Exhibit 10.3 March 12, 2007 Dear Jim, You have made an outstanding contribution to ViaCell, Inc. (the "Company" or "ViaCell") since joining us, and we feel confident that you will continue to be a valuable contributor to our success. On behalf of the Company, I am pleased to offer you continued employment on the terms described below. POSITION President of ViaCell Reproductive Health, reporting to Marc Beer, Chief Executive Officer. COMPENSATION The base salary for this position will continue to be $257,288 per year, payable in substantially equal bi-weekly installments or in accordance with the Company's regular payroll practices as in effect from time to time, subject to adjustment pursuant to the Company's standard annual salary review process. Currently, our standard annual salary review process occurs each January for senior management. In addition, you will continue to be eligible to participate in the Management Bonus Plan at an annual target of 40% of your base salary, payable annually based on agreed-to Company and individual performance objectives. Your bonus payout is determined based on achievement of both corporate and individual goals. ADDITIONAL EMPLOYMENT TERMS ViaCell will provide for twelve (12) months' severance pay in the event of involuntary termination without Cause or voluntary termination for Good Reason. If the Company terminates your employment without Cause or if you terminate your employment for Good Reason then ViaCell will continue paying your base salary and medical and dental benefit contributions for a period of twelve (12) months in accordance with its regular payroll practices at such time (the "Severance Payments"). The term "Cause" as used herein means (i) your continued failure to substantially perform your duties, provided you are reasonably notified of such failure and given reasonable time to correct such failure, (ii) any misappropriation of funds, properties or assets of the Company by you, (iii) any damage or destruction of any property or assets of the Company caused by you, whether resulting from your willful actions or willful omissions or gross negligence; (iv) your being convicted of a felony; or (v) any material breach of your employment obligations or of the Intellectual Property and Confidential Information Agreement.
J. Corbett Page 2 The term "Good Reason" as used herein means any action by the Company without your prior consent which results in (i) any material diminution in your title, position, duties, responsibilities or authority; or (ii) any breach by the Company of any material provision contained herein; provided that a Good Reason shall not be deemed to exist for purposes of this severance provision until you have provided the Company with written notice of same and the Company has not cured it for 30 days following the receipt of such notice. CHANGE OF CONTROL Upon a Change of Control of the Company, all options held by you at the time of such Change of Control scheduled to vest in the subsequent twelve-month period only as a result of the passage of time shall vest immediately with respect to that portion of such options so scheduled to vest. Such options will otherwise continue to be subject to other applicable grant provisions. If the Company terminates your employment without Cause or you voluntarily resign for Good Reason within twelve months of a Change of Control, all options held by you at the time of such Change of Control that, by their terms, become exercisable only as a result of the passage of time shall become fully vested and exercisable. Such options will otherwise continue to be subject to other applicable grant provisions. Further, ViaCell will, upon such a termination following a Change of Control and in addition to the severance payment described above, pay you your bonus pursuant to the Management Bonus Plan for the bonus year in which such termination occurs, with the bonus for such period determined by assuming achievement of Company and individual performance objectives (the "Change of Control Bonus"). A "Change in Control" shall mean: (i) a merger, consolidation or similar combination after which 50% or more of the voting stock of the surviving corporation is held by persons who were not stockholders of the Company immediately prior to such merger or combination; (ii) the sale, transfer or other disposition of all or substantially all of the Company's assets to one or more persons (other than any wholly owned subsidiary of the Company) in a single transaction or series of related transactions; or (iii) any person or related group of persons (other than the Company or a person who directly or indirectly controls, is controlled by, or is under common control with the Company) directly or indirectly acquires beneficial ownership (determined pursuant to Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of securities comprising more than 50% of the total combined voting power of the Company's outstanding securities pursuant to a tender or exchange offer made directly to the Company 's stockholders.
J. Corbett Page 3 RELEASE OF CLAIMS Any obligation of the Company to pay you the Severance Payments or the Change of Control Bonus described above is conditioned on your signing and returning to the Company a timely and effective release of claims in the form provided by the Company (the "Release of Claims"). Such Release of Claims creates legally binding obligations on your part, and the Company therefore advises you to seek the advice of an attorney before signing it. Any Severance Payment or Change of Control Bonus to which you are entitled shall be payable in accordance with the normal payroll practices of the Company, and will begin at the Company's next regular payroll period which is at least five business days following the later of the effective date of the Release of Claims or the date the Release of Claims, signed by you, is received by the Company; but the first payment shall be retroactive to the date of termination. BENEFITS Because we care about the well being of our employees, we are pleased to continue to provide you with a comprehensive offering of benefits. Our benefits currently include medical, dental, life insurance, 401k, three weeks vacation (accrued monthly and pro-rated during your first calendar year of employment), balance benefit, educational assistance and flexible-spending accounts. EMPLOYMENT RELATIONSHIP While we look forward to a long and mutually beneficial relationship, you acknowledge that this letter does not constitute a contract of employment for any particular period of time and does not affect the at-will nature of your employment relationship with the Company. Either you or ViaCell have the right to terminate your employment at any time.
We are very excited about the future of ViaCell and believe that the opportunities presented will allow you significant personal and professional growth. If you have any questions or concerns, please do not hesitate to contact me anytime. We look forward to having you continue on our team! Sincerely, /s/ Marc D. Beer - ------------------------------------- Marc D. Beer Chief Executive Officer /s/ Jim Corbett - ------------------------------------- Signature