Exhibit 10.39
EMPLOYMENT
AGREEMENT
THIS
AGREEMENT is made October 10, 2007, by and between BioTime, Inc.
(the "Company"), and Robert W. Peabody ("Executive").
W I T N E S S E T H
:
WHEREAS, the
Company desires to employ Executive, and Executive is willing to
accept such employment, all on the terms and subject to the
conditions hereinafter set forth;
NOW, THEREFORE,
in consideration of the terms and conditions hereinafter set forth,
the parties hereto agree as follows:
1. Engagement
(a)
Position and Duties . The Company agrees to
employ Executive in the position of Senior Vice President and Chief
Operating Officer. Executive shall report to the Chief
Executive Officer of the Company and shall perform the duties and
functions as are normally carried out by a Senior Vice President
and Chief Operating Officer of a developer of pharmaceutical or
medical products of a size comparable to the Company that has a
class equity securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended, and as the Board of
Directors of the Company (the "Board of Directors") shall from time
to time reasonably determine. Without limiting the
generality of the immediately preceding sentence, Executive's
duties shall include, but shall not be limited to: (i) assisting in
securing research grants; (ii) administering the non-scientific
issues surrounding accomplishing the task outlined in awarded
grants; (ii) setting up policies, procedures, and controls to
comply with the financial reporting requirements of the
Company, any collaborator on any grant financed project, and each
grant issuer; (iii) establishing a progress tracking system and
being responsible for insuring that projects are on budget and on a
timeline to achieve the grant requirements; (iv) make sure that all
external reporting to third parties and all internal reporting
within the Company is timely, proper, and accurate; (v) serve as
chief of staff for the Chief Executive Officer, and (vi) other
administrative duties as assigned by the Chief Executive Officer or
the Board of Directors which could be altered or changed from time
to time. Executive shall devote his best efforts, skills
and abilities, on a full-time basis, exclusively to the Company's
business pursuant to, and in accordance with, reasonable business
policies and procedures, as fixed from time to time by the Board of
Directors of the Company. Executive covenants and agrees
that he will faithfully adhere to and fulfill such policies as are
established from time to time by the Board of Directors.
(b)
No Conflicting Obligations . Executive represents
and warrants to the Company that he is under no obligations or
commitments, whether contractual or otherwise, that are
inconsistent with his obligations under this Agreement or that
would prohibit him, contractually or otherwise, from performing his
duties as Senior Vice President and Chief Operating Officer of the
Company as provided in this Agreement.
(c)
No Unauthorized Use of Third Party Intellectual Property.
Executive represents and warrants that he will not use
or disclose, in connection with his employment by the Company, any
patents, trade secrets, confidential information, or other
proprietary information or intellectual property as to which any
other person has any right, title or interest, except to the extent
that the Company holds a valid license or other written permission
for such use from the owner(s) thereof. Executive
represents and warrants to the Company that he has returned all
property and confidential information belonging to any prior
employer.
(a)
Salary and Bonuses . During the term of
this Agreement, the Company shall pay to the Executive:
(i)
Annual Salary . The Company shall pay Executive
an annual salary of one hundred sixty thousand dollars
($160,000.00) the (“Annual
Salary”). Executive’s salary shall be paid
in equal bi-monthly installments, consistent with the
Company’s regular salary payment
practices. Executive’s salary may be adjusted from
time-to-time by the Company without affecting this
Agreement.
(ii)
Bonus . In addition to his Annual Salary,
Executive shall be entitled to receive an annual bonus equal to the
lesser of (A) forty-five thousand dollars ($45,000.00) or (B) the
sum of 35% of Consulting Fees and 3.5% of Grant Funds received by
the Company during each fiscal year; provided that (x) the grant
that is the source of the Grant Funds was obtained by
the Company during the term of Executive’s employment by the
Company, (y) the grant that is the source of the Grant Funds is not
a renewal, extension, modification, or novation of a grant (or a
new grant to fund the continuation of a study funded by a prior
grant from the same source) obtained by the Company prior to
Executive’s employment by the Company, and (z) the grant that
is the source of the Grant Funds was not obtained by the Company
substantially through the efforts of any consultant or independent
contractor compensated by the Company for obtaining the
grant. The bonus shall be paid on a monthly basis,
subject to the Company's receipt of the funds from which the bonus
it to be paid.
(A) Grant
Funds means money actually paid to the Company during a fiscal year
as a research grant by any federal or state government agency or
any not for profit non-government organization, and expressly
excludes (1) license fees, (2) royalties, (3) Consulting Fees, (4)
capital contributions to the Company or any subsidiary of the
Company, or any joint venture of any kind (regardless of the legal
entity through which the joint venture is conducted) to which the
Company is a party, and (5) any other payments received by the
Company by a business or commercial enterprise for research and
development of products or technology pursuant to a contract or
agreement for the commercial development of a product or
technology.
(B) Consulting
Fees means money actually received by the Company under a contract
that entitles the Company to receive a cash fee for providing
scientific and technical advice to third parties concerning stem
cells.
(b)
Expense Reimbursements . The Company shall
reimburse Executive for reasonable travel and other business
expenses incurred by Executive in the performance of his duties
hereunder, subject to the Company's policies and procedures in
effect from time to time, and provided that Executive submits
supporting vouchers.
(c)
Benefit Plans. Executive shall be
eligible (to the extent he qualifies) to participate in any
retirement, pension, life, health, accident and disability
insurance, stock option plan or other similar employee benefit
plans which may be adopted by the Company (or any other member of a
consolidated group of which the Company is a part) for its
executive officers or other employees.
(d)
Stock Options/SARs . The Company will grant
Executive an option to purchase 500,000 of the Company’s
common shares (the “Option”) under the Company’s
2002 Employee Stock Option Plan (the
“Plan”). The Option shall be paired with a
stock appreciation right ("SAR") with respect to 325,530 shares
that may be exercised only as provided in this
Agreement.
(i) The
exercise price of the Option and the SAR will be the greater of
$0.50 per share and the Fair Market Value of the Company’s
common shares on the date of grant determined in accordance with
the Plan. The Option and the SAR will vest (as thereby
become exercisable) as follows: 1/60th of the number of Option
shares will vest at the end of each full month of
employment. Vesting will depend on Executive’s
continued employment with the Company through the applicable
vesting date, and will be subject to the terms and conditions of
the Plan and a Stock Option Agreement consistent with the Plan and
this paragraph. The unvested portion of the Option and
the SARs shall not be exercisable.
(ii) The
vested portion of the Option and the SAR shall expire on the
earliest of (A) seven (7) years from the date of grant, (B) three
months after Executive ceases to be an employee of the Company for
any reason other than Executive’s death or Disability (as
defined below), or (C) one year after Executive ceases to be an
employee of the Company due to his death or Disability; provided
that if Executive dies during the three month period described in
clause (B) of this paragraph, the expiration date of the vested
portion of the Option shall be one year after the date of his
death. In addition, (X) if the SAR is exercised, the
vested portion of the Option shall expire as to a number of shares
for which the SAR was exercised, and (Y) the vested and unvested
portion of the SAR shall expire when the shareholders of the
Company approve an amendment to the Plan described
below. The Option and the SAR, respectively, shall not
be exercisable after it has expired.
(iii) Except
as specifically set forth in this Section, Executive’s rights
under the Plan, or any other stock option plan later adopted by the
Company, shall be governed solely by the terms of the Plan, or the
later adopted stock option plan.
(iv) The
SAR may not be exercised, in whole or in part, until the vested
portion of the Option has been exercised in full. A
vested SAR may be exercised by the Executive by delivering a
written notice to the Company specifying the number of SAR shares
being exercised. Upon exercise of an SAR, Executive
shall be entitled to receive a payment of cash per SAR share
exercised equal to the amount by which the fair market value of a
Company common share on the date of exercise exceeds the exercise
price of the SAR. The fair market value of a Company common share
shall be determined by the Board of Directors in the manner
provided in the Plan. The amount payable to Executive
upon exercise of an SAR shall be subject to all applicable,
federal, state, and local income tax withholdings, FICA and similar
state withholdings, and any other applicable payroll tax
withholding. SARs may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and
may be exercised, during the lifetime of the Executive, only by the
Executive.
(v) On
the date of this Agreement, the number of shares available for the
grant of options under the Plan, as approved by the shareholders of
the Company, is less than 1,500,000. The Board of
Directors has approved an amendment to the Plan that would increase
the number of shares available for the exercise of options;
however, the amendment is subject to approval by the shareholders
of the Company. The Company will submit the Plan
amendment to its shareholders for approval at its next annual
meeting of shareholders, and the Board of Directors will recommend
that the shareholders approve the amendment. The Board
of Directors has reserved 174,459 shares under the Plan, as
previously approved by the shareholders, for the Option granted to
Executive.
(e)
Vacation; Sick Leave . Executive shall be
entitled to three weeks of vacation without reduction in
compensation, during each calendar year. Such vacation
shall be taken at such time as is consistent with the needs and
policies of the Company. All vacation days and sick
leave days shall accrue based upon days of
service. Executive shall also be entitled to leave from
work, without reduction in compensation for ten days during each
calendar year, due to illness subject to the policies and
procedures of the Company, and subject to the provisions of this
Agreement governing termination due to disability, sickness or
illness. The Company may, from time to time, adopt
policies governing the disposition of unused vacation days and sick
leave days remaining at the end of the Company's fiscal year; which
policies may govern whether unused vacation days or sick leave days
will be paid, lost, or carried over into subsequent fiscal
years.
3.
Competitive Activities . During the term of
Executive’s employment with the Company and for three years
thereafter, Executive shall not, for himself or any third party,
directly or indirectly employ, solicit for employment or recommend
for employment any person employed by the
Company. During the term of Executive’s
employment, he shall not, directly or
indirectly as an employee, contractor, officer,
director, member, partner, agent, or equity owner, engage in any
activity or business that competes or could reasonably be expected
to compete with the business of the
Company. Executive acknowledges that there is a
substantial likelihood that the activities described in this
Section would (a) involve the unauthorized use or disclosure of the
Company’s Confidential Information and that use or disclosure
would be extremely difficult to detect, and (b) result in
substantial competitive harm to the Company's
business. Executive has accepted the limitations of this
Section as a reasonably practicable and unrestrictive
means of preventing such use or disclosure of Confidential
Information and preventing such competitive harm.
4. Inventions/Intellectual
Property/Proprietary Information
(a)
Inventions and Discoveries Belong to the Company
. Any and all inventions, discoveries,
improvements or intellectual property which Executive may conceive
or make during the period of employment relating to or in any way
pertaining to or connected with the systems, products, apparatus,
or methods employed, manufactured, constructed or researched by the
Company shall be the sole and exclusive property of the
Company. The obligations provided for by this
Agreement, except for the requirements as to disclosure in Section,
do not apply to any rights Executive may have acquired in
connection with an invention, discovery, improvement or
intellectual property for which no equipment, supplies, facility,
or trade secret information of the Company was used and which was
developed entirely on the Executive’s own time and (a) which
at the time of conception or reduction to practice does not relate
directly or indirectly to the business of the Company or to the
Company’s actual o
