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AGREEMENT
This Agreement (the "Agreement") is made and entered into effective as
of September 5, 1997, by and between Xxxxx Xxxxxx (the "Employee") and CellPro,
Incorporated, a Delaware corporation (the "Company").
R E C I T A L S
A. The future and viability of the Company is uncertain and
substantially dependent upon Employee and other key employees continuing
employment with the Company and successfully completing one or more transactions
that give the Company a viable business in the future. The Board recognizes that
such instability may cause the Employee to consider alternative employment
opportunities. The Board has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have the continued
dedication of the Employee, notwithstanding the possibility or occurrence of
adverse events to the Company.
B. The Board believes that it is imperative to provide the Employee with
certain incentives to remain with the Company and to pursue one or more
transactions that will result in increased stability and business opportunity
for the Company.
C. To accomplish the foregoing objectives, the Board of Directors has
directed the Company, upon execution of this Agreement by the Employee, to agree
to the terms provided in this Agreement.
D. Certain capitalized terms used in the Agreement are defined in
Section 4 below.
In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Employee by the Company, the
parties agree as follows:
1. At-Will Employment. The Company and the Employee acknowledge that the
Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
written policies at the time of termination. The terms of this Agreement shall
terminate upon the earlier of (a) immediately following termination of
Employee's employment with the Company, or (b) September 30, 2000. A termination
of the terms of this Agreement pursuant to the preceding sentence shall be
effective for all purposes, except that such termination shall not affect the
payment or provision of compensation or benefits on account of a termination of
employment occurring prior to the termination of the terms of this Agreement
including, but not limited to severance benefits payable pursuant to Section 5.
2. Stock Options. In the event of a Significant Corporate Event and
regardless of whether the Employee's employment with the Company is terminated
in connection with the
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Significant Corporate Event, each stock option exercisable for the Company's
Common Stock held by Employee that is subject to the terms of an Option
Agreement that has a vesting provision granted to Employee (the "Stock Options")
shall become immediately vested immediately prior to the effectiveness of the
Significant Corporate Event, and shall be exercisable in full in accordance with
the provisions of the Option Agreement and Plan pursuant to which such option
was granted.
3. Compensation. Upon the effective date of a Significant Corporate
Event, Employee shall be paid cash compensation equal to 2.99 times the
Employee's "base amount" as defined in Section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code").
4. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:
(a) Significant Corporate Event. "Significant Corporate
Event" shall mean the occurrence of any of the following events:
(i) Sale/Issuance of Securities. Any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended) acquires, directly or indirectly, securities of the Company
representing twenty percent (20%) or more of the total equity interests of the
Company.
(ii) Merger. A merger or consolidation of the Company
whether or not approved by the Board of Directors of the Company, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or
(iii) Sale of Assets. The closing of the sale or
disposition of assets of the Company approved by the Board of Directors, based
on the Board of Director's determination that such sale or disposition is in the
best interests of the Company and its stockholders, representing (A) at least
twenty percent (20%) of the Company's total assets, (B) a value of at least
$20,000,000 or (C) all or substantially all of the tangible assets directly
related to the manufacture or sale of the Company's CEPRATE(R) Products.
5. Severance. If Employee's employment is terminated by Employee or the
Company for any reason or no reason after December 31, 1997, Employee will be
entitled to receive on the effective date of termination of Employee's
employment (the "Termination Date"), cash compensation equal to six (6) months
of Employee's base salary (the "Initial Severance Payment"). In addition to the
Initial Severance Payment, on the Termination Date, the Company will deposit an
amount equal to six (6) months of Employee's base salary in escrow (the "Escrow
Deposit") with a financial institution pursuant to an escrow agreement in form
reasonably acceptable to Employee and the Company. If Employee has not obtained
new employment within the six (6) month period immediately following the
Termination Date, then
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the Escrow Agent will distribute to Employee monthly, commencing on the seventh
(7th) month anniversary of the Termination Date and ending on the twelfth (12th)
month anniversary of the Termination Date (the "Subsequent Payment Period") an
amount equal to one-sixth (1/6th) of the Escrow Deposit (the "Subsequent
Severance Payments"); provided, that the Subsequent Severance Payments shall be
reduced, on a dollar for dollar basis, to the extent Employee receives
compensation for services rendered to another person or entity during the
Subsequent Payment Period (the "Offset Amounts"). The Offset Amounts, if any,
shall be distributed by the Escrow Agent to the Company. Notwithstanding the
foregoing, in the event that the severance and other benefits provided for in
this Agreement to Employee constitute "parachute payments" within the meaning of
Section 280G of the Code and, but for this Section 5, would be subject to the
excise tax imposed by Section 4999 of the Code, the aggregate amount of such
payments and benefits payable pursuant to this Section 5 shall be reduced such
that the present value thereof (as determined under the Code and the applicable
regulations) is equal to 2.99 times the Employee's "base amount" as defined in
Section 280G(b)(3) of the Code.
If Employee's employment is terminated by Employee or the Company
for any reason or no reason prior to December 31, 1997, Employee will not be
entitled to receive any severance payments pursuant to this Section 5.
6. Business Combinations. In the event it is determined by the Board,
upon consultation with Company management and the Company's independent
auditors, that the enforcement of any Section of this Agreement, including, but
not limited to, Section 2 hereof, which allows for the acceleration of vesting
of stock options granted for the Company's securities upon the effective date of
a Significant Corporate Event would preclude accounting for any proposed
business combination of the Company involving a Significant Corporate Event as a
pooling of interests, and the Board otherwise desires to approve such a proposed
business transaction which requires as a condition to the closing of such
transaction that it be accounted for as a pooling of interests, then any such
Section of this Agreement shall be modified to permit such accounting treatment.
For purposes of this Section 6, the Board's determination shall require the
unanimous approval of the non-employee Board members.
7. Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
to all or substantially all of the Company's business and/or assets shall assume
the obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. The terms of this Agreement and all of the Employee's rights
hereunder shall inure to the benefit of, and be enforceable by, the Employee's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
8. Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. Mailed notices to the Employee shall be
addressed to the Employee at the home address which the Employee most recently
communicated to the Company in writing. In the case of the
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Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Secretary.
9. Miscellaneous Provisions
(a) No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor, except as otherwise
provided in this Agreement, shall any such payment be reduced by any earnings
that the Employee may receive from any other source.
(b) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Employee and by an authorized officer of the
Company (other than the Employee). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.
(c) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement
supersedes any agreement of the same title and concerning similar subject matter
dated prior to the date of this Agreement, and by execution of this Agreement
both parties agree that any such predecessor agreement shall be deemed null and
void.
(d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Washington without reference to conflict of laws provisions.
(e) Severability. If any term or provision of this Agreement or
the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions of this Agreement or the application of such terms and
provisions to circumstances other than those as to which it is held invalid or
unenforceable, and a suitable and equitable term or provision shall be
substituted therefor to carry out, insofar as may be valid and enforceable, the
intent and purpose of the invalid or unenforceable term or provision.
(f) No Assignment of Benefits. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (f) shall be
void.
(g) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment
taxes.
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(h) Assignment by Company. The Company may assign its rights
under this Agreement to an affiliate, and an affiliate may assign its rights
under this Agreement to another affiliate of the Company or to the Company;
provided, however, that no assignment shall be made if the net worth of the
assignee is less than the net worth of the Company at the time of assignment. In
the case of any such assignment, the term "Company" when used in a section of
this Agreement shall mean the corporation that actually employs the Employee.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.
CELLPRO, INCORPORATED XXXXX XXXXXX
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx Xxxxxx
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Title: Secretary
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