Exhibit 10.2

 

CESCA THERAPEUTICS INC.
EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (“Agreement”) is made and entered into as of
February 15, 2017 by and between CESCA THERAPEUTICS INC. (“Employer”) and VIVIAN
LIU (“Executive”).

 

1.     Employment. Employer employs Executive and Executive accepts employment
with Employer on the terms and conditions set forth in this Agreement commencing
on February 15, 2017 (“Effective Date”).

 

2.     Position; Scope of Employment. Executive shall have the position of Chief
Operating Officer of Employer. Executive agrees to perform such services
customary to such position and as shall be assigned to him by the Employer’s
Chief Executive Officer and/or Board of Directors. Executive shall report
directly to the Employer’s Chief Executive Officer.

 

2.1.     Entire Time and Effort. Executive shall devote Executive’s full working
time, attention, abilities, skill, labor and efforts to the performance of
his/her employment. Executive shall not, directly or indirectly, alone or as a
member of a partnership or other organizational entity, or as an officer of any
corporation (other than any which are owned by or affiliated with Employer)
(i) be substantially engaged in or concerned with any other commercial duties or
pursuits, (ii) engage in any other business activity that will interfere with
the performance of Executive’s duties under this Agreement, except with the
prior written consent of Employer, or (iii) join the board of directors of any
other corporation; provided, however, that Executive may join the board of
directors of no more than one unaffiliated corporation so long as such
corporation is not directly competitive to the current or future operations of
Employer.

 

2.2.     Rules and Regulations. During his/her employment with Employer,
Executive agrees to observe and comply with Employer’s rules and regulations
(including Employer’s code of ethics and insider trading policy) as provided by
Employer and as may be amended from time to time by Employer and will carry out
and perform faithfully such orders, directions and policies of Employer. To the
extent any provision of this Agreement is contrary to an Employer rule or
regulation, as such may be amended from time to time, the terms of this
Agreement shall control.

 

2.3.     Limitations Upon Authority to Bind Employer. In his/her capacity as
Chief Operating Officer, Executive shall not engage in any of the following
actions on behalf of Employer without the prior approval of Employer: (i) borrow
or obtain credit in any amount or execute any guaranty, except for items
purchased from vendors in the ordinary course of Employer’s operations;
(ii) expend funds for capital equipment in excess of expenditures expressly
budgeted by Employer, if applicable, or in the event not budgeted, not to exceed
the amounts set forth in subparagraph (iii); (iii) sell or transfer capital
assets exceeding One Hundred Thousand Dollars ($100,000) in market value in any
single transaction or exceeding Two Hundred Fifty Thousand Dollars ($250,000) in
the aggregate during any one fiscal year; (iv) execute any lease for real
property; or (v) exercise any authority or control over the management of any
employee welfare or pension benefit plan maintained by Employer or over the
disposition of the assets of any such plan.

 

 
 

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3.     Employment Term. Executive’s term of employment (the “Employment Term”)
shall commence upon the Effective Date of this Agreement and shall terminate as
provided in Section 5.

 

4.     Compensation. During the Employment Term, Employer shall pay to or
provide compensation to Executive as set forth in this Section 4. All
compensation of every description shall be subject to the customary withholding
tax and other employment taxes as required with respect to compensation paid to
an employee.

 

4.1.     Base Salary. Employer shall pay Executive an annual base salary as
established by the Board of Directors from time-to-time through Compensation
Committee actions, and reflected on and reported in the Employer's reports filed
with the Securities and Exchange Commission. (“Base Salary”). Executive’s Base
Salary shall be payable in accordance with Employer’s regular payroll schedule,
but not less frequently than twice per month. The starting Base Salary will be
at the rate of $255,000 per year.

 

4.2.     Review. Executive’s Base Salary and duties shall be reviewed by the
Compensation Committee of the Board of Directors at least annually. During the
review, duties will be outlined and compensation may be adjusted up at the
discretion of the Compensation Committee. The Base Salary may not be decreased
during the Employment Term without the consent of the Executive; provided,
however, that the Compensation Committee may reduce the Base Salary by no more
than 15% for no longer than three (3) months in any twelve (12) month period. On
the date of Employer’s annual meeting of stockholders and on each subsequent
annual meeting of stockholders during the term of this Agreement, or at such
other time as the Governance and Nominating Committee may establish in its
discretion, the Governance and Nominating Committee shall review the previous
year’s performance of Executive.

 

4.3.     Cash/Stock Bonuses. In addition to the Base Salary provided for in
sections 4.1 and 4.2, Executive is eligible to receive a certain percentage of
his/her Base Salary in effect at the end of the fiscal year, based partially on
performance weighted bonus objectives established for Executive by the Board of
Directors (which will include both corporate objectives and individual
objectives) for the fiscal year, such objectives to be discussed with Executive
prior to being established, and partially based on the discretion of the Board
of Directors’ Compensation Committee. Bonuses may include cash, stock options
and restricted stock awards. The applicable percentage Executive is eligible for
under this section 4.3 shall be established by the Board of Directors from
time-to-time through Compensation Committee actions, and reflected on and
reported in the Employer's reports filed with the Securities and Exchange
Commission. Any and all bonuses provided to Executive shall be governed by the
terms of a separate Management Bonus Plan as adopted by the Board of Directors
in its sole discretion from time to time. For Fiscal 2017, Executive is eligible
to earn a bonus compensation of up to 50% of your base salary (the “Bonus”), on
a pro rata basis. Any earned Bonus is payable in cash or in shares of the
Company’s common stock, subject to the company’s or Board’s discretion. Bonus
determination will be based on the corporate/personal goals that will be
mutually determined by the Executive and the CEO before the end of first month
of employment.

 

 
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4.4.     Stock Option Grants/Stock Grants. Executive shall be eligible to
receive awards of stock options or restricted stock grants as may be determined
from time to time by the Board of the Directors or the Compensation Committee of
the Board of Directors. The Executive will be granted annually, 25,000 shares of
Restricted Stock (“Stock”) and options to purchase up to 25,000 shares of the
Company Common Stock (“Options”) under the Company’s Stock Incentive Plan (the
“Plan”). The Board may, in its absolute discretion, choose to grant to you
additional options in the future. The Stock and Options are subject to the terms
of the Plan, and will vest in four equal installments: 25% on March 31, 25% on
June 30, 25% on September 30 and 25% on December 31 of every year, assuming the
Executive remains in continuous and uninterrupted employment with the
Company.   The first vesting of the Stock and Options shall be March 31, 2017.

 

4.5.     Vacation and Sick Leave Benefits. Executive shall be entitled to accrue
eighteen (18) days of paid vacation annually. While Employer encourages
Executive to take vacation, if he does not use all vacation accrued in each
calendar year, Executive may carry it over from year to year; provided, however,
that the maximum accrual of Executive’s vacation shall be capped at two times
the annual accrual rate. Once the cap is reached, Executive shall no longer
accrue vacation until such time as he uses accrued vacation and his/her accrued
and unused vacation days fall below the cap, at which time he will again begin
to accrue vacation at the appropriate accrual rate. Any vacation benefit granted
or paid to Executive is based solely on his/her Base Salary. Executive shall be
entitled to sick leave in accordance with Employer’s sick leave policy, as
amended from time to time.

 

4.6.     Other Fringe Benefits. Executive shall participate in all of Employer’s
fringe benefit programs in substantially the same manner and to substantially
the same extent as other similar employees of Employer, excluding only those
benefits expressly modified by the terms hereof.

 

4.7      Expenses. Executive shall be reimbursed for his/her reasonable business
expenses, subject to the presentation of evidence that such expenses are made in
accordance with established policies adopted by Employer from time to time.

 

4.8     Compensation From Other Sources. Any proceeds that Executive shall
receive by virtue of qualifying for disability insurance, disability benefits,
or health or accident insurance shall belong to Executive. Executive shall not
be paid Base Salary in any period in which he receives benefits as determined
and paid under Employer’s long-term disability policy. Benefits paid to
Executive under Employer’s short-term disability policy shall reduce, by the
same amount, Base Salary payable to Executive for such period.

 

 
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5.     Termination of Employment. Executive’s employment with Employer shall
terminate on the earliest to occur of the following (the date of termination of
Executive’s employment being the “Termination Date”):

 

5.1     upon the mutual agreement of Employer and Executive in writing;

 

5.2     upon the Executive’s death;

 

5.3     upon delivery to Executive of a written notice of termination by
Employer if Executive should suffer a disability or physical or mental
condition, which for the purposes of this Agreement, means Executive’s
inability, for a period of ninety (90) consecutive days, to substantially
perform the essential functions of Executive’s duties as Chief Operating
Officer, with or without a reasonable accommodation. For purposes of determining
whether Executive has a disability or physical or mental condition under this
Section 5.3, upon request Executive agrees to submit to Employer a medical
certification regarding his/her health condition from his/her health care
provider, or submit to a medical exam by a health care provider selected by
Employer and Executive for the sole purpose of evaluating Executive’s ability to
perform the essential functions of his/her position. Employer’s written notice
of termination under this Section 5.3 shall coincide with the date Executive
qualifies for total disability payments under Employer’s long-term disability
plan.

 

5.4      upon the date set forth in a written notice of termination for Cause
delivered to Executive by Employer.

 

For purposes of this Agreement, “Cause” is defined as follows: (a) willful or
habitual breach of Executive’s duties, provided that Employer shall give
Executive notice of such breach and Executive shall not have cured such breach
within thirty (30) days of such notice; (b) fraud, dishonesty, deliberate injury
or intentional material misrepresentation by Executive to Employer or any
others; (c) embezzlement, theft or conversion by Executive; (d)  negligent
unauthorized disclosure or other use of Employer’s trade secrets, customer lists
or confidential information; (e) habitual misuse of alcohol or any
non-prescribed drug or intoxicant; (f) willful misconduct that causes material
harm to Employer; (g) willful violation of any other standards of conduct as set
forth in Employer’s employee manual and policies; (h) Executive’s conviction of
or plea of guilty or nolo contendere to a felony or misdemeanor involving moral
turpitude; (i) continuing failure to communicate and fully disclose material
information to the Board of Directors, the failure of which would adversely
impact the Employer or may result in a violation of state or federal law,
including securities laws; or (j) debarment by any federal agency that would
limit or prohibit Executive from serving in his/her capacity for Employer under
this Agreement.

 

5.5      upon the date set forth in a written notice of resignation delivered to
Employer by Executive for Good Reason if such notice is not delivered within one
(1) year following a Change in Control.

 

For purposes of this Agreement, “Good Reason” is defined as one or more of the
following: (a) without the consent of Executive, Executive is assigned material
duties that are materially inconsistent with Executive’s position, duties,
responsibilities or status as Chief Operating Officer of Employer, provided that
Executive must advise Employer’s Chief Executive Officer in writing within
fifteen (15) days of such assignment of duties that he believes the duties would
give him/her the right to terminate his/her employment for Good Reason and
Employer does not withdraw or change such assignment within a reasonable period
of time; or (b) without the consent of Executive, Employer relocates Executive’s
principal place of employment to a location further than 35 miles from the
Employer’s current principal offices.

 

 
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5.6     upon the date set forth in (a) a written notice of termination without
Cause delivered to Executive by Employer; or (b) a written notice of resignation
for Good Reason delivered to Employer by Executive, if such written notice is
provided within one (1) year following a Change in Control.

 

For purposes of this Agreement, “Change in Control” means an event involving one
transaction or a related series of transactions in which one of the following
occurs: (a) Employer issues securities equal to fifty percent 50% or more of
Employer’s issued and outstanding voting securities, determined as a single
class, to any individual, firm, partnership or other entity, including a “group”
within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934;
(b) Employer issues securities equal to fifty percent 50% or more of the issued
and outstanding common stock of Employer in connection with a merger,
consolidation or other business combination; (c) Employer is acquired in a
merger or other business combination transaction in which Employer is not the
surviving company; or (d) all or substantially all of Employer’s assets are sold
or transferred to a non-affiliated third party.

 

5.7     upon the date set forth in a written notice of resignation delivered to
Employer by Executive, other than a notice under Section 5.5 (Good Reason) or
Section 5.6 (Change in Control);

 

5.8     upon the date set forth in a written notice of termination without Cause
delivered to Executive by Employer, other than a notice under Section 5.3
(Disability), Section 5.4 (termination for Cause), or 5.6 (Change in Control).

 

6.     Compensation Upon Termination.

 

6.1      Minimum Payments. Upon termination of Executive’s employment for any
reason Executive shall be entitled to: (a) Base Salary accrued through the
Termination Date; (b)  reimbursement of expenses incurred prior to termination
of employment that are payable in accordance with Section 4.8; (c) any benefits
accrued or earned in accordance with the terms of any applicable benefit plans
and programs of Employer, including but not limited to accrued and unused
vacation; and (d) any earned but unpaid Annual Bonus plus any other earned
incentive compensation expressly provided for in any incentive compensation plan
for Executive.

 

6.2     Severance Payments for Termination Without Cause or for Resignation for
Good Reason. If Executive’s employment is terminated pursuant to Section 5.5
(Good Reason) or Section 5.8 (without Cause), in addition to the payments made
under Section 6.1, Executive shall be entitled to a sum equal to nine (9) months
of Base Salary in effect as of the Termination Date, payable in accordance with
Employer’s regular payroll dates. In addition, all of the Executive’s
outstanding options to acquire the Company’s common stock and restricted common
stock awards which would have otherwise vested within six (6) months of the
Termination Date shall become immediately vested as of the Termination Date.

 

 
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6.3     Severance Payments Related to Change of Control. If Executive’s
employment is terminated pursuant to Section 5.6 because Executive has resigned
for Good Reason, or because Employer terminated Executive without Cause, in
either case within three (3) months prior to a Change of Control or within one
(1) year following of a Change of Control, in addition to the benefits under
Sections 6.1, Executive shall be entitled to:

 

(a) Base Salary: a lump-sum cash payment equal to twelve (12) months of
Executive’s Base Salary in effect as of the Termination Date.

 

(b) Incentive Compensation: a lump sum cash payment equal to one (1) times the
Executive’s most recently established annual short-term incentive target award
and all the Executive’s outstanding options to acquire the Employer’s common
stock or restricted stock awards which have not vested as of the Termination
Date shall become immediately vested as of the Termination Date.

 

(c) Health and Welfare Benefits: Provided that the Executive timely elects
continuation coverage (as defined under COBRA) under the Employer’s medical and
dental plans as in effect at the time of the Executive’s termination, the
Employer shall pay the COBRA premiums for Executive and his/her dependents under
such plans (or any successor plans) until the earliest of i) the end of the
twelfth (12th) month following the Executive’s termination, or ii) the date
Executive secures subsequent employment with medical and dental coverage.
Executive shall provide at least five (5) business days advance written notice
informing the Employer when Executive becomes eligible for other comparable
medical and dental coverage in connection with subsequent employment. In
addition, if periodically requested by the Employer, Executive will provide the
Employer with written confirmation that Executive has not become eligible for
comparable medical and dental coverage.

 

6.4     Timing of Payments. Subject to the conditions set forth in Sections 6.5
(Release), Section 13.1 (280G), Section 13.2 (162(m)) and Section 14 (409A), all
compensation under Section 6.3 earned by and owing to Executive at the time of
his/her termination of employment shall be paid to him on the Termination Date.
Subject to the conditions set forth in Sections 6.5 (Release), Section 13.1
(280G), Section 13.2 (162(m)) and Section 14 (409A), all other payments made to
Executive under this Agreement shall be due and payable as stated and, if not
specified, in installments at least twice monthly at Employer’s sole discretion
and election. If compensation payments to Executive are delayed due to the
aforementioned IRS code requirements, the Employer shall immediately escrow such
payments owed until the prescribed date in which the payments are to be released
to Executive.

 

6.5     Release. Executive acknowledges and agrees that payments under Section
6.2 or 6.3 shall fully and completely discharge any and all obligations of
Employer to Executive arising out of or related to: (a) Executive’s employment
with, and/or separation from employment with Employer; and/or (b) this
Agreement. The payment(s) made hereunder shall constitute liquidated damages in
lieu of any and all claims which Executive may have against Employer or any of
its officers, directors, employees, or other agents, except for any obligations
under the workers' compensation laws including Employer's liability provisions.
Therefore, notwithstanding any provision of this Agreement to the contrary, no
payments or benefits shall be owed to Executive under Section 6.2 or Section 6.3
unless Executive executes and delivers to Employer a release in the form
attached hereto as Exhibit A (“Release”) within forty five (45) days following
the Termination Date, and any applicable revocation period has expired prior to
the sixtieth (60th) day following the Termination Date.

 

 

 
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6.6     No Obligation to Seek Employment. Executive shall have no obligation to
seek other employment following termination of his/her employment with Employer
nor shall any payment he receives from any subsequent employer reduce the
payments to which he is entitled to under this Agreement.

 

7.     Proprietary Information; Confidentiality.

 

7.1.     Confidential Information. Executive during the course of his/her duties
will be handling financial, accounting, statistical, marketing and personnel
information of Employer and/or its customers or other third-parties. All such
information is confidential and shall not be disclosed, directly or indirectly,
or used by Executive in any way, either during the term of this Agreement or at
any time thereafter except as required in the course of Executive’s employment
with Employer. Executive agrees not to disclose to any others, or take or use
for Executive’s own purposes or purposes of any others, during the term of this
Agreement, any of Employer's Confidential Information (as defined below).
Executive agrees that these restrictions shall also apply to (a) Confidential
Information belonging to third parties in Employer's possession; and (b)
Confidential Information conceived, originated, discovered or developed by
Executive during the term of this Agreement. “Confidential Information” means
any Employer proprietary information, trade secrets or know-how (of any kind,
type or nature, whether written, stored on magnetic or other media, or oral),
including, but not limited to, research, plans, services, customer lists,
Employer’s computer programs or computer software, marketing, finances or other
business information that has been compiled, prepared, devised, developed,
designed, discovered, or otherwise learned by Executive during the course of his
employment and/or disclosed to Executive by Employer, either directly or
indirectly, in writing, orally, or by observation of any business conduct.
Confidential Information does not include any of the foregoing items that has
become publicly known and made generally available through no wrongful act of
Executive. Executive further agrees not to use improperly or disclose or bring
onto the premises of Employer any trade secrets of another person or entity
during the term of this Agreement.

 

7.2.     Return of Property. Executive agrees that upon termination of
employment with Employer, Executive will deliver to Employer all devices,
records, data, disks, computer files, notes, reports, proposals, lists,
correspondence, materials, equipment, other documents or property, or
reproductions of any aforementioned items developed by Executive pursuant to
employment with Employer or otherwise belonging to Employer, its successors or
assigns.

 

7.3.     Employment Information. Executive represents and warrants to Employer
that information provided by Executive in connection with his/her employment and
any supplemental information provided to Employer is complete, true and
materially correct in all respects. Executive has not omitted any information
that is or may reasonably be considered necessary or useful to evaluate the
information provided by Executive to Employer. Executive shall immediately
notify Employer in writing of any change in the accuracy or completeness of all
such information.

 

 
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7.4.     Other Agreements. Executive represents that the performance of all the
terms of this Agreement will not breach any agreement to keep in confidence
proprietary information acquired by Executive in confidence or in trust prior to
employment with Employer. Executive has not and shall not: (a) disclose or use
in the course of his/her employment with Employer, any proprietary or
trade-secret information belonging to another; or (b) enter into any oral or
written agreement in conflict with this Agreement.

 

8.     Duty of Loyalty; Fiduciary Duty; Covenant Not to Unfairly Compete.

 

8.1     Obligations During Employment. During the term of this Agreement,
Executive has a duty of loyalty and a fiduciary duty to Employer. Executive
shall not, directly or indirectly, whether as a partner, employee, creditor,
stockholder, or otherwise, promote, participate, or engage in any activity or
other business which is directly competitive to the current operations of
Employer or the currently contemplated future operations of Employer. The
obligation of Executive not to compete with Employer shall not prohibit
Executive from owning or purchasing any corporate securities that are regularly
traded on a recognized stock exchange or on over-the-counter market.

 

8.2     Obligations Post-Employment. To the fullest extent permitted by law,
upon the termination of Executive’s employment with Employer for any reason,
Executive shall not use any of Employer’s confidential proprietary or trade
secrets information to directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director,
or any other individual or representative capacity, engage or participate in any
business, wherever located, that is in direct competition with the business of
Employer.

 

9.     Inventions; Ownership Rights. Executive agrees that all ideas,
techniques, inventions, systems, formulas, discoveries, technical information,
programs, know-how, prototypes and similar developments (“Developments”)
developed, created, discovered, made, written or obtained by Executive in the
course of or as a result, directly or indirectly, of performance of his/her
duties hereunder, and all related industrial property, copyrights, patent
rights, trade secrets, moral rights and other forms of protection thereof, shall
be and remain the property of Employer. Executive agrees to execute or cause to
be executed such assignments and applications, registrations and other documents
and to take such other action as may be requested by Employer to enable Employer
to protect its rights to any such Developments. If Employer requires Executive’s
assistance under this Section 9 after termination of this Agreement, Executive
shall be compensated for his/her time actually spent in providing such
assistance at an hourly rate equivalent to the prevailing rate for such services
and as agreed upon by the parties.

 

 
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10.     Non-Solicitation; Post-Termination Cooperation.

 

10.1     Customers. During the term of this Agreement, Executive has a duty of
loyalty and a fiduciary duty to Employer. While employed by Employer, Executive
shall not divert or attempt to divert (by solicitation or other means), whether
directly or indirectly, Employer’s customers for the purpose of inducing or
encouraging them to sever their relationship with Employer or to solicit them in
connection with any product or service competing with those products and
services offered and sold by Employer. Also, to the fullest extent permissible
under applicable law, following termination of Executive’s employment with
Employer for any reason, Executive agrees not use any of Employer’s confidential
proprietary or trade secrets information to directly or indirectly divert or
attempt to divert (by solicitation or other means) Employer’s customers for the
purpose of inducing or encouraging them to sever their relationship with
Employer or to solicit them in connection with any product or service competing
with those products and services offered and sold by Employer.

 

10.2     Employees. To the fullest extent permissible under applicable law,
Executive agrees that both during the term of this Agreement, and for a period
of one (1) year after the Termination Date, Executive shall not take any action
to induce employees or independent contractors of Employer to sever their
relationship with Employer and accept an employment or an independent contractor
relationship with any other business. However, this obligation will not affect
any responsibility Executive may have as an employee of Employer with respect to
the bona fide hiring and firing of Employer personnel.

 

10.3     Post-Termination Cooperation. For a period of one (1) month following
any termination of this Agreement, Executive will make himself available and
assist Employer, as reasonably requested, with respect to prior services,
transition of duties, and intellectual property filings and protection.

 

11.     Arbitration; Remedies. Executive and Employer agree that any dispute
between the parties (including any affiliate, successor, predecessor,
contractors, employees, and agents of Employer) that may arise from Executive’s
employment with Employer or termination of Executive’s employment with Employer,
and/or regarding the rights or obligations of the parties under this Agreement,
will be submitted to binding arbitration. The arbitration requirement applies to
all statutory, contractual, and/or common law claims arising from the employment
relationship including, but not limited to, claims arising under Title VII of
the Civil Rights Act of 1964; the Age Discrimination in Employment Act; the
Equal Pay act of 1963; the California Fair Employment and Housing Act; the
California Labor Code; the Fair Labor Standards Act, the American With
Disabilities Act, and other applicable federal and state employment laws. Both
Employer and Employee shall be precluded from bringing or raising in court or
another forum any dispute that was or could have been submitted to binding
arbitration. This arbitration requirement does not apply to claims for workers’
compensation benefits, claims arising under ERISA, or claims for any provisional
or injunctive relief remedies as set forth in the California Code of Civil
Procedure (or any statute or law of similar effect concerning provisional or
injunctive relief remedies in any other applicable jurisdiction). In fact, the
parties agree that, in the event of a breach or threatened breach of Sections
7-10 of this Agreement by Executive, monetary damages alone would not be an
adequate remedy to Employer for the injury that would result from such breach,
and that Employer shall be entitled to apply to any court of competent
jurisdiction for specific performance and/or injunctive relief (without posting
bond or other security) in order to enforce or prevent any violation of such
provisions of this Agreement. Executive further agrees that any such injunctive
relief obtained by Employer shall be in addition to monetary damages.

 

 
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Binding arbitration under this Agreement shall be conducted in Sacramento
County, California in accordance with the California Arbitration Act, Code of
Civil Procedure sections 1280, et. seq. The arbitration shall be conducted
before a neutral arbitrator selected by both parties and shall otherwise be
conducted in accordance with the American Arbitration Association’s “National
Rules for the Resolution of Employment Disputes”. Where required by law,
Employer shall pay all additional costs peculiar to the arbitration to the
extent such costs would not otherwise be incurred in a court proceeding. Each
party shall pay their own attorney’s fees and costs. The parties will be
permitted to conduct discovery as provided by the California Code of Civil
Procedure. The arbitrator shall, within thirty (30) days after the conclusion of
the arbitration, issue a written award setting forth the factual and legal bases
for his/her decision and judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.

 

NOTE: THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A
JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS
OF THE EMPLOYER/EMPLOYEE RELATIONSHIP.

 

12.     Actions Contrary to Law; Blue Pencil. Nothing contained in this
Agreement shall be construed to require the commission of any act contrary to
law, and whenever there is any conflict between any provision of this Agreement
and any statute, law, ordinance, or regulation, contrary to which the parties
have no legal right to contract, then the latter shall prevail; but in such
event, the provisions of this Agreement so affected shall be curtailed and
limited only to the extent necessary to bring it within legal requirements. The
parties hereby acknowledge that the restrictions set forth in Sections 7-10 have
been specifically negotiated and agreed to by the parties hereto and if the
scope or enforceability of any such section is in any way disputed at any time,
and should a court find that such restrictions are overly broad, the court may
modify and enforce the covenant to the extent that it believes to be reasonable
under the circumstances.

 

13.     Internal Revenue Code.

 

13.1     Section 280G. Notwithstanding any other provision of this Agreement to
the contrary, if the right to receive or benefit from any payments under this
Agreement, including Sections 6.2 or 6.3, either alone or together with other
payments that Executive has a right to receive from Employer, would constitute a
“parachute payment” (as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”)), all such payments will be reduced to the largest
amount that will result in no portion being subject to the excise tax imposed by
Section 4999 of the Code.

 

13.2     Section 162(m). Notwithstanding any provision of this Agreement to the
contrary, if Employer determines that compliance with Section 162(m) of the Code
is required or desired, all payments made under this Agreement to Executive will
comply with the requirements of Section 162(m) of the Code.

  

 
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14.     Section 409A Compliance.

 

14.1     Conditions to Payment. This Agreement is intended to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)
or an exemption thereunder and shall be construed and administered in accordance
with Section 409A. Notwithstanding any other provision of this Agreement,
payments provided under this Agreement may only be made upon an event and in a
manner that complies with Section 409A or an applicable exemption. Any payments
under this Agreement that may be excluded from Section 409A either as separation
pay due to an involuntary separation from service or as a short-term deferral
shall be excluded from Section 409A to the maximum extent possible. Any payments
to be made under this Agreement upon a termination of employment shall only be
made if such termination of employment constitutes a “separation from service”
under Section 409A. Notwithstanding the foregoing, Employer makes no
representations that the payments and benefits provided under this Agreement
comply with Section 409A and in no event shall Employer be liable for all or any
portion of any taxes, penalties, interest or other expenses that may be incurred
by the Executive on account of non-compliance with Section 409A.

 

14.2     Specified Employee. Notwithstanding any other provision of this
Agreement, if at the time of the Executive’s termination of employment, he is a
“specified employee”, determined in accordance with Section 409A, any payments
and benefits provided under this Agreement that constitute “nonqualified
deferred compensation” subject to Section 409A that are provided to the
Executive on account of his/her separation from service shall not be paid until
the first payroll date to occur following the six-month anniversary of the
Executive’s termination date (“Specified Employee Payment Date”). The aggregate
amount of any payments that would otherwise have been made during such six-month
period shall be paid in a lump sum on the Specified Employee Payment Date and
thereafter, any remaining payments shall be paid without delay in accordance
with their original schedule. If the Executive dies during the six-month period,
any delayed payments shall be paid to the Executive’s estate in a lump sum upon
the Executive’s death.

 

14.3     Reimbursement. To the extent required by Section 409A, each
reimbursement or in-kind benefit provided under this Agreement shall be provided
in accordance with the following: (a) the amount of expenses eligible for
reimbursement, or in-kind benefits provided, during each calendar year cannot
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year; (b) any reimbursement of an eligible
expense shall be paid to the Executive on or before the last day of the calendar
year following the calendar year in which the expense was incurred; and (c) any
right to reimbursements or in-kind benefits under this Agreement shall not be
subject to liquidation or exchange for another benefit.

 

15.     Miscellaneous.

 

15.1.     Notices. All notices and demands of every kind shall be personally
delivered or sent by first class mail to the parties at the addresses appearing
below or at such other addresses as either party may designate in writing,
delivered or mailed in accordance with the terms of this Agreement. Any such
notice or demand shall be effective immediately upon personal delivery or three
(3) days after deposit in the United States mail, as the case may be.

 

 

EMPLOYER:

Cesca Therapeutics

    2711 Citrus Road     Rancho Cordova, CA 95742

 

 
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EXECUTIVE:     Vivian Liu

_________________________

_________________________

 

15.2.     Attorneys’ Fees; Prejudgment Interest. If the services of an attorney
are required by any party to secure the performance hereof or otherwise upon the
breach or default of another party to this Agreement, or if any judicial remedy
or arbitration is necessary to enforce or interpret any provision of this
Agreement or the rights and duties of any person in relation thereto, to the
extent permitted by law, the prevailing party shall be entitled to reasonable
attorneys’ fees, costs and other expenses, in addition to any other relief to
which such party may be entitled. Any award of damages following judicial remedy
or arbitration as a result of the breach of this Agreement or any of its
provisions shall include an award of prejudgment interest from the date of the
breach at the maximum amount of interest allowed by law.

 

15.3.     Choice of Law, Jurisdiction, Venue. This Agreement is drafted to be
effective in the State of California, and shall be construed in accordance with
California law. The exclusive jurisdiction and venue of any legal action by
either party under this Agreement shall be the County of Sacramento, California.

 

15.4.     Amendment, Waiver. No amendment or variation of the terms of this
Agreement shall be valid unless made in writing and signed by Executive and
Employer. A waiver of any term or condition of this Agreement shall not be
construed as a general waiver by Employer. Failure of either Employer or
Executive to enforce any provision or provisions of this Agreement shall not
waive any enforcement of any continuing breach of the same provision or
provisions or any breach of any provision or provisions of this Agreement.

 

15.5     Change in the Time and Form of Payment. Any amendment that proposes to
delay the time or form of the payment of any deferred compensation payable
pursuant to the terms of this Agreement shall be subject to the following
restrictions:

 

(a)     Any election to amend the terms of this Agreement to defer the time or
form of payment of deferred compensation hereunder shall not take effect for
twelve (12) months after the date on which the election to amend the time of
form of payment is made: and

 

(b)     Any election to amend the terms of this Agreement to defer the payment
of deferred compensation payable hereunder shall require that the first payment
of any deferred compensation payable hereunder be deferred for a period of not
less than five (5) years from the date such payment would have been made but for
the amendment of the Agreement to defer the payment date.

 

15.6.     Assignment; Succession. It is hereby agreed that Executive’s rights
and obligations under this Agreement are personal and not assignable. Further,
neither Executive, nor beneficiary, nor any other person entitled to payments
hereunder shall have the power to transfer, assign, anticipate, mortgage or
otherwise encumber in advance any of such payments, nor shall such payments be
subject to seizure for the payment of public or private debts, judgment, alimony
or separate maintenance or be transferable by operation of law in event of
bankruptcy, insolvency or otherwise. This Agreement contains the entire
agreement and understanding between the parties to it and shall be binding on
and inure to the benefit of the heirs, personal representatives, successors and
assigns of the parties hereto.

 

 
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15.7.     Independent Covenants. All provisions herein concerning unfair
competition and confidentiality shall be deemed independent covenants and shall
be enforceable without regard to any breach by Employer unless such breach by
Employer is willful and egregious.

 

15.8.     Entire Agreement. This document constitutes the entire agreement
between the parties, all oral agreements being merged herein, and supersedes all
prior representations. There are no representations, agreements, arrangements,
or understandings, oral or written, between or among the parties relating to the
subject matter of this Agreement that are not fully expressed herein.

 

15.9.     Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of the
Agreement which can be given effect without the invalid provision shall continue
in full force and effect and shall in no way be impaired or invalidated.

 

15.10.     Captions. All captions of sections and paragraphs in this Agreement
are for reference only and shall not be considered in construing this Agreement.

 

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH AFFECTS YOUR LEGAL
RIGHTS AND MAY BE ENFORCED BY THE PARTIES.

 

 

    EMPLOYER:

 

CESCA THERAPEUTICS INC.

 

 

 

 

 

 

 

 

 

 

 

/s/ Xiaochun “Chris” Xu

 

 

 

Xiaochun “Chris” Xu

 

 

 

Interim Chief Executive Officer

 

            /s/ Mahendra Rao       Mahendra Rao       Compensation Committee
Chairman              

EXECUTIVE:

              /s/ Vivian Liu       Vivian Liu  

 

 
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EXHIBIT A

 

FORM OF GENERAL RELEASE

 

General Release and Waiver

 

 

This General Release and Waiver (“Release”) is made and entered into as of
________________________ (the “Release Date”), by and between Cesca Therapeutics
Inc., a Delaware corporation (“Employer”), and Vivian Liu (“Executive,”).
Employer and/or Executive may hereinafter be referred to individually as a
"Party" or collectively as the "Parties."

 

In consideration of the mutual covenants hereinafter set forth, the Parties
hereby agree as follows:

 

1.     Separation. Executive’s employment with Employer ended effective
______________________.

 

2.     Payment and Benefits. In consideration of the promises made in this
Release, Employer has agreed to pay Executive the benefits described in
Sections 6.2 and 6.3 of that certain Executive Employment Agreement made and
entered into as of _______________________, 2017, by and between the Parties
(the “Employment Agreement”). Executive understands and acknowledges that the
benefits described in this Section 2 constitute benefits in excess of those to
which Executive would be entitled without entering into this Release. Executive
acknowledges that such benefits are being provided by Employer as consideration
for Executive entering into this Release, including the release of claims and
waiver of rights provided in Section 3 of this Release.

 

3.     Release of Claims and Waiver of Rights.

 

(a)     Executive, on Executive’s own behalf and that of Executive’s spouse,
heirs, executors or administrators, assigns, insurers, attorneys and other
persons or entities acting or purporting to act on Executive’s behalf (the
“Executive’s Parties”), hereby irrevocably and unconditionally release, acquit
and forever discharge Employer, its affiliates, subsidiaries, directors,
officers, employees, shareholders, partners, agents, representatives,
predecessors, successors, assigns, insurers, attorneys, benefit plans sponsored
by Employer and said plans’ fiduciaries, agents and trustees (the “Released
Parties”), from any and all actions, cause of action, suits, claims,
obligations, liabilities, debts, demands, contentions, damages, judgments,
levies and executions of any kind, whether in law or in equity, known or
unknown, which the Executive’s Parties have, have had, or may in the future
claim to have against the Released Parties by reason of, arising out of, related
to, or resulting from Executive’s employment with Employer or the termination
thereof. This release specifically includes without limitation any claims
arising in tort or contract, any claim based on wrongful discharge, any claim
based on breach of contract, any claim arising under federal, state or local law
prohibiting race, sex, age, religion, national origin, handicap, disability or
other forms of discrimination, any claim arising under federal, state or local
law concerning employment practices, and any claim relating to compensation or
benefits. This specifically includes, without limitation, any claim which the
Executive has or has had under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, as amended, the Americans
with Disabilities Act, as amended, and the Employee Retirement Income Security
Act of 1974, as amended. It is understood and agreed that the waiver of benefits
and claims contained in this section does not include: (i) a waiver of the right
to payment of any vested, nonforfeitable benefits to which the Executive or a
beneficiary of the Executive may be entitled under the terms and provisions of
any employee benefit plan of Employer which have accrued as of the separation
date; (ii) a waiver of the right to benefits and payment of consideration to
which Executive may be entitled under the Employment Agreement or any of the
agreements contemplated thereby (including indemnification agreements and the
stock option agreements); and (iii) a waiver of any rights to indemnification
under the Certificate of Incorporation or Bylaws of the Employer or an
subsidiary of Employer or under applicable law and regulation. Executive
acknowledges that he is only entitled to the severance benefits and compensation
set forth in the Employment Agreement, and that all other claims for any other
benefits or compensation are hereby waived, except those expressly stated in the
preceding sentence.

 

 
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Nothing in this Release shall be deemed to require the waiver or release of any
claim that may not be released or waived under applicable federal or state law.

 

(b)     Executive hereby acknowledges that he/she understands that under this
Release he/she is releasing any known or unknown claims he may have arising out
of, related to, or resulting from Executive’s employment with Employer or the
termination thereof (the "Released Claims"). He/she therefore acknowledges that
he has read and understands Section 1542 of the California Civil Code, which
reads as follows:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”

 

Executive expressly waives and relinquishes all rights and benefits under that
section and any law of any jurisdiction of similar effect with respect to the
Released Claims.

 

4.     Acknowledgment of Waiver of Claims under ADEA. Executive acknowledges
that Executive is waiving and releasing any rights Executive may have under the
Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and
release is knowing and voluntary. Executive acknowledges that the consideration
given for this Release is in addition to anything of value to which Executive
already is entitled. Executive further acknowledges that Executive has been
advised by this writing that:

 

(a)     the release and waiver granted herein does not relate to claims under
the ADEA which may arise after this Release is executed;

 

(b)     Executive should consult with an attorney prior to executing this
Release;

 

 
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(c)     Executive has at least twenty-one (21) days within which to consider
this Release as it relates to claims under the ADEA, although Executive may
accept the terms of this Release at any time within those 21 days and earlier
execute this Release;

 

(d)     Executive has seven (7) days following the execution of this Release to
revoke this Release as it relates to claims under the ADEA; and

 

(e)     This Release will not be effective as it relates to claims under the
ADEA until the revocation period has expired, which will be the eighth (8th) day
after this Release is executed by both Parties, and the severance payments
described in the Employment Agreement will not be paid until this Release has
become effective and all statutory revocation periods have expired.

 

5.     Non-Disparagement. The parties agree to treat each other respectfully and
professionally and not disparage the other party, and the other party’s
officers, directors, employees, shareholders and agents, in any manner likely to
be harmful to them or their business, business reputation or personal
reputation; provided that both the Executive and Employer will respond
accurately and fully to any question, inquiry or request for information when
required by the legal process.

 

6.     No Admissions. Employer denies that it or any of its employees or agents
has taken any improper action against Executive. Nothing contained herein shall
be deemed as an admission by Employer of any liability of any kind to Executive,
all such liability being expressly denied. Further, this Release shall not be
admissible in any proceeding as evidence of improper action by Employer or any
of its employees or agents.

 

7.     Non-Waiver. Employer’s waiver of a breach of this Release by Executive
shall not be construed or operate as a waiver of any subsequent breach by
Executive of the same or of any other provision of this Release.

 

8.     Restrictive Covenants. Executive understands that the covenants in
Sections 7-10 of the Employment Agreement survive the termination of his/her
employment with Employer.

 

9.     Amendment, Waiver. No amendment or variation of the terms of this Release
shall be valid unless made in writing and signed by Executive and Employer. A
waiver of any term or condition of this Agreement shall not be construed as a
general waiver by Employer. Failure of either Employer or Executive to enforce
any provision or provisions of this Agreement shall not waive any enforcement of
any continuing breach of the same provision or provisions or any breach of any
provision or provisions of this Agreement.

 

10.     Construction. The terms set forth in Section 11 and Sections 15.1, 15.2,
15.3, 15.7 and 15.9 of the Employment Agreement shall apply to this Release,
provided that the word “Release” shall take the place of the word “Agreement” in
such Sections, where applicable.

 

 

[Remainder of page left blank intentionally. Signature page follows.]

 

 
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IN WITNESS WHEREOF, the Parties have executed this Release as of dates set forth
below their respective signatures below.

 

 

EMPLOYER:

EXECUTIVE:

       

CESCA THERAPEUTICS INC.

   

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Xiaochun “Chris” Xu

 

Vivian Liu

 

 

Interim CEO

 

 

                      Date:     Date:    

 

 

 

 

[Signature Page to General Release and Waiver]

 

 

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