CRDENTIA CORP. EXECUTIVE EMPLOYMENT AGREEMENT

 

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EXHIBIT 10.1

 

 

                                 CRDENTIA CORP.

 

                         EXECUTIVE EMPLOYMENT AGREEMENT

 

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This Executive Employment Agreement (the "AGREEMENT"), dated August 31, 2004, is

between Crdentia Corp., a Delaware corporation (the "COMPANY") and William C.

Crocker, an individual residing at Phoenix, Arizona ("EXECUTIVE").

 

1. POSITION AND RESPONSIBILITIES

 

         a. POSITION. Executive is employed by the Company to render services to

the Company in the position of Senior Vice President. Executive shall perform

such duties and responsibilities as are normally related to such position in

accordance with the standards of the industry and any additional duties now or

hereafter assigned to Executive by the Company. Executive shall abide by the

rules, regulations, and practices as adopted or modified from time to time in

the Company's sole discretion.

 

         b. OTHER ACTIVITIES. Except upon the prior written consent of the

Company, Executive will not, during the term of this Agreement, (i) accept any

other employment, or (ii) engage, directly or indirectly, in any other business

activity (whether or not pursued for pecuniary advantage) that might interfere

with Executive's duties and responsibilities hereunder or create a conflict of

interest with the Company.

 

         c. NO CONFLICT. Executive represents and warrants that Executive's

execution of this Agreement, Executive's employment with the Company, and the

performance of Executive's proposed duties under this Agreement shall not

violate any obligations Executive may have to any other employer, person or

entity, including any obligations with respect to proprietary or confidential

information of any other person or entity.

 

2. COMPENSATION AND BENEFITS

 

         a. BASE SALARY. In consideration of the services to be rendered under

this Agreement, the Company shall pay Executive a salary at the rate of One

Hundred Fifteen Thousand Dollars ($115,000) per year ("BASE SALARY"). The Base

Salary shall be paid in accordance with the Company's regularly established

payroll practice. Executive's Base Salary will be reviewed from time to time in

accordance with the established procedures of the Company for adjusting salaries

for similarly situated employees and may be adjusted in the sole discretion of

the Company; provided, however, that the Base Salary will be increased by no

less than ten percent (10%) on each yearly anniversary of the date of this

Agreement.

 

 

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         b. BENEFITS. Executive shall be eligible to participate in the benefits

made generally available by the Company to similarly-situated Executives, in

accordance with the benefit plans established by the Company, and as may be

amended from time to time in the Company's sole discretion.

 

         c. BONUS PROGRAM. Executive shall be eligible to participate in the

Bonus Program made generally available to the Company's Executives ("BONUS

PROGRAM"), such participation to be in accordance with the terms of the Bonus

Program established by the Company, and as made by amended from time to time in

the Company's sole discretion.

 

         d. EXPENSES. The Company shall reimburse Executive for reasonable

business expenses incurred in the performance of Executive's duties hereunder in

accordance with the Company's expense reimbursement guidelines.

 

3. AT-WILL EMPLOYMENT; TERMINATION BY COMPANY

 

         The employment of Executive shall be "at-will" at all times from and

after the third anniversary of the date hereof. The Company may terminate

Executive's employment with the Company (i) "For Cause" (as defined below) at

any time or (ii) at any time after the third anniversary of the date hereof,

without any advance notice, for any reason or no reason at all, notwithstanding

anything to the contrary contained in or arising from any statements, policies

or practices of the Company relating to the employment, discipline or

termination of its employees. Upon and after any such termination, all

obligations of the Company under this Agreement shall cease.

 

4. OTHER TERMINATIONS BY COMPANY

 

         a. TERMINATION FOR CAUSE. For purposes of this Agreement, "For Cause"

shall mean: (i) Executive commits a crime involving dishonesty, breach of trust,

or physical harm to any person; (ii) Executive willfully engages in conduct that

is in bad faith and materially injurious to the Company, including but not

limited to, misappropriation of trade secrets, fraud or embezzlement; (iii)

Executive willfully commits a material breach of this Agreement, which breach is

not cured within twenty days after written notice to Executive from the Company;

(iv) Executive willfully refuses to implement or follow a lawful policy or

directive of the Company, which breach is not cured within twenty days after

written notice to Executive from the Company; or (v) Executive engages in

misfeasance or malfeasance demonstrated by a pattern of failure to perform job

duties diligently and professionally after written notice thereof from the

Company. The Company may terminate Executive's employment For Cause at any time,

without any advance notice. The Company shall pay to Executive all compensation

to which Executive is entitled up through the date of termination, subject to

any other rights or remedies of The Company under law; and thereafter all

obligations of the Company under this Agreement shall cease.

 

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         b. BY DEATH. Executive's employment shall terminate automatically upon

Executive's death. The Company shall pay to Executive's beneficiaries or estate,

as appropriate, any compensation then due and owing. Thereafter all obligations

of the Company under this Agreement shall cease. Nothing in this Section shall

affect any entitlement of Executive's heirs or devisees to the benefits of any

life insurance plan or other applicable benefits.

 

         c. BY DISABILITY. If Executive becomes eligible for the Company's long

term disability benefits or if, in the sole opinion of the Company, Executive is

unable to carry out the responsibilities and functions of the position held by

Executive by reason of any physical or mental impairment for more than ninety

consecutive days or more than one hundred and twenty days in any twelve-month

period, then, to the extent permitted by law, the Company may terminate

Executive's employment. The Company shall pay to Executive all compensation to

which Executive is entitled up through the date of termination, and thereafter

all obligations of the Company under this Agreement shall cease. Nothing in this

Section shall affect Executive's rights under any disability plan in which

Executive is a participant.

 

5. TERMINATION BY EXECUTIVE

 

         a. AT-WILL TERMINATION BY EXECUTIVE. Executive may terminate employment

with the Company at any time for any reason or no reason at all, upon four

weeks' advance written notice. During such notice period Executive shall

continue to diligently perform all of Executive's duties hereunder. The Company

shall have the option, in its sole discretion, to make Executive's termination

effective at any time prior to the end of such notice period as long as the

Company pays Executive all compensation to which Executive is entitled up

through the last day of the four week notice period. Thereafter all obligations

of the Company shall cease.

 

6. TERMINATION OBLIGATIONS

 

         a. RETURN OF PROPERTY. Executive agrees that all property (including

without limitation all equipment, tangible proprietary information, documents,

records, notes, contracts and computer-generated materials) furnished to or

created or prepared by Executive incident to Executive's employment belongs to

the Company and shall be promptly returned to the Company upon termination of

Executive's employment.

 

         b. RESIGNATION AND COOPERATION. Upon termination of Executive's

employment, Executive shall be deemed to have resigned from all offices and

directorships then held with the Company. Following any termination of

employment, Executive shall cooperate with the Company in the winding up of

pending work on behalf of the Company and the orderly transfer of work to other

employees. Executive shall also cooperate with the Company in the defense of any

action brought by any third party against the Company that relates to

Executive's employment by the Company.

 

 

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         c. CONTINUING OBLIGATIONS. Executive understands and agrees that

Executive's obligations under Sections 6, 7, and 8 herein (including Exhibits A

and B) shall survive the termination of Executive's employment for any reason

and the termination of this Agreement.

 

7. INVENTIONS AND PROPRIETARY INFORMATION; PROHIBITION ON THIRD PARTY

   INFORMATION

 

         a. PROPRIETARY INFORMATION AGREEMENT. Executive agrees to sign and be

bound by the terms of the Proprietary Information and Inventions Agreement,

which is attached as Exhibit A ("PROPRIETARY INFORMATION AGREEMENT").

 

         b. NON-SOLICITATION. Executive acknowledges that because of Executive's

position in the Company, Executive will have access to material intellectual

property and confidential information. During the term of Executive's employment

and for one year thereafter, in addition to Executive's other obligations

hereunder or under the Proprietary Information Agreement, Executive shall not,

for Executive or any third party, directly or indirectly (a) divert or attempt

to divert from the Company any business of any kind, including without

limitation the solicitation of or interference with any of its customers,

clients, members, business partners or suppliers, or (b) solicit or otherwise

induce any person employed by the Company to terminate his employment.

 

         c. NON-DISCLOSURE OF THIRD PARTY INFORMATION. Executive represents and

warrants and covenants that Executive shall not disclose to the Company, or use,

or induce the Company to use, any proprietary information or trade secrets of

others at any time, including but not limited to any proprietary information or

trade secrets of any former employer, if any; and Executive acknowledges and

agrees that any violation of this provision shall be grounds for Executive's

immediate termination and could subject Executive to substantial civil

liabilities and criminal penalties. Executive further specifically and expressly

acknowledges that no officer or other employee or representative of the Company

has requested or instructed Executive to disclose or use any such third party

proprietary information or trade secrets.

 

8. ARBITRATION

 

Executive agrees to sign and be bound by the terms of the Arbitration Agreement,

which is attached as Exhibit B.

 

 

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9. AMENDMENTS; WAIVERS; REMEDIES

 

This Agreement may not be amended or waived except by a writing signed by

Executive and by a duly authorized representative of the Company other than

Executive. Failure to exercise any right under this Agreement shall not

constitute a waiver of such right. Any waiver of any breach of this Agreement

shall not operate as a waiver of any subsequent breaches. All rights or remedies

specified for a party herein shall be cumulative and in addition to all other

rights and remedies of the party hereunder or under applicable law.

 

10. ASSIGNMENT; BINDING EFFECT

 

         a. ASSIGNMENT. The performance of Executive is personal hereunder, and

Executive agrees that Executive shall have no right to assign and shall not

assign or purport to assign any rights or obligations under this Agreement. This

Agreement may be assigned or transferred by the Company; and nothing in this

Agreement shall prevent the consolidation, merger or sale of the Company or a

sale of any or all or substantially all of its assets.

 

         b. BINDING EFFECT. Subject to the foregoing restriction on assignment

by Executive, this Agreement shall inure to the benefit of and be binding upon

each of the parties; the affiliates, officers, directors, agents, successors and

assigns of the Company; and the heirs, devisees, spouses, legal representatives

and successors of Executive.

 

11. NOTICES

 

All notices or other communications required or permitted hereunder shall be

made in writing and shall be deemed to have been duly given if delivered: (a) by

hand; (b) by a nationally recognized overnight courier service; or (c) by United

States first class registered or certified mail, return receipt requested, to

the principal address of the other party, as set forth below. The date of notice

shall be deemed to be the earlier of (i) actual receipt of notice by any

permitted means, or (ii) five business days following dispatch by overnight

delivery service or the United States Mail. Executive shall be obligated to

notify the Company in writing of any change in Executive's address. Notice of

change of address shall be effective only when done in accordance with this

paragraph.

 

 

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Company's Notice Address:

 

14114 Dallas Parkway, Suite 600

Dallas, TX 75240

Attn: Chief Executive Officer

 

Executive's Notice Address:

 

10371 N. 124th Street

Scottsdale, Arizona  85259

 

 

12. SEVERABILITY

 

If any provision of this Agreement shall be held by a court or arbitrator to be

invalid, unenforceable, or void, such provision shall be enforced to the fullest

extent permitted by law, and the remainder of this Agreement shall remain in

full force and effect. In the event that the time period or scope of any

provision is declared by a court or arbitrator of competent jurisdiction to

exceed the maximum time period or scope that such court or arbitrator deems

enforceable, then such court or arbitrator shall reduce the time period or scope

to the maximum time period or scope permitted by law.

 

13. TAXES

 

All amounts paid under this Agreement (including without limitation Base Salary

and Severance) shall be paid less all applicable state and federal tax

withholdings and any other withholdings required by any applicable jurisdiction.

 

14. GOVERNING LAW

 

This Agreement shall be governed by and construed in accordance with the laws of

the State of Delaware.

 

15. INTERPRETATION

 

This Agreement shall be construed as a whole, according to its fair meaning, and

not in favor of or against any party. Sections and section headings contained in

this Agreement are for reference purposes only, and shall not affect in any

manner the meaning or interpretation of this Agreement. Whenever the context

requires, references to the singular shall include the plural and the plural the

singular.

 

 

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16. OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT

 

Executive agrees that any and all of Executive's obligations under this

agreement, including but not limited to Exhibits A and B, shall survive the

termination of employment and the termination of this Agreement.

 

17. COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, each of which

shall be deemed an original of this Agreement, but all of which together shall

constitute one and the same instrument.

 

18. AUTHORITY

 

Each party represents and warrants that such party has the right, power and

authority to enter into and execute this Agreement and to perform and discharge

all of the obligations hereunder; and that this Agreement constitutes the valid

and legally binding agreement and obligation of such party and is enforceable in

accordance with its terms.

 

19. ENTIRE AGREEMENT

 

This Agreement is intended to be the final, complete, and exclusive statement of

the terms of Executive's employment by the Company and may not be contradicted

by evidence of any prior or contemporaneous statements or agreements, except for

agreements specifically referenced herein (including the Proprietary Information

Agreement attached as Exhibit A and the Arbitration Agreement attached as

Exhibit B). To the extent that the practices, policies or procedures of the

Company, now or in the future, apply to Executive and are inconsistent with the

terms of this Agreement, the provisions of this Agreement shall control. Any

subsequent change in Executive's duties, position, or compensation will not

affect the validity or scope of this Agreement.

 

 

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20. EXECUTIVE ACKNOWLEDGEMENT

 

 

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL

COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND UNDERSTANDS THIS

AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT, AND THAT EXECUTIVE

HAS ENTERED INTO THIS AGREEMENT FREELY BASED ON EXECUTIVE'S OWN JUDGMENT AND NOT

ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.

 

 

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date

first written above.

 

CRDENTIA CORP.:                              EXECUTIVE:

 

 

 

By: /s/ James D. Durham                      By: /s/ William C. Crocker

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Name: James D. Durham                        Name: William C. Crocker

Title: Chief Executive Officer

 

 

 

 

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                                    EXHIBIT A

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                  PROPRIETARY RIGHTS AND INFORMATION AGREEMENT

 

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         In consideration of my employment by Crdentia Corp. (the "Company") and

the mutual covenants hereof, I and the Company hereby agree to the terms and

conditions set forth in this Proprietary Rights and Information Agreement (the

"Agreement").

 

 

                                    RECITALS

 

         WHEREAS, my responsibilities as an employee of the Company may include

creating, making, conceiving, inventing, discovering, developing, reducing to

practice or suggesting Technology (as defined below) that relates in any manner

to the actual or reasonably anticipated business, research, development or other

activities of the Company; and

 

         WHEREAS, my compensation as an employee of the Company takes into

account, among other things, the value of such Technology and the potential

economic benefit that may be derived therefrom by the Company;

 

         NOW THEREFORE, I and the Company hereby agree as follows:

 

1. PROPRIETARY INFORMATION

 

         a. RESTRICTIONS ON PROPRIETARY INFORMATION. I agree that, during my

employment and, as long as such information and materials constitute Proprietary

Information (as defined below) thereafter, I will hold the Proprietary

Information of the Company and its affiliates in strict confidence and will

neither use the information for the benefit of myself or any third party nor

disclose it to any third party, except to the extent necessary to carry out my

responsibilities as an employee of the Company or as specifically authorized in

writing by a duly authorized officer of the Company other than me. "PROPRIETARY

INFORMATION" means any and all information and materials, in whatever form,

whether tangible or intangible, pertaining in any manner to the business of the

Company or its affiliates, consultants, customers, business associates or

members (including its and their officers, directors, agents and employees), or

any person or entity to which the Company owes a duty of confidentiality,

whether or not labeled or identified as proprietary or confidential, and

including any copies, portions, extracts and derivatives thereof, except to the

extent that I can prove that such information or materials (i) are or become

generally known to the public through lawful means and through no act or

omission of mine; (ii) were part of my general knowledge prior to my employment

by the Company; or (iii) are disclosed to me without restriction by a third

party who rightfully possesses the information and is under no duty of

confidentiality with respect thereto. "Proprietary Information" includes but is

not limited to any and all (a) Creations and other Technology (as defined below)

and related records; (b) financial information and other information about

costs, budgets, profits, margins markets, sales, pricing, payment terms,

discounts, rebates and other concessions or incentives, forecasts, customers,

subscribers, members, and bids; (c) strategies and other plans for business,

marketing, advertisement, future development and new products, services and

concepts; (d) employee and personnel information, including, without limitation,

files and information about employee compensation and benefits.

 

 

 

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         b. LOCATION AND REPRODUCTION. I agree to maintain at my work station

and/or any other place under my control only such Proprietary Information that,

and only as long as such Proprietary Information, is necessary to carry out my

responsibilities as an employee of the Company. I agree to return to the

appropriate person or location or otherwise properly dispose of Proprietary

Information once that necessity no longer exists. I also agree not to make

copies or otherwise reproduce Proprietary Information except to the extent

necessary to carry out my responsibilities as an employee of the Company.

 

         c. PRIOR ACTIONS AND KNOWLEDGE. Except as disclosed on Schedule A to

this Agreement, I have no knowledge of the Company's business or Proprietary

Information, other than information I have learned from the Company in the

course of being hired and employed.

 

         d. THIRD PARTY INFORMATION. I recognize that the Company has received

and will receive confidential or proprietary information and materials from

third parties. Such information and materials shall be deemed "Proprietary

Information" for all purposes of this Agreement and I will be subject to all

limitations on use and disclosure set forth in this Agreement with respect

thereto. In addition, I shall not use or disclose any such information and

materials in any manner inconsistent with any of Company's obligations towards

such third party.

 

2. CREATIONS

 

         a. DEFINITIONS.

 

              (1) "TECHNOLOGY" comprises all materials, information, ideas and

other subject matter, including, without limitation, works of authorship and

other creations; inventions, invention disclosures, discoveries, developments

and patent applications; know-how and trade secrets; plans, designs and

concepts; drawings, diagrams and schematics; writings, reports, notebooks, and

other information; specifications, formulas, structures and other technical or