EXHIBIT 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”), executed as of July 10, 2012
(“Effective Date”), is between GlobalSCAPE, Inc., a Delaware corporation
(“GlobalSCAPE” or the “Company”), and James W. Albrecht (“Employee”).

RECITALS

WHEREAS, the Board of Directors (the “Board”) of the Company, has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of certain employees to their assigned duties; and

WHEREAS, in order to induce Employee to remain in the employ of the Company, and
in consideration of Employee’s agreement to continue employment with the
Company, the parties desire to enter into this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

1. Terms of Agreement. Except in the event of a Change in Control (as defined in
Section 4 hereof), at all times Employee’s employment shall be and remain at
will and may be terminated by the Company for any reason without notice or Cause
(as hereinafter defined). From and after the occurrence of a Change in Control,
this Agreement shall continue in effect for a period beginning on the effective
date of the Change in Control (the “Change in Control Date”) and ending on the
first anniversary of the Change in Control Date (the “Initial Term”) and shall
automatically be extended for an additional one-year period following the
Initial Term (each, an “Extended Term” and collectively with the Initial Term,
the “Term”) unless, not later than 90 days prior to the end of the then current
Term, the Company shall have given notice to Employee that it does not wish to
extend the Term.

2. Position. Employee agrees to be a full-time employee of the Company serving
in the position of Vice President & Chief Financial Officer (CFO), to devote
substantially all of his working time and attention to the business and affairs
of the Company and, to the extent necessary to discharge the responsibilities
associated with his position, to use his best efforts to perform faithfully and
efficiently such responsibilities. In addition, Employee agrees to serve in such
other capacities or offices to which he may be assigned, appointed or elected
from time to time by the Board.

3. Compensation. As compensation for his services under this Agreement, Employee
shall be entitled to receive base salary and other compensation to be determined
from time to time by the Board in its sole discretion. In addition, Employee
shall be entitled to participate in any additional bonus, incentive compensation
or employee benefit arrangement which may be established from time to time by
the Company in its sole discretion. Notwithstanding anything to the contrary
provided in this Agreement, prior to a Change in Control Employee shall not be
entitled to receive any compensation from the Company upon termination,
voluntary or involuntary, of his employment with the Company, regardless of the
reason for such termination.

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4. Change in Control. For purposes of this Agreement, a Change in Control shall
be deemed to have occurred if (a) any “person” or “group” (as such terms are
used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended, (the “Exchange Act”)) is or becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act as in effect on the date hereof, except
that a person shall be deemed to be the “beneficial owner” of all shares that
any such person has the right to acquire pursuant to any agreement or
arrangement or upon exercise of conversion rights, warrants, options or
otherwise, without regard to the sixty day period referred to in such Rule),
directly or indirectly, of securities representing 50% or more of the combined
voting power of GlobalSCAPE’s then outstanding securities; provided, however,
that if Thomas W. Brown and/or David Mann acquire, directly or indirectly,
securities representing 50% or more of the combined voting power of Employer’s
then outstanding securities it shall not be deemed a Change in Control, (b) any
person or group (other than Thomas W. Brown or David Mann or entities controlled
by either) shall make a tender offer or an exchange offer for 50% or more of the
combined voting power of GlobalSCAPE’s then outstanding securities, (c) at any
time during any period of two consecutive years (not including any period prior
to the execution of this Agreement), individuals who at the beginning of such
period constituted the board of directors of GlobalSCAPE and any new directors,
whose election by the board of directors of GlobalSCAPE or nomination for
election by GlobalSCAPE’s stockholders was approved by a vote of at least
two-thirds (2/3) of GlobalSCAPE’s directors then still in office who either were
GlobalSCAPE’s directors at the beginning of the period or whose election or
nomination for election was previously so approved (“Current Directors”), cease
for any reason to constitute a majority thereof, (d) GlobalSCAPE shall
consolidate, merge or exchange securities with any other entity and the
stockholders of GlobalSCAPE immediately before the effective time of such
transaction do not beneficially own, immediately after the effective time of
such transaction, shares or other equity interests entitling such stockholders
to a majority of all votes (without consideration of the rights of any class of
stock or other equity interests entitled to elect directors by a separate class
vote) to which all stockholders of the corporation or owners of the equity
interests of any other entity issuing cash or securities in the consolidation,
merger or share exchange would be entitled for the purpose of electing directors
or where the Current Directors immediately after the effective time of the
consolidation, merger or share exchange would not constitute a majority of the
board of directors or similar governing body of the corporation or other entity
issuing cash or securities in the consolidation, merger or share exchange, or
(e) any person or group acquires all or substantially all of GlobalSCAPE’s
assets.

Notwithstanding the foregoing, however, a Change in Control shall not be deemed
to occur merely by reason of (1) an acquisition of GlobalSCAPE securities by, or
any consolidation, merger or exchange of securities with, any entity that,
immediately prior to such acquisition, consolidation, merger or exchange of
securities, was a “subsidiary,” as such term is defined below or (2) an
acquisition of Company securities by Thomas W. Brown or David Mann. For these
purposes, the term “subsidiary” means (i) any corporation, limited liability
company or other entity of which 80% of the capital stock or other equity
interests of such entity is owned, directly or indirectly, by GlobalSCAPE and
(ii) any unincorporated entity in respect of which GlobalSCAPE has, directly or
indirectly, an equivalent degree of ownership.

 

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5. Termination of Employment Following Change in Control. Prior to a Change in
Control, Employee’s employment shall remain at will and may be terminated by the
Company for any reason without notice or Cause. From and after a Change in
Control, Employee shall be entitled to the benefits provided in Section 6 hereof
upon the subsequent termination of his employment during the Term unless such
termination is because of Employee’s death or Retirement, by the Company for
Cause or Disability, or by Employee other than for Good Reason.

(a) Disability. Termination by the Company or by Employee of his employment
based on “Disability” shall be deemed to have occurred where within thirty
(30) days after written Notice of Termination (as hereinafter defined) is given,
Employee shall not have returned to the full-time performance of his duties. For
purposes hereof, “Disability” shall be deemed to exist if Employee (A) meets the
definition of either “totally disabled” or “total disability” (or terms with
like meaning) under the terms of the Company’s long-term disability benefit
program, and (B) is suffering from any medical or mental condition that in the
Board’s reasonable opinion would prevent him from carrying out his normal
duties. Any refusal to submit to a reasonable medical examination by an
independent physician to determine whether Employee is so totally disabled shall
be deemed to constitute conclusive evidence of his disability. The determination
of such physician made in writing to the Company and to Employee shall be final
and conclusive for all purposes of this Agreement.

(b) Retirement. Termination by the Company or Employee of his employment based
on “Retirement” shall mean termination in accordance with the Company’s
retirement policy, generally applicable to its salaried employees or in
accordance with any retirement arrangement established with Employee’s consent.

(c) Cause. Termination by the Company of Employee’s employment for “Cause” shall
mean termination upon (i) the continued failure by Employee to substantially
perform his duties with the Company (other than any such failure resulting from
his incapacity due to Disability or any such actual or anticipated failure
resulting from termination by Employee for Good Reason) after a written demand
for substantial performance is delivered to Employee by the Board, which demand
specifically identifies the manner in which the Board believes that Employee has
not substantially performed his duties; (ii) Employee engages in conduct which
is demonstrably and materially injurious to the Company or any of its
affiliates, monetarily or otherwise; (iii) Employee commits fraud, bribery,
embezzlement or other material dishonesty with respect to the business of the
Company or any of its affiliates, or the Company discovers that Employee has
committed any such act in the past with respect to a previous employer;
(iv) Employee is indicted for any felony or any criminal act involving moral
turpitude, or the Company discovers that Employee has been convicted of any such
act in the past; (v) Employee commits a breach of any of the covenants,
representations, terms or provisions of this Agreement; (vi) Employee violates
any instructions or policies of the Company with respect to the operation of its
business or affairs; or (viii) Employee uses illegal drugs.

(d) Good Reason. For purposes of this Agreement, “Good Reason” shall mean,
without Employee’s express written consent, either:

(i) the material failure by the Company, without Employee’s consent, to pay to
Employee any portion of his current compensation within ten (10) days of the
date any such compensation payment is due;

 

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(ii) the Company commits a material breach of any of the covenants,
representations, terms or provisions of this Agreement; or

(iii) if, following a Change of Control, there is any material diminution of
Employee’s title, function, duties, authority or responsibilities (including
reporting requirements) if such diminution occurs during the Initial Term;
provided that Employee provides notice to the Company upon the initial
occurrence of such material diminution or within one year thereafter.

Employee must provide notice to the Company within 90 days of the initial
existence of the condition giving rise to “Good Reason”. Upon the receipt of
such notice, the Company shall have 30 days to remedy the condition giving rise
to “Good Reason”. After a Change in Control, if Employee terminates employment
with the Company after such condition giving rise to “Good Reason” is remedied,
Employee will not be entitled to the benefits under Section 6(d).

(e) Notice of Termination. Prior to a Change in Control, Employee may be
terminated with or without notice, with or without Cause or for any other reason
as Employee’s employment is at will. From and after a Change in Control, any
purported termination of Employee’s employment by the Company or by Employee
shall be communicated by written notice to the other party hereto in accordance
with Section 8 hereof (“Notice of Termination”). Such Notice of Termination
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Employee’s employment under the provisions so
indicated.

(f) Date of Termination, Etc. Prior to a Change in Control, “Date of
Termination” shall mean the date Employee’s employment is terminated. From and
after a Change in Control, “Date of Termination” shall mean (i) if Employee’s
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that Employee shall not have returned to the
full-time performance of his duties during such thirty (30) day period), or
(ii) if Employee’s employment is terminated pursuant to Subsections 5(c) or 5(d)
above or for any other reason (other than Disability), the date specified in the
Notice of Termination as the date on which it is reasonably anticipated that no
further services would be performed by Employee for the Company, as an employee
or independent contractor (which, in the case of a termination pursuant to
Subsection 5(d) above, shall not be less than two (2) weeks nor more than two
(2) months from the date such Notice of Termination is given).

6. Compensation Upon Termination or During Disability. Prior to a Change in
Control, Employee shall not be entitled to any benefits upon termination of
Employee’s employment. From and after a Change in Control, upon termination of
Employee’s employment or during a period of Disability, Employee shall be
entitled to the following benefits:

(a) During any period that Employee fails to perform his full-time duties with
the Company as a result of his Disability, Employee shall continue to receive
his base salary at the rate in effect at the commencement of any such period,
together with all compensation payable to Employee under the Company’s
disability plan or other plan during such period from the date that written
Notice of Termination is given until thirty (30) days thereafter as further
provided in Subsection 5(a) hereof. Thereafter, if Employee has not returned to
the full-time performance of his duties and employment terminates pursuant to
Subsection 5(a), Employee shall be provided with disability benefits that shall
be no less than the benefits that Employee would have been entitled to pursuant
to the Company’s long-term disability plan as in effect immediately prior to a
Change in Control.

 

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(b) If Employee’s employment shall be terminated by the Company for Cause or by
Employee other than for Good Reason, Disability, death or Retirement, the
Company shall pay Employee his full base salary through the Date of Termination
at the rate in effect at the time Notice of Termination is given and any amounts
to be paid to him pursuant to the Company’s retirement and other benefits plans
of the Company then in effect, and the Company shall have no further obligations
to Employee under this Agreement.

(c) If Employee’s employment shall be terminated by the Company or by Employee
for Retirement, or by reason of Employee’s death, Employee’s benefits shall be
determined in accordance with the Company’s retirement, benefit and insurance
programs then in effect.

(d) If Employee’s employment by the Company shall be terminated by the Company
other than for Cause, by Employee for Good Reason or otherwise because of
Employee’s death, Disability or Retirement then, effective as of the Date of
Termination, in lieu of any severance benefits which he otherwise would be
eligible to receive under the Company’s severance plan or policy, the Company
shall pay Employee:

(i) if prior to a Change of Control, his full base salary through the Date of
Termination at the rate in effect at the time the Notice of Termination is
given, plus all other amounts to which Employee is entitled under any
compensation or benefit plan of the Company (excluding any severance benefits
under the Company’s severance plan or policy) at the time such payments are due
under the terms of such plans; or

(ii) if after a Change of Control, (A) the Employee’s full base salary through
the Date of Termination at the rate in effect at the time the Notice of
Termination is given, plus all other amounts to which Employee is entitled under
any compensation or benefit plan of the Company as in effect immediately prior
to the Change in Control (excluding any severance benefits under the Company’s
severance plan or policy) at the time such payments are due under the terms of
such plans plus (B) the Employee’s then current base salary for a period
commencing on the Date of Termination and ending twelve (12) months after the
Date of Termination (collectively, the “Severance Benefit”); provided, however
in lieu of any further salary payments to Employee for periods subsequent to the
Date of Termination, the Company may pay to Employee a lump sum payment equal to
the Severance Benefit.

Notwithstanding any other provision of this Agreement, if any amount payable
hereunder (“Payments”) would, individually or together with any other amounts
paid or payable, constitute an “excess parachute payment,” within the meaning of
Section 280G of the Internal Revenue Code of 1986 and any applicable regulations
thereunder (the “Code”) which would require the payment by Employee of the
excise tax imposed by Section 4999 of the Code or any interest or penalty (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then he shall be entitled to
receive an additional Payment (the “Gross-Up Payment”) in an amount such that
after the payment by Employee of all taxes (including any interest or penalties
imposed with respect to such taxes) including, without limitation, any income
taxes (and any interest and penalties with respect thereto) and the Excise Tax
imposed upon the Gross-Up Payment, Employee shall retain an amount of the
Gross-Up

 

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Payment equal to the Excise Tax imposed upon the total Payments to be received
by Employee pursuant to this Agreement. The determination of whether the
Gross-Up Payment shall be paid shall be made by a nationally recognized
accounting firm selected by Employee and such determination shall be binding
upon him and the Company for purposes of this Agreement. The costs and expenses
of such accounting firm shall be paid by the Company.

(e) Except as specifically provided in this Section 6, Employee shall not be
required to mitigate the amount of any payment provided for in this Section 6 by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Section 6 be reduced by any compensation earned by
him as the result of employment by another employer or by retirement benefits
after the Date of Termination, or otherwise.

(f) Notwithstanding anything else herein, in the event that any payments under
this Section 6 or elsewhere in this Agreement are determined to be subject to
Section 409A of the Code, and Employee is a “specified employee” as defined in
Section 409A(a)(2)(B)(i) of the Code and Treasury Regulation §1.409A-1(i), no
such payments shall be made prior to the date that is six (6) months following
the Date of Termination.

(g) Employee acknowledges and agrees that (i) Employee is solely responsible for
all obligations arising as a result of the tax consequences associated with
payments under this Agreement, including without limitation, any taxes, interest
or penalties associated with Section 409A of the Code, (ii) Employee is not
relying upon any written or oral statement or representation the Company, any of
its Affiliates, or any of their respective employees, directors, officers,
attorneys or agents (collectively, the “Company Parties”) regarding the tax
effects associated with the execution of the this Agreement and the payment
under this Agreement, and (iii) in deciding to enter into this Agreement,
Employee is relying on his or her own judgment and the judgment of the
professionals of his or her choice with whom Employee has consulted. Employee
hereby releases, acquits and forever discharges the Company Parties from all
actions, causes of actions, suits, debts, obligations, liabilities, claims,
damages, losses, costs and expenses of any nature whatsoever, known or unknown,
on account of, arising out of, or in any way related to the tax effects
associated with the execution of this Agreement and any payment under the
Agreement.

(h) Employee must execute a full release of all claims within 10 days following
the Date of Termination in order to be eligible for the Severance Benefit.
Without limiting the remedies available to the Company for breach by Employee of
its obligations related to the Company’s intellectual property or proprietary
information, if Employee violates such obligations after the termination of
Employee’s employment with the Company in a manner reasonably determined by the
Board to be injurious to the Company or any of its affiliates, then Employee
will forfeit the right to any payments under this Section 6 which are unpaid at
the time such violation occurs.

7. Successors; Binding Agreement. (a) The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. Such assumption and agreement shall be obtained
prior to the effectiveness of any such succession. As used in this Agreement,
“Company” shall mean the Company as herein before defined and any successor to
its business

 

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and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise. Prior to a Change in Control, the term “Company”
shall also mean any affiliate of the Company to which Employee may be
transferred and Company shall cause such successor employer to be considered the
“Company” bound by the terms of this Agreement and this Agreement shall be
amended to so provide. Following a Change in Control the term “Company” shall
not mean any affiliate of the Company to which Employee may be transferred
unless Employee shall have previously approved of such transfer in writing, in
which case the Company shall cause such successor employer to be considered
“Company” bound by the terms of this Agreement and this Agreement shall be
amended to so provide.

(b) This Agreement shall inure to the benefit of and be enforceable by
Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Employee should die
while any amount would still be payable to Employee hereunder if he had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to his devisee, legatee or
other designee or, if there is no such designee, to his estate.

8. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the 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 to the
respective addresses set forth below, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt:

If to Employer or GlobalSCAPE, to:

GlobalSCAPE, Inc.

Attn: Board of Directors and President

4500 Lockhill Selma Road, Suite 150

San Antonio, Texas 78249

Facsimile: (210) 690-8824

If to Employee, to Employee’s last known address appearing on Employer’s records

9. Miscellaneous. No provision of this Agreement shall be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Employee and such officer as may be specifically designated by the
Board. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. Whenever the context
requires, the gender of all words used in this Agreement shall include the
masculine, feminine and neuter and the number of all words shall include the
singular and plural. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE
OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS.

 

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10. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

11. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

12. Arbitration. THIS AGREEMENT IS SUBJECT TO ARBITRATION UNDER THE FEDERAL
ARBITRATION ACT. Without limiting either party’s right to seek equitable
remedies, Company and Employee agree that any dispute or controversy arising
under or in connection with this Agreement shall be settled by arbitration.
Arbitration under this Agreement shall be governed by the Federal Arbitration
Act and proceed in San Antonio, Texas, in accordance with the rules of the
American Arbitration Association (“AAA”). Arbitration will be conducted before a
panel of three neutral arbitrators selected from an AAA list of proposed
arbitrators with business law experience. Either party may take any legal action
needed to protect any right pending completion of the arbitration. The
arbitrator will determine whether an issue is arbitrable and will give effect to
applicable statutes of limitation. The arbitrator has the discretion to decide,
upon documents only or with a hearing, any motion to dismiss for failure to
state a claim or any motion for summary judgment. Discovery shall be governed by
the Federal Rules of Civil Procedure and the Federal Rules of Evidence. All
information developed by the arbitration or litigation shall be held in
confidence subject to such protective orders, as the arbitrator deems useful to
ensure complete confidentiality. The decision of the arbitrator shall be final
and binding on all parties to this Agreement (and any third party beneficiaries
of this Agreement), and judgment thereon may be entered in any court having
jurisdiction over the parties. All costs of the arbitration proceeding or
litigation to enforce the arbitration award shall be paid by the party against
whom the arbitrator decides. The arbitrator shall have no right to award
punitive, consequential, exemplary or analogous damages.

13. Entire Agreement. This Agreement contains the entire agreement by the
parties with respect to the matters covered herein and supersedes any prior
agreement (including, without limitation, any prior employment or severance
agreement), condition, practice, custom, usage and obligation with respect to
such matters insofar as any such prior agreement, condition, practice, custom,
usage or obligation might have given rise to any enforceable right.

14. Employee Representations. Employee represents and certifies to Company that
he: (i) has received a copy of this Agreement for review and study and has had
ample time to review it before signing; (ii) has read this Agreement carefully;
(iii) has been given a fair opportunity to discuss and negotiate the terms of
this Agreement; (iv) understands its provisions; (v) has had the opportunity to
consult his attorney; and (vi) enters into this Agreement knowingly and
voluntarily.

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EXECUTED as of the date first above written.

 

GLOBALSCAPE, INC. By:    /s/ James R. Morris, CEO   James R. Morris, CEO /s/
James W. Albrecht, Jr. James W. Albrecht, Jr.

 

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