Document:

EX-10.22

 

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.

 

 

          (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	 	 	 	 	 	 	 	 

8EX-10.23

 

EXHIBIT
10.23

AMENDMENT NO. 1 TO

EMPLOYMENT AGREEMENT

     This Amendment No. 1 (this “Amendment”), dated as of May 31, 2007, to the Employment Agreement
(“Agreement”), dated as of September 25, 2000, between Kurt Brunden (“Employee”) and ADVANCED
BIOTHERAPEUTICS, INC. (“Employer”).

     WHEREAS, Employee is employed by Advanced Biotherapeutics, Inc., a wholly-owned subsidiary of
Athersys, Inc. (“Athersys”); and

     WHEREAS, Employer and Employee wish to amend the Agreement in connection with the planned
merger (the “Merger”) of Athersys with a wholly-owned subsidiary of a shell company (as such term
is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) that has a class of equity securities registered under Section 12 of the Exchange Act
(“PubCo”); and

     WHEREAS, concurrent with and as a condition to the closing of the Merger, PubCo intends to
conduct a private placement transaction pursuant to Regulation D promulgated under the Securities
Act of 1933, as amended, whereby PubCo will receive gross proceeds of at least $40 million as
consideration for the issuance of its equity securities (the “Offering”).

     NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

     1. Notwithstanding anything to the contrary in the Agreement, neither the consummation of the
Merger nor the consummation of the Offering shall be deemed a “Change in Control” for purposes of
the Agreement.

     2. This Amendment and the Agreement shall bind and inure to the benefit of and be enforceable
by Employee, Employer and their respective heirs, executors, personal representatives, successors
and assigns, except that neither party may assign any rights or delegate any obligations hereunder
without the prior written consent of the other party. Notwithstanding anything to the contrary in
the foregoing, Employee hereby consents to the assignment by Employer of all of its rights and
obligations hereunder to any successor to Employer by merger or consolidation or purchase of all or
substantially all of Employer’s assets, including, without limitation, any deemed assignment that
occurs as a result of the consummation of the Merger.

     3. This Amendment may be executed in two or more counterparts, each of which constitutes an
original, and all of which taken together shall constitute one and the same Amendment. It is
understood that all parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by email delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and

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effect as if such facsimile or “.pdf” signature page were an original thereof.

     4. The validity, interpretation, construction and performance of this Amendment will be
governed by the laws of the State of Ohio without regard to its conflicts of law principles.

     5. Capitalized terms used but not otherwise defined herein have the meanings set forth in the
Agreement.

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     IN WITNESS WHEREOF, each of the parties has executed this Amendment as of the day and year
first written above.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Kurt Brunden	 	 	 	Advanced Biotherapeutics, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	/s/ Kurt Brunden 	 	 	 	By:	 	/s/ Gil Van Bokkelen	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Name:
	 	Gil Van Bokkelen	 	 
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Date

	 	 	 	 	 	 	 	Date	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Acknowledged By:	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Athersys, Inc.	 	 	 	ReGenesys, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John Harrington	 	 	 	By:	 	/s/ William (BJ)
Lehmann	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	John Harrington
	 	 	 	 	 	Name:
	 	William (BJ) Lehmann	 	 
	 

	 	Title:
	 	Executive Vice President & CSO
	 	 	 	 	 	Title:
	 	Vice President, Secretary & Treasurer	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Date

	 	 	 	 	 	 	 	Date	 	 	 	 	 	 

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