EXHIBIT 10.80
EXHIBIT 10.80
XXXXXX X. XXXXXXXX
EMPLOYMENT AGREEMENT
EXHIBIT 10.80
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of this 8th day of June, 1998 (the
"Effective Date"), by and between CYTOTHERAPEUTICS, INC., a Delaware corporation
("Employer") having its principal place of business at 000 Xxxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxx, Xxxxx Xxxxxx 00000 and XXXXXX X. XXXXXXXX ("Employee") with a
principal residence at 0 Xxxxx Xxxxxxx Xxxxx, Xxxx Xxxxxx, Xxx Xxxxxx
00000-0000, collectively referred to as the "parties."
RECITALS
Whereas Employer desires to employ Employee at its Lincoln, Rhode Island
Facility and Employee desires to be so employed,
The parties enter this Agreement to set forth the terms and conditions of
Employee's employment by Employer, to address certain matters related to
Employee's employment with Employer, and Employee's loyalty and commitment to
Employer.
NOW THEREFORE, in consideration of these promises and the parties'
material covenants, representations, and warranties made herein, the parties
agree as follows:
STATEMENT OF AGREEMENT
SECTION 1. EMPLOYMENT
a. Position. Employer wishes to employ and Employee hereby accepts the
position of Senior Vice President - Business Development, General Counsel and
Secretary for the term of this Agreement. Employee shall report directly to
Employer's Chief Executive Officer.
b. Employee's Commitment. Employee shall consider his employment by
Employer as his principal employment, shall devote his full business time and
attention to his duties and responsibilities under this Agreement, and shall
perform them to the best of his abilities. While subject to any provision of
this Agreement, Employee shall maintain loyalty to Employer, and shall take no
action that would directly or indirectly promote any competitor or injure
Employer's interests. Subject to the foregoing, employee may engage in other
charitable or business activities to the extent that they do not interfere or
create a conflict with his obligations under this Agreement; provided that
Employee first discloses any such activities to Employer, and that Employee's
continued participation in any such activity shall be subject to Employer's
ongoing approval, which may be withheld at Employer's sole discretion.
c. Duties. Employee's primary duties and responsibilities as Senior Vice
President - Business Development, General Counsel and Secretary shall be to:
(1) Direct and oversee all legal matters pertaining to CTI, including
contractual relationships, general corporate and securities matters, patent,
copyright and the coordination of any legal matters handled by outside counsel.
(2) Direct the research and analysis of such business opportunities,
strategic partnerships, alliances and collaborations, including the
establishment and recommendation of strategic initiatives as directed by the
Employer's CEO from time to time; responsible for implementation of such
strategic initiatives of Senior Management as directed by the Employer's CEO
from time to time, including the negotiation of agreements related to external
alliances, direct the policies and programs related to corporate licensing
objectives for the acquisition of licensing opportunities and techniques.
(3) Serve as corporate secretary of the Company and its subsidiaries.
SECTION 2. COMPENSATION, BENEFITS AND EXPENSES
a. Salary. Subject to Subsection 2b, Employer shall pay Employee as salary
of Two Hundred Fifty Thousand dollars ($250,000.00) annually, payable in
accordance with Employer's payroll practices in effect from time to time.
b. Bonus.
(1) Employee shall receive a "sign on" bonus of Fifteen Thousand
Dollars ($15,000) payable, $10,000 in cash and $5,000 in registered shares of
Employer's common stock (2,712 shares), calculated at the price per share of
$1.84375 ($1 27/32) per share, the closing price of the Employer's common stock
as quoted on the Nasdaq stock exchange for the Effective Date of Employment.
(2) In addition, Employee shall be eligible (in the sole discretion
of the Employer) to receive performance related bonuses at the end of each
calendar year, including 1998, in a percentage amount of base salary similar to
that for which other members of the Employer's senior management are eligible or
are awarded under guidelines in effect at such time. Employee's bonus shall be
based on (i) the reduction in comparable outside legal fees versus the base
period of January 1, 1998 through June 30, 1998, (ii) the level of cash funding
received by Employer from business development transactions with third parties
in which Employee is materially involved, and (iii) the attainment of other
specific performance objectives mutually agreed with Employer's
Chief Executive Officer. The payment and amount of any such bonus shall be
determined in the sole discretion of the Employer and its Board of Directors.
c. Stock Options. Through the Employer's 1992 Equity Incentive Plan (the
"Incentive Plan") and subject to the terms and conditions set forth herein,
Employee is hereby granted, as of the Effective Date of this Agreement, an
option to acquire 75,000 shares of the common stock of the Employer at a strike
price per share equal to the closing price of the Employer's common stock on the
date such option is approved by the Employer's Board of Directors or such other
strike price as may be specified by the Board of Directors. The time-based
option will vest as follows: (i) 30,000 of the shares will vest on the Effective
Date, and (ii) the remaining 45,000 shares shall vest at the rate of 3,000
shares per month on each monthly anniversary of the Effective Date so long as
Employee continues to be employed hereunder. Employee shall have one (1) year
from the last such vesting date within which to exercise such option. The
expiration of the Initial Term of this Agreement shall not effect the validity,
the vesting schedule or the exercise period of such option granted Employee.
The compensation set forth in Sections 2a, 2b and 2c may be increased from time
to time at the will and discretion of Employer.
d. Relocation. As soon as reasonably practicable following the Effective
Date, Employee will establish his principal office at the Company's offices in
Lincoln, Rhode Island and a temporary residence within driving distance of such
office. The Employer shall pay or reimburse Employee up to an amount not to
exceed $2,500 per month for all costs of such temporary housing and related
expenses, including, but not limited to, apartment rent and security deposit,
furniture rental, utilities, cable television, basic telephone service and
similar expenses, for the term of this Agreement and for such additional period
while Employee is still rendering services to the Employer pursuant to Section
4.a.(1) (collectively the "Temporary Residence Period"). Employer shall also
during the Temporary Residence Period pay or reimburse Employee for two (2)
round trip airfares per month to the New Jersey/New York area for use by
Employee or his daughter. Until such time as Employee has established his
temporary residence in Rhode Island, Employer shall reimburse Employee for
hotel, travel, meal and related costs to and from New Jersey. The cost of
Employee's temporary housing and the cost of the two (2) round trips airfares
set forth above are hereinafter collectively referred to as the "Temporary
Relocation Expenses."
e. Benefits. Employee will be entitled to participate in any and all
employee benefit plans from time to time in effect for senior management of the
Employer generally, including, but not limited to, medical, dental and
hospitalization plans, retirement and 401(k) savings plans, life insurance and
accidental death plans, disability plans, etc., except to the extent that such
plans provide duplicative benefits or a lower level of benefits than that
specifically provided Employee herein. Additionally, Employee shall be entitled
to participation similar to that provided other members of
Employer's senior management in any supplemental stock or option grants, stock
appreciation rights awards, phantom stock rights, "golden parachute" or "golden
handcuff" policies of the Employer in effect as of the Effective Date or adopted
by Employer thereafter for the general benefit of its senior management.
Employee's participation shall be subject to (i) the terms of the applicable
plan documents, (ii) generally applicable policies of the Employer, and (iii)
the discretion of the Board of Directors of the Employer and plan
administrators, as provided for or contemplated by such plan. Employee will be
entitled to four (4) weeks vacation per year. Employer will provide Employee
with a leased automobile at a cost to be approved by Employer's CEO, cover the
cost of up to three (3) state bar memberships per year and the cost of
professional association memberships consistent with Employer's policy for its
senior management.
f. Withholdings, "Gross Up" of Compensation. Employer shall withhold from
any amounts payable as compensation all federal, state, municipal, or other
taxes as are required by any law, regulation, or ruling. Employer shall "gross
up" any and all Temporary Relocation Expenses paid or reimbursed to Employee
during the Temporary Residence Period by 36% in order to offset any and all
income tax liability to Employee for the payment or reimbursement of these
expenses by Employer. In addition, in the event Employee sustains an increased
state income tax liability due to the payment of state income taxes in both
Rhode Island and New Jersey versus Employee's paying only New Jersey state
income tax, then Employer shall "gross up" the compensation paid to Employee
hereunder in order to reimburse and offset any and all incremental increase in
Employee's state income tax liability.
g. Business Expenses. Employer shall reimburse Employee for expenses
reasonably incurred in the course of his employment, in accordance with
Employer's policies in effect from time to time.
SECTION 3. TERM
a. Initial Term. The term of Employee's employment shall commence on the
Effective Date and shall expire on June 7, 1999 (the "Initial Term") unless
extended as otherwise provided herein. Employer and Employee shall, on or about
the ninth (9th) monthly anniversary of the Effective Date, meet and discuss in
good faith whether it is in the best interests of both parties to extend the
term of this Agreement. In the event it is mutually agreed that the term of this
Agreement shall be extended (the "Renewal Term"), then the terms and conditions
for the Renewal Term shall be mutually agreed by Employer and Employee on or
before the eleventh (11th) monthly anniversary of the Effective Date. In the
event either party elects to not extend the term of this Agreement, or the
Employer and Employee are unable to mutually agree on the terms and conditions
for the Renewal Term on or before the eleventh (11th) monthly anniversary of the
Effective Date, then this Agreement shall expire on June 7, 1999 and the
provisions of Section 4 shall apply.
b. Termination. Notwithstanding any other provision of this Agreement,
Employee's employment shall terminate at any time, as follows:
(1) Employer may terminate your employment upon thirty (30) days written
notice to Employee in the event you become disabled during your employment
through any illness, injury, accident or condition of either a physical or
psychological nature and, as a result, you are unable to perform
substantially all of your duties and responsibilities hereunder for ninety
(90) consecutive days during the Initial Term. In that event, the Employer
shall pay Employee the severance set forth in Section 4.
(2) Employee's employment may also be terminated by Employer at any
time without prior notice upon a showing of "reasonable cause." Should Employee
be terminated by Employer for "reasonable cause," no severance pay will be paid
to Employee nor will his health insurance benefits be continued by Employer at
its expense for any period of time as addressed in Section 4 of this Agreement.
"Reasonable cause" shall be defined for the purposes of this Agreement as being:
(a) any act of fraud, embezzelement or other material dishonesty by Employee
with respect to the Employer which is proven to be directly detrimental to
Employer's best interest; (b) Employee's willful failure to perform material
duties and responsibilities described in Section 1 (c) above, after receiving
notice and a reasonable opportunity to cure; (d) Employee's conviction of, or
plea of nolo contendre to, any act that constitutes a felony under the laws of
the state of Rhode Island or the United States; or (e) Employee's material
breach of Section 5 of this Agreement.
SECTION 4. SEVERANCE
x. Xxxxxxxxx Payments and Benefits. In the event at the end of the Initial
Term either Employee chooses not to renew this Agreement, or Employer fails to
offer Employee employment in the capacity provided for herein at an annual
salary and related benefits at least equal to the salary and benefits provided
for herein and at a primary work location in the Northeastern United States
(subject to such travel as the Employer may reasonably request), or Employer and
Employee are unable to mutually agree to other terms and conditions for
Employee's continued employment during any such Renewal Term, Employee shall
receive the following Severance Payments and Benefits from Employer:
(1) A continuation of Employee's salary equal to the amount of his regular
salary as of the date of the expiration of the Initial Term for a period
of three (3) months, during which Employee shall continue to devote no
more than fifty percent (50%) of his time to performing or consulting with
Employer with respect to his duties and responsibilities described in
Section 1(c) above. In the event such part time services are rendered from
Rhode Island, then Employer
will continue to pay or reimburse Employee for the Temporary Relocation
Expenses for such three (3) month period pursuant to Section 2.d and
provide the other benefits set forth in Sections 2.e., 2.f. and 2.g.
(2) A lump sum payment equal to six (6) month's of Employee's
regular salary as of the date of the expiration of the Initial Term, such lump
sum to be payable no later than the expiration of the three (3) month period set
forth in Section 4.a.(1) above.
(3) Payment of any accrued but unpaid bonus under Section 2.b.(2)
for the year in which the Initial Term expires, such bonus sum to be payable no
later than the expiration of the three (3) month period set forth in Section
4.a.(1) above.
(4) During the nine (9) month period following the expiration of the
Initial Term and to the extent allowed by the Employer's benefit plans,
Employee shall continue to be eligible to participate in, and shall accrue
benefits as does an active employee in all benefit plans, including, but
not limited to, medical, dental and hospitalization plans, retirement and
401(k) savings plans, life insurance and accidental death plans,
disability plans, etc., in which Employee is enrolled as of the expiration
of the Initial Term, and in each case as applicable during such period.
Employee shall be treated as an employee of the Employer during the first
three months of such nine month period for the purposes of Section 2.c,
2.d., 2.e., 2.f and 2.g. of this Agreement.
b. Payments Upon Employee's Disability. In the event of an early
termination of this Agreement pursuant to Section 3.b.(1) due to Employee's
disability then the Severance Pay and Benefits provided in Section 4.a. shall be
paid to Employee. If Severance Pay and Benefits are payable because of
Employee's disability, they shall be deemed to be made as compensation for
Employee's past services to Employer.
c. Reference Letter Upon Separation of Employment. Employer agrees to
provide Employee with a letter of recommendation upon Employee's separation of
employment, granted that Employee's separation of employment from Employer is
for any reason other than "reasonable cause."
SECTION 5. CONFIDENTIALITY
a. Confidential Information. "Confidential Information" means information
in whatever form, including information that is written, electronically stored,
orally transmitted, or memorized, that is of commercial value to Employer and
that was created, discovered, developed, or otherwise becomes known to Employee,
or in which property rights are held, assigned to, or otherwise acquired by or
conveyed to Employer, including any Employee Invention (as subsequently defined)
or idea, knowledge, know-how, process, system, method, technique research and
development,
technology, software, technical information, trade secret, as defined in state
statute, trademark, copyrighted material, reports, records, documentation, data,
customer or supplier lists, tax or financial information, business or marketing
plans, strategy or forecast. Confidential Information does not include
information that is or becomes generally known within Employer's industry
through no act or omission by Employee, provided, however, that the compilation,
manipulation, or other exploitation of generally known information may
constitute Confidential Information.
b. Employee Invention. "Employee Invention" means any idea, invention,
software, technique, modification, process, improvement, or similar item,
whether or not reduced to writing or stored electronically or otherwise, and
whether or not protectible by patent, trademark, copyright, or other
intellectual property law, that is crated, conceived, or developed by Employee
or under his direction, whether solely or with others, during or after his
employment by Employer, that relates in any way to, or is useful in any manner
in, the business now or then conducted or proposed to be conducted by Employer
or which is based upon or otherwise derives from or makes use of the
Confidential Information.
c. Ownership; Disclosure. Any Confidential Information, whether or not
developed by Employee, shall at all times be Employer's exclusive property.
Employee shall promptly disclose any Employee Invention to Employer in writing.
d. Restrictions. During the term of this Agreement, and for ten (10) years
thereafter, Employee shall not, without Employer's prior written consent:
(1) Use any Confidential Information for the benefit of himself of any
other party other than Employer or disclose it to any other person or
entity;
(2) Remove any Confidential Information or other documentation, device,
plan or other record or evidence pertaining to Employer's business from
Employer's premises, except when specifically authorized to do so in
pursuit of Employer's business; or
e. Purpose. The parties acknowledge and agree that the Confidential
Information is a valuable business asset, and that this Section is necessary to
protect Employer's legitimate business interests.
SECTION 6. ADDITIONAL REPRESENTATIONS AND WARRANTIES
In addition to his other representation and warranties set forth in this
Agreement, Employee further represents and warrants as follows:
a. Employee's performance of this Agreement shall not breach any agreement
to which he is or was a party that requires him to hold any information in
confidence or in trust;
b. Employee has not and shall not breach any such Agreement;
c. Employee shall not bring to Employer or use in connection with his
employment any confidential or proprietary information belonging to another
entity without first delivering a written release of that information to
Employer; and
d. Employee has provided Employer with an original or true copy of any
employment, non-competition, confidential or proprietary information, or similar
agreement to which he is or has been a party which is now in effect or which may
be in effect during the term of this Agreement.
SECTION 7. REMEDIES
a. Irreparable Harm. The parties acknowledge and agree that irreparable
harm would result in the event of a breach or threat of a breach by Employee of
Section 5 or the making of any untrue representation or warranty by Employee in
this Agreement. Therefore, in such an event, and notwithstanding any other
provision of this Agreement:
(1) Employer shall be entitled to a restraining order, order of specific
performance, or other injunctive relief, without showing actual damage and
without bond or other security; and
(2) Employer's obligation to make any payment or provide any benefit under
this Agreement, including without limitation any severance benefits, shall
immediately cease.
b. Remedies Not Exclusive. Employer's remedies under this Section are not
exclusive, and shall not prejudice or prohibit any other rights or remedies
under this Agreement or otherwise. To the extent required to be enforceable by
applicable law, the cessation of Employer's obligation to make payments or
continue benefits under this Section shall be deemed to be in the nature of
liquidated damages and not a penalty.
c. Cessation of Payments. In the event Employer obtains relief as provided
in this Section, or in the event of Employee's breach of Section 5 or the making
of any untrue representation or warranty by Employee in this Agreement,
Employer's obligation to make any payment or provide any benefit under this
Agreement, including any severance benefits, shall immediately cease.
SECTION 8. LEGAL COUNSEL
a. Understanding, Voluntary Agreement. Employee represents and warrants
that he has been afforded a reasonable opportunity to review this Agreement,
to understand its terms, and to discuss it with an attorney of his choice, and
that he knowingly and voluntarily enters this Agreement.
b. Waiver of Separate Representation. To the extent Employee has not
engaged separate legal counsel to represent him in connection with this
Agreement, the parties acknowledge an agree that their respective interest in
this Agreement are in conflict, that they have the right to retain independent
counsel, that they have been fully informed about this right and conflicts of
interest that arise from retaining the same legal counsel to represent both of
them, and that this Section constitutes written disclosure of these conflicts.
The parties further affirm that they are waiving separate representation freely,
voluntarily, and with full knowledge of the effect of this waiver. NO party
shall at any time claim that this Agreement is void or unenforceable in any
respect because of the lack of use of independent counsel, or that the legal
counsel who prepared this Agreement acted improperly in doing so.
SECTION 9. CONFIDENTIAL AGREEMENT
This Agreement is confidential, Employee and Employer shall keep its provisions
confidential and shall not disclose them to anyone, including any past, present,
or prospective employee of Employer; provided, that this Section shall not
prohibit Employee from discussing this Agreement in confidential communications
with his family members, attorneys, accountants, or other professional advisors,
provided that the provisions of Section 5 shall at all times apply to
communications with any such persons, and provided Employer may disclose the
terms of this Agreement to the extent it is required by federal or state law,
rule or regulation.
SECTION 10. MISCELLANEOUS PROVISIONS
a. Waivers. No assent, express or implied, by any party to any breach or
default under this Agreement shall constitute a waiver of or assent to any
breach or default of any other provision of this Agreement or any breach or
default of the same provision on any other occasion.
b. Entire Agreement, Modification. This Agreement constitutes the entire
agreement of the parties concerning its subject matter and supersedes all other
oral or written understandings, discussions, and agreements, and may be modified
only in a writing signed by both parties.
c. Binding Effect; No Third Party Beneficiaries This Agreement shall bind
and benefit the parties and their respective heirs, devisees, beneficiaries,
grantees, donees, legal representatives, successors, and assigns. Nothing in
this Agreement shall be construed to confer any rights or benefits on third
parties.
d. Assignment. Neither party may assign its interest in this Agreement
without the other's prior written consent; provided that Employer may assign its
interest to another entity which controls, is controlled by, or is under common
control with Employer.
e. Severability. If any provision of this Agreement, including the
restriction on time and geographic area contained in the Covenant Not to Compete
and Confidential Information provisions of this Agreement, is found in binding
arbitration or by a court or other tribunal of competent jurisdiction to be
invalid or unenforceable, the attempt shall first be made to read that provision
in such a way to make it valid and enforceable in light of the parties' apparent
intent as evidenced by this Agreement. If such a reading is impossible, the
tribunal having jurisdiction may revise the provision in any reasonable manner,
to the extent necessary to make it binding and enforceable. If no such revision
is possible, the offending provision shall be deemed stricken from the
Agreement, and every other provision shall remain in full force and effect.
f. Forum. All lawsuits, actions, and other proceedings arising from this
Agreement or the transactions it contemplates shall be prosecuted in the
appropriate court in New Jersey and all parties agree to both subject matter and
in personam jurisdiction in that forum.
g. Governing Law. This Agreement shall be governed by and construed under
the laws of the State of Rhode Island.
h. Legal Counsel. The parties acknowledge that they have read and fully
understand the contents of this Agreement and execute it after having had an
opportunity to consult with legal counsel.
IN WITNESS WHEREOF, the partied have executed this Agreement to be
effective as specified above.
XXXXXX X. XXXXXXXX CYTOTHERAPEUTICS, INC.
BY: /S/ XXXXXX X. XXXXXXXX BY: /S/ XXXXXXX X. XXXX
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Xxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxx, MD
President & CEO
