Deferred Compensation Agreement - Biopure Corp. and Carl W. Rausch
Execution Version
DEFERRED COMPENSATION AGREEMENT
This agreement (this "Agreement"), dated as of July 29, 2002, is made by and
between Biopure Corporation, a Delaware corporation (the "Company"), and Carl W.
Rausch (the "Executive").
RECITALS
The Executive and the Company entered into a Deferred Compensation Agreement
("Deferred Compensation Agreement") dated as of August 8, 1990, pursuant to
which the Executive agreed to defer incentive compensation in the amount of
$700,000 ("Compensation") plus interest ("Interest") thereon at the "Prescribed
Rate" as defined therein. Payment of the Compensation was deferred twice for
consideration paid by the Company, the last such deferral being by action of the
board of directors of the Company taken June 24, 1999; such board action
deferred payment of the Compensation and Interest until July 31, 2003 and
established the Prescribed Rate from and after July 24, 1999 at 4.71% annually.
The Executive and the Company have agreed to enter into an employment agreement
as of the date hereof ("Employment Agreement").
AGREEMENT
Now therefore, in consideration of the mutual covenants and promises herein
contained and other good and valuable consideration, including but not limited
to the Executive's benefits under the Employment Agreement, the Company and the
Executive hereby agree as follows:
1. The Executive hereby cancels, forgives and foregoes entitlement to and
receipt of all Interest accrued through the date of this Agreement.
2. The Company agrees to accelerate payment of the Compensation (i.e.,
$700,000) to the date hereof. Payment of the Compensation shall be
made in full as follows:
$233,100, to be retained as withholding tax; and
$466,900, to be applied to the payment of outstanding
indebtedness from the Executive to the Company;
3. The Executive represents that he expects that his marginal income tax
rate for federal and state taxes for the year 2002 will be
approximately 33.3%.
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4. The Deferred Compensation Agreement and all amendments thereto and the
parties' rights, powers and obligations thereunder are hereby
terminated, and any liabilities thereunder are hereby mutually
released.
In witness whereof this Agreement has been executed by or on behalf of the
parties hereto, as an instrument under seal as of the date first above written.
Biopure Corporation
By: ________________________ ____________________________
Title Carl W. Rausch