EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into effective as of January
1, 2005 (the "Effective Date"), by and between NEOPROBE CORPORATION, a Delaware
Corporation with a place of business at 425 Metro Place North, Suite 300,
Dublin, Ohio 43017-1367 (the "Company") and BRENT L. LARSON of Columbus, Ohio
(the "Employee").
WHEREAS, the Company and the Employee entered into an Employment Agreement
effective as of April 1, 2000 (the "2000 Employment Agreement"); and
WHEREAS, the Company and the Employee entered into an Employment Agreement
effective as of October 1, 2001 (the "2001 Employment Agreement"); and
WHEREAS, the Company and the Employee amended the 2001 Employment
Agreement on August 1, 2002 (the "2001 Amendment"); and
WHEREAS, the Company and the Employee entered into an Employment Agreement
effective as of February 1, 2003 (the "2003 Employment Agreement"); and
WHEREAS, the Company and the Employee entered into an Employment Agreement
effective as of January 1, 2004 (the "2004 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
Vice-President, Chief Financial 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 President and
CEO. While serving in such executive level position or positions,
the Employee shall report to, be responsible to, and shall take
direction from the President and CEO of the Company. 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 that are assigned to him. The Employee
shall observe and abide by the reasonable corporate policies and
decisions of the Company in all business matters disclosed to
employee.
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 that 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 twenty-four (24) months, commencing January 1, 2005 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 one hundred forty-seven thousand four hundred twenty
dollars ($149,000.00) per year, payable in semi-monthly or
monthly installments as requested by the Employee. Further,
the Company agrees to review the Employee's base salary by
January 1, 2006.
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 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 twenty-five (25)
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 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
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of all accrued but previously unpaid base salary through the
date of such termination, excluding any salary deferred under
paragraph A of Section 3 above. 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 G 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. The Company
shall pay for any requested examination. 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 in accordance with paragraph A of
Section 3 above. 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 G 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 twelve (12)
months. 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 the
Employee at the end of the Term of this Employment Agreement
without any liability on the part of the Company to the
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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.
F. SEVERANCE. 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 one hundred forty-nine
thousand ($149,000.00) together with the value of any accrued
but unused vacation time.
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 two hundred
ninety-eight thousand dollars ($298,000.00) 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 twelve (12) months or the full un-expired 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.
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 thirty percent
(30%) 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 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
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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:
a. is engaged in the development and/or commercialization of
gamma radiation detection 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.
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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 2000, 2001, 2003 and 2004 Employment Agreements and the
2001 Amendment are terminated as of the effective date of this
Employment Agreement, except that awards under the Stock Plans
granted to the Employee in the 2000, 2001, 2003 and 2004
Employment Agreements and the 2001 Amendment or in any
previous employment agreement or by the Compensation Committee
remain in full force and effect.
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.
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/ David C. Bupp /s/ Brent L. Larson
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David C. Bupp, President and CEO Brent L. Larson
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