Exhibit 10.1

 

 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”), dated as of February 4, 2009, to
be effective as of the 1st day of July 2008, between CPC of America, Inc., a
Nevada corporation (together with its successors or assigns as permitted under
this Agreement, the “Company”), and Marcia J. Hein, an individual (the
“Executive”).
 
RECITALS
 
The Company desires to employ the Executive and enter into this Agreement
embodying the terms of such employment and the Executive desires to enter into
this Agreement and to accept such employment.
 
In consideration of the mutual covenants and for other good and valuable
consideration, the Company and the Executive (individually a “Party” and
together the “Parties”) agree as follows:
 
 
1.  
DEFINITIONS

 
(a) “Base Salary” shall mean the salary provided for in Section 4 below subject
to such increases as may be made from time to time.
 
(b) “Cause” shall mean:
 
(i) the conviction of (including any act as a result of pleading nolo
contendere) or entry of judgment against the Executive by a civil or criminal
court of competent jurisdiction of a felony, or any other offense or wrongdoing
involving embezzlement, fraud, misappropriation of funds, any act of moral
turpitude or dishonesty;
 
(ii) the indictment of the Executive by a state or federal grand jury or the
filing of a criminal complaint or information for a felony, or any other offense
involving embezzlement, fraud, misappropriation of funds, any act of moral
turpitude or dishonesty, unless such indictment or filing is dismissed within
one hundred eighty (180) days from the date of such indictment or filing.  The
Board of Directors of the Company (“Board of Directors”) may elect to suspend
and extend the Term of Employment by such one hundred eighty (180) day period or
the number of days actually taken by the Executive to dismiss such indictment or
filing, whichever is less; provided that the Executive notifies the Company in
writing that the Executive intends to contest in good faith such indictment or
filing and pursues the dismissal of such indictment or filing with reasonable
diligence.  During such period of suspension, Executive may be relieved of
duties, but shall be entitled to receive Base Salary;
 
(iii) the written confession by the Executive of embezzlement, fraud,
misappropriation of funds, any act of moral turpitude or dishonesty or acts
constituting a felony;
 
(iv) the finding by a court of competent jurisdiction in a criminal or civil
action or by the U.S. Securities and Exchange Commission or state blue sky
agency in an administrative proceeding that the Executive has willfully violated
any federal or state securities law;
 
 
 

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(v) the engagement by the Executive in willful and continued misconduct, or the
Executive’s willful and continued failure to substantially perform the
Executive’s obligations, for a period of twenty (20) days following written
notice by the Company describing in reasonable detail the specific items of
misconduct or failures;
 
(vi) the use by the Executive of alcohol or any controlled substance to an
extent that it interferes, in the sole discretion of the Board of Directors, on
a continuing and material basis with the performance of the Executive’s duties
under the Agreement;
 
(vii) the willful, unauthorized disclosure by the Executive of Confidential
Information, as defined in Section 10, concerning the Company or any subsidiary,
unless such disclosure was (A) believed in good faith by the Executive to be
appropriate in the course of properly carrying out duties under the Agreement,
or (B) required by an order of a court having jurisdiction over the subject
matter or a summons, subpoena or order in the nature thereof of any legislative
body (including any committee thereof) or any governmental or administrative
agency;
 
(viii) performance of services by the Executive, other than in the course of
properly carrying out her duties under the Agreement and as otherwise provided
herein, in breach of Executive’s covenants set forth in Section 10(b) of this
Agreement while the Executive is employed by the Company
 
(ix) commission by Executive of an act involving moral turpitude, dishonesty,
theft or unethical business conduct, or conduct which impairs or injures the
reputation of, or harms, the Company, or any violation of law or regulations on
Company premises or to which the Company is subject; or
 
(x) any material breach of this Agreement or Company rules that, if capable of
being corrected, remain uncorrected 15 days following the Company’s delivery of
written notice of such breach.
 
(c) “Change in Control” means, and shall be deemed to occur upon the happening
of the acquisition, directly or indirectly, in a single transaction or a series
of related transactions by any person resulting in the beneficial ownership of
50% or more of the combined voting power of the then outstanding voting
securities of the Company  entitled to vote;
 
(d) "Sale of the Company" means either of the following transaction that takes
place during the Term or to which the Company agrees to during the Term (i) a
merger or consolidation of involving the Company (except where the shareholders
of the Company immediately prior to the merger or consolidation own 50% or more
of the voting shares of the surviving corporation immediately after the merger
or consolidation), (ii) the sale of all or substantially all of the assets of
the Company, or (iii) the sale or licensing of all or substantially all of the
Company’s rights to its MedClose device.
 
(e) “Term of Employment” shall mean the initial three-year period specified in
Section 2 below and if, but only if, automatically renewed as provided in
Section 2, shall include the period of such renewal.
 
(f) “Voting Securities” means securities of the Company, the holders of which
are entitled to vote for the election of directors.
 
 
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2.  
TERM OF EMPLOYMENT

 
(a) The Company hereby employs the Executive, and the Executive hereby accepts
employment with the Company, in the position and with the duties and
responsibilities as set forth in Section 3 below for the Term of Employment,
subject to the terms and conditions of the Agreement.
 
(b) The initial Term of Employment shall commence as of the date of this
Agreement retroactive to July 1, 2008 and shall terminate on June 30, 2011,
unless terminated earlier as provided in Section 8; provided that the Term of
Employment shall automatically renew for successive one-year periods unless
(i) it has sooner terminated as provided in Section 8 or (ii) either party has
notified the other in writing at least thirty (30) days prior to the otherwise
scheduled expiration of the Term of Employment that such Term of Employment
shall not so renew.
 
(c) The Executive shall devote such portion of her business time as is necessary
to carry out the duties and responsibilities of her employment hereunder in a
timely and competent manner.  Otherwise, the Executive shall be allowed to
devote her remaining business time to other non-Company related business
matters, including her private accounting practice, provided that such other
business activities do not conflict with the covenants in Section 10.
 
 
3.  
POSITION, DUTIES AND AUTHORITIES

 
During the Term of Employment, the Executive shall be employed as the Chief
Financial Officer of the Company.  Subject to supervision and in accordance with
the policies and directives established by the Chief Executive Officer, the
Executive’s duties and responsibilities shall include responsibility for all
accounting and SEC reporting functions and such other duties, responsibilities
and authorities customarily associated with such positions.
 
 
4.  
BASE SALARY; EXPENSES

 
(a)           During the Term of Employment, the Executive shall be paid by the
Company a Base Salary payable no less frequently than in equal monthly
installments at an annualized rate of $60,000; subject to increase as may be
determined by the Company within its sole discretion.
 
(b)           Executive shall be personally responsible for the payment of, and
shall not be entitled to seek reimbursement from the Company for, any travel,
entertainment or other business expenses incurred by Executive in connection
with the performance of her duties on behalf of the Company.
 
 
5.  
RESTRICTED STOCK GRANT

 
In addition to the Base Salary, the Company shall issue to Executive upon the
execution of this Agreement by the parties hereto 30,000 shares (“Restricted
Shares”) of the Company’s Series E Preferred Stock.  The Restricted Shares shall
be subject to vesting and risk of forfeiture as follows:  5,000 Restricted
Shares shall vest and become fully paid for on January 1, 2009; 833.3 Restricted
Shares shall vest and become fully paid for on the first day of each of the next
29 months during the term of this agreement; and 834.3 Restricted Shares shall
vest and become fully paid for on June 29, 2011.  In the event of the early
termination of this Agreement pursuant to Section 8(a) or Section 8(c), all
Restricted Shares that are unvested shall be automatically forfeited and
cancelled.  Executive shall return to the Company all Restricted Shares
forfeited pursuant to this Section 5 and hereby grants the Company a limited
power of attorney for purposes of executing any stock powers or assignments
necessary or desirable to effect the cancellation of any forfeited Restricted
Shares.  In the event of (i) Change in Control, (ii) change in the chief
executive officer of the Company (other than Executive’s appointment to such
position); or (iii) termination of this Agreement pursuant to Section 8(b), all
unvested Restricted Shares shall immediately vest and be deemed fully paid for.
 
 
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6.  
BONUS

 
The Executive will be entitled to receive a performance-based bonus of up to
100% of the Executive’s annual Base Salary for the calendar year commencing
January 1, 2009 and for each calendar year during the remainder of the Term of
Employment.  The performance bonus shall be subject to the Executive’s
satisfaction of certain performance goals determined by the Board of
Directors.  Prior to January 1, 2009, or as near such date as possible, and the
commencement of each calendar year thereafter during the remainder of the Term
of Employment, the Board of Directors shall determine, in its sole and absolute
discretion, the performance goals for the Executive and deliver a written
description of those goals to Executive.  The written description shall be
incorporated into and become a part of this Agreement.  All payments of bonuses
earned during any calendar year shall be due and payable no later than March
31st of the following year.  The determination of whether the Executive has
satisfied the performance goals shall be made by the Board of Directors in its
reasonable discretion.  The Board of Directors may delegate its obligations
under this Section 6 to any Compensation Committee of the Board of Directors.
 
 
7.  
EMPLOYEE BENEFIT PROGRAMS

 
During the Term of Employment, the Executive and her dependents shall be
entitled to participate in, at the Company’s expense, whatever employee benefit
plans the Company may offer to its employees or officers, if any, such as
medical, surgical, hospitalization, dental and visual insurance coverage.  The
Company will pay all expenses for these insurance program(s) or plan(s).
 
 
8.  
TERMINATION OF EMPLOYMENT

 
(a) Termination by the Company for Cause.  At any time after learning of an
event constituting Cause, the Company may elect to give the Executive written
notice of its intention to terminate for Cause, specifying in such notice the
event forming the basis for Cause.  Termination shall be effective immediately
upon delivery of notice hereunder or, in the event of Cause as defined under
Section 1(b)(x), termination of the specified cure period.  In the event the
Executive’s employment is terminated by the Company for Cause, the Executive
shall be entitled only to:
 
(i) Base Salary, at the rate in effect at the time of termination, accrued and
payable through the date of termination of employment;
 
(ii) any other compensation and benefits accrued and to which the Executive is
entitled under applicable plans, programs and agreements of the Company as of
the date of termination of employment; and
 
(iii) any Restricted Shares that have vested as of the date of termination of
employment.
 
The Executive’s entitlement to the foregoing shall be without prejudice to the
right of the Company to claim or sue for any damages or other legal or equitable
remedy to which the Company may be entitled as a result of such Cause; provided,
however, that offset shall not be available to the Company in any event.
 
 
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(b) Termination Without Cause.  In the event the Executive’s employment is
terminated by the Company without Cause (which shall include a termination by
way of death or disability), the Executive shall be entitled only to:
 
(i) Base Salary, at the rate in effect at the time of termination, accrued and
payable through the date of termination of employment;
 
(ii) the immediate vesting of all Restricted Shares then subject to vesting and
risk of forfeiture;
 
(iii) any amounts due to the Executive under Section 9; and
 
(iv) any other compensation and benefits accrued and to which the Executive is
entitled under applicable plans, programs and agreements of the Company as of
the date of termination without Cause.
 
(c) Voluntary Termination.  A “Voluntary Termination” shall mean a termination
of employment by the Executive on her own initiative other than a termination
under Section 8(a) or 8(b).  In the event of a Voluntary Termination, the
Executive shall be entitled only to:
 
(i) Base Salary, at the rate in effect at the time of termination, accrued and
payable through the date of termination of employment;
 
(ii) any other compensation and benefits accrued and to which the Executive is
entitled under applicable plans, programs and agreements of the Company; and
 
(iii) any Restricted Shares that have vested as of the date of termination of
employment.
 
A Voluntary Termination shall not, solely due to a Voluntary Termination, be
deemed a breach of this Agreement and shall be effective upon the expiration of
30 days after written notice is delivered to the Company, unless another period
of time is agreed to in writing by the Parties.
 
(d) No Mitigation; No Offset.  In the event of any termination of the
Executive’s employment under the Agreement without Cause, the Executive shall be
under no obligation to seek other employment, and there shall be no offset
against amounts due the Executive under the Agreement on account of any
remuneration attributable to any subsequent employment that the Executive may
obtain.
 
(e) Nature of Payments.  Any amounts due the Executive under the Agreement in
the event of any termination of employment with the Company are in the nature of
severance payments, or liquidated damages which contemplate both direct damages
and consequential damages that the Executive may suffer as a result of the
termination of employment, or both, and are not in the nature of a penalty.
 
 
9.  
PAYMENTS IN CASE OF SALE OF COMPANY

 
In the event of a Sale of the Company, if the Company is obligated, pursuant to
a written agreement approved by the Board of Directors (or Compensation
Committee of the Board), to pay to its chief executive officer compensation or
bonus based on the Sale of the Company, then the Company shall then be obligated
to pay to the Executive, within five days of the closing of such transaction,
twenty percent (20%) of the consideration payable to the chief executive officer
of the Company based on the Sale of the Company.
 
 
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10.  
CONFIDENTIAL INFORMATION AND NON-COMPETITION

 
(a)           The Executive shall not, during the Term of Employment or anytime
thereafter, without prior written consent of the Company, divulge, publish or
otherwise disclose to any other person any Confidential Information regarding
the Company except in the course of carrying out the Executive’s
responsibilities on behalf of the Company (e.g., providing information to the
Company’s attorneys, accountants, bankers, etc.) or if required to do so
pursuant to the order of a court having jurisdiction over the subject matter or
a summons, subpoena or order in the nature thereof of any legislative body
(including any committee thereof and any litigation or dispute resolution method
against the Company related to or arising out of this Agreement) or any
governmental or administrative agency.  For this purpose, Confidential
Information shall include, but is not limited to, the Company’s financial
position and results of operations, trades secrets and intellectual property,
products and product development plans, marketing and promotional plans and
strategies, customer lists and customer data bases.  Confidential Information
does not include information that is generally available to the public other
than through a breach of the Agreement on the part of the Executive.
 
(b)           The Executive covenants and agrees that she will not, during the
Term of Employment, either individually or in partnership or in conjunction with
any person and whether as principal, agent, shareholder, member, officer,
employee, investor or in any manner whatsoever, directly or indirectly:

1)  
engage in, continue in, or carry on, invest in, own, manage, operate, finance or
control, or participate in the ownership, management, operation, finance or
control, of any business (“Competing Business”) that manufactures, markets or
sells products that directly competes with a principal product of the Company;

 
2)  
be retained by, employed by, consult with, advise or assist in any way, whether
or not for consideration, any Competing Business; or

 
3)  
engage in any practice the purpose of which is to evade the provisions of this
covenant not to compete;

 
provided, however, that none of the foregoing shall prohibit the ownership of
securities of a person that is listed on a national securities exchange or
traded in the national over-the-counter market in an amount that does not exceed
one percent (1%) of the outstanding shares of any such person.  
 
 
11.  
NON-SOLICITATION

 
Except with the prior written consent of the Company, Executive shall not
solicit customers, clients, or employees of the Company or any of its affiliates
for a period of twelve (12) months after the date of the expiration or
termination of this Agreement.  Without limiting the generality of the
foregoing, Executive will not, for a period of twelve (12) months after the date
of the expiration or termination of this Agreement, willfully canvas or solicit
any such business in competition with the business of the Company from any
customers of the Company with whom Executive had contact during, or of which
Executive had knowledge solely as a result of, his performance of services for
the Company pursuant to this Agreement.  Executive will not, for a period of
twelve (12) months after the date of the expiration or termination of this
Agreement, directly or indirectly request, induce or advise any customers of the
Company with whom Executive had contact during the term of this Agreement to
withdraw, curtail or cancel their business with the Company.  Executive will
not, for a period of twelve (12) months after the date of the expiration or
termination of this Agreement, induce or attempt to induce any employee of the
Company to terminate his/her employment with the Company.
 
 
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12.  
REMEDIES

 
(a) Executive acknowledges and agrees that immediate and irreparable harm, for
which damages would be an inadequate remedy, would occur in the event any of the
provisions of Sections 10 or 11 of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.  Accordingly,
Executive agrees that Company shall be entitled to an injunction or injunctions
to prevent breaches of such provisions of this Agreement and to enforce
specifically the terms and provisions thereof without the necessity of proving
actual damages or securing or posting any bond or providing prior notice, in
addition to any other remedy to which it may be entitled at law or equity.
 
(b) Nothing herein contained is intended to waive or diminish any rights Company
may have at law or in equity at any time to protect and defend its legitimate
property interests (including its business relationship with third parties), the
foregoing provisions being intended to be in addition to and not in derogation
or limitation of any other rights the Company may have at law or equity.
 
(c) Executive shall have no rights, remedies or claims for damages, at law, in
equity or otherwise with respect to any termination of Executive’s employment by
the Company other than as set forth in Section 8 of this Agreement.
 
 
13.  
REPRESENTATION

 
The Company and the Executive respectively represent and warrant to each other
that each respectively is fully authorized and empowered to enter into the
Agreement and that their entering into the Agreement and the performance of
their respective obligations under the Agreement will not violate any agreement
between the Company or the Executive respectively and any other person, firm or
organization or any law or governmental regulation.
 
 
14.  
ENTIRE AGREEMENT

 
This Agreement contains the entire agreement between the Parties and supersedes
all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the Parties.
 
 
15.  
AMENDMENT OR WAIVER

 
This Agreement cannot be changed, modified or amended without the consent in
writing of both the Executive and the Company.  No waiver by either Party at any
time of any breach by the other Party of any condition or provision of the
Agreement shall be deemed a waiver of a similar or dissimilar condition or
provision at the same or at any prior or subsequent time.  Any waiver must be in
writing and signed by the Executive or an authorized officer of the Company, as
the case may be.
 
 
16.  
SEVERABILITY

 
The provisions of this Agreement shall be severable and the invalidity,
illegality or unenforceability of any provision of this Agreement shall not
affect, impair or render unenforceable this Agreement or any other provision
hereof, all of which shall remain in full force and effect.  If any provision of
this Agreement is adjudicated by a court of competent jurisdiction as invalid,
illegal or otherwise unenforceable, but such provision may be made enforceable
by a limitation or reduction of its scope, the Parties agree to abide by such
limitation or reduction as may be necessary so that said provision shall be
enforceable to the fullest extent permitted by law.  The Parties further intend
to and hereby confer jurisdiction to enforce the covenants contained in Sections
10 and 11 (the “Restrictive Covenants”) upon the courts of any jurisdiction
within the geographical scope of such Restrictive Covenants.
 
 
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17.  
SURVIVAL

 
The respective rights and obligations of the Parties shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations.
 
 
18.  
GOVERNING LAW

 
This Agreement shall be governed by and construed under the law of the State of
Nevada, disregarding any principles of conflicts of law that would otherwise
provide for the application of the substantive law of another jurisdiction.  The
Parties each hereby consents to the jurisdiction and venue of the state courts
of Clark County, Nevada and the United States district courts with jurisdiction
in Nevada with respect to any matter arising out of or relating to this
Agreement other than matters that are subject to the arbitration provisions of
Section 19 of this Agreement.
 
 
19.  
SETTLEMENT OF DISPUTES

 
Except for equitable actions seeking to enforce the provisions of Sections 10
and 11 of this Agreement which may be brought by a court in any competent
jurisdiction, in the event a dispute, claim or controversy arises between the
parties relating to the validity, interpretation, performance, termination or
breach of this Agreement, (collectively, a "Dispute"), the Parties agree to hold
a meeting regarding the Dispute, attended by individuals with decision-making
authority, to attempt in good faith to negotiate a resolution of the Dispute
prior to pursuing other available remedies.  If, within thirty (30) days after
such meeting or after good faith attempts to schedule such a meeting have
failed, the Parties have not succeeded in negotiating a resolution of the
Dispute, the Dispute shall be resolved through final and binding arbitration to
be held in Nevada in accordance with the rules and procedures of the American
Arbitration Association.  The prevailing party in such proceeding shall be
entitled to recover the costs of the arbitration from the other party,
including, without limitation, reasonable attorneys’ fees.
 
 
20.  
HEADINGS

 
The headings of the paragraphs contained in this Agreement are for convenience
only and shall not be deemed to control or affect the meaning or construction of
any provision of this Agreement.
 
 
21.  
COUNTERPARTS

 
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
 
 
22.  
TAXES

 
The Executive’s compensation payable hereunder is stated in gross amounts and
shall be subject to such withholding taxes and other taxes as may be required by
law.
 
 
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23.  
ACKNOWLEDGMENT

 
The Executive acknowledges that he/she has been given a reasonable period of
time to study this Agreement before signing it and has had an opportunity to
secure counsel of his/her own.  The Executive certifies that he/she has fully
read and completely understands the terms, nature, and effect of this
Agreement.  The Executive further acknowledges that he/she is executing this
Agreement freely, knowingly, and voluntarily and that the Executive’s execution
of this Agreement is not the result of any fraud, duress, mistake, or undue
influence whatsoever.  In executing this Agreement, the Executive does not rely
on any inducements, promises, or representations by the Company other than that
which is stated in this Agreement.
 
 
24.  
WAIVER OF JURY TRIAL

 
Each Party waives, to the fullest extent permitted by applicable law, any right
it may have to a trial by jury in respect of any litigation arising out of or
relating to this Agreement and Executive’s employment by the Company.  Each
Party (a) certifies that no representative, agent or attorney of the other Party
has represented, expressly or otherwise, that such other Party would not, in the
event of litigation, seek to enforce the foregoing waiver and (b) acknowledges
that it has been induced to enter into this Agreement by, among other things,
the mutual waivers and certifications set forth in this section.
 
In Witness Whereof, the undersigned have executed the Agreement as of the date
first written above.
 
CPC OF AMERICA, INC.,
a Nevada corporation
 
By: /s/ Rod A. Shipman        
Rod A. Shipman, President

 
Executive

 
 /s/ Marcia J. Hein            
MARCIA J. HEIN
 

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