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EXECUTIVE
EMPLOYMENT AGREEMENT
This
Employment Agreement (“Agreement”) is made this
31st day of May, 2007 ("Effective Date") between WaferGen
Bio-Systems, Inc., a Nevada corporation (the "Company") and
Amjad Huda ("Executive").
WITNESSETH:
WHEREAS,
the Executive desires to be employed by the Company as its
Chief Financial Officer and Treasurer and the Company wishes
to employ Executive in such capacity;
NOW,
THEREFORE, in consideration of the foregoing recital and the
respective covenants and agreements of the parties contained
in this document, the Company and Executive hereby agree as
follows:
1.
Employment and Duties .
The Company agrees to employ and Executive agrees to serve as the
Company's Chief Financial Officer and Treasurer. The duties and
responsibilities of Executive shall include the duties and
responsibilities as the Board of Directors (the
“Board”) may from time to time reasonably assign to
Executive.
Executive
shall devote substantially all of his working time and efforts
during the Company's normal business hours to the business and
affairs of the Company and its subsidiaries and to the
diligent and faithful performance of the duties and
responsibilities duly assigned to him pursuant to this
Agreement.
2.
Term .
The term of this Agreement shall commence on the Effective Date and
shall continue for a period of one year and shall be automatically
renewed for successive one year periods thereafter unless either
party provides the other party with written notice of his or its
intention not to renew this Agreement at least three months prior
to the expiration of the initial term or any renewal term of this
Agreement. “Employment Period” shall mean the initial
one year term plus renewals, if any.
3.
Place of Employment .
Executive's services shall be performed at the Company's offices
located in Fremont, California and any other locus where the
Company now or hereafter has a business facility within 50 miles of
the Company’s Fremont office. The parties acknowledge,
however, that Executive may be required to travel in connection
with the performance of his duties hereunder.
4.
Base Salary .
For all services to be rendered by Executive pursuant to this
Agreement, the Company agrees to pay Executive during the
Employment Period an initial base salary (the "Base Salary") at an
annual rate of $250,000. The Base Salary shall be paid in periodic
installments in accordance with the Company's regular payroll
practices.
The
Compensation Committee (the “Compensation
Committee”) of the Board (or by the independent members
of the Board, if there is no Compensation Committee) shall
review the Executive’s Base Salary annually and shall
make a recommendation to the Board as to whether such Base
Salary should be increased but not decreased, which decision
shall be within the Board’s sole
discretion.
5.
Bonus .
During the term of this Agreement, the Executive shall be entitled
to an annual bonus of 25% of his Base Salary (which percentage may
be increased in the discretion of the Board), to be determined
according to achievement of performance-related financial and
operating targets established annually for the Company and the
Executive by the Compensation Committee (or by the independent
members of the Board if there is no Compensation Committee).
Executive shall have reasonable input in the development of these
targets. Such performance targets for each fiscal year shall be
adopted by the Compensation Committee prior to the end of the prior
fiscal year. Each annual bonus shall be paid by the Company to the
Executive promptly after determination that the relevant targets
have been met, it being understood that the attainment of any
financial targets shall be determined after the results of the
annual audit are known.
6.
Expenses .
Executive shall be entitled to prompt reimbursement by the Company
for all reasonable ordinary and necessary travel, entertainment,
and other expenses incurred by Executive while employed (in
accordance with the policies and procedures established by the
Company for its senior executive officers) in the performance of
his duties and responsibilities under this Agreement; provided,
that Executive shall properly account for such expenses in
accordance with Company policies and procedures.
7.
Other Benefits .
During the term of this Agreement, the Executive shall be eligible
to participate in incentive, savings, retirement (401(k)), and
welfare benefit plans, including, without limitation, health,
medical, dental, vision, life (including accidental death and
dismemberment) and disability insurance plans (collectively,
"Benefit Plans"), in substantially the same manner and at
substantially the same levels as the Company makes such
opportunities available to the Company's managerial or salaried
executive employees.
8.
Vacation .
During the term of this Agreement, the Executive shall be entitled
to accrue, on a pro rata basis, 20 paid vacation days per year. The
Executive shall be entitled to carry over any accrued, unused
vacation days from year to year without limitation.
9.
Stock Options .
(a)
Grant of Options .
Upon the execution hereof, the Company shall grant the Executive
options to purchase an aggregate of 166,667 shares of the Company's
common voting stock ("Options") under the Company's 2007 Stock
Option Plan (the "Stock Option Plan"). Such grant shall be
evidenced by an Option Agreement as contemplated by the Stock
Option Plan. In subsequent years the Executive shall be eligible
for such grants of Options and other permissible awards under the
Stock Option Plan as the Compensation Committee or the Board shall
determine.
(b)
Option Price; Term .
The per share exercise price of the Options shall be $1.50, which
represents the fair market value per share of Company common stock
on the date of grant. The term of the Option shall be ten years
from the date of grant.
(c)
Exercise .
One forty-eighth (2.083%) of the Options shall become exercisable
on each monthly anniversary of the date of grant.
(d)
Payment .
The full consideration for any shares purchased by the Executive
upon exercise of the Options shall be paid either (i) in cash or
(ii) on a “cashless” basis in accordance with the terms
of the Stock Option Plan.
(e)
Termination of Employment; Accelerated Vesting
.
(1)
If
the Executive’s employment is terminated for Cause, as
such term is defined below, all Options, whether or not
vested, shall immediately expire effective the date of
termination of employment.
(2)
If
the Executive’s employment is terminated voluntarily by
the Executive without Good Reason, as such term is defined
below, all unvested Options shall immediately expire effective
the date of termination of employment. Vested Options, to the
extent unexercised, shall expire one month after the
termination of employment.
(3)
If
the Executive’s employment terminates on account of
death or Disability, as defined below, all unvested Options
shall immediately expire effective the date of termination of
employment. Vested Options, to the extent unexercised, shall
expire one year after the termination of
employment.
(4)
If
the Executive’s employment is terminated (A) in
connection with a Change of Control, as defined below, (B) by
the Company without Cause or (C) by the Executive for Good
Reason, all unvested Options shall immediately vest and become
exercisable effective the date of termination of employment,
and, to the extent unexercised, shall expire one year after
any such event.
10.
Termination of Employment .
(a)
Death .
If Executive dies during the Employment Period, this Agreement and
the Executive’s employment with the Company shall
automatically terminate and the Company shall have no further
obligations to the Executive or his heirs, administrators or
executors with respect to compensation and benefits accruing
thereafter, except for the obligation to pay to the
Executive’s heirs, administrators or executors any earned but
unpaid Base Salary and vacation pay, unpaid
pro rata annual
bonus through the date of death and reimbursement of any and all
reasonable expenses paid or incurred by the Executive in connection
with and related to the performance of his duties and
responsibilities for the Company during the period ending on the
termination date. The Company shall deduct, from all payments made
hereunder, all applicable taxes, including income tax, FICA and
FUTA, and other appropriate deductions. In addition, the
Executive’s spouse and minor children shall be entitled to
continued coverage, at the Company’s expense, under all
health, medical, dental and vision insurance plans in which the
Executive was a participant immediately prior to his last date of
employment with the Company.
(b)
Disability .
In the event that, during the term of this Agreement the Executive
shall be prevented from performing his duties and responsibilities
hereunder to the full extent required by the Company by reason of
Disability (as defined below) this Agreement and the
Executive’s employment with the Company shall automatically
terminate and the Company shall have no further obligations or
liability to the Executive or his heirs, administrators or
executors with respect to compensation and benefits accruing
thereafter, except for the obligation to pay the Executive or his
heirs, administrators or executors any earned but unpaid Base
Salary, unpaid
pro rata annual
bonus and unused vacation days accrued through the
Executive’s last date of Employment with the Company and
reimbursement of any and all reasonable expenses paid or incurred
by the Executive in connection with and related to the performance
of his duties and responsibilities for the Company during the
period ending on the termination date. The Company shall deduct,
from all payments made hereunder, all applicable taxes, including
income tax, FICA and FUTA, and other appropriate deductions through
the last date of the Executive’s employment with the Company.
For purposes of this Agreement, “Disabilit
y ”
shall mean a physical or mental disability that prevents the
performance by the Executive, with or without reasonable
accommodation, of his duties and responsibilities hereunder for a
period of not less than an aggregate of three months during any
twelve consecutive months.
(c)
Cause .
(1)
At
any time during the Employment Period, the Company may
terminate this Agreement and the Executive’s employment
hereunder for Cause. For purposes of this Agreement,
“Cause” shall mean: (a) the willful and continued
failure of the Executive to perform substantially his duties
and responsibilities for the Company (other than any such
failure resulting from a Disability) after a written demand by
the Board for substantial performance is delivered to the
Executive by the Company, which specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed his duties and responsibilities, which
willful and continued failure is not cured by the Executive
within thirty (30) days of his receipt of such written demand;
(b) the conviction of, or plea of guilty or
nolo contendere to,
a felony, (c), violation of Sections 11 or 12 of this Agreement, or
(d) fraud, dishonesty or gross misconduct which is materially and
demonstratively injurious to the Company. Termination under
sections 10(c)(1)(b), 10(c)(1)(c) or 10(c)(1)(d) above shall not be
subject to cure.
(2)
Upon
termination of this Agreement for Cause, the Company shall
have no further obligations or liability to the Executive or
his heirs, administrators or executors with respect to
compensation and benefits thereafter, except for the
obligation to pay the Executive any earned but unpaid Base
Salary and vacation pay, and reimbursement of any and all
reasonable expenses paid or incurred by the Executive in
connection with and related to the performance of his duties
and responsibilities for the Company during the period ending
on the termination date. The Company shall deduct, from all
payments made hereunder, all applicable taxes, including
income tax, FICA and FUTA, and other appropriate
deductions.
(d)
Change of Control .
For purposes of this Agreement, “Change of Control”
shall mean the occurrence of any one or more of the following: (i)
the accumulation, whether directly, indirectly, beneficially or of
record, by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended) of 50% or more of the shares of the outstanding
Common Stock of the Company, (ii) a merger or consolidation of
the Company in which the Company does not survive as an independent
public company or upon the consummation of which the holders of the
Company’s outstanding equity securities prior to such merger
or consolidation own less than 50% of the outstanding equity
securities of the Company after such merger or consolidation, or
(iii) a sale of all or substantially all of the assets of the
Company,
provided ,
however ,
that the following acquisitions shall not constitute a Change of
Control for the purposes of this Agreement: (A) any acquisitions of
Common Stock or securities convertible into Common Stock directly
from the Company, or (B) any acquisition of Common Stock or
securities convertible into Common Stock by any employee benefit
plan (or related trust) sponsored by or maintained by the
Company.
(e)
Good Reason .
(1)
At
any time during the term of this Agreement, subject to the
conditions set forth in Section 10(e)(2) below, the Executive
may terminate this Agreement and the Executive’s
employment with the Company for “Good Reason.” For
purposes of this Agreement, “Good Reason” shall
mean the occurrence of any of the following events: (A) the
assignment, without the Executive’s consent, to the
Executive of duties that are significantly different from, and
that result in a substantial diminution of, the duties that he
assumed on the Effective Date; (B) the assignment, without the
Executive’s consent, to the Executive of a title that is
different from and subordinate to the title Chief Financial
Officer and Treasurer; (C) any termination of the
Executive’s employm
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