Exhibit 10.2
EXECUTION COPY
XCYTE THERAPIES,
INC
ACQUISITION BONUS AND SEVERANCE
AGREEMENT
This Acquisition Bonus and Severance
Agreement (the “Agreement”) is made and entered into by
and between Robert Lawrence Kirkman, M.D. (the
“Employee”) and Xcyte Therapies, Inc, a Delaware
Corporation (the “Company”), effective as of
October 4, 2005 (the “Effective Date”).
RECITALS
1. It is expected that the Company
from time to time will consider the possibility of a strategic
combination with another company or other change of control. The
Board of Directors of the Company (the “Board”)
recognizes that such consideration can be a distraction to the
Employee and can cause the Employee to consider alternative
employment opportunities. The Board has determined that it is in
the best interests of the Company and its stockholders to assure
that the Company will have the continued dedication and objectivity
of the Employee, notwithstanding the possibility, threat or
occurrence of an Acquisition (as defined herein) of the
Company.
2. The Board believes that it is
imperative to provide the Employee with certain bonus benefits upon
an Acquisition and certain severance benefits upon the
Employee’s termination of employment following an
Acquisition. These benefits will provide the Employee with enhanced
financial security and incentive and encouragement to remain with
the Company notwithstanding the possibility of an
Acquisition.
3. Certain capitalized terms used in
the Agreement are defined in Section 7 below.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants contained herein, the parties hereto agree as
follows:
1. Term of Agreement . This
Agreement shall terminate upon the date that all of the obligations
of the parties hereto with respect to this Agreement have been
satisfied or discharged.
2. At-Will Employment . The
Company and the Employee acknowledge that the Employee’s
employment is and shall continue to be at-will, as defined under
applicable law, except as may otherwise be specifically provided
under the terms of any written formal employment agreement or offer
letter between the Company and the Employee (an “Employment
Agreement”). If the Employee’s employment terminates
for any reason, including (without limitation) any termination
prior to the closing date of an Acquisition, the Employee shall not
be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement or under his
or her Employment Agreement, or as may otherwise be available in
accordance with the Company’s established employee
plans.
3. Acquisition Bonus
.
(a) Bonus Payment Upon
Acquisition . Subject to the terms and conditions set forth in
this Agreement, if (i) within sixty (60) days prior to
the closing date of an Acquisition (A) Employee terminates his
employment with the Company (or any parent or subsidiary of the
Company) for “Good Reason” (as defined herein) or
(B) the Company (or any parent or subsidiary of the Company)
terminates the Employee’s employment for other than
“Cause” (as defined herein) or (ii) Employee
remains employed by the Company (or any parent or subsidiary of the
Company) through the closing date of an Acquisition, in either
case, without duplication, Employee shall be entitled to receive a
lump-sum bonus payment (less applicable withholding taxes) equal to
50% of the Employee’s annual base salary as in effect
immediately prior to the closing date of such
Acquisition.
(b) Timing of Bonus Payments
. The bonus payment to which Employee is entitled shall be paid by
the Company to Employee in cash and in full, not later than ten
(10) calendar days after the closing date of the Acquisition.
If the Employee should die after he becomes entitled to the bonus
payment, but before it has been paid, such unpaid bonus payment
(less any withholding taxes) shall be paid to the Employee’s
designated beneficiary, if living, or otherwise to the personal
representative of the Employee’s estate.
(c) Termination Apart from
Acquisition . In the event the Employee’s employment is
terminated for any reason prior to the date that is sixty
(60) days before the closing date of an Acquisition, then the
Employee shall not be entitled to receive the bonus payment
contemplated by this Agreement.
4. Severance Benefits
.
(a) Involuntary Termination Other
than for Cause or Voluntary Termination for Good Reason Following
an Acquisition . Subject to the terms and conditions set forth
in this Agreement, if within the sixty (60) days prior to, or
twelve (12) months following, the closing date of an
Acquisition (i) the Employee terminates his or her employment
with the Company (or any parent or subsidiary of the Company) for
“Good Reason” or (ii) the Company (or any parent
or subsidiary of the Company) terminates the Employee’s
employment for other than “Cause” and, in either case,
the Employee signs and does not revoke a standard release of claims
with the Company in a form acceptable to the Company (the
“Release”), then the Employee shall receive the
following severance from the Company:
(i) Severance Payment . The
Employee shall be entitled to receive a lump-sum severance payment
(less applicable withholding taxes) equal to 50% of the
Employee’s annual base salary (as in effect immediately prior
to (A) the closing date of an Acquisition, or (B) the
Employee’s termination, whichever is greater);
(ii) COBRA Benefits . Upon
Employee’s timely election for continued coverage under the
Company’s health plans pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1984, as amended
(“COBRA”), the Company will pay one hundred percent
(100%) of Employee’s COBRA premium for himself and his
dependents who qualify for COBRA
-2-
coverage, as applicable, for the
period beginning on the date Employee’s employment with the
Company is terminated and ending on the earlier of (i) the
last day of the month following the month in which the
Employee’s employment with the Company is terminated, and
(ii) the date upon which the Company is no longer obligated to
provide COBRA continuation coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1984, as amended.
(iii) Payment for Vacation
Pay . Payment for any vacation time, including any vacation
time accrued above the current 120 hour vacation accrual payout
limit (but below the 180 hour maximum), if applicable;
and
(iv) Stock Option Vesting .
Vesting of Employee’s option(s) to purchase shares of Common
Stock granted to Employee under the Company’s Amended and
Restated 1996 Stock Option Plan, 2003 Stock Plan and/or 2003
Directors’ Stock Option Plan will terminate upon the date
that Employee’s employment with the Company is terminated. No
additional option shares shall vest after such date. In accordance
with the terms of the Stock Option Agreement, the vested options
will be exercisable until the date that is 3 months following the
date that Employee’s employment with the Company is
terminated.
(v) Timing of Severance
Payments . The severance payment to which Employee is entitled
shall be paid by the Company to Employee in cash and in full, not
later than ten (10) calendar days after the effective date of
the Release. If the Employee should die after he becomes entitled
to the severance payment, but before it has been paid, such unpaid
severance payment (less any withholding taxes) shall be paid to the
Employee’s designated beneficiary, if living, or otherwise to
the personal representative of the Employee’s
estate.
(b) Voluntary Resignation;
Termination for Cause . If the Employee’s employment with
the Company terminates (i) voluntarily by the Employee other
than for Good Reason or (ii) for Cause by the Company, then
the Employee shall not be entitled to receive severance or other
benefits except for those (if any) as may then be established under
the Company’s then existing severance and benefits plans and
practices or pursuant to other written agreements with the
Company.
(c) Termination Apart from
Acquisition . In the event the Employee’s employment is
terminated for any reason, either prior to the date that is sixty
(60) days before the closing date of an Acquisition or after
the twelve (12)-month period following the closing date of an
Acq
