EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT"), effective as of February 1,
1998, is entered into by and between Avatex Corporation, a Delaware corporation
(the "COMPANY"), and Xxxx X. Xxxxxx ("EMPLOYEE").
In consideration of the mutual covenants contained herein, the parties
hereto agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Employee, and
Employee hereby agrees to be employed by the Company, beginning on the date of
this Agreement through and including January 31, 2000 (the "TERM OF
EMPLOYMENT").
2. POSITION AND RESPONSIBILITIES. The Company hereby employs Employee to
serve as Vice President -- Finance. Employee shall have such duties,
responsibilities and authority as may, from time to time, be assigned to
Employee by more senior officers of the Company.
3. COMPENSATION. As compensation for all services performed and to be
performed by Employee under this Agreement, the Company shall compensate
Employee as follows:
a. BASE SALARY. The Company shall pay Employee a minimum monthly
base salary of $16,666.67 (as may be adjusted from time to time, the
"MONTHLY BASE SALARY"). During the term of this Agreement, Employee's
Monthly Base Salary shall be reviewed periodically to determine whether
such salary shall be adjusted in accordance with the duties and
responsibilities of Employee and his performance thereof, but no adjustment
shall reduce Employee's base salary below the minimum Monthly Base Salary
set forth above.
b. CAR ALLOWANCE. The Company shall pay Employee a minimum monthly
car allowance in the amount of $750.00.
c. BENEFITS, INCENTIVES AND PERQUISITES. Employee shall be entitled
to participate in the incentive, stock option and employee benefit plans of
the Company, including but not limited to a Performance Incentive Plan to
be implemented by the Company, and the perquisites enjoyed by other
employees with similar or same titles of the Company as presently in effect
or as they may be modified from time to time, provided that the Company may
not reduce the benefits provided to Employee pursuant to Employee's life
insurance, accidental death and dismemberment, long-term disability and
business travel accident insurance during the term of this Agreement.
d. INDEMNIFICATION. Employee shall be entitled to all of the rights
and benefits set forth in the Indemnification Agreement dated as of October
23, 1997 between the Company and Employee.
4. TERMINATION. This Agreement may be terminated upon the following
terms:
a. TERMINATION UPON DEATH. If Employee dies during the Term of
Employment, this Agreement shall terminate immediately.
b. TERMINATION UPON DISABILITY. The Company shall have the right to
terminate this Agreement upon the "Disability" of Employee by providing ten
(10) days written notice to Employee. "DISABILITY" as used in this section
shall mean any illness or any impairment of mind or body that (i) renders
it impossible or impracticable for Employee to perform his duties and
responsibilities hereunder for a continuous period of at least six (6)
months or (ii) is likely to prevent Employee from performing his duties and
responsibilities hereunder for more than nine (9) months during any
eighteen (18) month period, each as determined in good faith by a physician
selected by the Board of Directors. The Company's selection of a physician
shall be subject to Employee's approval, which shall not be unreasonably
withheld. Any refusal without reasonable cause by Employee to submit to a
medical examination for the purpose of certifying Disability under this
section shall be deemed to constitute conclusive evidence of Employee's
Disability. In the event of termination upon Disability, Employee shall
continue to receive the Monthly
Base Salary in effect at the time of termination (reduced by any amounts
payable to Employee as disability benefits under any Company plan, social
security or otherwise) for the remainder of the Term of Employment.
c. TERMINATION FOR CAUSE. The Company shall have the right to
terminate this Agreement, and have no further obligation to Employee under
this Agreement, for "Cause" after giving written notice of termination to
Employee. "CAUSE" as used in this section shall mean:
(i) misconduct or negligence in the performance by Employee of his
duties and responsibilities hereunder;
(ii) the failure by Employee to follow any reasonable directive of
Employee's Supervisor or the Company's Chief Executive Officers in
carrying out his duties or responsibilities hereunder;
(iii) the failure by Employee to substantially achieve agreed upon
goals and objectives;
(iv) the theft or misappropriation of funds or the disclosure of trade
secrets or other confidential or proprietary information in violation
of SECTION 6 of this Agreement; or
(v) the conviction of Employee for (A) a crime involving an act or
acts of dishonesty or moral turpitude or (B) a felony.
d. TERMINATION WITHOUT CAUSE. The Company shall have the right to
terminate Employee's employment at any time without Cause ("TERMINATION
WITHOUT CAUSE"). In the event of a Termination Without Cause of Employee's
employment, and provided that Employee complies with SECTION 5 hereof, the
Company agrees to provide Employee with:
(i) At Employee's option, (x) a single lump sum severance payment
equal to the amount of the total compensation that would otherwise be
paid by the Company to Employee during the nine (9) month period
commencing on the effective date of Termination Without Cause or (y)
monthly severance payments in the amount of Employee's total annual
compensation during the twelve (12) month period commencing on the
effective date of Termination Without Cause, divided by twelve (12),
for a period of eighteen (18) months; and
(ii) For a period of twelve (12) months commencing on the effective
date of Termination Without Cause, medical and dental benefits
coverage, less any amount that Employee is required to pay to receive
such medical and dental coverage had termination of his employment not
occurred.
In addition to the foregoing, as set forth in Section 12 of the
Company's 1993 Stock Option and Performance Award Plan (as amended, the
"PLAN") and Section 4(c) of the stock option agreements previously executed
by the Company and Employee, in the Event of a Termination Without Cause of
Employee's employment following or in connection with a Change in Control
(as such term is defined in Section 14 of the Plan), all options previously
issued to Employee pursuant to the Plan that have not yet vested thereunder
shall be deemed to have vested as of the date of such termination and
Employee shall be entitled to exercise all options issued pursuant to the
Plan during the remaining term specified in the option grant and pursuant
to the other terms thereof.
Without in any way limiting the generality of what may be deemed to
constitute a Termination Without Cause hereunder, it is hereby agreed that
any material reduction of Employee's duties, responsibilities and authority
shall be deemed to constitute a Termination Without Cause hereunder.
e. TERMINATION BY EMPLOYEE. Employee shall be entitled to terminate
his employment with the Company at any time. If Employee's terminates his
employment for Good Reason (as such term is defined below), such
termination shall be deemed a Termination Without Cause under SECTION 4(d)
of this
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Agreement. If Employee terminates without Good Reason, Employee
shall no longer be entitled to any form of compensation, including but not
limited to any Monthly Base Salary, benefits, incentives, perquisites or
vacation.
Without in any way limiting the generality of what may be deemed to
constitute a Good Reason hereunder, it is hereby agreed that a termination
by Employee shall be deemed for Good Reason if it is as a result of or
follows:
(i) A breach by the Company of this Agreement (including but not
limited to as a result of or following rejection of this Agreement
under any debtor relief or similar law);
(ii) A reduction in Employee's Monthly Base Salary as in effect on
the date hereof or as may be increased from time to time;
(iii) The taking of any action by the Company that could be deemed
to constitute a Termination Without Cause; or
(iv) The mandatory transfer of the permanent residence of Employee
to another geographic location more than 40 miles from Dallas, Texas,
except for required travel on Company business to an extent
substantially consistent with Employee's prior business travel
obligations.
5. NONDISCLOSURE.
a. Employee acknowledges that during the course of the
performance of his services for the Company he will acquire confidential
and proprietary information with respect to the Company's business
operations (the "CONFIDENTIAL INFORMATION"). Employee agrees that during
the term of this Agreement and thereafter, Employee shall not divulge any
Confidential Information to any person, directly or indirectly, except to
the Company, its directors, officers, agents and representatives and its
subsidiaries and affiliated companies, or as may reasonably be necessary in
connection with his duties on behalf of the Company or unless required by
law.
b. Employee acknowledges that all documents, written information,
records, data, computer information and material, tapes, film, maps and
other material of any kind relating to Confidential Information,
including, without limitation, memoranda, notes, sketches, records,
reports, manuals, business plans and notebooks (collectively, "MATERIALS")
in Employee's possession or under his control during the term of his
employment hereunder are and shall remain the property of the Company and
agrees that if his relationship with Company is terminated (for whatever
reason), he shall not take with him but shall leave with the Company all
Materials and any copies thereof or, if such Materials are not on the
premises of the Company, he shall return the same to the Company
immediately upon his termination.
c. This SECTION 5 shall survive any termination of this Agreement
and shall continue to bind Employee in accordance with its terms. The
existence of any claim or cause of action by Employee against the Company
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the Company's enforcement of the covenants contained in this
Agreement.
6. REMEDIES. In the event that Employee breaches any of the provisions
of SECTION 5 above, in addition to any legal rights and remedies that the
Company may have to enforce the provisions of this Agreement, the Company shall
have no further obligations to Employee under this Agreement. In the event of
such a breach, Employee agrees that any and all proceeds, funds, payments and
proprietary interests of every kind and description arising from, or
attributable to, such breach shall be the sole and exclusive property of the
Company and the Company shall be entitled to recover any additional actual
damages incurred as a result of such breach.
7. INJUNCTIVE RELIEF. Notwithstanding anything contained in this
Agreement to the contrary, in the
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event of a breach of the provisions of SECTION 5 above, the Company shall, in
addition to any other remedies available under law, be entitled to an
injunction enjoining Employee or any person or persons acting for or with
Employee in any capacity whatsoever from violating any of the terms thereof.
8. SEVERABILITY. If any provision of this Agreement shall for any reason
be held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision was never contained herein and the remaining provisions
of this Agreement shall remain in full force and effect.
9. WAIVER AND LIMITATION. Any waiver by either party of a provision or a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any other provision or subsequent breach of any provision hereof.
10. TAXES. Employee shall be responsible for the payment of all
individual taxes on all amounts paid or benefits provided to him under this
Agreement. All compensation paid to Employee shall be subject to any
withholdings as from time to time may be required to be made pursuant to law,
government regulations or order, or by agreement with, or consent of, Employee.
11. NO FUNDING. The right of Employee under this Agreement shall be that
of a general creditor of the Company and Employee shall have no preferred claims
on, or any beneficial ownership in, the assets of the Company.
12. ENTIRE AGREEMENT. Except as expressly provided herein, this
Agreement, and the agreements, documents and compensation, incentive and option
plans referred to herein, contain the entire agreement between the parties
hereto relating to the subject matter hereof and supersede any and all other
prior or contemporaneous employment, compensation, incentive or retirement
agreements, either oral or in writing, between the parties.
13. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, legatees,
legal representatives, successors and assigns. Employee may not assign any of
his rights or responsibilities under this Agreement.
14. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
mailed by certified mail (return receipt requested) or sent by overnight
delivery service, cable, telegram, facsimile transmission or telex to the
parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice:
a. if to the Company:
Avatex Corporation
Attention: Xx. Xxxxx X. Xxxxxx
Xx. Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
b. if to Employee:
Xxxx X. Xxxxxx
0000 Xxxxxxxxxx
Xxxxxx, Xxxxx 00000
15. HEADINGS. Section and subsection headings used in this Agreement have
been inserted solely for convenience of reference and do not constitute a part
of this Agreement and are not intended to affect the
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interpretation of any provision of this Agreement.
16. AMENDMENTS. This Agreement may not be amended except by an instrument
in writing signed by the parties hereto.
17. GOVERNING LAW. This Agreement and all performance hereunder shall be
governed by and construed in accordance with the laws of the State of Texas
without regard to the principles of conflict of laws thereof.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective on
the date and year first above written.
AVATEX CORPORATION ------------------------------
Xxxx X. Xxxxxx
By:
--------------------------
Abbey X. Xxxxxx
Co-Chief Executive Officer
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