Attached files
| file | filename |
|---|---|
| 10-K - 10-K - Ocata Therapeutics, Inc. | v177442_10k.htm |
| EX-31.1 - EX-31.1 - Ocata Therapeutics, Inc. | v177442_ex31-1.htm |
| EX-23.1 - EX-23.1 - Ocata Therapeutics, Inc. | v177442_ex23-1.htm |
| EX-32.1 - EX-32.1 - Ocata Therapeutics, Inc. | v177442_ex32-1.htm |
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (this
“Agreement”) is made effective as of October 1, 2009, by and between ADVANCED CELL TECHNOLOGY,
INC., a Delaware corporation (the “Company”) and WILLIAM M. CALDWELL, IV, an
individual (the “Executive”).
WHEREAS, the Board of
Directors of the Company (the “Board”) has approved and authorized the entry
into this Agreement with Executive; and
WHEREAS, Executive is
currently employed by Company as Company's Chief Executive Officer and Chairman;
and
WHEREAS, Company desires to
retain the services of Executive as Company's Chief Executive Officer and
Chairman, and Executive desires to continue to provide Executives' services as
Chief Executive Officer and Chairman of Company, and, therefore, the parties
desire to enter into this Agreement setting forth the terms and conditions for
the retention of the services of Executive and specifying the terms and
conditions of the continued employment relationship of Executive with the
Company.
NOW, THEREFORE, in
consideration of the promises and mutual covenants and agreements herein
contained, and for other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by Company and Executive, and intending to be
legally bound hereby, the Company and Executive hereby agree as
follows;
1. Term. Subject
to the termination provisions of Section 11 below, the term of this Agreement
shall be for a period of two and one third (2 1/3) years (“Term”), commencing
October 1, 2009 (the "Commencement Date") and ending January 31, 2012
(“Termination Date”); provided, however, that this Agreement shall automatically
be extended for additional one year terms beyond the Termination Date (the
“Extended Termination Date”) or the then current Extended Termination Date,
unless at least 90 calendar days prior to the Termination Date or the then
current Extended Termination Date, Executive or the Company shall have given
notice that he or it does not wish to extend the Agreement.
2. Employment. Executive
shall continue to be employed as and to hold the title of Chief Executive
Officer from the Commencement Date until such employment is terminated in
accordance with this Agreement. Executive, in his capacity as Chief
Executive Officer will have the full range of executive duties and
responsibilities that are customary for public company CEO
positions. All Company officers shall report to and take direction
from Executive, provided however, that nothing
herein shall restrict the Board from conferring directly with Company officers
and the Company shall have the right to enter into agreements with Company
officers for the Board to determine specific employment-related issues such as
compensation and termination. Executive shall have day-to-day
responsibility for the affairs of the Company and shall have such other powers
and duties as may be from time to time assigned to him by the Board of Directors
of the Company (the “Board”). Executive shall report directly to the
Board. All other employees of Company will report, either directly or
through other officers of Company, to Executive. Executive shall
devote substantially all of Executive's time, attention and energies to the
business and affairs of the Company; provided, however, the Company acknowledges
that Executive is an executive and/or director in the entities listed on
Schedule “A” attached hereto, as described therein and may continue in such
capacities only so long as such activities do not unreasonably or materially
interfere with the performance of his duties under this Agreement and do not
present any conflicts of interest with the Company.
3. Salary. The
Company shall pay Executive an annual salary at an initial annual rate of four
hundred eighty thousand ($480,000), less applicable deductions (the “Base
Salary”). Such Base Salary will be reviewed by the Board
annually. The Base Salary shall be payable by the Company to
Executive in substantially equal installments not less frequently than
semi-monthly (two times per month). At the end of each full year of this
Agreement, the Base Salary shall be increased (but not decreased) by an amount
determined by the Board; provided, however, that each such annual increase will
be not less than the percentage increase in the Consumer Price Index during the
preceding year, provided further, however, that the increase set forth in this
sentence shall never be zero or less. For purposes of this Agreement,
the “Consumer Price Index” as of any particular date means the Consumer Price
Index for Urban Wage Earners and Clerical Workers, Los Angeles/Anaheim/
Riverside CMSA, all items, in respect of the month immediately preceding such
particular date, published by the U.S. Department of Labor, Bureau of Labor
Statistics, or if such index is no longer published, the U.S. Department of
Labor's most comprehensive official index then in use that most nearly
corresponds to the index named above. The
Company’s awards of deferred compensation, discretionary bonus, retirement,
stock option and other Executive benefit plans and in fringe benefits shall not
reduce the Base Salary; provided, however, that voluntary deferrals or
contributions by the Executive to such plans agreed to by Executive, if any,
shall reduce the current cash compensation paid
to Executive
4. Bonuses.
(a) Within ten (10) days following the
execution of this Agreement by Company and Executive, Company will pay to
Executive a retention bonus in the amount of one hundred thousand dollars
($100,000) (the "Retention Bonus"). The Retention Bonus will be
deemed fully earned by Executive upon Executive's execution of this Agreement
and delivery of this Agreement by Executive to Company.
(b) Commencing for calendar year 2010,
Executive shall be eligible for an additional annual cash bonus (a “Bonus” if
the Company realizes a per share
stock price increase at the end of each fiscal year of Company during the Term
or the Extended Term of this Agreement. Any Bonus will be computed on
an annual basis and earned at the close of Company's applicable fiscal year, and
shall be paid to Executive within thirty days of completion of the Company’s
Compensation Committee’s annual review for such fiscal year. The
amount and award of each such Bonus, if any, shall be based upon the following
schedule:
|
Stock Price Accretion Attainment
|
Cash Bonus
|
|
|
From
minimum 20% increase for 4th
quarter over higher of same period a year ago or $.10 per
share
|
50%
of salary cash bonus
|
|
|
50%
increase for 4th
quarter over higher of same period a year ago or $.10 per
share
|
100%
of salary cash bonus
|
|
|
100%
or greater increase for 4th
quarter over higher of same period a year ago of $.10 per
share
|
200%
of salary cash
bonus
|
2
Stock
Price Accretion Attainment "SPAA” for any year shall mean the average per day
closing price for all fourth quarter trading days averaged over the quarter as
determined by the Bloomberg closing price each day. If the Company
completes a stock split or reverse split, the “SPAA” levels herein shall be
appropriately adjusted in a manner the Board determines in good faith to be fair
and equitable to Executive.
(c) In
addition to the foregoing bonuses, Company may, in its discretion, award
additional annual or other bonuses to Executive during the Term of this
Agreement based upon the Executive's performance or such other criteria as may
be determined from time to time by the Board including financial condition of
the company and the attainment of company’s operational milestones etc.
5. Benefits. Executive
shall receive the following benefits and/or be entitled to participate in the
following benefits programs of Company:
5.1 (a) Following
the execution and delivery of this Agreement by Company and Executive, Company
will recommend to the Board that Company grant to Executive restricted Common
Stock of Company in an amount equal to the greater of (a) Seventy Million
shares, or (b) seven percent (7%) of the fully diluted shares of issued and
outstanding stock of Company, including all warrants, conversions of Preferred
Stock, Debentures and all issued Subordinated stock, all of which grants will be
made by the Board by no later than the January 2010 meeting of the
Board. All such restricted stock granted to Executive will be
restricted to provide that Executive cannot sell such stock for a period of one
(1) year plus one (1) day following the grant date of such restricted stock;
provided, however, that in the event of any "Change of Control", as that term is
hereinafter defined, prior to the expiration of such restriction period, and if
Executive is not retained as the Chief Executive Officer and Chairman of the
Board of the acquiring or surviving entity, then all such restrictions on all of
said restricted shares of stock shall be deemed to be removed and all such
restricted stock will thereupon be unrestricted and may be sold by Executive in
Executive's sole and absolute discretion. Executive may also receive
additional future grants of restricted stock during the Term of this Agreement
as may be determined by the Board in its sole discretion.
(b) Concurrently
with the execution and delivery of this Agreement by Executive and Company,
vesting of any and all stock options that were previously granted to Executive
will immediately thereupon become fully vested, and the term during which
Executive will be entitled to exercise all such stock options will immediately
thereupon be extended to be a period of five (5) years following the
Commencement Date (as that term is defined in this Agreement).
3
5.2 (a) In
addition, at the first meeting of the Board following the Commencement Date of
this agreement, Company will recommend to the Board that the Company grant to
Executive options (the "Initial Options") to purchase an additional 100% of the
existing aggregated employee options that were previously or are currently
awarded to Executive under the Company’s 2005 Stock Option Plan (the
“Plan”). The exercise price of the Initial Options shall be equal to
the per share price of the Company’s Common Stock at the close of trading on the
trading day that the Compensation Committee approves the award. Except as provided herein, the terms
of the Initial Options shall be set by the Compensation Committee in accordance
with the Plan and in the Company's standard form Incentive Option Agreement;
provided, further, that the Initial Options shall be incentive stock options to
the maximum extent permitted under the Company's Plan and applicable provisions
of the Internal Revenue Code. Unless vesting is otherwise accelerated
as provided in this Agreement in connection with a
Change of Control, 100 % of the Initial Options shall vest immediately on
the first anniversary of the Commencement Date.
(b) Executive
shall also be eligible for subsequent grants of stock options during the term of
this Agreement as determined by the Board in its sole discretion under the
Plan. The parties intend that the award of such option, when considered with the other compensation provided
to Executive and the financial performance of the Company under Executive's
management, shall be commensurate with that offered to CEOs of similarly
situated public companies in the same or similar industries as
Company.
(c) Following
the execution and delivery of this Agreement by Executive and Company, if a
"Change of Control", as hereinafter defined, occurs and if Executive is not
retained at the Chief Executive Officer and Chairman of the Board by the
acquiring or surviving entity, then (a) vesting of all previously issued stock
options, including but not limited to, the Initial Options and any other stock
options to be granted to Executive by Company under and pursuant to this
Agreement, will accelerate and all such stock options will thereupon become
fully vested. Further, Executive will also thereafter be allowed to
have a period of three (3) years to exercise all vested stock options then held
by or previously issued to Executive in the event that Executive is no longer
employed with Company.
(d) For purposes of this Agreement, “Change in
Control” means the occurrence of any of the following events:
(i) the
acquisition, directly or indirectly, by any ”person” or “group” (as those terms
are defined in Sections 3(a)(9), 13(d), and 14(d) of the Securities Exchange Act
of 1934 (the “Exchange Act”) and the rules thereunder) of “beneficial
ownership”(as determined pursuant to Rule 13d-3 under the Exchange Act) of
securities entitled to vote generally in the election of directors (“voting
securities”) of the Company that represent 50% or more of the combined voting
power of the Company’s then outstanding voting securities, other
than:
4
a. an
acquisition by a trustee or other fiduciary holding securities under any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any person controlled by the Company or by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any person controlled
by the Company, or
b. an
acquisition of voting securities by the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of the stock of the Company, or
c. an
acquisition of voting securities pursuant to a transaction described in clause
(iii) below that would not be a Change in Control under clause
(iii);
(ii) individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or
(iii) the
consummation by the Company (whether directly involving the Company or
indirectly involving the Company through one or more intermediaries) of (x) a
merger, consolidation, reorganization, or business combination or (y) a sale or
other disposition of all or substantially all of the Company’s assets or (z) the
acquisition of assets or stock of another entity, in each case, other than a
transaction:
a. which
results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being
converted into voting securities of the Company or the person that, as a result
of the transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the Company’s assets or
otherwise succeeds to the business of the Company (the Company or such person,
the “Successor Entity”)) directly or indirectly, at more than 50% of the
combined voting power of the Successor Entity’s outstanding voting securities
immediately after the transaction, or
b. after
which no person or group beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however,
that no person or group shall be treated for purposes of this clause b. as
beneficially owning 50% or more of combined voting power of the Successor Entity
solely as a result of the voting power held in the Company prior to the
consummation of the transaction.
5.3 Executive
and his spouse shall be entitled to participate in the Company’s health
insurance program effective as of the Commencement Date and the Company shall
pay all premiums for said insurance for Executive and his spouse under the
applicable plans. .
5
5.4 In
addition to the foregoing, Executive shall be entitled to participate with other
key executive officers of the Company based on position, tenure and salary in
any plan of the Company relating to stock purchases, pension, thrift, profit
sharing, life insurance, disability insurance, education, or other retirement or
Executive benefits that the Company has adopted or may hereafter adopt for the
benefit of its executive officers.
5.5 The
Company shall pay all unreimbursed out-of-pocket costs associated with an annual
physical examination of Executive, such amount not to exceed $3,000 per
year.
5.6 Executive
shall be reimbursed for his legal fees incurred in connection with negotiating
and drafting this Agreement up to a maximum of $10,000.
5.7 Company
will reimburse Executive for the requisite annual premiums for a policy of
25-year level-premium term life insurance coverage in the amount of Three
Million Dollars ($3,000,000) for Executive (with Executive designating the
beneficiary of such life insurance). Executive will submit an invoice
to Company for reimbursement of the annual premiums.
5.8 Executive agrees that the Company may apply for and take
out in its own name and at its own expense such “key person” life insurance upon
the life of Executive as the Company may deem necessary or advisable to protect
its interests; provided, however, that (i) such insurance coverage does not
otherwise diminish or restrict Executive's eligibility for and/or participation
level in any benefit plan or arrangement described in this Section 5, and (ii)
such coverage does not otherwise diminish any other economic benefit to which
Executive is entitled pursuant to the terms of this Agreement, and (iii) no
taxable income is attributed to Executive as a result of such
coverage. Executive agrees to reasonably assist and reasonably
cooperate with the Company in procuring such insurance, including (without
limitation) submitting to medical examinations for purposes of obtaining and/or
maintaining such insurance. Employee agrees that he shall have no
right, title or interest in and to such insurance.
6. Automobile. The
Company shall provide Executive a car allowance of $600 per month, payable on
the Commencement Date and on the 1st day of each calendar month
thereafter. In addition, the Company shall reimburse Executive for
reasonable actual expenses incurred (including, without limitation, gas,
scheduled and unscheduled maintenance and repairs, insurance, registration fees
and taxes) in operating the vehicle used for business purposes subject to the
provisions of paragraph 8.
7. Vacation. Executive
shall be entitled to six (6) weeks annual paid vacation in accordance with the
Company’s policy, in addition to holidays and other paid time off (excluding
vacation) provided to similarly situated executive officers of the
Company. The maximum amount of accrued vacation to which Executive
may be entitled at any time is twelve (12) weeks.
6
8. Business
Expenses. During such time as Executive is rendering services
hereunder, Executive shall be entitled to incur and be reimbursed by the Company
for all reasonable business expenses, including but not limited to, at least
business class airfare while traveling at least 1,000 miles from Executive's
home city (at least coach class for travel under 1,000 miles), first class hotel
accommodations, ground transportation while traveling, reasonable meals or an
agreed upon per diem while traveling, mobile telephone and text messaging
charges. The Company agrees that it will reimburse Executive for all
such expenses upon the presentation by Executive, on a monthly basis, of an
itemized statement of such expenditures setting forth the date, the purposes for
which incurred, and the amounts thereof, together with such receipts showing
payments in conformity with the Company’s established
policies. Reimbursement for approved expenses shall be made within a
reasonable period not to exceed 30 days after the receipt of foregoing
statements and supporting documentation. Further, Company recognizes
that the Executive’s spouse will be traveling with Executive and that her
airfare will be included as a business expense in accordance with IRS guidelines
as to comporting to business duties requested by Executive.
9. Indemnity. Company
shall to the extent permitted and required by law, indemnify and hold Executive
harmless from costs, expense or liability arising out of or relating to any acts
or decisions made by Executive in the course of his employment to the same
extent Company indemnifies and holds harmless other officers and directors of
Company in accordance with Company’s established policies. This
indemnity shall include, without limitation, advancing Executive attorneys
fees to the fullest extent permitted by applicable
law. Company agrees to continuously maintain Directors and
Officers Liability Insurance with limits of coverage the same as currently in
effect, unless a change is mutually agreed upon by Executive and the Board of
Directors of Company, and to include Executive within said coverage while
Executive is employed by Company and for at least thirty-six (36) months after
the termination of Executive's employment by Company.
10. Termination. Executive's
employment with Company may be terminated for the reasons set forth
below. At the request of the Board, Executive agrees to resign from
his position as a director of Company within 24 hours after his
termination.
10.1 Death. This
Agreement shall terminate upon Executive’s death. Company shall pay
Executive’s estate (i) on the date it would have been payable to Executive any
unpaid Base Salary and accrued vacation earned prior to the date of Executive’s
death, (ii) within 30 days of the conclusion of the quarter following
Executive’s death, any unpaid Bonus prorated to the date of Executive’s death,
and (iii) any unpaid reimbursements due Executive for expenses incurred by
Executive prior to Executive’s death upon receipt from Executive’s personal
representative of receipts therefore. Any Initial Options and
subsequent stock options granted to Executive that have not vested as of the
date of Executive’s death shall terminate
on the date of Executive’s death, but all vested but unexercised Initial Options
and subsequently granted stock options will be exercisable by Executive's heirs
in accordance with the Plan; provided, however, that Executive's estate shall
have a period of up to three (3) years within which to exercise any vested
Initial Options or subsequently issued stock options following the date of death
of Executive.
7
10.2 Disability. If,
as a result of Executive’s incapacity due to physical or mental illness,
Executive shall have been absent from the full time performance of substantially
all of his material duties with Company for 90 consecutive days or 180 days
total within any 12-month period, Executive's employment may be terminated by
Company or by Executive for “Disability.” Termination shall occur 30 days after
a notice of a written termination is delivered to Executive by Company or by
Executive to Company (the “Effective Date of Termination”). In the
event of such a termination, Company shall pay Executive (i) any unpaid Base
Salary and accrued vacation earned prior to the date of Executive’s Effective
Date of Termination, (ii) within 30 days of the end of the quarter following
Executive’s Effective Date of Termination, any unpaid Bonus prorated to
Executive's last day of actual employment, (iii) any unpaid reimbursements due
Executive for expenses incurred by Executive prior to Executive’s Effective Date
of Termination, pursuant to paragraph 8, and (iv) if Executive is not covered by
any other comprehensive insurance that provides a comparable level of benefits,
Company will pay Executive an amount equivalent to Executive’s COBRA payments up
to 18 months following the Effective Date of Termination or the maximum term
allowable by then applicable law for coverage of Executive and his eligible
dependents. Any Initial Options and subsequent options that have not
vested as of Executive’s Effective Date of Termination shall terminate on the date of Executive’s Effective
Date of Termination for Disability, but all vested but unexercised Initial Options
and subsequent options will be exercisable by Executive's in accordance with the
Plan; provided, however, that in the event of such a termination, Executive or
Executive's legal representative will have a period of up to three (3) years
within which to exercise any vested Initial Options or subsequently issued stock
options following the Effective Date of Termination.
10.3 Cause. The
Company may terminate Executive's employment hereunder for Cause. For
purposes of this Agreement, “Cause” means
(i) an
act or acts of fraud or dishonesty undertaken by Executive during the course of
his employment;
(ii) misconduct
by Executive that is willful or deliberate on Executive’s part and that, in
either event, is materially injurious to Company, monetarily or
otherwise;
(iii) the
indictment, formal charge, conviction of Executive of, or the Executive entering
of a plea of nolo contendere to, a misdemeanor involving fraud, theft,
dishonesty or moral turpitude or a felony, or Executive’s debarment by the U.S.
Food and Drug Administration from working in or providing services to any
pharmaceutical or biotechnology company;
(iv) the
material breach of any terms and conditions of this Agreement by Executive,
which failure or breach has not been cured by Executive within 30 days after
written notice thereof to Executive from Company; or
(v) Executive’s
failure to perform his duties or follow the lawful directions of the Board,
which failure has not been cured by Executive within 30 days after written
notice thereof to Executive from Company
The
termination of Executive’s employment shall not be deemed to be for Cause unless
and until there shall have been delivered to Executive a copy of a resolution,
duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board
(not including Executive) at a meeting of the Board (after reasonable notice to
Executive and an opportunity for him, together with his counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board, one or
more causes for termination exist under this Section 10.3, and specifying the particulars thereof in
detail. In the event of termination for Cause, Executive
will be entitled to such Base Salary, accrued vacation pay, and benefits as have
accrued under this Agreement through the date of termination which accrued
amounts shall be payable on the Effective Date of Termination, to exercise
vested stock options in accordance with the terms
of the Plan and to extend his insurance coverage at his own expense for
up to 18 months following the Effective Date of Termination or the maximum term
allowable by then applicable law for coverage of Executive and his eligible
dependents, but will not be entitled to any other salary, benefits, bonuses or
other compensation after such date.
8
10.4 Without
Cause. This
Agreement may also be terminated by Company without Cause, and for any reason or
no reason, at any time by the delivery to Executive of a written notice of
termination; provided, however, that upon any termination of this Agreement by
Company other than for Cause, Executive shall be entitled to receive the
following (collectively, the "Severance Benefits"): (a) on the Effective Date of
Termination, Executive will be paid such Base Salary, vacation, pro rated bonus
(pro rated on a daily basis based on the number of days during the year in which
such termination occurs prior to the effective date of such termination, over a
presumed 365 day year) and all other benefits as have been earned or accrued
under this Agreement through the date of termination and (b) provided Executive
executes the Company’s standard general release for employees (and does not
revoke such general release) (i) if Executive is not covered by any other
comprehensive insurance, the Company will pay Executive an amount equivalent to
Executive’s and Executive's Spouse’s COBRA payments up to 24 months following
the Effective Date of Termination or the maximum term allowable by then
applicable law for coverage of Executive and his Spouse, and (ii) Executive will
also be paid a lump sum severance equal to two (2) year’s then current Base
Salary within thirty days of the Executive’s execution of the general release,
and (iii) Company will continue to reimburse Executive for the
premiums on the 25 year level premium term life policy for Executive for a
period of two (2) years following any such termination, and (iv) in the event of
a termination without Cause during the twenty-four month (24) month period
following a Change of Control, any Initial Options and subsequent options
and any replacement options in any successor entity that were obtained by
Executive in exchange for the Initial Options or subsequent options that have
not vested as of Executive’s Effective Date of Termination ("Unvested Options")
shall vest on the date of Executive’s Effective Date of
Termination. For avoidance of any doubt, the Company shall not be
obligated to pay Executive any Severance Benefits if his employment is
terminated on a Termination Date or Extended Termination Date in accordance with
the notice provision of Article 1 of this Agreement.
10.5 By
Executive. Executive
may terminate this Agreement for any reason or no reason at any time upon 30
days written notice to Company.
(a) In
the event Executive terminates this Agreement for “Good Reason,” Executive shall
be entitled to receive the Severance Benefits. As used herein, “Good
Reason” shall mean:
(i) any
removal of Executive from, or any failure to nominate or re-elect Executive to,
his current office and/or as the Chairman of the Board, except in connection
with termination of Executive’s employment for death, disability or Cause as
provided above in this Agreement;;
9
(ii) the
failure of Company to obtain the assumption of this Agreement by any successor
to Company, as provided in this Agreement;
(iii) in
the event of a Change in Control:
a. (1) any reduction in Executive's then-current
Base Salary or any material reduction in Executive's comprehensive benefit
package (other than changes, if any, required by group insurance carriers
applicable to all persons covered under such plans or changes required under
applicable law), or (2) the assignment to Executive of duties that
represent or constitute a material adverse change in Executive's position,
duties, responsibilities and status with Company immediately prior to a Change
in Control, or (3) a material adverse change in Executive's reporting
responsibilities, titles, offices, or any removal of Executive from, or any
failure to re-elect Executive to, any of such positions; except in connection
with the termination of Executive's employment for Cause, upon the disability or
death of Executive, or upon the voluntary termination by Executive;
b. the
relocation of Executive’s place of employment from the location at which
Executive was principally employed immediately prior to the date of the Change
in Control to a location more than 50 miles from such location; or
c. the
failure of any successor to Company to assume and agree to perform Company's
obligations under this Agreement; or
(iv) the
material breach of any terms and conditions of this Agreement by
Company.
Within
thirty (30) days of the initial existence of any event described above,
Executive must give the Company a written notice which shall identify the above
basis for termination for Good Reason and set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination (“Good Reason Notice”). A
separation for Good Reason shall not occur if the basis for Good Reason is
remedied by the Company during such 30-day period. If the Company does not
remedy the basis for Good Reason, the separation from service for Good Reason
shall occur on the 31st day
after receiving the Good Reason Notice from the Executive.
If it
shall be determined that any payment or distribution by Company to or for the
benefit of Executive hereunder (a “Payment”) would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”) or any interest or penalties are incurred by Executive with respect to
such excise tax (such excise tax, together with any such interest and penalties,
are hereafter collectively referred to as the “Excise Tax”), then Company shall
calculate the amount Executive will retain net after-all-taxes, including Excise
Taxes, if all payments are made and also calculate the amount Executive shall
retain net after-all-taxes, including Excise Taxes, if payments are reduced to
an amount so that no Excise Taxes are imposed, and Company shall pay Executive
the amount that maximizes the amount Executive will receive
after-all-taxes. Company will consult with Executive as to the
appropriate Federal and any state income tax to be used in making such
calculations. In the event that it is determined that Executive
should receive an amount that results in the Payment not being subject to Excise
Taxes (the "Reduced Payment"), Executive advise Company as to how to reduce or
eliminate the Payment or Payments from among the following
categories:
10
|
(1)
|
the
portion denominated and payable in
cash;
|
|
(2)
|
the
portion payable in-kind, such as insurance coverage, or in cash as a
reimbursement; and
|
|
(3)
|
equity-based
compensation and enhancements, such as accelerated vesting and extended
periods to exercise options.
|
Executive
shall have full discretionary authority to determine which payments to reduce
within any of the three categories described in the preceding sentence, and can
determine to have Company reduce payments in any or all of the three categories
in such order as Executive shall advise Company. As promptly as
practicable following such determination and election by Executive and subject
to any payment provisions otherwise applicable under this Agreement, Company
shall pay to or distribute for the benefit of Executive such Payments as are
then due to Executive under this Agreement. In the event that
Executive is nevertheless subject to Excise Tax, the Company shall have no
liability to Executive for payment thereof.
(b) In
the event Executive terminates this Agreement other than because of Disability
or other than for Good Reason, Company shall pay Executive: (i) on the date it
would have been payable to Executive, any unpaid Base Salary and accrued
vacation pay earned prior to the date of Executive’s termination, and (ii) any
unpaid reimbursements due Executive for expenses incurred by Executive prior to
the date of Executive’s termination, pursuant to this Agreement, and Executive
shall have the right to exercise any vested stock options in accordance with the
terms of the Plan but be allowed to due such exercise in over a thirty-six (36)
month period after termination of this Agreement and to extend Executive's and
Executive's eligible dependents' medial insurance coverage at Executive's own
expense for up to twenty-four (24) months following the Effective Date of
Termination, or the maximum term allowable by then applicable law for coverage
of Executive and his eligible dependents.
10.6 Notwithstanding
anything contained in this Agreement, under applicable law, or otherwise, in the
event of any termination of this Agreement whereby Executive is entitled to
receive all or any portion of the Severance Benefits (as defined and provided in
this Agreement), then (a) Executive shall have no obligation to seek or accept
any other employment or engagement with any other individual or entity following
any such termination, and (b) in the event that Executive accepts any other
employment or any engagement with any other individual or entity, Company will
not be entitled to offset or reduce any portion of the Severance Benefits by any
compensation, remuneration, consideration or other things of value received or
to be received by Executive from or in connection therewith, it being expressly
understood and agreed by Company and Executive that Executive will be entitled
to receive all such Severance Benefits without deduction or offset as provided
in this Agreement, except that any benefits otherwise receivable by Executive
pursuant to Sections 10.4(b)(i) and 10.4(b)(iii) shall be reduced to the extent
comparable benefits are received by Executive from a subsequent employer during
the two years after termination of his employment.
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11. Assignment.
11.1 This
Agreement may not be assigned by Executive.
11.2 This
Agreement may be assigned by Company provided that Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of Company
to expressly assume and agree to perform under this Agreement in the same manner
and to the same extent that Company would be required to perform as if no such
succession had taken place.
12. Covenants.
12.1 Confidential
Information. During the term of this Agreement and thereafter,
Executive shall not, except as may be required to perform his duties hereunder
or as required by applicable law or court order, disclose to others for use,
whether directly or indirectly, any Confidential Information regarding
Company. “Confidential Information” shall mean information about
Company, its subsidiaries and affiliates, and their respective clients and
customers that is not available to the general public or that does not otherwise
become available to the general public, and that was learned by Executive in the
course of his employment by Company, including, without limitation, any data,
formulae, recipes, methods, information, proprietary knowledge, trade secrets
and client and customer lists and all papers, resumes, records and other
documents containing such Confidential Information. Executive
acknowledges that such Confidential Information is specialized, unique in nature
and of great value to Company, and that such information gives Company a
competitive advantage. Upon the termination of his employment,
Executive will promptly deliver to Company all documents, maintained in any
format, including electronic or print, (and all copies thereof) in his
possession containing any Confidential Information.
12.2 Noncompetition. Except
as otherwise provided herein, Executive agrees that during the term of this
Agreement he will not, directly or indirectly, without the prior written consent
of Company, provide consulting services with or without pay, or own, manage,
operate, join, control, participate in, or be connected as a stockholder,
employee, partner, or otherwise with any business, individual, partner, firm,
corporation, or other entity which is then in competition with Company or any
present affiliate of Company in the biotech industry; provided, however, that
the “beneficial ownership” by Executive, either individually or as a member of a
“group,” as such terms are used in Rule 13d of the General Rules and Regulations
under the Securities Exchange Act of 1934 (“Exchange Act”), of not more than 5 %
of the voting stock of any corporation shall not be a violation of this
Agreement. Notwithstanding the foregoing, Executive shall be
permitted to maintain the ownership interests and directorship described on
Exhibit “A” attached hereto so long as they do not interfere with the
performance of his duties and do not constitute competitive
activities.
12.3 Right to Company
Materials. Executive
agrees that all materials, books, files, reports, correspondence, records, and
other documents (“Company Material”) used, prepared, or made available to
Executive, shall be and shall remain the property of Company. Upon
the termination of his employment and/or the expiration of this Agreement, all
Company Materials shall be returned immediately to Company, and Executive shall
not make or retain any copies thereof, unless and except to the extent required
by applicable law, rule or regulation and provided that Executive gives the
Company with specific written notice of the copies retained and the purpose of
retaining them.
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12.4 Non-solicitation. Executive
understands and agrees that in the course of employment with Company, Executive
will obtain access to and/or acquire Company trade secrets, including
Confidential Information, which are solely the property of
Company. Therefore, to protect such trade secrets, Executive promises
and agrees that during the term of this Agreement, and for a period of six (6)
months thereafter, he will not solicit or assist
or instruct others in soliciting any employees of Company or any of its
present or future subsidiaries or affiliates, to divert their employment or
business to or with any individual, partnership, firm, corporation or other
entity then in competition with the business of Company, or any subsidiary or
affiliate of Company.
12.5 Non-disparagement. Except for
statements of fact, internal Company communications relating to the performance
of Company, disclosures required under applicable law or in connection with any
legal proceedings with respect to which Executive is a party or witness,
Executive will not make any disparaging remarks regarding Company at any time
during or after the termination of Executive's employment with
Company. Except for statements of fact, internal communications
relating to the performance of Executive, and disclosures required under
applicable law or in connection with any legal proceedings with respect to which
Company is a party or witness, Company will not make any disparaging remarks
regarding Executive at any time during or after the termination of his
employment with Company.
12.6 Survival. This Article 12 shall survive the
termination or expiration of this Agreement for the periods of time indicated
herein or indefinitely if no period of time is indicated.
13. Notice. For
the purpose of this Agreement, notices and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or when mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to the respective
addresses set forth below, or to such other addresses as either party may have
furnished to the other in writing in accordance herewith, exception that notice
of a change of address shall be effective only upon actual receipt:
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Company:
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Advanced
Cell Technology, Inc.
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|
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381
Plantation Street,
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||
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Biotech
V.
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||
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Worcester,
Massachusetts 09605
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||
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Attention: Rita
Parker
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||
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Executive:
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William
M. Caldwell, IV
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15516
W. Sunset, #205
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||
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Pacific
Palisades, CA 90272
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14. Amendments or
Additions. No
amendment or additions to this Agreement shall be binding unless in writing and
signed by both parties hereto.
13
15. Section
Headings. The
section headings used in this Agreement are included solely for convenience and
shall not affect, or be used in connection with, the interpretation of this
Agreement.
16. Severability. The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof.
17. Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original, but both of which together will constitute one and the same
instrument.
18. Arbitration. Except
as provided herein, any controversy or claim arising out of or relating in any
way to this Agreement or the breach thereof, or Executive's employment and any
statutory claims including all claims of employment discrimination shall be
subject to private and confidential arbitration in Los Angeles County,
California in accordance with the laws of the State of
California. The arbitration shall be conducted in a procedurally fair
manner by a mutually agreed upon neutral arbitrator selected in accordance with
the National Rules for the Resolution of Employment Disputes (“Rules”) of the
American Arbitration Association or if none can be mutually agreed upon, then by
one arbitrator appointed pursuant to the Rules. The arbitration shall be
conducted confidentially in accordance with the Rules. The
arbitration fees shall be paid by the Company. Each party shall have
the right to conduct discovery including depositions, requests for production of
documents and such other discovery as permitted under the Rules or ordered by
the arbitrator. The statute of limitations or any cause of action
shall be that prescribed by law. The arbitrator shall have the
authority to award any damages authorized by law for the claims presented
including punitive damages and shall have the authority to award reasonable
attorneys fees to the prevailing party in accordance with applicable
law. The decision of the arbitrator shall be final and binding on all
parties and shall be the exclusive remedy of the parties. The award
shall be in writing in accordance with the Rules, and shall be subject to
judicial enforcement in accordance with California law. Notwithstanding anything to the contrary
contained in this Section, nothing herein shall prevent or restrict the Company
or Executive from seeking provisional injunctive relief from any forum having
competent jurisdiction over the parties.
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19. Section
409A. This Agreement is intended to comply with Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) and will be
interpreted in a manner intended to comply with Section 409A of the
Code. To the extent any reimbursements or in-kind benefits due to
Executive under this Agreement constitute “deferred compensation” under
Section 409A of the Code, any such reimbursements or in-kind benefits shall
be paid to Executive in a manner consistent with Treas. Reg. Section
1.409A-3(i)(1)(iv). Each payment made under this Agreement shall be
designated as a “separate payment” within the meaning of Section 409A of
the Code. Notwithstanding anything herein to the contrary, if any
payment of money or other benefits due to Executive hereunder could cause the
application of an accelerated or additional tax under Section 409A of the
Code, Company, in its reasonable discretion, may decide such payments or other
benefits shall be deferred if deferral will make such payment or other benefits
compliant under Section 409A of the Code (“a 409A Tax”), or otherwise such
payment or other benefits shall be restructured, to the extent possible, in a
manner, determined by Company that does not cause such accelerated or additional
tax. In addition, to the extent Executive is a “specified employee”
as defined in Section 409A of the Code as of the earlier of a Services Cessation
Date or the date of termination of Executive's employment, and the deferral of
the commencement of any compensation or benefits otherwise payable under this
Agreement, or any other applicable separation program or plan, as a result of
such Services Cessation Date or termination of employment is necessary in order
to prevent a 409A Tax, then Company will postpone the commencement of
such payment of any such compensations or benefits until the first business day
of the seventh month following Executive's termination date (the “Delayed
Payment Date”). Payment of the withheld and accumulated payments
(with interest as calculated below) shall be treated as made on the Delayed
Payment Date if the payment is made on such date or on a later date within the
same calendar year as the Delayed Payment Date, or, if later, by the 15th day of
the third month following the Delayed Payment Date, provided that Executive may
not, directly or indirectly, designate the year of payment. In the
event that this Paragraph 14(d) requires a delay of any payment or benefit,
such payment shall be accumulated and paid in a single lump sum on the Delayed
Payment Date, with interest for the period of delay, compounded monthly, equal
to the prime or base lending rate then in effect as of the date the payment
would have otherwise been made. Company shall consult with Executive
in good faith regarding the implementation of the provisions of this Paragraph,
but Company shall determine the terms of any such
implementation. Executive acknowledges that Executive has been
advised to obtain independent legal, tax or other counsel in connection with
409A, and that Executive has done so to the extent that you deemed necessary or
appropriate.
20. Miscellaneous. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by
Executive and such officer as may be specifically designated by the
Board. No waiver by either party hereto at any time of any breach by
the other party hereto of, or compliance with, any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of California without regard to its
conflicts of law principles. All references to sections of the
Exchange Act shall be deemed also to refer to any successor provisions to such
sections. This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which, taken together, shall
constitute one document.
IN WITNESS WHEREOF, each of
the parties hereto has executed this Agreement and has made it effective as of
the date first indicated above.
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ADVANCED CELL TECHNOLOGY,
INC.
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EXECUTIVE:
|
|
By:
/s/ William M. Caldwell, IV
|
/s/
William M. Caldwell, IV
|
|
William
M. Caldwell, IV
|
|
|
Name:
William M. Caldwell, IV
|
|
|
Title:
Chief Executive Officer
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15
SCHEDULE
A
EXISTING
EXECUTIVE AND/OR DIRECTOR POSITIONS
Director: Lee
Pharmaceuticals, Inc, El Monte, California
Director: King
Koil Licensing Company, Chicago, Illinois
16