Employment Agreement - ViaCell Inc. and Jeffrey Sacher
VIACELL
October 26, 2002
Jeffrey Sacher
25 Lawrence Drive
Short Hills, NJ 07078
Dear Jeff,
On behalf of ViaCell, Inc. (the "Company"), I am pleased to extend an offer of
employment to you. You have made an outstanding impression, 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, 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
2002 fiscal year will be $210,000.00 per year payable
in bi-weekly installments of $8,076.92. For the 2003
fiscal year and thereafter, this base salary shall be
subject to adjustment.
In addition, you will be eligible to participate in
the Executive Management Bonus Plan at an annual
target of 30% of base salary, payable annually based
on agreed to company and individual performance
objectives. Please note that you will not be eligible
for the Executive Management Bonus for calendar year
2002 and eligibility will begin January 2003. Please
see enclosed plan document for details.
TERM This letter indicates a 1-year contract,
automatically renewable for additional 1-year periods
unless either party to the contract gives notice of
termination at least 3 months prior to the end of
period.
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 will equal the fair market value of our
Common Stock as determined by the Board of Directors
on your date of hire. The Options will vest quarterly
over four years beginning on the last
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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
OPTIONS additional stock options ("Performance Based
Options") to purchase 75,000 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. The Performance Based Options shall become
exercisable as to 25% of the shares on each of the
fourth, fifth, sixth and seventh anniversaries of the
date of grant; provided, however, that 20,000 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"), 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"), then 35,000
such shares shall become fully vested and exercisable
until the expiration of such options or until they
sooner terminate in accordance with their terms. The
$26.00 and $34.00 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, and you will
be entitled to receive, as of the date of
termination, an additional twelve months of vesting
of the two option awards granted at the time of hire
(i.e. as if Mr. Sacher had been employed by ViaCell
for an additional twelve months from the date of
termination). 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
herein means (i) your continued failure to
substantially perform your duties provided you are
reasonably notified of such failure and
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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.
CHANGE OF CONTROL Upon a Change in Control of the Company, as defined
below, in which the per share consideration to the
Company is at least $12.00 per share, within 24
months from the date you commence employment with the
company, the 75,000 Performance Based Options granted
on the date of hire shall become fully vested and
exercisable.
If in connection with a Change in Control, as defined
below, 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,
without duplicating other amounts due under this
agreement. 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.
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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,
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.
RELOCATION ASSISTANCE In connection with your relocation to the
Massachusetts area, ViaCell agrees to provide the
following:
MOVING EXPENSES: ViaCell will pay for all actual
reasonable moving expenses for packing and shipping
household goods and two cars to the Massachusetts
area (arrangements to be made by ViaCell Human
Resources).
TEMPORARY HOUSING/TRAVEL/STORAGE: The company will
pay the actual costs of traveling for you and your
family to Massachusetts plus you will be entitled to
reimbursement for up to $20,000, or reasonable costs
related to temporary housing arrangements as agreed
to by you and ViaCell at the time of hire.
HOUSE HUNTING TRIPS: ViaCell will reimburse two
house-hunting trips for you and your spouse, for up
to three days with reasonable transportation, hotel
accommodations, and meal allowance of up to $25.00
per day per person.
REAL ESTATE FEE: ViaCell will reimburse all actual
reasonable real estate commissions (up to 6%) related
to the sale of your residence in New Jersey (all
monies will be grossed up to cover state and federal
tax liability).
CLOSING COSTS: ViaCell will reimburse for closing
costs on the purchase of a new home such as: title,
insurance property tax fees, transfer tax, tax
service/notary recording fees, appraisal and credit
report, and home inspection fees (all monies will be
grossed up to cover any applicable state and federal
tax liability).
Please be advised that relocation items will be
taxable income and only the Real Estate Fee and
Closing Costs will be grossed up to cover tax
liability. If you should for any reason voluntarily
terminate your employment with ViaCell within the
first 12 months of relocating to Massachusetts, you
will be obligated to reimburse ViaCell for any
relocation monies paid on your behalf.
ELIGIBILITY FOR The Immigration Reform and Control Act of 1986
EMPLOYMENT requires 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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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 Kristin Dickson 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/ Jeffrey Sacher
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Signature Date
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Social Security Number Start Date