EMPLOYMENT
AGREEMENT
EMPLOYMENT
AGREEMENT (the " Agreement ") dated
July __ 2006 by and between Biolife Solutions, Inc., a Delaware
corporation (the " Company ") and Michael Rice (the "
Executive ").
In consideration of the
premises and mutual covenants herein and for other good and
valuable consideration, the parties agree as follows:
1.
Term of Employment;
Executive Representation .
a.
The Company hereby
employs the Executive in accordance with the terms and conditions
set forth in this Agreement. Executive's employment shall
commence on August 7, 2006 (the "Effective Date").
Executive's initial term of employment shall be for a period
of one year from and including the Effective Date (the " Initial
Term "); provided, however, that this Agreement shall
automatically renew for successive one (1) year periods in the
event either party does not send the other a "termination notice"
not less than ninety (90) prior to the expiry of the Initial Term,
and in subsequent years, prior to the expiry of any such successive
annual period. Executive and the Company agree and
acknowledge that Executive's employment with the Company may be
terminated at any time, with or without cause, by the Company or
Executive, upon written notice in accordance with Section 7 of this
Agreement.
b.
Executive hereby
represents to the Company that the execution and delivery of this
Agreement by Executive and the performance by Executive of the
Executive's duties hereunder shall not constitute a breach of, or
otherwise contravene, the terms of any new statute, law,
regulation, employment agreement or other agreement or policy to
which Executive is a party or otherwise bound.
2.
Position
.
a.
While employed
hereunder, Executive's title and position shall be President and
Chief Executive Officer of the Company (" CEO "). In
such position, Executive shall have such duties and authority as
shall be determined from time to time by the Company's Board of
Directors (the "Board"). The Board also will nominate
Executive as Director to sit on the Board for the duration of
Executive's employment.
b.
While employed
hereunder, Executive will devote Executive's full business time and
best efforts to the performance of Executive's duties hereunder and
will not engage in any other business, profession or occupation for
compensation or otherwise which would conflict with the rendition
of such services either directly or indirectly, without the prior
written consent of the CEO; provided that nothing herein
shall preclude Executive from: (1) continuing to serve on the board
of directors or trustees of any business corporation or any
charitable organization on which he currently serves and which is
identified on Exhibit A hereto, or (2) subject to the prior
approval of the CEO, from appointment to any additional
directorships or trusteeships, or (3) serve in an advisory role for
other business entities, provided in each case, and in the
aggregate, that such activities do not interfere with the
performance of Executive's duties hereunder or conflict with
Section 8 of this Agreement.
3.
Base Salary and
Bonus .
While employed hereunder, the Company shall pay Executive a
base salary (the " Base Salary ") at the annual
rate of $200,000, payable in regular installments in accordance
with the Company's usual payment practices.
Executive shall be entitled to such increases in Executive's
Base Salary, if any, as may be determined from time to
time in the sole discretion of the Board, which shall be
consistent with industry standards. Executive
will be eligible for quarterly bonus payments equal to
$25,000 per calendar quarter based on the achievement
of certain key objectives which will be determined by
the Board and communicated to the Executive in writing within 60
days of the date of this Agreement.
4.
Executive
Benefits .
The Company shall provide Executive the following during the
term of his
employment
hereunder:
a.
Coverage under all
employee pension and welfare benefit programs, plans and practices
in accordance with the terms thereof, which the Company generally
makes available to its executives.
b.
To the extent Executive
continues to receive health care coverage from his former employer,
AMI Semiconductor, Inc., pursuant to COBRA, Company agrees to
promptly reimburse Executive for any monthly premium costs incurred
by Executive. If and when COBRA extended healthcare coverage
is no longer available to Executive, for whatever reason, Executive
shall be covered under the Company's health benefit program, and to
the extent Executive incurs prescription drug expenses in excess of
those covered by the Company's health benefit program, the Company
will reimburse Executive for those costs.
c.
Paid vacation of four
(4) weeks each calendar year, which shall be the maximum number of
weeks Executive may accrue at any time, and which shall be taken at
such times as are consistent with Executive's responsibilities
hereunder.
5.
Business
Expenses .
Executive shall be reimbursed for the reasonable expenses in
carrying out his duties and responsibilities under this
Agreement, including, without limitation, expenses for travel and
similar items related to such duties and
responsibilities, upon submission of vouchers therefore with backup
data.
6.
Equity Interest in
Company .
As of the Effective Date, Executive will be granted stock
options to purchase 1,500,000 shares of the Company's
Common Stock, under the terms set forth in the Option Agreement
attached thereto as Exhibit B (the " Option
Agreement ").
7.
Termination . The Executive's employment
hereunder may be terminated by either party at any time and
for any reason; provided that, except as otherwise set
forth in this Section 7, the terminating party will be
required to give the other party at least 90 days
advance written notice of such termination (unless the
other party waives its right to receive such 90-day
notice). Notwithstanding any other provision of this
Agreement, the provisions of this Section 7 shall
exclusively govern Executive's rights upon termination
of employment with the Company and its
affiliates.
a.
By the Company for
Cause; By the Executive Without Good Reason .
(i)
The Executive's
employment hereunder may be terminated by the Company for Cause (as
defined below) at any time or by Executive without Good Reason
after 90 days prior written notice (unless the Company waives such
notice requirement or a portion thereof).
(ii)
For purposes of this
Agreement, " Cause " shall mean:
(A)
Executive's failure
substantially to perform his duties under this Agreement (other
than as a result of total or partial incapacity due to physical or
mental illness) after 30 days prior written notice by the Company
to Executive specifying either the acts (or lack of action)
constitution such failure to perform. Notwithstanding the
foregoing, such notice and opportunity to cure shall not be
required in the event of any consequent failure by Executive to
perform his employment duties hereunder, and the Company shall have
the right to terminate the Executive immediately upon the
occurrence thereof.
(B)
dishonesty in the
performance of Executive's duties hereunder,
(C)
An act or acts on
Executive's part constituting (a) a felony under the laws of the
United States or any state thereof, or (b) a misdemeanor involving
moral turpitude,
(D)
Executive's malfeasance
or misconduct in connection with Executive's duties hereunder or
any act or omission of Executive which is materially injurious to
the financial condition or business reputation of the Company or
any of its subsidiaries or affiliates, or
(E)
Executive's breach of
the provisions of Section 8 of this Agreement.
(iii)
If Executive's
employment is terminated during the term of this Agreement by the
Company for Cause or by Executive without Good Reason, Executive
shall be entitled to receive:
(A)
the Base Salary through
the date of termination;
(B)
reimbursement for any
unreimbursed business expenses properly incurred by Executive in
accordance with Company policy prior to the date of Executive's
termination; and
(C)
such Employee Benefits,
if any, as to which Executive may be entitled under the employee
benefit plans of the Company through the date of termination (the
amounts described in clauses (A) through (C) hereof being referred
to as the " Accrued Rights "), except healthcare benefits
which would extend through the end of the month.
Following such
termination of Executive's employment by the Company for Cause or
by Executive without Good Reason, except as set forth in this
Section 7.a, Executive shall have no further rights to any
compensation or any other benefits under this Agreement.
b.
Disability or
Death .
(i)
The Executive's
employment hereunder shall terminate automatically upon Executive's
death or, at the option of the Company, if Executive becomes
physically or mentally incapacitated and is therefore unable for a
period of forty five (45) consecutive days or for an aggregate of
seventy five (75) days in any six (6) month consecutive month
period to effectively perform Executive's duties (such incapacity
is hereinafter referred to as " Disability ").
(ii)
Upon termination of
Executive's employment during the term of this Agreement for either
Disability or Death, Executive or Executive's estate (as the case
may be) shall be entitled to receive the Accrued Rights and a
prorated portion of the current quarter's bonus amount.
Following the
termination of Executive's employment hereunder due to death or
Disability, except as set forth in this Section 7.b, Executive
shall have no further rights to any compensation or any other
benefits under this Agreement.
c.
By the Company
Without Cause or Resignation by Executive for Good
Reason .
(i)
The Executive's
employment hereunder may be terminated by the Company without Cause
or by Executive's resignation for Good Reason.
(ii)
For purposes of this
Agreement, " Good Reason " shall mean:
(A)
within thirty (30) days
following the occurrence of a "change in control" of the Company
(as defined below);
(B)
within thirty (30) days
if, without Executive's express written consent, the Company
materially changes Executive's position, duties, responsibilities,
or status as in effect at the time of the execution of this
Agreement;
(C)
a failure by the Company
to comply with any material provision of this Agreement, which has
not been cured within thirty (30) days after notice of such
non-compliance has been given by Executive to the Company,
including but not limited to (1) a failure by the Company to pay
Executive any currently earned base salary and bonus amounts, a
failure by the Company to reimburse Executive for any incurred
Business Expenses and/or COBRA insurance premiums, a reduction by
the Company in Executive's base salary as in effect on the date
hereof or as the same may be increased from time to time during the
term of this Agreement (other than as a result of a
general
salary reduction
affecting substantially all Company employees); (2) any failure by
the Company to obtain the assumption of this Agreement by any
successor or assign of the Company; or (3) any failure by the
COmpany to provide medical and disability insurance as discussed
above;
(iii)
if Executive's
employment is terminated during the term of this Agreement by the
Company without Cause (other than by reason of death or Disability)
or if Executive resigns during the term of this Agreement for Good
Reason, Executive shall be entitled to receive:
(A)
the Accrued
Rights;
(B)
a prorated portion of
the current quarter's bonus amount;
(C)
subject to Executive's
continued compliance with the provisions of Section 8 of this
Agreement, continued payment of the Base Salary (1) one year after
the date of such termination, or (2) in the event of a change of
control, continued payment of Base Salary until eighteen months
(18) after the effective date of the change of control event;
and
(D)
In the event of a change
of control, accelerated vesting of any remaining unvested stock
options pursuant to the terms the Option Agreement attached hereto
as Exhibit B .
(iv)
A "change in control" of
the Company shall be deemed to have occurred if:
(A)
There shall be
consummated (1) any consolidation or merger of the Company in which
the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Common Stock would be
converted into cash, securities or other property, other than a
merger of the Company in which the holders of the Company's Common
Stock immediately prior to the merger have the same proportionate
ownership of at least 50% of common stock of the surviving
corporation immediately after the merger, or (2) any sale, lease,
exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets
of the Company;
(B)
The stockholders of the
Company approve any plan or proposal for the liquidation or
dissolution of the Company;
(C)
Any person (as such term
is used in Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the " Exchange Act ")), shall
become the beneficial owner (within the meaning of Rule 13d-3 under
the Exchange Act) of 50% or more of the Company's outstanding
Common Stock.
d.
Notice of
Termination .
Any purported termination of employment by the Company or by
Executive (other than due to Executive's death) shall be
communicated by written Notice of Termination to the other party
hereto in accordance with Section 9(h) hereof. For purposes
of this Agreement, a " Notice of Termination " shall mean a
notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of employment under the provision so
indicated.
8.
Executive's Covenants
Not To Disclose Confidential Information and Trade
Secrets .
a.
At any time during or
after Executive's employment with the Company, Executive shall not,
without the prior written consent of the Company, use, divulge,
disclose or make accessible to any other person, firm, partnership,
corporation or other entity any Confidential Information (as
hereinafter defined) pertaining to the business of the Company or
any of its subsidiaries, except (i) while employed by the Company,
in the business of and for the benefit of the Company, or (ii) when
required to do so by a court of competent jurisdiction, by any
governmental agency having supervisory authority over the business
of the Company, or by any administrative body or legislative body
(including a committee thereof) with
jurisdiction to order
Executive to divulge, disclose or make accessible such information.
For purposes of this Section 8(a), " Confidential
Information " shall mean non-public information concerning the
financial data, strategic business plans, intellectual property and
other non-public, proprietary and confidential information of the
Company as in existence as of the date of Executive's termination
of employment that, in any case, is not otherwise available to the
public (other than by Executive's breach of the terms hereof).
Confidential Information shall not include information which
at the time of disclosure was already known to Executive as
evidenced by written records of Executive. Executive agrees
that all confidential information described in this Paragraph of
this Agreement is and constitutes trade secret information and is
the exclusive property of the Company.
b.
During the period of his
employment hereunder and for twenty-four (24) months thereafter,
Executive agrees that, without the prior written consent of the
Company, he shall not, on his own behalf or on behalf of any
person, film or company, directly or indirectly, (i), in any city,
town or county in which the Company conducts or does any business,
render services to any other business or business entity which is
engaged directly or indirectly in any line of business in which the
Company is engaged at the time of termination of Executive's
employment hereunder, or (ii) solicit, interfere with, induce or
attempt to induce, or offer employment to any person who has been
employed by the Company at any time during the twelve (12) months
immediately preceding such solicitation, or directly or indirectly
solicit, interfere with, induce or attempt to induce any customer
of the Company to reduce, withdraw, or withhold business from the
Company.
c.
The results and proceeds
of Executive's services hereunder, including, without limitation,
any works or authorship results from Executive's services during
Executive's employment with the Company and/or any of the Company's
affiliates and any works in progress, will be works-made-for hire
and the Company will be deemed the sole owner throughout the
universe of any and all rights of whatsoever nature therein,
whether or not now or hereafter known, existing, contemplated,
recognized or developed, with the right to use the same in
perpetuity in any manner the Company determines in its sole
discretion without any further payment to Executive whatsoever.
If, for any reason, any of such results and proceeds will not
legally be a work-for-hire and/or there are any rights which do not
accrue to the Company under the preceding sentence, then Executive
hereby irrevocably assigns and agrees to assign any and all of
Executive's right, title and interest thereto, including, without
limitation, any and all copyrights, patents, trade secrets,
trademarks and/or other rights of whatsoever nature therein,
whether or not now or hereafter known, existing, contemplated,
recognized or developed, to the Company, and the Company will have
the right to use the same in perpetuity throughout the universe in
any manner the Company determines without any further payment to
Executive whatsoever. Executive will, from time to time as
may be requested by the Company, (i) during the term of Executive's
employment without further consideration, and (ii) thereafter at
Executive's then current rate of compensation, do any and all
things which the Company may deem useful or desirable to establish
or document the Company's exclusive ownership of any and all rights
in any such results and proceeds, including, without limitation,
the execution or appropriate copyright and/or patent application or
assignments. To the extent Executive has any rights in the
results and proceeds of Executive's services that cannot be
assigned in the manner described above, Executive unconditionally
and irrevocably waives the enforcement of such rights. This
subsection is subject to and will not be deemed to limit, restrict,
or constitute any waiver by the Company of any rights of ownership
to which the Company may be entitled by operation of law by virtue
of the Company being Executive's employer. This Section does
not apply to any invention for which no equipment, supplies,
facilities or Confidential Information was used, which does not (i)
relate to the business of the Company; (ii) relate to the Company's
actual or demonstrable anticipated research or development or (iii)
result from any work performed by Executive for the
Company.
d.
Executive and the
Company agree that the covenants outlined in this Section 8 are
reasonable covenants under the circumstances, and further agree
that if in the opinion of any court of competent jurisdiction any
such restraint is not reasonable in any respect, such court shall
have the right, power and authority to excise or modify such
provision or provisions of this Section as to the court shall
appear not reasonable and to enforce the remainder of the covenants
as so amended. Executive agrees that any breach of the
covenants contained in this Section 8 would irreparably injure the
Company.
e.
In the event that the
Company defaults on its payment obligations to the Executive set
forth in this Agreement, and such default continues for a period of
thirty (30) days following written notice to the Company of such
default, then at such time, the non-competition and
non-solicitation provisions set forth in this Section 8 shall
terminate and shall not be enforceable by the Company; provided,
that the confidentiality provisions shall not terminate and shall
remain in full force and effect.
9.
Specific
Performance .
Executive acknowledges and agrees that the Company's remedies
at law for a breach or threatened breach of any of the
provisions of Section 8 would be inadequate and, in recognition
of this fact, Executive agrees that, in the event of
such a breach or threatened breach, in addition to any
remedies at law, the Company, without posting any bond,
shall be entitled to cease making any payments or
providing any benefit otherwise required by this Agreement and
obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then
be available.
10.
Arbitration .
a.
Executive agrees that
any dispute or controversy arising out of, relating to, or in
connection with this Agreement, or the interpretation, validity,
construction, performance, breach, or termination thereof, shall be
settled by binding arbitration to be held in Tioga County, NY, in
accordance with the National Rules for the Resolution of Employment
Disputes then in effect of the American Arbitration Association
(the " Rules "). The arbitrator may grant injunctions
or other relief in such dispute or controversy. The decision
of this arbitrator will be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.
b.
The arbitrator(s) will
apply Delaware state law to the merits of any dispute or claim,
without reference to rules of conflicts of law. Executive
hereby consents to the personal jurisdiction of the state and
federal courts located in New York for any action or proceeding
arising from or relating to this Agreement or relating to any
arbitration in which the parties are participants.
c.
EXECUTIVE HAS READ AND
UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION.
EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT,
EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO,
OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PEFORMANCE, BREACH OR TERMINATION TEREOF TO
BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A
WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE
RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP.
11.
Miscellaneous
.
a.
Governing
Law .
This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard
to conflicts of laws principles thereof.
b.
Entire
Agreement/Amendments . This Agreement contains the entire
understanding of the parties with respect to the employment of
Executive by the Company. There are no restrictions,
agreements, promises, warranties, covenants or undertakings between
the parties with respect to the subject matter herein other than
those expressly set forth herein. This Agreement may not be
altered, modified, or amended except by written instrument signed
by the parties hereto. This Agreement supersedes all prior
agreements and understandings (including verbal agreements) between
Executive and the Company and/or its affiliates regarding the terms
and conditions of Executive's employment with the Company and/or
its affiliates (collectively, the " Prior Agreements
").
c.
No Waiver
. The failure of a
party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver of such party's
rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this
Agreement.
d.
Severability . In the event that any one or
more of the provisions of this Agreement shall be or become
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the
remaining provisions of
this Agreement shall not be affected thereby.
e.
Assignment
. This Agreement
shall not be assignable by Executive. This Agreement may be
assigned by the Company to a company which is a successor in
interest to substantially all of the business operations of the
Company or the Parent. Such assignment shall become effective
when the Company notifies the Executive of such assignment or at
such later date as may be specified in such notice. Upon such
assignment, the rights and obligations of the Company hereunder
shall become the rights and obligations of such successor company,
provided that any assignee expressly assumes the obligations,
rights and privileges of this Agreement.
f.
Mitigation
. Executive shall
not be required to mitigate damages or the amounts of any salary
continuation payments provided for under this Agreement by seeking
other employment or otherwise, nor shall the amount of any payments
provided for under this Agreement be reduced by any compensation
earned by Executive as the results of employment by another
employer or self-employment after the date of
termination.
g.
Successors; Binding
Agreement. This Agreement shall inure to
the benefit of and be binding upon personal or legal
representatives, executors, administrators, successors, heirs,
distr
