THERMOGENESIS CORP. EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10
THERMOGENESIS CORP. (“Employer”) and Xxxxxx X. Xxxxxx (“Executive”), agree as follows:
1. Employment. Employer employs Executive and Executive accepts employment with Employer
on the terms and conditions set forth in this Employment Agreement (“Agreement”).
2. Position; Scope of Employment. Executive shall have the position of Chief Executive
Officer, and the position will transition upon Employer’s engagement of a new Chief Executive
Officer, at which time Executive shall serve as Chief Technology Architect. Executive agrees to
perform such services customary to such offices as shall be assigned to him by the Board of
Directors. Executive shall report directly to Employer’s Board of Directors. Upon assuming the
role of Chief Technology Architect, Executive shall report directly to the Governance and
Nominating Committee of the Board of Directors and perform such services customary to such office,
including those provided on the attached Exhibit A. In addition, Executive will agree to serve as
Chairman of the Board, at the Board’s discretion, for a period of three years. It is contemplated
that Executive may serve in the role of Chief Executive Officer for a period not to exceed 12
months from the effective date of this Agreement, and shall assist the transition of the office to
a new Chief Executive Officer over a period of at least 6 months from the date a new Chief
Executive Officer is engaged. Executive’s prior Employment Agreement is hereby terminated and
superseded in whole by this Employment Agreement.
2.1. Entire Time and Effort. Executive shall devote Executive’s full working time,
attention, abilities, skill, labor and efforts to the performance of his employment. Executive
shall not, directly or indirectly, alone or as a member of a partnership or other organizational
entity, or as an officer of any corporation (other than any which are owned by or affiliated with
Employer) (i) be substantially engaged in or concerned with any other commercial duties or
pursuits, (ii) engage in any other business activity that will interfere with the performance of
Executive’s duties under this Agreement, except with the prior written consent of Employer, or
(iii) join the board of directors of any other corporation; provided, however, that
Executive may join the board of directors of no more than three unaffiliated corporations so long
as such corporations are not directly competitive to the current or future operations of Employer.
2.2. Rules and Regulations. Executive agrees to observe and comply with Employer’s
rules and regulations (including Employer’s code of ethics and xxxxxxx xxxxxxx policy) as provided
by Employer and as may be amended from time to time by Employer and will carry out and perform
faithfully such orders, directions and policies of Employer. To the extent any provision of this
Agreement is contrary to an Employer rule or regulation, as such may be amended from time to time,
the terms of this Agreement shall control.
2.3. Limitations Upon Authority to Bind Employer. In his capacity as Chief Executive
Officer, Executive shall not engage in any of the following actions on behalf of
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Employer without the prior approval of Employer: (i) borrow or obtain credit in any amount or execute
any guaranty, except for items purchased from vendors in the ordinary course of Employer’s
operations; (ii) expend funds for capital equipment in excess of expenditures expressly budgeted by
Employer, if applicable, or in the event not budgeted, not to exceed the amounts set forth in
subparagraph (iii); (iii) sell or transfer capital assets exceeding One Hundred thousand Dollars
($100,000) in market value in any single transaction or exceeding Two Hundred Fifty Thousand
Dollars ($250,000) in the aggregate during any one fiscal year; (iv) execute any lease for real
property; or (v) exercise any authority or control over the management of any employee welfare or
pension benefit plan maintained by Employer or over the disposition of the assets of any such plan.
3. Term. The term of this Agreement shall be for a period of three (3) years which
shall commence on April 24, 2007 and end on April 23, 2010 (subject to adjustment to an earlier
start date and termination date by mutual agreement); unless terminated earlier as provided below
in Section 5. This Agreement shall be renewable in two one-year (1-year) extensions by mutual
agreement.
4. Compensation. Employer shall pay to or provide compensation to Executive as set forth
in this Section 4. All compensation of every description shall be subject to the customary
withholding tax and other employment taxes as required with respect to compensation paid to an
employee.
4.1. Base Salary. Employer shall pay Executive a base salary Three Hundred Sixty
Thousand Dollars ($360,000) per year commencing on April 24, 2007 (“Base Salary”). Executive’s
Base Salary shall be payable in accordance with Employer’s regular pay schedule, but not less
frequently than twice per month.
4.2. Review. Executive’s base salary and duties shall be reviewed by the Compensation
Committee of the Board of Directors at least annually, and upon any transition to Chief Technology
Architect. During the review, duties will be outlined, prior year performance assessed, and
compensation may be adjusted up or down accordingly, at the discretion of the Compensation
Committee. On the date of Employer’s annual meeting of stockholders and on each subsequent annual
meeting of stockholders during the term of this Agreement, or at such other time as the Governance
and Nominating Committee may establish in its discretion, Governance and Nominating Committee shall
review the previous year’s performance of Executive.
4.3. Cash/Stock Bonuses. In addition to the Base Salary provided for in sections 4.1
and 4.2, Executive is eligible to receive discretionary bonuses based on Employer performance and
Executive’s attainment of objectives periodically established by Employer. Such discretionary
bonuses may be paid in cash, through issuance of stock or grant of stock options, or any
combination thereof, subject to Board discretion. Annual bonuses that may be awarded to Executive
shall be up to thirty-five percent (35%) of Executive’s Base Salary then in effect in any given
year. Cash bonus will be paid only when the Employer attains positive cash flow and net income.
4.4. Stock Option Grants/Stock Grants. In addition to Base Salary provided for in
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Sections 4.1 and 4.2, Executive is eligible to receive an award of stock options as may be
determined from time to time by Employer’s Compensation Committee which consists of disinterested
directors who administer Employer’s Equity Incentive Plans. All previously issued options shall
continue to vest, consistent with the terms of such option agreements. In addition, Executive
shall be granted 500,000 shares of stock pursuant to the Company’s 2006 Equity Incentive Plan and
the form of Stock Grant Agreement attached to this Employment Agreement, which shares shall vest
over three years, with acceleration of vesting under terms and conditions stated in the Stock Grant
Agreement.
4.5. [omitted]
4.6. Vacation; Sick Leave; Insurance. Executive shall be entitled to three (3) weeks
of vacation annually; provided, however, that vacation time may not accrue beyond two weeks of
accrued and unused time with any unused balance to be paid in cash at the end of each calendar
year, and further provided that accrued vacation pay shall not accrue beyond three (3) weeks at any
given time without the unused balance being paid in cash. Executive shall be entitled to sick
leave in accordance with Employer’s sick leave policy, as amended from time to time. During the
term of this Agreement, Employer shall maintain in force current key man life insurance policies on
Executive for which Employer and Executive’s wife are beneficiaries.
4.7. Other Fringe Benefits. Executive shall participate in all of Employer’s fringe
benefit programs in substantially the same manner and to substantially the same extent as other
similar employees of Employer, excluding only those benefits expressly modified by the terms
hereof.
4.8. Expenses. Executive shall be reimbursed for his reasonable business expenses,
subject to the presentation of evidence that such expenses are made in accordance with established
policies adopted by Employer from time to time.
4.9. Compensation From Other Sources. Any proceeds that Executive shall receive by
virtue of qualifying for disability insurance, disability benefits, or health or accident insurance
shall belong to Executive. Executive shall not be paid Base Salary in any period in which he
receives benefits as determined and paid under Employer’s long-term disability policy. Benefits
paid to Executive under Employer’s short-term disability policy shall reduce, by the same amount,
Base Salary payable to Executive for such period.
5. Early Termination. Executive’s employment with Employer may be terminated prior to the
expiration of the term of this Agreement, upon any of the following events: (i) the mutual
agreement of Employer and Executive in writing; (ii) the disability of Executive due to physical or
mental illness, which shall, for the purposes of this Agreement, mean Executive’s inability, for a
period exceeding three (3) months, to substantially perform such duty on a full time basis; (iii)
Executive’s death; (iv) notice of termination by Employer for “cause” (as defined in Section 5.1);
(v) Employer’s cessation of business; (vi) written notice of termination by Employer without cause
upon six months notice, subject to the provisions for compensation upon early termination in
Section 5.3(b); (vii) upon a Change in Control (as defined below) of Employer (as defined in
and under the circumstances described in Section 5.4);or resignation by Executive upon six (6)
months prior written notice.
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5.1. Definition of Cause. For purposes of this Agreement, any of the following shall
constitute cause: (i) fraud, deliberate injury or intentional material misrepresentation by
Executive to Employer or any others; (ii) embezzlement, theft or conversion by Executive; (iii)
unauthorized disclosure or other use of Employer’s trade secrets, customer lists or confidential
information; (iv) habitual misuse of alcohol or any non-prescribed drug or intoxicant; (v) willful
misconduct that causes material harm to Employer, (vi) intentional violation of any other standards
of conduct as set forth in Employer’s employee manual and policies, (vii) conviction of or plea of
guilty or nolo contendere to a felony or to a misdemeanor involving moral turpitude, (viii)
continuing failure to communicate and fully disclose material information to the Board of
Directors, the failure of which would adversely impact the Company or may result in a violation of
state or federal securities laws, or (ix) debarment by any federal agency that would limit or
prohibit Executive from serving in his capacity for Employer under this Agreement.
5.2. Damages. If Employer terminates Executive for cause, Employer shall be entitled
to damages and all other remedies to which Employer may otherwise be entitled.
5.3. Compensation Upon Early Termination.
| (a) | If Executive resigns during the term of this Agreement (without mutual consent of Employer), or if this Agreement is terminated by Employer for cause, Executive shall be entitled only to all accrued but unpaid Base Salary and vacation pay accrued through the date of delivery of the notice of termination. All non-vested options and restricted stock shall be deemed canceled as of that date. | ||
| (b) | If Executive is involuntarily terminated without cause, as defined in Section 5.1 above, Employer shall pay to Executive as liquidated damages and in lieu of any and all other claims which Executive may have against Employer, the greater of twelve (12) months of Executive’s salary or the remaining term of this Agreement for Executive’s salary, excluding any amounts for benefits, payable over that period on each payroll period. Employer’s payment pursuant to this subparagraph shall fully and completely discharge any and all obligations of Employer to Executive arising out of or related to this Agreement and shall constitute liquidated damages in lieu of any and all claims which Executive may have against Employer not including any obligation under the workers’ compensation laws including Employer’s liability provisions. | ||
| Initials: Executive ___Employer ___ | |||
| (c) | If Executive’s employment is terminated as a result of death or total disability, Executive shall accrue all pay and benefits described herein until the date of termination. The date of termination shall be deemed the date of death or, in the event of disability, the date Executive qualified for total disability payments under Employer’s long-term disability plan. | ||
| (d) | If Executive’s employment is terminated involuntarily without cause or voluntarily from a breach of this Agreement by Employer, as a result of a Change in |
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| Control of Employer, Executive shall be entitled to a lump-sum payment equal to two times Executive’s Base Salary at the time; provided, however, if terminated involuntarily without cause, Executive agrees to remain for a transition period not to exceed six (6) months if requested by Employer. A “Change in Control” shall mean an event involving one transaction or a related series of transactions in which one of the following occurs: (i) Employer issues securities equal to 33% or more of Employer’s issued and outstanding voting securities, determined as a single class, to any individual, firm, partnership or other entity, including a “group” within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934; (ii) Employer issues securities equal to 33% or more of the issued and outstanding common stock of Employer in connection with a merger, consolidation or other business combination; (iii) Employer is acquired in a merger or other business combination transaction in which Employer is not the surviving company; (iv) all or substantially all of Employer’s assets are sold or transferred; or (v) there is a change in the members constituting a majority of the Board in any given year. | |||
| (e) | Except as expressly provided in paragraph (d) above, all compensation described in this Section 5.3 shall be due and payable in installments at least twice monthly or at the time of the delivery of notice of termination, at Employer’s sole discretion and election. |
6. Confidential Information of Customers of Employer. Executive during the course of his
duties will be handling financial, accounting, statistical, marketing and personnel information of
customers of Employer. All such information is confidential and shall not be disclosed, directly
or indirectly, or used by Executive in any way, either during the term of this Agreement or at any
time thereafter except as required in the course of Executive’s employment with Employer.
7. Unfair Competition. During the term of this Agreement, Executive shall not, directly or
indirectly, whether as a partner, employee, creditor, stockholder, or otherwise, promote,
participate, or engage in any activity or other business which is directly competitive to the
current operations of Employer or the currently contemplated future operations of Employer. The
obligation of Executive not to compete with Employer shall not prohibit Executive from owning or
purchasing any corporate securities that are regularly traded on a recognized stock exchange or on
over-the-counter market. In order to protect the trade secrets of Employer, after the term, or
upon earlier termination of this Agreement, Executive shall not, directly or indirectly, either as
an employee, employer, consultants, agent, principal, partner, stockholder, corporate officer,
director, or any other individual or representative capacity, engage or participate in any business
that is in direct competition with the business of Employer for a period of one (1) year from the
date of the expiration of this Agreement. Executive acknowledges that Employer’s business is not
limited by geographical scope, is operating throughout the world and that the effect of this
section may be to prevent Executive from working in a competitive business after termination of
employment hereunder, and agrees that the limitations stated herein are fair in light of
Executive’s past involvement with Employer’s trade secrets, intellectual property, and business
plans, and is a reasonable restriction in consideration for the payments provided and the risks of
exposure to Employer’s confidential information.
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8. Trade Secrets. Executive shall not disclose to any others, or take or use for
Executive’s own purposes or purposes of any others, during the term of this Agreement or at any
time thereafter, any of Employer’s trade secrets, including without limitation, confidential
information, customer lists, computer programs or computer software of Employer. Executive agrees
that these restrictions shall also apply to (i) trade secrets belonging to third parties in
Employer’s possession and (ii) trade secrets conceived, originated, discovered or developed by
Executive during the term of this Agreement. Information of Employer shall not be considered a
trade secret if it is lawfully known outside of Employer by anyone who does not have a duty to keep
such information confidential.
9. Inventions; Ownership Rights. Executive agrees that all ideas, techniques, inventions,
systems, formulas, discoveries, technical information, programs, know-how, prototypes and similar
developments (“Developments”) developed, created, discovered, made, written or obtained by
Executive in the course of or as a result, directly or indirectly, of performance of his duties
hereunder, and all related industrial property, copyrights, patent rights, trade secrets, moral
rights and other forms of protection thereof, shall be and remain the property of Employer.
Executive agrees to execute or cause to be executed such assignments and applications,
registrations and other documents and to take such other action as may be requested by Employer to
enable Employer to protect its rights to any such Developments. If Employer requires Executive’s
assistance under this Section 9 after termination of this Agreement, Executive shall be compensated
for his time actually spent in providing such assistance at an hourly rate equivalent to the
prevailing rate for such services and as agreed upon by the parties.
10. Non-Solicitation; Post-Termination Cooperation.
| 10.1 | Customers. While employed by Employer, and for a period of one (1) year thereafter, Executive agrees not to divert or attempt to divert (by solicitation or other means), whether directly or indirectly, Employer’s customers existing at the time Executive’s employment with Employer terminates. | ||
| 10.2 | Employees. While employed by Employer, and for a period of one (1) year thereafter, Executive will not solicit or encourage, or cause others to solicit or encourage, any employees of Employer to terminate their employment with Employer; provided, however, this obligation will not affect any responsibility Executive may have as an employee of Employer with respect to the bona fide hiring and firing of Employer personnel. | ||
| 10.3 | Post-Termination Cooperation. For a period of six months following any termination of this Agreement, Executive will make himself available and assist Employer, as reasonably requested, with respect to prior services, transition of duties, and intellectual property filings and protection. |
11. Arbitration; Remedies. Any disputes regarding the rights or obligations of the parties
under this Agreement shall be conclusively determined by binding arbitration. Any controversy or
claim arising out of or relating to this contract, or the breach thereof, shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration
Association conducted in Sacramento, California, and judgment upon the award rendered by the
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arbitrator(s) may be entered in any court having jurisdiction thereof. THIS ARBITRATION CLAUSE
CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL
DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP. Notwithstanding the
previous sentence, the parties agree that, in the event of the breach or threatened breach of
Sections 6-10 of this Agreement by Executive, monetary damages alone would not be an adequate
remedy to Employer for the injury that would result from such breach, and that Employer shall be
entitled to apply to any court of competent jurisdiction for specific performance and/or injunctive
relief (without posting bond or other security) in order to enforce or prevent any violation of
such provisions of this Agreement. Executive further agrees that any such injunctive relief
obtained by Employer shall be in addition to monetary damages.
12. Actions Contrary to Law; Blue Pencil. Nothing contained in this Agreement shall be
construed to require the commission of any act contrary to law, and whenever there is any conflict
between any provision of this Agreement and any statute, law, ordinance, or regulation, contrary to
which the parties have no legal right to contract, then the latter shall prevail; but in such
event, the provisions of this Agreement so affected shall be curtailed and limited only to the
extent necessary to bring it within legal requirements. The parties hereby acknowledge that the
restrictions set forth in Sections 6-10 have been specifically negotiated and agreed to by the
parties hereto and if the scope or enforceability of any such section is in any way disputed at any
time, and should a court find that such restrictions are overly broad, the court may modify and
enforce the covenant to the extent that it believes to be reasonable under the circumstances.
13. Internal Revenue Code.
13.1 Section 280G. Notwithstanding any other provision of this Agreement to the
contrary, if the right to receive or benefit from any payments under this Agreement, including
Section 5.2(d), either alone or together with other payments that Executive has a right to receive
from Employer, would constitute a “parachute payment” (as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (the “Code”)), all such payments will be reduced to the largest
amount that will result in no portion being subject to the excise tax imposed by Section 4999 of
the Code.
14. Miscellaneous.
14.1. Notices. All notices and demands of every kind shall be personally delivered or
sent by first class mail to the parties at the addresses appearing below or at such other addresses
as either party may designate in writing, delivered or mailed in accordance with the terms of this
Agreement. Any such notice or demand shall be effective immediately upon personal delivery or
three (3) days after deposit in the United States mail, as the case may be.
| EMPLOYER: | ThermoGenesis Corp. 0000 Xxxxxx Xxxx Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000 |
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| EXECUTIVE: | Xxxxxx X. Xxxxxx
0000 00xx Xxxxxx |
0 xx 00
| Xxxxxxxxxx, XX 00000 |
14.2. Attorneys’ Fees; Prejudgment Interest. If the services of an attorney are
required by any party to secure the performance hereof or otherwise upon the breach or default of
another party to this Agreement, or if any judicial remedy or arbitration is necessary to enforce
or interpret any provision of this Agreement or the rights and duties of any person in relation
thereto, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and other
expenses, in addition to any other relief to which such party may be entitled. Any award of
damages following judicial remedy or arbitration as a result of the breach of this Agreement or any
of its provisions shall include an award of prejudgment interest from the date of the breach at the
maximum amount of interest allowed by law.
14.3. Choice of Law, Jurisdiction, Venue. This Agreement is drafted to be effective
in the State of California, and shall be construed in accordance with California law. The
exclusive jurisdiction and venue of any legal action by either party under this Agreement shall be
the County of Sacramento, California.
14.4. Amendment, Waiver. No amendment or variation of the terms of this Agreement
shall be valid unless made in writing and signed by Executive and Employer. A waiver of any term
or condition of this Agreement shall not be construed as a general waiver by Employer. Failure of
either Employer or Executive to enforce any provision or provisions of this Agreement shall not
waive any enforcement of any continuing breach of the same provision or provisions or any breach of
any provision or provisions of this Agreement.
14.5. Assignment; Succession. It is hereby agreed that Executive’s rights and
obligations under this Agreement are personal and not assignable. This Agreement contains the
entire agreement and understanding between the parties to it and shall be binding on and inure to
the benefit of the heirs, personal representatives, successors and assigns of the parties hereto.
14.6. Independent Covenants. All provisions herein concerning unfair competition and
confidentiality shall be deemed independent covenants and shall be enforceable without regard to
any breach by Employer unless such breach by Employer is willful and egregious.
14.7. Entire Agreement. This document constitutes the entire agreement between the
parties, all oral agreements being merged herein, and supersedes all prior representations. There
are no representations, agreements, arrangements, or understandings, oral or written, between or
among the parties relating to the subject matter of this Agreement that are not fully expressed
herein.
14.8. Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of the Agreement which can be
given effect without the invalid provision shall continue in full force and effect and shall in no
way be impaired or invalidated.
14.9. Captions. All captions of sections and paragraphs in this Agreement are for
reference only and shall not be considered in construing this Agreement.
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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH AFFECTS YOUR LEGAL RIGHTS AND MAY BE
ENFORCED BY THE PARTIES.
| EMPLOYER: THERMOGENESIS CORP. |
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| By: | ||||
| Xxxxxxx Xxxxxx, Chief Financial Officer | ||||
| By: | ||||
| Xxxxxx Xxxxxx, MD, Chairman, Compensation Committee | ||||
| EMPLOYEE: |
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| By: | ||||
| Xxxxxx X. Xxxxxx, an Individual | ||||
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EXHIBIT A
PRINCIPAL RESPONSIBILITIES OF
CHIEF TECHNOLOGY ARCHITECT
CHIEF TECHNOLOGY ARCHITECT
Work with the Advanced Development group to accomplish the following:
| a) | analyze and evaluate development of the next platform technology to extend the current cell therapy product portfolio further into the future; | ||
| b) | assist with patents and protection of intellectual property rights to protect existing and future products; | ||
| c) | engage relationships with clinicians and research scientists whose support will be critical in the insertion of the Employer’s enabling products into important cell therapy clinical trials; | ||
| d) | analyze and evaluate collaboration relationships with academic institutions of regenerative medicine which advance the revenue and profit goals of the Employer’s strategic plan; | ||
| e) | evaluate potential acquisitions for technology that is accretive to existing product lines |
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