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Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment
Agreement (this “Agreement”) is entered into between
AVAX Technologies, Inc., a Delaware corporation (the
“Corporation”), and Mr. Richard P. Rainey, an
individual (the “Executive”) residing at 203 North
Blakely Street, Dunmore, Pennsylvania, effective as of April 1,
2004, (the “Effective Date”).
WITNESSETH:
WHEREAS, the
Corporation and the Executive desire to enter into this Agreement,
setting forth certain terms of the Executive’s
employment.
NOW, THEREFORE,
in consideration of the foregoing and the mutual promises and
covenants herein contained, it is agreed as follows:
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EMPLOYMENT; DUTIES, POWERS AND AUTHORITY
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(a) The
Corporation engages and employs the Executive, and the Executive
hereby accepts engagement and employment as President of the
Corporation.
(b) The
Executive shall perform his duties with all such powers and
authority as appertain to such office in accordance with the
Corporation’s by-laws, subject to overall direction
consistent with the legal authority of the Board of Directors of
the Corporation (the “Board”) and such duties, powers
and authority shall not be limited or materially changed by the
Corporation during the Employment Period. The Executive shall
perform his duties hereunder from the Corporation’s offices
and at such other places as shall be necessary according to the
needs, business or opportunities of the Corporation; provided, that
the Executive acknowledges and agrees that the performance by the
Executive of his duties hereunder may require significant domestic
and international travel by the Executive.
(c) The
Executive shall report solely to the Board, and, subject to such
direction and supervision, the Executive shall supervise, control
and be responsible for all financial aspects of the Corporation and
have such other executive powers and duties as may from time to
time be prescribed by the Board.
(d) The
Executive shall devote such of his time and efforts as shall be
necessary to the proper discharge of his duties and
responsibilities under this Agreement. The Executive may engage in
other ventures and activities only with the permission of the
Board.
The
Executive’s employment hereunder shall, unless earlier
terminated, be for a term of three (3) years (the “Initial
Period”) commencing on the Effective Date of this Employment
Agreement. The Initial Period and any Renewal Periods (as defined
below) are collectively referred to herein as the “Employment
Period”. On a date not less than nine (9) months before the
end of the Employment Period, the Company and the Employee shall
negotiate in good faith whether to extend the Term of this
Agreement for a further three year period (the “Renewal
Periods”) which term(s) are subject to earlier termination as
hereinafter provided.
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(a) As
compensation for the performance of his duties on behalf of the
Corporation, the Executive shall be compensated during the
Employment Period as follows:
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(i) |
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A base salary of not less than $200,000 per annum (the
“Base Salary”), subject to annual review commencing 12
months from the Effective Date; |
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(ii) |
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At the sole and absolute discretion of the Board, the Executive
may be eligible to receive an annual incentive bonus (targeted to
be 30%, the “Target”), beginning with the first
anniversary of the Effective Date during the Employment Period. The
Executive shall meet with the Chairman to establish such objectives
and performance standards (as the Board determines are to be taken
into account in determining the Executive’s bonus awards
provided for herein. It is assumed that the objectives will include
performance criteria for the Corporation and the stock of the
Corporation, pursuant to the compensation plan of the Corporation.
In consideration of such bonus, the Executive may use some or all
of the criteria listed in Exhibit I to make its determination. The
Target shall be paid only if the Executive reasonably determines
that the Executive has met all of the agreed to Objectives and
performance standards. The bonus may be more or less than Target
based upon the degree to which the Objectives and performance
standards are met or exceeded, and shall be calculated pursuant to
the Compensation Plan of the Corporation as approved by the
Compensation Committee of the Board of Directors. |
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(iii) |
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The Corporation shall withhold all applicable federal, state
and local taxes, social security and workers’ compensation
contributions and such other amounts as may be required by law or
agreed upon by the parties with respect to the compensation payable
to the Executive pursuant to this section 3(a) or otherwise in
connection with his employment by the Corporation. |
(b) The
Corporation hereby awards to the Executive the right and option to
purchase from the Corporation all or any part of an aggregate
250,000 shares of the Common Stock of the Corporation, par value
$.004, at an exercise price of $0.125 per share. These options
shall vest and be exercisable in accordance with the terms and
conditions of the Corporation’s Incentive Stock Option Plan.
In addition, from time to time, at the discretion of the Board of
Directors, the Executive may be entitled to additional stock
options pursuant to the Corporation’s Incentive Stock Option
Plan.
(c) The
Corporation shall reimburse the Executive for all normal, usual and
necessary expenses incurred by the Executive in furtherance of the
business and affairs of the Corporation, including reasonable
travel and entertainment, against receipt by the Corporation of
appropriate vouchers or other proof of the Executives expenditures
and otherwise in accordance with such Expense Reimbursement Policy
as may from time to time be adopted by the Board of Directors of
the Corporation.
(d) The
Executive shall be entitled, during the Employment Period, to not
less than four weeks per year of paid vacation time, so long as it
does not, in the discretion of the Board, disrupt operations. The
days selected for the Executive’s vacation must be mutually
agreeable to the Corporation and the Executive.
(e) During
the Employment Period, the Executive shall be entitled to
participate in any group insurance, hospitalization, medical,
dental, health and accident, disability or similar plan or program
of Corporation now existing or established hereafter to the extent
that he is eligible under the general
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provisions
thereof. The Corporation shall at all times during the term of this
Agreement maintain at its expense life insurance on the life of the
Executive with death benefits of at least Six Hundred Thousand
Dollars ($600,000) in the form of a policy owned by the Executive,
the beneficiaries of which are the Executive’s estate or
other beneficiaries designated by the Executive. Upon termination
of this Agreement, the Corporation shall transfer the policy and
all accrued benefits thereunder to the Executive at no cost to the
Executive such that thereafter the Executive may maintain the full
benefits of the policy by paying premiums that become due for
periods after termination at levels not greater than those being
paid by the Corporation during the term of this
Agreement.
(f) The
Executive shall continue to be entitled to receive his salary and
benefits hereunder during any period (up to a maximum of 10
business days (or such greater number of days as are consistent
with the Corporation’s sick leave policies) per year) during
which he is unable to perform his duties hereunder because of ill
health or Disability (as defined below).
(g) Subject
to paragraphs (d) through (f) of Section 10 below, the Executive
must be an employee of the Corporation at the time that any
compensation is due in order to receive such
compensation.
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REPRESENTATIONS AND WARRANTIES BY EXECUTIVE AND
CORPORATION
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The Executive
hereby represents and warrants to the Corporation as
follows:
(a) Neither
the execution and delivery of this Agreement nor the performance by
the Executive of his duties and other obligations hereunder violate
or will violate any statute, law, determination or award, or
conflict with or constitute a default under (whether immediately,
upon the giving of notice or lapse of time or both) any prior
employment agreement, contract, or other instrument to which the
Executive is a party or by which he is bound.
(b) The
Executive has the full right, power and legal capacity to execute
and deliver this Agreement and to perform his duties and other
obligations hereunder. This Agreement constitutes the legal, valid
and binding obligation of the Executive enforceable against him in
accordance with its terms. No approvals or consents of any persons
or entities are required for the Executive to execute and deliver
this Agreement or perform his duties and other obligations
hereunder.
The Corporation
hereby represents and warrants to the Executive as
follows:
(a) The
Corporation is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, which has
all requisite corporate power and authority to own its properties
and conduct its business in the manner presently
contemplated.
(b) The
Corporation has full power and authority to enter into this
Agreement and to incur and perform its obligations hereunder. This
Agreement constitutes the legal, valid and binding obligation of
the Corporation enforceable against the Corporation in accordance
with its terms.
(c) The
execution, delivery and performance by the Corporation of this
Agreement does not conflict with or result in a breach or violation
of or constitute a default under (whether immediately, upon the
giving of notice or lapse of time or both) the certificate of
incorporation or by-laws of the Corporation, or any agreement or
instrument to which the Corporation is a party or by which the
Corporation or any of its properties may be found or
affected.
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(a) The
Executive understands and recognizes that his services to the
Corporation are special and unique and agrees that, during the
Employment Period and for a period of two years from the date of
termination of his employment for cause hereunder, he shall not in
any manner, directly or indirectly, on behalf of himself or any
person, firm, partnership, joint venture, corporation or other
business entity (“Person”), enter into or engage in any
business directly competitive with the Corporation’s business
or relating to — immunotherapies for the treatment of cancer,
or other therapies, treatments or matters within the scope of, or
research and development relating to, the Corporation’s
business, either as an individual for his own account, or as a
partner, joint venturer, executive, agent, consultant, salesperson,
officer, director or shareholder of a Person operating or intending
to operate within the area that the Corporation is, at the date of
termination, conducting its business (collectively,
“Restricted Business”). This paragraph 5(a) shall be
null and void if the Executive is terminated by the Corporation for
any reason other than that pursuant to Section
10(a)(iii).
(b) In
the event that the Executive breaches any provisions of this
Section 5 or there is a threatened breach, then, in addition to any
other rights which the Corporation may have, the Corporation shall
be entitled, without the posting of a bond or other security, to
injunctive relief to enforce the restrictions contained herein. In
the event that an actual proceeding is brought in equity to enforce
the provisions of this Section 6, the Executive shall not urge as a
defense that there is an adequate remedy at law nor shall the
Corporation be prevented from seeking any other remedies that may
be available.
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CONFIDENTIAL INFORMATION
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(a) The
Executive agrees that during the course of his employment and for a
period of three years after termination, he will not disclose or
make accessible to any other person, the Corporation’s
products, services and technology, both current and under
development, promotion and marketing programs, lists, trade secrets
and other confidential and proprietary business information of the
Corporation or any of its clients except to the extent the same
have become generally known to the public other than through a
breach of this Section 6. The Executive agrees: (1) not to use any
such information for himself or others during such three-year
period; and (ii) not to take any such material or reproductions
thereof from the Corporation’s facilities at any time during
his employment by the Corporation, except as required in the
Executive’s duties to the Corporation. The Executive agrees
immediately to return all such material and reproductions thereof
in his possession to the Corporation upon request and in any event
upon termination of employment.
(b) Except
with prior written authorization by the Corporation, the Executive
agrees not to disclose or publish any of the confidential,
technical or business information or material of the Corporation,
its clients or any other party to whom the Corporation owes an
obligation of confidence, at any time during or for a period of
three (3) years after his employment with the
Corporation.
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OWNERSHIP OF PROPRIETARY INFORMATION
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(a) The
Executive agrees that all information that has been created,
discovered or developed by the Corporation, its subsidiaries,
affiliates, successors or assigns (collectively, the
“Affiliates”) (including, without limitation,
information relating to the development of the Corporation’s
business created by, discovered by, developed by or made known to
the Corporation or the Affiliates by Executive during the
Employment Period and information relating to Corporation’s
customers, sup
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