Employment Agreement - PET Net Pharmaceutical Services and Mark S. Rhoads
February 15, 2000
Mark S. Rhoads
797 N. St. Augustine Road
Chesapeake City, MD 21915
Dear Mark:
We're very pleased to offer you employment as the President and CEO of P.E.T.Net
Pharmaceutical Services. In this position, you will report to the Board of
Directors of P.E.T.Net, and work closely with other P.E.T.Net and CTI employees.
As you know, P.E.T.Net is the only commercial company that manufactures and
distributes PET radiopharmaceuticals through a nationwide network of PET
Manufacturing Distribution Centers (PMDC). We believe you have the background
and skills to make a significant contribution to our long-term success, and that
you will play an important role in helping P.E.T.Net achieve our goals and
objectives. We also believe that P.E.T.Net provides a unique environment and
career challenges that will stimulate your continued personal and professional
development.
We are offering you a comprehensive compensation package which includes the
following elements:
- Base salary of $175,000 a year, paid every two weeks. Your salary will
be reviewed annually by the Board of Directors of P.E.T.Net.
- A professional expense and car allowance of $8,000 per year, paid every
two weeks.
- Participation in the executive incentive pay program. Basically, you
can earn up to 120% of your base salary in incentive pay compensation.
For a "normal" year, e.g. one in which we make plan, you could earn a
cash bonus of 40% of base pay for the year. For a "very good" year, you
could earn up to an additional 40% of base pay with 50% of the amount
in cash and 50% in stock options. For an "outstanding" year, you could
earn up to an additional 40% of base pay all of which would be in stock
options. The number of shares in the options would be determined from
the dollar amount of the applicable bonus and the FMV of the stock at
the time of the award. The parameters defining a normal, very good, and
outstanding year will be defined at the beginning of the year by the
Officer Compensation Committee of the Board. Since our fiscal year
began in October, this fiscal year you would earn a 40% cash bonus if
we make plan. Since you did not participate in the plan development, we
would guarantee a minimum cash bonus of 40% this year. The Officer
Compensation Committee will determine any awards beyond this amount.
<PAGE>
- An Incentive Stock Option grant of 800,000 P.E.T.Net shares at today's
FMV of $2.25 per share. These 800,000 shares would be 4.6% of the
current outstanding P.E.T.Net shares. Twenty percent of the options
would vest on your start date and 20% would vest on each anniversary of
your start date. Obviously, the potential for significant returns from
the growth in value of P.E.T.Net is very high, and you will be a major
contributor to making that happen.
- An excellent Fringe Benefits Program, which includes a medical and
dental plan, life insurance, and a 401(k) Plan. The P.E.T.Net Benefits
Program provides a number of individual options, including the
opportunity to achieve tax savings through Flexible Spending and
Dependent Care Accounts. Our benefits are explained in more detail in
the attachment. We have provided some additional information that will
help to quantify the value of your personal P.E.T.Net benefits package.
- Three weeks of vacation per year and ten paid holidays.
- A relocation package which includes the relocation of your household
goods with our current carrier, QuickWay Transportation, temporary
housing for up to 90 days with Corporate Quarters, duplicate housing
costs and a relocation allowance of $25,000. The duplicate housing
costs payment, not to exceed $3,000 per month, will be provided after
you move from Corporate Quarters until your present home is sold for up
to 12 months. The relocation allowance is provided to cover transition
expenses such as current home sale costs, new home closing costs, final
moving trip expenses, miscellaneous items such as car tags and
cable/phone connections, and IRS taxes on the allowance amount.
This offer is contingent on your ability to pass a physical examination and drug
screening test administered by a licensed physician designated by and
compensated by P.E.T.Net. This offer is also contingent on your agreement to
P.E.T.Net's "Guidelines for Protection of Confidential and Proprietary
Information," which are attached. You should sign and return these guidelines to
us with the signed copy of the offer letter.
In the event that, P.E.T.Net terminates your employment for any reason other
than Cause or Disability, then you shall be entitled to receive the following
payment:
P.E.T.Net shall pay you following the date of your employment termination and
over the succeeding (6) six months, in accordance with standard payroll
procedures, an amount equal to six (6) months of your Base Compensation in
effect on the date of the employment termination.
P.E.T.Net may terminate your employment for "Cause." "Cause" will exist in the
event you are convicted of a felony, or in carrying out your duties, you are
guilty of gross negligence or gross misconduct resulting, in either case in
material harm to P.E.T.Net. In the event your employment is terminated for
Cause, you will be entitled to any unpaid salary through the date of termination
due you, and you will be entitled to no other compensation hereunder from
P.E.T.Net and your deferred compensation will be forfeited.
<PAGE>
We want you to know how much we hope that you decide to join us. If you have any
questions or we can assist you in any way, please let us know.
Regards,
/s/ Terry Douglass /s/ James K. Milam
------------------------------------- -------------------------------------
Terry Douglass James K. Milam
President & CEO Human Resources Director
The undersigned accepts the above employment offer and agrees that it contains
the terms of employment with P.E.T.Net and that there are no other terms
expressed or implied
/s/ Mark Rhoads Date: February 21, 2000
------------------------------------- -------------------------------
Mark Rhoads