THERMOGENESIS CORP.
EMPLOYMENT AGREEMENT
for
Philip H. Coelho
THERMOGENESIS CORP. ("Employer"), and Philip H. Coelho ("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 Chief
Executive 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 Chief Executive Officer, Employee shall report directly to the Employer's
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.
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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 three (3)
years which shall commence on July 1, 1999 and end on June 30, 2002; 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 Seventy Nine Thousand Six Hundred dollars ($179,600) per year
commencing on July 1, 1999 ("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 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. 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 and Employers 1998 Employee Equity Incentive Plan.
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.
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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.
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 (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.
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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,
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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.
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EMPLOYER: THERMOGENESIS CORP.
3146 Gold Camp Drive
Rancho Cordova, California 95670
EMPLOYEE: Philip H. Coelho
121 Giotto Way
El Dorado Hills, CA 95762
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.
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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: _______________________________________________
(James H. Godsey, President & Chief Operating
Officer)
By:_______________________________________________
(David Howell, Chairman Compensation Committee)
EMPLOYEE: By:______________________________________________
(Philip H. Coelho)
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EXHIBIT "A"
EMPLOYEE POSITION DESCRIPTION