Exhibit 10.1
TRANSITION AGREEMENT
This Transition Agreement (the "Agreement") is entered into as of August 11,
2006 (the "Effective Date"), by and between CardioTech International, Inc.
("CardioTech" or the "Company") and Michael Szycher ("Szycher") (collectively,
the "Parties").
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:
1.
TRANSITION PERIOD.
EFFECTIVE AUGUST 7, 2006 (THE "TRANSITION
DATE"), SZYCHER HAS RESIGNED FROM (I) HIS POSITIONS AS PRESIDENT, CHIEF
EXECUTIVE OFFICER AND TREASURER OF CARDIOTECH, (II) THE COMPANY'S BOARD OF
DIRECTORS, AND (III) ALL POSITIONS, OFFICES AND DIRECTORSHIPS WITH ANY
SUBSIDIARIES OF CARDIOTECH.
BEGINNING ON THE TRANSITION DATE AND ENDING ON THE
EARLIER OF AUGUST 6, 2007 OR A TERMINATION OF SZYCHER'S EMPLOYMENT PURSUANT TO
PARAGRAPH 2 BELOW (THE "TRANSITION PERIOD"), SZYCHER SHALL BE EMPLOYED BY
CARDIOTECH IN A NON-EXECUTIVE CAPACITY AS ITS SPECIAL SCIENCE ADVISOR.
IN THAT
CAPACITY, HE SHALL REPORT SOLELY TO CARDIOTECH'S PRESIDENT AND CHIEF EXECUTIVE
OFFICER ("CEO").
DURING THE TRANSITION PERIOD, SZYCHER SHALL MEET AND/OR
COMMUNICATE WITH COMPANY MANAGEMENT AND SENIOR COMPANY TECHNICAL PERSONNEL AND
PROVIDE SUCH INFORMATION AND EXPERTISE AS HE MAY POSSESS FOR THE PURPOSE OF
TRANSITIONING TO SENIOR COMPANY TECHNICAL PERSONNEL HIS KNOWLEDGE AND EXPERTISE
RELATING TO POLYMER DEVELOPMENT AND RELATED ACTIVITIES CONDUCTED BY THE COMPANY,
UPON THE CEO'S REASONABLE REQUEST.
THE PARTIES AGREE THAT SZYCHER SHALL NOT
PERFORM ANY WORK OR TAKE ANY ACTION ON BEHALF OF THE COMPANY DURING THE
TRANSITION PERIOD EXCEPT AS EXPLICITLY DIRECTED AND AUTHORIZED BY THE CEO AND,
EXCEPT FOR REASONABLE TRANSITION ASSISTANCE AS SPECIFICALLY SET FORTH ABOVE,
AGREED TO BY SZYCHER.
THE PARTIES FURTHER AGREE THAT SZYCHER SHALL PERFORM ALL
WORK AND PROVIDE ALL ASSISTANCE HEREUNDER AT SUCH TIMES AND LOCATIONS AS ARE
MUTUALLY AGREED TO BY THE CEO AND SZYCHER.
IT IS UNDERSTOOD THAT SZYCHER'S
POSITION IS NOT FULL-TIME AND THAT, WITH THE EXCEPTION OF THE TRANSITION
ASSISTANCE SPECIFICALLY SET FORTH ABOVE, HIS SERVICES WILL BE SUBJECT TO HIS
AVAILABILITY AND OTHER OBLIGATIONS HE MAY THEN HAVE.
DURING THE TRANSITION PERIOD, THE COMPANY SHALL COMPENSATE SZYCHER AT THE ANNUAL
RATE OF $325,000, LESS APPLICABLE TAXES AND WITHHOLDINGS, TO BE PAID AT A
MONTHLY RATE OF $23,000 WITH A FINAL PAYMENT OF $49,000 DUE UPON EXECUTION,
DELIVERY AND NON-REVOCATION OF THE RELEASE OF CLAIMS ATTACHED HERETO AS EXHIBIT
A (THE "RELEASE"), AS FURTHER DESCRIBED IN PARAGRAPH 4.
FOR THE DURATION OF THE
TRANSITION PERIOD, THE COMPANY SHALL CONTINUE TO PROVIDE SZYCHER WITH INSURANCE
COVERAGE UNDER ITS GROUP HEALTH, DENTAL, LIFE AND OTHER PLANS, UNDER THE SAME
TERMS THAT APPLIED TO SZYCHER ON THE TRANSITION DATE, SUBJECT TO THE TERMS OF
THOSE PLANS.
DURING THE TRANSITION PERIOD, SZYCHER SHALL NOT BE ELIGIBLE FOR A
BONUS OR OTHER INCENTIVE COMPENSATION, NOR SHALL HE ACCRUE VACATION OR SICK
TIME.
2.
TERMINATION DURING THE TRANSITION PERIOD.
THE COMPANY MAY NOT
TERMINATE SZYCHER'S EMPLOYMENT DURING THE TRANSITION PERIOD OTHER THAN FOR
CAUSE, WHICH SHALL BE DEFINED AS (A) MATERIAL BREACH OF ANY OF THE MATERIAL
TERMS OF THIS AGREEMENT OR THE AGREEMENTS