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TERMINATION AND CONSULTING AGREEMENT
This
Termination and Consulting Agreement (this "Agreement") is
entered into on June 5, 2008, by and between Cytomedix, Inc.,
a Delaware corporation (the "Company"), and Kshitij Mohan (the
"Executive").
WHEREAS ,
the Executive currently serves as the Company’s Chairman of
the Board of Directors (the “Board”) and Chief
Executive Officer pursuant to that certain Employment Agreement,
dated as of April 20, 2004, as amended, by and between the Company
and the Executive (the "Employment Agreement"); and
WHEREAS ,
the parties have agreed to terminate the Employment Agreement
effective as of the close of business on June 30, 2008 (the
“Separation Date”) not for cause and by amicable
settlement; and
WHEREAS ,
the Company and the Executive desire that the Employment Agreement
be terminated and superseded to the extent set forth herein;
and
WHEREAS ,
the Company desires that, following his departure from the Company,
the Executive provide services to the Company as an independent
contractor on an as needed and as available basis; and
WHEREAS ,
the Executive desires to provide such services as an independent
contractor.
NOW, THEREFORE ,
in consideration of the mutual representations, promises and
agreements contained herein, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Executive hereby agree
as follows:
1.
Term of Agreement .
The Company hereby engages the Executive as a consultant, subject
to the terms and conditions hereof, for the period commencing as of
the Separation Date and ending on June 30, 2010 (the "Consulting
Period"), except as the Consulting Period may be extended by mutual
written agreement of the parties hereto.
2.
Consulting Services .
(a)
During
the Consulting Period, the Executive shall perform consulting
services (the “Consulting Services”) for the
Company on an “as needed” basis, subject to
Executive’s availability to perform the Consulting
Services. The Company’s request for Executive to perform
Consulting Services shall be at the sole discretion of the
Company, subject to advance notice and the Executive’s
availability. The Executive shall perform the Consulting
Services at times and places reasonable and convenient to
Executive, subject to Executive’s sole discretion as to
his availability to perform the Consulting
Services.
(b)
The
Executive agrees to exercise the highest degree of
professionalism and utilize his expertise and talents in
responding to the Company’s or the Board’s
requests. Such Consulting S ervices
are anticipated to include, without limitation, working with
Company management at a strategic level with respect to the
Company's development and product acquisition activities,
capital structure, investor relations and reduction of
production costs, and to follow up on clinical trials as well
as any other matters and activities with respect to which the
Company management may require Executive’s services. The
Executive will devote such business time, subject to
Executive’s availability, as is reasonably necessary or
desirable to accomplish his duties and responsibilities under
this Agreement.
(c)
It
is acknowledged and agreed by the Company that Executive
carries neither professional licenses nor memberships in any
self-regulatory organizations. It is further acknowledged and
agreed by the Company that the Executive is not rendering
expert or legal advice or performing accounting services and
is not acting and shall not act as an investment advisor or
broker/dealer within the meaning of any applicable state or
federal securities laws. No portion of the services rendered
pursuant to this Agreement shall be provided in connection
with the offer or sale of securities in a capital raising
transaction or for the purpose of directly or indirectly
promoting or maintaining a market for the Company’s
securities. The Company shall not require Executive to perform
any services inconsistent with the foregoing. The Company
acknowledges and agrees that Executive is one of multiple
sources of advice obtained by the Company and is not the sole
source of advice nor the final decision maker for any aspect
of the Company’s operations or actions. The Executive
further acknowledges and agrees that the Company may or may
not follow Executive’s advice, but if the Company does
follow all or part of Executive’s advice, it shall be
after independent legal or other appropriate validation and
the Company takes full and sole responsibility for all
decisions and actions of the Company regardless of whether or
not they were related to the services provided by
Executive.
(d)
The
Company also acknowledges and agrees that the Executive will
be free to take on any consulting projects, employment or any
other activities, provided that it does not violate the
confidentiality and non-competition provisions of this
Agreement. While the Executive will attempt to make himself
reasonably available to provide Consulting Services to the
Company, such availability will be subject to the
circumstances faced by the Executive at the time, including,
but not limited to, conditions of his employment or
professional activities, prior commitments or health
status.
3.
Independent Contractor .
(a)
The
Executive shall provide the Consulting Services described in
Section 2 as an independent contractor without the power to
bind or represent the Company for any purpose whatsoever.
Nothing herein contained shall be construed to constitute the
parties hereto as partners or as joint venturers, or either as
agent of the other, or as employer and employee. During the
Consulting Period, the Executive shall not present himself as
an employee of the Company or any of its
affiliates.
(b)
Except
as specified in this Agreement, the Executive shall not be
entitled to participate in any employee benefit plans
maintained on behalf of the Company or any of its affiliates
during the Consulting Period. The Executive hereby
acknowledges that if the Company compensates Executive for the
Consulting Services, the Company shall not withhold income
taxes or withhold or make payments for social security, make
unemployment insurance or disability insurance contributions,
or obtain worker’s compensation insurance on
Executive’s (or his employees’ or agents’)
behalf. The Executive hereby acknowledges his separate
responsibility for all federal, state and local income taxes,
Federal Insurance Contribution Act taxes, payroll, workers'
compensation and unemployment compensation taxes and business
license fees, if applicable, for all compensation and benefits
under this Agreement.
(c)
Subject
only to such specific limitations as are contained in this
Agreement, the manner, means, details or methods by which the
Executive performs the Consulting Services shall be solely
within the discretion of the Executive. The Company shall not
have the authority to, nor shall it, supervise, direct or
control the manner, means, details or methods utilized by the
Executive to perform the Consulting Services and nothing in
this Agreement shall be construed to grant the Company any
such authority.
4.
Severance Pay and Compensation .
(a)
Severance Pay .
In settlement of the severance pay requirements in the Employment
Agreement related to termination “Not For Cause”, the
Executive shall receive payments (each a “Severance
Payment”, collectively “Severance Payments”) in
the amount equal to five hundred thousand dollars ($500,000)
payable in twenty four (24) equal monthly installments in arrears
at the end of each month. The Company shall make the first
Severance Payment to Executive at the end of the first month after
the Effective Date (as defined in Section 7 of this
Agreement).
(b)
Outstanding Equity Awards .
The Company and the Executive acknowledge and agree that all of the
stock options previously awarded by the Company to the Executive
and vested as of the date hereof as set forth in
Exhibit A hereto
(each an “Option”, and collectively referred to the
“Options”), shall:
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(i)
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remain
in full force and effect, and
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(ii)
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continue
to be governed by the terms of the applicable stock option grant
notices and agreements between the Company and the Executive
regarding the Options.
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Notwithstanding
the foregoing, Company represents, warrants and agrees that
the Options are fully vested as set forth in
Exhibit A and
will not terminate (and Executive’s ability to exercise each
Option will not expire) until the close of business on the
expiration dates set forth in each respective option grant notice
and agreement (such expiration dates are also set forth in Exhibit
A), which is the last day of the tenth (10
th )
year following the date of grant of each Option. The Company
further represents, warrants and agrees that, consistent with the
terms and provisions of the Executive’s Employment Agreement,
in the event of Executive’s death or disability, the Options
will remain vested and exercisable by the Executive’s estate
or the Executive (in case of his disability) until the close of
business on the expiration dates set forth in each respective
option grant notice and agreement (such expiration dates are also
set forth in Exhibit A), which is the last day of the tenth
(10
th )
year following the date of grant of each Option. Under no
circumstances will the termination of Executive’s consulting
with the Company affect the foregoing provisions. The Company
hereby agrees to effect such changes and amendments to its
agreements, plans and other written instruments setting forth the
terms and provisions of the Options as it may deem necessary or
appropriate to carry out the purposes of this Section
4(b).
(c)
Additional Payment for Counsel Fees and Costs
.
Within ten (10) days after the Separation Date, the Company shall
make an additional payment to Executive to reimburse Executive for
the fees and costs incurred by Executive’s counsel’s
review of this Agreement; provided, however, that such
reimbursement shall not exceed the sum of $5,000.
(d)
No Other Severance Pay .
Except as set forth in this Agreement, the Executive acknowledges
and agrees that he will not enforce the Company’s obligations
to pay the other severance or termination pay or benefits under
Section 5 of the Employment Agreement.
(e)
Vacation Pay .
The Executive shall be reimbursed for all accrued but unused
vacation time as of the Separation Date, which vacation time is not
to exceed two hundred (200) hours on or before June 30,
2008.
(f)
Health Benefits .
The Company agrees to continue to make available and pay the same
proportion of the deductible and portion of the premium as it
currently does for participation for the Executive and his spouse,
Mrs. Meenakshi Mohan, to the extent each is eligible under Maryland
continuation of benefits laws, in the Company’s health
benefit plans (including medical and dental plans) or programs
equivalent to those that are offered to the key executive employees
of Company as may be established from time to time by the Company
management or its Board of Directors (the “Health
Plans”) on substantially the same basis as is in effect for
the Company’s active employees for a period of eighteen (18)
months commencing on the first day of the month next-following the
Separation Date (the “Continuation Period”). If and to
the extent Executive and his spouse cease to be eligible for
coverage under the Health Plans, respectively, at any point after
the commencement of the Continuation Period but prior to the end of
the Continuation Period, continuation coverage under the Health
Plans or any available alternate coverage shall be provided to the
Executive and his spouse in accordance with the applicable
requirements of Maryland law for up to eighteen (18) months (the
“Continuation Coverage”); provided, that any such
Continuation Coverage shall be provided at the same proportion of
the deductible and portion of the premium, if available, as may
then be in effect for the Company’s active employees
generally. In the event the Executive’s or his spouse’s
eligibility for Continuation Coverage ends prior to the expiration
of the Continuation Period, the Company shall, upon the
presentation of receipts or invoices, promptly reimburse the
Executive and/or his spouse for the costs of any replacement
coverage they may thereafter secure until the end of the
Continuation Period; provided, that the amount of the
Company’s reimbursement for such alternative coverage shall
be no greater than hundred and fifty percent (150%) of the cost of
coverage it otherwise would have provided to the Executive in
connection with the Continuation Coverage (the “Coverage
Maximum”). The Executive acknowledges and agrees that the
Company’s obligations to pay or reimburse the costs of such
Continuation Coverage or alternative coverage shall terminate at
the end of the Continuation Period. The Executive acknowledges and
agrees that the Company’s reimbursement for the alternative
coverage contemplated hereunder shall be limited to the Coverage
Maximum. The Executive further acknowledges and agrees to pay all
federal, state and any other taxes in connection with or caused by
the Company’s providing the Continuation Coverage (or
alternative coverage) contemplated hereunder; provided, however, in
the event that the Company reports any such Continuation Coverage
as a taxable benefit to the Executive, the Company hereby agrees to
provide the Executive written notice of any such
report.
(g)
Additional Benefits .
In the event of the Executive’s death, benefits due to the
Executive shall be paid in full to the Executive’s spouse,
Mrs. Meenakshi Mohan, or if she predeceases him, to his son, Vivek
Mohan, and daughter, Kavita Mohan, in equal shares.
5.
Reference Inquiries .
In the event that any person or entity requests information
regarding Executive’s employment with the Company, the
Company will inform the inquiring party that Executive’s
employment with the Company ended by mutual agreement and that
Executive has transitioned from being an employee of the Company to
an independent consultant to the Company. Notwithstanding the
foregoing, the Company acknowledges that it terminated the
Employment Agreement Not for Cause pursuant to Section 5.6 of the
Employment Agreement. In addition, Executive may refer potential
employers or clients to Andrew Maslan, Chief Financial Officer of
the Company.
6.
Intentionally deleted .
7.
Termination of the Employment Agreement; Mutual Release and
Covenant Not To Sue .
(a)
Except
as otherwise provided in this Agreement, the Company and the
Executive hereby represent, warrant and agree that, except as
expressly set forth in this Agreement, the Employment
Agreement executed by such parties is hereby terminated and
canceled, and is of no further force and effect, effective
immediately upon the execution of this Agreement by each party
thereto. Except for any agreements between the Company and the
Executive regarding the Options, directors’ and
officers’ (D&O) liability insurance coverage of
Executive provided by the Company, or the indemnification
rights to which Executive may be entitled from the Company,
this Agreement supersedes and extinguishes any agreements or
understandings, whether oral or written, made between the
Company and the Executive at any time prior to the date of
this Agreement, including, but not limited to, the Employment
Agreement. The Executive hereby appoints the Chief Financial
Officer of the Company as its agent and attorney-in-fact for
the limited purpose of taking any and all action necessary or
deemed advisable by such attorney and agent-in-fact to cause
the Employment Agreement to be terminated and canceled, such
appointment to be effective once this Agreement has been
executed by the Company and delivered to the
Executive.
(b)
Except
for claims arising under any agreement between the Company and
the Executive regarding the Options, the Company’s
directors’ and officers’ (D&O) liability
insurance coverage of Executive, and the indemnification
rights to which Executive may be entitled from the Company,
the Executive, for himself and his respective heirs,
executors, representatives, beneficiaries and assigns,
irrevocably and unconditionally releases and discharges the
Company, together with its officers, directors, shareholders,
partners, employees, administrators, representatives,
beneficiaries, attorneys and assigns (the "Released Persons"),
from any and all claims, demands, causes of action, actions,
judgments, liens, indebtedness, costs, damages, obligations,
attorneys’ fees, losses and liability of whatever kind
and character, that are known to the Executive as of the
Effective Date, in law or equity, liquidated or unliquidated,
whether asserted personally, derivatively or in any other
capacity, arising from, referring to, relating to or in
connection with events, acts or conduct at any time prior to
and including the execution date of this Agreement, including,
without limiting the foregoing, (i) any claims relating to or
arising out of the Employment Agreement including, but not
limited to breach of contract, breach of covenant of good
faith and fair dealing, fraud, promissory or equitable
estoppel, misrepresentation, violation of public policy,
wrongful discharge, unfair dismissal, or any other common law
claim now or hereafter recognized; (ii) any claims for unpaid
or withheld wages, vacation, paid time off, sick and/or
personal time pay, severance pay, notice, bonuses, and/or
other compensation or benefits of any kind; (iii) any and all
claims of discrimination in employment arising before the
execution of this Agreement, including, but not limited to
claims for discrimination or harassment on the basis of age,
sex, race, religion, color, creed, handicap, disability,
citizenship, national origin, sexual orientation or any other
factor protected by Title VII of the Civil Rights Act of 1964,
The Americans with Disabilities Act, T
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