Employment Agreement - ViaCell Inc. and Stephen P. Dance
VIACELL
December 15, 2003
With clarifications, finalized March 11, 2004
Stephen P. Dance
1147D La Rochelle Terrace
Sunnyvale, CA 94089
Dear Steve,
On behalf of ViaCell, Inc. (the "Company"), I am pleased to extend an offer of
employment to you. You have made an outstanding impression throughout the
interview process, and we feel confident that you will become a valuable asset
to the company. Information about ViaCell as well as the details of our offer of
employment are summarized below.
VIACELL MISSION To provide the highest quality cellular medicines for
the treatment of human diseases.
VIACELL CULTURE We are dedicated to delivering revolutionary medicines
through development of important new therapeutic
applications. Every day you will be contributing to a
technology that is enriching of the lives of people in
the future. We hire innovative thinkers, with the
skills and capabilities to thrive on a high quality,
success driven team.
POSITION Senior Vice President, Finance and Chief Financial
Officer, Reporting to Marc Beer, Chief Executive
Officer. This position is a key factor in ViaCell's
continued success, and I am confident that it will be
an exciting opportunity for you as well.
COMPENSATION The starting base salary for this position for the 2004
fiscal year will be $235,000.00 per year payable in
bi-weekly installments of $9,038.46. For the 2004
fiscal year and thereafter, this base salary shall be
subject to adjustment. As agreed, your compensation
package will be reviewed when the company successfully
completes its initial public offering. Currently our
standard annual salary review process occurs each
January for senior management.
In addition, you will be eligible to participate in the
Management Bonus Plan at an annual target of $50,000 of
base salary, payable annually based on agreed to
company and individual performance objectives.
Eligibility will begin January 2004. Your bonus payout
is determined based on achievement of both corporate
and individual goals.
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S. Dance Revised Offer
December 15, 2003
Page 2
RELOCATION You will receive a lump sum bonus towards your
relocation assistance in the amount of $30,000.
Additionally, the company understands that you may
incur some costs as a result of your family's
relocation that will not be covered by your spouse's
relocation package. ViaCell will cover reasonable
relocation costs that are not covered by other
assistance and which are made necessary by your
employment with us in Boston. Please work with Kathleen
Hayes to set up a budget for necessary relocation
expenses.
STOCK OPTIONS As an incentive for you to participate in the Company's
future growth, you will receive, subject to approval by
our Board of Directors, options to purchase up to
125,000 shares of our Common Stock (the "Options"). The
Options will be incentive stock options ("ISO's") to
the extent allowable under the Internal Revenue Code.
The exercise price of the Options equals the fair
market value of our Common Stock as determined by the
Board of Directors on your date of hire; your fair
market value price is $5.00 per share. The Options will
vest quarterly over four years beginning on the last
day of the first quarter after the date of commencement
of your employment. The Options will be granted under
the Company's 1998 Equity Incentive Plan pursuant to an
ISO certificate or nonstatutory stock option ("NSO")
certificate, as appropriate, shall have a term of ten
years and contain such additional terms as shall be
determined by the Board of Directors of the Company or
the Compensation Committee thereof.
ADDITIONAL STOCK In addition, the Company shall grant to you additional
stock options ("Performance Based OPTIONS Options") to
purchase 100,000 shares of Common Stock as NSO's. The
exercise price of the options will equal the fair
market value of our Common Stock as determined by the
Board of Directors on your date of hire; your fair
market value price is $5.00 per share. The Performance
Based Options shall become exercisable as to 25% of the
shares on each of the fourth, fifth, sixth and seventh
anniversary of the date of grant; provided, however,
that 25,000 such shares shall become fully vested and
exercisable on each of the first and second
anniversaries of the initial public offering; and if at
any time within 24 months after the expiration of any
lock up period imposed by the underwriters in
connection with the Company's initial public offering
of Common Stock, the average closing prices of the
Company's common stock over a period of 30 consecutive
trading days, as reported by the Nasdaq National
Market, or any exchange on which the Company's Common
Stock is then traded, equals or exceeds $26.00 per
share ("Milestone A", to be determined), or if at any
time within 36 months after the expiration of any lock
up period imposed by the underwriters in connection
with the Company's initial public offering of Common
Stock, the average closing prices of the Company's
common stock over a period of 30 consecutive trading
days, as reported by the Nasdaq National Market, or any
exchange on which the Company's Common Stock is then
traded, equals or exceeds $34.00 per share ("Milestone
B", to be determined), then 50,000 such shares shall
become fully vested and exercisable until the
expiration
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S. Dance Revised Offer
December 15, 2003
Page 3
of such options or until they sooner terminate in
accordance with their terms. The milestones above are
determined relative to a goal of $1 billion market
valuation. The per share figures shall be adjusted for
stock splits, stock dividends and reverse stock splits.
The options shall have a term of ten years from the
date of grant, and contain such other terms and
conditions as are consistent with the form of NSO
certificate, most recently approved by the Board or any
authorized committee thereof for use under the 1998
Plan or as the Board or any such committee may
hereafter direct. Granting of these Performance Based
Options will not preclude you from participating in
other performance based option grant programs that may
be established within the Company.
ADDITIONAL EMPLOYMENT ViaCell will provide for twelve months' severance pay
TERMS in the event of involuntary termination without cause
or voluntary termination for good reason. If the
Company shall terminate your employment without "cause"
or if you terminate your employment for "good reason,"
then ViaCell will continue paying your base salary and
medical and dental benefit contributions for a period
of twelve months in accordance with its regular payroll
practices at such time. If the Company terminates your
employment with "cause," then ViaCell will continue
paying your base salary for a period of thirty days and
all options will cease to continue vesting as of the
date of termination. The term "cause" as used here
means (i) your continued failure to substantially
perform your duties provided you are reasonably
notified of such failure and given reasonable time to
correct such failure, (ii) any misappropriation of
funds, properties or assets of the Company by you,
(iii) any damage or destruction of any property or
assets of the Company caused by you, whether resulting
from your willful actions or willful omissions or gross
negligence; (iv) your being convicted of a felony; or
(v) any material breach of your employment obligations
or of the Intellectual Property and Confidential
Information Agreement. The term "good reason" as used
here means any action by the Company without your prior
consent which results in (i) any material diminution in
your title, position, duties, responsibilities or
authority; or (ii) any breach by the Company of any
material provision contained herein.
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S. Dance Revised Offer
December 15, 2003
Page 4
CHANGE OF CONTROL Upon a Change of Control with the Company, the 100,000
Performance Based Options granted on the date of hire
shall become fully vested and exercisable.
If in connection with a change in control described
above, the company terminates your employment without
"cause" within twelve months of the change in control
or you voluntarily resign for "good reason", all
options granted as of that date shall become fully
vested and exercisable and ViaCell will continue paying
your base salary and benefits for a period of twelve
months following the date of termination. The options
will continue to be subject to the grant provisions
under the 1998 Plan. A "Change in Control" shall mean:
(i) a merger, consolidation or similar combination
after which 50% or more of the voting stock of the
surviving corporation is held by persons who were not
stockholders of the Company immediately prior to such
merger or combination; (ii) the sale, transfer or other
disposition of all or substantially all of the
Company's assets to one or more persons (other than any
wholly owned subsidiary of the Company) in a single
transaction or series of related transactions; or (iii)
any person or related group of persons (other than the
Company or a person that directly or indirectly
controls, is controlled by, or is under common control
with the Company) directly or indirectly acquires
beneficial ownership (determined pursuant to Rule 13d-3
promulgated under the Securities Exchange Act of 1934,
as amended) of securities possessing more than 50% of
the total combined voting power of the Company's
outstanding securities pursuant to a tender or exchange
offer made directly to the Company 's stockholders.
BENEFITS Because we care about the well being of our employees,
we are pleased to provide you with a comprehensive
offering of benefits. Our benefits currently include
medical, dental, life insurance, 401k, three weeks
vacation (accrued monthly and pro-rated during your
first calendar year of employment), balance benefit,
educational assistance and flexible-spending accounts.
Additional information about these benefits is outlined
in the enclosed summary.
ELIGIBILITY FOR The Immigration Reform and Control Act of 1986 requires
EMPLOYMENT ViaCell to review documentary evidence that you are
eligible for employment. This requirement applies to US
citizens, as well as foreign nationals. A list of
approved documents that are acceptable as verification
of employment eligibility are listed on page two of the
I-9 form which will be included with your orientation
packet. Please bring the appropriate documents with you
on your first day of employment.
EMPLOYMENT RELATIONSHIP While we look forward to a long and mutually beneficial
relationship, you acknowledge that this letter does not
constitute a contract of employment for any particular
period of time and does not affect the at-will nature
of the employment relationship with the company. Either
you or ViaCell have the right to terminate your
employment at any time.
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S. Dance Revised Offer
December 15, 2003
Page 5
We are very excited about the future of ViaCell and believe that the
opportunities presented will allow you significant personal and professional
growth. If you have any questions or concerns, please do not hesitate to contact
me anytime. We look forward to having you join our team!
Sincerely,
/s/ Marc Beer
Marc Beer
Chief Executive Officer
Please acknowledge your acceptance of this offer by signing a copy of this
document along with the Agreement Related to Intellectual Property and
Confidential Information and faxing it to Kathleen Hayes at 617-247-6271. This
offer will remain in effect for a period of seven (7) calendar days from the
date of this letter.
/s/ Stephen Dance
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Signature Date
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Social Security Number Start Date