schaberempagree.htm


    
      

      

    

    Exhibit
      10.1

     

    EMPLOYMENT
      AGREEMENT

    


    This
      Agreement (the “Agreement”), dated as of December 27, 2007 (the
      “Effective Date”) by and between DOR BioPharma, Inc., a Delaware corporation
      having a place of business at 850 Bear Tavern Road, Suite 201, Ewing, NJ 08628
      (the “Corporation”), and Christopher J. Schaber, PhD, an individual (the
“Employee”).

    


    W
      I T N E
      S S E T H:

    


    WHEREAS,
      the Corporation desires to employ Employee as President and Chief Executive
      Officer, and the Employee desires to be employed by the Corporation as President
      and Chief Executive Officer, all pursuant to the terms and conditions
      hereinafter set forth;

    


    NOW,
      THEREFORE, in consideration of the foregoing and the mutual promises and
      covenants herein contained, it is agreed as follows:

    


    
      	
              1.

            	
              EMPLOYMENTDUTIES

            


    

    


    The
      Corporation engages and employs Employee, and Employee hereby accepts engagement
      andemployment, as President and Chief Executive Officer and a member of the
      board of directors, and shallperform high quality, full-time service to the
      Corporation to direct, supervise and have responsibility for the operations
      of
      the Corporation, including, but not limited to: (i) directing and supervising
      the business, clinical, and research and development efforts of the Corporation;
      (ii) managing the other executives and personnel of the Corporation; and (iii)
      evaluating, negotiating, structuring and implementing business transactions
      with
      the Corporation’s customers and suppliers, and such other activities as may be
      reasonably requested by the Board of Directors of the
      Corporation.  While the Employee remains employed by the Corporation,
      the Corporation shall use its best efforts to nominate and reelect Employee
      as a
      member of the Board of Directors of the Corporation. Employee acknowledges
      and
      understands that his employment may entail significant travel on behalf of
      the
      Corporation.

    


    


    
      	
              2.

            	
              EMPLOYMENT
                TERM

            


    

    


    Employee’s
      employment hereunder shall be for a period of three (3) years, unless extended
      by mutual agreement of the parties (the”Term”).  The Company will have
      a two-week period three months before end of contract to notify Employee that
      contract will not be renewed.  If notification does not come during
      this time it will be understood by all parties that contract will be
      automatically renewed for another three (3) years.

    


    
      	
              3.

            	
              COMPENSATION

            


    

    


    As
      compensation for the performance of
      Employee’s duties on behalf of the Corporation, Employee shallbe compensated as
      follows:

    


    
      	
                          (a)

            	
              (i) The
                Corporation
                shall pay Employee an annual base salary (“Base Salary”) of three hundred
                thousand dollars ($300,000) per annum, payable in accordance with
                the
                usual payroll period of the Corporation.  The base salary shall
                be reviewed at the start of each calendar year for the purposes of
                determining increases, if any.

            


    

    


    (ii)        The
      Corporation shall pay Employee a minimum annual bonus of one hundred thousand
      dollars ($100,000), payable at the end of each calendar year in prorated amount
      if necessary.

    


    (b)           All
      options granted to Employee will be granted pursuant to the Corporation’s
      Employee Stock Option Plan and the Corporation’s standard Stock Option
      Agreement.  All vested options shall be exercisable for a period of
      one year following termination of employment, subject to extension in the
      discretion of the Stock Option Plan administrator.  Upon a change in
      control due to merger or acquisition, all Employee options shall become fully
      vested, and be exercisable for a period of 5 years after the merger or
      acquisition (unless they would have expired sooner pursuant to their natural
      term).  In the event of death of Employee during Term, all unvested
      options shall immediately vest and remain exercisable for the rest of their
      natural term and become property of Employee’s immediate family.

    


    (c)     1,000,000
      shares of common stock of the Corporation will be issued to Employee immediately
      prior to the completion of a transaction, or series or combination of related
      transactions, negotiated by the Corporation’s Board of Directors whereby,
      directly or indirectly, a majority of the Corporation’s capital stock or a
      majority of its assets are transferred from the Corporation and/or our
      stockholders to a third party.

    


    (d)    The
      Corporation shall withhold all applicable federal, state and local taxes; social
      security;  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 Employee pursuant to section 3(a)
      hereof.

    


    (e)    The
      Corporation shall reimburse Employee for all normal, usual and necessary
      expenses incurred by Employee 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 Employee’s
      expenditures and otherwise in accordance with the policy of the
      Corporation.

    


    (f)        During
      the Term, Employee shall be entitled to a maximum of four (4) weeks paid
      vacation per annum.  Unused vacation may be carried over to successive
      years.

    


    (g)        The
      Corporation shall make available to Employee and his dependents such medical,
      dental, disability, life insurance and such other benefits as the Corporation
      makes available to its other senior officers and directors.  Employee
      may elect to have the Corporation reimburse Employee for payments made to his
      own family medical and/or dental plan.  Company will maintain a
      $1,000,000 term life insurance policy for Employee during term of
      employment.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              4.

            	
              REPRESENTATIONS
                AND WARRANTIES BY EMPLOYEE AND
                CORPORATION

            


    

    


    (a)        Employee
      hereby represents and warrants to the Corporation as follows:

    


    (i)      Neither
      the execution and delivery of this Agreement nor the performance by Employee
      of
      hisduties and other obligations hereunder violate or will violate any statute,
      law, determination oraward, 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 Employee
      is a
      party or by which he is bound.

    


    (ii)           Employee
      has the full right, power and legal capacity to enter and deliver this Agreement
      and toperform his duties and other obligations hereunder. This Agreement
      constitutes the legal, valid andbinding obligation of Employee enforceable
      against him in accordance with its terms. No approvals or consents of any
      persons or entities are required for Employee to execute and deliver this
      Agreement or perform his duties and other obligations hereunder.

    


    (b)      The
      Corporation hereby represents and warrants to Employee as follows:

    


    (i)      The
      Corporation is duly organized, validly existing and in good standing under
      the
      laws of theState of Delaware, with all requisite corporate power and authority
      to own its properties andconduct its business in the manner presently
      contemplated.

    


    (ii)           The
      Corporation has full power and authority to enter into this Agreement and to
      incur andperform its obligations hereunder. This Agreement constitutes the
      legal, valid and bindingobligation of the Corporation enforceable against it
      in
      accordance with its terms. Except asexpressly set forth herein, no approvals
      or
      consents of any persons or entities are required for Corporation to execute
      and
      deliver this Agreement or perform its duties and other obligations
      hereunder.

    


    (iii)   The
      execution, delivery and performance by the Corporation of this Agreement does
      not conflictwith or result in a breach or violation of or constitute a default
      under (whether immediately, uponthe 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 bound or affected.

    


    
      	
              5.

            	
              NON-COMPETITION

            


    

    


    
      	
               

            	
              (a)

            	
              Employee
                understands and recognizes that his services to the Corporation are
                special and unique and agrees that, during the term of this Agreement
                and
                for a period of two (2) years following the termination of the Employee’s
                employment with the Corporation (or one (1) year in the event that
                the
                Employee is terminated within 1 year of the Effective Date), employee
                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
                competitive with the Corporation’s business or research activities, either
                as an individual for his own account, or as a partner, joint venturer,
                executive, agent, consultant, salesperson, officer, director of a
                Person
                operating or intending to operate in the area of the use of any of
                the
                compounds owned or licensed by the Corporation during the time of
                his
                employ.

            


    

    


    
      	
               

            	
              (b)

            	
              During the
                Term and for two
                (2) years (or one (1) year in the event that the Employee is terminated
                within 1 year of the Effective Date) following the termination of
                the
                Employee’s employment with the Corporation, Employee shall not, directly
                or indirectly, without the prior written consent of the
                Corporation:

            


    

    


    (i)      interfere
      with, disrupt or attempt to disrupt any past, present or prospective
      relationship,contractual or otherwise ,
      between the Corporation and any of its licensors, licensees,
      clients,customers, suppliers, employees, consultants or other related parties,
      or solicit or induce for hire any of the employees or agents of the Corporation,
      or any such individual who in the past was employed or retained by the
      Corporation within six (6) months of the termination of said individual’s
      employment or retention by the Corporation; or

    


    (ii)            solicit
      or accept employment or be retained by any party who, at any time during the
      term ofthis Agreement, was a customer or supplier of the Corporation or any
      of
      its affiliates or anylicensor or licensee thereof where his position will be
      related to the business of the Corporation; or

    


               (c)                  In
      the event that Employee 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 beentitled without the posting
      of a
      bond or other security to injunctive relief to enforce the restrictions
      contained herein.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              6.

            	
              CONFIDENTIAL
                INFORMATION

            


    

    


    
      	
               

            	
              (a)

            	
              Employee
                agrees that during the course of his employment or at any time after
                termination, he will

            	
              not
                disclose or make accessible to any other person, the Corporation’s or any
                of its subsidiaries’ or

            	
              affiliates’,
                (collectively the “Affiliates”) products, services and technology, both
                current and under development, promotion and marketing programs,
                business
                plans, lists, customer lists, product or licensing opportunities,
                investor
                lists, trade secrets and other confidential and proprietary business
                information of the Corporation or the Affiliates. Employee agrees:
                (i) not
                to use any such information for himself or others; and (ii) not to
                take
                any such material or reproductions thereof in any form or media from
                the
                Corporation’s facilities at any time during his employment by the
                Corporation, except as required in Employee’s duties to the Corporation.
                Employee 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, Employee agrees not to
      disclose orpublish any of the confidential, technical or business information
      or
      material of the Corporation, toany suppliers, licensors, licensees, customers,
      partners or other third parties to whom the Corporation owes an obligation
      of
      confidence, at any time during or after his employment with the
      Corporation.

    


    
      	
               

            	
              (c)

            	
              Employee
                hereby assigns to the Corporation all right, title and interest he
                may
                have or acquire in all inventions (including patent rights) developed
                by
                Employee during the term of this Agreement (hereinafter the “Inventions”)
                and agrees that all Inventions shall be the sole property of the
                Corporation and its assigns, and the Corporation and its assigns
                shall be
                the sole owner of all patents, copyrights and other rights in connection
                therewith. Employee further agrees to assist the Corporation in every
                proper way (but at the Corporation’s expense) to obtain and from time to
                time enforce patents, copyrights or other rights on said Inventions
                in any
                and all countries. Employee hereby irrevocably designates counsel
                to the
                Corporation as Employee’s agent and attorney-in-fact to do all lawful acts
                necessary to apply for and obtain patents and copyrights and to enforce
                the Corporation’s rights under this Section. This Section shall survive
                the termination of this Agreement for any
                reason.

            


    

    


    
      	
               

            	
              (d)

            	
              The
                Employee recognizes that in the course of his duties hereunder, he
                may
                  receive from Affiliates or others information which may be considered
                ‘material, nonpublic information” concerning a public company that is
                subject to the reporting requirements of the Securities and Exchange
                Act
                of 1934, as amended. The Employee agrees not
                to:

            


    

    


    (i)         Buy
      or sell any security, option, bond or warrant while in possession of
      relevantmaterial, nonpublic information received from Affiliates or others
      in
      connectionherewith;

    


    (ii)  Provide
      Affiliates with information with respect to any public company that may
      beconsidered material, nonpublic information; or

    


    (iii)     Provide
      any person with material, nonpublic information, received from
      Affiliates,including any relative, associate, or other individual who intends
      to, or may otherwisedirectly or indirectly benefit from, such
      information.

    


    
      	
              7.

            	
              TERMINATION

            


    

    


    (a)         The
      Employee’s employment hereunder shall begin on the Effective Date and shall
      continue for theperiod set forth in Section 2 hereof unless renewed by mutual
      agreement or sooner terminated uponthe first to occur of the following
      events:

    


    (i)         The
      death of the Employee;

    


    (ii)         One
      year following the merger or consolidation in which either more than fifty
      percent of thevoting power of the Corporation is transferred or the Corporation
      is not the surviving entity,or sale or other disposition of all or substantially
      all the assets of the Corporation;

    


    (iii)      Termination
      by the Board of Directors of the Corporation for Just Cause. Any of thefollowing
      actions by the Employee shall constitute “Just Cause”:

    


    (A)          Material
      breach by the Employee of Section 1, Section 5 or Section 6 of
      thisAgreement;

    


    (B)          Material
      breach by the Employee of any provision of this Agreement other thanSection
      5 or
      Section 6 which is not cured by the Employee within thirty (30) days ofnotice
      thereof from the Corporation;

    


    (C)          Any
      action by the Employee to intentionally harm the Corporation or any action
      ofgross negligence by the Employee; or

    


    (D)          The
      conviction of the Employee of a felony.

    


    (iv)    Termination
      by the Employee for Just Cause. Any of the following actions or omissions by
      the
      Corporation shall constitute just cause, subject to the notice and cure
      requirements below, provided that the Employee terminates employment with the
      Corporation within one year following the initial existence of one or more
      of
      the following conditions, without the consent of the Executive:

    


    
      	
              (A)  

            	
              Material
                diminution of base salary;

            


    

    


    
      	
              (B)  

            	
              Material
                diminution of the Employee’s authority, duties or
                responsibilities;

            


    

    


    
      	
              (C)  

            	
              Material
                change in the geographic location in which the Employee provides
                services
                to the Corporation; or

            


    

    


    
      	
              (D)  

            	
              Material
                breach by the Corporation of any provision of this Agreement which
                is not
                cured by the Corporation within thirty (30) days of notice thereof
                from
                the Employee.

            


    

    


    The
      Employee must provide notice to the Corporation of the existence of the “just
      cause” condition not later than 90 days of its initial existence and the
      Corporation shall have 30 days from the date of the Employee notice to cure
      the
      condition giving rise to such notice.

    


    (b)        Upon
      termination by the Corporation pursuant to either subparagraph (i) or (iii)
      of
      paragraph (a) above or by Employee other than pursuant to subparagraph (iv)
      of
      paragraph (a) above, the Employee (or his estate in the event of termination
      pursuant to subparagraph (i)) shall be entitled to receive the Base Salary
      plus
      Bonus accrued but unpaid as of the date of termination including any vacation
      time accrued but not taken.

    


    (c)      Upon
      termination by the Corporation without Just Cause or pursuant to subparagraphs
      (i), (ii) or (iv of paragraph (a) above, then the term of the Agreement as
      set
      forth in Section 2 hereof shall be deemed to have been terminated as of such
      date and (i) the Corporation shall pay to the Employee (or his estate in the
      event of termination pursuant to subparagraph (i)), nine months salary and
      any
      accrued Bonuses payable upon the normal payroll periods of the Corporation
      including any vacation accrued but not  taken.  Health
      benefits and life insurance will also be maintained for Employee (or his
      dependents in the event of termination pursuant to subparagraph (i)) by Company
      during severance period.  No unvested options shall vest beyond the
      termination date, except where previously noted in Section 3 (b) or at the
      discretion of the Stock Option Plan Administrator.  

    


    (d)  Upon
      the cessation of
      service to the Company by Employee for any reason, Employee will immediately
      resign from the Board of Directors of the Company.

    


    (e)        Not
      withstanding any of the foregoing, Sections 5 and 6 shall survive the
      termination or expiration of this Agreement.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.          NOTICES

    


    Any
      notice or other communication under this Agreement shall be in writing and
      shall
      be deemed to havebeen given: when delivered personally against receipt therefor;
      one (1) day after being sent by FederalExpress or similar overnight delivery;
      or
      three (3) days after being mailed registered or certified mail, postage prepaid,
      return receipt requested, to either party at the address set forth above, or
      to
      such other address as such party shall give by notice hereunder to the other
      party.

    


    9.          SEVERABILITY
      OF PROVISIONS

    


    If
      any
      provision of this Agreement shall be declared by a court of competent
      jurisdiction to be invalid, illegalor incapable of being enforced in whole
      or in
      part, such provision shall be interpreted so as to remainenforceable to the
      maximum extent permissible consistent with applicable law and the remaining
      conditions and provisions or portions thereof shall nevertheless remain in
      full
      force and effect and enforceable to the extent they are valid, legal and
      enforceable, and no provision shall be deemed dependent upon any other covenant
      or provision unless so expressed herein.

    


    10.           ENTIRE
      AGREEMENT MODIFICATION

    


    This
      Agreement contains the entire agreement of the parties relating to the subject
      matter hereof, and theparties hereto have made no agreements, representations
      or
      warranties relating to the subject matter of thisAgreement which are not set
      forth herein. No modification of this Agreement shall be valid unless made
      in
      writing and signed by the parties hereto.

    


    11.          BINDING
      EFFECT

    


    The
      rights, benefits, duties and obligations under this Agreement shall inure to,
      and be binding upon, theCorporation, its successors and assigns, and upon
      Employee and his legal representatives. This Agreementconstitutes a personal
      service agreement, and the performance of Employee’s obligations hereunder may
      not be transferred or assigned by Employee.

    


    12.          NON-WAIVER

    


    The
      failure of either party to insist upon the strict performance of any of the
      terms, conditions and provisionsof this Agreement shall not be construed as
      a
      waiver or relinquishment of future compliance therewith, andsaid terms,
      conditions and provisions shall remain in full force and effect. No waiver
      of
      any term or condition of this Agreement on the part of either party shall be
      effective for any purpose whatsoever unless such waiver is in writing and signed
      by such party.

    


    13.          GOVERNING
      LAW

    


    This
      Agreement shall be governed by, and construed and interpreted in accordance
      with, the laws of theState of New Jersey without regard to principles of
      conflict of laws.

    


    14.          HEADINGS

    


    The
      headings of paragraphs are inserted for convenience and shall not affect any
      interpretation of thisAgreement.

    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day
      and year firstabove written.

    


    


    DOR
      BIOPHARMA, INC.

    


    


    By:
/s/
      James S. Kuo

    


    James
      S.
      Kuo, M.D

    Chairman
      of the Board

    


    EMPLOYEE:

    


    


    By:
/s/
      Christopher J. Schaber

    Christopher
      J.  Schaber, PhD

    President
      & CEO