Exhibit 10.25


 


Talecris Biotherapeutics

79 TW Alexander Drive

Research Triangle Park, North Carolina 27709


 


February 8, 2005


 


Stephen Petteway


203 LeGault Dr.


Cary, North Caroline, 27513


 


Dear Steve,


 


As you know, Talecris Biotherapeutics (“Talecris”) has agreed to
purchase Bayer’s Plasma Business. When the purchase is completed (the “Closing”)
we want you to be a part of the Talecris team. The purpose of this letter is to
confirm the basic terms of your employment with Talecris.


 


Your Position


 


We anticipate that the Closing will occur within the next month or two
months. If you are actively employed by Bayer at the time of Closing, you will
transfer to Talecris in the position of Senior Vice President, Research and
Development, and will to have the authority, responsibilities and duties of
that position and such other duties as are assigned to you from time to time.


 


Your Base Salary


 


Your base salary (“Base Salary”) will be $225,000 per year (plus the
amount of any performance increase to which you are entitled for 2005). Each year, your performance
and salary will be reviewed. Based on business outlook and individual
performance your salary may be adjusted.


 


Your Benefits


 


While employed by Talecris, you will be
entitled to participate in all benefit plans in which employees of Talecris
are generally eligible to participate within the terms of those plans. Some of the benefit plans that
will be provided include health plans, disability, and life insurance plans;
profit sharing, options and a 401(k) savings plan. For the purpose of
benefits eligibility, your prior service with Bayer will be honored.


 


Until the Closing, you will continue your current level of
participation in your medical, dental, vision, and prescription drug plans;
short-term disability plan; flexible spending accounts; and life insurance.
Following the Closing, the plans will be replaced with new Talecris plans.
These new plans will be implemented as soon as practicable and you will receive
separate communication associated with those plans. The Pension Plan and
Retiree Medical Plan will remain obligations of Bayer and will not be replaced
by Talecris.


 


The current Talecris holiday and vacation schedule is the same as the Bayer
holiday and vacation schedule. You will be “grandfathered” at your current
level of vacation benefits.


 

















 


Your
Bonus Compensation


 


Regardless
of the date of the Closing, Bayer has informed us it will continue to honor its
obligations to pay any awards for which you were eligible under the terms of
the Bayer Long Term Incentive Compensation (LIC) plan and Short Term Incentive
(STI) plan. These awards, if any, will be paid by Bayer and are expected to be
paid according to Bayer payroll policies.


 


Following
the Closing, and while you are employed by Talecris, you will be entitled to
participate in an annual bonus pool. Your target annual bonus will be 40%. For
2005, the overall financial measure for funding the Bonus program is based on a
combination of EBITDA (Earnings Before Interest, Depreciation ant
Amortization), FCF (Free Cash Flow) and other strategic performance goals.


 


Bonus
payments, if earned, will be made in two installments over two years. Once the
audited financial results are known and management has had the opportunity to
determine the award pool based on the corporate performance
targets, your individual bonus will be calculated. The first payment which will
equal 60% of your total award will be made on or before May 1 of the year
following the year in which the bonus performance was calculated. The second payment
of the remaining 40% will be made on or before May 1 of the following
year, along with any new bonus payment for that year. To be eligible to receive
the bonus payment, you must be actively employed on each award payment date and
have met individual performance expectations.


 


Options:


 


You
will be eligible to participate in an equity incentive plan established by Talecris in an amount and on terms to be determined by Talecris and subject to approval by the Board of Directors. The number of options in your grant will be
communicated to you shortly. Options will vest based on time and performance
requirements:


 


Time-Based Vesting of Options


 


·                  Twenty-five
percent (25%) of your option grant will be based upon a five year time based vesting
schedule, with 5% of the initial
options vesting on an annual
basis beginning with the individuals first year
anniversary date.


 


Performance-Based Distribution of Options


 


·                  Seventy-five
percent (75%) of the Individual’s option grant will be based upon a five-year
performance based vesting schedule (“Performance Options”).


 


·                  Two thirds of your Performance Options (50%
of your total option grant) will vest based upon annual performance targets
(10% per year) (“Annual Performance Options”) and one third
(25% of your option grant) based upon a 5- year cumulative performance target (“Cumulative
Performance Options”). In order for Annual Performance Options to vest, the
Company’s performance must be at or above 100% of the performance targets set
by the Board for the year in question.


 


·                  Performance
targets will be tied to EBITDA and FCF goals set by the Board. In setting these
goals the Board will take into consideration the initial investment thesis and
the current budget.


 


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·                  The Board may, in its sole discretion, make
appropriate adjustments for changes in timing of major capital projects and
other quality of earnings adjustments or other factors determined in good faith
by the
Board.


 


This
is a summary, and does not describe all of the terms of your options. Your
options will be governed by the terms of the Talecris Stock Option Plan, which
will control if there is any conflict with this letter.


 


Withholding


 


All
pay, bonuses, stock options, incentives, and other compensation shall be
subject to applicable withholdings for federal, state and local taxes and shall
be payable in accordance with Talecris regular payroll policies.


 


Employment
At Will


 


Notwithstanding
anything in this letter to the contrary, your employment by Talecris will be at
will and may be terminated by Talecris at any time, subject to Talecris
generally applicable employment policies.


 


Amendment
or termination of plans or practices


 


Talecris
continues to reserve the right to modify, amend or terminate any of the employee
benefit plans or practices described in these materials. In all cases, the plan
rules are the exclusive source for determining rights and benefits under a
benefit or compensation plan and those plans shall govern if there is conflict
with these materials.


 


In the event the Closing does not occur and the Purchase Agreement
terminates pursuant to its terms, the terms outlined above are null and void.


 


As a condition to your employment you must agree to the terms of the
enclosed Agreement. To indicate your acceptance of an offer of employment from
Talecris, please sign where indicated below and return a copy of this letter
along with a signed copy of the attached Executive Intellectual Property
Agreement by February 25, 2005 to Don Taylor, Director of Human Resources.


 


I
look forward to working with you. Welcome to the Talecris team!


 


Sincerely,


 


	
  /s/ Lawrence Stern

  	
   

  
	
  Lawrence Stern

  	
   

  
	
  Chairman and Interim CEO

  	
   

  
	
  Talecris Biotherapeutics, Inc.

  	
   

  



 


I accept the above described offer of employment with Talecris Biotherapeutics,
Inc.


 


	
  /s/ Stephen R. Petteway Jr.

  	
   

  	
  Stephen R. Petteway Jr.

  
	
  Signature

  	
   

  	
  Print Name

  
	
   

  	
   

  	
   

  
	
  2/   /05

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  



 


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Appendix Re: Termination Provisions


 


	
  Termination/
  Severance:

  Good Reason/ without Cause

  	
   

  	
  In
  the event of a termination of the Executive’s employment by the Company
  without Cause or by Executive for Good Reason (other than on account of a
  Change of Control), the Executive will be entitled to the following upon
  execution of a valid release of claims against the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·      A lump sum payment of all accrued and unpaid
  salary and vacation pay (“Accrued Benefits”); 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·      Continued payment (in accordance with the normal
  payroll practices of the Company) of the monthly amount of Base Salary in
  effect as of the date of termination for a period that is equal to at least
  12 months; 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·      Continuation of benefits for the period during
  which the monthly installments are paid; and 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ·      A lump sum payment of any accrued, unpaid bonus
  under the Company’s annual bonus plan, the amount of which will based upon
  the achievement of performance targets as of the date of termination of
  employment.

  
	
   

  	
   

  	
   

  
	
  Termination/Severance: Death/Disability/Cause or
  without Good Reason

  	
   

  	
  In the event of a termination of the Executive’s
  employment by the Company for Cause or as a result of death or Disability or
  by Executive without Good Reason, the Executive will be entitled to Accrued
  Benefits.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Disability” means inability to perform duties for
  six (6) consecutive months and, within thirty (30) days after a notice
  of termination is given to Executive, Executive has not returned to work.

  
	
   

  	
   

  	
   

  
	
  Definitions of Cause and Good Reason:

  	
   

  	
  “Cause” means (i) conviction of, or plea of
  guilty or nolo contendere to, a misdemeanor involving moral turpitude or a
  felony; or (ii) a willful and intentional breach of the Employment
  Agreement by Executive which is materially economically harmful to the
  Company; (iii) willful misconduct by Executive that is materially economically
  injurious to the Company, (iv) Executive’s willful contravention of
  specific lawful directions from the Board or (v) intentional breach of
  Executive’s covenant not to compete or confidentiality. No act, or failure to
  act, shall be considered “willful” unless committed in bad faith and without
  a reasonable belief that the act or omission was in the best interests of the
  Company.  

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “Good Reason” means, without Executive’s consent,
  (i) the failure of Executive to be appointed to the position set forth;
  (ii) the assignment to Executive of duties materially inconsistent with
  Executive’s status as [title] or an adverse alteration in the nature of
  Executive’s duties and/or responsibilities, reporting obligations, titles or
  authority; (iii) a reduction by the Company in Executive’s Base Salary
  or annual short term bonus; or (iv) the relocation of Executive’s
  principal office location to a location that is more than 50 miles away. The
  Company shall have 30 days after receipt of notice from
  Executive in writing specifying the deficiency to cure the deficiency that
  would result in Good Reason.

  
	
   

  	
   

  	
   

  
	
  Non-Competition; Non-Solicitation and
  Confidentiality:

  	
   

  	
  For a period of one year following the Executive’s
  termination of employment, the Executive will not enter into any employment
  or service relationship with or have any economic interest in (subject to
  customary carve-outs for public holdings) any competitor in the business of
  manufacturing, marketing, distribution, sale and or research and development
  of all plasma-derived products. In addition for a period of one year
  following the Executive’s termination of employment for any reason, the
  Executive will not solicit any of the Company’s customers or employees or
  independent contractors of the Company during that period and the Executive
  shall not be permitted at any time to disclose any 

  



 

















 


	
   

  	
   

  	
  confidential information of the Company or
  Cerberus, unless required by law or an order of a court or governmental
  agency with jurisdiction. In the event of the breach by the Executive of any
  of the foregoing covenants, the Company shall have the right to exercise customary
  remedial measures, including, but not limited to, ceasing the payment of any
  severance payments.

  
	
   

  	
   

  	
   

  
	
  Inventions

  	
   

  	
  The Executive agrees that all discoveries,
  inventions, improvement and innovations related to the Company’s business
  discovered, invented or originated by the Executive during his employment or
  within a 12-month period after termination of employment
  is the exclusive property of the Company.