EMPLOYMENT
AGREEMENT
This Employment
Agreement (“Agreement”) is entered into this
16 th day of February 2009, by and between James
Flounlacker (the “Executive”) and ReGen Biologics, Inc.
(“ReGen” or the “Company”).
WHEREAS, the
Company wishes to retain the services of Executive; and
WHEREAS, the
Executive desires to be employed by the Company;
NOW, THEREFORE,
in consideration of the promises and mutual agreements made herein,
the sufficiency of which the parties expressly acknowledge, and
intending to be legally bound hereby, the Company and Executive
agree as follows:
1.
Employment Term . The Company shall employ the
Executive for a one-year term beginning on February 16, 2009
(“Effective Date”). Thereafter, this
Agreement will automatically renew for one-year terms, unless
either party provides the other party with ninety (90) days advance
written notice of the parties’ intent not to
renew.
2.
Employment Duties . Executive will serve in a
full-time capacity as Senior Vice President of Administration of
the Company. Executive shall be responsible for the
following activities of the Company: management, coordination or
oversight of key objectives, projects and processes, including but
not limited to coordination of the implementation of the sales
strategy and plan for the Company’s products in the United
States, and other duties as assigned by the Chief Executive Officer
or his designee. Executive shall report directly to the
Chief Executive Officer.
(a) The Company shall
pay Executive a base salary of $230,000 per annum, to be paid in
approximately equal bi-weekly installments, minus regular payroll
withholdings. The Compensation Committee of the Board of
Directors shall review Executive’s base salary at the
beginning of each calendar year during its annual compensation
review. Such compensation may be adjusted by the Company
by mutual agreement with Executive at such annual
reviews. Executive shall receive a $40,000 signing
bonus, to be paid in full along with the Company’s first
payroll disbursed after the Effective Date of this
Agreement. Executive shall also be eligible to receive
an annual performance bonus of up to 25% of his annual base salary,
subject to the achievement of defined goals and
objectives. Annual bonuses are intended as
incentive payments, and will not be paid after the termination of
Executive’s employment with the Company.
(b) Executive shall
also be entitled to an initial stock option grant of 110,000 shares
of the Company’s common stock vesting in equal installments
over the first four years of his employment by the Company, as well
as a grant of 20,000 restricted shares of the Company’s
common stock, which shall become fully vested and unrestricted as
of December 31, 2009. Both such grants shall be subject
to the terms of a separate stock option and grant agreement to be
entered into between Executive and the Company.
(a) Executive
will be entitled during the term of this Agreement to such paid
vacation, paid holidays, and sick leave benefits as such benefits
are provided by the Company pursuant to the Company’s
standard policies. Additionally, Executive shall be
entitled during the term of this Agreement, and pursuant to the
terms of the individual benefit policies (including any eligibility
requirements), to (i) the Company’s standard health and
disability benefits, (ii) participation in the Company’s
401(k) program, and (iii) any other benefits that may be
customarily provided from time to time by the Company to its
employees.
(b) The
Company shall reimburse Executive for all documented reasonable
expenses incurred in connection with the performance of his duties
under the Agreement pursuant to the Company’s standard
business expense reimbursement policies.
(c) The
Company shall provide Executive during the Term of this Agreement
the same level of coverage of directors and officers liability
insurance that the Company extends to its other officers and
directors. In addition, Company shall indemnify and hold
Executive harmless from any and all claims, demands, judgments,
damages and attorneys’ fees resulting from his actions in the
performance of his duties under this Agreement on behalf of the
Company to the extent provided in the “Indemnification
Agreement” attached hereto as Exhibit A , which shall
be executed by the Company and Executive simultaneously with the
execution of this Agreement.
(a)
For Cause . Notwithstanding any other provision
of this Agreement, the Company may terminate Executive’s
employment for cause at any time without notice. For
purposes of this Agreement, “cause” shall mean the
Executive’s (i) commission of an action having a material
adverse effect on the Company which constitutes an act of fraud,
dishonesty, or moral turpitude, or which, if proven in a court of
law, would constitute a violation of a criminal code or other law;
(ii) divulging or using for a non-Company purpose the
Company’s Confidential Information (as such term is defined
in Section 8); (iii) commission of any act of discrimination or
harassment; (iv) use of alcohol or drugs that interferes with the
performance of Executive’s duties or (v) material breach of
any duty or obligation of the Executive to the Company where such
failure is not corrected within thirty (30) days after Executive
receives written notice thereof, and an opportunity to cure (to the
extent curable). Should the Company determine that such
“cause” exists, it may terminate Executive’s
employment immediately. Should the Company terminate
Executive’s employment pursuant to this Section 5(a), the
Company’s obligations under this Agreement shall cease, and
except as required by applicable law, Executive shall forfeit all
rights to receive any other compensation or benefits under this
Agreement, except that he shall be entitled to his base salary,
minus regular payroll withholdings, for services rendered through
the effective date of termination.
(b)
Without Cause . Notwithstanding any ot
