General Counsel Employment Agreement

EXHIBIT 10.80


EXHIBIT 10.80


PHILIP K. YACHMETZ
EMPLOYMENT AGREEMENT


EXHIBIT 10.80


EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT is made as of this 8th day of June, 1998 (the "Effective Date"), by and between CYTOTHERAPEUTICS, INC., a Delaware corporation ("Employer") having its principal place of business at 701 George Washington Highway, Lincoln, Rhode Island 02865 and PHILIP K. YACHMETZ ("Employee") with a principal residence at 7 North Koewing Place, West Orange, New Jersey 07052-4014, collectively referred to as the "parties."


RECITALS


Whereas Employer desires to employ Employee at its Lincoln, Rhode Island Facility and Employee desires to be so employed,


The parties enter this Agreement to set forth the terms and conditions of Employee's employment by Employer, to address certain matters related to Employee's employment with Employer, and Employee's loyalty and commitment to Employer.


NOW THEREFORE, in consideration of these promises and the parties' material covenants, representations, and warranties made herein, the parties agree as follows:


STATEMENT OF AGREEMENT


SECTION 1. EMPLOYMENT


a. Position. Employer wishes to employ and Employee hereby accepts the position of Senior Vice President - Business Development, General Counsel and Secretary for the term of this Agreement. Employee shall report directly to Employer's Chief Executive Officer.


b. Employee's Commitment. Employee shall consider his employment by Employer as his principal employment, shall devote his full business time and attention to his duties and responsibilities under this Agreement, and shall perform them to the best of his abilities. While subject to any provision of this Agreement, Employee shall maintain loyalty to Employer, and shall take no action that would directly or indirectly promote any competitor or injure Employer's interests. Subject to the foregoing, employee may engage in other charitable or business activities to the extent that they do not interfere or create a conflict with his obligations under this Agreement; provided that Employee first discloses any such activities to Employer, and that Employee's


continued participation in any such activity shall be subject to Employer's ongoing approval, which may be withheld at Employer's sole discretion.


c. Duties. Employee's primary duties and responsibilities as Senior Vice President - Business Development, General Counsel and Secretary shall be to:


(1) Direct and oversee all legal matters pertaining to CTI, including contractual relationships, general corporate and securities matters, patent, copyright and the coordination of any legal matters handled by outside counsel.


(2) Direct the research and analysis of such business opportunities, strategic partnerships, alliances and collaborations, including the establishment and recommendation of strategic initiatives as directed by the Employer's CEO from time to time; responsible for implementation of such strategic initiatives of Senior Management as directed by the Employer's CEO from time to time, including the negotiation of agreements related to external alliances, direct the policies and programs related to corporate licensing objectives for the acquisition of licensing opportunities and techniques.


(3) Serve as corporate secretary of the Company and its subsidiaries.


SECTION 2. COMPENSATION, BENEFITS AND EXPENSES


a. Salary. Subject to Subsection 2b, Employer shall pay Employee as salary of Two Hundred Fifty Thousand dollars ($250,000.00) annually, payable in accordance with Employer's payroll practices in effect from time to time.


b. Bonus.


(1) Employee shall receive a "sign on" bonus of Fifteen Thousand Dollars ($15,000) payable, $10,000 in cash and $5,000 in registered shares of Employer's common stock (2,712 shares), calculated at the price per share of $1.84375 ($1 27/32) per share, the closing price of the Employer's common stock as quoted on the Nasdaq stock exchange for the Effective Date of Employment.


(2) In addition, Employee shall be eligible (in the sole discretion of the Employer) to receive performance related bonuses at the end of each calendar year, including 1998, in a percentage amount of base salary similar to that for which other members of the Employer's senior management are eligible or are awarded under guidelines in effect at such time. Employee's bonus shall be based on (i) the reduction in comparable outside legal fees versus the base period of January 1, 1998 through June 30, 1998, (ii) the level of cash funding received by Employer from business development transactions with third parties in which Employee is materially involved, and (iii) the attainment of other specific performance objectives mutually agreed with Employer's


Chief Executive Officer. The payment and amount of any such bonus shall be determined in the sole discretion of the Employer and its Board of Directors.


c. Stock Options. Through the Employer's 1992 Equity Incentive Plan (the "Incentive Plan") and subject to the terms and conditions set forth herein, Employee is hereby granted, as of the Effective Date of this Agreement, an option to acquire 75,000 shares of the common stock of the Employer at a strike price per share equal to the closing price of the Employer's common stock on the date such option is approved by the Employer's Board of Directors or such other strike price as may be specified by the Board of Directors. The time-based option will vest as follows: (i) 30,000 of the shares will vest on the Effective Date, and (ii) the remaining 45,000 shares shall vest at the rate of 3,000 shares per month on each monthly anniversary of the Effective Date so long as Employee continues to be employed hereunder. Employee shall have one (1) year from the last such vesting date within which to exercise such option. The expiration of the Initial Term of this Agreement shall not effect the validity, the vesting schedule or the exercise period of such option granted Employee.


The compensation set forth in Sections 2a, 2b and 2c may be increased from time to time at the will and discretion of Employer.


d. Relocation. As soon as reasonably practicable following the Effective Date, Employee will establish his principal office at the Company's offices in Lincoln, Rhode Island and a temporary residence within driving distance of such office. The Employer shall pay or reimburse Employee up to an amount not to exceed $2,500 per month for all costs of such temporary housing and related expenses, including, but not limited to, apartment rent and security deposit, furniture rental, utilities, cable television, basic telephone service and similar expenses, for the term of this Agreement and for such additional period while Employee is still rendering services to the Employer pursuant to Section 4.a.(1) (collectively the "Temporary Residence Period"). Employer shall also during the Temporary Residence Period pay or reimburse Employee for two (2) round trip airfares per month to the New Jersey/New York area for use by Employee or his daughter. Until such time as Employee has established his temporary residence in Rhode Island, Employer shall reimburse Employee for hotel, travel, meal and related costs to and from New Jersey. The cost of Employee's temporary housing and the cost of the two (2) round trips airfares set forth above are hereinafter collectively referred to as the "Temporary Relocation Expenses."


e. Benefits. Employee will be entitled to participate in any and all employee benefit plans from time to time in effect for senior management of the Employer generally, including, but not limited to, medical, dental and hospitalization plans, retirement and 401(k) savings plans, life insurance and accidental death plans, disability plans, etc., except to the extent that such plans provide duplicative benefits or a lower level of benefits than that specifically provided Employee herein. Additionally, Employee shall be entitled to participation similar to that provided other members of


Employer's senior management in any supplemental stock or option grants, stock appreciation rights awards, phantom stock rights, "golden parachute" or "golden handcuff" policies of the Employer in effect as of the Effective Date or adopted by Employer thereafter for the general benefit of its senior management. Employee's participation shall be subject to (i) the terms of the applicable plan documents, (ii) generally applicable policies of the Employer, and (iii) the discretion of the Board of Directors of the Employer and plan administrators, as provided for or contemplated by such plan. Employee will be entitled to four (4) weeks vacation per year. Employer will provide Employee with a leased automobile at a cos ...