THERMOGENESIS CORP.
EMPLOYMENT AGREEMENT
FOR
XXXXX X. XXXXXX, PHD
THERMOGENESIS CORP. ("Employer"), and Xxxxx X. Xxxxxx, PhD,
("Employee"), agree as follows:
1. EMPLOYMENT. Employer employs Employee and Employee accepts employment
with Employer on the terms and conditions set forth in this Employment
Agreement ("Agreement").
2. POSITION; SCOPE OF EMPLOYMENT. Employee shall have the position of
President, Chief Operating Officer for Employer, and shall have the duties
and authority set forth below, and as detailed on the position description
attached as EXHIBIT "A", which duties and authority may be modified from
time to time by Employer. As President, Chief Operating Officer, Employee
shall report directly to the Employer's Chief Executive Officer, and to the
Board of Directors.
2.1. ENTIRE TIME AND EFFORT. Employee shall devote Employee's full
working time, attention, abilities, skill, labor and efforts to the
performance of his employment. Employee 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 Employee'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 Employee may join the board of directors of no more than two
unaffiliated corporations so long as such corporations are not competitive
to the current or future operations of Employer and those corporations
offer some synergistic prospects or other support for the Employer's goals.
2.2. RULES AND REGULATIONS. Employee agrees to observe and comply
with Employer's rules and regulations 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. Employee shall not
engage in any of the following actions on behalf of 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 twenty-five thousand dollars ($25,000) in market value in any
single transaction or exceeding Two Hundred and Fifty Thousand Dollars
($250,000) in the aggregate during any one fiscal year; (iv) execute any
lease for real or personal 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 November 23, 1997 and end on November 22,
2000; unless terminated earlier as provided below in section 5.
4. COMPENSATION. Employer shall pay to or provide compensation to
Employee 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 Employee a base salary of One-
Hundred Sixty Thousand dollars ($160,000) per year commencing on November
23, 1997 ("Base Salary"). Employee's Base Salary shall be payable in
accordance with Employer's regular pay schedule, but not less frequently
than twice per month. In addition to the Base Salary provided herein, the
Employee shall also be paid a car allowance of Five-Hundred dollars ($500)
per month commencing on December 1, 1997, and continuing during the term of
this agreement.
4.2. ANNUAL REVIEW. On the date of the Employer's annual meeting of
shareholders, or within thirty (30) days thereafter, and on each subsequent
annual meeting of shareholders during the term of this Agreement, Employer
shall review the previous year's performance of Employee for the purpose of
making reasonable increases to Employee's Base Salary; PROVIDED that
Employer shall not be required to increase Employee's Base Salary, but may
do so at its discretion.
4.3. CASH BONUSES. In addition to the Base Salary provided for in
sections 4.1 and 4.2, Employee is eligible to receive bonuses based on
Employer performance and Employee's attainment of objectives periodically
established by Employer. Employee shall receive an initial bonus of
$60,000 at the end of the first anniversary of this Agreement, and
thereafter annual bonuses to be provided to Employee shall not exceed
thirty-five percent (35%) of Employee's Base Salary then in effect in any
given year.
4.4. STOCK OPTION GRANTS. In addition to Base Salary provided for in
sections 4.1 and 4.2, Employee is eligible to receive, in addition to any
cash bonus provided for in section 4.3, 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 Amended 1994
Stock Option Plan. In connection with the employment hereunder, Employee
shall receive an initial grant of 200,000 options, vesting over three
years, which options will be priced on the closing price for the Employer's
common stock as quoted on the Nasdaq market on the date of grant.
4.5. ENGAGEMENT BONUS. As part of the inducement for employment with
Employer, Employer shall also pay Employee a sum equal to $50,000 on the
first day of employment under this Agreement.
4.6. VACATION AND SICK LEAVE. Employee shall be entitled to accrue up
to four (4) weeks vacation annually; provided, however, that vacation time
may not accrue beyond two weeks of accrued and unused time. Vacation pay
shall not accrue beyond two (2) weeks at any given time. Employee shall be
entitled to sick leave in accordance with Employer's sick leave policy, as
amended from time to time. At the end of each anniversary of this
Agreement, subject to the limit on two weeks accrued and unused vacation,
all such unused and accrued vacation time shall be paid in cash.
4.7. OTHER FRINGE BENEFITS. Employee 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. Employee shall be reimbursed for his reasonable
business expenses; subject to the presentation of evidence of such expenses
in accordance with established policies adopted by Employer from time to
time.
4.9. COMPENSATION FROM OTHER SOURCES. Any proceeds that Employee
shall receive by virtue of qualifying for disability insurance, disability
benefits, or health or accident insurance shall belong to Employee.
Employee 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 Employee under Employer's short-term disability
policy shall reduce, by the same amount, Base Salary payable to Employee
for such period.
5. EARLY TERMINATION. Employee'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 Employee
in writing; (ii) the disability of Employee, which shall, for the purposes
of this Agreement, mean Employee's inability, for a period exceeding three
(3) months as determined by a qualified physician, and which qualifies
Employee for benefits under Employer's long-term disability policy, to
perform in the usual manner the material duties usually and customarily
pertaining to Employee's long-term employment; (iii) Employee's death;
(iv) notice of termination by Employer for cause; (v) Employer's cessation
of business; (vi) written notice of termination by Employer without cause
upon fourteen (14) days' notice, subject to the provisions for compensation
upon early termination in section 5.3(b); or (vii) upon a Change in Control
(as defined below) of Employer (as defined in and under the circumstances
described in section 5.4).
5.1. DEFINITION OF CAUSE. For purposes of this Agreement, any of the
following shall constitute cause: (i) willful or habitual breach of
Employee's duties; (ii) fraud or intentional material misrepresentation by
Employee to Employer or any others; (iii) theft or conversion by Employee;
(iv) unauthorized disclosure or other use of Employer's trade secrets,
customer lists or confidential information; (v) habitual misuse of alcohol
or any nonprescribed drug or intoxicant; or (vi) willful violation of any
other standards of conduct as set forth in Employer's employee manual.
5.2. DAMAGES. If Employer terminates Employee 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 Employee resigns during the term of this Agreement, or if this
Agreement is terminated by Employer for cause, Employee shall be
entitled to all accrued but unpaid Base Salary and vacation pay
accrued through the date of delivery of notice of termination.
(b) If Employee is terminated without cause, Employer shall pay to
Employee as liquidated damages and in lieu of any and all other
claims which Employee may have against Employer the greater of
(i) six (6) months of Employee's salary excluding any amounts for
benefits or automobile allowance; or (ii) an amount equal to the
then current per month Base Salary multiplied by the number of
calendar months remaining of the term of this Agreement.
Employer's payment pursuant to this subparagraph shall fully and
completely discharge any and all obligations of Employer to
Employee arising out of or related to this Agreement and shall
constitute liquidated damages in lieu of any and all claims which
Employee may have against Employer not including any obligation
under the workers' compensation laws including Employer's
liability provisions.
Initials: Employee _________ Employer _________
(c) If Employee's employment is terminated as a result of death or
total disability, Employee shall be entitled to accrued but
unpaid Base Salary to date of termination. The date of
termination shall be deemed the date of death or, in the event of
disability, the date Employee qualified for total disability
payments under Employer's long-term disability plan.
(d) If Employee's employment is terminated as a result of a Change in
Control of Employer, Employee shall be entitled to a lump-sum
payment equal to three times Employee's Base Salary at the time.
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; or (iv) all or substantially all of Employer's assets
are sold or transferred.
(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 bi-weekly or at the time of the
delivery of notice of termination, at Employer's discretion.
6. CONFIDENTIAL INFORMATION OF CUSTOMERS OF EMPLOYER. Employee 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 Employee in any way, either during the term of
this Agreement or at any time thereafter except as required in the course
of Employee's employment with Employer.
7. UNFAIR COMPETITION. During the term of this Agreement, Employee shall
not, directly or indirectly, whether as a partner, employee, creditor,
shareholder, or otherwise, promote, participate, or engage in any activity
or other business which is competitive in any way with Employer's business.
The obligation of the Employee not to compete with the Employer shall not
prohibit the Employee 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, the Employee 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 the Employer
for a period of one (1) year from the date of the expiration of this
Agreement in the areas related to blood processing equipment or procedures.
8. TRADE SECRETS. Employee shall not disclose to any others, or take or
use for Employee'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. Employee 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 Employee 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.
8.1 INVENTIONS; OWNERSHIP RIGHTS. Employee agrees that all ideas,
techniques, inventions, systems, formulas, discoveries, technical
information, programs, prototypes and similar developments ("Developments")
developed, created, discovered, made, written or obtained by Employee 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 and other forms of protection thereof, shall be and
remain the property of Employer. Employee 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 Employee's assistance under this section 8.1 after
termination of this Agreement, Employee 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.
9. ARBITRATION. 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, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
10. ACTIONS CONTRARY TO LAW. 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.
11. MISCELLANEOUS.
11.1. 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.
00000 Xxxxxxx Xxxx Xxx., Xxxxx X
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000
EMPLOYEE: Xxxxx X. Xxxxxx, Ph.D.
000 Xxxxxx Xxxxx Xxxxx
Xxxxxx, XX 00000
11.2. 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.
11.3. 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.
11.4. AMENDMENT, WAIVER. No amendment or variation of the terms of
this Agreement shall be valid unless made in writing and signed by Employee
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 Employee 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.
11.5. ASSIGNMENT; SUCCESSION. It is hereby agreed that Employee'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.
11.6. 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.
11.7. 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.
11.8. 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.
11.9. CAPTIONS. All captions of sections and paragraphs in this
Agreement are for reference only and shall not be considered in construing
this Agreement.
EMPLOYER: THERMOGENESIS CORP.
By:_______________________________________________
(Xxxxxx X. Xxxxxx, Chief Executive Officer)
By:_______________________________________________
(Xxxxxx Xxxxxx, Chairman Compensation Committee)
EMPLOYEE: By:______________________________________________
(Xxxxx X. Xxxxxx, Ph.D.)
