10. Commitments and contingencies Employment and Consulting Agreements Gary S. Jacob, Ph.D. On May 2, 2011, Dr. Gary Jacob entered into an amended and restated employment agreement with the Company in which he agreed to serve as Chief Executive Officer and President. The term of the agreement was effective as of August 1, 2008 and continues until December 31, 2014 and is automatically renewed for successive one year periods at the end of each term. Dr. Jacob s current base salary is $324,450 per year. Dr. Jacob is eligible to receive a cash bonus of up to 50% of his base salary per year based on meeting certain performance objectives and bonus criteria. Dr. Jacob is also eligible to receive a realization bonus in the event that the Company enters into an out-license agreement for its technology or enter into a joint venture in which the Company contributes such rights to the joint venture where the enterprise value equals or exceeds a minimum of $250 million in the term of the agreement, or the license fees the Company contracts to receive equals or exceeds $50 million. The realization bonus will be equal to the enterprise value in the case of a joint venture or the sum of the license fees actually received in the case of an out license, multiplied by 0.5%. In addition, in the event the Company engages in a merger transaction or a sale of substantially all of its assets where (i) the enterprise value at the time of the merger or sale equals or exceed $400 million and the Company s stockholders, prior to consummation of the merger or sale, beneficially own less than 20% of the stock of the surviving entity after consummation of the merger or (ii) the Company s enterprise value at the time of the merger or sale or 12 months after the merger or sale equals or exceed $250 million and its stockholders prior to consummation of the merger or sale beneficially own 20% or more of the stock of the surviving entity after consummation of the merge, Dr. Jacob shall receive a bonus in an amount determined by multiplying the en