Dyadic International, Inc. Exhibit 10.1 11.19.07


    Exhibit
      10.1

    
 

    RETENTION
      BONUS PLAN

     

    FOR
      NON-MANAGEMENT EMPLOYEES

    


    OF

    


    DYADIC
      INTERNATIONAL, INC.

    


    ADOPTED
      NOVEMBER 7, 2007

    


    


    Background

     

    Dyadic
      International, Inc. (the "Company")
      recognizes that its employees are essential to the Company’s past and continued
      operation, value and success. More specifically, the Company recognizes that
      the
      employees who are eligible to participate in this Plan (the "Employees"
      and,
      individually, an "Employee")
      make a
      significant contribution to the operation, value and success of the Company.
      In
      recognition of this fact, the Company desires to adopt this Retention Bonus
      Plan
      (the "Plan"),
      the
      purpose of which is to enable the Company to retain the Employees' services,
      during a period when the Company is encountering certain distressful
      circumstances and is exploring a potential sale, business combination or
      restructuring, in order to ensure the Company is not disrupted or adversely
      affected by the loss of personnel or their commitment to the Company. The
      Company has determined that it is in the best interests of the Company to
      provide for the following arrangements with the Employees. These arrangements
      provide for compensation to be paid to the Employees who participate, upon
      the
      occurrence of certain events as described herein.

     

    Plan

     

    In
      consideration of the foregoing and an Employee’s continued employment and
      services with the Company, and intending to be legally bound, the Company adopts
      the following Plan on the terms and subject to the conditions set forth
      below:

     

    1.  Participation
      and Maximum Aggregate Amount of Potential Retention
      Bonuses.
      All
      full time Employees of the Company whose annual base salary is less than
      $115,000 are eligible to participate in this Plan. The Chief Executive Officer
      of the Company shall recommend to the Compensation Committee of the Company's
      Board of Directors (the "Compensation
      Committee")
      which
      Employees shall participate and the amount of the total Potential Retention
      Bonus, as defined below, each Employee participant in this Plan will be paid
      upon the occurrence of the events set forth in Section 2 (the "Potential
      Retention Bonus").
      Upon
      such recommendation, the Compensation Committee shall determine, in its sole
      discretion, whether to admit such Employee as a participant in this Plan and
      the
      amount of such Employee's Potential Retention Bonus. Once the Compensation
      Committee has admitted an Employee as a participant in this Plan and determined
      the amount of such Employee's Potential Retention Bonus, the Company's Chief
      Executive Officer, Chief Financial Officer or other designated officer shall
      communicate the admission and decision to such Employee. The aggregate amount
      of
      Potential Retention Bonuses that may be paid to all Employees under this Plan
      is
      $450,000. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.  Retention
      Bonus and Severance Payment.
      

     

    (a)  If
      an
      Employee participant remains employed by and is in the employment of the Company
      on the last day of each Retention Period as set forth in Section 2(b) below
      (a
      "Retention
      Date"),
      or is
      terminated on or prior to the applicable Retention Date by the Company without
      Cause (as defined in Section 5(a) below), and a Change of Control Transaction
      Bonus (as defined in Section 3 below) has not been paid pursuant to Section
      3
      hereof, the Company will pay to each such Employee a cash bonus equal to the
      applicable percentage set forth in Section 2(c) below (the "Retention
      Bonus")
      of
      such Employee's Potential Retention Bonus. The Retention Bonus shall be paid
      to
      the Employee, after withholding of all federal, state or local income or payroll
      taxes or any other amounts that the Company is required by applicable law to
      withhold from such payments. Payment of the Retention Bonus shall be made no
      later than the 11th
      business
      day after the Retention Date, or if earlier, the 11th
      business
      day following the Employee’s termination by the Company without Cause.


     

    (b)  There
      shall be three retention periods (each a "Retention
      Period")
      as
      follows:

     

    October
      1, 2007 - March 31, 2008  First
      Retention Period

     

    April
      1,
      2008 - June 30, 2008  
Second
      Retention Period

     

    July
      1,
      2008 - September 30, 2008  Third
      Retention Period

     

    (c)  If
      an
      Employee participant remains employed by and is in the employment of the Company
      on a Retention Date, or is terminated on or prior to the applicable Retention
      Date by the Company without Cause, and a Change of Control Transaction Bonus
      has
      not been paid pursuant to Section 3 hereof, each Employee shall be entitled
      to
      receive a Retention Bonus for each applicable Retention Period as follows:
      

     

    First
      Retention Period    50%
      of
      Potential Retention Bonuses

     

    Second
      Retention Period   25%
      of
      Potential Retention Bonuses

     

    Third
      Retention Period   25%
      of
      Potential Retention Bonuses 

     

    (d)  In
      addition to the Retention Bonuses described in Section 2(c), if an Employee
      (A)
      is terminated by the Company without Cause on or prior to a Closing Date (as
      defined in Section 5(c) below) with respect to a Change of Control Transaction
      (as defined in Section 5(b) below) or (B) if an Employee who is not so
      terminated either (i) is terminated by the Company without Cause within 45
      calendar days after the Closing Date or (ii) terminates his employment by notice
      to the Company during the period beginning 15 calendar days after the Closing
      Date and ending 45 calendar days after the Closing Date, then each such Employee
      who is so terminated or terminates shall be entitled to a severance payment
      equal to three months of such Employee's annual base salary as in effect as
      of
      the date of termination. Any severance payment shall be paid to the Employee,
      after withholding of all federal, state or local income or payroll taxes or
      any
      other amounts that the Company is required by applicable law to withhold from
      such payments. Payment of any severance payment shall be made no later than
      the
      11th
      business
      day after the date of termination. 

     

    
      
         

      

      
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    3.  Change
      of Control Transaction Bonus.
      The
      Change of Control Transaction Bonus is not an additional payment to the
      Retention Bonus provided in Sections 2(a), (b) and (c) but replaces any
      Retention Bonuses otherwise payable after the Closing Date, and no further
      Retention Bonuses shall be payable after a Change of Control Transaction. On
      or
      prior to the Closing Date, an Employee employed on such date will be entitled
      to
      a cash bonus payment equal (i) the Retention Bonus in the event the Closing
      occurs during the First Retention Period, (ii) to a fraction of the Second
      Retention Bonus payable under this Plan in accordance with Section 2 hereof
      in
      the event the Closing occurs during the Second Retention Period, the numerator
      of which is the number of days from the first day of the Second Retention Period
      to and including the Closing Date, and the denominator of which is the total
      number of days in the Second Retention Period or (iii) to a fraction of the
      Third Retention Bonus payable under this Plan in accordance with Section 2
      hereof in the event the Closing occurs during the Third Retention Period, the
      numerator of which is the number of days from the first day of the Third
      Retention Period to and including the Closing Date, and the denominator of
      which
      is the total number of days in the Third Retention Period (the "Change
      of Control Transaction Bonus").
      In
      such event, the Employee will not be entitled to any payment of Retention
      Bonuses which are payable after the Closing Date. The Change in Control
      Transaction Bonus shall be paid to the Employee, after withholding of all
      federal, state or local income or payroll taxes or any other amounts that the
      Company is required by applicable law to withhold from such payments. Payment
      of
      the Change of Control Transaction Bonus shall be made no later than the
      11th
      business
      day after the Closing Date. 

     

    4.  Additional
      Payment; Additional Participants.
      The
      Retention Bonuses set forth herein are intended to be in lieu of the
      discretionary bonuses that have historically been paid to most employees with
      respect to each fiscal year of the Company. Nevertheless, from time to time,
      at
      the sole discretion of the Compensation Committee, the Company may pay such
      additional amounts to an Employee as the Company deems appropriate and in the
      best interests of the Company consistent with the goals and purposes of this
      Plan or otherwise. 

     

    5.  Definitions.
      

     

    As
      used
      in this Plan, the following terms shall have the following
      meanings:

     

    (a)  "Cause"
      means
      any (i) breach by an Employee of any written agreement with the Company, (ii)
      violation of any Company procedure or policy (including any of the same
      contained in the Company's Employee Handbook), (iii) failure or refusal by
      an
      Employee to perform the assigned duties of his employment by the Company to
      the
      Company’s reasonable satisfaction, which, if capable of being remedied, is not
      remedied to the Company’s satisfaction within five days after receipt of written
      notice from the Company or (iv) conviction of an Employee of a felony involving
      moral turpitude.

     

    (b)  "Change
      of Control Transaction"
      means
      (i) a sale of all or substantially all of the assets of the Company or (ii)
      a
      merger, consolidation, business combination or recapitalization of the Company
      as a result of which the shareholders of the Company immediately prior to such
      merger, consolidation, business combination or recapitalization do not,
      immediately after such merger, consolidation or business combination,
      "beneficially own" (as such term is defined in Rule 13d-3 under the Securities
      Exchange Act of 1934) shares representing in the aggregate 50.1% or more of
      the
      combined voting power of the securities of the corporation or corporations
      or
      other entity or entities issuing cash or securities in the merger,
      consolidation, business combination or recapitalization. 

     

    
      
         

      

      
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    (c)  "Closing"
      means
      the closing and consummation of a Change of Control Transaction.

     

    (d)  "Closing
      Date"
      means
      the date on which the Closing occurs.

     

    6.  Interpretation
      of Plan; Compensation Committee Authority.
      Subject
      to Section 7 below, the Compensation Committee shall have the authority to
      adopt, alter and repeal such administrative rules, guidelines and practices
      governing the Plan as it shall, from time to time, deem advisable, to interpret
      the terms and provisions of the Plan and any payment issued or paid or to be
      issued or paid under the Plan (and to determine the form and substance of all
      agreements relating thereto), and to otherwise supervise the administration
      of
      the Plan. Subject to Section 7 below, all decisions made by the Compensation
      Committee pursuant to the provisions of the Plan shall be made in the
      Compensation Committee's sole discretion and shall be final and binding upon
      all
      persons, including the Company and the Employees.

     

    7.  Amendment
      and Termination.
      The
      Compensation Committee may at any time, and from time to time, amend, alter,
      suspend or discontinue any of the provisions of the Plan, but no amendment,
      alteration, suspension or discontinuance thereof shall be made which would
      impair the rights of an Employee under the Plan theretofore accrued and vested
      hereunder, without the Employee's consent. 

     

    8.  Term
      of Plan.
      The
      Plan shall be effective as of November 7, 2007 (the "Effective
      Date").
      Unless terminated sooner by the Compensation Committee, the Plan shall continue
      to remain effective until September 30, 2008. 

       

      9.  General
        Provisions.
        

       

      (a)  Unfunded
        Status of Plan.
        The
        Plan is intended to constitute an "unfunded" plan for retention, incentive
        and
        deferred compensation. With respect to any payments not yet made to an Employee
        by the Company, nothing contained herein shall give any such Employee any
        rights
        that are greater than those of a general unsecured creditor of the
        Company.

       

      (b)  Termination
        for Cause.
        Except
        as otherwise expressly provided in a separate written agreement with an
        Employee, the Compensation Committee may, in the event an Employee's employment
        with the Company is terminated for Cause, annul any right under the Plan
        to such
        Employee and, in such event, the Compensation Committee, in its sole discretion,
        may require such Employee to return to the Company any payment which was
        realized or obtained by such Employee at any time during the term of the
        Plan
        and the Employee agrees to return any such payment to the Company.

       

      
        
           

        

        
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      (c)  No
        Right of Employment.
        All
        Employees are and shall continue to be "at will." Nothing contained in the
        Plan
        shall be deemed to confer upon any Employee any right to continued employment
        with the Company, nor shall it interfere in any way with the right of the
        Company to terminate the employment of any Employee at any time. 

       

      (d)  Governing
        Law.
        The
        Plan and all awards made and actions taken thereunder shall be governed by
        and
        construed, interpreted and enforced in accordance with the laws of the State
        of
        Florida (without regard to choice of law provisions). 

       

      (e)  Other
        Benefit Plan.
        Any
        right under the Plan shall not be deemed compensation for purposes of computing
        benefits under any retirement plan of the Company and shall not affect any
        benefits under any other benefit plan now or subsequently in effect under
        which
        the availability or amount of benefits is related to the level of compensation
        (unless required by specific reference in any such other plan to awards under
        this Plan). 

       

      (f)  Non-Transferability.
        No
        right or benefit under the Plan may be alienated, sold, assigned, hypothecated,
        pledged, exchanged, transferred, encumbered or charged, and any attempt to
        alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber
        or
        charge the same shall be null and void. 

       

      (g)  Conflicts.
        If any
        of the terms or provisions of the Plan conflict with the requirements of
        Section
        162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
        then
        such terms or provisions shall be deemed inoperative to the extent they so
        conflict with the requirements of said Sections 162(m) of the Code.
        Additionally, if the Plan does not contain any provision required to be included
        herein under Sections 162(m) of the Code, such provision shall be deemed
        to be
        incorporated herein and therein with the same force and effect as if such
        provision had been set out at length herein. 

       

       

      AS
        ADOPTED, APPROVED AND AUTHORIZED BY THE COMPENSATION COMMITTEE OF THE BOARD
        OF
        DIRECTORS OF DYADIC INTERNATIONAL, INC. ON NOVEMBER 7, 2007

       

      
        
           

        

        
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