Exhibit 10.1
 
EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”), dated as of the 23rd day
of May, 2012, is by and between AspenBio Pharma, Inc., a Colorado corporation
(the “Employer” or “Company”) and Don Hurd (the “Executive”).  In consideration
of the mutual covenants contained in this Agreement, the Employer agrees to
employ the Executive, and the Executive agrees to be employed by the Employer,
upon the terms and conditions hereinafter set forth.

ARTICLE 1
TERM OF EMPLOYMENT

1.1  Term.  The Executive shall serve at the pleasure of the Board of Directors
of the Company.  The term of employment hereunder shall commence as of the day
first written above (the “Commencement Date”) and shall continue until
terminated as provided in Article 5.

ARTICLE 2
DUTIES OF THE EXECUTIVE

2.1  Duties.  The Executive shall be employed with the title of Senior Vice
President and Chief Commercial Officer, with the responsibilities and
authorities as are customarily performed by such positions including, but not
limited to, those duties as may from time to time be assigned to the Executive
by the Chief Executive Officer of the Employer.  The Executive shall report to
the Chief Executive Officer, and the Executive’s responsibilities and
authorities are subject to the general direction and control of the Chief
Executive Officer.

2.2  Extent and Place of Duties.  The Executive shall devote working time,
efforts, attention and energies to the business of the Employer on a full-time
basis; with such changes as may further be agreed upon between the parties from
time to time.  All such duties shall be performed working out of either the
Castle Rock, CO offices of the Company or the Executive’s home office in
addition to regular trips for business and meetings on behalf of the Company as
the Executive and the Company may reasonably agree.

ARTICLE 3
COMPENSATION OF THE
EXECUTIVE

3.1  Salary.  As compensation for services rendered under this Agreement, the
Executive will receive a salary of $230,000 per year.  The Executive’s salary is
payable in accordance with the Employer’s normal business practices. The parties
agree that the salary and compensation package will be reviewed at the end of
the initial year by the Chief Executive Officer in conjunction with the
Compensation Committee of the Board of Directors and the Board of Directors.
 

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3.2  Annual Incentive Bonus.  The Executive’s annual incentive bonus for 2012
shall be equal to 35% of his actual base salary at target, with such designated
performance goals as established by the Compensation Committee of the Board of
Directors and confirmed by the Board of Directors.

3.3  Stock Option Award.  The Executive shall be awarded an initial stock option
award to purchase 120,000 shares of the Company’s common stock.  The date of
grant shall be the Commencement Date, provided that the Executive begins
employment with the Company on such date; otherwise the date of grant shall be
the date his employment with the Company begins (the “grant date”).  The stock
option award shall have a term of ten (10) years, and shall constitute a
non-qualified option award outside of the Company’s Incentive Stock Option Plan.
The options shall vest as to 50% of the total at the six months anniversary
following the grant date and the balance vesting one-twelfth monthly over months
seven through twelve, following the grant date.  Any stock options granted
hereunder, that are then unvested, shall vest upon the consummation of a Change
in Control of the Company, using the same terms as contained in the Company’s
2002 Stock Incentive Plan, as amended, with a “Change in Control” meaning, (a)
the acquisition, directly or indirectly, by any person or group (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934) of the
beneficial ownership of more than fifty percent of the outstanding securities of
the Company, excluding equity rights issued in connection with an offering, (b)
a merger or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the state
in which the Company is incorporated, (c) the sale, transfer or other
disposition of all or substantially all of the assets of the Company, (d) a
complete liquidation or dissolution of the Company, or (e) any reverse merger in
which the Company is the surviving entity but in which securities possessing
more than fifty percent of the total combined voting power of the Company’s
outstanding securities are transferred to a person or persons different from the
persons holding those securities immediately prior to such merger.

3.4  Benefits.  The Executive shall be entitled, subject to this Section 3.4, to
participate in all of the Employer’s employee benefit plans and employee
benefits, including any retirement, pension, profit-sharing, incentive
compensation, stock option, insurance, hospital or other plans and benefits
which now may be in effect or which may hereafter be adopted, it being
understood that the Executive shall have the same rights and privileges to
participate in such plans and benefits as any other executive employee during
the term of this Agreement.  Participation in any benefit plans shall be in
addition to the compensation otherwise provided for in this Agreement.  The
Executive’s health care benefits shall be coordinated, if applicable, with any
COBRA benefits currently held by the Executive.  The Executive shall be entitled
to paid vacation time and personal time off (“PTO”) as provided in the Company’s
Personnel Manual.

3.5  Expenses.  The Executive shall be entitled to prompt reimbursement for all
reasonable expenses incurred by the Executive in the performance of his duties
hereunder.

3.6  Travel/Relocation.  The Employer does not expect the Executive to relocate
to the Castle Rock, CO area in the near term and will, to the extent consistent
with applicable tax law, pay for lodging and travel costs for the Executive for
travel associated with the Executive’s position with the Company.  Domestic air
travel shall be reimbursed at economy fare and international travel at business
class fare.

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ARTICLE 4
NON-COMPETITION; CONFIDENTIALITY

4.1  During the term of this Agreement, the Executive may make passive
investments in companies involved in industries in which the Company operates,
provided any such investment does not exceed a 5% equity interest, unless the
Executive obtains consent to acquire an equity interest exceeding 5% by a vote
of a majority of the directors.
 

 
4.2  During the term of this Agreement the Executive, subject to Board approval,
which will not be unreasonably withheld, can join non-competitive boards as an
independent board member, not to exceed a total of two boards at any one time.
 

4.3  Except as provided in this Article 4 hereof, the Executive may not
participate in any business or other areas of business in which the Company is
engaged during the term of this Agreement.

4.4           (a)           The Executive recognizes and acknowledges that the
information, business, list of the Employer’s customers and any other trade
secret or other secret or confidential information relating to the Employer’s
business as they may exist from time to time are valuable, special and unique
assets of the Employer’s business.  Therefore, the Executive agrees as follows:

(1) The Executive will hold in strictest confidence and not disclose, reproduce,
publish or use in any manner, whether during or subsequent to this employment,
without the express authorization of the Board of Directors of the Employer, any
information, business, customer lists, or any other secret or confidential
matter relating to any aspect of the Employer’s business, except as such
disclosure or use may be required in connection with the Executive’s work for
the Employer.

(2) Upon request or at the time of leaving the employ of the Employer, the
Executive shall deliver to the Employer, and not keep or deliver to anyone else,
any and all notes, memoranda, documents and, in general, any and all material
relating to the Employer’s business.

(3) The Board of Directors of the Employer may from time to time reasonably
designate other subject matters requiring confidentiality and secrecy which
shall be deemed to be covered by the terms of this Agreement.

(b)           In the event of a breach or threatened breach by the Executive of
the provisions of this paragraph 4.4, the Employer shall be entitled to an
injunction (i) restraining the Executive from disclosing, in whole or in part,
any information as described above or from rendering any services to any person,
firm, corporation, association or other entity to whom such information, in
whole or in part, has been disclosed or is threatened to be disclosed; and/or
(ii) requiring that the Executive deliver to the Employer all information,
documents, notes, memoranda and any and all other material as described above
upon the Executive’s leave of the employ of the Employer.  Nothing herein shall
be construed as prohibiting the Employer from pursuing other remedies available
to the Employer for such breach or threatened breach, including the recovery of
damages from the Executive.
 

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(c)           The Executive hereby agrees that, upon the execution of this
Agreement, he will sign the Company’s standard forms of Code of Conduct,
Confidentiality, Insider Trading Policy and Inventions agreements.
 
4.5   Non-disparagement.  During the Term of the Executive’s employment
hereunder and for five (5) years thereafter (a) the Executive shall not
disparage, deprecate, or make any comments or take any other actions, directly
or indirectly, that a reasonable person would expect at the time would have the
effect of diminishing or constraining the goodwill and good reputation of the
Company or its officers, directors, employees or services and (b) the Employer
shall not disparage, deprecate, or make any comments or take any other actions,
directly or indirectly, that a reasonable person would expect at the time would
have the effect of diminishing or constraining the goodwill and good reputation
of the Executive, except in each case as may be required by law.  For the
Executive, this obligation includes, but is not limited to, refraining from
negative statements about the Company’s methods of doing business, the
effectiveness of its business policies, and the quality of any of its services
or personnel. Further, the Executive will refrain from criticizing, or making
(directly or indirectly), or encouraging any other(s) to make, any public
attack(s) against the Company or any of its officers, directors or employees. 
This specifically includes any such communications with any newspaper or other
news media.

ARTICLE 5
TERMINATION OF EMPLOYMENT

5.1  Termination.  The Executive’s employment hereunder may be terminated
without any breach of this Agreement only under the following circumstances:

(a)           By Executive.  Upon the occurrence of any of the following events,
this Agreement may be terminated by the Executive by prior written notice to the
Employer:

(1) if the Employer makes a general assignment for the benefit of creditors,
files a voluntary bankruptcy petition, files a petition or answer seeking a
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any law, or there shall have been filed any petition or
application for the involuntary bankruptcy of the Employer, or other similar
proceeding, in which an order for relief is entered or which remains undismissed
for a period of thirty (30) days or more, or the Employer seeks, consents to, or
acquiesces in the appointment of a trustee, receiver, or liquidator of the
Employer or any material part of its assets;

(2) a Change in Control of the Employer;

(3) a decision by the Employer, approved by the Board of Directors of the
Employer, to terminate its business and liquidate its assets.

(b)           Death.  This Agreement shall terminate upon the death of the
Executive.

(c)           Disability.  The Employer may terminate this Agreement upon the
disability of the Executive.  The Executive shall be considered disabled
(whether permanent or temporary) if he is incapacitated to such an extent that
he is unable to perform substantially all of his duties for Employer that he
performed prior to such incapacitation.
 

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(d)           Cause.  The Employer may terminate this Agreement for Cause.  For
purposes of this Agreement, “Cause” means (i) the willful and continued failure
by the Executive to substantially perform his duties with the Employer (other
than any such failure resulting from his incapacity due to physical or mental
illness) after a written demand specifically identifies the manner in which the
Board of Directors believes that the Executive has not substantially performed
his duties and responsibilities hereunder, or (ii) the willful engaging by the
Executive in conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise.  For purposes of this paragraph, no act or
failure to act on the Executive’s part shall be considered “willful” unless done
or omitted to be done by the Executive not in good faith and without reasonable
belief that his action or omission was in the best interest of the Employer.

(e)           Other Termination by Company.  The Employer may terminate the
Executive’s employment hereunder for any reason.

(f)           Other Termination by Executive.  The Executive may terminate the
Agreement for any reason by providing written notice to the Chief Executive
Officer at least thirty (30) days prior to the Date of Termination.

5.2  Notice of Termination.  Any termination of the Executive’s employment by
the Employer or by the Executive (other than termination pursuant to subsection
5.1(b) above) shall be communicated by written Notice of Termination to the
other party.

5.3  Date of Termination.  “Date of Termination” shall mean (a) if the
Executive’s employment is terminated by his death, the date of his death; (b) if
the Executive’s employment is terminated for Cause, the date on which a Notice
of Termination is received by the Executive; (c) if the Executive is determined
to be disabled, the date of such determination; and (d) if the Executive’s
employment is terminated for any other reason stated above, the date specified
in a Notice of Termination by the Employer or the Executive, which date in the
case of termination by Executive, shall be no less than thirty (30) days
following the date on which Notice of Termination is first given.

5.4  Compensation Upon Termination.

(a)           Following the termination of this Agreement by the Company for
Cause as set forth in Section 5.1(d), or any termination of this Agreement by
the Executive pursuant to Section 5.1(f), the Executive shall be entitled to
compensation only through the Date of Termination.
 
(b)           Following the termination of this Agreement pursuant to Section
5.1(b), the Employer shall pay to the Executive’s estate all compensation due
through the Date of Termination and if such termination occurs after July 24,
2012, plus an amount equal to six (6) months base salary following such
termination for his death.
 
(c)           In the event of disability of the Executive as described in
Section 5.1(c), if the Employer elects to terminate this Agreement, the
Executive shall receive compensation through the Date of Termination and if such
termination occurs after July 24, 2012, plus an amount equal to six(6) months
base salary following such termination for his disability.

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(d)           If the Executive is terminated by the Employer for any reason
other than death, disability or Cause as set forth in this Article 5, or the
Executive terminates his employment under Section 5.1(a) hereof, then the
Executive shall, subject to execution of a customary release of claims, receive
compensation through the Date of Termination and if such termination occurs
after July 24, 2012, plus severance payments equal to six (6) months base salary
following the Date of Termination.  The amount of such base salary shall be the
base salary at the Date of Termination.

(e)           Any amounts payable under this Section 5.4 shall be paid on the
Company’s normal payroll cycle; provided, however, that all such payments
(including by a lump sum payment as applicable) shall be paid in full by March
15 of the year following the year containing the Date of Termination or, if
applicable, otherwise so as not to be subject to Section 409A of the Internal
Revenue Code.

 
5.5  Other Termination Provisions.  The Executive agrees that upon termination
of this Agreement and upon reasonable request by the Board of Directors, the
Executive shall resign from any then effective Board, Officer or Committee
Employer positions.
 
 
5.6  Remedies.  Any termination of this Agreement shall not prejudice any other
remedy to which the Employer or the Executive may be entitled, either at law,
equity, or under this Agreement.
 
ARTICLE 6
INDEMNIFICATION

To the fullest extent permitted by applicable law, the Employer agrees to
indemnify, defend and hold the Executive harmless from any and all claims,
actions, costs, expenses, damages and liabilities, including, without
limitation, reasonable attorneys’ fees, hereafter or heretofore arising out of
or in connection with activities of the Employer or its employees, including the
Executive, or other agents in connection with and within the scope of this
Agreement or by reason of the fact that he is or was a director or officer of
the Employer or any affiliate of the Employer.  To the fullest extent permitted
by applicable law, the Employer shall advance to the Executive expenses of
defending any such action, claim or proceeding.  However, the Employer shall not
indemnify the Executive or defend the Executive against, or hold him harmless
from any claims, damages, expenses or liabilities, including attorneys’ fees,
resulting from the gross negligence or willful misconduct of the Executive.  The
duty to indemnify shall survive the expiration or early termination of this
Agreement as to any claims based on facts or conditions which occurred or are
alleged to have occurred prior to expiration or termination.

ARTICLE 7
GENERAL PROVISIONS

7.1  Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
 

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7.2  Arbitration.  Any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by arbitration in the City and
County of Denver, Colorado in accordance with the rules then existing of the
American Arbitration Association and judgment upon the award may be entered in
any court having jurisdiction thereof.

7.3  Entire Agreement.  This Agreement supersedes any and all other agreements,
whether oral or in writing, between the parties with respect to the employment
of the Executive by the Employer.  Each party to this Agreement acknowledges
that no representations, inducements, promises, or agreements, oral or
otherwise, have been made by either party, or anyone acting on behalf of any
party, that are not embodied in this Agreement, and that no agreement,
statement, or promise not contained in this Agreement shall be valid or binding.

7.4  Successors and Assigns.  This Agreement, all terms and conditions
hereunder, and all remedies arising herefrom, shall inure to the benefit of and
be binding upon the Employer, any successor in interest to all or substantially
all of the business and/or assets of the Employer, and the heirs,
administrators, successors and assigns of the Executive.  Except as provided in
the preceding sentence, the rights and obligations of the parties hereto may not
be assigned or transferred by either party without the prior written consent of
the other party.

7.5  Notices.  For purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
 
Executive:
Don Hurd
720 King Road
Cox’s Creek, KY 40013
Email: churd60041@aol.com
Phone: 502-682-8710

Employer:
AspenBio Pharma, Inc.
Attn: Chief Executive Officer
1585 South Perry Street
Castle Rock, CO 80104
Fax: 303-798-8332

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

7.6  Severability.  If any provision of this Agreement is prohibited by or is
unlawful or unenforceable under any applicable law of any jurisdiction as to
such jurisdiction, such provision shall be ineffective to the extent of such
prohibition without invalidating the remaining provisions hereof.
 

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7.7   Section Headings.  The section headings used in this Agreement are for
convenience only and shall not affect the construction of any terms of this
Agreement.

7.8   Survival of Obligations.  Termination of this Agreement for any reason
shall not relieve the Employer or the Executive of any obligation accruing or
arising prior to such termination.

7.9   Amendments.  This Agreement may be amended only by written agreement of
both the Employer and the Executive.

7.10  Counterparts.  This Agreement may be executed in one or more counterparts,
each of which shall constitute an original but all of which, when taken
together, shall constitute only one legal instrument.  This Agreement shall
become effective when copies hereof, when taken together, shall bear the
signatures of both parties hereto.  It shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.

7.11  Fees and Costs.  If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys’ fees, costs and necessary disbursements in addition to
any other relief to which that party may be entitled.

7.12  Other Agreements. The parties agree that the execution of this Agreement
shall at the Effective Date, terminate and supersede the Consulting Agreement
dated as of May 1, 2012 between the Company and Executive.
 
 
 
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IN WITNESS WHEREOF, Employer and Executive enter into this Executive Employment
Agreement effective as of the date first set forth above.

AspenBio Pharma, Inc. - “EMPLOYER”

By:   /s/Stephen Lundy
Name: Stephen T. Lundy
Title: Chief Executive Officer

Don Hurd - “EXECUTIVE”

Signed:   /s/ Don Hurd
Don Hurd, Individually

 
 
 
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