UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 26, 2007
NEOSTEM, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-10909 22-2343568
-------- ------- ----------
(State Or Other Jurisdiction (Commission (IRS Employer
Of Incorporation) File Number) Identification No.)
420 Lexington Avenue, Suite 450
New York, New York 10170
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212)-584-4814
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
Effective as of January 26, 2007, concurrently and in connection with
entering into the subscription agreements for the sale to accredited investors
of units (the "Units"), comprised of two shares of its common stock, par value
$.001 per share (the "Common Stock"), one redeemable seven-year warrant to
purchase one share of Common Stock at a purchase price of $.80 per share and one
non-redeemable seven-year warrant to purchase one share of Common Stock at a
purchase price of $.80 per share (together, the Warrants), at a per Unit price
of $1.00 for aggregate consideration of $1,920,000 (the "Financing"), the
officers of the Company entered into letter agreements with the Company amending
or supplementing their employment agreements or entered into a new employment
agreement, as follows, each of which included a reduction in the salary of the
officer from that to which the officer was entitled under the terms of his or
her respective employment agreement.
The Company entered into a letter agreement with Dr. Robin L. Smith, its
Chairman of the Board and Chief Executive Officer, pursuant to which Dr. Smith's
employment agreement dated as of May 26, 2006 was amended to provide that: (a)
the term of her employment would be extended to December 31, 2010; (b) upon the
closing of the Financing, Dr. Smith's base salary would be increased to $250,000
(such amount being $25,000 less than the amount to which Dr. Smith would have
otherwise been entitled under her original employment agreement); (c) her base
salary would be increased by 10% on each one year anniversary of the agreement;
(d) no cash bonus would be paid to Dr. Smith for 2007; (e)cash bonuses and stock
awards under the Company's 2003 Equity Participation Plan ("2003 EPP") would be
fixed at the end of 2007 for 2008, in an amount to be determined; and (f) upon
termination of Dr. Smith's employment by the Company without cause or by Dr.
Smith with good reason, the Company shall pay to Dr. Smith her base salary for
the two year period following such termination. Other than as set forth therein,
Dr. Smith's original employment agreement and all amendments thereto remain in
full force and effect. In connection with the Financing, on January 18, 2007 Dr.
Smith was also granted an option under the 2003 EPP to purchase 550,000 shares
of the Common Stock at a per share exercise price equal to $.50 vesting as to
(i) 250,000 shares upon the closing of the Financing; (ii) 150,000 shares on
June 30, 2007; and (iii) 150,000 shares on December 31, 2007.
The Company entered into a letter agreement with Mark Weinreb, its
President, pursuant to which Mr. Weinreb's employment agreement dated as of
August 12, 2005 was supplemented with new terms which provide that: (a) upon the
closing of the Financing, Mr. Weinreb's base salary would be paid at the annual
rate of $200,000 (an annual rate which is 20% lower than the amount to which he
was otherwise entitled under his employment agreement); (b) he would be entitled
to quarterly bonuses of $5,000 commencing March 31, 2007; (c) he would be
entitled to bonuses ranging from $3,000 to $5,000 upon the Company achieving
certain business milestones (as follows: (i) a $5,000 bonus for every fifty
collection fees paid to the Company; (ii) a $5,000 bonus for every five
collection agreements signed and for which the fee is collected by the Company;
and (iii) a $3,000 bonus for every twenty five fees paid to the Company for
collection through certain strategic alliances negotiated by Mr. Weinreb; (d)
any other bonuses would only be paid upon approval by the Compensation Committee
of the Board of Directors; and (e) in the event of termination of employment,
severance would be paid over a 12 month period in accordance with the payroll
policies and practices of the Company. Further, an option to purchase 100,000
shares of Common Stock at $.60 per share, previously granted to Mr. Weinreb on
December 5, 2006 and tied to the opening of certain collection centers, vested
upon the execution of the agreement. This supplemental agreement will terminate
upon the Company achieving certain revenue, financing or adult stem cell
collection milestones, or at the discretion of the Compensation Committee of the
Board of Directors. Other than as set forth therein, Mr. Weinreb's original
employment agreement and all amendments thereto remain in full force and effect.
The Company entered into a letter agreement with Larry A. May, its Chief
Financial Officer, pursuant to which Mr. May's employment agreement dated as of
January 19, 2006 was supplemented with new terms to provide that: (a) upon the
closing of the Financing, Mr. May's base salary would be paid at the annual rate
of $132,000 (an annual rate which is 20% lower than the amount to which he was
otherwise entitled under his original employment agreement); (b) any bonus would
only be paid upon approval by the Compensation Committee of the Board of
Directors; and (c) in the event of termination of employment, severance would be
paid over a 12 month period in accordance with the payroll policies and
practices of the Company. This supplemental agreement will terminate upon the
Company achieving certain revenue, financing or adult stem cell collection
milestones, at the discretion of the Compensation Committee of the Board of
Directors or at such time as Mr. May is no longer the Company's Chief Financial
Officer. Other than as set forth therein, Mr. May's original employment
agreement and all amendments thereto remain in full force and effect.
The Company entered into a letter agreement with Catherine M. Vaczy
pursuant to which Ms. Vaczy serves as the Company's Vice President and General
Counsel. This agreement supercedes Ms. Vaczy's employment agreement dated as of
April 20, 2005 and all amendments thereto. Subject to the terms and conditions
of the letter agreement, the term of Ms. Vaczy's employment in such capacity
will continue through December 31, 2008. In consideration for her services under
the letter agreement, Ms. Vaczy will be entitled to receive a minimum annual
salary of $150,000 during 2007 (such amount being 20% less than the annual
salary to which Ms. Vaczy would have been entitled commencing April 20, 2007
pursuant to the terms of her original employment agreement) and a minimum annual
salary of $172,500 during 2008.
In the event Ms. Vaczy's employment is terminated prior to the end of the
term of her letter agreement, for any reason, earned but unpaid cash
compensation and unreimbursed expenses due as of the date of such termination
will be payable in full. In addition, in the event Ms. Vaczy's employment is
terminated prior to the end of the term for any reason other than by the Company
with cause or Ms. Vaczy without good reason, Ms. Vaczy or her executor of her
last will or the duly authorized administrator of her estate, as applicable,
will be entitled to receive severance payments equal to $187,500 in the event
the employment termination date is during 2007 and $215,700 in the event the
employment termination date is during 2008. In the event her employment is
terminated prior to the end of the term by the Company without cause or by Ms.
Vaczy for good reason, all options granted by the Company will immediately vest
and become exercisable in accordance with their terms. No other payments shall
be made, nor benefits provided, by the Company in connection with the
termination of employment prior to the end of the term, except as otherwise
required by law. No severance payments will be payable without Ms. Vaczy first
providing the Company with a release in customary form.
Ms. Vaczy is also entitled to receive a cash bonus upon the occurrence of
each of the following milestones: (a) $5,000 upon the closing of the Financing;
and (b) $7,500 upon the next registration statement (other than a Form S-8)
being declared effective by the Securities and Exchange Commission. Ms. Vaczy
shall also be eligible for additional cash bonuses as follows, in each case as
may be approved by the Compensation Committee of the Board of Directors: (a) for
other tasks and responsibilities as mutually agreed, such as foundation legal
counsel; (b) pursuant to milestones for 2008 as shall be set no later than
December 31, 2007 by Ms. Vaczy and the Company's Chief Executive Officer, which
the Chief Executive Officer shall recommend to the Compensation Committee of the
Board of Directors for their vote thereon; and (c) as may be approved from time
to time.
Ms. Vaczy is also entitled to payment or reimbursement of certain expenses
(including a car allowance equal to $1,000 per month) incurred by her in
connection with the performance of her duties and obligations under the letter
agreement, and to participate in any incentive and employee benefit plans or
programs which may be offered by the Company and in all other plans in which the
Company executives participate.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
---------
Exhibit 10.1 January 26, 2007 Amendment to Employment Agreement of Robin
Smith
Exhibit 10.2 January 26, 2007 Amendment to Employment Agreement of Mark
Weinreb
Exhibit 10.3 January 26, 2007 Amendment to Employment Agreement of Larry A.
May
Exhibit 10.4 January 26, 2007 Employment Agreement with Catherine M. Vaczy
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEOSTEM, INC.
By: /s/ Catherine M. Vaczy
Catherine M. Vaczy
VP and General Counsel
Dated: January 31, 2007
EXHIBIT INDEX
-------------
Exhibit Number Description
- -------------- -----------
Exhibit 10.1 January 26, 2007 Amendment to Employment Agreement of Robin
Smith
Exhibit 10.2 January 26, 2007 Amendment to Employment Agreement of Mark
Weinreb
Exhibit 10.3 January 26, 2007 Amendment to Employment Agreement of Larry A.
May
Exhibit 10.4 January 26, 2007 Employment Agreement with Catherine M. Vaczy
Exhibit 10.1
January 26, 2007
Dr. Robin L. Smith
930 Fifth Avenue
Suite 8H
New York, NY 10021
Dear Robin:
This letter is being written to serve as an amendment to the employment
agreement by and between you and NeoStem, Inc. (the "Company") dated as of May
26, 2006 pursuant to which you serve as the Company's Chairman of the Board and
Chief Executive Officer (the "Agreement"). Except as set forth herein, your
employment agreement shall remain unchanged. Initially capitalized terms used
herein but not defined herein shall have the meaning set forth in the Agreement.
1. Base Salary.
-----------
Upon the closing of the Company's current equity financing, your Base Salary
shall be increased to $250,000. During the Term of the Agreement, your Base
Salary shall be increased by 10% on each one year anniversary of the execution
of this Amendment.
2. Cash and Stock Bonuses.
----------------------
No cash bonus shall be paid for 2007. Cash bonuses and stock awards under the
Company's 2003 Equity Participation Plan shall be fixed at the end of 2007 for
2008, in an amount to be determined.
3. Term.
----
The Term of the Agreement is hereby extended until December 31, 2010.
4. Severance
---------
Section 7(b)(i) of the Agreement is hereby amended to read in its entirety as
follows:
"(b) Termination of Your Employment by the Company Without Cause or
Voluntary Termination by You With Good Reason. If the Company terminates
your employment without Cause or if you terminate your employment with Good
Reason the following shall apply:
(i) The Company shall pay to you the Base Salary at the time of
termination for a period equal to two years following the date of such
termination (the "Severance Period"). You shall be under no obligation
to secure alternative employment during the Severance Period, and
payment of the Base Salary shall be made without regard to any
subsequent employment you may obtain."
5. Acknowledgement of Stock Option Grant.
-------------------------------------
You hereby acknowledge the grant to you on January 18, 2007 of an option under
the EPP to purchase 550,000 shares of the Company's common stock, $.001 par
value (the "Common Stock") at a per share exercise price equal to $.50 vesting
as to (i) 250,000 shares upon the closing of the Company's current equity
financing; (ii) as to 150,000 shares on June 30, 2007 and (iii) as to 150,000
shares on December 31, 2007; and shall otherwise be subject to all of the terms
and conditions of the EPP.
Except as provided in this letter agreement, the terms of the Employment
Agreement shall remain unchanged.
Very truly yours,
NeoStem, Inc.
By: /s/ Richard Berman
Name: Richard Berman
Title: Chair, Compensation Committee
Accepted and Agreed:
/s/ Robin Smith
Robin Smith
Exhibit 10.2
NeoStem, Inc.
420 Lexington Avenue
Suite 450
New York, New York 10170
Attention: Robin Smith, CEO
January 22, 2007
Dear Robin:
This letter is being written to confirm certain understandings relating to my
employment with NeoStem, Inc. (the "Company").
I understand that in connection with a proposed financing by the Company (the
"Financing") in which Emerging Growth Equities is acting as placement agent,
certain key employees of the Company as a condition to such Financing moving
forward are being asked to make certain agreements relating to their employment
by the Company.
Accordingly, for valuable consideration, the receipt of which is hereby
acknowledged, I hereby agree that commencing with the closing of the Financing:
1. My base salary shall be paid at an annual rate which is 20% below the
$250,000 to which I am otherwise entitled pursuant to my employment
agreement with the Company dated August 12, 2005, as amended from time to
time.
2. Any vacation time to which I am entitled under my employment agreement that
is unused during a calendar year shall be forfeited without compensation.
3. I will be entitled to the following bonuses based on the criteria set
forth:
Quarterly payments of $5000 commencing March 31, 2007. These payments are
payable on the last payroll of each quarter
For every 50 collections NeoStem is paid after the execution of this
letter, I will receive $5000 to be paid after the fee is collected, in
accordance to payroll practices
For every 5 collection agreements which NeoStem signs, I will receive $5000
to be paid after the deposit fee is collected, in accordance to payroll
practices
For every strategic alliance agreement which I negotiate, (insurance,
med-spa etc, exclusive of grants), I will be paid a $3000 bonus when 25
collections have been paid to NeoStem as a result of the agreement.
4. In the event of my termination, I agree to take my severance in equal
installments over a 12 month period in accordance with the payroll policies
and practices of the company.
5. The 100,000 options granted in December of 2006 tied to opening of the
collection centers in NY and California will vest when this letter becomes
effective.
This letter agreement shall terminate upon the first to occur of the following:
1. The date on which the Company processes and stores 1,000 adult stem
cell collections.
2. The date on which the Company achieves cumulative revenues of
$3,500,000 with the measurement period commencing on January 1, 2007.
3. The date on which the Company raises a cumulative of $6,000,000
pursuant to equity or debt financings with the measurement period
commencing on January 1, 2007.
4. The date on which the Compensation Committee of the Board of Directors
of the Company determines in its sole discretion to terminate this
letter agreement.
Except as contained herein, my employment agreement and any amendments thereto
with the Company shall remain in full force and effect.
Please acknowledge your agreement with the foregoing by countersigning this
letter agreement as provided below.
Very truly yours,
/s/ Mark Weinreb
- ----------------
Accepted and agreed:
NeoStem, Inc.
By: /s/Robin Smith
Name: Robin Smith
Title: CEO
2
Exhibit 10.3
NeoStem, Inc.
420 Lexington Avenue
Suite 450
New York, New York 10170
Attention: Robin Smith, CEO
January 18, 2007
Dear Robin:
This letter is being written to confirm certain understandings relating to my
employment with NeoStem, Inc. (the "Company").
I understand that in connection with a proposed financing by the Company (the
"Financing") in which Emerging Growth Equities is acting as placement agent,
certain key employees of the Company as a condition to such Financing moving
forward are being asked to make certain agreements relating to their employment
by the Company.
Accordingly, for valuable consideration, the receipt of which is hereby
acknowledged, I hereby agree that commencing with the closing of the Financing:
1. My base salary shall be paid at an annual rate which is 20% below the
rate to which I am otherwise entitled pursuant to my employment
agreement with the Company, as amended from time to time. For the
purpose of clarity, the letter agreement between me and the Company
dated as of June 2, 2006 shall not be deemed an amendment to my
employment agreement.
2. Any vacation time to which I am entitled under my employment agreement
that is unused during a calendar year shall be forfeited without
compensation.
3. Any bonus above base salary shall only be paid upon approval by the
Compensation Committee of the Board of Directors.
I further acknowledge that my expense reimbursement from the Company shall be
governed by the Company's standard policies and procedures applicable to all
employees as approved by the Company from time to time.
This letter agreement shall terminate upon the first to occur of the following:
1. The date on which the Company processes and stores 1,000 adult stem
cell collections.
2. The date on which the Company achieves cumulative revenues of
$3,500,000 with the measurement period commencing on January 1, 2007.
3. The date on which the Company raises a cumulative of $6,000,000
pursuant to equity or debt financings with the measurement period
commencing on January 1, 2007.
4. The date on which the Compensation Committee of the Board of Directors
of the Company determines in its sole discretion to terminate this
letter agreement.
5. I no longer serve as the CFO.
Except as contained herein, my employment agreement and any amendments thereto
with the Company shall remain in full force and effect.
Please acknowledge your agreement with the foregoing by countersigning this
letter agreement as provided below.
Very truly yours,
/s/Larry May
Accepted and agreed:
NeoStem, Inc.
By: /s/Robin Smith
Name: Robin Smith
Title: CEO
2
Exhibit 10.4
NEOSTEM, INC.
420 Lexingnton Avenue
Suite 450
New York, New York 11747
212.584.4180
January 26, 2007
Ms. Catherine M. Vaczy
140 East 28th Street
Apartment #11C
New York, New York 10016
Dear Ms. Vaczy:
Reference is made to your employment agreement with the Company dated as of
April 20, 2005 (the "Original Agreement") pursuant to which you serve as the
Vice President and General Counsel ("General Counsel") of NeoStem, Inc. (the
"Company").
You and the Company have agreed to enter into a new agreement (the
"Agreement") that will supercede the Original Agreement and govern the terms of
your employment by the Company. Accordingly, the terms hereof shall govern your
employment by the Company and the Original Agreement shall cease to be effective
as of the execution hereof. As you know, the Company is a public company engaged
in the collection, processing and storage of adult stem cells. As General
Counsel, you will be responsible for overseeing the Company's legal affairs,
including assisting the Company (i) in fund raising activities; (ii) with
Securities and Exchange Commission and other securities filings; (iii) expanding
the Company's intellectual property portfolio; and (iv) in developing other
strategic alliances You shall report to the Chief Executive Officer ("CEO").
This Letter Agreement shall be effective as of the date first above written
(the "Commencement Date") and shall continue through December 31, 2008, unless
earlier terminated as provided hereunder (the "Term"). For all services rendered
by you in any capacity hereunder during the Term, you shall be entitled to a
minimum annual salary of $150,000 during calendar year 2007 and a minimum annual
salary of $172,500 during calendar year 2008 payable within normal payroll
practices for executives of the Company.
Your employment with the Company shall automatically terminate upon your
death or Disability (as defined below). The Company may terminate your
employment prior to the end of the Term with or without Cause (as defined below)
immediately upon written notice to you. You may terminate your employment upon
thirty (30) days' prior written notice to the Company. For purposes of this
Letter Agreement, the terms set forth below shall have the meanings ascribed to
them below:
"Cause" shall mean (i) willful engaging by you in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company; (ii)
your refusal to attempt to perform your obligations under this Letter Agreement
(other than resulting from illness or incapacity) which is materially and
demonstrably injurious to the Company which is not cured to the reasonable
satisfaction of the Company within fifteen (15) business days after notice
thereof; (iii) your conviction of, or entry of a plea of guilty to, or entry of
a plea of nolo contendre with respect to, any crime other than a traffic
violation or infraction which is a misdemeanor; or (iv) material breach by you
of any of your agreements in this Letter Agreement which is not cured to the
reasonable satisfaction of the Company within fifteen (15) business days after
notice thereof.
"Disability" shall mean your inability to perform the essential functions
of your duties and responsibilities to the Company by reason of a physical or
mental disability or infirmity, which inability has continued for a period of
more than six (6) consecutive months, or for a period aggregating more than six
(6) months, whether or not continuous, during any nine (9) month period.
1
"Good Reason" shall mean (i) the Company's reassignment of your base of
operations outside of the New York metropolitan area without your consent, (ii)
the material reduction by the Company of your duties during the Term, (iii) the
Company's material breach of the Company's obligations under this Letter
Agreement or the Promissory Note or Stock Purchase Agreement, (iv) the Company
not continuing to retain you as General Counsel during the Term, (v) your
ceasing to report to the CEO of the Company, or (iv) the departure of Robin L.
Smith as CEO of the Company.
In the event your employment is terminated prior to the end of the Term due
to your death or Disability, by the Company with or without Cause or upon your
resignation from your position as General Counsel for any reason, earned but
unpaid cash compensation, including any accrued salary, and unreimbursed
expenses due as of the date of such termination (the "Employment Termination
Date") shall be payable in full. In addition, in the event your employment is
terminated prior to the end of the Term for any of the reasons identified in the
preceding sentence other than by the Company with Cause or you without Good
Reason, you or your executor of your last will or the duly authorized
administrator of your estate, as applicable, will be entitled to receive
severance payments equal to $187,550 in the event the Employment Termination
Date is during 2007 and $215,700 in the event the Employment Termination Date is
during 2008, in each case paid in accordance with the Company's standard payroll
practices for executives of the Company; provided, however that such payments
shall in no event exceed the remaining salary payments payable to you for the
remainder of the Term . In addition, in the event your employment is terminated
prior to the end of the Term by the Company without Cause or by you for Good
Reason, all Options granted to you by the Company shall vest and become
immediately exercisable in their entirety and remain exercisable in accordance
with their terms. A release of the Company in satisfactory and customary form
shall be provided by you prior to the making of severance payments. No other
payments shall be made, nor benefits provided, by the Company in connection with
the termination of employment prior to the end of the Term, except as otherwise
required by law.
The Company shall pay or reimburse you for all reasonable travel or other
expenses (including, without limitation, digital subscriber line (DSL), car (at
$1,000 per month), cell phone, professional licenses and health insurance
expenses) incurred by you in connection with the performance of your duties and
obligations under this Letter Agreement, subject to your presentation of
appropriate vouchers in accordance with such procedures as the Company may from
time to time establish (including any procedures established to preserve any
deductions for Federal income taxation purposes to which the Company may be
entitled). You shall also be eligible to participate in any incentive and
employee benefit plans or programs which may be offered by the Company and in
all other plans in which the Company executives participate and shall be
entitled to vacations in accordance with the policy of the Company with respect
to its senior management, in effect from time to time.
The Company shall indemnify you and hold you harmless from and against any
claim, liability and expense (including, without limitation, reasonable attorney
fees) made against or incurred by you in connection with your employment by the
Company, in a manner and to an extent that is not less favorable to you as the
indemnification protection that is afforded by the Company to any other senior
officer or director and that is consistent with industry custom and standards.
You shall also receive a cash bonus upon the occurrence of each of the
milestones (each, a "Milestone") set forth below. The amount of the cash bonus
shall be as set forth after each of the respective Milestones:
(i) upon the closing of the Company's current financing ($5,000)
(ii) upon the next registration statement (other than a Form S-8) being
declared effective by the Securities and Exchange Commission ($7,500).
You shall be eligible for cash bonuses for other tasks and responsibilities
as mutually agreed, such as foundation legal counsel, all as approved by the
Compensation Committee of the Board of Directors. No later than December 31,
2007, you and the CEO shall discuss and agree on milestones for 2008 pursuant to
which you will be eligible to receive cash bonuses during 2008 and the CEO shall
recommend such agreed upon milestones to the Compensation Committee of the Board
of Directors at their next meeting for their vote thereon. You shall be eligible
for additional cash bonuses as approved by the Compensation Committee of the
Board of Directors from time to time.
It is acknowledged that on December 5, 2006, the Compensation Committee of
the Board of Directors awarded to you the following under the EPP:
(i) a Common Stock award of 100,000 shares of Common Stock that are fully
vested;
2
(ii) an option to purchase 50,000 shares of Common Stock that vests on the
closing of the next financing; provided gross proceeds are no less than
$4,000,000;
(iii) an option to purchase 100,000 shares of Common Stock that vests upon
the next registration statement (other than a Form S-8) being declared effective
by the Securities and Exchange Commission.
The options described in (ii) and (iii) have an exercise price equal to the
closing price of the Common Stock on the date of grant, shall vest as set forth
above and shall remain exercisable as to any vested portion thereof in
accordance with the terms of the EPP notwithstanding your termination of
employment. In addition, at the discretion of the Board of Directors (or its
applicable committee), you shall be entitled to receive further grants of stock
options, subject to the terms of the 2003 EPP.
You acknowledge that you have executed and it remains in full force and
effect the Company's standard Employee Confidentiality, Invention Assignment and
Non-Compete Agreement.
You hereby represent and warrant that (i) you have the legal capacity to
execute and perform this Letter Agreement, (ii) this Letter Agreement is a valid
and binding agreement enforceable against you according to its terms, (iii) the
execution and performance of this Letter Agreement does not violate the terms of
any existing agreement or understanding to which you are a party or by which you
may be bound and (iv) you have, and will, maintain during the Term, all
requisite licenses, permits and approvals necessary to perform the duties of
General Counsel set forth herein.
This Letter Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York, without reference to the
choice of law principles thereof. Any claim, controversy or dispute between the
parties hereto, arising out of, relating to, or in connection with this Letter
Agreement or any aspect of your services to the Company hereunder, including but
not limited to the termination of this Letter Agreement and any and all claims
in tort or contract, shall be submitted to arbitration in Melville, New York,
pursuant to the American Arbitration Association ("AAA") National Arbitration
Rules for the Resolution of Employment Disputes. This provision shall apply to
claims against the Company and/or its affiliates and their respective current or
former employees, agents, managers, officers and/or directors. Any issue about
whether a claim is covered by this Letter Agreement shall be determined by the
arbitrator. There shall be one arbitrator, who (a) shall be chosen from a panel
provided by the AAA and who shall apply the substantive law of the State of New
York, (b) may award injunctive relief or any other remedy available from a
judge, including attorney fees and costs to the prevailing party, and (c) shall
not have the power to award punitive damages. Judicial review of the
arbitrator's award shall be strictly limited to the issue of whether said award
was obtained through fraud, corruption or misconduct.
This Letter Agreement shall be binding upon, and shall inure to the benefit
of, the Company and you and its and your respective permitted successors,
assigns, heirs, beneficiaries and representatives. This Letter Agreement is
personal to you and may not be assigned by you without the prior written consent
of the Company. Any attempted assignment in violation of this paragraph shall be
null and void. This Letter Agreement shall constitute the entire agreement among
the parties with respect to the matters covered hereby and shall supersede all
previous written, oral or implied understandings among them with respect to such
matters.
We are excited about your involvement with the Company and look forward to
a long and mutually rewarding scientific and business relationship.
For our records, I would appreciate your countersigning the attached copy
of this Letter Agreement and returning the same to me at your earliest
convenience.
Sincerely,
NEOSTEM, INC.
By: /s/ Robin L. Smith
Robin L. Smith, CEO
Accepted and agreed to:
/s/ Catherine M. Vaczy
Catherine M. Vaczy
3