Exhibit 10.1
THERMOGENESIS CORP.
EMPLOYMENT AGREEMENT
for
Kevin Simpson
THERMOGENESIS CORP. ("Employer") and Kevin Simpson ("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
and 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 and Chief Operating Officer, Employee shall report
directly to Employer's Chief Executive Officer.
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 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 One Hundred thousand Dollars ($100,000) in market value
in any single transaction or exceeding Two Hundred Fifty Thousand Dollars
($250,000) in the aggregate during any one fiscal year; (iv) execute any lease
for real 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 five (5) years
which shall commence on January 15, 2003 and end on January 14, 2008 (subject to
adjustment to an earlier start date and termination date by mutual agreement);
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 Two Hundred
Seventeen Thousand Two-hundred Dollars ($217,200) per year commencing on January
1, 2003 ("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.
4.2. Annual Review. On the date of Employer's annual meeting of
stockholders and on each subsequent annual meeting of stockholders during the
term of this Agreement, or at such other time as Employer may establish in its
discretion, 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/Stock Bonuses. In addition to the Base Salary provided for in
sections 4.1 and 4.2, Employee is eligible to receive discretionary bonuses
based on Employer performance and Employee's attainment of objectives
periodically established by Employer. Such discretionary bonuses may be paid in
cash, through issuance of stock or grant of stock options, or any combination
thereof, subject to Board discretion. Annual bonuses that may be awarded to
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 and Amended 1998 Employee Equity Incentive Plan. At the inception of this
Agreement, and subject to Plan requirements, Employee shall be granted an
initial option to acquire 300,000 shares of the Company's common stock, which
option shall be fully vested at the time of grant. Incident to the provisions of
Section 4.3., Employer's Compensation Committee will establish an incentive
program whereby Employee may earn and be granted additional options, up to an
additional 300,000 options in year 2, up to an additional 200,000 options in
each of year 3 and year 4 of this contract, and thereafter on a sliding scale
based on achieving a percentage of objectives in the prior three years.
4.5. 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.
4.6. 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.
4.7. 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.
4.8. 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.
4.9. Initial Signing Bonus. Employee shall be paid an initial signing bonus
of $35,000, which shall be paid on the first full payroll following Employee's
commencement of services under this Agreement.
4.10. Moving Expenses. Employer shall reimburse Employee for actual moving
expenses, as incurred, up to an aggregate amount of $10,000. Employee shall
submit invoices and required reports for reimbursement. In addition, Employer
shall reimburse Employee $7,500 for actual travel costs incurred that are
associated with relocation and commencement of work during the first year of
this Agreement.
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); (vii) debarment by any
federal agency that would limit or prohibit Employee from serving in his
capacity for Employer under this Agreement, or (viii) 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; (vi) debarment by any federal agency that would limit or
prohibit Employee from serving in his capacity for Employer under this
Agreement, or (vii) 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 (without mutual
consent of Employer), 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 the
notice of termination, and all non-vested options shall be deemed
canceled as of that date.
(b) If Employee is terminated without cause, as defined in subsection (i)
through (vii) of section 5 above, 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 (ii) an
amount equal to the then current per month Base Salary in accordance
with the following schedule:
(i) If terminated within the first full year of this Agreement, an
amount equal to two (2) years Base salary, payable twice monthly
in accordance with the Company's payroll dates; or
(ii) If terminated in the second or third year of this Agreement, an
amount equal to one (1) year Base salary, pay payable twice
monthly in accordance with the Company's payroll dates.
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 twice monthly or at the time of the delivery of notice of
termination, at Employer's sole discretion and election.
6. Confidential Information of Customers of Employer. 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, stockholder,
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
Employee not to compete with Employer shall not prohibit 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, 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
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.
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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.
3146 Gold Camp Drive
Rancho Cordova, California 95670
EMPLOYEE: Kevin Simpson
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:
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Philip H. Coelho,
Chairman & Chief Executive Officer
By:
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David Howell, Chairman Compensation Committee)
EMPLOYEE:
By:
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Kevin Simpson, an individual