Sample Business Contracts

Employment Agreement - CytoTherapeutics Inc. and Philip K. Yachmetz

Employment Forms

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  • Consulting Agreement. Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
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  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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                              EMPLOYMENT AGREEMENT

      THIS EMPLOYMENT AGREEMENT is made as of this 8th day of June, 1998 (the
"Effective Date"), as amended and restated as of June 8, 1999, by and between
CytoTherapeutics, Inc., a Delaware corporation ("Employer") having its principal
place of business at 701 George Washington Highway, Lincoln, Rhode Island 02865
and PHILIP K. YACHMETZ ("Employee") with a principal residence at 7 North
Koewing Place, West Orange, New Jersey 07052-4014, collectively referred to as
the "parties."


      Whereas Employer desires to employ Employee at its Lincoln, Rhode Island
Facility and Employee desires to be so employed,

      The parties enter this Agreement to set forth the terms and conditions of
Employee's employment by Employer, to address certain matters related to
Employee's employment with Employer, and Employee's loyalty and commitment to

      NOW THEREFORE, in consideration of these promises and the parties'
material covenants, representations, and warranties made herein, the parties
agree as follows:

                             STATEMENT OF AGREEMENT


      a. Position. Employer wishes to employ and Employee hereby accepts the
position of Senior Vice President - Business Development, General Counsel and
Secretary for the term of this Agreement. Employee shall report directly to
Employer's Chief Executive Officer. Such employment shall be at a primary work
location in the Northeastern United States (subject to such travel as the
Employer may reasonably request).

      b. Employee's Commitment. Employee shall consider his employment by
Employer as his principal employment, shall devote his full business time and
attention to his duties and responsibilities under this Agreement, and shall
perform them to the best of his abilities. While subject to any provision of
this Agreement, Employee shall maintain loyalty to Employer, and shall take no
action that would directly or indirectly promote any competitor or injure
Employer's interests. Subject to the foregoing, employee may engage in other
charitable or business activities to the extent that they do not interfere or
create a conflict with his obligations under this Agreement; provided that
Employee first discloses any such activities to Employer, and that Employee's
continued participation in any such activity shall be subject to Employer's
ongoing approval, which may be withheld at Employer's sole discretion.


      c. Duties. Employee's primary duties and responsibilities as Senior Vice
President - Business Development, General Counsel and Secretary shall be to:

      (1) Direct and oversee all legal matters pertaining to CTI, including
contractual relationships, general corporate and securities matters, patent,
copyright and the coordination of any legal matters handled by outside counsel.

      (2) Direct the research and analysis of such business opportunities,
strategic partnerships, alliances and collaborations, including the
establishment and recommendation of strategic initiatives as directed by the
Employer's CEO from time to time; responsible for implementation of such
strategic initiatives of Senior Management as directed by the Employer's CEO
from time to time, including the negotiation of agreements related to external
alliances, direct the policies and programs related to corporate licensing
objectives for the acquisition of licensing opportunities and techniques.

      (3) Serve as corporate secretary of the Company and its subsidiaries.


      a. Salary. Subject to Subsection 2b, Employer shall pay Employee as salary
of Two Hundred Fifty Thousand dollars ($250,000.00) annually, payable in
accordance with Employer's payroll practices in effect from time to time.

      b. Bonus.

            (1) Employee shall receive a "sign on" bonus of Fifteen Thousand
Dollars ($15,000) payable, $10,000 in cash and $5,000 in registered shares of
Employer's common stock (3,906 shares), calculated at the price per share of
$1.28 per share, the closing price of the Employer's common stock as quoted on
the Nasdaq stock exchange for the Effective Date of Employment.

            (2) In addition, Employee shall be eligible (in the sole discretion
of the Employer) to receive performance related bonuses at the end of each
calendar year, including 1998, in a percentage amount of base salary similar to
that for which other members of the Employer's senior management are eligible or
are awarded under guidelines in effect at such time. Employee's bonus shall be
based on (i) the reduction in comparable outside legal fees versus the base
period of January 1, 1998 through June 30, 1998, (ii) the level of cash funding
received by Employer from business development transactions with third parties
in which Employee is materially involved, and (iii) the attainment of other
specific performance objectives mutually agreed with Employer's Chief Executive
Officer. The payment and amount of any such bonus shall be determined in the
sole discretion of the Employer and its Board of Directors.

      c. Stock Options and Grants. (i) Through the Employer's 1992 Equity
Incentive Plan (the "Incentive Plan") and subject to the terms and conditions
set forth herein, Employee is hereby granted, as of the Effective Date of this
Agreement, an option to acquire 75,000 shares of the common stock of the
Employer at a strike price, subject to


the approval of the Employer's Board of Directors, of $1.281 per share, or such
other strike price as may be specified by the Board of Directors (the
"Time-Based Option"). The time-based option will vest as follows: (A) 30,000 of
the shares will vest on the Effective Date, and (B) the remaining 45,000 shares
shall vest at the rate of 3,000 shares per month on each monthly anniversary of
the Effective Date so long as Employee continues to be employed hereunder.
Employee shall have one (1) year from the last such vesting date within which to
exercise such option (e.g.: September 10, 2000). The expiration of the Initial
Term of this Agreement shall not effect the validity, the vesting schedule or
the exercise period of such Time-Based Option granted Employee. (ii) Through the
Incentive Plan, upon the approval of the Employer's Board of Directors, Employee
is hereby granted a second option to acquire 12,000 shares of the common stock
of the Employer at a strike price equal to the closing price for the Employer's
Common Stock on the date of the approval of this grant by the Company's Board
(the "Time-Based Option II"). The Time-Based Option II will vest at the rate of
1,500 shares per month on the 1st day of each month commencing with September 1,
1999 and ending with April 1, 2000. Employee shall have one (1) year from the
Termination Date of this Agreement to exercise the option to purchase the shares
subject to the Time-Based Option and the Time-Based Option II (e.g.: April 1,

The compensation set forth in Sections 2a, 2b and 2c may be increased from time
to time at the will and discretion of Employer.

      d. Relocation. As soon as reasonably practicable following the Effective
Date, Employee will establish his principal office at the Company's offices in
Lincoln, Rhode Island and a temporary residence within driving distance of such
office. The Employer shall pay or reimburse Employee up to an amount not to
exceed $2,500 per month for all costs of such temporary housing and related
expenses, including, but not limited to, apartment rent and security deposit,
furniture rental, utilities, cable television, basic telephone service and
similar expenses, for the term of this Agreement and for such additional period
while Employee is still rendering services to the Employer pursuant to Section
4.a.(1) (collectively the "Temporary Residence Period"). Employer shall also
during the Temporary Residence Period pay or reimburse Employee for two (2)
round trip airfares per month to the New Jersey/New York area for use by
Employee or his daughter. Until such time as Employee has established his
temporary residence in Rhode Island, Employer shall reimburse Employee for
hotel, travel, meal and related costs to and from New Jersey. The cost of
Employee's temporary housing and the cost of the two (2) round trips airfares
set forth above are hereinafter collectively referred to as the "Temporary
Relocation Expenses."

      e. Benefits. Employee will be entitled to participate in any and all
employee benefit plans from time to time in effect for senior management of the
Employer generally, including, but not limited to, medical, dental and
hospitalization plans, retirement and 401(k) savings plans, life insurance and
accidental death plans, disability plans, etc., except to the extent that such
plans provide duplicative benefits or a lower level of benefits than that
specifically provided Employee herein. Additionally, Employee shall be entitled
to participation similar to that provided other members of Employer's senior
management in


any supplemental stock or option grants, stock appreciation rights awards,
phantom stock rights, "golden parachute" or "golden handcuff" policies of the
Employer in effect as of the Effective Date or adopted by Employer thereafter
for the general benefit of its senior management. Employee's participation shall
be subject to (i) the terms of the applicable plan documents, (ii) generally
applicable policies of the Employer, and (iii) the discretion of the Board of
Directors of the Employer and plan administrators, as provided for or
contemplated by such plan. Employee will be entitled to four (4) weeks' vacation
for the period ending on the first anniversary of this Agreement and two (2)
weeks' vacation for the period from the first anniversary of this Agreement
through the Termination Date. Employer will provide Employee with a leased
automobile at a cost to be approved by Employer's CEO, cover the cost of up to
three (3) state bar memberships per year and the cost of professional
association memberships consistent with Employer's policy for its senior

      f. Withholdings, "Gross Up" of Compensation. (i) Employer shall withhold
from any amounts payable as compensation all federal, state, municipal, or other
taxes as are required by any law, regulation, or ruling. (ii) Employer shall
"gross up" any and all Temporary Relocation Expenses paid or reimbursed to
Employee during the Temporary Residence Period by 36% in order to offset any and
all income tax liability to Employee for the payment or reimbursement of these
expenses by Employer. (iii) In addition, in the event Employee sustains an
increased state income tax liability due to the payment of state income taxes in
both Rhode Island and New Jersey versus Employee's paying only New Jersey state
income tax, then Employer shall "gross up" the compensation paid to Employee
hereunder in order to reimburse and offset any and all incremental increase in
Employee's state income tax liability.

      g. Business Expenses. Employer shall reimburse Employee for expenses
reasonably incurred in the course of his employment, in accordance with
Employer's policies in effect from time to time.


      a. Initial Term. The term of Employee's employment shall commence on the
Effective Date and shall expire on October 31, 1999 (the "Term"), after which
the provisions of Section 4 shall apply. For purposes of this Agreement, the
"Termination Date" shall mean October 31, 1999 or the effective date of an early
termination pursuant to section 3.b below.

      b. Early Termination. Notwithstanding any other provision of this
Agreement, Employee's employment shall terminate at any time, as follows:

      (1) Employer may terminate your employment upon thirty (30) days written
      notice to Employee in the event you become disabled during your employment
      through any illness, injury, accident or condition of either a physical or
      psychological nature and, as a result, you are unable to perform
      substantially all of your duties and responsibilities hereunder for ninety
      (90) consecutive days during


      the Initial Term. In that event, the Employer shall pay Employee the
      severance set forth in Section 4.

      (2) Employee's employment may also be terminated by Employer at any time
      without prior notice upon a showing of "reasonable cause." Should Employee
      be terminated by Employer for "reasonable cause," no severance pay will be
      paid to Employee nor will his health insurance benefits be continued by
      Employer at its expense for any period of time as addressed in Section 4
      of this Agreement. "Reasonable cause" shall be defined for the purposes of
      this Agreement as being: (a) any act of fraud, embezzelement or other
      material dishonesty by Employee with respect to the Employer which is
      proven to be directly detrimental to Employer's best interest; (b)
      Employee's willful failure to perform material duties and responsibilities
      described in Section 1 (c) above, after receiving notice and a reasonable
      opportunity to cure; (c) Employee's conviction of, or plea of nolo
      contendre to, any act that constitutes a felony under the laws of the
      state of Rhode Island or the United States; or (d) Employee's material
      breach of Section 5 of this Agreement.

      (3) Employee may terminate his employment with immediate effect at any
      time "with cause" upon written notice to Employer, in which event the
      provisions of Section 4 shall apply. The following shall constitute "with
      cause" for the puposes of this Agreement: (a) material breach by Employer
      of any provision of this Agreement, includng without limitation any
      material diminution of Employee's position, authorities or
      responsibilities from that contemplated hereby or as in effect by practice
      during the Term of this Agreement, or (b) a Change of Control, being
      defined as the execution of agreements, the consummation of an agreed
      transaction or the pending consummation of a tender offer which will
      result in (i) a consolidation or merger in which the Employer is not the
      surviving corporation, or (ii) a transaction or series of transactions
      that result in acquisition of fifty percent (50%) or more of the
      Employer's outstanding Common Stock by a single person or entity or a
      group of persons or entities acting in concert, or (iii) the sale or
      transfer of all or substantially all of the Employer's assets.


      a. Severance Payments and Benefits. Upon the expiration of the Term or
upon the early termination of the Term pursuant to Sections 3.b.(1) or 3.b.(3),
Employee shall receive the following Severance Payments and Benefits from

      (1)   A payment equal to nine (9) month's of Employee's regular salary as
            of the date of the Termination Date, such lump sum shall be payable
            at Employee's sole election in either a lump sum on the Termination
            Date or in periodic payments specified by Employee. In the event the
            early termination is pursuant to Section 3.b.(1), such lump sum
            payment and related benefits hereunder shall be deemed to be made as
            compensation for Employee's past services to Employer.


      (2)   Employer will pay to Employee the balance of any accrued and unused
            vacation earned by Employee through the Termination Date.

      (3)   Employer will pay any accrued but unpaid bonus, if any, under
            Section 2.b.(2) for the period ending with the Termination Date or
            any prior fiscal period, if any, or any such other bonus, if any,
            which may be agreed between Employer and Employee or to which
            Employee may become entitled to prior to the Termination Date.

      (4)   Employer will continue to pay or reimburse Employee for the
            Temporary Relocation Expenses pursuant to Section 2.d for the period
            through the Termination Date and for any residual notice period
            occasioned by the termination provisions of those obligations which
            extends beyond the Termination Date. Such payment or reimbursement
            shall continue to be subject to the "gross up" provisions of Section
            2.f.(ii) until final such payment shall be made.

      (5)   Employer will pay for the first twelve (12) months of Employee's
            COBRA coverage or, if such COBRA is unavailable, Employer shall pay
            to Employee the cash value of such twelve (12) months of COBRA

      (6)   Employer will also "gross up" the ordinary and severance
            compensation paid to Employee hereunder in order to reimburse and
            offset any and all incremental increase in Employee's state income
            tax liability pursuant to the provisions of Section 2.f.(iii)

      (7)   To facilitate the consulting obligations of Employee under Section
            4.a.(8) below, Employee will be permitted to retain possession of
            the Sony Vaio desktop and portable computer equipment, and related
            equipment (monitor, printer, fax machine, etc.), assigned to
            Employee as of the Termination Date. Employee may retain such
            equipment upon the expiration of his consulting obligations

      (8)   For the period of November 1, 1999 through April 30, 2000, Employer
            shall pay Employee Two Thousand Five Hundred Dollars ($2,500) per
            month as a retainer, payable within the first ten (10) days of each
            month, for up to twelve (12) hours per month of business
            development, management, legal and related consulting services to be
            rendered by Employee with respect to Employer's business. Subject to
            Employee's availability, additional consulting services may be
            provided to Employer at the rate of $1,500 per day.

      b. Reference Letter Upon Separation of Employment. Employer agrees to
provide Employee with a letter of recommendation upon Employee's separation of


employment, granted that Employee's separation of employment from Employer is
for any reason other than "reasonable cause."


      a. Confidential Information. "Confidential Information" means information
in whatever form, including information that is written, electronically stored,
orally transmitted, or memorized, that is of commercial value to Employer and
that was created, discovered, developed, or otherwise becomes known to Employee,
or in which property rights are held, assigned to, or otherwise acquired by or
conveyed to Employer, including any Employee Invention (as subsequently defined)
or idea, knowledge, know-how, process, system, method, technique research and
development, technology, software, technical information, trade secret, as
defined in state statute, trademark, copyrighted material, reports, records,
documentation, data, customer or supplier lists, tax or financial information,
business or marketing plans, strategy or forecast. Confidential Information does
not include information that is or becomes generally known within Employer's
industry through no act or omission by Employee, provided, however, that the
compilation, manipulation, or other exploitation of generally known information
may constitute Confidential Information.

      b. Employee Invention. "Employee Invention" means any idea, invention,
software, technique, modification, process, improvement, or similar item,
whether or not reduced to writing or stored electronically or otherwise, and
whether or not protectible by patent, trademark, copyright, or other
intellectual property law, that is crated, conceived, or developed by Employee
or under his direction, whether solely or with others, during or after his
employment by Employer, that relates in any way to, or is useful in any manner
in, the business now or then conducted or proposed to be conducted by Employer
or which is based upon or otherwise derives from or makes use of the
Confidential Information.

      c. Ownership; Disclosure. Any Confidential Information, whether or not
developed by Employee, shall at all times be Employer's exclusive property.
Employee shall promptly disclose any Employee Invention to Employer in writing.

      d. Restrictions. During the term of this Agreement, and for ten (10) years
thereafter, Employee shall not, without Employer's prior written consent:

      (1) Use any Confidential Information for the benefit of himself of any
      other party other than Employer or disclose it to any other person or

      (2) Remove any Confidential Information or other documentation, device,
      plan or other record or evidence pertaining to Employer's business from
      Employer's premises, except when specifically authorized to do so in
      pursuit of Employer's business; or

      e. Purpose. The parties acknowledge and agree that the Confidential
Information is a valuable business asset, and that this Section is necessary to
protect Employer's legitimate business interests.



In addition to his other representation and warranties set forth in this
Agreement, Employee further represents and warrants as follows:

      a. Employee's performance of this Agreement shall not breach any agreement
to which he is or was a party that requires him to hold any information in
confidence or in trust;

      b. Employee has not and shall not breach any such Agreement;

      c. Employee shall not bring to Employer or use in connection with his
employment any confidential or proprietary information belonging to another
entity without first delivering a written release of that information to
Employer; and

      d. Employee has provided Employer with an original or true copy of any
employment, non-competition, confidential or proprietary information, or similar
agreement to which he is or has been a party which is now in effect or which may
be in effect during the term of this Agreement.


      a. Irreparable Harm. The parties acknowledge and agree that irreparable
harm would result in the event of a breach or threat of a breach by Employee of
Section 5 or the making of any untrue representation or warranty by Employee in
this Agreement. Therefore, in such an event, and notwithstanding any other
provision of this Agreement:

      (1) Employer shall be entitled to a restraining order, order of specific
      performance, or other injunctive relief, without showing actual damage and
      without bond or other security; and

      (2) Employer's obligation to make any payment or provide any benefit under
      this Agreement, including without limitation any severance benefits, shall
      immediately cease.

      b. Remedies Not Exclusive. Employer's remedies under this Section are not
exclusive, and shall not prejudice or prohibit any other rights or remedies
under this Agreement or otherwise. To the extent required to be enforceable by
applicable law, the cessation of Employer's obligation to make payments or
continue benefits under this Section shall be deemed to be in the nature of
liquidated damages and not a penalty.

      c. Cessation of Payments. In the event Employer obtains relief as provided
in this Section, or in the event of Employee's breach of Section 5 or the making
of any untrue representation or warranty by Employee in this Agreement,
Employer's obligation


to make any payment or provide any benefit under this Agreement, including any
severance benefits, shall immediately cease.


      a. Understanding, Voluntary Agreement. Employee represents and warrants
that he has been afforded a reasonable opportunity to review this Agreement, to
understand its terms, and to discuss it with an attorney of his choice, and that
he knowingly and voluntarily enters this Agreement.

      b. Waiver of Separate Representation. To the extent Employee has not
engaged separate legal counsel to represent him in connection with this
Agreement, the parties acknowledge an agree that their respective interest in
this Agreement are in conflict, that they have the right to retain independent
counsel, that they have been fully informed about this right and conflicts of
interest that arise from retaining the same legal counsel to represent both of
them, and that this Section constitutes written disclosure of these conflicts.
The parties further affirm that they are waiving separate representation freely,
voluntarily, and with full knowledge of the effect of this waiver. NO party
shall at any time claim that this Agreement is void or unenforceable in any
respect because of the lack of use of independent counsel, or that the legal
counsel who prepared this Agreement acted improperly in doing so.


This Agreement is confidential, Employee and Employer shall keep its provisions
confidential and shall not disclose them to anyone, including any past, present,
or prospective employee of Employer; provided, that this Section shall not
prohibit Employee from discussing this Agreement in confidential communications
with his family members, attorneys, accountants, or other professional advisors,
provided that the provisions of Section 5 shall at all times apply to
communications with any such persons, and provided Employer may disclose the
terms of this Agreement to the extent it is required by federal or state law,
rule or regulation.


      a. Waivers. No assent, express or implied, by any party to any breach or
default under this Agreement shall constitute a waiver of or assent to any
breach or default of any other provision of this Agreement or any breach or
default of the same provision on any other occasion.

      b. Entire Agreement, Modification. This Agreement constitutes the entire
agreement of the parties concerning its subject matter and supersedes all other
oral or written understandings, discussions, and agreements, and may be modified
only in a writing signed by both parties.


      c. Binding Effect; No Third Party Beneficiaries This Agreement shall bind
and benefit the parties and their respective heirs, devisees, beneficiaries,
grantees, donees, legal representatives, successors, and assigns. Nothing in
this Agreement shall be construed to confer any rights or benefits on third

      d. Assignment. Neither party may assign its interest in this Agreement
without the other's prior written consent; provided that Employer may assign its
interest to another entity which controls, is controlled by, or is under common
control with Employer.

      e. Severability. If any provision of this Agreement, including the
restriction on time and geographic area contained in the Covenant Not to Compete
and Confidential Information provisions of this Agreement, is found in binding
arbitration or by a court or other tribunal of competent jurisdiction to be
invalid or unenforceable, the attempt shall first be made to read that provision
in such a way to make it valid and enforceable in light of the parties' apparent
intent as evidenced by this Agreement. If such a reading is impossible, the
tribunal having jurisdiction may revise the provision in any reasonable manner,
to the extent necessary to make it binding and enforceable. If no such revision
is possible, the offending provision shall be deemed stricken from the
Agreement, and every other provision shall remain in full force and effect.

      f. Forum. All lawsuits, actions, and other proceedings arising from this
Agreement or the transactions it contemplates shall be prosecuted in the
appropriate court in New Jersey and all parties agree to both subject matter and
in personam jurisdiction in that forum.

      g. Governing Law. This Agreement shall be governed by and construed under
the laws of the State of Rhode Island.

      h. Legal Counsel. The parties acknowledge that they have read and fully
understand the contents of this Agreement and execute it after having had an
opportunity to consult with legal counsel.

      IN WITNESS WHEREOF, the partied have executed this Agreement to be
effective as specified above.


BY: _____________________________   BY: __________________________
     Philip K. Yachmetz                   Richard M. Rose, MD
                                          President  & CEO