EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made September 1, 2004 by and between UTEK
CORPORATION, a Delaware corporation, having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Employer") and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Ph.D., c/o UTEK Corporation,(hereinafter referred an
individual "Employee"):
WHEREAS, Employer employs, and desires to continue to employ, Employee
as the Chief Executive Officer (CEO) and Chairman of the Board (COB) of
Directors of Employer, and
WHEREAS, Employee is willing to continue to be employed as the CEO and
COB in the manner provided for herein, and to perform the duties of the Employer
upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth it is agreed as follows;
1. EMPLOYMENT OF EMPLOYEE: Employer hereby employs Employee as Chief
Executive Officer and will nominate him, during the term of this employment
agreement to continue to be COB.
2. TERM.
a. Subject to Section 10 below the term of this Agreement shall commence on the
first day of September 2004 and expire three years from such date. During the
term hereof, Employee shall devote substantially all of his business time and
efforts to Employer and its subsidiaries and affiliates.
3. DUTIES. The Employee shall perform those functions generally
performed by persons of such title and position, shall attend all meetings of
the stockholders and the Board (unless unforeseen circumstances made such
attendance extremely difficult or impractical), shall perform any and all
related duties and shall have any and all powers as may be prescribed by
resolution of the Board, and shall be available to confer and consult with and
advise the officers and directors of Employer at such times that may be required
by Employer. Employee shall report directly and solely to the Board.
4. COMPENSATION.
a. (i) Employee shall be paid a salary of $300,000 for each Annual Period
thereafter. Employee shall be paid periodically in accordance with the policies
of the Employer during the term of this Agreement, but not less than monthly.
5
b. (ii) A reasonable automobile allowance to cover the cost of leasing, insuring
and maintaining a vehicle for the duration of this employment agreement.
c. (iii)In the event of a "Change of Control:
(A) A person (other than a person who is an officer or a Director of Employer on
the effective date hereof), including a "group" as defined in Section 13(d)(3)
of the securities Exchange Act of 1934, becomes, or obtains the right to become,
the beneficial owner of Employer securities having 30% or more of the combined
voting power of then outstanding securities of the Employer that may be cast for
the election of directors of the Employer;
(B) At any time, the Board-nominated slate of candidates for the Board is not
elected;
(C) Employer consummates a merger in which it is not the surviving entity;
(D) Substantially all of Employer's assets are sold; or Employer's stockholders
approve the dissolution or liquidation of Employer; then
(E) Employee shall be eligible to receive a one-time bonus, equal on an
after-tax basis to two times his then current annual base salary. To effectuate
this provision, the bonus shall be "grossed-up" to include the amount necessary
to reimburse Employee for his federal, state and local income tax liability on
the bonus and on the "gross-up" at the respective effective marginal tax rates.
In no event shall this bonus exceed three times Employee's then current base
salary. Said bonus shall be paid within thirty (30) days of the Change of
Control.
(F) All stock options, warrants and stock appreciation rights ("Rights") granted
by Employer to Employee under any plan or otherwise prior to the effective date
of the Change of Control, shall become vested, accelerate and become immediately
exercisable. In the event Employee owns or is entitled to receive any
unregistered securities of Employer, then Employer shall use its best efforts to
affect the registration of all such securities as soon as practicable, but no
later than 120 days after the effective date of; provided, however, that such
period may be extended or delayed by Employer for one period of up to 60 days
if, upon the advice of counsel at the time such registration is required to be
filed, or at the time Employer is required to exercise its best efforts to cause
such registration statement to become effective, such delay is advisable and in
the best interests of Employer because of the existence of non-public material
information, or to allow Employer to complete any pending audit of its financial
statements;
d. Employer shall include Employee in its health insurance program available to
Employer's executive officers and shall pay 100% of the premiums for such
program.
e. Employee shall have the right to participate in any other employee benefit
plans established by Employer.
f. If the Agreement is not renewed at the end of the term, or any mutually
agreed upon extensions thereof, or of if the Employee is terminated or requested
or forced to resign during the
6
term of this Agreement, the Employee shall be entitled to receive a one-time
severance payment, based upon the number of years the Employee has worked for
the Employer times the sum of $50,000.00 per year (commencing in August 1997).
To effectuate this provision, the payment shall be "grossed-up" to include the
amount necessary to reimburse Employee for his federal, state and local income
tax liability on the bonus and on the "gross-up" at the respective effective
marginal tax rates. Said severance shall be paid within thirty (30) days.
All stock options, warrants and stock appreciation rights ("Rights")
granted by Employer to Employee under any plan or otherwise prior to the
effective date of the termination by either the Company or the Employee, or the
completion of the term of this Agreement, or the resignation of Employee after
one year, shall become vested, accelerate and become immediately exercisable. In
the event Employee owns or is entitled to receive any unregistered securities of
Employer, then Employer shall use its best efforts to affect the registration of
all such securities as soon as practicable, but no later than 120 days after the
effective date; provided, however, that such period may be extended or delayed
by Employer for one period of up to 60 days if, upon the advice of counsel at
the time such registration is required to be filed, or at the time Employer is
required to exercise its best efforts to cause such registration statement to
become effective, such delay is advisable and in the best interests of Employer
because of the existence of non-public material information, or to allow
Employer to complete any pending audit of its financial statements;
5. BOARD OF DIRECTORS. Employer agrees that so long as this Agreement
in effect, Employee will be nominated to the Board as part of management's slate
of Directors.
6. EXPENSES. Employee shall be reimbursed for all of his actual
out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are acceptable to Employer, which approval shall not be
unreasonably withheld, for business related travel and entertainment expenses,
and that Employee shall submit to Employer reasonably detailed receipts with
respect thereto.
7. VACATION. Employee shall be entitled to receive six (6) weeks paid
vacation time upon dates agreed upon by Employer. Vacation time not used may be
accrued by the Employee during the term this Agreement.
8. SECRECY. At no time shall Employee disclose to anyone any
confidential or secret information (not already constituting information
available to the public) concerning internal affairs or proprietary business
operations of Employer.
9. COVENANT NOT TO COMPETE. Subject to, and limited by, section 11(b),
Employee will not, at any time, anywhere in the world, during the term of this
Agreement, and for one (1) year thereafter, either directly or indirectly,
engage in, with or for any enterprise, institution, whether or not for profit,
business, or company, competitive with the business of Employer as such business
may be conducted on the date thereof, as a creditor, guarantor, or financial
backer,
7
stockholder, director, officer, consultant, advisor, employee, member, inventor,
producer, director, or otherwise of or through any corporation, partnership,
association, sole proprietorship or other entity; provided, that an investment
by Employee, his spouse or his children is permitted if such investment is not
more than four percent (4%) of the total debt or equity capital of any such
competitive enterprise or business and further provided that said competitive
enterprise or business is a publicly held entity whose stock is listed and
traded on a national stock exchange or through the NASDAQ or AMEX Stock Market.
10. TERMINATION.
a. TERMINATION BY EMPLOYER
(i) Employer may terminate this Agreement upon written notice for
Cause. For purposes hereof, "Cause" shall mean (A) engaging by the Employee in
conduct that constitutes activity in competition with Employer; (B) the
conviction of Employee for the commission of a felony; and/or (C) the habitual
abuse of alcohol or controlled substances. Notwithstanding anything to the
contrary in this Section 10(a)(i), Employer may not terminate Employee's
employment under this Agreement for Cause unless Employee shall have first
received notice from the Board advising Employee of the specific acts or
omissions alleged to constitute cause, and such acts or omissions continue after
Employee shall have had a reasonable opportunity (At least 10 days from the date
Employee receives the notice from the Board) to correct the acts or omissions so
complained of. In no event shall alleged incompetence of Employee in the
performance of Employees duties be deemed grounds for termination for Cause.
(ii) Employer may terminate Employee's employment under this Agreement
if, as a result of any physical or mental disability, Employee shall fail or be
unable to perform his duties under this Agreement for any consecutive period of
90 days during any twelve-month period. If Employees employment is terminated
under this Section 10(a)(ii): (A) for the first six months after termination,
Employee shall be paid 100% of his full compensation under Section 4(a) of this
Agreement at the rate in affect on the date of termination, and in each
successive 12 month period thereafter Employee shall be paid an amount equal to
67% of his compensation under Section 4(a) of this agreement at the rate in
effect on the date of termination and (B) Employee shall continue to be
entitled, insofar as is permitted under applicable insurance policies or plans,
to such general medical and employee benefit plans (including profit sharing or
pension plans) as Employee had been entitled to on the date of termination. Any
amounts payable by Employer to Employee under this paragraph shall be reduced by
the amount of any disability payments payable by or pursuant to plans provided
by Employer and actually paid to Employee.
(iii) This agreement automatically shall terminate upon the death of
Employee, except that Employee's estate shall be entitled to receive any amount
accrued under Section 4(a) and any other amount to which Employee was entitled
of the time of his death.
8
b. TERMINATION BY EMPLOYEE
Employee shall have the right to terminate his employment under this Agreement
upon 30 days' notice to Employer given within 90 days following the occurrence
of any of the following events (A) through (F):
(A) Employee is not elected or retained as CEO.
(B) Employer acts to materially reduce Employee's duties and
responsibilities hereunder. Employee's duties and responsibilities shall not be
deemed materially reduced for purposes hereof solely by virtue of the fact that
Employer is (or substantially all of its assets are) sold to, or is combined
with, another entity, provided that Employee shall continue to have the same
duties and responsibilities with respect to Employer's business, and Employee
shall report directly to the chief executive officer and/or board of directors
of the entity (or individual) that acquires Employer or its assets.
(C) A Material Reduction (as hereinafter defined) in Employees rate of
base compensation, or Employee's other benefits. "Material Reduction" shall mean
a ten percent (10%) differential;
(D) A failure by Employer to obtain the assumption of this Agreement by
any successor;
(E) A material breach of this Agreement by Employer, which is not cured
within thirty (30) days of written notice of such breach by Employer;
(F) A change of control
11. CONSEQUENCES OF BREACH BY EMPLOYMENT TERMINATION.
a. If this Agreement is terminated pursuant to Section 10(a)i hereof,
or if Employer shall terminate Employee's employment under this Agreement in
any way that is a breach of this Agreement by Employer, the Employee shall
receive the severance payment as set forth in paragraph 4 (f).
12. REMEDIES.
Employer recognizes that because of Employee's special talents, stature
and opportunities in the technology transfer industry, and because of the
special creative nature of and compensation practices of said industry and the
material impact that individual projects can have on company's results of
operations, in the event of termination by Employer hereunder (except under
Section 10(a)(i) or (iii), or in the event of termination by Employee under
Section 10(b)(i) before the end of the agreed term, the Employer acknowledges
and agrees that the provisions of this Agreement regarding further payments of
base salary, bonuses and the exercisability of Rights Constitute fair and
reasonable provisions for the consequences of such termination, do not
constitute a penalty, and such payments and benefits shall not be limited or
reduced by amounts'
9
Employee might earn or be able to earn from any other employment or ventures
during the remainder of the agreed term of this Agreement.
13. EXCISE TAX. In the event that any payment or benefit received or to
be received by Employee in connection with a termination of his employment with
Employer would constitute a "parachute payment" within the meaning of Code
Section 28OG or any similar or successor provision to 28OG and/or would be
subject to any excise tax imposed by Code Section 4999 or any similar or
successor provision then Employer shall assume all liability for the payment of
any such tax and Employer shall immediately reimburse Employee on a "grossed-up"
basis for any income taxes attributable to Employee by reason of such Employer
payment and reimbursements.
14. ARBITRATION. Any controversies between Employer and Employee
involving the construction or application of any of the terms, provisions or
conditions of this Agreement, save and except for any breaches arising out of
Sections 8 and 9 hereof, shall on the written request of either party served on
the other be submitted to arbitration. Such arbitration shall comply with and be
governed by the rules of the American Arbitration Association. An arbitration
demand must be made within one (1) year of the date on which the party demanding
arbitration first had notice of the existence of the claim to be arbitrated, or
the right to arbitration along with such claim shall be considered to have been
waived. An arbitrator shall be selected according to the procedures of the
American Arbitration Association. The cost of arbitration shall be born by the
losing party or in such proportions as the arbitrator shall decide. The
arbitrator shall have no authority to add to, subtract from or otherwise modify
the provisions of this Agreement, or to award punitive damages to either party.
15. ATTORNEY'S FEES AND COSTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.
16. ENTIRE AGREEMENT; SURVIVAL. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement or
understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this Agreement
shall not effect the enforceability of any other Provision. This Agreement may
not be amended except by an agreement in writing signed by the Employee and the
Employer, or any waiver, change, discharge or modification as sought. Waiver of
or failure to exercise any rights provided by this Agreement and in any respect
shall not be deemed a waiver of any further or future rights.
The provisions of Sections 4, 8, 9,10, 11, 12, 13, 14,15,18,19 and 20
shall survive the termination of this Agreement.
17. ASSIGNMENT. This Agreement shall not be assigned to other parties.
10
18. GOVERNING LAW. This Agreement and all the amendments hereof, and
waivers and consents with respect thereto shall be governed by the internal laws
of the State of Florida, without regard to the conflicts of laws principles
thereof.
19. NOTICE. All notices, responses, demands or other communications
under this Agreement shall be in writing and shall be deemed to have been given
when
a. delivered by hand;
b. sent be telex or telefax, (with receipt confirmed), provided that a
copy Is mailed by registered or certified mail, return receipt requested; or
c. received by the addressee as sent be express delivery service
(receipt requested) in each case to the appropriate addresses, telex numbers and
telefax numbers as the party may designate to itself by notice to the other
parties:
(i) If to the Employer:
UTEK Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telefax: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
(ii) If to the Employee:
▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone ▇▇▇-▇▇▇-▇▇▇▇
20. SEVERABILITY. Should any part of this Agreement for any reason be
declared invalid by a court of competent jurisdiction, such decision shall not
affect the validity of any remaining portion, which remaining provisions shall
remain in full force and effect as if this Agreement had been executed with the
invalid portion thereof eliminated, and it is hereby declared the intention of
the parties that they would have executed the remaining portions of this
Agreement without including any such part, parts or portions which may, for any
reason, be hereafter declared invalid.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the day and year first above written. UTEK Corporation
By; /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, Vice President &
General Counsel
By; /s/ ▇▇▇▇▇▇▇▇ ▇.▇▇▇▇▇, Ph. D.
--------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Ph.D.,
employee
11