SEVERANCE AGREEMENT
THIS AGREEMENT is made as of August 19, 1996 by and between BioTime,
Inc., a California corporation (hereinafter referred to as the "Company"), and
Lawrence Cohen (hereinafter referred to as "Cohen").
W I T N E S S E T H:
WHEREAS, Cohen is presently a director of the Company and is employed
by the Company in the capacity of Chairman of the Board; and
WHEREAS, Cohen desires to retire from the Company and the Company and
Cohen desire to implement certain arrangements in connection with Cohen's
retirement from the Company.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, the parties hereto agree as follows:
1. Stock Options. The Company hereby grants to Cohen stock options
("Options") to purchase up to 25,000 of the Company's Common Shares, no par
value ("Shares") at an exercise price of $14.88 per Share. All such Options are
granted pursuant to and shall be governed by the Company's 1992 Stock Option
Plan, as amended, and by that certain Stock Option Agreement between the Cohen
and the Company in the form attached as EXHIBIT A. The grant of Options to Cohen
under this Agreement is subject to the express condition that Cohen execute and
deliver the Stock Option Agreement.
(a) Exercise Period and Expiration of Options. The Stock
Option Agreement shall provide, among other things, that the Options granted
under this Section 1 shall not become exercisable unless and until vested. Such
Options shall vest and thereby become exercisable ninety (90) days after the
date of this Agreement if (i) concurrently with Cohen's execution and delivery
of this Agreement, his wife, Donna Cohen, shall have executed and delivered to
the Company that certain Stock Lock-Up Agreement in the form attached as EXHIBIT
B, and (ii) no breach or default by Cohen or Donna Cohen under this Agreement,
the Stock Option Agreement or the Stock Lock-Up Agreement shall have occurred.
The Stock Option Agreement shall provide, among other things, that the Options
shall expire on the earliest to occur of: (A) two years after the date of grant;
and (B) any breach or default by Cohen or Donna Cohen under this Agreement, the
Stock Option Agreement or the Stock Lock-Up Agreement.
2. Resignation. Cohen hereby resigns as a director, officer (Chairman
of the Board) and employee of BioTime.
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3. Severance Compensation. As severance compensation, the Company
agrees to pay to Cohen the unpaid portion of his salary and other benefits
payable to him under the terms of his Employment Agreement, dated April 25,
1994, through April 24, 1997, provided that Cohen fully and faithfully performs
and complies with all of his agreements and obligations under this Agreement,
and Donna Cohen fully and faithfully performs and complies with all of her
agreements and obligations under the Stock Lock-Up Agreement; provided, however,
that the provisions of Section 6.8 of Cohen's Employment Agreement shall not
apply in the event that a "Change in Control" as defined therein occurs; and
provided, further, that Cohen agrees that the unpaid portion of his salary plus
other cash benefits payable for the remainder of the term of his Employment
Agreement (ie. through April 24, 1997) is $42,500.
4. Confidentiality. In the course of serving as an officer, director
and employee of the Company, the Company has disclosed to Cohen, and Cohen may
otherwise have obtained knowledge of or access to, trade secrets and other
proprietary and confidential information concerning the Company, the Company
products, financial condition, research and development plans, and other matters
pertaining to the Company's business ("Confidential Information"). Cohen agrees
to treat and hold all Confidential Information as secret and confidential, and
to apply strict standards of care to maintain the secrecy of the Confidential
Information. In this regard, Consultant agrees not to copy or reproduce any
Confidential Information and not to disclose the contents of any Confidential
Information to any person or entity, other than officers and directors of the
Company. Cohen further agrees to return to the Company written or other copies
(including electronic media containing Confidential Information) of any and all
Confidential Information in Cohen's possession. The provisions of this Section 4
shall not apply to any Confidential Information that Cohen is obligated by law
to disclose to any court or any federal or state government agency.
5. Restrictions on Certain Sales. Cohen agrees that, for a period of
six months from the date of this Agreement, he will not, directly or indirectly,
in his own name, in the name of any other person or entity, or through any
account owned or controlled by Cohen or over which Cohen holds any power to
direct the sale or other disposition of securities (a) sell, offer for sale,
transfer or exchange any Common Shares of the Company, or (b) grant, write,
purchase or sell any call, put or other option giving Cohen or any other person
or entity the right to sell, or giving any other person or entity the right to
purchase, Common Shares of the Company, except for such sales or other
transactions in or pertaining to Common Shares of the Company for which no
report, statement, form, notice or other document (including, without
limitation, any notice under Rule 144 under the Securities Act of 1933, as
amended (the "Securities Act"), or any Form 4 under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) is required to
be filed with the Securities and Exchange Commission.
6. Restrictions on Certain Actions. For a period of five (5) years
commencing on the date of this Agreement, Cohen agrees not to (a) make any
statement (public or private) critical of the Company, its management (or any
officer or director of the Company), technology, products, business or
prospects, (b) recommend that anyone sell or refrain from purchasing Common
Shares
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of the Company, (c) engage (directly, or indirectly through the participation in
any group, or ownership of any direct or indirect interest in account,
corporation, partnership or other entity) in any short sale of Common Shares of
the Company, (d) acquire, directly or indirectly, as part of a group or
otherwise, beneficial ownership of 5% or more of any outstanding class of the
Company equity securities, and Cohen will not join in any group that
beneficially owns 5% or more of any such class of equity securities, and (e)
participate in or support any group or slate of candidates seeking to replace
any incumbent director of the Company. Beneficial ownership shall be determined
under Section 13(d) of the Exchange Act and the rules promulgated thereunder.
7. Injunctive Relief. Cohen acknowledges that the Company would be
irreparably harmed by the disclosure or use of any Confidential Information in
violation of this Agreement. Cohen agrees that, in addition to all other
remedies available to the Company at law or in equity, the Company shall be
entitled to equitable relief enjoining any use, appropriation or disclosure of
Confidential Information in violation of this Agreement.
8. Certain Remedies for Breach. Cohen agrees that the Options to be
granted under Subsection 1 are being granted in consideration of Cohen's
agreement to comply with the provisions of this Agreement and the Stock Option
Agreement, and Donna Cohen's Agreement to comply with the provisions of the
Stock Lock-Up Agreement, and Cohen's right to exercise such Options is
conditioned upon Cohen's full compliance with this Agreement and the Stock
Option Agreement, and Donna Cohen's full compliance with the Stock Lock-Up
Agreement. Because a breach of the provisions of this Agreement and the Stock
Lock-Up Agreement could not adequately be compensated by money damages, and/or
because determination of any monetary damages incurred by the Company would be
difficult to calculate, in the event of a breach of this Agreement or the Stock
Lock-Up Agreement, the Company shall be entitled (in addition to, and not in
lieu of, any other right or remedy available to it under this Agreement, the
Stock Option Agreement, and the Stock Lock-Up Agreement to cancel any or all of
the Options granted to Cohen under this Agreement which have not theretofore
been exercised in accordance with their terms and conditions. Such cancellation
may be effected without any compensation to Cohen or Donna Cohen for the value
of such Options or the value of the Shares or other securities underlying such
Options.
9. Reasonable Restrictions. Cohen agrees that the provisions of
Sections 4, 5 and 6 are reasonable and necessary to protect the Company and its
business. It is the desire and intent of the parties that the provisions of
Sections 4, 5 and 6 shall be enforced to the fullest extent permitted under the
public policies and laws applied in each jurisdiction in which enforcement is
sought. If any restriction contained in Sections 4, 5 and 6 shall be deemed to
be invalid, illegal or unenforceable by reason of the extent or duration
thereof, or otherwise, then the court making such determination shall have the
right to reduce such extent or other provisions hereof and in its reduced form
such restriction shall then be enforceable in the manner contemplated hereby.
10. Release. Cohen hereby forever releases, acquits and discharges the
Company and each officer, director and employee of the Company from any and all
liability, whether in
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contract, tort, or otherwise, that Cohen may now have or which may hereafter
accrue, arising out of or connected with the service of Cohen as a director,
officer or employee of the Company, or as a shareholder of the Company, prior to
the date of this Agreement. Cohen further agrees not to participate as a party
adverse to the Company in any lawsuit or other proceeding and not to finance or
otherwise assist any party adverse to the Company in any lawsuit or other
proceeding, other than proceedings pertaining to any actual or alleged breach of
this Agreement or the Stock Option Agreement. The Company hereby forever
releases, acquits and discharges Cohen from any and all liability, whether in
contract, tort, or otherwise, that the Company may now have or which may
hereafter accrue, arising out of or connected with the service of Cohen as a
director, officer or employee of the Company, or as a shareholder of the
Company, prior to the date of this Agreement. The Company and Cohen agree that
this release includes all claims of every kind and nature, past, present and
future, known or unknown, suspected or unsuspected. With respect to the subject
matter of this release, the Company and Cohen expressly waive any and all rights
or claims under Section 1542 of the California Civil Code, which provides:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor."
This Section 10 shall not affect Cohen's rights to indemnification arising from
his acting as an officer, director or employee of the Company, as provided in
the articles of incorporation and bylaws of the Company or Section 317 of the
California Corporations Code. The Company's articles of incorporation authorize
the corporation to indemnify officers and directors to the fullest extent
permitted under California law, and the Company agrees to so indemnify Cohen but
only to the same extent as such indemnification is provided to other officers
and directors of the Company; provided, however, that the Company does not
presently maintain insurance indemnifying its officers and directors from
liabilities arising from their acts and omissions, and the Company shall not be
obligated to provide Cohen with any such insurance even if such insurance is
obtained for other officers and directors in the future.
11. Tax Withholding. Cohen agrees that the Company may withhold from
the severance payments all federal, state, and local income, employment, FICA,
SDI and other taxes. Cohen also agrees to remit to the Company on demand all
federal, state, and local income tax withholdings arising from the grant of the
Option, as may be required by applicable law. In this regard, Cohen acknowledges
that the exercise price of the Option on the date of grant is less than the fair
market value per share of the Shares issuable upon Cohen's exercise of the
Option.
12. Transfers of Restricted Shares. The Company agrees that it will not
act to materially delay or prohibit any sale of restricted Company Shares owned
by Cohen or Donna Cohen, and will not impose any fee as a condition of such
transfer, provided that the sale (a) does not violate the terms of this
Agreement or the Stock Lock-Up Agreement, (b) is made in compliance with Rule
144(k) under the Securities Act, (c) does not violate Section 10 or Section 16
of the Exchange Act or any regulation thereunder, and (d) does not violate the
securities or "Blue Sky" laws of any state. For the purpose of this Section, the
Company shall not be deemed to have caused a restriction or delay on any sale
resulting from (i) the placement of a legend on any stock certificate
restricting sales or transfers without registration or an exemption from
registration under the Securities Act and applicable state securities or Blue
Sky laws, (ii) the entry of any stop transfer order or legend on the books and
records of the transfer agent of the Shares relating to the restrictions on
transfer described in (i), and (iii) any requirement that Cohen or Donna Cohen
provide the transfer agent for the Shares with an opinion of counsel to the
effect that the proposed sale may be made without registration under the
Securities Act or the securities or Blue Sky laws of any state.
13. Entire Agreement. The provisions of this Agreement, the Stock
Option Agreement and the Stock Lock-Up Agreement constitute the entire agreement
between Cohen and the Company with respect to the subject matter of this
Agreement, and supersede any prior oral understanding. No modification,
supplement or discharge of this Agreement shall be effective unless in writing
and executed on behalf of the party to be charged.
14. Waiver. No waiver by either party of any condition, term or
provision of this Agreement shall be deemed to be a waiver of any proceeding or
succeeding breach of the same or of any other condition, term or provision of
this Agreement.
15. Successors and Assigns. This Agreement shall be binding upon the
heirs, executors, administrators, successors and assigns of Cohen, and shall
inure to the benefit of the successors and assigns of the Company.
16. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
17. Construction. This Agreement shall be construed in accordance with
the laws of the State of California.
18. Notices. Any notices or other communication required or permitted
to be given under this Agreement shall be in writing and shall be deemed
received when personally delivered to the party to whom it is to be given, or
four (4) days after being deposited in the United States mail, first class
certified postage prepaid, and addressed as follows:
To the Company: BioTime, Inc.
935 Pardee Street
Berkeley, California 94710
To Cohen: Lawrence Cohen
3311 N.E. 26th Avenue
Lighthouse Point, Florida 33064
Either party may change its address for notices by giving the other party notice
of such new address in the manner provided in this Section.
19. Titles and Subtitles. The titles or headings of the Sections and
Subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
20. Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, each such unenforceable provision
shall be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if each such unenforceable provision were so excluded, and the
balance of this Agreement as so interpreted shall be enforceable in accordance
with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
BIOTIME, INC.
By _______________________________________
Paul E. Segall, President
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Lawrence Cohen
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