EXHIBIT 10.22
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made as of September 25, 2000
between Kurt Brunden, an individual (“Employee”), and Advanced Biotherapeutics,
Inc. (“ABT”), a wholly-owned subsidiary of Athersys, Inc., a Delaware
corporation (“Athersys”), (together “the Company”).
RECITALS:
     A. ABT, d.b.a. Athersys, Inc., is engaged in the competitive business of
developing, marketing and selling certain core biotechnologies for the diagnosis
and treatment of genetic and infectious disease.
     B. ABT desires to employ Employee on the terms and conditions set forth in
this Agreement.
     C. Employee is willing to accept employment on the terms and conditions
expressed in this Agreement.
AGREEMENTS:
     NOW, THEREFORE, the parties agree as follows:
     1. Employment. ABT agrees to employ Employee, and Employee agrees to serve
ABT, on the terms and conditions set forth in this Agreement.
          (a) Term. Subject to the provisions for termination as hereinafter
provided, the term of this Agreement will begin on September 25, 2000 (the
“Effective Date”) and continue through the fourth anniversary of the Effective
Date. Such term will automatically be extended for one additional year on each
anniversary of the Effective Date beginning on the fourth anniversary of the
Effective Date unless (i) this Agreement is terminated as provided in Section 4,
or (ii) either Employee or ABT gives written notice of termination of this
Agreement to the other at least thirty (30) days prior to such date.
          (b) Position and Duties. Employee will serve as Vice President of Drug
Discovery at ABT and will have such responsibilities, duties and authority as
are customary of a Vice President of Drug Discovery of a company the size and
structure of ABT (or any position to which Employee may be promoted after the
date of this Agreement) and as may from time to time be assigned to Employee by
the Board of Directors of ABT (the “Board”) that are consistent with such
responsibilities, duties, authority and applicable law, including those
responsibilities, duties and authority described on Exhibit A. Employee will
devote substantially all of his working time and effort to the business and
affairs of ABT.
          (c) Place of Performance. In connection with Employee’s employment by
ABT, Employee will be based at the principal executive offices of ABT in the
greater Cleveland, Ohio area.

 

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          (d) Continuous Employment. For all purposes under this Agreement, the
Employee shall be considered to have been continuously employed by ABT without
regard to any change of duties or position of the Employee, including transfers
between and among ABT and its affiliates, so long as Employee is continuously
employed by ABT or any of its affiliates, including Athersys.
     2. Compensation and Related Matters. As compensation and consideration for
the performance by Employee of Employee’s duties, responsibilities and covenants
pursuant to this Agreement, ABT will pay Employee the amounts and benefits set
forth below:
          (a) Salary. ABT will pay to Employee an initial annual base salary
(“Base Salary”) at a rate of One Hundred and Fifty-Five Thousand Dollars
($155,000.00) commencing on the Effective Date, such salary to be paid in
substantially equal installments no less frequently than monthly. The Base
Salary may be adjusted to One Hundred Sixty Thousand Dollars ($160,000)
following a three-month performance evaluation. The Base Salary may be increased
from time to time by the Board in its sole discretion and, if so increased, will
not thereafter during the term of this Agreement be decreased. The Board will
review the Base Salary at least annually to determine, in its sole discretion,
whether an increase is appropriate. Compensation of Employee by salary payments
will not be deemed exclusive and will not prevent Employee from participating in
any other compensation or benefit plan of ABT.
          (b) Bonus. Employee will receive a guaranteed bonus of $30,000 on
September 25, 2001 and September 25, 2002.
          (c) Expenses. Employee will be entitled to receive prompt
reimbursement for all reasonable and customary travel and entertainment expenses
or other out-of-pocket business expenses incurred by Employee in fulfilling
Employee’s duties and responsibilities under this Agreement, including all
expenses of travel and living expenses while away from home on business or at
the request of and in the service of ABT, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures
established by ABT. .
          (d) Other Benefits. Employee will be entitled to participate in all of
the employee benefit plans and arrangements of ABT and enjoy all of the
perquisites provided to the employees of ABT (including, without limitations
each retirement, thrift and profit sharing plan, group life insurance and
accident plan, medical and/or dental insurance plan, and disability plan);
provided, however, that a change may be made to a plan in which salaried
employees of ABT participate, including termination of any such plan,
arrangement or perquisite, if it does not result in a proportionately greater
reduction in the rights of or benefits to Employee as compared with the other
salaried employees of ABT or is required by law or a technical change. Employee
will be entitled to participate in and receive benefits under any employee
benefit plan, arrangement or perquisite made available by ABT in the future to
its executive employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans, arrangements and
perquisites. Nothing paid to Employee under any plan, arrangement or perquisite
presently in effect or made available in the future will be deemed to be in lieu
of the salary payable to Employee pursuant to paragraph (a) of this Section 2.
          (e) Vacations. Employee will be entitled to paid vacation in each
calendar year, determined in accordance with ABT’s vacation policy, but in all
events in an amount of not less than three (3) weeks per calendar year. Employee
will also be entitled to all paid holidays and personal days given by ABT to its
executive employees.

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     3. Stock Options. The Board will grant to Employee, under the 1995
Incentive Plan of Athersys, Inc., as amended (the “Plan”), nonqualified stock
options to purchase Fifty Thousand (50,000) shares of common stock of Athersys
at One Dollar ($1.00) per share, and incentive stock options to purchase Ten
Thousand (10,000) shares of common stock of Athersys at Fifteen Dollars and
Sixty Cents ($15.60) per share. The stock options vest over a four year period
and shall be subject to the terms and conditions of the Plan and one or more
stock option agreements between Athersys and Employee of even date herewith.
     4. Termination. Employee’s employment under this Agreement may be
terminated under the following circumstances:
          (a) Death. Employee’s employment under this Agreement will terminate
upon Employee’s death.
          (b) Disability. If, in the written opinion of a qualified physician
selected by ABT and agreed to by Employee (or if no agreement is reached within
thirty (30) days of the commencement of discussions between ABT and Employee,
then of a qualified physician agreed upon by the physician selected by ABT and a
physician selected by Employee), Employee becomes unable to perform his duties
under this Agreement due to physical or mental illness, ABT may terminate
Employee’s employment under this Agreement.
          (c) Cause. ABT may terminate Employee’s employment under this
Agreement for Cause. For purposes of this Agreement, ABT will have “Cause” to
terminate Employee’s employment under this Agreement upon:
          (i) The willful and continuous neglect or willful and continuous
refusal to perform Employee’s duties or responsibilities under this Agreement
which continues for a period of at least thirty (30) days after being brought to
the attention of Employee in writing (other than any such failure resulting from
Employee’s incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination (as defined in
paragraph (e) of this Section 4) by Employee for Good Reason (as defined in
paragraph (d) of this Section 4)); or
          (ii) The willful act, willful failure to act or willful misconduct by
Employee which is materially and manifestly injurious to ABT and which is
brought to the attention of Employee in writing not more than thirty (30) days
from the date of its discovery by ABT or the Board.
     For purposes of this paragraph (c), no act, or failure to act, on
Employee’s part will be considered “willful” unless done, or omitted to be done,
by him not in good faith or without reasonable belief that his action or
omission was in the best interest of ABT. Notwithstanding the foregoing,
Employee will not be deemed to have been terminated for Cause without
(1) reasonable written notice to Employee specifying in detail the specific
reasons for ABT’ intention to terminate for Cause, (2) an opportunity for
Employee, together with his counsel, to be heard before the Board, and
(3) delivery to Employee of a Notice of Termination, as defined in paragraph
(e) of this Section 4, approved by the affirmative vote of not less than a
majority of the entire membership of the Board finding that in the good faith
opinion of the Board, Employee was guilty of conduct set forth in clause (i) or
(ii) above.

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          (d) Good Reason.
          (i) Employee may terminate his employment under this Agreement (X) for
Good Reason or (Y) otherwise upon written notice to ABT.
          (ii) For purposes of this Agreement, “Good Reason” includes the
occurrence of any of the following circumstances, without Employee’s express
consent, unless such circumstances are fully corrected prior to the Date of
Termination (as defined in paragraph (f) of this Section 4) specified in the
Notice of Termination (as defined in paragraph (e) of this Section 4) given in
respect thereof and such circumstances do not reoccur: (A) a diminution in
Employee’s position, duties, responsibilities or authority (unless such
diminution occurs with the prior written consent of Employee, or except during
periods when Employee is unable to perform all or substantially all of
Employee’s duties and/or responsibilities as a result of Employee’s illness
(either physical or mental) or other incapacity); (B) a reduction in either
Employee’s annual rate of Base Salary or level of participation in any bonus or
incentive plan for which he is eligible under Section 2(b); (C) an elimination
or reduction of Employee’s participation in any benefit plan generally available
to executive employees of ABT, unless ABT continues to offer Employee benefits
substantially similar to those made available by such plan; provided, however,
that a change to a plan in which salaried employees of ABT generally
participate, including termination of any such plan, if it does not result in a
proportionately greater reduction in the rights of or benefits to Employee as
compared with the other salaried employees of ABT or is required by law or a
technical change, will not be deemed to be Good Reason; (D) failure to provide
facilities or services which are suitable to Employee’s position and adequate
for the performance of Employee’s duties and responsibilities; (E) failure of
any successor (whether direct or indirect, by purchase of stock or assets,
merger, consolidation or otherwise) to ABT to assume ABT’s obligations under
this Agreement or failure to remain liable to Employee under this Agreement
after an assignment by ABT of this Agreement, in each case as contemplated by
Section 6; (F) any purported termination by ABT of Employee’s employment which
is not effected pursuant to a Notice of Termination satisfying the requirements
of paragraph (e) of this Section 4 (and for purposes of this Agreement no such
purported termination will be effective); (G) a change in the location of ABT’s
principal executive offices to outside the greater Cleveland, Ohio area; (H) a
termination of employment by Employee within ninety (90) days following a Change
in Control (as defined in paragraph (g) of this Section 4); provided, however,
that Good Reason will not exist if Employee has accepted employment with the
successor entity and such successor entity has assumed this Agreement; (I) a
breach of this Agreement by ABT; or (J) any similar circumstances which Employee
reasonably believes are contrary to this Agreement. Employee’s right to
terminate employment pursuant to this paragraph (d) will not be affected by
Employee’s incapacity due to physical or mental illness. Employee’s continued
employment will not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason; provided, however, that Employee
will be deemed to have waived his rights pursuant to circumstances constituting
Good Reason if Employee has not provided to ABT a Notice of Termination within
ninety (90) days following his knowledge of the circumstances constituting Good
Reason.
          (e) Notice of Termination. Any termination of Employee’s employment by
ABT or by Employee (other than a termination pursuant to paragraph (a) of this
Section 4) must be communicated by written Notice of Termination to the other
party in accordance with Section

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7. For purposes of this Agreement, a “Notice of Termination” means a notice
which indicates the specific termination provision in this Agreement relied upon
and sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Employee’s employment under the provision so
indicated.
          (f) Date of Termination. “Date of Termination” means (i) if Employee’s
employment is terminated pursuant to paragraph (a) above, the date of his death,
(ii) if Employee’s employment is terminated pursuant to paragraph (b) above,
thirty (30) days after Notice of Termination is given (provided that Employee
has not returned to the full-time performance of Employee’s duties during such
thirty (30) day period), (iii) if Employee’s employment is terminated pursuant
to paragraph (c) or (d) above, the date specified in the Notice of Termination
which, in the case of a termination by ABT for Cause will not be less than
fifteen (15) days from the date such Notice of Termination is given, and, in the
case of a termination by Employee pursuant to Section 4(d)(i), such date will
not be less than fifteen (15) days nor more than thirty (30) days from the date
such Notice of Termination is given, (iv) if Employee’s employment is terminated
by ABT other than for Cause, thirty (30) days from the date Employee is notified
of such termination, or (v) if Employee terminates his employment and fails to
provide written notice to ABT of such termination, the date of such termination.
          (g) Change in Control. For purposes of this Agreement, a “Change in
Control” will occur (i) upon the sale or other disposition to a person, entity
or group (as such term is used in Rule 13d-5 promulgated under the Securities
Exchange Act of 1934, as amended) (such a person, entity or group being referred
to as an “Outside Party”) of 50% or more of the consolidated assets of Athersys
taken as a whole, or (ii) if shares representing a majority of the voting power
of Athersys are acquired by a person or group (as such term is used in
Rule 13d-5 promulgated under the Securities Exchange Act of 1934, as amended) of
persons other than the holders of the capital stock of Athersys as of the date
of this Agreement, or (iii) if following an underwritten public offering of
equity securities of Athersys pursuant to an effective registration statement
under the Securities Act of 1933, as amended, the individuals who are directors
of Athersys immediately following the effective date of such public offering (or
individuals nominated by such directors) no longer constitute a majority of the
whole Board.
     5. Compensation Upon Termination.
          (a) Disability. During any period that Employee fails to perform his
duties under this Agreement as a result of incapacity due to physical or mental
illness, Employee will continue to receive his full Base Salary at the rate then
in effect for such period (offset by any payments to Employee received pursuant
to disability benefit plans maintained by ABT) and all other compensation and
benefits under this Agreement (including pro rata payment for vacation days not
taken) until his employment is terminated pursuant to Section 4(b) and for a
period of twelve (12) months from the date of such termination.
          (b) Cause or Death. If Employee’s employment is terminated by ABT for
Cause or by Employee other than for Good Reason or as a result of Employee’s
death, ABT will pay to Employee his full Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given and
all other unpaid amounts, if any, to which Employee is entitled as of the Date
of Termination, including any bonus owed pursuant to Section 2(b), expenses owed
pursuant to Section 2(c) and amounts under any compensation plan or program of
ABT, at the time such payments are due and ABT will, thereafter, have no further
obligations to Employee under this Agreement.

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          (c) Good Reason. If (i) in breach of this Agreement, ABT terminates
Employee’s employment (it being understood that a purported termination for
disability pursuant to Section 4(b) or for Cause which is disputed and finally
determined not to have been proper will be a termination by ABT in breach of
this Agreement), or (ii) Employee terminates his employment for Good Reason;
then
          (i) ABT will continue to pay to Employee his full base salary for a
period of six months from the Date of Termination at the rate in effect at the
time Notice of Termination is given and all other unpaid amounts, if any, to
which Employee is entitled as of the Date of Termination, including any bonus
owed pursuant to Section 2(b) and any expenses owed pursuant to Section 2(c);
provided, however, if during such six month period, Employee violates any
provision of the Agreement for Disclosure of Confidential Information between
Employee and Athersys, then ABT will not be required to make any further
payments to Employee; and
          (ii) ABT will permit Employee, at Employee’s option and expense, to
continue the participation of Employee for a period of eighteen (18) months in
all medical, life and other employee “welfare” benefit plans and programs in
which Employee was entitled to participate immediately prior to the Date of
Termination provided that Employee’s continued participation is possible under
the general terms and provisions of such plans and programs.
          (d) Mitigation. Employee will be required to mitigate the amount of
any payment provided for in this Section 5 by seeking other employment or
otherwise, and the amount of any payment or benefit provided for in this
Section 5 will be reduced by any compensation earned by Employee as the result
of employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by Employee to ABT, or otherwise.
          (e) Survival of Obligations. The obligations of ABT to make payments
and provide benefits under this Section 5 will survive the termination of this
Agreement.
     6. Binding Agreement. This Agreement and all rights of Employee under this
Agreement will inure to the benefit of and be enforceable by Employee’s personal
or legal representatives, executors, administrators, successors, heirs,
distributes, devises and legatees. If Employee dies while any amounts would
still be payable to him under this Agreement if he had continued to live, all
such amounts, unless otherwise provided in this Agreement, will be paid in
accordance with the terms of this Agreement to Employee’s devisee, legatee, or
other designee or, if there be no such designee, to Employee’s estate. This
Agreement and all rights of ABT under this Agreement will inure to the benefit
of and be enforceable by ABT’s successors or assigns; provided, however, any
assignment of this Agreement by ABT will not relieve ABT from any liability it
may have under this Agreement.
     7. Notice. Notices, demands and all other communications provided for in
this Agreement will be in writing and will be deemed to have been duly given
when delivered, if delivered personally, or (unless otherwise specified) mailed
by United States certified or registered mail, return receipt requested, postage
prepaid, and when received if delivered otherwise, addressed as follows:

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If to Employee:
Kurt Brunden
664 Glen Eden Ct.
Aurora, OH 44202
If to ABT:
Advanced Biotherapeutics, Inc., d.b.a. Athersys, Inc.
3201 Carnegie Avenue
Cleveland, Ohio 44115-2634
Attention: President & Chief Executive Officer
Copy to:
Christopher M. Kelly, Esq.
Jones, Day, Reavis & Pogue
North Point, 901 Lakeside Avenue
Cleveland, Ohio 44114
or to such other address as any party may have furnished to the other in
writing, except that notices of change of address will be effective only upon
receipt.
     8. General Provisions. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the parties hereto. No waiver by either party to this
Agreement at any time of any breach by the other party of, or compliance with,
any condition or provision of this Agreement to be performed by such other party
will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. The validity, interpretation,
construction and performance of this Agreement will be governed by the laws of
the State of Ohio without regard to its conflicts of law principles.
     9. Validity. The invalidity or unenforceability of any provision or
provisions, in whole or in part, of this Agreement will not affect the validity
or enforceability of any other provision or enforceable part of such partially
unenforceable provision of this Agreement, which will remain in full force and
effect.
     10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same instrument.
     11. Captions. The headings of paragraphs are included solely for
convenience of reference only and are not part of this Agreement and will not be
used in construing it.
     12. Consent to Jurisdiction and Forum. Employee expressly and irrevocably
agrees that ABT may bring any action, whether at law or in equity, arising out
of or based upon this Agreement in the State of Ohio or in any federal court
therein. Employee irrevocably consents to personal jurisdiction in such court
and to accept service of process in accordance with the provisions of the laws
of the State of Ohio.

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     13. Entire Agreement. This Agreement sets forth the entire agreement of the
parties in respect of the subject matter contained in this Agreement and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party; and any prior agreement of the
parties in respect of the subject mater contained in this Agreement is
terminated and canceled.
     IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the date first above written.

                      Advanced Biotherapeutics, Inc.       EMPLOYEE:    
 
                   
By:
  /s/   Gil Van Bokkelen       By:   /s/   Kurt Brunden    
 
 
 
Gil Van Bokkelen          
 
Kurt Brunden    
 
  President & Chief Executive Officer                

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