EXHIBIT
10.1
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (the “Agreement”) is entered into effective
the 13th day of August, 2007, by and between Amerityre Corporation
(the “Company”), and Gary N. Benninger (the
“Executive”).
PREMISES
A.
The Board of Directors
of the Company (the “Board”), desires to employ the
Executive as Chief Executive Officer.
B.
The Executive desires to
perform all of such services as the Company’s Chief Executive
Officer and both the Company and the Executive want to enter into a
written agreement as to their understanding of the employment
relationship.
C.
The Board has determined
that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or threatened
Change of Control and to encourage the Executive’s full
attention and dedication to the Company currently and in the event
of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change
of Control which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are
competitive with those of other corporations.
FOR AND IN CONSIDERATION
of the mutual covenants contained herein and of the mutual benefits
to be derived hereunder, the parties agree as follows:
1.
Definitions . Whenever used in this
Agreement, the following terms shall have the meanings set forth
below:
(a)
“Accrued
Benefits” shall mean the amount payable not later than ten
(10) days following an applicable Termination Date and which shall
be equal to the sum of the following amounts:
(i)
All salary, options,
bonus or stock awards, earned or accrued through the Termination
Date;
(ii)
Reimbursement for any
and all monies advanced in connection with the Executive’s
employment for reasonable and necessary expenses incurred by
the Executive and approved by the Company through the Termination
Date; and
(iii)
All other payments and
benefits to which the Executive may be entitled under the terms of
any benefit plan of the Company.
(b)
“Board”
shall mean the board of directors of the Company.
(c)
“Cause”
shall mean any of the following:
(i)
The engagement by the
Executive in fraudulent conduct, which the Board determines, in its
reasonable discretion, has a significant adverse impact on the
Company in the conduct of the Company’s business;
(ii)
Conviction of a
felony, as evidenced by a binding and final judgment, order or
decree of a court of competent jurisdiction, which the Board
determines, in its sole discretion, has a significant adverse
impact on the Company in the conduct of the Company’s
business;
(iii)
Neglect or refusal by
the Executive to perform his duties or responsibilities, which
neglect or refusal, if capable of correction, is not corrected by
Executive after seven (7) days’ notice in writing to
Executive from the Board which specifies the neglect or refusal;
or
(iv)
Material violation by
the Executive of the Company’s established policies and
procedures, which violation, if capable of correction, is not
corrected by Executive after seven (7) days’ notice in
writing to Executive from the Board which specifies the
violation.
(d)
“Change of
Control” shall mean:
(i)
The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (1) the then outstanding
shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (2) the combined voting power of
the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for
purposes of this subsection (d), the following acquisitions shall
not constitute a Change of Control: (1) any acquisition
directly from the Company, (2) any acquisition by the Company, (3)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company or (4) any acquisition by any corporation
pursuant to a transaction which complies with clauses (1), (2) and
(3) of subsection (iii) of this Section 1; or
(ii)
(1) Individuals who, as
of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board or (2) a majority of
the members of the Board ceases to be comprised of Directors whose
most recent election to the Board was approved by at least a
majority of the Incumbent Board prior to such election;
or
(iii)
Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case,
unless, following such Business Combination, (1) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (2) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly,
20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination
or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (3) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such
Business Combination; or
(iv)
Approval by the
shareholders of the Company of a complete liquidation or
dissolution of the Company.
(e)
“Change of Control
Period” shall mean the term of this Agreement and any renewal
or extension thereof.
(f)
“Code” shall
mean the Internal Revenue Code of 1986, as amended from time to
time.
(g)
“Confidential
Information” means information (i) disclosed to or known by
the Executive as a consequence of or through his/her employment
with the Company, (ii) not generally known outside the Company, and
(iii) which relates to the Company’s business.
Confidential Information includes, but is not limited to,
information of a technical nature, such as methods and materials,
trade secrets, inventions, processes, formulas, systems, computer
programs, and studies, and information of a business nature such as
business plans, market information, costs, customer lists, and so
forth.
(h)
“Developments” means all
Inventions, whether or not patentable, computer programs, copyright
works, trademarks, Confidential Information, Works of Authorship,
and other intellectual property, made, conceived or authored by the
Executive, alone or jointly with others, while employed by the
Company; whether or not during normal business hours or on the
Company’s premises, that are within the present or reasonably
contemplated scope of the Company’s business at the time such
Developments are made, conceived, or authored, or which result from
or are suggested by any work the Executive or others may do for or
on behalf of the Company.
(i)
“Invention”
means discoveries, concepts, and ideas, whether or not patentable
or copyrightable, including but not limited to improvements,
know-how, data, processes, methods, formulae, and techniques, as
well as improvements thereof, or know-how related thereto,
concerning any past, present or prospective activities of the
Company which the Executive makes, discovers or conceives (whether
or not during the hours of his engagement of with the use of the
Company’s facilities, materials or personnel), either solely
or jointly with others during his engagement by the Company or any
affiliate and, if based on or related to Proprietary Information,
at any time after termination of such engagement.
(j)
“Intellectual
Property” means Inventions, Confidential Information, Works
of Authorship, patent rights, trademark rights, service mark
rights, copyrights, know-how, Developments and rights of like
nature arising or subsisting anywhere in the world, in relation to
all of the foregoing, whether registered or
unregistered.
(k)
“Notice of
Termination” shall mean the notice described in Section 13
hereof.
(l)
“Person”
shall mean any individual, partnership, joint venture, association,
trust, corporation or other entity, other than an executive benefit
plan of the Company of an entity organized, appointed of
established pursuant to the terms of any such benefit
plan.
(m)
“Proprietary
Information” shall mean any and all methods, inventions,
improvements or discoveries, whether or not patentable or
copyrightable, and any other information of a similar nature
related to the business of the Company disclosed to the Executive
or otherwise made known to him as a consequence of or through his
engagement by the Company (including information originated by the
Executive) in any technological area previously developed by the
Company or developed, engaged in, or researched, by the Company
during the term of the Executive’s engagement, including, but
not limited to, trade secrets, processes, products, formulae,
apparatus, techniques, know-how, marketing plans, data,
improvements, strategies, forecasts, customer lists, and technical
requirements of customers, unless such information is in the public
domain to such an extent as to be readily available to
competitors.
(n)
“Termination
Date” shall mean, except as otherwise provided in Section 13
hereof,
(i)
The Executive’s
date of death;
(ii)
Thirty (30) days after
the delivery of the Notice of Termination terminating the
Executive’s employment on account of Illness or Incapacity
pursuant to Section 17 hereof, unless the Executive returns on a
full-time basis to the performance of his duties prior to the
expiration of such period;
(iii)
Thirty (30) days after
the delivery of the Notice of Termination if the Executive’s
employment is terminated by the Executive voluntarily;
and
(iv)
Thirty (30) days after
the delivery of the Notice of Termination if the Executive’s
employment is terminated by the Company for any reason other than
death or Disability.
(o)
“Termination
Payment” shall mean the payment described in Section 15
hereof.
(p)
“Works of
Authorship” means an expression fixed in a tangible medium of
expression regardless of the need for a machine to make the
expression manifest, and includes but is not limited to, writings,
reports, drawings, sculptures, illustrations, video recordings,
audio recordings, computer programs, and charts.
2.
Employment
. The Company
hereby employs the Executive to perform those duties generally
described in this Agreement, and the Executive hereby accepts and
agrees to such employment on the terms and conditions hereinafter
set forth.
3.
Stated
Term .
The Executive’s Employment as Chief Executive
Officer shall commence on or about September 1, 2007, and shall end
on August 31, 2009, subject to the termination provision of Section
13 of this Agreement, or unless extended or renewed by the written
agreement of the parties.
4.
Duties
. During the term
of this Agreement, the Executive shall be employed by the Company
as its Chief Executive Officer to perform the following
duties:
(a) Have general
charge of the Company’s business affairs and property and
general supervision over the Company’s officers, employees
and agents;
(b) Serve as a
member of the Company’s executive committee;
(c) Execute
certificates representing shares of the Company’s equity
securities, the issuance of which shall have been authorized by the
Board;
(d) Provide
leadership, coordination and general direction regarding the
Company’s policies, plans and programs to the operations of
the Company and oversee their execution;
(e) Establish
goals and objectives for the operations of the Company and ensures
that such goals and objectives are met;
(f) Administer and
otherwise ensure compliance with the Company’s policies and
procedures and local, county, state and federal
regulations;
(g) Develop and
manage Company’s strategic operating plan and
budgets;
(h) Perform
related duties as required or deemed appropriate by the Board to
accomplish the responsibilities and funct
