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EXHIBIT 10.1

 

UROPLASTY, INC.

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the "Agreement") is made and entered into effective the 25th day of July, 2013, between Uroplasty, Inc., a Minnesota corporation, located at 5420 Feltl Road, Minnetonka, Minnesota, 55343 (hereinafter referred to as the "Company") and Brett Reynolds, who resides at 3809 New Brighton Road, Arden Hills, MN 55112 (hereinafter referred to as "Employee").

 

WHEREAS, Uroplasty is a medical device company that develops, manufactures and markets innovative, proprietary products for the treatment of voiding dysfunctions; and

 

WHEREAS, the Company and the Employee desire to set forth in this Agreement the terms under which Employee will serve as Chief Financial Officer of the Company.

 

NOW, THEREFORE, the parties agree as follows.

 

1.            EMPLOYMENT. The Company hereby employs Employee as the Senior Vice President & Chief Financial Officer of the Company and Employee accepts such employment and agrees to serve the Company with undivided loyalty and to the best of his ability promote the interests and business of the Company and to devote his full business time, energy and skill to such employment.

 

 

 

 

3.            TERM. The term of this Agreement shall commence on August 12, 2013 (the "Start Date") and shall continue indefinitely, until such time, if any, that this Agreement is terminated pursuant to Section 10 herein.

 

4.            BASE SALARY. The Company shall pay to Employee a base salary of Two Hundred Forty Thousand Dollars ($240,000) per year, which shall be paid in installments at least twice per month, and such amount shall be adjusted at least on an annual basis pursuant to the mutual agreement of the Company and Employee.

 

5.            BONUS. Employee shall be entitled to participate in the annual cash incentive program established by the Board of Directors, starting with the year ending March 31, 2014. For the year ending March 31, 2014, such bonus program shall include provisions allowing Employee to achieve a bonus equal to 40% of the salary paid to Employee for such fiscal year if performance is achieved at the target performance established for such plan, pro-rated for days of service in Fiscal Year 2014 ((232/365 X $240,000) X .40 or $61,019.18 at target performance).

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(a)             Subject to the provisions of this Section 11, including subsections (c), (d), (e) and (f) of this Section 11, if Employee's employment under this Agreement is terminated:

 

(i)

by the Company or its successors or assigns without Cause at any time other than during the two years following a Change of Control, the Company, or such successors or assigns, shall pay to Employee an amount equal to twelve times his monthly base salary;

 

(ii)

by the Company, its successors or assigns, without Cause, or by the Employee for Good Reason, within the two years following a Change of Control, the Company, or such successors or assigns, shall pay to Employee an amount equal to twelve times his monthly base salary plus Employee's targeted bonus.

 

 

(i)

"Change in Control" shall have the meaning set forth in Section 12(i) of the Company's 2006 Amended Stock and Incentive Plan.

 

(ii)

"Good Reason" shall mean:

 

(A)

the Company's imposition of material and adverse changes, without the Employee's consent, in the Employee's principal duties, responsibilities, status, reporting relationship, title or authority, or the Company's assignment of duties inconsistent with the Employee's position;

 

(B)

a material reduction in the Employee's annual base salary or target annual incentive compensation opportunity;

 

(C)

the Company moving its principal executive offices more than 50 miles from its current location without the Employee's consent; or

 

(D)

the Company's material breach of this Agreement; and

 

in the case of each of (iii)(A)— (D), such condition remains uncured by the Company after receipt of thirty (30) days prior written notice of the existence of such condition.

 

(c)              Severance payments under this Section 11 shall be made monthly after termination until the full amount of severance has been paid; provided, however, that if the Company determines in its discretion that the Employee is a "specified employee" (as defined in Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the "Code")) as of the date of termination and that Section 409A of the Code applies with respect to a payment to Employee pursuant to this Section 11, the severance payments will commence on the six-month anniversary of the date of termination (or the date of Employee's death, if earlier). The Company reserves the right to revise the timing of any payments hereunder in order to comply with Section 409A of the Code.

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(0            As a condition to receiving the severance payments provided in this Section 11, the Company may require the Employee to execute a full release and waiver of all claims against the Company (excluding claims for amounts required under this Agreement to be paid upon severance and any then existing indemnification obligations to Employee) in a form reasonably acceptable to the Company. If the Company requires such a release, the Company will further delay the commencement of severance payments until the period of rescission for the release has lapsed.

 

12.        RESTRICTIVE COVENANTS; NON-COMPETITION; NON-SOLICITATION. The restrictive covenants in this Section 12 apply during Employee's employment and for 12 months following termination of employment for any reason. Employee agrees that he will not, without the Company's prior written consent, directly or indirectly, for himself or for any other person or entity, as agent, employee, officer, director, consultant, owner, principal, partner or shareholder, or in any other individual or representative capacity, engage in any of the following activities:

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(a)            Competition: Employee shall not, and shall not permit any of his affiliates to, directly or indirectly, (i) engage in or assist others in engaging in or competing with the Company in its development, manufacturing, licensing, marketing or distribution of products or services for the treatment of urinary or fecal voiding dysfunctions anywhere in the world (the "Business"); (ii) have an interest in any entity that engages directly or indirectly in the Company's Business in any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee or consultant; or (iii) intentionally interfere in any material respect with the business relationships (whether formed prior to or after the date of this Agreement) between the Company and customers or suppliers of the Company. Notwithstanding the foregoing, the Employee may own, directly or indirectly, solely as an investment, securities of any entity traded on any national securities exchange and does not, directly or indirectly, own 5% or more of any class of securities of such entity.

 

 

 

The parties acknowledge and agree that Employee's covenants set forth in this Section 12 form a material part of the inducement to the Company's willingness to enter into this Agreement and that the provisions of this Section 12 are necessary to protect the interests and goodwill of the Company. Employee specifically recognizes that any breach of the provisions of this Section 12 will cause irreparable harm and damage to the Company which cannot be adequately compensated for by a monetary award and actual damages will be difficult to ascertain. Accordingly, Employee agrees that in the event of any such breach, the Company shall be entitled to injunctive relief in addition to such other legal and equitable remedies that may be available. The parties also acknowledge that in the event that any covenant contained in this Section 12 should ever be adjudicated to exceed the time, geographic, product or service, or other limitations permitted by applicable law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service, or other limitations permitted by applicable law.

 

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above:

 

 

 

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