EXHIBIT 99.2
SEVERANCE AGREEMENT
SEVERANCE AGREEMENT, dated as of February 25, 2001
(this "Agreement"), by and among AVAX Technologies, Inc., a Delaware corporation
(the "Corporation"), and Xx. Xxxxxxx X. Xxxxx (the "Executive").
RECITALS
WHEREAS, the Corporation and the Executive entered into an
employment agreement dated as of October 15, 1999 (the "Employment Agreement"),
pursuant to which the Executive agreed to serve as President and Chief Executive
Officer of the Corporation;
WHEREAS, the Executive has served as President and Chief
Executive Officer of the Corporation since June 1, 1996;
WHEREAS, the Executive has resigned, effective as of February
28, 2001, from his positions as President, Chief Executive Officer and a
director of the Corporation; and
WHEREAS, the Corporation and the Executive have agreed that it
is in their respective best interests to provide for an amicable separation by
setting forth the parties' rights and obligations with respect to each other in
connection with the Executive's resignation.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Executive and the
Corporation agree as follows:
1. TERMINATION OF THE EXECUTIVE'S EMPLOYMENT.
The Executive hereby confirms his resignation from his
positions as President, Chief Executive Officer and a director of the
Corporation (and all subsidiaries of the Corporation) effective as of February
28, 2001 (the "Termination Date").
2. TERMINATION OF THE EXECUTIVE'S EMPLOYMENT AGREEMENT.
The Executive and the Corporation hereby agree that the
Employment Agreement is terminated effective as of the Termination Date;
PROVIDED, HOWEVER, that, notwithstanding anything to the contrary contained in
the Employment Agreement, the respective rights and obligations of the Executive
and the Corporation under Sections 3 (c) and (e) (Compensation), 6 (Confidential
Information), 7 (Ownership of Proprietary Information), 8 (Disclosure and
Ownership of Inventions) and 11 (Indemnification) shall survive such termination
as amended herein.
3. SEVERANCE COMPENSATION.
a. In consideration of the Executive's
execution of the Severance Agreement, the Executive shall receive a lump sum
payment equal to (i) $315,000 payable on March 6, 2001 (the first business
day following the eighth day after execution by the Executive of the Severance
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Agreement) and (ii) $78,750 payable on March 1, 2002 (collectively referred to
as the "Severance Payment"); provided, that the Executive shall not in the
interim have revoked his agreement hereto as set forth in Section 8(e) hereof;
provided further, however, that the amounts payable to the Executive pursuant to
clause (ii) above shall be offset by any payments that the Executive is then
entitled to earn as salary from alternative employment during the period from
March 1, 2002 through May 31, 2002. Each Severance Payment shall be made by
certified or cashier's check representing immediately available funds to be
delivered by the Corporation to the Executive on or before the date that such
Severance Payment is due.
b. The Severance Payment shall be subject to
all applicable withholding taxes; provided, however, that all such applicable
taxes are to be withheld at the minimum amounts or in accordance with the
minimum rates as provided by applicable federal and state laws. The Executive
hereby acknowledges that the Severance Payment represents all monies payable to
him by the Corporation, including, without limitation, wages, payment for
accrued and unused vacation days, holiday pay, sick pay and severance pay.
c. In addition to the foregoing, the
Executive shall be paid his regular salary payment covering the period through
February 28, 2001 by check delivered by the Corporation on February 28, 2001.
4. OPTIONS.
a. The Corporation has granted to the
Executive options to purchase an aggregate of 962,761.50 shares (the "Stock
Options") of the Corporation's common stock, par value $.004 per share ("common
stock"). Through June 30, 2002, the Stock Options shall continue to vest and
become fully exercisable in accordance with the respective vesting schedule
(attached hereto as Schedule 2) for each Stock Option as provided in the
respective Notice of Grant of Stock Option. On July 1, 2002, all Stock Options
that have not previously vested shall expire. Notwithstanding anything in the
Severance Agreement to the contrary, all then outstanding Stock Options shall
vest and become fully exercisable on the 10th business day preceding the record
date or effective date, as applicable, of a Change of Control, as defined in the
letter of employment dated May 17, 1996, as amended on April 7, 1997, from the
Corporation to the Executive.
b. Provided that the Executive shall not have
revoked the Severance Agreement as set forth in Section 8(e) hereof, the Stock
Options shall expire in accordance with the respective Expiration Date (as
defined in each Notice of Grant of Stock Option) set forth for each Stock Option
and without regard to the cessation of service provisions contained in Section 6
of the respective Stock Option Agreements relating to the Stock Options. The
Corporation agrees to keep in effect with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, a Registration Statement on Form
S-8 (or successor form) covering the shares of common stock issuable pursuant to
exercise of the Stock Options at all times until all of the Stock Options have
either been exercised or have expired.
5. SALE OF SHARES.
a. The Executive hereby represents and
warrants, as of the date of the Severance Agreement, he owns 9,301 shares of
common stock (excluding common stock issuable upon exercise of the Stock
Options). Any restrictive legends formerly applicable to such shares shall be
deemed to have expired as of the date 90 days after the Executive's resignation,
and, at that time, the
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Corporation shall take all necessary and appropriate steps to release such
shares from the restrictions formerly imposed by the legend.
b. Commencing on the date of the Severance
Agreement and continuing until February 28, 2002, the Executive shall not sell
any shares of common stock that are issued upon the exercise of the Executive's
options and that are acquired by the Executive after the date hereof.
c. From March 1, 2002 to February 28, 2004,
the Executive may sell during any given calendar week no more than 10,000 shares
of common stock. Sales of shares shall be made in blocks of not more than 5,000
shares per day.
d. The Executive may make gifts of his shares
of common stock, provided that the recipient of such gift shall agree that any
sales made by the recipient shall be subject to the selling limitations set
forth in this Section 5.
e. All of the Executive's sales of shares of
common stock under this Section 5 shall be made through a broker that can
provide appropriate documentation regarding compliance with the terms hereof.
All shares issued upon exercise of the Stock Options shall be held of record by
the Executive (or his giftee) until sold in accordance with the Severance
Agreement.
f. The provisions of Sections 5(b), 5(c)
and 5(e) above shall not apply to any sale or other disposition of shares of
common stock by the Executive in any transaction approved by the Board of
Directors of the Corporation or to any sale or other disposition in a private
transaction in which the purchaser agrees in writing to be bound by the
restrictions on transfer contained in Sections 5(b), 5(c) and 5(e) above, as
modified by this Section 5(f).
6. BENEFITS.
a. Pursuant to the requirements of the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), the Executive
and his covered dependents are eligible to continue health and dental insurance
coverage for eighteen (18) months from the Termination Date. The Executive
hereby acknowledges that he has received all requisite COBRA information and is
hereby electing to continue health and dental insurance coverage for himself and
his dependants at his own expense, effective as of the Termination Date.
b. The Executive shall be eligible to exercise
all rights as a participant under the Corporation's 401(k) retirement savings
plan, and shall be entitled to make such contributions to such 401(k) retirement
savings plan as entitled under the terms of the plan and the limitations of
applicable law. Nothing in the Severance Agreement is intended to limit such
rights or entitlement to contributions.
c. The Corporation shall transfer the life
insurance policy on the life of the Executive described in Section 3(e) of the
Employment Agreement, and the individual supplemental disability policy
currently providing coverage to the Executive, and all accrued benefits
thereunder at no cost to the Executive on March 6, 2001, the first business day
following the eighth day after execution by the Executive of the Severance
Agreement; provided, that the Executive shall not have revoked his agreement
hereto as set forth in Section 8(e) hereof.
d. The Corporation shall provide continuing
Directors and Officers
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insurance coverage to the Executive under its Directors and Officers policy for
a period of six years from the date hereof.
e. The Corporation shall reimburse the
Executive for all reasonable legal expenses (not to exceed $15,000.00)
associated with the preparation and negotiation of the Severance Agreement.
7. PROPERTY. The Executive hereby represents and warrants that
attached hereto as SCHEDULE 1 is a complete, true and accurate list of all
property owned by the Corporation currently in the possession of the Executive
("Company Property"). The Executive hereby covenants that all Company Property
will be returned to the Corporation on or before the Termination Date.
Notwithstanding the foregoing, the Executive shall be entitled to retain the
Corporation's laptop computer which he is presently using, provided that all
programs, files, software, improvements and information relating to the
Corporation are removed and/or deleted from the laptop computer by Xxxxx
Xxxxxxxx or Xxx Xxxxxxxx, on behalf of the Corporation, on or before the
Termination Date. The Corporation shall not be responsible for the cost of any
repair or maintenance of the laptop computer that currently or in the future may
be required. The Executive may remove all personal property, including personal
files unrelated to the Corporation, on or before the Termination Date, so long
as the Executive is accompanied by Xxxx Xxxxxx, as counsel to the Corporation.
8. GENERAL RELEASE AND WAIVER.
a. The Executive hereby irrevocably and
unconditionally releases, remises, acquits and discharges the Corporation and
its respective subsidiaries, officers, directors and employees, and each of
their successors and assigns, jointly and severally, from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorneys fees and cost actually
incurred), known or unknown, which the Executive, his heirs, successors, or
assigns have or may have against any of such parties and any and all liability
which any of such parties may have to the Executive whether denominated claims,
demands, causes of action, obligations, damages or liabilities arising from any
and all bases, however denominated, including but not limited to claims under
the Employment Agreement, claims of discrimination under the Civil Rights Act of
1866, as amended, the Civil Rights Act of 1991, as amended, Title VII of the
United States Civil Rights Act of 1964, as amended, 42 U.S.C. Section 1981, the
Equal Pay Act, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Employee Retirement Income Security Act of 1974, as
amended, the human rights laws of the State of Missouri and Kansas City, or any
other federal, state or local law concerning wages, employment or discharge, and
any other law, rule, or regulation or workers' compensation or disability claim
under any such laws. Notwithstanding any other provision of the Severance
Agreement, this release is not intended to interfere with the Executive's right
to file a charge with the U.S. Equal Employment Opportunity Commission in
connection with any claim he believes he may have against the Corporation.
However, by signing and returning the Severance Agreement, the Executive agrees
to waive the right to recover damages in any proceeding he may bring before the
U.S. Equal Employment Opportunity Commission or in any proceeding brought by the
U.S. Equal Employment Opportunity Commission on his behalf. This release relates
to claims directly or indirectly arising from and during his employment
relationship with the Corporation or as a result of the termination of such
relationship. This release is for any relief, no matter how denominated,
including but not limited to wages, back pay, front pay, tort claims,
compensatory damages or punitive damages, in any such case whether or not such
claims have been previously asserted by the Executive. The Executive further
agrees that he will not file
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or permit to be filed on his behalf any such released claim. This release shall
not apply to any of the obligations set forth in the Severance Agreement.
b. The Executive hereby acknowledges that he
has been advised to consult with an attorney in connection with his execution of
the Severance Agreement and that he has done so.
c. The Executive expressly acknowledges
that the termination benefit being offered to him hereby is a benefit to which
he would not be entitled without executing the foregoing release, and
constitutes consideration for the foregoing release.
d. The Executive hereby acknowledges that he
has been provided the opportunity to take twenty-one (21) days to consider
whether to execute the Severance Agreement, and the Executive has chosen to
waive such period and execute the Severance Agreement prior to the expiration of
that twenty-one (21) day waiting period.
e. The Executive understands that during
the seven (7) days following his execution of the Severance Agreement the
Executive may revoke his agreement hereto at any time by notifying the
Corporation in writing. The Executive acknowledges and agrees that in the event
that the Executive revokes his agreement hereto this entire Agreement will be
thereby revoked.
9. RELEASE BY THE CORPORATION.
a. The Corporation, on behalf of itself, its
respective subsidiaries, officers, directors and employees, and each of their
respective predecessors, successors and assigns, jointly and severally, hereby
irrevocably and unconditionally releases, acquits and forever discharges
Executive, Executive's successors, heirs, assigns, executors, administrators
and/or estate, from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses (including
attorney's fees and costs actually incurred), known or unknown, that directly or
indirectly arise out of, relate to or concern Executive's employment or
termination of employment with the Corporation (the "Corporation Claims") which
the Corporation has, owns or holds, or at any time heretofore had, owned or held
against the Executive up to the date on which it executes the Severance
Agreement.
b. The Corporation, on behalf of itself, its
respective subsidiaries, officers, directors and employees, and each of their
respective predecessors, successors and assigns, jointly and severally,
represents and warrants that it has not filed any complaints or charges
asserting any Corporation Claims against the Executive with any local, state or
federal agency or court. The Corporation further represents and warrants that it
has not assigned or transferred to any person or entity any Corporation Claims
or any part or portion thereof.
c. The Corporation agrees that it will not
hereafter pursue any Corporation Claims against the Executive by filing a
lawsuit in any local, state or federal court for or on account of anything which
has occurred up to the present time as a result of Executive's employment;
provided, however, that nothing in this Section 9 shall be deemed to release
Executive from any claims the Corporation may have under the Severance
Agreement.
d. Notwithstanding any provision of this
Section 9 to the contrary, the release described in this Section 9 shall not
apply to any Corporation Claim if:
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(i) the Corporation was unaware of such
Corporation Claim as of the date
hereof;
(ii) the Corporation could not have
discovered such Corporation Claim on
or before the date hereof through
diligent investigation; AND
(iii) the Executive fraudulently concealed
such Corporation Claim, through
active concealment, in addition to
the Executive's conduct giving rise
to such Corporate Claim.
With respect to the exception described in this Section 9(d), the
Corporation has conducted a diligent investigation and is not aware of any
Corporate Claims as of the date hereof.
10. FUTURE COOPERATION.
For a period of one year from the date hereof, without waiving
any privileges or rights, the Executive agrees that so long as the Corporation
is in full compliance with its obligations under the Severance Agreement, he
will make himself available to consult with the Corporation on reasonable
advance notice for up to three (3) business days per calendar month to provide
reasonable transition assistance as well as cooperation with respect to matters
relating to the operations of the Corporation during Executive's tenure. Without
executive's prior consent, such consultation shall not require him to travel
outside of Kansas City. The Executive shall make all travel and hotel
arrangements and reservations as necessary. The Corporation shall reimburse the
Executive for all of his expenses incurred in connection with such assistance
and cooperation and shall pay the Executive for such assistance and cooperation
at a rate of $400.00 per hour (including all travel time), such reimbursement
and payments to be made within two weeks of delivery of an invoice therefor by
the Executive to the Corporation.
11. NON-DISPARAGEMENT/PUBLIC ANNOUNCEMENT.
a. The Executive and the Corporation mutually
agree not to make any statements, in writing or otherwise, that disparage the
reputation or character of the other party hereto (and, with respect to the
Corporation and its affiliates, its and their respective officers, directors,
employees and agents), at any time for any reason whatsoever, except in
connection with any litigation or administrative proceedings by or between the
Executive and the Corporation or as otherwise required by law. The Corporation
shall inform its officers, directors and employees that they may not at any time
whatsoever make any statements, in writing or otherwise, that disparage the
reputation or character of the Executive or that contain untrue facts about the
Executive or omit material facts about the Executive necessary to make any
statements made about the Executive not misleading, except in connection with
any litigation or administrative proceedings by or between the Executive and the
Corporation or as otherwise required by law, and the Corporation shall be liable
to the Executive if any officers or directors of the Corporation make any such
statements, without limiting the right of the Executive to pursue his legal
rights against any such persons if they make any such statements.
b. The Corporation shall provide the Executive
with drafts of any press releases, securities law filings, or other documents,
whether internal or external, referring to the resignation or tenure of the
Executive as far as possible in advance of the release or dissemination of such
information. The Executive may review and comment upon such releases, filings
and other documents, and the Corporation shall exercise reasonable efforts to
modify such statements to
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accommodate the Executive in accordance with federal securities laws. Subsequent
to the Executive's acceptance of a specific press release, securities law
filing, or other document, the Corporation may re-release, re-use or
re-disseminate such prior approved press release, securities law filing, or
other document without further acceptance by the Executive.
12. NON-SOLICITATION.
From the date of the Severance Agreement until
August 31, 2002, Executive shall not, directly or indirectly, without the prior
written consent of the Corporation, solicit or induce any employee of the
Corporation or any of its subsidiaries, Affiliates, successors or assigns to
leave the employ of the Corporation or any Affiliate. From the date of the
Severance Agreement until August 31, 2001, the Executive shall not hire, for any
purpose, any present or former employee of the Corporation, or any of its
subsidiaries, Affiliates, successors or assigns; provided, however,
notwithstanding any provision of the Severance Agreement to the contrary, the
Executive may hire, Xxxxx Xxxx, for any purpose, following the date hereof.
13. NON-COMPETITION.
a. The Executive understands and recognizes
that his services to the Corporation are special and unique and agrees that
until August 31, 2001, 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 whose
primary focus is in the area of cancer vaccines (the "Restricted 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 whose primary focus is the Restricted Business; provided, however, that
nothing herein will preclude the Executive from holding one percent (1%) or less
of the stock of any publicly traded company or from holding a position with a
Person whose primary focus is the Restricted Business so long as (i) the
Executive works in a division of such Person whose primary focus is not the
Restricted Business and (ii) the Executive has no responsibilities for the
direct supervision of, and will not in the ordinary course of discharging his
responsibilities become involved in the analysis of proprietary data or
marketing strategies relating to the Restricted Business.
b. In the event that the Executive breaches
any provision of this Section 13 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 13, 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 which may be available.
14. GENERAL PROVISIONS.
a. If any provision contained in the Severance
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such provision will be modified to the extent necessary to
permit it to be enforceable, and the remaining provisions of the Severance
Agreement will continue to be in force. The parties agree that the Severance
Agreement shall be construed, enforced and interpreted in accordance with and
governed by the laws of the State of Delaware without regard to its conflicts of
law rules.
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b. This Agreement contains the entire
agreement among the Executive and the Corporation with respect to the matters
contemplated herein and supersedes all prior agreements or understandings,
whether written or oral, among the parties with respect to such matters. The
terms of the Severance Agreement may be changed, modified or discharged only by
an instrument in writing signed by the parties hereto. A failure of a party to
insist on strict compliance with any provision of the Severance Agreement shall
not be deemed a waiver of such provision or any other provision hereof. This
Agreement is binding upon the heirs and personal representatives of the
Executive and upon the successors and assigns of the Corporation.
c. The section headings contained in the
Severance Agreement are for the convenience of reference only and shall not
affect the construction of any provision of the Severance Agreement.
d. This Agreement may be executed in two or
more counterparts, each of which will be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed the Severance Agreement
as of the date first written above.
AVAX TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxx
------------------------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Director
EXECUTIVE
/s/ Xxxxxxx X. Xxxxx, M.D.
-------------------------------------------------
Xx. Xxxxxxx X. Xxxxx
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SCHEDULE 1
- Nextel cellular telephone
- Hewlett-Packard Journada
- RIM Blackberry pager
- LCD projector case
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SCHEDULE 2
XXXXXXX X. XXXXX
SCHEDULES OF OPTIONS ISSUED AND VESTING
GRANT VESTING EXPIRATION EXERCISE VESTED AS OF VESTED AS OF VESTED AS OF
DATE COMMENCEMENT DATE AMOUNT PRICE 2/23/01 2/23/02 6/30/02
-----------------------------------------------------------------------------------------------------------
Agreement 1 6/17/96 9/1/96 9/1/03 318,872.50 $1.00 318,872.50 318,872.50 318,872.50
Agreement 2 7/10/97 9/1/97 9/1/04 150,000.00 $4.50 131,250.00 150,000.00 150,000.00
Agreement 3 10/7/98 10/7/98 10/7/05 120,000.00 $1.25 75,000.00 105,000.00 112,500.00
Agreement 4 11/16/99 1/1/00 11/16/06 121,246.00 $2.94 37,889.38 68,200.88 75,778.75
Agreement 5 11/22/99 1/1/00 11/22/06 202,643.00 $2.94 63,325.94 113,986.69 126,651.88
Agreement 6 6/8/00 7/1/00 6/8/07 50,000.00 $8.81 9,375.00 21,875.00 25,000.00
TOTALS 962,761.50 635,712.81 777,935.06 808,803.13
% VESTED 66.0% 80.8% 84.0%
VESTING DATES AGREEMENT 1 AGREEMENT 2 AGREEMENT 3 AGREEMENT 4 AGREEMENT 5 AGREEMENT 6
1 9/1/96 9/1/97 10/7/98 1/1/00 1/1/00 7/1/00
2 12/1/96 12/1/97 1/7/99 4/1/00 4/1/00 10/1/00
3 3/1/97 3/1/98 4/7/99 7/1/00 7/1/00 1/1/01
4 6/1/97 6/1/98 7/7/99 10/1/00 10/1/00 4/1/01
5 9/1/97 9/1/98 10/7/99 1/1/01 1/1/01 7/1/01
6 12/1/97 12/1/98 1/7/00 4/1/01 4/1/01 10/1/01
7 3/1/98 3/1/99 4/7/00 7/1/01 7/1/01 1/1/02
8 6/1/98 6/1/99 7/7/00 10/1/01 10/1/01 4/1/02
9 9/1/98 9/1/99 10/7/00 1/1/02 1/1/02 7/1/02
10 12/1/98 12/1/99 1/7/01 4/1/02 4/1/02 10/1/02
11 3/1/99 3/1/00 4/7/01 7/1/02 7/1/02 1/1/03
12 6/1/99 6/1/00 7/7/01 10/1/02 10/1/02 4/1/03
13 9/1/99 9/1/00 10/7/01 1/1/03 1/1/03 7/1/03
14 12/1/99 12/1/00 1/7/02 4/1/03 4/1/03 10/1/03
15 3/1/00 3/1/01 4/7/02 7/1/03 7/1/03 1/1/04
16 6/1/00 6/1/01 7/7/02 10/1/03 10/1/03 4/1/04
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