1010-00004 · Arbor Health Technologies Inc · Transaction Documents/Employment Agreement

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EXECUTIVE EMPLOYMENT AGREEMENT

by and between

ARBOR HEALTH TECHNOLOGIES INC.

and

DR. MARCUS J. ELLISTON

Dated as of August 5, 2022

FIRST DRAFT — Subject to Further Negotiation

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED Prepared by Calderwood & Harkness LLP One International Place, Suite 3400, Boston, MA 02110

EXECUTIVE EMPLOYMENT AGREEMENT

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This EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of August 5, 2022, by and between Arbor Health Technologies Inc., a Delaware corporation (the "Company" or "AHT"), with its principal place of business at 400 Brattle Commerce Park, Suite 1200, Cambridge, MA 02138, and Dr. Marcus J. Elliston, an individual residing at 87 Laurel Hill Road, Wellesley, MA 02481 ("Executive"). The Company and Executive are sometimes referred to herein individually as a "Party" and collectively as the "Parties." This Agreement shall become effective as of November 1, 2022 (the "Effective Date" or "Start Date").

RECITALS

WHEREAS, the Company desires to employ Executive as its Chief Operating Officer and to secure Executive's services, knowledge, and expertise for the benefit of the Company and its stockholders;

WHEREAS, Executive desires to accept such employment with the Company on the terms and conditions set forth herein;

WHEREAS, Executive possesses specialized skills, knowledge, and extensive experience in healthcare operations and technology that make Executive uniquely qualified to serve in the role of Chief Operating Officer of the Company;

WHEREAS, Executive most recently served as Senior Vice President of Operations at Pinnacle Care Systems, Inc., where Executive oversaw multi-site clinical operations, technology integration, and enterprise-wide process improvement initiatives;

WHEREAS, the Parties wish to set forth the terms and conditions of Executive's employment with the Company, including matters relating to compensation, benefits, equity awards, severance protections, restrictive covenants, confidentiality, intellectual property, and other related matters; and

WHEREAS, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I — EMPLOYMENT; POSITION; DUTIES

Section 1.1 — Employment and Title

The Company hereby agrees to employ Executive, and Executive hereby accepts employment with the Company, as Chief Operating Officer ("COO") of the Company, effective as of the Effective Date, on the terms and conditions set forth in this Agreement. Executive's employment with the Company shall be subject to all of the terms and conditions contained herein.

Section 1.2 — Reporting

Executive shall report directly to the Chief Executive Officer of the Company, currently Priya Chandrasekaran, or to such other individual as may be designated by the Board of Directors of the Company (the "Board") from time to time. In the performance of Executive's duties, Executive shall also be available to interact with and present to the Board as reasonably requested by the CEO or the Board. Executive shall maintain a cooperative and professional working relationship with the CEO, the Board, and all other members of the Company's senior leadership team.

Section 1.3 — Duties and Responsibilities

(a) Executive shall devote substantially all of Executive's business time, attention, skill, and best efforts to the performance of Executive's duties and responsibilities on behalf of the Company and to the furtherance of the Company's business interests. Executive shall perform such duties and responsibilities as are customarily associated with the position of Chief Operating Officer of a company of the size, type, and nature of the Company, including without limitation oversight of day-to-day operations, supply chain management, technology implementation, quality assurance, regulatory compliance, and cross-functional coordination, and such other duties as may be assigned to Executive by the CEO from time to time, consistent with Executive's position, title, and stature within the Company.

(b) A detailed description of Executive's initial duties, responsibilities, and reporting structure is set forth on Exhibit A attached hereto and incorporated herein by reference. The Parties acknowledge that the duties and responsibilities described on Exhibit A may evolve over time in the ordinary course of the Company's business, and that modifications to such duties and responsibilities that are consistent with Executive's position as Chief Operating Officer shall not constitute a material diminution in Executive's authority, duties, or responsibilities for purposes of this Agreement.

(c) Executive shall at all times comply with all Company policies and procedures as may be in effect from time to time, including without limitation the Company's Code of Business Conduct and Ethics, Employee Handbook, and all applicable compliance, data privacy, and information security policies.

Section 1.4 — Place of Employment

Executive's principal place of employment shall be the Company's headquarters, currently located in Cambridge, Massachusetts, or such other location as the Company may designate from time to time, subject to the provisions of Section 6.3(a)(iii) of this Agreement. Executive acknowledges that the performance of Executive's duties may require reasonable business travel, both domestically and internationally, as necessary to fulfill Executive's responsibilities, and Executive agrees to undertake such travel as reasonably required.

Section 1.5 — Outside Activities

(a) During the Employment Period, Executive shall not, without the prior written consent of the CEO, engage in any other business activity, whether or not such activity is pursued for gain, profit, or other pecuniary advantage, that would interfere or conflict with Executive's duties and responsibilities under this Agreement. Notwithstanding the foregoing, nothing in this Section 1.5 shall preclude Executive from:

(i) making passive personal investments in any entity, provided that such investments do not create an actual or apparent conflict of interest with the Company and, in the case of investments in any entity that competes with the Company, do not exceed two percent (2%) of the outstanding equity of such entity;

(ii) serving on the board of directors or advisory board of one (1) outside company that does not compete with the Company, subject to the prior written approval of the Board, which approval shall not be unreasonably withheld or delayed; and

(iii) engaging in charitable, civic, educational, religious, or community activities that do not materially interfere with the performance of Executive's duties under this Agreement.

(b) Executive hereby represents and warrants to the Company that Executive's obligations under this Agreement do not conflict with, and will not be constrained by, any prior or existing agreements, obligations, or commitments of Executive to any third party, including without limitation any former employer, and that Executive has disclosed to the Company any and all agreements, obligations, or commitments that could reasonably be expected to affect Executive's ability to perform Executive's duties hereunder.

ARTICLE II — TERM

Section 2.1 — Initial Term

The initial term of Executive's employment under this Agreement shall commence on the Effective Date and shall continue for a period of three (3) years, ending on October 31, 2025, unless earlier terminated in accordance with the provisions of Article VI of this Agreement (the "Initial Term").

Section 2.2 — Renewal Terms

Following the expiration of the Initial Term, this Agreement shall automatically renew for successive periods of one (1) year each (each, a "Renewal Term"), unless either Party provides written notice to the other Party of its intention not to renew this Agreement at least ninety (90) days prior to the expiration of the then-current term (whether the Initial Term or any Renewal Term). In the event the Company delivers a notice of non-renewal, such non-renewal shall be treated as a termination by the Company without Cause for purposes of Section 6.2 and Section 6.4 of this Agreement. The Initial Term and any Renewal Terms are collectively referred to herein as the "Employment Period."

Section 2.3 — Survival

Notwithstanding any termination or expiration of this Agreement or Executive's employment hereunder, the following provisions shall survive in accordance with their respective terms: the restrictive covenant provisions set forth in Article VII, the confidentiality provisions set forth in Article VIII, the invention assignment provisions set forth in Article IX, the indemnification provisions set forth in Article XI, and any other provisions of this Agreement that by their nature or express terms are intended to survive termination or expiration.

ARTICLE III — COMPENSATION

Section 3.1 — Base Salary

During the Employment Period, the Company shall pay Executive an annual base salary of Five Hundred Seventy-Five Thousand Dollars ($575,000) per annum (the "Base Salary"). The Base Salary shall be payable in substantially equal installments in accordance with the Company's regular payroll practices as in effect from time to time, less all applicable federal, state, local, and other withholdings and authorized deductions. The Base Salary shall be subject to annual review by the Board (or the Compensation Committee of the Board, if one has been established) (the "Compensation Committee"), and may be increased (but not decreased) in the sole discretion of the Board or Compensation Committee. In no event shall Executive's Base Salary be reduced below Five Hundred Seventy-Five Thousand Dollars ($575,000) per annum without Executive's prior written consent.

Section 3.2 — Annual Bonus

(a) During the Employment Period, Executive shall be eligible to earn an annual performance bonus with respect to each fiscal year of the Company (or portion thereof) during which Executive is employed (the "Annual Bonus"). Executive's target Annual Bonus shall be equal to seventy-five percent (75%) of Executive's then-current Base Salary (i.e., Four Hundred Thirty-One Thousand Two Hundred Fifty Dollars ($431,250) at the initial Base Salary level) (the "Target Bonus"). Executive's maximum Annual Bonus shall be equal to one hundred fifty percent (150%) of the Target Bonus (i.e., Six Hundred Forty-Six Thousand Eight Hundred Seventy-Five Dollars ($646,875) at the initial Base Salary level) (the "Maximum Bonus").

(b) The Annual Bonus for each fiscal year shall be based upon the achievement of individual performance objectives and Company-wide performance objectives (which may include, without limitation, revenue targets, EBITDA targets, operational milestones, product development milestones, and strategic objectives), as established by the CEO and the Board (or Compensation Committee) within the first ninety (90) days of each fiscal year. The determination of the extent to which the Annual Bonus has been earned for any fiscal year shall be made by the Board (or Compensation Committee) in its reasonable discretion, based on the achievement of such objectives.

(c) The Annual Bonus, if earned, shall be payable within seventy-five (75) days following the end of the fiscal year to which it relates, subject to applicable withholdings and deductions. Except as otherwise provided in Article VI of this Agreement, Executive must be employed by the Company on the date the Annual Bonus is paid in order to be eligible to receive the Annual Bonus for the applicable fiscal year. No partial or pro-rata bonus shall be payable for any fiscal year in which Executive's employment terminates, except as expressly set forth in Article VI.

(d) For the fiscal year in which the Effective Date occurs, Executive's Annual Bonus shall be prorated based on the number of days of Executive's employment during such fiscal year divided by three hundred sixty-five (365).

Section 3.3 — Signing Bonus

(a) Within thirty (30) days following the Effective Date, the Company shall pay to Executive a one-time signing bonus in the amount of Two Hundred Fifty Thousand Dollars ($250,000) (the "Signing Bonus"), less all applicable federal, state, local, and other withholdings and authorized deductions.

(b) Clawback. In the event that Executive voluntarily resigns from employment with the Company (other than a resignation for Good Reason, as defined in Section 6.3(a) of this Agreement) or Executive's employment is terminated by the Company for Cause (as defined in Section 6.1 of this Agreement), in either case within twenty-four (24) months following the Effective Date, Executive shall repay the full gross amount of the Signing Bonus to the Company within thirty (30) days of the date of such termination. Executive hereby acknowledges and agrees that this repayment obligation is a material term of this Agreement, and that the Company would not have agreed to pay the Signing Bonus absent Executive's agreement to this clawback provision. This repayment obligation shall survive the termination of this Agreement and Executive's employment hereunder.

Section 3.4 — Expense Reimbursement

The Company shall reimburse Executive for all reasonable and documented business expenses incurred by Executive in the performance of Executive's duties under this Agreement, in accordance with the Company's expense reimbursement policy as in effect from time to time. Executive shall submit appropriate documentation and receipts for all expenses for which reimbursement is sought within sixty (60) days of incurring such expenses, and the Company shall reimburse Executive within thirty (30) days of the Company's receipt of such documentation. In no event shall the amount of expenses eligible for reimbursement during one calendar year affect the amount of expenses eligible for reimbursement in any other calendar year.

Section 3.5 — Relocation

In the event that Executive is required to relocate Executive's primary residence in connection with Executive's employment with the Company at any time during the Employment Period, the Company shall reimburse Executive for reasonable, documented relocation expenses, including moving costs, temporary housing (for up to sixty (60) days), and reasonable travel costs associated with house-hunting trips, up to a maximum aggregate amount of Seventy-Five Thousand Dollars ($75,000). The Parties acknowledge that as of the date of this Agreement, Executive currently resides in the Commonwealth of Massachusetts and that no immediate relocation is anticipated. This relocation allowance shall be available to Executive if Executive's circumstances change during the Employment Period such that relocation becomes necessary in connection with Executive's duties hereunder.

ARTICLE IV — EQUITY COMPENSATION

Section 4.1 — Stock Option Grant

(a) On or promptly following the Effective Date (and in no event later than thirty (30) days following the Effective Date), the Company shall grant to Executive a nonqualified stock option to purchase a number of shares of the Company's common stock, par value $0.001 per share, equal to one and one-quarter percent (1.25%) of the fully diluted equity of the Company as of the Effective Date (the "Option"). For purposes of this Section 4.1, "fully diluted equity" shall mean the total number of shares of the Company's common stock outstanding on the Effective Date, calculated on a fully diluted basis assuming the exercise or conversion of all outstanding options, warrants, convertible securities, and other rights to acquire shares of common stock.

(b) The Option shall be granted under and subject to the terms and conditions of the Arbor Health Technologies Inc. 2020 Equity Incentive Plan (as amended May 2021) (the "Plan") and a separate Stock Option Award Agreement to be entered into between the Company and Executive in the form customarily used by the Company for senior executive grants under the Plan.

(c) The exercise price per share of the Option shall be equal to the fair market value per share of the Company's common stock as of the date of grant, as determined by the Board in good faith and in compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and any applicable guidance thereunder, which determination shall be based upon the most recent independent valuation (a "409A valuation") obtained by the Company.

(d) The Option shall vest and become exercisable in accordance with the following schedule, subject to Executive's continued employment with the Company through each applicable vesting date:

(i) Twenty-five percent (25%) of the total number of shares subject to the Option shall vest on the first anniversary of the Effective Date (the "Cliff Vesting Date"); and

(ii) The remaining seventy-five percent (75%) of the total number of shares subject to the Option shall vest in thirty-six (36) equal monthly installments following the Cliff Vesting Date, such that the Option shall be fully vested on the fourth anniversary of the Effective Date.

(e) Notwithstanding the foregoing vesting schedule, the vesting of the Option shall be subject to acceleration as provided in Section 6.4, Section 6.5, and Section 6.7 of this Agreement.

Section 4.2 — Restricted Stock Unit Grant

(a) On or promptly following the Effective Date (and in no event later than thirty (30) days following the Effective Date), the Company shall grant to Executive restricted stock units representing one-half of one percent (0.50%) of the fully diluted equity of the Company as of the Effective Date (the "RSUs"). For purposes of this Section 4.2, "fully diluted equity" shall have the same meaning as set forth in Section 4.1(a) above.

(b) The RSUs shall be granted under and subject to the terms and conditions of the Plan and a separate Restricted Stock Unit Award Agreement to be entered into between the Company and Executive in the form customarily used by the Company for senior executive grants under the Plan.

(c) The RSUs shall vest in accordance with the following schedule, subject to Executive's continued employment with the Company through each applicable vesting date:

(i) One-third (33.33%) of the RSUs shall vest on the first anniversary of the Effective Date;

(ii) One-third (33.33%) of the RSUs shall vest on the second anniversary of the Effective Date; and

(iii) The remaining one-third (33.34%) of the RSUs shall vest on the third anniversary of the Effective Date.

(d) Notwithstanding the foregoing vesting schedule, the vesting of the RSUs shall be subject to acceleration as provided in Section 6.4, Section 6.5, and Section 6.7 of this Agreement.

Section 4.3 — Terms of Equity Awards

(a) All equity awards granted to Executive pursuant to this Article IV, including the Option and the RSUs, shall be subject to the terms and conditions of the Plan and the applicable award agreements (the Stock Option Award Agreement and the Restricted Stock Unit Award Agreement, respectively), including without limitation the provisions of such documents relating to exercise procedures, settlement, forfeiture, transfer restrictions, and tax withholding.

(b) In the event of any conflict between the terms of this Agreement and the terms of the Plan or any applicable award agreement, the terms of the Plan shall control; provided, however, that the acceleration provisions set forth in Section 6.4, Section 6.5, and Section 6.7 of this Agreement shall supersede any less favorable provisions relating to the vesting or acceleration of equity awards contained in the Plan or any applicable award agreement.

(c) The grant of all equity awards described in this Article IV shall be subject to the approval of the Board (or the Compensation Committee), including any required consents or approvals under the Stockholders' Agreement, dated as of July 15, 2020 (as amended from time to time), among the Company, Ridgeline Capital Partners, LP, Helix Ventures Fund III, LP, and the other stockholders party thereto (the "Stockholders' Agreement"). The Company shall use commercially reasonable efforts to obtain all such approvals promptly following the execution of this Agreement.

ARTICLE V — BENEFITS

Section 5.1 — Health Insurance

During the Employment Period, Executive shall be eligible to participate in the Company's executive health plan, including medical, dental, and vision coverage, on the same terms and conditions as are generally available to other senior executives of the Company. As of the date of this Agreement, the Company's estimated employer contribution toward health insurance premiums for Executive and Executive's eligible dependents is approximately Two Thousand One Hundred Fifty Dollars ($2,150) per month. The Company reserves the right to modify its health insurance offerings in its discretion, subject to the provisions of Section 5.7 below.

Section 5.2 — Life Insurance

During the Employment Period, the Company shall provide Executive with Company-paid life insurance coverage in an amount equal to two times (2×) Executive's Base Salary (i.e., One Million One Hundred Fifty Thousand Dollars ($1,150,000) at the initial Base Salary level), subject to the terms and conditions of the Company's life insurance policy as in effect from time to time and any applicable insurability requirements. Executive shall have the right to designate the beneficiary or beneficiaries of such life insurance coverage.

Section 5.3 — Disability Insurance

During the Employment Period, Executive shall be eligible to participate in the Company's long-term disability insurance program, which shall provide coverage at a rate equal to sixty percent (60%) of Executive's Base Salary, subject to the terms, conditions, and maximum benefit limitations of the Company's disability insurance policy as in effect from time to time.

Section 5.4 — 401(k) Retirement Plan

During the Employment Period, Executive shall be eligible to participate in the Company's 401(k) retirement savings plan on the same terms and conditions as are generally available to other employees of the Company. The Company shall provide an employer matching contribution of up to four percent (4%) of Executive's eligible compensation, subject to the terms of the 401(k) plan and all applicable limits imposed by the Internal Revenue Service, including the annual compensation and contribution limits under Sections 401(a)(17), 402(g), and 415 of the Code.

Section 5.5 — Paid Time Off

During the Employment Period, Executive shall be entitled to twenty-five (25) days of paid time off ("PTO") per calendar year, in addition to all Company-designated holidays. PTO shall accrue and be administered in accordance with the Company's PTO policy as in effect from time to time. For any partial calendar year during which Executive is employed, PTO shall be prorated based on the number of days remaining in such calendar year following the Effective Date (or preceding the date of termination, as applicable) divided by three hundred sixty-five (365). Any unused PTO shall be subject to the Company's PTO carryover and forfeiture policies as in effect from time to time, subject to applicable law.

Section 5.6 — Executive Perquisites

During the Employment Period, Executive shall be entitled to the following executive perquisites:

(a) Professional Development Allowance. An annual professional development allowance of Fifteen Thousand Dollars ($15,000) for attendance at industry conferences, continuing education programs, professional association memberships, and related professional development activities. Such allowance shall be administered in accordance with the Company's expense reimbursement policy, and any unused portion of the allowance in any calendar year shall not carry over to subsequent years.

(b) Executive Physical Examination. An annual comprehensive executive physical examination through the Company's designated executive health program, at the Company's expense.

Section 5.7 — General Benefits Provisions

(a) All benefits described in this Article V are subject to the terms and conditions of the applicable plans, policies, and programs as in effect from time to time. The descriptions of benefits set forth in this Article V are intended to be summaries only and are not intended to modify or supplement the terms of any applicable plan, policy, or program.

(b) The Company reserves the right to modify, amend, or terminate any benefit plan, policy, or program at any time, in its sole discretion, consistent with applicable law; provided, however, that during the Employment Period, Executive shall receive benefits that are, in the aggregate, no less favorable than those provided to other similarly situated senior executives of the Company.

ARTICLE VI — TERMINATION OF EMPLOYMENT; SEVERANCE

Section 6.1 — Termination by the Company for Cause

(a) The Company may terminate Executive's employment for "Cause" at any time, effective immediately upon written notice to Executive (or, where a cure period applies, upon the expiration of such cure period without cure).

(b) For purposes of this Agreement, "Cause" shall mean the occurrence of any one or more of the following:

(i) Executive's material breach of any provision of this Agreement, which breach, if capable of cure, remains uncured for a period of thirty (30) days after written notice thereof from the Company to Executive specifying the nature of such breach in reasonable detail;

(ii) Executive's conviction of, or entry of a plea of guilty or nolo contendere to, (A) a felony under the laws of the United States or any state thereof, or (B) any crime (whether or not a felony) involving fraud, dishonesty, embezzlement, or moral turpitude;

(iii) Executive's willful and continued failure to substantially perform Executive's duties and responsibilities under this Agreement (other than any such failure resulting from Executive's Disability), which failure continues for a period of thirty (30) days after written notice thereof from the Company to Executive specifying the nature of such failure in reasonable detail and requesting cure;

(iv) Executive's gross negligence or willful misconduct in the performance of Executive's duties and responsibilities under this Agreement, which has or is reasonably likely to have a material adverse effect on the Company;

(v) Executive's material violation of any written Company policy, including without limitation the Company's Code of Business Conduct and Ethics, anti-harassment policy, data privacy policy, or information security policy, as in effect from time to time; or

(vi) Executive's fraud, embezzlement, or misappropriation of Company funds, property, or assets, regardless of the amount involved.

(c) Upon termination of Executive's employment for Cause, Executive shall be entitled solely to the Accrued Obligations (as defined in Section 6.8). Executive shall not be entitled to any severance pay, any Annual Bonus for the fiscal year in which termination occurs (whether or not otherwise earned), any acceleration of vesting of equity awards, or any other compensation or benefits, except as required by applicable law.

Section 6.2 — Termination by the Company Without Cause

The Company may terminate Executive's employment without Cause at any time upon not less than thirty (30) days' prior written notice to Executive (or, at the Company's election, by providing Executive with thirty (30) days' Base Salary in lieu of such notice period). In the event of such termination, Executive shall be entitled to the Accrued Obligations and the severance benefits described in Section 6.4 or Section 6.5, as applicable, subject to the conditions set forth therein.

Section 6.3 — Resignation by Executive

(a) Resignation for Good Reason. Executive may resign Executive's employment with the Company for "Good Reason" (as defined below) and, upon such resignation, shall be entitled to the Accrued Obligations and the severance benefits described in Section 6.4 or Section 6.5, as applicable, subject to the conditions set forth therein.

For purposes of this Agreement, "Good Reason" shall mean the occurrence of any one or more of the following events without Executive's prior written consent:

(i) A material diminution in Executive's title, authority, duties, or responsibilities, including without limitation a requirement that Executive report to any person other than the CEO or the Board, or the assignment to Executive of duties that are materially inconsistent with Executive's position as Chief Operating Officer;

(ii) A reduction in Executive's Base Salary below Five Hundred Seventy-Five Thousand Dollars ($575,000) per annum (or, if Executive's Base Salary has been increased above such amount, below the then-current Base Salary);

(iii) The relocation of Executive's principal place of employment to a location that is more than thirty-five (35) miles from the Company's current headquarters in Cambridge, Massachusetts;

(iv) A material breach by the Company of any material provision of this Agreement; or

(v) The failure of any successor entity to assume this Agreement in its entirety following a Change in Control (as defined in Section 6.6), in accordance with Section 12.7 hereof.

Notwithstanding the foregoing, no event shall constitute "Good Reason" unless: (A) Executive provides written notice to the Company specifying the event or condition giving rise to Good Reason within sixty (60) days following Executive's first becoming aware of the occurrence of such event or condition; (B) the Company fails to cure such event or condition within thirty (30) days following its receipt of such notice (the "Cure Period"); and (C) Executive actually resigns Executive's employment within thirty (30) days following the expiration of the Cure Period. If the Company cures the event or condition giving rise to Good Reason within the Cure Period, Executive's notice of Good Reason shall be deemed withdrawn and of no further force or effect.

(b) Voluntary Resignation Without Good Reason. Executive may resign Executive's employment with the Company at any time without Good Reason upon not less than sixty (60) days' prior written notice to the Company. In the event of such voluntary resignation, Executive shall be entitled solely to the Accrued Obligations. No severance pay, Annual Bonus for the fiscal year in which such resignation occurs, or acceleration of vesting of equity awards shall be payable to Executive. For the avoidance of doubt, a voluntary resignation without Good Reason within twenty-four (24) months following the Effective Date shall trigger the Signing Bonus clawback provision set forth in Section 3.3(b) of this Agreement.

Section 6.4 — Severance Upon Termination Without Cause or Resignation for Good Reason (No Change in Control)

If Executive's employment is terminated by the Company without Cause (other than by reason of Executive's death or Disability) pursuant to Section 6.2, or if Executive resigns for Good Reason pursuant to Section 6.3(a), in either case at a time that is not within twenty-four (24) months following a Change in Control (as defined in Section 6.6), then, in addition to the Accrued Obligations, and subject to Executive's satisfaction of the conditions set forth in this Section 6.4, Executive shall be entitled to the following severance benefits:

(a) Severance Payment. Continued payment of Executive's Base Salary at the rate in effect on the date of termination for a period of twelve (12) months following the date of termination (the "Severance Period"), payable in substantially equal installments in accordance with the Company's regular payroll practices, commencing on the first regular payroll date following the date on which the Release (as defined below) becomes effective and irrevocable; provided, however, that any installments that would have been paid during the period between the date of termination and the date of the first such payment shall be accumulated and paid in a lump sum on such first payment date. The aggregate amount of severance payments under this Section 6.4(a) shall be Five Hundred Seventy-Five Thousand Dollars ($575,000).

(b) Pro-Rata Annual Bonus. A pro-rata Annual Bonus for the fiscal year in which Executive's termination of employment occurs, calculated based on actual Company performance for such fiscal year and prorated based on the number of days Executive was employed during such fiscal year divided by three hundred sixty-five (365), payable at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year (but in no event later than seventy-five (75) days following the end of such fiscal year).

(c) COBRA Continuation. Subject to Executive's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company shall pay or reimburse Executive for the full cost of COBRA premiums for Executive and Executive's eligible dependents for a period of twelve (12) months following the date of termination (the estimated monthly cost of such premiums being approximately $2,150, for an estimated total of $25,800), or, if earlier, until Executive becomes eligible for comparable group health insurance coverage through another employer or source. If the Company determines in its reasonable judgment that providing such COBRA premium payments would violate applicable law or result in adverse tax consequences to the Company, the Company shall instead pay Executive a taxable monthly cash payment equal to the applicable COBRA premium for the remainder of the twelve (12)-month period, which Executive may use for any purpose.

(d) Equity Acceleration. Notwithstanding the vesting schedules set forth in Section 4.1 and Section 4.2, upon a termination described in this Section 6.4, twenty-five percent (25%) of the then-unvested portion of the Option and the RSUs shall immediately vest and, in the case of the Option, become exercisable, as of the date of termination. The remaining unvested portion of the Option and the RSUs shall be forfeited as of the date of termination, subject to the terms of the Plan and the applicable award agreements.

(e) Conditions to Severance. All severance benefits described in this Section 6.4 (other than the Accrued Obligations) are expressly conditioned upon:

(i) Executive's timely execution (and non-revocation during any applicable revocation period) of a general release of claims in favor of the Company, its affiliates, and their respective officers, directors, employees, agents, and representatives, in substantially the form attached hereto as Schedule B (the "Release"), which Release must become effective and irrevocable no later than sixty (60) days following Executive's date of termination; and

(ii) Executive's continued compliance with the restrictive covenant provisions set forth in Article VII of this Agreement and the Non-Competition Agreement (as defined in Section 7.1).

In the event that Executive breaches any of the restrictive covenant provisions of Article VII or the Non-Competition Agreement at any time during the period in which severance benefits are being paid, the Company's obligation to make any further severance payments or provide any further severance benefits under this Section 6.4 shall immediately cease, and Executive shall be required to repay to the Company any severance payments previously made under this Section 6.4 (other than the Accrued Obligations).

(f) Estimated Severance Value. For informational purposes only, the estimated total value of the severance benefits payable under this Section 6.4, excluding the value of any equity acceleration, is approximately One Million Thirty-Two Thousand Fifty Dollars ($1,032,050), calculated as follows: Severance Payment ($575,000) plus Target Bonus proxy ($431,250) plus COBRA Continuation ($25,800). Actual amounts may vary based on performance, Base Salary adjustments, and COBRA premium rates in effect at the time of termination.

Section 6.5 — Severance Upon Termination Without Cause or Resignation for Good Reason Following a Change in Control (Double Trigger)

If Executive's employment is terminated by the Company without Cause (other than by reason of Executive's death or Disability) pursuant to Section 6.2, or if Executive resigns for Good Reason pursuant to Section 6.3(a), in either case within twenty-four (24) months following a Change in Control (as defined in Section 6.6) (a "CIC Qualifying Termination"), then, in addition to the Accrued Obligations, and subject to Executive's satisfaction of the conditions set forth in this Section 6.5, Executive shall be entitled to the following severance benefits in lieu of (and not in addition to) the severance benefits described in Section 6.4:

(a) CIC Severance Payment. A lump-sum cash payment equal to twenty-four (24) months of Executive's Base Salary at the rate in effect on the date of termination (or, if higher, the rate in effect immediately prior to the Change in Control), payable within sixty (60) days following the date of termination, subject to the provisions of Section 6.10 regarding Section 409A compliance. The aggregate amount of the CIC Severance Payment shall be One Million One Hundred Fifty Thousand Dollars ($1,150,000) (calculated as $575,000 × 2), or such greater amount as may result from any increase in Base Salary prior to the date of termination.

(b) CIC Bonus Payment. A lump-sum cash payment equal to two times (2×) the Target Bonus at the rate in effect on the date of termination (or, if higher, the Target Bonus in effect immediately prior to the Change in Control), payable at the same time as the CIC Severance Payment. The aggregate amount of the CIC Bonus Payment shall be Eight Hundred Sixty-Two Thousand Five Hundred Dollars ($862,500) (calculated as $431,250 × 2), or such greater amount as may result from any increase in Base Salary (and corresponding Target Bonus) prior to the date of termination.

(c) CIC COBRA Continuation. Subject to Executive's timely election of COBRA continuation coverage, the Company (or its successor) shall pay or reimburse Executive for the full cost of COBRA premiums for Executive and Executive's eligible dependents for a period of eighteen (18) months following the date of termination (the estimated monthly cost of such premiums being approximately $2,150, for an estimated total of $38,700), or, if earlier, until Executive becomes eligible for comparable group health insurance coverage through another employer or source. If the Company determines in its reasonable judgment that providing such COBRA premium payments would violate applicable law or result in adverse tax consequences, the Company shall instead pay Executive a taxable monthly cash payment equal to the applicable COBRA premium for the remainder of the eighteen (18)-month period.

(d) CIC Equity Acceleration. Notwithstanding the vesting schedules set forth in Section 4.1 and Section 4.2, upon a CIC Qualifying Termination, one hundred percent (100%) of all then-unvested portions of the Option and the RSUs shall immediately vest in full and, in the case of the Option, become fully exercisable, as of the date of termination (or, if earlier, the date of the Change in Control if Executive is terminated on or prior to such date).

(e) Total Estimated CIC Severance Value. For informational purposes only, the estimated total value of the severance benefits payable under this Section 6.5, excluding the value of any equity acceleration, is approximately Two Million Fifty-One Thousand Two Hundred Dollars ($2,051,200), calculated as follows: CIC Severance Payment ($1,150,000) plus CIC Bonus Payment ($862,500) plus CIC COBRA Continuation ($38,700). Actual amounts may vary based on Base Salary adjustments and COBRA premium rates in effect at the time of termination.

(f) Conditions. All severance benefits described in this Section 6.5 (other than the Accrued Obligations) are subject to the same conditions as set forth in Section 6.4(e), including the timely execution and non-revocation of the Release and Executive's continued compliance with the restrictive covenant provisions of Article VII and the Non-Competition Agreement.

Section 6.6 — Definition of "Change in Control"

For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any one or more of the following events:

(a) Any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than Ridgeline Capital Partners, LP, or any of its affiliates (including any fund managed or controlled by Ridgeline Capital Partners, LP or its general partner), acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated under such Act) of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then-outstanding voting securities entitled to vote generally in the election of directors;

(b) The consummation of a merger, consolidation, statutory share exchange, reorganization, or similar business combination involving the Company, or the sale, transfer, or other disposition of all or substantially all of the assets of the Company (whether by sale, merger, or otherwise), unless, immediately following such transaction, the stockholders of the Company immediately prior to such transaction retain, directly or indirectly, at least fifty percent (50%) of the combined voting power of the then-outstanding voting securities of the surviving, resulting, or acquiring entity (or its ultimate parent entity) entitled to vote generally in the election of directors;

(d) A change in the composition of the Board such that, during any twelve (12)-month period, individuals who at the beginning of such period constituted the Board (the "Incumbent Directors"), together with any director whose election by the Board or whose nomination for election by the Company's stockholders was approved by a vote of at least a majority of the Incumbent Directors then in office (excluding any director whose initial assumption of office occurred as a result of an actual or threatened proxy contest, election contest, or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute at least a majority of the Board.

Notwithstanding the foregoing, the term "Change in Control" shall not include any initial public offering of the Company's securities or any transaction solely between the Company and one or more of its wholly owned subsidiaries.

Section 6.7 — Termination Due to Death or Disability

(a) Death. Executive's employment shall terminate automatically upon Executive's death. In the event of Executive's death, Executive's estate or designated beneficiary shall be entitled to: (i) the Accrued Obligations; (ii) a pro-rata Target Bonus for the fiscal year in which Executive's death occurs, calculated by multiplying the Target Bonus by a fraction, the numerator of which is the number of days Executive was employed during such fiscal year and the denominator of which is three hundred sixty-five (365), payable within seventy-five (75) days following the end of such fiscal year; and (iii) twelve (12) months of accelerated vesting of the then-unvested portion of the Option and the RSUs.

(b) Disability. The Company may terminate Executive's employment upon Executive's Disability. For purposes of this Agreement, "Disability" shall mean Executive's inability, due to physical or mental incapacity, to perform the essential functions of Executive's position, with or without reasonable accommodation, for a period of one hundred eighty (180) consecutive calendar days or for a total of two hundred seventy (270) calendar days in any three hundred sixty-five (365)-day period, as determined in good faith by the Board, based upon such medical evidence as the Board may reasonably require. In the event of Executive's termination due to Disability, Executive shall be entitled to: (i) the Accrued Obligations; (ii) a pro-rata Target Bonus for the fiscal year in which such termination occurs, calculated in the same manner as described in Section 6.7(a)(ii) above; and (iii) twelve (12) months of accelerated vesting of the then-unvested portion of the Option and the RSUs.

Section 6.8 — Accrued Obligations

Upon any termination of Executive's employment for any reason, whether by the Company or by Executive, Executive (or Executive's estate or designated beneficiary, as applicable) shall be entitled to receive the following (collectively, the "Accrued Obligations"):

(a) Any earned but unpaid Base Salary through and including the date of termination, payable on the next regular payroll date following the date of termination (or earlier if required by applicable law);

(b) Any accrued but unused PTO as of the date of termination, payable in accordance with Company policy and applicable law;

(c) Reimbursement for any unreimbursed business expenses properly incurred by Executive prior to the date of termination, in accordance with Section 3.4 of this Agreement and the Company's expense reimbursement policy; and

(d) Any vested benefits to which Executive is entitled under any Company benefit plan, policy, or program, in accordance with the terms and conditions of such plan, policy, or program and applicable law.

Section 6.9 — Section 280G Best-Net Cutback

(a) In the event that any payment, benefit, or distribution of any type to or for the benefit of Executive by the Company, any affiliate of the Company, any person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Code), or any affiliate of such person, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the "Total Payments"), would constitute a "parachute payment" within the meaning of Section 280G of the Code, then the Total Payments shall be reduced (but not below zero) to the greatest amount that would not cause any portion of the Total Payments to be subject to the excise tax imposed by Section 4999 of the Code (the "Reduced Amount"); provided, however, that such reduction shall be made only if and to the extent that the after-tax value of the Total Payments received by Executive after giving effect to such reduction (after taking into account federal, state, and local income taxes, employment taxes, and the excise tax under Section 4999 of the Code) would exceed the after-tax value of the Total Payments received by Executive without such reduction (after taking into account federal, state, and local income taxes, employment taxes, and the excise tax under Section 4999 of the Code). This approach is referred to as the "best net" cutback.

(b) No tax gross-up payment shall be provided to Executive with respect to any excise tax imposed under Section 4999 of the Code or any other tax imposed in connection with any payment or benefit provided under this Agreement.

(c) If a reduction of the Total Payments is required pursuant to this Section 6.9, such reduction shall be applied in the following order: (i) first, by reducing cash severance payments under Section 6.5(a); (ii) second, by reducing the CIC Bonus Payment under Section 6.5(b); (iii) third, by reducing the value of COBRA continuation benefits under Section 6.5(c); and (iv) fourth, by reducing the value of accelerated vesting of equity awards under Section 6.5(d), with such equity acceleration reduced in reverse order of the scheduled vesting dates of the applicable awards (i.e., the awards with the latest scheduled vesting dates shall be reduced first).

(d) All determinations required to be made under this Section 6.9, including whether any payment or benefit is a "parachute payment," the amount of any reduction, and the assumptions to be utilized in arriving at such determinations, shall be made by Hargrove & Sinclair CPAs (or such other nationally recognized accounting or tax advisory firm as may be designated by the Company with Executive's reasonable consent) (the "Tax Advisor"), at the Company's expense. The Company and Executive shall cooperate with the Tax Advisor in making such determinations, and shall provide such information and documents as the Tax Advisor may reasonably request.

Section 6.10 — Section 409A Compliance

(a) The Parties intend that all payments and benefits provided under this Article VI shall comply with, or be exempt from, the requirements of Section 409A of the Code and the Treasury Regulations promulgated thereunder ("Section 409A"), and this Agreement shall be interpreted and administered in a manner consistent with such intent. Notwithstanding any other provision of this Agreement, to the extent that any payment or benefit under this Agreement is subject to Section 409A, such payment or benefit shall be provided in a manner that complies with Section 409A.

(b) For purposes of Section 409A, each installment payment of Base Salary continuation provided under Section 6.4(a) shall be treated as a separate payment. The right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments for purposes of Section 409A.

(c) If Executive is determined to be a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code at the time of Executive's "separation from service" (within the meaning of Section 409A), then, to the extent that any payment or benefit to which Executive becomes entitled under this Agreement on account of Executive's separation from service constitutes "deferred compensation" (within the meaning of Section 409A) and is not otherwise exempt from Section 409A, such payment or benefit shall not be paid or provided until the earlier of (i) the date that is six (6) months and one (1) day following the date of Executive's separation from service, or (ii) the date of Executive's death (the "Delayed Payment Date"). On the Delayed Payment Date, Executive shall receive a lump-sum payment equal to the aggregate amount of all payments that would have been made during such six (6)-month delay period, together with interest thereon at the applicable federal rate under Section 7872(f)(2)(A) of the Code.

(d) For purposes of this Agreement, any reference to "termination of employment," "termination," or words of similar import shall mean a "separation from service" within the meaning of Section 409A, and Executive shall not be deemed to have experienced a termination of employment unless and until Executive has experienced a separation from service.

(e) The Parties acknowledge that the Section 409A compliance provisions of this Agreement have been drafted in coordination with Gregory Tan, a tax partner at Calderwood & Harkness LLP, and the Company's outside tax advisors at Hargrove & Sinclair CPAs, and that additional review may be required as the Company's circumstances change.

Section 6.11 — No Mitigation; No Offset

Executive shall not be required to seek other employment or otherwise mitigate damages by seeking or accepting alternative employment following the termination of Executive's employment with the Company, and the amount of any severance payments or benefits to which Executive is entitled under this Article VI shall not be reduced, offset, or otherwise affected by any compensation, income, or benefits earned or received by Executive from any other source of employment or engagement following Executive's termination, including any employment, self-employment, consulting, or advisory engagement.

ARTICLE VII — RESTRICTIVE COVENANTS

Section 7.1 — Non-Competition

(a) Executive acknowledges that, concurrently with the execution and delivery of this Agreement, Executive and the Company are entering into a separate Employee Non-Competition Agreement (the "Non-Competition Agreement"), which is incorporated herein by reference and made a part of this Agreement for all purposes.

(b) Without limiting the terms and conditions of the Non-Competition Agreement, Executive agrees that during the Employment Period and for a period of eighteen (18) months following the termination of Executive's employment with the Company for any reason (the "Restricted Period"), Executive shall not, directly or indirectly, whether as an employee, consultant, advisor, independent contractor, principal, agent, partner, officer, director, stockholder (other than as a passive holder of not more than two percent (2%) of the outstanding equity of a publicly traded company), member, manager, or in any other capacity, engage in, or provide services to any person or entity that is engaged in, the healthcare information technology, healthcare software-as-a-service, or healthcare data analytics business in the United States.

(c) The Non-Competition Agreement contains additional terms, conditions, and provisions relating to the non-competition obligations, including garden-leave provisions, that are intended to comply with the Massachusetts Noncompetition Agreement Act (M.G.L. c. 149, § 24L), and Executive's non-competition obligations shall be governed by and subject to the terms of the Non-Competition Agreement to the extent required by such statute.

Section 7.2 — Non-Solicitation of Employees

During the Employment Period and for a period of eighteen (18) months following the termination of Executive's employment with the Company for any reason, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity: (a) solicit, recruit, hire, or attempt to solicit, recruit, or hire any employee of the Company who holds a position at the level of manager or above; or (b) encourage, induce, or attempt to encourage or induce any such employee to leave the employment of the Company or to accept employment or an engagement with any other person or entity. For purposes of this Section 7.2, "employee" shall include any individual who was an employee of the Company at any time during the six (6)-month period immediately preceding the date of the solicitation.

Section 7.3 — Non-Solicitation of Customers and Partners

During the Employment Period and for a period of twelve (12) months following the termination of Executive's employment with the Company for any reason, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, solicit, contact, or engage any customer, client, or business partner of the Company with whom Executive had material contact, or about whom Executive received Confidential Information, during the last twenty-four (24) months of Executive's employment with the Company, for the purpose of providing, selling, marketing, or distributing products or services that are competitive with those offered by the Company. For purposes of this Section 7.3, "material contact" means interaction between Executive and the customer, client, or business partner within the scope of Executive's duties and responsibilities.

Section 7.4 — Remedies for Breach

(a) Executive acknowledges and agrees that the restrictive covenants set forth in this Article VII and in the Non-Competition Agreement are reasonable and necessary to protect the Company's legitimate business interests, including its trade secrets, Confidential Information, customer and business partner relationships, goodwill, and investment in Executive's training and professional development. Executive further acknowledges that a breach or threatened breach of any of the restrictive covenants set forth in this Article VII would cause irreparable harm to the Company that cannot be adequately compensated by monetary damages alone.

(b) In the event of a breach or threatened breach by Executive of any of the restrictive covenants set forth in this Article VII or in the Non-Competition Agreement, the Company shall be entitled to seek and obtain, in addition to any other remedies available at law or in equity (including monetary damages), temporary, preliminary, and permanent injunctive relief, specific performance, and any other equitable remedies, without the necessity of posting a bond or proving actual damages.

(c) In the event that Executive breaches any of the non-competition or non-solicitation obligations set forth in this Article VII, the applicable Restricted Period shall be automatically tolled and extended for a period equal to the duration of such breach, so that the Company receives the full benefit of the bargained-for restrictive period.

ARTICLE VIII — CONFIDENTIALITY

Section 8.1 — Confidential Information

(a) Executive acknowledges that, in the course of Executive's employment with the Company, Executive will have access to and become acquainted with confidential, proprietary, and trade secret information of the Company and its affiliates that is not generally known to the public and that derives independent economic value from not being generally known (collectively, "Confidential Information"). Executive agrees that, during the Employment Period and at all times thereafter (a perpetual obligation), Executive shall not, directly or indirectly, disclose, publish, disseminate, use, or permit the use of any Confidential Information, except as required in the proper performance of Executive's duties and responsibilities under this Agreement or as expressly authorized in writing by the Company.

(b) For purposes of this Agreement, "Confidential Information" includes, without limitation, all non-public information relating to the Company's business, operations, finances, products, services, technology, and strategic plans, including without limitation: trade secrets; customer lists, databases, and identities; prospective customer information; pricing information, strategies, and models; financial data, projections, budgets, and forecasts; product roadmaps, specifications, and development plans; technology, algorithms, source code, object code, architectures, and designs; business strategies, marketing plans, and competitive analyses; supply chain and vendor information; personnel information, compensation data, and organizational plans; research and development activities; patent applications and prosecution strategies; merger and acquisition targets and strategies; investor information; and any other information that the Company designates as confidential or that a reasonable person would understand to be confidential given the nature of the information and the circumstances of its disclosure.

(i) becomes generally available to the public through no act, omission, or fault of Executive;

(ii) was independently developed by Executive without reference to, reliance upon, or use of any Confidential Information, as demonstrated by contemporaneous written documentation;

(iii) was rightfully received by Executive from a third party without restriction on disclosure and without breach of any obligation of confidentiality owed to the Company; or

(iv) is required to be disclosed by applicable law, regulation, rule, or order of any governmental authority or regulatory body, or by valid legal process (including a subpoena or court order); provided, however, that in the event of any such required disclosure, Executive shall (A) provide the Company with prompt written notice of such requirement (to the extent legally permitted), so that the Company may seek a protective order, confidential treatment, or other ap

EXECUTIVE EMPLOYMENT AGREEMENT
by and between
ARBOR HEALTH TECHNOLOGIES INC.
and
DR. MARCUS J. ELLISTON
Dated as of August 5, 2022
FIRST DRAFT — Subject to Further Negotiation
CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED Prepared by Calderwood & Harkness LLP One International Place, Suite 3400, Boston, MA 02110
EXECUTIVE EMPLOYMENT AGREEMENT
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This EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of August 5, 2022, by and between Arbor Health Technologies Inc., a Delaware corporation (the "Company" or "AHT"), with its principal place of business at 400 Brattle Commerce Park, Suite 1200, Cambridge, MA 02138, and Dr. Marcus J. Elliston, an individual residing at 87 Laurel Hill Road, Wellesley, MA 02481 ("Executive"). The Company and Executive are sometimes referred to herein individually as a "Party" and collectively as the "Parties." This Agreement shall become effective as of November 1, 2022 (the "Effective Date" or "Start Date").
RECITALS
WHEREAS, the Company desires to employ Executive as its Chief Operating Officer and to secure Executive's services, knowledge, and expertise for the benefit of the Company and its stockholders;
WHEREAS, Executive desires to accept such employment with the Company on the terms and conditions set forth herein;
WHEREAS, Executive possesses specialized skills, knowledge, and extensive experience in healthcare operations and technology that make Executive uniquely qualified to serve in the role of Chief Operating Officer of the Company;
WHEREAS, Executive most recently served as Senior Vice President of Operations at Pinnacle Care Systems, Inc., where Executive oversaw multi-site clinical operations, technology integration, and enterprise-wide process improvement initiatives;
WHEREAS, the Parties wish to set forth the terms and conditions of Executive's employment with the Company, including matters relating to compensation, benefits, equity awards, severance protections, restrictive covenants, confidentiality, intellectual property, and other related matters; and
WHEREAS, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — EMPLOYMENT; POSITION; DUTIES
Section 1.1 — Employment and Title
The Company hereby agrees to employ Executive, and Executive hereby accepts employment with the Company, as Chief Operating Officer ("COO") of the Company, effective as of the Effective Date, on the terms and conditions set forth in this Agreement. Executive's employment with the Company shall be subject to all of the terms and conditions contained herein.
Section 1.2 — Reporting
Executive shall report directly to the Chief Executive Officer of the Company, currently Priya Chandrasekaran, or to such other individual as may be designated by the Board of Directors of the Company (the "Board") from time to time. In the performance of Executive's duties, Executive shall also be available to interact with and present to the Board as reasonably requested by the CEO or the Board. Executive shall maintain a cooperative and professional working relationship with the CEO, the Board, and all other members of the Company's senior leadership team.
Section 1.3 — Duties and Responsibilities
(a) Executive shall devote substantially all of Executive's business time, attention, skill, and best efforts to the performance of Executive's duties and responsibilities on behalf of the Company and to the furtherance of the Company's business interests. Executive shall perform such duties and responsibilities as are customarily associated with the position of Chief Operating Officer of a company of the size, type, and nature of the Company, including without limitation oversight of day-to-day operations, supply chain management, technology implementation, quality assurance, regulatory compliance, and cross-functional coordination, and such other duties as may be assigned to Executive by the CEO from time to time, consistent with Executive's position, title, and stature within the Company.
(b) A detailed description of Executive's initial duties, responsibilities, and reporting structure is set forth on Exhibit A attached hereto and incorporated herein by reference. The Parties acknowledge that the duties and responsibilities described on Exhibit A may evolve over time in the ordinary course of the Company's business, and that modifications to such duties and responsibilities that are consistent with Executive's position as Chief Operating Officer shall not constitute a material diminution in Executive's authority, duties, or responsibilities for purposes of this Agreement.
(c) Executive shall at all times comply with all Company policies and procedures as may be in effect from time to time, including without limitation the Company's Code of Business Conduct and Ethics, Employee Handbook, and all applicable compliance, data privacy, and information security policies.
Section 1.4 — Place of Employment
Executive's principal place of employment shall be the Company's headquarters, currently located in Cambridge, Massachusetts, or such other location as the Company may designate from time to time, subject to the provisions of Section 6.3(a)(iii) of this Agreement. Executive acknowledges that the performance of Executive's duties may require reasonable business travel, both domestically and internationally, as necessary to fulfill Executive's responsibilities, and Executive agrees to undertake such travel as reasonably required.
Section 1.5 — Outside Activities
(a) During the Employment Period, Executive shall not, without the prior written consent of the CEO, engage in any other business activity, whether or not such activity is pursued for gain, profit, or other pecuniary advantage, that would interfere or conflict with Executive's duties and responsibilities under this Agreement. Notwithstanding the foregoing, nothing in this Section 1.5 shall preclude Executive from:
(i) making passive personal investments in any entity, provided that such investments do not create an actual or apparent conflict of interest with the Company and, in the case of investments in any entity that competes with the Company, do not exceed two percent (2%) of the outstanding equity of such entity;
(ii) serving on the board of directors or advisory board of one (1) outside company that does not compete with the Company, subject to the prior written approval of the Board, which approval shall not be unreasonably withheld or delayed; and
(iii) engaging in charitable, civic, educational, religious, or community activities that do not materially interfere with the performance of Executive's duties under this Agreement.
(b) Executive hereby represents and warrants to the Company that Executive's obligations under this Agreement do not conflict with, and will not be constrained by, any prior or existing agreements, obligations, or commitments of Executive to any third party, including without limitation any former employer, and that Executive has disclosed to the Company any and all agreements, obligations, or commitments that could reasonably be expected to affect Executive's ability to perform Executive's duties hereunder.
ARTICLE II — TERM
Section 2.1 — Initial Term
The initial term of Executive's employment under this Agreement shall commence on the Effective Date and shall continue for a period of three (3) years, ending on October 31, 2025, unless earlier terminated in accordance with the provisions of Article VI of this Agreement (the "Initial Term").
Section 2.2 — Renewal Terms
Following the expiration of the Initial Term, this Agreement shall automatically renew for successive periods of one (1) year each (each, a "Renewal Term"), unless either Party provides written notice to the other Party of its intention not to renew this Agreement at least ninety (90) days prior to the expiration of the then-current term (whether the Initial Term or any Renewal Term). In the event the Company delivers a notice of non-renewal, such non-renewal shall be treated as a termination by the Company without Cause for purposes of Section 6.2 and Section 6.4 of this Agreement. The Initial Term and any Renewal Terms are collectively referred to herein as the "Employment Period."
Section 2.3 — Survival
Notwithstanding any termination or expiration of this Agreement or Executive's employment hereunder, the following provisions shall survive in accordance with their respective terms: the restrictive covenant provisions set forth in Article VII, the confidentiality provisions set forth in Article VIII, the invention assignment provisions set forth in Article IX, the indemnification provisions set forth in Article XI, and any other provisions of this Agreement that by their nature or express terms are intended to survive termination or expiration.
ARTICLE III — COMPENSATION
Section 3.1 — Base Salary
During the Employment Period, the Company shall pay Executive an annual base salary of Five Hundred Seventy-Five Thousand Dollars ($575,000) per annum (the "Base Salary"). The Base Salary shall be payable in substantially equal installments in accordance with the Company's regular payroll practices as in effect from time to time, less all applicable federal, state, local, and other withholdings and authorized deductions. The Base Salary shall be subject to annual review by the Board (or the Compensation Committee of the Board, if one has been established) (the "Compensation Committee"), and may be increased (but not decreased) in the sole discretion of the Board or Compensation Committee. In no event shall Executive's Base Salary be reduced below Five Hundred Seventy-Five Thousand Dollars ($575,000) per annum without Executive's prior written consent.
Section 3.2 — Annual Bonus
(a) During the Employment Period, Executive shall be eligible to earn an annual performance bonus with respect to each fiscal year of the Company (or portion thereof) during which Executive is employed (the "Annual Bonus"). Executive's target Annual Bonus shall be equal to seventy-five percent (75%) of Executive's then-current Base Salary (i.e., Four Hundred Thirty-One Thousand Two Hundred Fifty Dollars ($431,250) at the initial Base Salary level) (the "Target Bonus"). Executive's maximum Annual Bonus shall be equal to one hundred fifty percent (150%) of the Target Bonus (i.e., Six Hundred Forty-Six Thousand Eight Hundred Seventy-Five Dollars ($646,875) at the initial Base Salary level) (the "Maximum Bonus").
(b) The Annual Bonus for each fiscal year shall be based upon the achievement of individual performance objectives and Company-wide performance objectives (which may include, without limitation, revenue targets, EBITDA targets, operational milestones, product development milestones, and strategic objectives), as established by the CEO and the Board (or Compensation Committee) within the first ninety (90) days of each fiscal year. The determination of the extent to which the Annual Bonus has been earned for any fiscal year shall be made by the Board (or Compensation Committee) in its reasonable discretion, based on the achievement of such objectives.
(c) The Annual Bonus, if earned, shall be payable within seventy-five (75) days following the end of the fiscal year to which it relates, subject to applicable withholdings and deductions. Except as otherwise provided in Article VI of this Agreement, Executive must be employed by the Company on the date the Annual Bonus is paid in order to be eligible to receive the Annual Bonus for the applicable fiscal year. No partial or pro-rata bonus shall be payable for any fiscal year in which Executive's employment terminates, except as expressly set forth in Article VI.
(d) For the fiscal year in which the Effective Date occurs, Executive's Annual Bonus shall be prorated based on the number of days of Executive's employment during such fiscal year divided by three hundred sixty-five (365).
Section 3.3 — Signing Bonus
(a) Within thirty (30) days following the Effective Date, the Company shall pay to Executive a one-time signing bonus in the amount of Two Hundred Fifty Thousand Dollars ($250,000) (the "Signing Bonus"), less all applicable federal, state, local, and other withholdings and authorized deductions.
(b) Clawback. In the event that Executive voluntarily resigns from employment with the Company (other than a resignation for Good Reason, as defined in Section 6.3(a) of this Agreement) or Executive's employment is terminated by the Company for Cause (as defined in Section 6.1 of this Agreement), in either case within twenty-four (24) months following the Effective Date, Executive shall repay the full gross amount of the Signing Bonus to the Company within thirty (30) days of the date of such termination. Executive hereby acknowledges and agrees that this repayment obligation is a material term of this Agreement, and that the Company would not have agreed to pay the Signing Bonus absent Executive's agreement to this clawback provision. This repayment obligation shall survive the termination of this Agreement and Executive's employment hereunder.
Section 3.4 — Expense Reimbursement
The Company shall reimburse Executive for all reasonable and documented business expenses incurred by Executive in the performance of Executive's duties under this Agreement, in accordance with the Company's expense reimbursement policy as in effect from time to time. Executive shall submit appropriate documentation and receipts for all expenses for which reimbursement is sought within sixty (60) days of incurring such expenses, and the Company shall reimburse Executive within thirty (30) days of the Company's receipt of such documentation. In no event shall the amount of expenses eligible for reimbursement during one calendar year affect the amount of expenses eligible for reimbursement in any other calendar year.
Section 3.5 — Relocation
In the event that Executive is required to relocate Executive's primary residence in connection with Executive's employment with the Company at any time during the Employment Period, the Company shall reimburse Executive for reasonable, documented relocation expenses, including moving costs, temporary housing (for up to sixty (60) days), and reasonable travel costs associated with house-hunting trips, up to a maximum aggregate amount of Seventy-Five Thousand Dollars ($75,000). The Parties acknowledge that as of the date of this Agreement, Executive currently resides in the Commonwealth of Massachusetts and that no immediate relocation is anticipated. This relocation allowance shall be available to Executive if Executive's circumstances change during the Employment Period such that relocation becomes necessary in connection with Executive's duties hereunder.
ARTICLE IV — EQUITY COMPENSATION
Section 4.1 — Stock Option Grant
(a) On or promptly following the Effective Date (and in no event later than thirty (30) days following the Effective Date), the Company shall grant to Executive a nonqualified stock option to purchase a number of shares of the Company's common stock, par value $0.001 per share, equal to one and one-quarter percent (1.25%) of the fully diluted equity of the Company as of the Effective Date (the "Option"). For purposes of this Section 4.1, "fully diluted equity" shall mean the total number of shares of the Company's common stock outstanding on the Effective Date, calculated on a fully diluted basis assuming the exercise or conversion of all outstanding options, warrants, convertible securities, and other rights to acquire shares of common stock.
(b) The Option shall be granted under and subject to the terms and conditions of the Arbor Health Technologies Inc. 2020 Equity Incentive Plan (as amended May 2021) (the "Plan") and a separate Stock Option Award Agreement to be entered into between the Company and Executive in the form customarily used by the Company for senior executive grants under the Plan.
(c) The exercise price per share of the Option shall be equal to the fair market value per share of the Company's common stock as of the date of grant, as determined by the Board in good faith and in compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and any applicable guidance thereunder, which determination shall be based upon the most recent independent valuation (a "409A valuation") obtained by the Company.
(d) The Option shall vest and become exercisable in accordance with the following schedule, subject to Executive's continued employment with the Company through each applicable vesting date:
(i) Twenty-five percent (25%) of the total number of shares subject to the Option shall vest on the first anniversary of the Effective Date (the "Cliff Vesting Date"); and
(ii) The remaining seventy-five percent (75%) of the total number of shares subject to the Option shall vest in thirty-six (36) equal monthly installments following the Cliff Vesting Date, such that the Option shall be fully vested on the fourth anniversary of the Effective Date.
(e) Notwithstanding the foregoing vesting schedule, the vesting of the Option shall be subject to acceleration as provided in Section 6.4, Section 6.5, and Section 6.7 of this Agreement.
Section 4.2 — Restricted Stock Unit Grant
(a) On or promptly following the Effective Date (and in no event later than thirty (30) days following the Effective Date), the Company shall grant to Executive restricted stock units representing one-half of one percent (0.50%) of the fully diluted equity of the Company as of the Effective Date (the "RSUs"). For purposes of this Section 4.2, "fully diluted equity" shall have the same meaning as set forth in Section 4.1(a) above.
(b) The RSUs shall be granted under and subject to the terms and conditions of the Plan and a separate Restricted Stock Unit Award Agreement to be entered into between the Company and Executive in the form customarily used by the Company for senior executive grants under the Plan.
(c) The RSUs shall vest in accordance with the following schedule, subject to Executive's continued employment with the Company through each applicable vesting date:
(i) One-third (33.33%) of the RSUs shall vest on the first anniversary of the Effective Date;
(ii) One-third (33.33%) of the RSUs shall vest on the second anniversary of the Effective Date; and
(iii) The remaining one-third (33.34%) of the RSUs shall vest on the third anniversary of the Effective Date.
(d) Notwithstanding the foregoing vesting schedule, the vesting of the RSUs shall be subject to acceleration as provided in Section 6.4, Section 6.5, and Section 6.7 of this Agreement.
Section 4.3 — Terms of Equity Awards
(a) All equity awards granted to Executive pursuant to this Article IV, including the Option and the RSUs, shall be subject to the terms and conditions of the Plan and the applicable award agreements (the Stock Option Award Agreement and the Restricted Stock Unit Award Agreement, respectively), including without limitation the provisions of such documents relating to exercise procedures, settlement, forfeiture, transfer restrictions, and tax withholding.
(b) In the event of any conflict between the terms of this Agreement and the terms of the Plan or any applicable award agreement, the terms of the Plan shall control; provided, however, that the acceleration provisions set forth in Section 6.4, Section 6.5, and Section 6.7 of this Agreement shall supersede any less favorable provisions relating to the vesting or acceleration of equity awards contained in the Plan or any applicable award agreement.
(c) The grant of all equity awards described in this Article IV shall be subject to the approval of the Board (or the Compensation Committee), including any required consents or approvals under the Stockholders' Agreement, dated as of July 15, 2020 (as amended from time to time), among the Company, Ridgeline Capital Partners, LP, Helix Ventures Fund III, LP, and the other stockholders party thereto (the "Stockholders' Agreement"). The Company shall use commercially reasonable efforts to obtain all such approvals promptly following the execution of this Agreement.
ARTICLE V — BENEFITS
Section 5.1 — Health Insurance
During the Employment Period, Executive shall be eligible to participate in the Company's executive health plan, including medical, dental, and vision coverage, on the same terms and conditions as are generally available to other senior executives of the Company. As of the date of this Agreement, the Company's estimated employer contribution toward health insurance premiums for Executive and Executive's eligible dependents is approximately Two Thousand One Hundred Fifty Dollars ($2,150) per month. The Company reserves the right to modify its health insurance offerings in its discretion, subject to the provisions of Section 5.7 below.
Section 5.2 — Life Insurance
During the Employment Period, the Company shall provide Executive with Company-paid life insurance coverage in an amount equal to two times (2×) Executive's Base Salary (i.e., One Million One Hundred Fifty Thousand Dollars ($1,150,000) at the initial Base Salary level), subject to the terms and conditions of the Company's life insurance policy as in effect from time to time and any applicable insurability requirements. Executive shall have the right to designate the beneficiary or beneficiaries of such life insurance coverage.
Section 5.3 — Disability Insurance
During the Employment Period, Executive shall be eligible to participate in the Company's long-term disability insurance program, which shall provide coverage at a rate equal to sixty percent (60%) of Executive's Base Salary, subject to the terms, conditions, and maximum benefit limitations of the Company's disability insurance policy as in effect from time to time.
Section 5.4 — 401(k) Retirement Plan
During the Employment Period, Executive shall be eligible to participate in the Company's 401(k) retirement savings plan on the same terms and conditions as are generally available to other employees of the Company. The Company shall provide an employer matching contribution of up to four percent (4%) of Executive's eligible compensation, subject to the terms of the 401(k) plan and all applicable limits imposed by the Internal Revenue Service, including the annual compensation and contribution limits under Sections 401(a)(17), 402(g), and 415 of the Code.
Section 5.5 — Paid Time Off
During the Employment Period, Executive shall be entitled to twenty-five (25) days of paid time off ("PTO") per calendar year, in addition to all Company-designated holidays. PTO shall accrue and be administered in accordance with the Company's PTO policy as in effect from time to time. For any partial calendar year during which Executive is employed, PTO shall be prorated based on the number of days remaining in such calendar year following the Effective Date (or preceding the date of termination, as applicable) divided by three hundred sixty-five (365). Any unused PTO shall be subject to the Company's PTO carryover and forfeiture policies as in effect from time to time, subject to applicable law.
Section 5.6 — Executive Perquisites
During the Employment Period, Executive shall be entitled to the following executive perquisites:
(a) Professional Development Allowance. An annual professional development allowance of Fifteen Thousand Dollars ($15,000) for attendance at industry conferences, continuing education programs, professional association memberships, and related professional development activities. Such allowance shall be administered in accordance with the Company's expense reimbursement policy, and any unused portion of the allowance in any calendar year shall not carry over to subsequent years.
(b) Executive Physical Examination. An annual comprehensive executive physical examination through the Company's designated executive health program, at the Company's expense.
Section 5.7 — General Benefits Provisions
(a) All benefits described in this Article V are subject to the terms and conditions of the applicable plans, policies, and programs as in effect from time to time. The descriptions of benefits set forth in this Article V are intended to be summaries only and are not intended to modify or supplement the terms of any applicable plan, policy, or program.
(b) The Company reserves the right to modify, amend, or terminate any benefit plan, policy, or program at any time, in its sole discretion, consistent with applicable law; provided, however, that during the Employment Period, Executive shall receive benefits that are, in the aggregate, no less favorable than those provided to other similarly situated senior executives of the Company.
ARTICLE VI — TERMINATION OF EMPLOYMENT; SEVERANCE
Section 6.1 — Termination by the Company for Cause
(a) The Company may terminate Executive's employment for "Cause" at any time, effective immediately upon written notice to Executive (or, where a cure period applies, upon the expiration of such cure period without cure).
(b) For purposes of this Agreement, "Cause" shall mean the occurrence of any one or more of the following:
(i) Executive's material breach of any provision of this Agreement, which breach, if capable of cure, remains uncured for a period of thirty (30) days after written notice thereof from the Company to Executive specifying the nature of such breach in reasonable detail;
(ii) Executive's conviction of, or entry of a plea of guilty or nolo contendere to, (A) a felony under the laws of the United States or any state thereof, or (B) any crime (whether or not a felony) involving fraud, dishonesty, embezzlement, or moral turpitude;
(iii) Executive's willful and continued failure to substantially perform Executive's duties and responsibilities under this Agreement (other than any such failure resulting from Executive's Disability), which failure continues for a period of thirty (30) days after written notice thereof from the Company to Executive specifying the nature of such failure in reasonable detail and requesting cure;
(iv) Executive's gross negligence or willful misconduct in the performance of Executive's duties and responsibilities under this Agreement, which has or is reasonably likely to have a material adverse effect on the Company;
(v) Executive's material violation of any written Company policy, including without limitation the Company's Code of Business Conduct and Ethics, anti-harassment policy, data privacy policy, or information security policy, as in effect from time to time; or
(vi) Executive's fraud, embezzlement, or misappropriation of Company funds, property, or assets, regardless of the amount involved.
(c) Upon termination of Executive's employment for Cause, Executive shall be entitled solely to the Accrued Obligations (as defined in Section 6.8). Executive shall not be entitled to any severance pay, any Annual Bonus for the fiscal year in which termination occurs (whether or not otherwise earned), any acceleration of vesting of equity awards, or any other compensation or benefits, except as required by applicable law.
Section 6.2 — Termination by the Company Without Cause
The Company may terminate Executive's employment without Cause at any time upon not less than thirty (30) days' prior written notice to Executive (or, at the Company's election, by providing Executive with thirty (30) days' Base Salary in lieu of such notice period). In the event of such termination, Executive shall be entitled to the Accrued Obligations and the severance benefits described in Section 6.4 or Section 6.5, as applicable, subject to the conditions set forth therein.
Section 6.3 — Resignation by Executive
(a) Resignation for Good Reason. Executive may resign Executive's employment with the Company for "Good Reason" (as defined below) and, upon such resignation, shall be entitled to the Accrued Obligations and the severance benefits described in Section 6.4 or Section 6.5, as applicable, subject to the conditions set forth therein.
For purposes of this Agreement, "Good Reason" shall mean the occurrence of any one or more of the following events without Executive's prior written consent:
(i) A material diminution in Executive's title, authority, duties, or responsibilities, including without limitation a requirement that Executive report to any person other than the CEO or the Board, or the assignment to Executive of duties that are materially inconsistent with Executive's position as Chief Operating Officer;
(ii) A reduction in Executive's Base Salary below Five Hundred Seventy-Five Thousand Dollars ($575,000) per annum (or, if Executive's Base Salary has been increased above such amount, below the then-current Base Salary);
(iii) The relocation of Executive's principal place of employment to a location that is more than thirty-five (35) miles from the Company's current headquarters in Cambridge, Massachusetts;
(iv) A material breach by the Company of any material provision of this Agreement; or
(v) The failure of any successor entity to assume this Agreement in its entirety following a Change in Control (as defined in Section 6.6), in accordance with Section 12.7 hereof.
Notwithstanding the foregoing, no event shall constitute "Good Reason" unless: (A) Executive provides written notice to the Company specifying the event or condition giving rise to Good Reason within sixty (60) days following Executive's first becoming aware of the occurrence of such event or condition; (B) the Company fails to cure such event or condition within thirty (30) days following its receipt of such notice (the "Cure Period"); and (C) Executive actually resigns Executive's employment within thirty (30) days following the expiration of the Cure Period. If the Company cures the event or condition giving rise to Good Reason within the Cure Period, Executive's notice of Good Reason shall be deemed withdrawn and of no further force or effect.
(b) Voluntary Resignation Without Good Reason. Executive may resign Executive's employment with the Company at any time without Good Reason upon not less than sixty (60) days' prior written notice to the Company. In the event of such voluntary resignation, Executive shall be entitled solely to the Accrued Obligations. No severance pay, Annual Bonus for the fiscal year in which such resignation occurs, or acceleration of vesting of equity awards shall be payable to Executive. For the avoidance of doubt, a voluntary resignation without Good Reason within twenty-four (24) months following the Effective Date shall trigger the Signing Bonus clawback provision set forth in Section 3.3(b) of this Agreement.
Section 6.4 — Severance Upon Termination Without Cause or Resignation for Good Reason (No Change in Control)
If Executive's employment is terminated by the Company without Cause (other than by reason of Executive's death or Disability) pursuant to Section 6.2, or if Executive resigns for Good Reason pursuant to Section 6.3(a), in either case at a time that is not within twenty-four (24) months following a Change in Control (as defined in Section 6.6), then, in addition to the Accrued Obligations, and subject to Executive's satisfaction of the conditions set forth in this Section 6.4, Executive shall be entitled to the following severance benefits:
(a) Severance Payment. Continued payment of Executive's Base Salary at the rate in effect on the date of termination for a period of twelve (12) months following the date of termination (the "Severance Period"), payable in substantially equal installments in accordance with the Company's regular payroll practices, commencing on the first regular payroll date following the date on which the Release (as defined below) becomes effective and irrevocable; provided, however, that any installments that would have been paid during the period between the date of termination and the date of the first such payment shall be accumulated and paid in a lump sum on such first payment date. The aggregate amount of severance payments under this Section 6.4(a) shall be Five Hundred Seventy-Five Thousand Dollars ($575,000).
(b) Pro-Rata Annual Bonus. A pro-rata Annual Bonus for the fiscal year in which Executive's termination of employment occurs, calculated based on actual Company performance for such fiscal year and prorated based on the number of days Executive was employed during such fiscal year divided by three hundred sixty-five (365), payable at the same time as Annual Bonuses are paid to other senior executives of the Company for such fiscal year (but in no event later than seventy-five (75) days following the end of such fiscal year).
(c) COBRA Continuation. Subject to Executive's timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company shall pay or reimburse Executive for the full cost of COBRA premiums for Executive and Executive's eligible dependents for a period of twelve (12) months following the date of termination (the estimated monthly cost of such premiums being approximately $2,150, for an estimated total of $25,800), or, if earlier, until Executive becomes eligible for comparable group health insurance coverage through another employer or source. If the Company determines in its reasonable judgment that providing such COBRA premium payments would violate applicable law or result in adverse tax consequences to the Company, the Company shall instead pay Executive a taxable monthly cash payment equal to the applicable COBRA premium for the remainder of the twelve (12)-month period, which Executive may use for any purpose.
(d) Equity Acceleration. Notwithstanding the vesting schedules set forth in Section 4.1 and Section 4.2, upon a termination described in this Section 6.4, twenty-five percent (25%) of the then-unvested portion of the Option and the RSUs shall immediately vest and, in the case of the Option, become exercisable, as of the date of termination. The remaining unvested portion of the Option and the RSUs shall be forfeited as of the date of termination, subject to the terms of the Plan and the applicable award agreements.
(e) Conditions to Severance. All severance benefits described in this Section 6.4 (other than the Accrued Obligations) are expressly conditioned upon:
(i) Executive's timely execution (and non-revocation during any applicable revocation period) of a general release of claims in favor of the Company, its affiliates, and their respective officers, directors, employees, agents, and representatives, in substantially the form attached hereto as Schedule B (the "Release"), which Release must become effective and irrevocable no later than sixty (60) days following Executive's date of termination; and
(ii) Executive's continued compliance with the restrictive covenant provisions set forth in Article VII of this Agreement and the Non-Competition Agreement (as defined in Section 7.1).
In the event that Executive breaches any of the restrictive covenant provisions of Article VII or the Non-Competition Agreement at any time during the period in which severance benefits are being paid, the Company's obligation to make any further severance payments or provide any further severance benefits under this Section 6.4 shall immediately cease, and Executive shall be required to repay to the Company any severance payments previously made under this Section 6.4 (other than the Accrued Obligations).
(f) Estimated Severance Value. For informational purposes only, the estimated total value of the severance benefits payable under this Section 6.4, excluding the value of any equity acceleration, is approximately One Million Thirty-Two Thousand Fifty Dollars ($1,032,050), calculated as follows: Severance Payment ($575,000) plus Target Bonus proxy ($431,250) plus COBRA Continuation ($25,800). Actual amounts may vary based on performance, Base Salary adjustments, and COBRA premium rates in effect at the time of termination.
Section 6.5 — Severance Upon Termination Without Cause or Resignation for Good Reason Following a Change in Control (Double Trigger)
If Executive's employment is terminated by the Company without Cause (other than by reason of Executive's death or Disability) pursuant to Section 6.2, or if Executive resigns for Good Reason pursuant to Section 6.3(a), in either case within twenty-four (24) months following a Change in Control (as defined in Section 6.6) (a "CIC Qualifying Termination"), then, in addition to the Accrued Obligations, and subject to Executive's satisfaction of the conditions set forth in this Section 6.5, Executive shall be entitled to the following severance benefits in lieu of (and not in addition to) the severance benefits described in Section 6.4:
(a) CIC Severance Payment. A lump-sum cash payment equal to twenty-four (24) months of Executive's Base Salary at the rate in effect on the date of termination (or, if higher, the rate in effect immediately prior to the Change in Control), payable within sixty (60) days following the date of termination, subject to the provisions of Section 6.10 regarding Section 409A compliance. The aggregate amount of the CIC Severance Payment shall be One Million One Hundred Fifty Thousand Dollars ($1,150,000) (calculated as $575,000 × 2), or such greater amount as may result from any increase in Base Salary prior to the date of termination.
(b) CIC Bonus Payment. A lump-sum cash payment equal to two times (2×) the Target Bonus at the rate in effect on the date of termination (or, if higher, the Target Bonus in effect immediately prior to the Change in Control), payable at the same time as the CIC Severance Payment. The aggregate amount of the CIC Bonus Payment shall be Eight Hundred Sixty-Two Thousand Five Hundred Dollars ($862,500) (calculated as $431,250 × 2), or such greater amount as may result from any increase in Base Salary (and corresponding Target Bonus) prior to the date of termination.
(c) CIC COBRA Continuation. Subject to Executive's timely election of COBRA continuation coverage, the Company (or its successor) shall pay or reimburse Executive for the full cost of COBRA premiums for Executive and Executive's eligible dependents for a period of eighteen (18) months following the date of termination (the estimated monthly cost of such premiums being approximately $2,150, for an estimated total of $38,700), or, if earlier, until Executive becomes eligible for comparable group health insurance coverage through another employer or source. If the Company determines in its reasonable judgment that providing such COBRA premium payments would violate applicable law or result in adverse tax consequences, the Company shall instead pay Executive a taxable monthly cash payment equal to the applicable COBRA premium for the remainder of the eighteen (18)-month period.
(d) CIC Equity Acceleration. Notwithstanding the vesting schedules set forth in Section 4.1 and Section 4.2, upon a CIC Qualifying Termination, one hundred percent (100%) of all then-unvested portions of the Option and the RSUs shall immediately vest in full and, in the case of the Option, become fully exercisable, as of the date of termination (or, if earlier, the date of the Change in Control if Executive is terminated on or prior to such date).
(e) Total Estimated CIC Severance Value. For informational purposes only, the estimated total value of the severance benefits payable under this Section 6.5, excluding the value of any equity acceleration, is approximately Two Million Fifty-One Thousand Two Hundred Dollars ($2,051,200), calculated as follows: CIC Severance Payment ($1,150,000) plus CIC Bonus Payment ($862,500) plus CIC COBRA Continuation ($38,700). Actual amounts may vary based on Base Salary adjustments and COBRA premium rates in effect at the time of termination.
(f) Conditions. All severance benefits described in this Section 6.5 (other than the Accrued Obligations) are subject to the same conditions as set forth in Section 6.4(e), including the timely execution and non-revocation of the Release and Executive's continued compliance with the restrictive covenant provisions of Article VII and the Non-Competition Agreement.
Section 6.6 — Definition of "Change in Control"
For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any one or more of the following events:
(a) Any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than Ridgeline Capital Partners, LP, or any of its affiliates (including any fund managed or controlled by Ridgeline Capital Partners, LP or its general partner), acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated under such Act) of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then-outstanding voting securities entitled to vote generally in the election of directors;
(b) The consummation of a merger, consolidation, statutory share exchange, reorganization, or similar business combination involving the Company, or the sale, transfer, or other disposition of all or substantially all of the assets of the Company (whether by sale, merger, or otherwise), unless, immediately following such transaction, the stockholders of the Company immediately prior to such transaction retain, directly or indirectly, at least fifty percent (50%) of the combined voting power of the then-outstanding voting securities of the surviving, resulting, or acquiring entity (or its ultimate parent entity) entitled to vote generally in the election of directors;
(c) The approval by the Company's stockholders of a plan of complete liquidation or dissolution of the Company; or
(d) A change in the composition of the Board such that, during any twelve (12)-month period, individuals who at the beginning of such period constituted the Board (the "Incumbent Directors"), together with any director whose election by the Board or whose nomination for election by the Company's stockholders was approved by a vote of at least a majority of the Incumbent Directors then in office (excluding any director whose initial assumption of office occurred as a result of an actual or threatened proxy contest, election contest, or other actual or threatened solicitation of proxies or consents), cease for any reason to constitute at least a majority of the Board.
Notwithstanding the foregoing, the term "Change in Control" shall not include any initial public offering of the Company's securities or any transaction solely between the Company and one or more of its wholly owned subsidiaries.
Section 6.7 — Termination Due to Death or Disability
(a) Death. Executive's employment shall terminate automatically upon Executive's death. In the event of Executive's death, Executive's estate or designated beneficiary shall be entitled to: (i) the Accrued Obligations; (ii) a pro-rata Target Bonus for the fiscal year in which Executive's death occurs, calculated by multiplying the Target Bonus by a fraction, the numerator of which is the number of days Executive was employed during such fiscal year and the denominator of which is three hundred sixty-five (365), payable within seventy-five (75) days following the end of such fiscal year; and (iii) twelve (12) months of accelerated vesting of the then-unvested portion of the Option and the RSUs.
(b) Disability. The Company may terminate Executive's employment upon Executive's Disability. For purposes of this Agreement, "Disability" shall mean Executive's inability, due to physical or mental incapacity, to perform the essential functions of Executive's position, with or without reasonable accommodation, for a period of one hundred eighty (180) consecutive calendar days or for a total of two hundred seventy (270) calendar days in any three hundred sixty-five (365)-day period, as determined in good faith by the Board, based upon such medical evidence as the Board may reasonably require. In the event of Executive's termination due to Disability, Executive shall be entitled to: (i) the Accrued Obligations; (ii) a pro-rata Target Bonus for the fiscal year in which such termination occurs, calculated in the same manner as described in Section 6.7(a)(ii) above; and (iii) twelve (12) months of accelerated vesting of the then-unvested portion of the Option and the RSUs.
Section 6.8 — Accrued Obligations
Upon any termination of Executive's employment for any reason, whether by the Company or by Executive, Executive (or Executive's estate or designated beneficiary, as applicable) shall be entitled to receive the following (collectively, the "Accrued Obligations"):
(a) Any earned but unpaid Base Salary through and including the date of termination, payable on the next regular payroll date following the date of termination (or earlier if required by applicable law);
(b) Any accrued but unused PTO as of the date of termination, payable in accordance with Company policy and applicable law;
(c) Reimbursement for any unreimbursed business expenses properly incurred by Executive prior to the date of termination, in accordance with Section 3.4 of this Agreement and the Company's expense reimbursement policy; and
(d) Any vested benefits to which Executive is entitled under any Company benefit plan, policy, or program, in accordance with the terms and conditions of such plan, policy, or program and applicable law.
Section 6.9 — Section 280G Best-Net Cutback
(a) In the event that any payment, benefit, or distribution of any type to or for the benefit of Executive by the Company, any affiliate of the Company, any person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Code), or any affiliate of such person, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the "Total Payments"), would constitute a "parachute payment" within the meaning of Section 280G of the Code, then the Total Payments shall be reduced (but not below zero) to the greatest amount that would not cause any portion of the Total Payments to be subject to the excise tax imposed by Section 4999 of the Code (the "Reduced Amount"); provided, however, that such reduction shall be made only if and to the extent that the after-tax value of the Total Payments received by Executive after giving effect to such reduction (after taking into account federal, state, and local income taxes, employment taxes, and the excise tax under Section 4999 of the Code) would exceed the after-tax value of the Total Payments received by Executive without such reduction (after taking into account federal, state, and local income taxes, employment taxes, and the excise tax under Section 4999 of the Code). This approach is referred to as the "best net" cutback.
(b) No tax gross-up payment shall be provided to Executive with respect to any excise tax imposed under Section 4999 of the Code or any other tax imposed in connection with any payment or benefit provided under this Agreement.
(c) If a reduction of the Total Payments is required pursuant to this Section 6.9, such reduction shall be applied in the following order: (i) first, by reducing cash severance payments under Section 6.5(a); (ii) second, by reducing the CIC Bonus Payment under Section 6.5(b); (iii) third, by reducing the value of COBRA continuation benefits under Section 6.5(c); and (iv) fourth, by reducing the value of accelerated vesting of equity awards under Section 6.5(d), with such equity acceleration reduced in reverse order of the scheduled vesting dates of the applicable awards (i.e., the awards with the latest scheduled vesting dates shall be reduced first).
(d) All determinations required to be made under this Section 6.9, including whether any payment or benefit is a "parachute payment," the amount of any reduction, and the assumptions to be utilized in arriving at such determinations, shall be made by Hargrove & Sinclair CPAs (or such other nationally recognized accounting or tax advisory firm as may be designated by the Company with Executive's reasonable consent) (the "Tax Advisor"), at the Company's expense. The Company and Executive shall cooperate with the Tax Advisor in making such determinations, and shall provide such information and documents as the Tax Advisor may reasonably request.
Section 6.10 — Section 409A Compliance
(a) The Parties intend that all payments and benefits provided under this Article VI shall comply with, or be exempt from, the requirements of Section 409A of the Code and the Treasury Regulations promulgated thereunder ("Section 409A"), and this Agreement shall be interpreted and administered in a manner consistent with such intent. Notwithstanding any other provision of this Agreement, to the extent that any payment or benefit under this Agreement is subject to Section 409A, such payment or benefit shall be provided in a manner that complies with Section 409A.
(b) For purposes of Section 409A, each installment payment of Base Salary continuation provided under Section 6.4(a) shall be treated as a separate payment. The right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments for purposes of Section 409A.
(c) If Executive is determined to be a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Code at the time of Executive's "separation from service" (within the meaning of Section 409A), then, to the extent that any payment or benefit to which Executive becomes entitled under this Agreement on account of Executive's separation from service constitutes "deferred compensation" (within the meaning of Section 409A) and is not otherwise exempt from Section 409A, such payment or benefit shall not be paid or provided until the earlier of (i) the date that is six (6) months and one (1) day following the date of Executive's separation from service, or (ii) the date of Executive's death (the "Delayed Payment Date"). On the Delayed Payment Date, Executive shall receive a lump-sum payment equal to the aggregate amount of all payments that would have been made during such six (6)-month delay period, together with interest thereon at the applicable federal rate under Section 7872(f)(2)(A) of the Code.
(d) For purposes of this Agreement, any reference to "termination of employment," "termination," or words of similar import shall mean a "separation from service" within the meaning of Section 409A, and Executive shall not be deemed to have experienced a termination of employment unless and until Executive has experienced a separation from service.
(e) The Parties acknowledge that the Section 409A compliance provisions of this Agreement have been drafted in coordination with Gregory Tan, a tax partner at Calderwood & Harkness LLP, and the Company's outside tax advisors at Hargrove & Sinclair CPAs, and that additional review may be required as the Company's circumstances change.
Section 6.11 — No Mitigation; No Offset
Executive shall not be required to seek other employment or otherwise mitigate damages by seeking or accepting alternative employment following the termination of Executive's employment with the Company, and the amount of any severance payments or benefits to which Executive is entitled under this Article VI shall not be reduced, offset, or otherwise affected by any compensation, income, or benefits earned or received by Executive from any other source of employment or engagement following Executive's termination, including any employment, self-employment, consulting, or advisory engagement.
ARTICLE VII — RESTRICTIVE COVENANTS
Section 7.1 — Non-Competition
(a) Executive acknowledges that, concurrently with the execution and delivery of this Agreement, Executive and the Company are entering into a separate Employee Non-Competition Agreement (the "Non-Competition Agreement"), which is incorporated herein by reference and made a part of this Agreement for all purposes.
(b) Without limiting the terms and conditions of the Non-Competition Agreement, Executive agrees that during the Employment Period and for a period of eighteen (18) months following the termination of Executive's employment with the Company for any reason (the "Restricted Period"), Executive shall not, directly or indirectly, whether as an employee, consultant, advisor, independent contractor, principal, agent, partner, officer, director, stockholder (other than as a passive holder of not more than two percent (2%) of the outstanding equity of a publicly traded company), member, manager, or in any other capacity, engage in, or provide services to any person or entity that is engaged in, the healthcare information technology, healthcare software-as-a-service, or healthcare data analytics business in the United States.
(c) The Non-Competition Agreement contains additional terms, conditions, and provisions relating to the non-competition obligations, including garden-leave provisions, that are intended to comply with the Massachusetts Noncompetition Agreement Act (M.G.L. c. 149, § 24L), and Executive's non-competition obligations shall be governed by and subject to the terms of the Non-Competition Agreement to the extent required by such statute.
Section 7.2 — Non-Solicitation of Employees
During the Employment Period and for a period of eighteen (18) months following the termination of Executive's employment with the Company for any reason, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity: (a) solicit, recruit, hire, or attempt to solicit, recruit, or hire any employee of the Company who holds a position at the level of manager or above; or (b) encourage, induce, or attempt to encourage or induce any such employee to leave the employment of the Company or to accept employment or an engagement with any other person or entity. For purposes of this Section 7.2, "employee" shall include any individual who was an employee of the Company at any time during the six (6)-month period immediately preceding the date of the solicitation.
Section 7.3 — Non-Solicitation of Customers and Partners
During the Employment Period and for a period of twelve (12) months following the termination of Executive's employment with the Company for any reason, Executive shall not, directly or indirectly, whether on Executive's own behalf or on behalf of any other person or entity, solicit, contact, or engage any customer, client, or business partner of the Company with whom Executive had material contact, or about whom Executive received Confidential Information, during the last twenty-four (24) months of Executive's employment with the Company, for the purpose of providing, selling, marketing, or distributing products or services that are competitive with those offered by the Company. For purposes of this Section 7.3, "material contact" means interaction between Executive and the customer, client, or business partner within the scope of Executive's duties and responsibilities.
Section 7.4 — Remedies for Breach
(a) Executive acknowledges and agrees that the restrictive covenants set forth in this Article VII and in the Non-Competition Agreement are reasonable and necessary to protect the Company's legitimate business interests, including its trade secrets, Confidential Information, customer and business partner relationships, goodwill, and investment in Executive's training and professional development. Executive further acknowledges that a breach or threatened breach of any of the restrictive covenants set forth in this Article VII would cause irreparable harm to the Company that cannot be adequately compensated by monetary damages alone.
(b) In the event of a breach or threatened breach by Executive of any of the restrictive covenants set forth in this Article VII or in the Non-Competition Agreement, the Company shall be entitled to seek and obtain, in addition to any other remedies available at law or in equity (including monetary damages), temporary, preliminary, and permanent injunctive relief, specific performance, and any other equitable remedies, without the necessity of posting a bond or proving actual damages.
(c) In the event that Executive breaches any of the non-competition or non-solicitation obligations set forth in this Article VII, the applicable Restricted Period shall be automatically tolled and extended for a period equal to the duration of such breach, so that the Company receives the full benefit of the bargained-for restrictive period.
ARTICLE VIII — CONFIDENTIALITY
Section 8.1 — Confidential Information
(a) Executive acknowledges that, in the course of Executive's employment with the Company, Executive will have access to and become acquainted with confidential, proprietary, and trade secret information of the Company and its affiliates that is not generally known to the public and that derives independent economic value from not being generally known (collectively, "Confidential Information"). Executive agrees that, during the Employment Period and at all times thereafter (a perpetual obligation), Executive shall not, directly or indirectly, disclose, publish, disseminate, use, or permit the use of any Confidential Information, except as required in the proper performance of Executive's duties and responsibilities under this Agreement or as expressly authorized in writing by the Company.
(b) For purposes of this Agreement, "Confidential Information" includes, without limitation, all non-public information relating to the Company's business, operations, finances, products, services, technology, and strategic plans, including without limitation: trade secrets; customer lists, databases, and identities; prospective customer information; pricing information, strategies, and models; financial data, projections, budgets, and forecasts; product roadmaps, specifications, and development plans; technology, algorithms, source code, object code, architectures, and designs; business strategies, marketing plans, and competitive analyses; supply chain and vendor information; personnel information, compensation data, and organizational plans; research and development activities; patent applications and prosecution strategies; merger and acquisition targets and strategies; investor information; and any other information that the Company designates as confidential or that a reasonable person would understand to be confidential given the nature of the information and the circumstances of its disclosure.
(c) The obligations of confidentiality set forth in this Section 8.1 shall not apply to information that:
(i) becomes generally available to the public through no act, omission, or fault of Executive;
(ii) was independently developed by Executive without reference to, reliance upon, or use of any Confidential Information, as demonstrated by contemporaneous written documentation;
(iii) was rightfully received by Executive from a third party without restriction on disclosure and without breach of any obligation of confidentiality owed to the Company; or
(iv) is required to be disclosed by applicable law, regulation, rule, or order of any governmental authority or regulatory body, or by valid legal process (including a subpoena or court order); provided, however, that in the event of any such required disclosure, Executive shall (A) provide the Company with prompt written notice of such requirement (to the extent legally permitted), so that the Company may seek a protective order, confidential treatment, or other ap

EXECUTIVE EMPLOYMENT AGREEMENT

ARBOR HEALTH TECHNOLOGIES INC.

DR. MARCUS J. ELLISTON

EXECUTIVE EMPLOYMENT AGREEMENT

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