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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
BETWEEN: A-FEM MEDICAL CORPORATION, a Nevada corporation (the "Company");
AND: XXXXXX X. XXXXXXX ("Employee").
DATED: Effective April 25, 1998.
RECITAL:
The Company is engaged in the business of developing and marketing
feminine hygiene products and diagnostics world-wide. The parties desire to set
forth their agreement as to Employee's services as Chief Executive Officer of
the Company.
AGREEMENT:
In consideration of the foregoing Recital and the terms, conditions and
covenants set forth below, the parties agree as follows:
SECTION 1. EMPLOYMENT
The Company agrees to employ Employee as its Chief Executive Officer
for a term commencing April 25, 1998, and continuing until termination in
accordance with Section 5. Employee accepts employment with the Company on the
terms and conditions set forth in this Agreement, and agrees to devote
Employee's full time and attention to the performance of Employee's duties under
this Agreement. On all matters of Company policy, Employee shall consult with
the Chairman of the Company. Employee shall perform such specific duties and
shall exercise such specific authority as may be assigned to Employee by the
Company's Board of Directors.
Employee agrees that in all aspects of his employment, Employee shall
comply with the policies, standards, rules and regulations of the Company from
time to time established, and shall perform Employee's duties faithfully,
intelligently, to the best of Employee's ability and in the best interest of the
Company. The devotion of reasonable periods of time by Employee for personal
purposes, outside non-competitive business activities, including service on the
boards of directors of other companies which are not in competition with the
Company, and charitable, civic
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and other activities shall not be deemed a breach of this Agreement, provided
that such purposes or activities do not materially interfere with the services
required to be rendered to or on behalf of the Company.
SECTION 2. CONFIDENTIALITY
2.1 CONFIDENTIAL INFORMATION
Employee acknowledges and agrees that all research, product and
equipment specifications, manufacturing methods, lists of the Company's
customers and suppliers, marketing and product planning information, and other
Company data related to its business, as well as information of third parties
that the Company is required to keep confidential (collectively, the
"Confidential Information"), are valuable assets of the Company. Except for
disclosures reasonably made to advance the business of the Company and
information which is a matter of public record, Employee shall not, during the
term of this Agreement or after termination of employment with the Company for
any reason, disclose any Confidential Information to any person or use any
Confidential Information (regardless of whether same is considered proprietary
or a trade secret) for the benefit of Employee or any other person, except with
the prior written consent of the Company in each instance.
2.2 RETURN OF DOCUMENTS AND PROPERTY
Employee acknowledges and agrees that all originals and all copies of
records, reports, files, correspondence, lists, plans, drawings, memoranda,
notes, sketches, summaries, schedules, codes, tapes and other documentation and
property related to the business of the Company or containing any Confidential
Information are and shall be the sole and exclusive property of the Company, and
shall be returned to the Company upon termination of Employee's employment with
the Company or upon the written request of an authorized representative of the
Company at any time.
2.3 RELATED COMPANY POLICIES
Employee further agrees to comply with all policies, rules and
regulations adopted by the Company's Board of Directors or shareholders from
time to time with respect to xxxxxxx xxxxxxx and other duties applicable to the
employees of a publicly-traded corporation. Employee also agrees, if requested,
to sign a separate confidentiality agreement applicable to all employees. The
terms of such separate agreement will control over any conflicting term in this
Agreement.
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2.4 INJUNCTION
Employee agrees that it would be difficult to measure damage to the
Company from any breach by Employee of Section 2.1, 2.2 or 2.3 and that monetary
damages would be an inadequate remedy for any such breach. Accordingly, Employee
agrees that if Employee shall breach Section 2.1, 2.2 or 2.3, the Company shall
be entitled, in addition to any and all other remedies it may have at law or in
equity, to an injunction or other appropriate order to restrain any such breach,
without showing or proving any actual damage sustained by the Company, and
without posting bond or other undertaking.
2.5 NO RELEASE
Employee agrees that termination of employment with the Company shall
not release Employee from any of Employee's obligations under Section 2.1, 2.2
or 2.3.
SECTION 3. COMPENSATION
3.1 AMOUNT
In consideration of all services to be rendered by Employee to the
Company under this Agreement, the Company shall pay to Employee monthly
compensation of $20,000 (an annualized salary of $240,000.00), payable monthly
in arrears on the same dates as other management personnel are paid, and
prorated for any short calendar month, provided that the Company shall have no
obligation to pay any salary in excess of $10,000 per month unless and until the
Company raises after the date hereof six million dollars ($6,000,000) in equity
or debt acceptable to the Company's Board of Directors, in one transaction or a
series of related transactions, prior to December 31, 1998. Promptly after
closing on such financing, the Company will pay to Employee any accrued but
unpaid salary. Compensation shall be subject to the customary withholding of
income taxes and to other employment taxes required with respect to compensation
paid by an employer to an employee.
3.2 OTHER BENEFITS
Compensation paid to Employee shall be in addition to any contribution
made by the Company for the benefit of Employee to any qualified profit-sharing
or retirement plan maintained by the Company for the exclusive benefit of its
employees. The Company shall provide to Employee and Employee's spouse and
dependents the same coverage and participation that the Company may provide to
other management personnel with respect to accident and health insurance, life
insurance and other employment benefits, upon Employee meeting the respective
eligibility conditions of each such benefit.
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3.3 INCENTIVE AND NON-QUALIFIED STOCK OPTIONS
Subject to approval by the Company's Board of Directors (or a committee
thereof), Employee may be awarded one or more options to purchase shares of the
Company's common stock, exercisable at the approximate publicly-traded price of
such stock on the date of award. The options will be exercisable according to a
vesting schedule and such other terms agreed upon by the parties.
3.4 INCOME FROM EMPLOYEE'S EFFORTS
All income generated by Employee for Employee's services to the
Company, and all activities related to such services, shall belong to the
Company, whether paid directly to the Company or to Employee. Employee agrees
to, upon request by the Company from time to time, render a detailed accounting
of all transactions during the course of Employee's employment.
3.5 WORK MADE FOR HIRE
All techniques, processes, products, manuals, documents, materials,
ideas and Confidential Information developed by Employee while employed by the
Company shall be considered work made for hire and shall, unless specifically
otherwise agreed in writing by the Company prior to such development, become the
sole and exclusive property of the Company.
SECTION 4. EXPENSES
Employee shall be reimbursed expenses incurred in traveling between
Portland and San Diego. In addition, Employee shall be entitled to reimbursement
from the Company for reasonable expenses necessarily incurred by Employee in the
performance of Employee's duties under this Agreement, upon presentation of
vouchers detailing the amount, date and business purpose of each such expense.
All travel and related expenses and reimbursements will be governed by the
travel policies and procedures adopted by the Company.
SECTION 5. TERMINATION
5.1 TERMINATION BY PRIOR NOTICE OR AGREEMENT
The employment of Employee by the Company may be terminated by either
the Company or Employee upon the giving of 30 days' prior written notice to the
other party. This Agreement may be terminated at any earlier time upon the
mutual written agreement of the Company and Employee.
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5.2 IMMEDIATE TERMINATION
The employment of Employee by the Company may be terminated immediately
in the sole discretion of the Board of Directors of the Company upon the
occurrence of any one of the following events:
5.2.1 If Employee shall willfully and continuously fail or
refuse to comply with any of the policies, standards, rules and regulations
established by the Company's Board of Directors or shareholders from time to
time.
5.2.2 If Employee shall be guilty of fraud or dishonesty in
the performance of Employee's duties on behalf of the Company.
5.2.3 If Employee shall fail or refuse to perform any material
provision of this Agreement to be performed by Employee.
5.2.4 If Employee shall suffer a permanent disability. For
purposes of this Agreement, "permanent disability" shall be defined in
accordance with the terms of any disability income policy insuring Employee
which may be purchased by the Company, as determined by the company issuing such
policy. But if such a policy is not in force, "permanent disability" shall be
defined as Employee's inability due to physical or mental illness, or other
cause, to perform the majority of Employee's usual duties for a period of three
months or more, as determined by a physician licensed to practice medicine in
Oregon and chosen by the Company.
5.3 DEATH
In the event Employee dies during the term of this Agreement, this
Agreement shall automatically terminate, and the Company shall pay to Employee's
estate the compensation which would be otherwise payable to Employee through the
last day of the month in which Employee's death occurs.
5.4 COMPENSATION UPON CERTAIN TERMINATION
In the event that the Company terminates Employee's employment without
his consent and not by reason of an event described in Section 5.2 or 5.3 above,
the Company agrees to pay to Employee on the effective date of termination an
amount (net of customary withholdings) equal to 50% of Employee's then
annualized base salary, if notice of termination is given on or prior to 18
months from the effective date of this Agreement, or 100% of Employee's then
annualized base salary if notice of termination is given more than 18 months
from the effective date of this Agreement.
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5.5 AT-WILL EMPLOYMENT
The employment of Employee by the Company is "at-will". Employee may
terminate employment at any time, for any reason or for no reason.
Correspondingly, the Company may terminate Employee's employment at any time,
for any reason or for no reason.
SECTION 6. VACATION; SICK LEAVE
Subject to the prior coordination of time with other officers and
senior management of the Company, Employee shall be entitled to 30 working days
per calendar year (prorated for a short year) of combined vacation/sick days.
Accrual of same and permitted leaves shall be as provided in the Company's
employee manual.
SECTION 7. MISCELLANEOUS
7.1 REPRESENTATION BY EMPLOYEE
Employee represents and warrants to the Company that there is no
employment contract or any other contractual obligation to which Employee is
subject which prevents Employee from entering into this Agreement or from
performing fully Employee's duties under this Agreement.
7.2 NOTICES
Any notice or consent required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
personally delivered to a party or 24 hours after deposit in the United States
Mail, first class postage prepaid by both first class and certified mail, return
receipt requested, or 24 hours after delivery to a recognized national overnight
carrier, with overnight shipping charges paid, and addressed to such party as
follows:
If to Employee: Xxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxxxx
Xx Xxxxx, XX 00000
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If to the Company: A-Fem Medical Corporation
00000 XX Xxxxxx Xxxxxx, Xxxxx X-0
Xxxxxxxx, XX 00000
Attn: Chairman
or such other address as a party may specify by a notice in writing, given in
the same manner.
7.3 ATTORNEYS' FEES
If any action or other proceeding shall be instituted relating to any
term or condition of this Agreement or relating to any of the rights, duties or
obligations arising under it (including without limitation a proceeding for
injunction as provided by Section 2.4), the prevailing party shall be entitled
to recover from the other party, and the other party agrees to pay to the
prevailing party, whether or not the matter proceeds to final judgment or
decree, in addition to costs and disbursements allowed by law, such sum as the
trial and each appellate court may adjudge reasonable as attorneys' fees in such
action or other proceeding, and in any appeal of it.
7.4 INTERPRETATION
The waiver by either party of a breach of any term or provision of this
Agreement shall not be construed as a waiver of any subsequent breach of the
same or any other term or provision by either party. Time is of the essence of
this Agreement in all particulars. The term "days" means calendar days. This
Agreement may not be amended or modified except by written agreement executed by
the parties. The captions heading the sections and subsections of this Agreement
are inserted for convenience of reference only, and are not to be used to
define, limit, construe or describe the scope or intent of any term, provision
or section of this Agreement. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
7.5 INTEGRATION
THIS AGREEMENT CONTAINS THE FINAL AND CONCLUSIVE AGREEMENT AND
UNDERSTANDING OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER OF IT, AND
SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS AGREEMENTS, ORAL OR WRITTEN, INCLUDING
WITHOUT LIMITATION THE PARTIES' LETTER AGREEMENT OF APRIL 21, 1998 (THE
"LETTER"), EXCEPT THE PROVISIONS OF THE LETTER DEALING WITH THE GRANT OF STOCK
OPTIONS.. EXCEPT AS SET FORTH IN THIS AGREEMENT, THERE ARE NO PROMISES,
REPRESENTATIONS,
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AGREEMENTS OR UNDERSTANDINGS, ORAL OR WRITTEN, BETWEEN THE PARTIES RELATING TO
THE SUBJECT MATTER OF THIS AGREEMENT, EXCEPT THE PROVISIONS OF THE LETTER
DEALING WITH THE GRANT OF STOCK OPTIONS.
EXECUTED as of the date first set forth above.
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
EMPLOYEE
A-Fem MEDICAL CORPORATION
By /s/ Xxxxx X. Xxxxxxxx
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Its Chairman
COMPANY
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