Exhibit 10.3
EXECUTION COPY
XCYTE THERAPIES,
INC
ACQUISITION BONUS
AGREEMENT
This Acquisition Bonus Agreement
(the “Agreement”) is made and entered into by and
between Christopher S. Henney, Ph.D., D.Sc. and Xcyte Therapies,
Inc, a Delaware Corporation (the “Company”), effective
as of October __, 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.
2. The Board of Directors of the
Company (the “Board”) recognizes that the exploration
and successful consummation of a strategic combination with another
company or other change of control will require a substantial
increase in the workload of Dr. Henney as chairman of the
Company’s board of directors and believes that it is in the
best interest of the Company to provide Dr. Henney with the
benefits provided for in this Agreement.
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. 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, Dr. Henney is removed as
chairman of the Company’s board of directors or as a director
from the Company’s board of directors for other than
“Cause” (as defined herein) or
(ii) Dr. Henney remains in his position as chairman of
the board of directors of the Company through the closing date of
an Acquisition, in either case, without duplication,
Dr. Henney shall be entitled to receive a lump-sum bonus
payment (less applicable withholding taxes) of $250,000.
(b) Timing of Severance
Payments . The bonus payment to which Dr. Henney is
entitled shall be paid by the Company to Dr. Henney in cash
and in full, not later than ten (10) calendar days after the
closing date of the Acquisition. If Dr. Henney 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 Dr. Henney’s personal
representative.
(c) Termination Apart from
Acquisition . In the event Dr. Henney ceases to be the
chairman of the Company’s board of directors for any reason
prior to the date that is sixty (60) days
before the closing date of an
Acquisition, then Dr. Henney shall not be entitled to receive
the bonus payment contemplated by this Agreement.
3. Golden Parachute Excise Tax
Best Results . In the event that the benefits provided for in
this agreement or otherwise payable to Dr. Henney
(a) constitute “parachute payments” within the
meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”) and (b) would be subject
to the excise tax imposed by Section 4999 of the Code, then
such benefits shall be either:
(i) delivered in full, or
(ii) delivered as to such lesser
extent which would result in no portion of such benefits being
subject to excise tax under Section 4999 of the
Code,
whichever of the foregoing amounts, taking into
account the applicable federal, state and local income and
employment taxes and the excise tax imposed by Section 4999,
results in the receipt by Dr. Henney, on an after-tax basis,
of the greatest amount of benefits, notwithstanding that all or
some portion of such benefits may be taxable under
Section 4999 of the Code. Unless the Company and
Dr. Henney otherwise agree in writing, the determination of
Dr. Henney’s excise tax liability and the amount
required to be paid under this Section 3 shall be made in
writing by the Company’s independent auditors who are
primarily used by the Company immediately prior to the Acquisition
(the “Accountants”). For purposes of making the
calculations required by this Section 3, the Accountants may
make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and
4999 of the Code. The Company and Dr. Henney shall furnish to
the Accountants such information and documents as the Accountants
may reasonably request in order to make a determination under this
Section. The Company shall bear all costs th
