Exhibit 10.1
CELL THERAPEUTICS,
INC.
JAMES BIANCO EMPLOYMENT
AGREEMENT
This Employment Agreement is entered
into as of December 31, 2008, (the “Effective
Date”) by and between Cell Therapeutics, Inc. (the
“Company”), and James A. Bianco (the
“Executive”) (the “Agreement”) and
effective January 1, 2009. This Agreement will automatically
terminate on December 31, 2010 unless it is amended prior to
such time to extend the termination date.
1. Duties and Scope of
Employment .
(a) Positions and Duties . As
of the Effective Date, Executive will continue to serve as Chief
Executive Officer of the Company reporting directly to the
Company’s Board of Directors (the “Board”).
Executive will render such business and professional services in
the performance of his duties, consistent with Executive’s
position within the Company, as will reasonably be assigned to him
by the Board.
(b) Board Membership . During
Executive’s employment, at each annual meeting of the
Company’s stockholders at which Executive’s term as a
member of the Board has otherwise expired, the Company will
nominate Executive to serve as a member of the Board.
Executive’s service as a member of the Board will be subject
to any required stockholder approval. While a member of the Board,
Executive will be permitted to attend all meetings of the Board and
executive sessions thereof, on substantially the same basis as
other members of the Board, except as is prohibited by applicable
law or listing standard and except any meeting of the Independent
Directors held in an executive session. Notwithstanding the
preceding sentence, Executive will not have the right to attend any
portion of a meeting or executive session where the item of
discussion relates to Executive’s employment, including (but
not limited to) his compensation, performance, and/or service on
the Board.
(c) Obligations . During
Executive’s employment, Executive will perform his duties
faithfully and to the best of his ability and will devote his full
business efforts and time to the Company. For the duration of
Executive’s employment, Executive agrees not to actively
engage in any other employment, occupation or consulting activity
for any direct or indirect remuneration without the prior written
approval of the Board. Notwithstanding the foregoing, Executive may
serve on civic or charitable boards, fulfill speaking engagements
and manage personal investments, provided that they do not
materially interfere with Executive’s responsibilities and
are otherwise not competitive and do not conflict with the
Company’s business in any manner. Executive may also serve in
non-executive roles (including as a non-executive chairman of a
board or a similar role) for other entities, provided Executive
receives prior written approval from the Board, which approval
shall not be unreasonably withheld. As of the Effective Date, the
Board has approved Executive’s role as a consultant and as a
member of the Board of Directors of Aequus Biopharma, Inc.
Executive shall comply with the Company’s policies and rules,
as they may be in effect from time to time during Executive’s
employment.
2. At-Will Employment . The
parties agree that the Executive’s employment with the
Company constitutes “at-will” employment and may be
terminated at any time with or without cause or notice. Executive
understands and agrees that neither his job performance nor
promotions, commendations, bonuses or the like from the Company
give rise to or in any way serve as the basis for modification,
amendment, or extension, by implication or otherwise, of his
employment with the Company.
3. Compensation .
(a) Base Salary . During
Executive’s employment, the Company will pay Executive as
compensation for his services a base salary at the annualized rate
of Six Hundred Fifty Thousand Dollars ($650,000) (the “Base
Salary”); provided that the Compensation Committee of the
Board (the “Committee”) shall reconsider such Base
Salary on or before February 28, 2009 and, in its’ sole
discretion after due consideration, determine to maintain or
increase such Base Salary for the remainder of Executive’s
employment. The Base Salary will be paid periodically in accordance
with the Company’s normal payroll practices and be subject to
the usual, required withholding.
(b) Annual Bonus . Executive
will be eligible to earn an annual performance bonus each calendar
year based upon Executive’s actual achievement for the
calendar year relative to certain specified objective or subjective
performance goals, as determined by the Committee in its sole
discretion. Specifically:
(i) Executive will be eligible to
earn a target bonus for a calendar year of performance based upon
Executive’s achievement of specified reasonable and
achievable individual, financial and/or business goals (the
“Target Bonus Goals”), which goals are established,
after consultation with Executive, by the Committee no later than
sixty (60) days after the beginning of each calendar year of
performance; provided that the Target Bonus Goals for the 2009
calendar year of performance shall be established by
February 28, 2009. Executive will be eligible to receive a
target bonus of at least fifty percent (50%) of his Base
Salary upon one hundred percent (100%) achievement of the
Target Bonus Goals. For purposes of clarity, the Committee may
approve individual Target Bonus Goals which, if achieved, will
result in some portion of the target bonus being achieved, as
determined by the Committee in its’ sole discretion. The
Committee may also, in its’ sole discretion, approve
discretionary bonuses in any amount at any time.
(ii) Executive will be eligible to
earn additional bonus amounts for a calendar year of performance
based upon Executive’s achievement of specified individual,
financial and/or business goals which are considered
“stretch” goals that are achievable upon
Executive’s outstanding performance for the calendar year of
performance (the “Stretch Bonus Goals”), which goals
and the additional bonus amounts that are eligible to be earned
upon one hundred percent (100%) achievement of one or more of
such goals shall be established, after consultation with Executive,
by the Committee no later than sixty (60) days after the
beginning of each calendar year of performance; provided that the
Stretch Bonus Goals and amount of additional bonus that may be
earned for the 2009 calendar year of performance shall be
established by February 28, 2009.
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Whether or not any target bonus or
additional bonus is earned by Executive will depend on
Executive’s actual performance for the calendar year relative
to the established performance goals, as determined by the
Committee, in its sole discretion. Notwithstanding anything stated
herein to the contrary, Executive must be employed by or providing
services to the Company on the date bonus payments are made to be
eligible to receive any target or additional bonus amounts
(Executive will not receive any target or additional bonus amounts
if Executive’s service terminates, for any reason, prior to
the date either such bonus amount is paid).
(c) Equity Compensation .
Executive will be eligible to receive equity awards at the
discretion of the Board or the Committee, as applicable, under and
pursuant to the terms of the Company’s equity plans. In
its’ sole and absolute discretion, the Committee shall
determine a reasonable strategy for future equity awards on or
before February 28, 2009.
4. Executive Benefits
.
(a) Health Benefits . During
Executive’s employment, Executive will be entitled to
participate in the employee benefit plans currently and hereafter
maintained by the Company and generally available to other senior
executives of the Company, including, without limitation, the
Company’s group medical (including reimbursement of retainer
fees for physician concierge services (MD2), subject to a maximum
cap on such reimbursements of Fifteen Thousand Dollars ($15,000)
per year), dental, vision, and flexible-spending account plans. To
the extent the Company cancels or changes the benefit plans and
programs generally available to other senior executives of the
Company, the Company reserves the right to cancel or change the
benefit plans and programs it offers to Executive on an equivalent
basis.
(b) Life/Disability Insurance
. The Company will pay the annual premiums for universal life
insurance (or other non-term life insurance) for the benefit of
Executive and his beneficiaries, with a policy coverage amount of
not less than Five Million Dollars ($5,000,000); provided that the
total premiums for such life insurance paid by the Company shall
not exceed Forty One Thousand Five Hundred Dollars ($41,500) per
year (such cap shall be adjusted annually based on the cost of
living adjustments applicable to U.S. social security benefits
beginning with calendar year 2010; Executive shall not be entitled
to any tax gross-up for this life insurance benefit). Furthermore,
the Company will provide, at Executive’s expense, disability
insurance for the benefit of Executive. Executive’s Base
Salary will be increased by the amount of the annual premium for
such disability coverage and the Company’s records will
reflect that the premiums for the disability policy have been paid
by the Executive. The above benefits are subject to availability at
reasonable cost and any limitations resulting from
Executive’s physical condition; provided that, in the event
the annual premium cost of the above life insurance coverage shall
increase above the premium cap specified above due to changes in
Executive’s physical condition or other factors, the Company
shall pay the annual premiums for such coverage as may be available
and which is as comparable to the above coverage as possible, with
total annual premiums not to exceed the annual premium cap
specified above. The policy will accrue to the benefit of Executive
and Executive will be entitled to the full ownership and benefit of
the life insurance policy, even after termination of his employment
for any reason.
(c) Health Club Membership .
The Company will reimburse the Executive for the reasonable dues
and expenses of maintaining his health club membership, not to
exceed Five Hundred Dollars ($500) per month (Executive shall not
be entitled to any tax gross-up for this health club
benefit).
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(d) Chartered Aircraft . To
the extent permitted by the Company’s travel policy to be
reviewed and approved from time to time by the Company’s
audit committee: (i) the Company shall pay for
Executive’s use of chartered aircraft for business purposes
when cost effective and/or in the best interests of the Company,
and (ii) Executive’s family members may accompany
Executive on such business trips, provided that Executive must pay
the Company the amount necessary to ensure that such travel by
Executive’s family members will not be treated as taxable
compensation to Executive. (Executive shall not be entitled to any
tax gross-up for this chartered aircraft benefit).
(e) Tax Preparation . The
Company shall reimburse Executive for all reasonable costs and
expenses incurred by Executive for outside tax planning and tax
return preparation services for Executive, up to a maximum of Three
Thousand Five Hundred Dollars ($3,500)(Executive shall not be
entitled to any tax gross-up for this tax preparation
benefit).
(f) Medical License Fees .
The Company shall promptly reimburse Executive for all reasonable
and necessary costs and expenses incurred by Executive to maintain
Executive’s medical license (Executive shall not be entitled
to any tax gross-up for this benefit).
5. Vacation . Executive will
be entitled to paid vacation of four (4) weeks per year in
accordance with the Company’s vacation policy, with the
timing and duration of specific vacations mutually and reasonably
agreed to by parties hereto. Any accrued but unused vacation time
will be carried to the following year, pursuant to Company
policy.
6. Expenses . The Company
will reimburse Executive for reasonable travel, entertainment or
other expenses incurred by Executive in the furtherance of or in
connection with the performance of Executive’s duties
hereunder, in accordance with the Company’s expense
reimbursement policy as in effect from time to time.
7. Severance .
(a) Involuntary Termination .
If Executive’s employment is terminated by the Company
without Cause (as defined herein) or if Executive resigns from
Executive’s employment for Good Reason (as defined
herein)(for purposes of clarity, a termination without Cause or for
Good Reason does not include a termination that occurs as a result
of Executive’s death or disability), and provided that such
termination constitutes a “separation from service” as
defined in Treasury Regulation Section 1.409A-1(h)
(“Separation”) and Executive signs and does not revoke
a general release of all claims in the form prescribed by the
Company (a “Release”) and such Release becomes
effective within sixty (60) days of Executive’s
Separation (the “Deadline”), then, subject to
Section 7(e) below, Executive shall receive: (i) two
(2) years of Base Salary, which shall be paid in twenty-four
(24) equal installments pursuant to the Company’s
regular payroll procedures, commencing on the Company’s first
normal payroll date that occurs on or after the Deadline;
(ii) any unvested portion of any outstanding options and/or
any unvested shares of Company common stock that have been issued
under any stock option and stock incentive plans of the Company or
otherwise will immediately vest and become
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exercisable and will remain
exercisable for a period of two (2) years following the date
of Executive’s Separation (except with respect to any options
granted pursuant to a plan intended to qualify under
Section 423 of the Internal Revenue Code of 1986, as amended
(the “Code”)), subject to the terms of the applicable
plan and award agreement; (iii) the Company shall reimburse
Executive for monthly premiums paid to continue Executive’s
(and, if applicable, Executive’s eligible spouse and
dependents) Company health insurance under the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”) for two
(2) years from the date that Executive (and, if applicable,
Executive’s eligible spouse and dependents) lose health care
coverage as an employee under the Company’s health plans
until the earlier of: (1) a da
