that he i s not perso n a l ly subject t o t he jurisdicti o n o f t he above name d c o urt s, that the su i t, ac t ion o r p r oceeding is b r ough t i n an i n c onven i ent fo rum or that t h e v en u e of t he su i t, ac t io n o r pr o c eeding is improper. The Executive consents and agrees to service of process or other legal sum m ons for purpose of any such suit, action or proceeding by registered mail addressed to the Executive at h is address listed i n the business records of the Company or i n this section. No t hing conta i ned he r ei n sha ll affect the ri ghts of t h e Compan y to b r i n g a sui t, ac t io n o r procee d i ng i n an y o th er a p p r opriate j urisd ict io n.
(i) EACH P A RTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CO N TROV- ERSY W H ICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPL I CATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND U NCO ND I T I ONALL Y W A IVES AN Y RIGHT SUCH PA RTY M AY HAV E T O A TR I A L BY JU RY IN R ESPEC T OF A N Y LIT I GATION D I RECTLY OR I N D I RE C TL Y A R I S IN G OUT OF O R R E LATING T O T H IS A GREEME N T, A NY OR AN Y O TH ER I NSTRU M ENT E X ECUTED I N C ONNE C T I ON HEREWITH OR THEREW I TH, OR IN ANY WAY CONNECTED WITH OR RELATED OR INC I DENTAL TO T HE DEALINGS OF THE PARTIES OR ANY OF THEM IN RESPECT OF THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRES E NTA T IVE, AG E N T OR A TIOR N EY OF THE OTHER PARTY H A S REP R ESE N TED, E X P R E S SL Y OR O T HE R W I SE, THAT S U CH OTHER PARTY W OULD NO T, I N T HE E V E N T OF L ITI GA TI O N, S EE K TO E N FORCE TH E FOREGOING WAI V ER, (i i) EAC H S UC H PAR TY U N DE R ST AN DS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WA I VER, (iii) EACH SUCH PARTY MAKES T H I S WAIVER VOLUNTARILY, AND (i v) EACH SUCH PARTY HAS BEEN INDUCED TO E NTER I NTO T H I S AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS A N D CERTIFICATIONS IN T HIS SECTIO N. EACH PARTY A GREES THAT THE OTHER MAY FI LE A C O PY O F T H I S AGREEMENT WITH A N Y COURT AS WR I TIEN EVIDENCE O F THE CO N SE N T OF THE PAR T I ES TO TH E W A I VE R OF I TS R I GHT T O TRIAL BY J U RY.
(j) T h e parties agree that in the event of the institution of any action at law or in equity b y either party to enforce the provisions of this Agreement, the losing party sha l l pay all of the costs and expenses of the prevai l ing party, including reasonable fees and expenses of attorneys and accountants, incu r red i n connectio n t he r ew i t h.
(k) This A g r ee m e nt m a y be e x ec u ted i n counte rp arts, eac h o f wh i c h sha l l be d e em e d an o r iginal, a n d said counterparts shall const i tute but one and the same instrume n t. Delivery of an e x ecuted counterpart of a signature page to this Agreement by facs i mile, portable document fo r mat or other e l ectronic means shall be effective as delivery of a manually executed counterpart to the A greem en t.
S IGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties have entered into th i s Agreement as of the day and yea r first above written.

DYADIC INTERNATIONAL, INC.
By: |  | /s/ Michael P. Tarnok
| Name: | Michael P. Tarnok
| Title: | Chairman, Compensation Committee
/s/ Mark A. Emalfarb
Mark A. Emalfarb

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June 16, 2016
Mark A. Emalfarb
1 93 Spyglass C ourt
J up i ter, F L 3 3 4 77
Re: Change of Cont r ol Compensation
Dear Mark,
Simultaneously here with, yo u ar e enter i ng into a n Emp loyme nt A greem en t w ith Dyadic wh i ch supe r s e des y our E mp l o ym ent A greeme nt fr om October 23, 2013 (th e "Origin a l Contra c t") that se t t he term s for yo u r emplo y m e nt a s D y adic's P res i dent and Chief Ex e cut iv e Offic er.
Sec. 6(a) of the Original Contract provided you with certain rights in the event of a Cha n ge of C o ntrol as defined in that subsection, includ i ng the right to receive a lump sum p ayment of $1,335,000 (the equivalent of three years' of total compensation) upon giving Notice of Term i nation for Good Reason be for e D e c e mber 3 1, 2016 (the "C h a n ge o f C ontr ol Compen s a t ion"). Dyadic 's sa l e of a ssets tra n sac ti on in D e c em b e r 20 15 en t i tled y ou to g i v e suc h a N o tice.
Because your new Employment Agreement supersedes t he Original Contract, as consideration for your executing the new Employment Agreement, the Change of Control Compensation shall be pa i d to you in 36 consecutive monthly payments of $37,083.33 in lieu of a lump sum. If your emplo y men t by Dyadic t ermin at es f o r a n y re as on, the ent ir e unpaid remainin g ba la n c e o f t he C ha n g e of C o ntr ol Compe n sat ion sh all be immed i at e l y due and pa y able to yo u i n f u l l.
This letter agreement const i tutes a legally binding agreement between you and Dyadic.
P lease acknowledge our a cceptance of the foregoing by signing you r na m e where i ndicated b e low.
V e ry trul y y o u rs,
/s/ Michael P. Tarnok
M ic h ael P. Tarnok
Cha i rman, Compensation Committee

Accepted and acknowledged this 16th day of June, 2016
/s/ Mark A. Emalfarb
Mark A. Emalfarb

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FIRST AMENDMENT
TO
EMPLOYMENT
AGREEMENT
THIS FIRST AMENDMENT (this "First Amendment") is made and entered into by and between DYADIC INTERNATIONAL, INC., a Delaware corporation (the "Company") and MARK A. EMALFARB (the "Executive") as of the 23 th day of January, 2017 .
RECITALS:
A. The Company and the Executive are parties to that certain Employment Agreement dated June 21", 2016 (the "Employment Agreement"). Each capitalized term used but not expressly defined in this First Amendment shall have the meaning assigned that defined term in the Employment Agreement.
B. The Company and the Executive wish to amend the exercise price of the options under the Employment Agreement to be priced at an exercise price equal to the average closing price of the Company's publicly-traded shares often (l0) trading days preceding the grant date as provided herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the Company and the Executive hereby amend the Employment Agreement as follows:
1. Revise Exercise Price on Option.
Section 3.(c) of the Employment Agreement, entitled "3. Compensation (c) Performance Stock Options" is hereby amended to read as follows:
(i) ... which option shall be priced at an exercise price equal to the average closing price of the Company's publicly-traded shares of ten (10) trading days preceding the first business day of 2017 and shall vest on January 2, 2017.
(ii) On the first business day of each of 2018 and 2019, the Company shall grant the Executive an option to purchase up to three hundred thousand (300,000) shares based on the Compensation Committee's evaluation of the Executive's prior year performance objectives established and agreed upon by the Company and the Executive. In each case, the option shall be priced at an exercise price equal to the average closing price of the Company's publicly-traded shares of ten (10) trading days proceeding the first business day of each of 2018 and 2019, respectively, and shall vest on the grant date.
2. Effect of Amendment. Except as expressly amended by the provisions of this First Amendment, all of the terms and provisions of the Employment Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the Company and the Executive have executed this First Amendment as of the day and year first above written.

THE COMPANY: |  | THE EXECUTIVE:
DYADIC INTERNATIONAL, INC., a |  |
Delaware Corporation |  |
By: | /s/ Michael P. Tarnok |  | By: | /s/ Mark A. Emalfarb
| Michael P. Tarnok |  |  | Mark A. Emalfarb
| Chairman |  |  |

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