Severance Agreement - ViaCell Inc. and Jeffrey Sacher
VIACELL, INC.
January 2, 2004
BY HAND DELIVERY
Mr. Jeffrey Sacher
12 Chanticleer Road
Sudbury, MA 01776
Dear Jeff:
As we discussed, a decision has been reached that it is appropriate to
end our employment relationship. As a result, following a period of transition,
your employment with ViaCell, Inc. (the "Company") will end on February 2, 2004
(the "Separation Date"), subject to the terms of this letter. The purpose of
this letter is to confirm the agreement between you and the Company concerning
your transition period and severance arrangements as agreed upon herein and in
accordance with the October 26, 2002 letter to you from Marc Beer, Chief
Executive Officer ("Offer Letter"):
1. You and the Company agree that your separation from employment is
not a termination "for cause," and hence the Company has agreed to provide you
with the following post-employment benefits, pursuant to the Offer Letter:
(a) The Company will provide you severance pay at your current
base rate of pay for the twelve-month period beginning the business day after
your Separation Date and ending February 2, 2005. Payment will be made at the
Company's regular payroll periods, less taxes and other legally required
deductions, beginning on the Company's next regular payday which is at least
five business days following the date this Agreement, signed by you, is received
by the Company.
(b) The Company will extend by a period of twelve (12) months,
measured from the Separation Date, the vesting period of the two stock option
awards granted to you at your time of hire, namely, those stock option grants
described with particularity in the Offer Letter as "ISO's" and "Performance
Based Options".
(c) The Company will continue your participation in its group
health and dental plans for a period of 12 months after the Separation Date,
through February 2, 2005, and will continue paying medical and dental premium
contributions on your behalf in accordance with its regular payroll practices
throughout that 12-month period. At the conclusion of the 12-month period ending
February 2, 2005, you may elect to continue your participation and that of your
eligible dependents in the Company's group health and dental plans to full
extent permissible under the federal law known as "COBRA" by paying the full
premium cost of coverage plus a small administrative fee.
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In consideration of your meeting in full your obligations under the
terms below and under the Confidentiality Agreement described with particularity
in paragraph 2(a) below, the Company agrees as follows:
2. There will be a transition period:
(a) Provided that you continue to meet the provisions set
forth in paragraphs 2 through 14 hereof and under the Confidential Disclosure
Agreement which you signed in favor of the Company on October 31, 2002 (the
"Confidentiality Agreement"), the Company will continue your employment from the
date of this letter, above, through the Separation Date (the "Transition
Period"), a period of one month. During the Transition Period, the Company will
continue to pay you your base salary, at your current base rate of pay (a total
sum of one-twelfth (1/12) of your annual base salary), and will continue your
participation in the group benefit plans in which you were enrolled as of the
date of this letter, above.
(b) You agree during the Transition Period to be
available for up to three (3) full business days each week to assist the Company
with its transition of your duties. In doing so, you agree to continue during
the Transition Period to conduct yourself at all times in a courteous and
professional manner and to cooperate fully to assure a smooth transition of your
duties. During the Transition Period, you may arrange time off to seek other
employment opportunities, provided that you make yourself available for up to
three (3) full business days each week. On the Separation Date, you will turn
over to me or my designee all of your work responsibilities.
(c) In accordance with applicable law, if you have
vacation time accrued but unused on the Separation Date, you will be paid, at
your current base rate, for that vacation time.
3. You agree to consult with the Company after the Transition
Period on an as needed basis as agreed to by both parties for incremental
compensation of $100 per hour. You agree that your status in regard to the
Company in connection with any such consulting work will be as an independent
contractor, and, as such, you will not be eligible to participate in any Company
benefits made available to its employees, except as expressly provided in
paragraph 1 hereof.
4. You agree that, except as expressly provided in this
Agreement, no further compensation is owed to you. You will not continue to earn
vacation or other paid time off after the Separation Date and, except as
provided in paragraph 2(c) above and in any further right you may have to
continue participation in the Company's group health and benefit plans at your
cost under the federal law known as COBRA following the Separation Date, your
participation in all Company employee benefit plans will end as of the
Separation Date, in accordance with the terms of those plans and programs.
5. You agree that, during the Transition Period, you will
continue to use your best efforts to support and promote the interests and
reputation of the Company and that, during the Transition Period and thereafter,
you will not disparage the Company, its business or
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management, or any of the people or organizations connected with the Company,
and you will not otherwise do or say anything that could be reasonably expected
to disrupt the good morale of the employees of the Company or otherwise harm the
Company's goodwill, business interests or reputation. In turn, the Company's
officers agree not to disparage you in any way and not to do or say anything
that could be reasonably expected to harm your business interests or reputation
and the Company agrees to instruct employees and members of its Board of
Directors not to disparage you in any way and not to do or say anything that
could be reasonably expected to harm your business interests or reputation.
6. The Company agrees that in response to any external and
internal inquiries directed to it during the Transition Period or thereafter
regarding the status of your employment with the Company and/or the
circumstances of your separation of employment, it shall respond by providing,
in substance, the following information:
(a) The Company and Jeff have agreed that ViaCell needed
a CFO with a very deep accounting and public company
reporting background.
(b) Jeff had made significant contributions to move
ViaCell forward.
(c) Jeff will be transitioning his responsibilities to a
successor over a month or so, and thereafter he will
remain open to consult on an as needed basis.
(d) Please contact Jeff at (917) 273 - 5757 for more
information.
For purposes of effectuating this paragraph 6, you agree to direct all external
inquiries regarding your employment status with the Company and/or the
circumstances of your separation of employment to Marc Beer, the Company's Chief
Executive Officer, or to Kathleen Hayes, Director of Human Resources.
7. You agree to return to the Company, no later than the
Separation Date, any and all documents, materials and information related to the
business, whether present or otherwise, of the Company, and all copies, whether
in hardcopy or in electronic or other media, and all keys and other property of
the Company, in your possession or control. You also give the Company assurance
that you have disclosed to the Company all passwords necessary to enable the
Company to access any information which you have password-protected on its
computer network or system.
8. You hereby acknowledge and confirm your obligations to the
Company under the Confidentiality Agreement, and you agree to abide by all terms
and commitments to which you are bound under the Confidentiality Agreement. You
further understand and agree that any breach by you of the Confidentiality
Agreement will constitute a material breach of this Agreement.
9. As an additional Special Severance Benefit, the Company will
extend by nine (9) months the exercise period of your vested stock options, to
February 3, 2005 ("Special Severance Benefit").
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10. In exchange for the special severance benefits provided to you
hereunder, including the Special Severance Benefit, to which you would not
otherwise be entitled, on your own behalf and that of your heirs, executors,
administrators, beneficiaries, personal representatives and assigns, you agree
that this Agreement shall be in complete and final settlement of any and all
causes of action, rights or claims, whether known or unknown, that you have had
in the past, now have, or might now have, in any way related to, connected with
or arising out of your employment or its termination or pursuant to Title VII of
the Civil Rights Act, the Americans with Disabilities Act, the Age
Discrimination in Employment Act, the fair employment practices statutes of the
state or states in which you have provided services to the Company or any other
federal, state or local law, regulation or other requirement, and you hereby
release and forever discharge the Company and its subsidiaries and other
affiliates and all of their respective past, present and future directors,
shareholders, officers, members, managers, general and limited partners,
employees, agents, representatives, successors and assigns, and all others
connected with any of them, both individually and in their official capacities,
from any and all such causes of action, rights or claims, except only as to any
rights that you may have to vested benefits.
11. In exchange for your agreement to the terms of this Agreement,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company agrees that this Agreement shall be
in complete and final settlement of any and all causes of action, rights or
claims, whether known or unknown, that it has had in the past, now has, or might
now have arising out of your employment with the Company, and hereby forever
discharges you, your heirs, executors, administrators, beneficiaries, personal
representatives and assigns from any and all such causes of action, rights, or
claims.
12. By signing this Agreement, you give the Company assurance that
you have signed it voluntarily and with a full understanding of its terms; that
you have had sufficient opportunity, before signing this Agreement, to consider
its terms and to consult with an attorney, if you wished to do so; and that, in
signing this Agreement, you have not relied on any promises or representations,
express or implied, that are not set forth expressly in this Agreement.
13. This letter contains the entire agreement between you and the
Company and replaces all prior and contemporaneous agreements, communications
and understandings, whether written or oral, with respect to your employment and
its termination and all related matters, excluding only the Confidentiality
Agreement, which shall remain in full force and effect in accordance with its
terms. This Agreement may not be modified or amended, and no breach shall be
deemed to be waived, unless agreed to in a writing of later date signed by you
and by an expressly authorized representative of the Company.
14. The Company and you agree that any controversy, claim or
dispute arising out of or relating to paragraphs 2-13 hereof, either during the
Transition Period or afterwards, between the parties to this Agreement, their
successors, assigns, affiliates or agents, shall be settled by arbitration in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association ("AAA") then in effect. Any such
arbitration may be initiated within thirty (30) days after written notification
to the other party specifying in sufficient detail the nature of the dispute
hereunder, but in no event later than ninety (90) days
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after such written notice. The arbitration shall be conducted in the
Commonwealth of Massachusetts by an arbitrator either mutually agreed upon by
you and the Company or chosen in accordance with the AAA's rules and, unless
otherwise agreed, shall occur on the earliest pair of contiguous dates made
available to the parties by the arbitrator so selected following a period of
discovery of not less than twenty-one (21) days. All aspects of any such
arbitration, including with respect to discovery, shall be conducted in
accordance with the AAA's rules.
If the terms of this Agreement are acceptable to you, please sign, date
and return it to me within ten days of the date you receive it. At the time you
sign and return this letter, it will take effect as a legally-binding agreement
between you and the Company on the basis set forth above under Massachusetts
law. The enclosed copy of this letter, which you should also sign and date, is
for your records.
Sincerely,
VIACELL, INC.
By: /s/ Kathleen Hayes
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Kathleen Hayes
Director of Human Resources
Accepted and agreed:
Signature: /s/ Jeffrey Sacher
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Jeffrey Sacher
Date: ________________________________
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