EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of January
1, 2004 (the "Effective Date"), by and between NEOPROBE CORPORATION, a Delaware
Corporation with a place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Company") and ▇▇▇▇▇ ▇. ▇▇▇▇ of Dublin, Ohio (the
"Employee").
WHEREAS, the Company and the Employee entered into an Employment Agreement
dated as of January 1, 1996 (the "1996 Employment Agreement"); and
WHEREAS, the Company and the Employee entered into an Employment Agreement
dated as of January 1, 1998 (the "1998 Employment Agreement"); and
WHEREAS, the Company and the Employee entered into an Employment Agreement
dated as of July 1, 1999 (the "1999 Employment Agreement"); and
WHEREAS, the Company and the Employee entered into an Employment Agreement
dated as of July 1, 2000 (the "2000 Employment Agreement");
WHEREAS, the Company and the Employee entered into an Employment Agreement
dated as of July 1, 2001 (the "2001 Employment Agreement"); and
WHEREAS, the Company and the Employee wish to establish new terms,
covenants, and conditions for the Employee's continued employment with the
Company through this agreement ("Employment Agreement").
NOW, THEREFORE, in consideration of the mutual agreements herein set forth,
the parties hereto agree as follows:
1. DUTIES. From and after the Effective Date, and based upon the terms
and conditions set forth herein, the Company agrees to employ the
Employee and the Employee agrees to be employed by the Company, as
President and Chief Executive Officer of the Company and in such
equivalent, additional or higher executive level position or positions
as shall be assigned to him by the Company's Board of Directors. While
serving in such executive level position or positions, the Employee
shall report to, be responsible to, and shall take direction from the
Board of Directors of the Company. The Board of Directors shall not
require the Employee to perform any task that is inconsistent with the
office of President or the position of Chief Executive Officer. During
the Term of this Employment Agreement (as defined in Section 2 below),
the Employee agrees to devote substantially all of his working time to
the position he holds with the Company and to faithfully,
industriously, and to the best of his ability, experience and talent,
perform the duties which are assigned to him. The Employee shall
observe and abide by the reasonable corporate policies and decisions
of the Company in all business matters.
The Employee represents and warrants to the Company that Exhibit A
attached hereto sets forth a true and complete list of (a) all
offices, directorships and other positions held by the Employee in
corporations and firms other than the Company and its subsidiaries and
(b) any investment or ownership interest in any corporation or firm
other than the Company beneficially owned by the Employee (excluding
investments in life insurance policies, bank deposits, publicly traded
securities that are less than five percent (5%) of their class and
real estate). The Employee will promptly notify the Board of Directors
of the Company of any additional positions undertaken or investments
made by the Employee during the Term of this Employment Agreement if
they are of a type which, if they had existed on the date hereof,
should have been listed on Exhibit A hereto. As long as the Employee's
other positions or investments in other firms do not create a conflict
of interest, violate the Employee's obligations under Section 7 below
or cause the Employee to
neglect his duties hereunder, such activities and positions shall not
be deemed to be a breach of this Employment Agreement.
2. TERM OF THIS EMPLOYMENT AGREEMENT. Subject to Sections 4 and 5 hereof,
the Term of this Employment Agreement shall be for a period of
thirty-six (36) months, commencing January 1, 2004 and terminating
December 31, 2006.
3. COMPENSATION. During the Term of this Employment Agreement, the
Company shall pay, and the Employee agrees to accept as full
consideration for the services to be rendered by the Employee
hereunder, compensation consisting of the following:
A. SALARY. Beginning on the first day of the Term of this Employment
Agreement, the Company shall pay the Employee a salary of Two
Hundred Seventy-one Thousand Two Hundred Fifty Dollars ($271,250)
per year, payable in semi-monthly or monthly installments as
requested by the Employee.
B. BONUS. The Compensation Committee of the Board of Directors will,
on an annual basis, review the performance of the Company and of
the Employee and will pay such bonus as it deems appropriate, in
its discretion, to the Employee based upon such review. Such
review and bonus shall be consistent with any bonus plan adopted
by the Compensation Committee, which covers the executive
officers and employees of the Company generally.
C. BENEFITS. During the Term of this Employment Agreement, the
Employee will receive such employee benefits as are generally
available to all employees of the Company.
D. STOCK OPTIONS. The Compensation Committee of the Board of
Directors may, from time-to-time, grant stock options, restricted
stock purchase opportunities and such other forms of stock-based
incentive compensation as it deems appropriate, in its
discretion, to the Employee under the Company's Stock Option and
Restricted Stock Purchase Plan and the 1996 and 2002 Stock
Incentive Plan (the "Stock Plans"). The terms of the relevant
award agreements shall govern the rights of the Employee and the
Company thereunder in the event of any conflict between such
agreement and this Employment Agreement.
E. VACATION. The Employee shall be entitled to thirty (30) days of
vacation during each calendar year during the Term of this
Employment Agreement.
F. EXPENSES. The Company shall reimburse the Employee for all
reasonable out-of-pocket expenses incurred by him in the
performance of his duties hereunder, including expenses for
travel, entertainment and similar items, promptly after the
presentation by the Employee, from time-to-time, of an itemized
account of such expenses.
4. TERMINATION.
A. FOR CAUSE. The Company may terminate the employment of the
Employee prior to the end of the Term of this Employment
Agreement "for cause." Termination "for cause" shall be defined
as a termination by the Company of the employment of the Employee
occasioned by the failure by the Employee to cure a willful
breach of a material duty imposed on the Employee under this
Employment Agreement within 15 days after written notice thereof
by the Company or the continuation by the Employee after written
notice by the Company of a willful and continued neglect of a
duty imposed on the Employee under this Employment Agreement. In
the event of termination by the Company "for cause," all salary,
benefits and other payments shall cease at the time of
termination, and the Company shall have no further obligations to
the Employee.
B. RESIGNATION. If the Employee resigns for any reason, all salary,
benefits and other payments (except as otherwise provided in
paragraph G of this Section 4 below) shall cease at the time
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such resignation becomes effective. At the time of any such
resignation, the Company shall pay the Employee the value of any
accrued but unused vacation time, and the amount of all accrued
but previously unpaid base salary through the date of such
termination. The Company shall promptly reimburse the Employee
for the amount of any expenses incurred prior to such termination
by the Employee as required under paragraph F of Section 3 above.
C. DISABILITY, DEATH. The Company may terminate the employment of
the Employee prior to the end of the Term of this Employment
Agreement if the Employee has been unable to perform his duties
hereunder for a continuous period of six (6) months due to a
physical or mental condition that, in the opinion of a licensed
physician, will be of indefinite duration or is without a
reasonable probability of recovery. The Employee agrees to submit
to an examination by a licensed physician of his choice in order
to obtain such opinion, at the request of the Company, made after
the Employee has been absent from his place of employment for at
least six (6) months. Any requested examination shall be paid for
by the Company. However, this provision does not abrogate either
the Company's or the Employee's rights and obligations pursuant
to the Family and Medical Leave Act of 1993, and a termination of
employment under this paragraph C shall not be deemed to be a
termination for cause.
If during the Term of this Employment Agreement, the Employee
dies or his employment is terminated because of his disability,
all salary, benefits and other payments shall cease at the time
of death or disability, provided, however, that the Company shall
provide such health, dental and similar insurance or benefits as
were provided to Employee immediately before his termination by
reason of death or disability, to Employee or his family for the
longer of twelve (12) months after such termination or the full
unexpired Term of this Employment Agreement on the same terms and
conditions (including cost) as were applicable before such
termination. In addition, for the first six (6) months of
disability, the Company shall pay to the Employee the difference,
if any, between any cash benefits received by the Employee from a
Company-sponsored disability insurance policy and the Employee's
salary hereunder. At the time of any such termination, the
Company shall pay the Employee, the value of any accrued but
unused vacation time, and the amount of all accrued but
previously unpaid base salary through the date of such
termination. The Company shall promptly reimburse the Employee
for the amount of any expenses incurred prior to such termination
by the Employee as required under paragraph F of Section 3 above.
D. TERMINATION WITHOUT CAUSE. A termination without cause is a
termination of the employment of the Employee by the Company that
is not "for cause" and not occasioned by the resignation, death
or disability of the Employee. If the Company terminates the
employment of the Employee without cause, (whether before the end
of the Term of this Employment Agreement or, if the Employee is
employed by the Company under paragraph E of this Section 4
below, after the Term of this Employment Agreement has ended) the
Company shall, at the time of such termination, pay to the
Employee the severance payment provided in paragraph F of this
Section 4 below together with the value of any accrued but unused
vacation time and the amount of all accrued but previously unpaid
base salary through the date of such termination and shall
provide him with all of his benefits under paragraph C of Section
3 above for the longer of twenty-four (24) months or the full
unexpired Term of this Employment Agreement. The Company shall
promptly reimburse the Employee for the amount of any expenses
incurred prior to such termination by the Employee as required
under paragraph F of Section 3 above.
If the Company terminates the employment of the Employee because
it has ceased to do business or substantially completed the
liquidation of its assets or because it has relocated to another
city and the Employee has decided not to relocate also, such
termination of employment shall be deemed to be without cause.
E. END OF THE TERM OF THIS EMPLOYMENT AGREEMENT. Except as otherwise
provided in paragraphs F and G of this Section 4 below, the
Company may terminate the employment of
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the Employee at the end of the Term of this Employment Agreement
without any liability on the part of the Company to the Employee
but, if the Employee continues to be an employee of the Company
after the Term of this Employment Agreement ends, his employment
shall be governed by the terms and conditions of this Agreement,
but he shall be an employee at will and his employment may be
terminated at any time by either the Company or the Employee
without notice and for any reason not prohibited by law or no
reason at all. If the Company terminates the employment of the
Employee at the end of the Term of this Employment Agreement, the
Company shall, at the time of such termination, pay to the
Employee the severance payment provided in paragraph F of this
Section 4 below together with the value of any accrued but unused
vacation time and the amount of all accrued but previously unpaid
base salary through the date of such termination. The Company
shall promptly reimburse the Employee for the amount of any
reasonable expenses incurred prior to such termination by the
Employee as required under paragraph F of Section 3 above.
▇. ▇▇▇▇▇▇▇▇▇. If the employment of the Employee is terminated by the
Company, at the end of the Term of this Employment Agreement or,
without cause (whether before the end of the Term of this
Employment Agreement or, if the Employee is employed by the
Company under paragraph E of this Section 4 above, after the Term
of this Employment Agreement has ended), the Employee shall be
paid, as a severance payment at the time of such termination, the
amount of Four Hundred Six Thousand Two Hundred Fifty Dollars
($406,250) together with the value of any accrued but unused
vacation time. If any such termination occurs at or after the
substantial completion of the liquidation of the assets of the
Company, the severance payment shall be increased by adding
Eighty-One Thousand Two Hundred Fifty Dollars ($81,250) to such
amount.
G. CHANGE OF CONTROL SEVERANCE. In addition to the rights of the
Employee under the Company's employee benefit plans (paragraphs C
of Section 3 above) but in lieu of any severance payment under
paragraph F of this Section 4 above, if there is a Change in
Control of the Company (as defined below) and the employment of
the Employee is concurrently or subsequently terminated (a) by
the Company without cause, (b) by the expiration of the Term of
this Employment Agreement, or (c) by the resignation of the
Employee because he has reasonably determined in good faith that
his titles, authorities, responsibilities, salary, bonus
opportunities or benefits have been materially diminished, that a
material adverse change in his working conditions has occurred,
that his services are no longer required in light of the
Company's business plan, or the Company has breached this
Employment Agreement, the Company shall pay the Employee, as a
severance payment, at the time of such termination, the amount of
Six Hundred Fifty Thousand Dollars ($650,000) together with the
value of any accrued but unused vacation time, and the amount of
all accrued but previously unpaid base salary through the date of
termination and shall provide him with all of this benefits under
paragraph C of Section 3 above for the longer of six (6) months
or the full unexpired Term of this Employment Agreement. If any
such termination occurs at or after the substantial completion of
the liquidation of the assets of the Company, the severance
payment shall be increased by adding Eighty-One Thousand Two
Hundred Fifty Dollars ($81,250) to such amount. The Company shall
promptly reimburse the Employee for the amount of any expenses
incurred prior to such termination by the Employee as required
under paragraph F of Section 3 above.
For the purpose of this Employment Agreement, a Change in Control
of the Company has occurred when: (a) any person (defined for the
purposes of this paragraph G to mean any person within the
meaning of Section 13 (d) of the Securities Exchange Act of 1934
(the "Exchange Act")), other than Neoprobe or an employee benefit
plan created by its Board of Directors for the benefit of its
employees, either directly or indirectly, acquires beneficial
ownership (determined under Rule 13d-3 of the Regulations
promulgated by the Securities and Exchange Commission under
Section 13(d) of the Exchange Act) of securities issued by
Neoprobe having fifteen percent (15%) or more of the voting power
of all the voting securities issued by Neoprobe in the election
of Directors at the next meeting of the holders of voting
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securities to be held for such purpose; (b) a majority of the
Directors elected at any meeting of the holders of voting
securities of Neoprobe are persons who were not nominated for
such election by the Board of Directors or a duly constituted
committee of the Board of Directors having authority in such
matters; (c) the stockholders of Neoprobe approve a merger or
consolidation of Neoprobe with another person other than a merger
or consolidation in which the holders of Neoprobe's voting
securities issued and outstanding immediately before such merger
or consolidation continue to hold voting securities in the
surviving or resulting corporation (in the same relative
proportions to each other as existed before such event)
comprising eighty percent (80%) or more of the voting power for
all purposes of the surviving or resulting corporation; or (d)
the stockholders of Neoprobe approve a transfer of substantially
all of the assets of Neoprobe to another person other than a
transfer to a transferee, eighty percent (80%) or more of the
voting power of which is owned or controlled by Neoprobe or by
the holders of Neoprobe's voting securities issued and
outstanding immediately before such transfer in the same relative
proportions to each other as existed before such event. The
parties hereto agree that for the purpose of determining the time
when a Change of Control has occurred that if any transaction
results from a definite proposal that was made before the end of
the Term of this Employment Agreement but which continued until
after the end of the Term of this Employment Agreement and such
transaction is consummated after the end of the Term of this
Employment Agreement, such transaction shall be deemed to have
occurred when the definite proposal was made for the purposes of
the first sentence of this paragraph G of this Section 4.
H. BENEFIT AND STOCK PLANS. In the event that a benefit plan or
Stock Plan which covers the Employee has specific provisions
concerning termination of employment, or the death or disability
of an employee (e.g., life insurance or disability insurance),
then such benefit plan or Stock Plan shall control the
disposition of the benefits or stock options.
5. PROPRIETARY INFORMATION AGREEMENT. Employee has executed a Proprietary
Information Agreement as a condition of employment with the Company.
The Proprietary Information Agreement shall not be limited by this
Employment Agreement in any manner, and the Employee shall act in
accordance with the provisions of the Proprietary Information
Agreement at all times during the Term of this Employment Agreement.
6. NON-COMPETITION. Employee agrees that for so long as he is employed by
the Company under this Employment Agreement and for one (1) year
thereafter, the Employee will not:
A. enter into the employ of or render any services to any person,
firm, or corporation, which is engaged, in any part, in a
Competitive Business (as defined below);
B. engage in any directly Competitive Business for his own account;
C. become associated with or interested in through retention or by
employment any Competitive Business as an individual, partner,
shareholder, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor, or in any other
relationship or capacity; or
D. solicit, interfere with, or endeavor to entice away from the
Company, any of its customers, strategic partners, or sources of
supply.
Nothing in this Employment Agreement shall preclude Employee from
taking employment in the banking or related financial services
industries nor from investing his personal assets in the securities or
any Competitive Business if such securities are traded on a national
stock exchange or in the over-the-counter market and if such
investment does not result in his beneficially owning, at any time,
more than one percent (1%) of the publicly-traded equity securities of
such Competitive Business. "Competitive Business" for purposes of this
Employment Agreement shall mean any business or enterprise which:
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a. is engaged in the development and/or commercialization of
products and/or systems for use in intraoperative detection of
cancer, or
b. reasonably understood to be competitive in the relevant market
with products and/or systems described in clause a above, or
c. the Company engages in during the Term of this Employment
Agreement pursuant to a determination of the Board of Directors
and from which the Company derives a material amount of revenue
or in which the Company has made a material capital investment.
The covenant set forth in this Section 6 shall terminate immediately
upon the substantial completion of the liquidation of assets of the
Company or the termination of the employment of the Employee by the
Company without cause or at the end of the Term of this Employment
Agreement.
7. ARBITRATION. Any dispute or controversy arising under or in connection
with this Employment Agreement shall be settled exclusively by
arbitration in Columbus, Ohio, in accordance with the non-union
employment arbitration rules of the American Arbitration Association
("AAA") then in effect. If specific non-union employment dispute rules
are not in effect, then AAA commercial arbitration rules shall govern
the dispute. If the amount claimed exceeds $100,000, the arbitration
shall be before a panel of three arbitrators. Judgment may be entered
on the arbitrator's award in any court having jurisdiction. The
Company shall indemnify the Employee against and hold him harmless
from any attorney's fees, court costs and other expenses incurred by
the Employee in connection with the preparation, commencement,
prosecution, defense, or enforcement of any arbitration, award,
confirmation or judgment in order to assert or defend any right or
obtain any payment under paragraph C of Section 4 above or under this
sentence; without regard to the success of the Employee or his
attorney in any such arbitration or proceeding.
8. GOVERNING LAW. The Employment Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio.
9. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Employment Agreement shall not affect the validity
or enforceability of any other provision of the Employment Agreement,
which shall remain in full force and effect.
10. ENTIRE AGREEMENT.
A. The 2001 Employment Agreement is terminated as of the effective
date of this Employment Agreement, except that awards under the
Stock Plans granted to the Employee in the 2001 Employment
Agreement or in any previous employment agreement or by the
Compensation Committee remain in full force and effect, and
survive the termination of the 1999 Employment Agreement and
except that the bonus opportunities granted to the Employee in
paragraph 3 of the letter agreement dated February 16, 1995
remain in full force and effect, and survive the termination of
the 2000 Employment Agreement.
B. This Employment Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof,
superseding all negotiations, prior discussions, and preliminary
agreements. This Employment Agreement may not be amended except
in writing executed by the parties hereto.
11. EFFECT ON SUCCESSORS OF INTEREST. This Employment Agreement shall
inure to the benefit of and be binding upon heirs, administrators,
executors, successors and assigns of each of the parties hereto.
Notwithstanding the above, the Employee recognizes and agrees that his
obligation under this Employment Agreement may not be assigned without
the consent of the Company.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Employment Agreement as of the date first written above.
NEOPROBE CORPORATION EMPLOYEE
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chairman ▇▇▇▇▇ ▇. ▇▇▇▇
Neoprobe Corporation
Board of Directors
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EXHIBIT A
None