BioElectronics Corporation - Exhibit 10.1 - Prepared By TNT Filings Inc.




 



Exhibit 10.1

EMPLOYMENT AGREEMENT 


This Employment Agreement ("Agreement") dated August 1, 2006 between
BioElectronics Corporation, a Maryland Corporation (the "Company") located at
401 Rosemont Avenue, 3rd Floor Rosenstock Hall, Frederick, Maryland
21701 and Lawrence Rosen (the "Executive"), residing at 1 Suntop Court, Unit
102, Baltimore, MD 21209. 


WITNESSETH: 


WHEREAS, The Board of Directors (the "Board") of the Company wishes to employ
the Executive as Vice President Finance and Chief Financial Officer of the
Company on the terms and subject to the conditions set forth herein; and 

WHEREAS, the Executive wishes to accept employment with the Company in the
position of Vice President Finance and Chief Financial Officer on the terms and
subject to the conditions set forth herein. 

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


1) EMPLOYMENT 


The Executive's employment under the terms of this Agreement shall commence
on August 1, 2006 (the "Effective Date"), and shall continue until July 31, 2009
unless terminated earlier pursuant to Section 5. (Such period of employment
under this Agreement is hereinafter referred to as the "Employment Term.") The
Executive shall provide services to the Company hereunder as the Vice President
of Finance and Chief Financial Officer of the Company. The Executive will serve
the Company subject to the general supervision, advice and direction of the
President upon the terms and conditions set forth in this Agreement. 


2) DUTIES 

PERFORMANCE OF DUTIES. During the period of the Executive's employment
with the Company, the Executive shall: 

a)     Manage
the Company's finances, accounting and information systems. Executive shall also
perform such further duties as are incidental or implied from his obligation to
provide overall financial management, accounting, internal control, SEC
reporting and investor relations for the Company. 

b)     In all
respects use his best efforts to assist the President in raising capital to
support the business and its growth. 

c)     In all
respects use his best efforts to further, enhance, and develop the Company's
business, affairs, interests and welfare; and, 

d)     Not
become directly or indirectly associated with or engaged in any business which
competes with the Company or accept any employment or other engagement
whatsoever from any other person, firm, corporation, or entity or do anything
inconsistent with his duties to the Company. 


3) COMPENSATION AND BENEFITS 


a)     BASE
COMPENSATION. The Company shall pay the Executive a base salary (the "Base
Salary"), as compensation for his employment under this Agreement, in the amount
of $150,000 a year. Thereafter within the Employment Term, the Base Salary shall
be as determined by the President and the Board of Directors but shall not be
less than $150,000. 




During the Employment Term such Base Salary shall be
paid in equal installments on at least a monthly basis, or on such other basis
as is applicable to Executives of the Company. 

b)     ANNUAL
BONUS. For each calendar year ending during the Employment Term, the
Executive's bonus compensation ("Annual Bonus") shall be up to 50% of base
compensation for the year. The 2006 calendar year bonus will be predicated and
calculated on annual sales as follows: 

(i)    Sales under
$1.5 million 0.0% 

(ii)   Sales over $1.5 million 1.0% 

(iii)  Sales over $2.0 million 1.5% 

(iv)  Sales over $3.0 million 2.5% 

The annual bonus formula after the first year will be
established annually by the Compensation Committee of the Board of Directors.
The Executive's Annual Bonus earned with respect to each year shall be paid on
or before March 31st of the succeeding year. 

c)     STOCK
OPTIONS. On the Effective Date of this Agreement, (the "Grant Date"), the
Company shall in consideration of the Covenants in paragraph 5 grant to the
Executive a Grant of 500,000 thousand shares of restricted common stock of the
Company and an option (the "Option") to purchase 2.1 million shares of common
stock of the Company, $.001 par value per share (the "Stock"), each of which
shall vest over a period of three-years. The restricted common stock shall vest
in equal thirds, 33.3% on the first, second and third anniversaries of the Grant
date. The Option shall be granted subject to the following terms: (i) the
exercise price with respect to the initial 700,000 shares under the Option shall
be $.20 per share (ii) an additional 700,000 shares at a grant price of $ .30
per share; (iii) an additional 700,000 shares at a grant price of $.40 per share
(iv) the Option and Grant shall fully vest over a three-year period and the
Options are exercisable as follows: 33.3% shall be exercisable on each of the
first, second and third anniversaries of the Grant Date; and (iv) the Option
shall be exercisable by Executive or his estate for a period of five years. The
Executive shall immediately become 100% vested in, and eligible to exercise, the
Option, and others that may be granted to him in the future, in the event of (a)
his termination without Cause (as defined in Section 4, (b) a dissolution or
liquidation of the Company, (c) a sale of all or substantially all of the
Company's assets, (d) a merger or consolidation involving the Company in which
the Company is not the surviving corporation, (e) a merger or consolidation
involving the Company in which the Company is the surviving corporation but the
holders of shares of common stock receive securities of another corporation
and/or other property, including cash, or (f) a tender offer for at least a
majority of the outstanding stock of the Company. If immediate vesting occurs
because of a termination without Cause, the Option shall be exercisable for
thirty-six (36) months following the effective date of such termination; in all
other events the option will remain exercisable under the terms of the grant.


d)     BENEFITS.
During the Employment Term, the Executive shall be entitled to participate in
all pension, profit sharing and other retirement plans, all incentive
compensation plans and all group health, hospitalization and disability
insurance plans and other Executive welfare benefit plans in which other senior
executives of the Company may participate on terms and conditions no less
favorable than those which apply to such other senior executives of the Company.
The Executive shall be entitled to three weeks annual paid vacations; and to be
reimbursed for any reasonable out-of-pocket expenses incurred by the Executive
in connection with the performance of his duties, upon presentation of
reasonable evidence satisfactory to the Company of the amounts and nature of
such expenses. 

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4) TERMINATION 

EVENTS OF TERMINATION. The Employment Term shall terminate upon the first
to occur of the following events: 

a)     The
close of business on July 31, 2009, unless mutually extended in writing by the
parties; 

b)     The
death of the Executive; 

c)     The
close of business on the 180th day following the date on which the
Company gives the Executive written notice of the termination of his employment
as a result of his Permanent Disability. Permanent Disability shall mean the
Executive's inability to per form the material duties contemplated by this
Agreement by reason of a physical or mental disability or infirmity which has
continued for more than 30 consecutive days. The Executive agrees to submit such
medical evidence regarding such disability or infirmity as is reasonably
requested by the Company, including, but not limited to, an examination by a
physician selected by the Company in its sole discretion; 

d)     The
close of business on the date on which the Company gives the Executive written
notice of the Company's termination of his employment for Cause, Cause shall
mean (A) the Executive's neglect of his material duties, (B) an act or acts by
the Executive, or any omission by him, constituting a felony, and the Executive
has entered a guilty plea or confession to, or has been convicted of, such
felony, (C) the Executive's failure to follow any lawful directive of the
President consistent with the Executive's position and duties, (D) an act or
acts of fraud or dishonesty by the Executive which results or is intended to
result in financial or economic harm to the Company, or (E) breach of a material
provision of this Agreement by the Executive; and, 

e)    
The close of business on the effective date of a Voluntary Termination by the
Executive of his employment with the Company, Voluntary Termination shall
mean any voluntary termination by the Executive of his employment with the
Company provided that the Executive shall give the Company at least 30 days'
prior written notice of the effective date of such termination. 


5) PROTECTED INFORMATION; PROHIBITED SOLICITATION AND COMPETITION 


a)     The
Executive hereby recognizes and acknowledges that during the course of his
employment by the Company, the Company will furnish, disclose or make available
to the Executive confidential or proprietary information related to the
Company's business, including, without limitation, customer lists, ideas,
processes, inventions and devices, that such confidential or proprietary
information has been developed and will be developed through the Company's
expenditure of substantial time and money, and that all such confidential
information could be used by the Executive and others to compete with the
Company. The Executive hereby agrees that all such confidential or proprietary
information shall constitute trade secrets, and further agrees to use such
confidential or proprietary information only for the purpose of carrying out his
duties with the Company and not otherwise to disclose such information unless
otherwise required to do so by subpoena or other legal process. The Executive
agrees that all inventions and discoveries shall be the sole property of the
Company, and the Company shall be the sole owner of all patents. 

b)     The
Executive hereby agrees, in consideration of his employment hereunder and in
view of the confidential position to be held by the Executive hereunder, that
during the Employment Term and for the period ending on the date which is one
year after the later of the termination of the Employment Term that the
Executive shall not, without the written consent of the 

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Company, knowingly solicit, entice or persuade any
other employee of the Company or any affiliate of the Company to leave the
services of the Company or such affiliate for any reason. 

c)     The
Executive further agrees that, he shall not during the Employment Term and for
the period ending on the date which one year after enter into any relationship
whatsoever, either directly or indirectly, alone or in partnership, or as an
officer, director, employee or stockholder (beneficially owning stock or options
to acquire stock totaling more than five percent of the outstanding shares) of
any corporation (other than the Company),or otherwise acquire or agree to
acquire a significant present or future equity or other proprietorship interest,
whether as a stockholder, partner, proprietor or otherwise, with any enterprise,
business or division thereof (other than the Company), which is engaged in the
development, manufacture or marketing and sales of electromagnetic medical
devices. 

d)     The
restrictions in this Section 5 shall survive the termination of this Agreement
and shall be in addition to any restrictions imposed upon the Executive by
statute or at common law. The parties hereby acknowledge that the restriction in
this Section 5 have been specifically negotiated and agreed to by the parties to
protect the Company from unfair competition. 


e)     The
Employee and its principals agree that for a period of one (1) year following
the termination of its engagement with the company, it will not, directly or
indirectly, (A) solicit, interfere with or endeavor to entice away from the
Company, any employees or customers or any persons, firms or corporations
dealing with or doing business with the Company, or (B) make an investment in a
company this is competitive with the Company other than an investment of less
than five percent (5%) in equity of a publicly held company, or (C) accept any
engagement whatsoever with, or advise or consult with or serve as an officer or
director of or otherwise do business with a company this is in competition,
either directly or indirectly, with the Company in the electromedical device
business at the date of the termination of the Consultant's engagement with the
Company, or (D) compete with the Company in any line of business in any
geographic area where the Company is doing business at the time of the
termination of Employee's employment with the Company. 

6) INJUNCTIVE RELIEF 


The Executive hereby expressly acknowledges that any breach or threatened
breach by the Executive of any of the terms set forth in Section 5 of this
Agreement may result in significant and continuing injury to the Company, the
monetary value of which would be impossible to establish. Therefore, the
Executive agrees that the Company shall be entitled to apply for injunctive
relief in court of appropriate jurisdiction. The provisions of this Section
shall survive the Employment Term. 


7) PARTIES BENEFITED; ASSIGNMENTS 


This Agreement shall be binding upon the Executive, his heirs and his
personal representative or representatives, and upon the Company and its
successors and assigns. Neither this Agreement nor any rights or obligations
hereunder may be assigned by the Executive, other than by will or by the laws of
descent and distribution. 


8) NOTICES 


Any notice required or permitted by this Agreement shall be in writing, sent
by registered or certified mail, return receipt requested, addressed to the
President and the Company at its then principal office, or to the Executive at
the address set forth in the preamble, as the case may be, or to such other
address or addresses as any party hereto may from time to time specify in
writing for the purpose in a notice given to the other parties in compliance
with this Section. Notices shall be deemed given when received. 


9) GOVERNING LAW 


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This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Maryland, without regard to conflict of law
principles. 


10) DISPUTES 


Any dispute or controversy arising under, out of, in connection with or in
relation to this Agreement shall, at the election and upon written demand of
either the Executive or the Company, be finally determined and settled by
arbitration in Frederick, Maryland in accordance with the rules and procedures
of the American Arbitration Association, and judgment upon the award may be
entered in any court having jurisdiction thereof. 


11) MISCELLANEOUS 


This Agreement contains the entire agreement of the parties relating to the
subject matter hereof. This Agreement supersedes any prior written or oral
agreements or understandings between the parties relating to the subject matter
hereof. No modification or amendment of this Agreement shall be valid unless in
writing and signed by or on behalf of the parties hereto. A waiver of the breach
of any term or condition of this Agreement shall not be deemed to constitute a
waiver of any subsequent breach of the same or any other term or condition. This
Agreement is intended to be performed in accordance with, and only to the extent
permitted by, all applicable laws, ordinances, rules and regulations. If any
provision of this Agreement, or the application thereof to any person or
circumstance, shall, for any reason and to any extent, be held in valid or
unenforceable, such invalidity and unenforceability shall not affect the
remaining provisions hereof and the application of such provisions to other
persons or circumstances, all of which shall be enforced to the greatest extent
permitted by law. The compensation provided to the Executive pursuant to this
Agreement shall be subject to any withholdings and deductions required by any
applicable tax laws. Any amounts payable under this Agreement to the Executive
after the death of the Executive shall be paid to the Executive's estate or
legal representative. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning of any provision hereof. 

IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first written above. 

BioElectronics Corporation 

___________________ 

By: Andrew J. Whelan, President 

Executive 

___________________ 

By: Lawrence H. Rosen 

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