**Exhibit 10.1**

 

June 8, 2004

 

Mr. Rodney A. Young

5804 Olinger Road

Edina, Minnesota 55436

 

Dear Mr. Young

 

We write to setforth our agreement with respect to your employment as an officer of AngeionCorporation (the “Company”) commencing July 6, 2004 (the “Employment Date”).

 

# 1.             Employment.

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The Company herebyagrees to employ you, and you agree to be employed by the Company, on the termsand conditions hereinafter set forth. Effective July 6, 2004, you will serve as Executive Vice President ofthe Company.  Beginning November 1,2004, you will serve as the President and Chief Executive Officer of theCompany.

 

At no additionalcompensation, you will be elected as a member of the Board of Directors of theCompany effective as of November 1, 2004 (or such earlier date as you and theBoard of Director jointly agree), and in such other directorships, Boardcommittee memberships and offices of the Company and its subsidiaries(including November 1, 2004, President and Chief Executive Officer of MedicalGraphics) to which you may from time to time be elected or appointed by theChairman of the Board of the Company. You agree to serve the Company faithfully and, to the best of yourability, to promote the Company’s interest, and to devote your full workingtime, energy and skill to the Company’s business.  You may attend to personal business and investment, engage incharitable activities and community affairs, and serve on a reasonable numberof corporate, educational and civic boards, so long as those activities do notinterfere with your duties under this Agreement.  Your service on any corporate boards on which you did not serveas of the date hereof is subject to prior approval by the Board of Directors.

 

You will have suchauthority, powers, functions, duties, and responsibilities as are normallyaccorded executive officers serving in the respective capacities in which youserve.  You will discharge your dutiesat all times in accordance with any and all policies established by the Boardof Directors and will report to, and be subject to the direction of, the Boardof Directors.

 

# 2.             Base Salary.

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As partialcompensation for all of your services (including services as director, Boardcommittee member or officer of the Company and its subsidiaries) during yourterm of employment hereunder, you will receive a base salary at an annual rateof no less than Two Hundred Thirty Thousand Dollars ($230,000), payable inbiweekly

 

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installments.  This base salarywill be reviewed annually and subject to increase at the discretion of theBoard.

 

# 3.             Cash Bonus; StockAwards and Options.

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## (a)           As additionalcompensation for your services, beginning November 1, 2004, you will beeligible to earn cash bonus compensation for each fiscal year up to a target of35% of your annual salary, and an over-achievement bonus of up to an additional15% of your annual salary, which percentage targets will be reviewed annuallyand subject to increase at the discretion the Board.  Bonuses each year will be determined by the Board of Directors inaccordance with a bonus plan to be established by mutual agreement between youand the Board of Directors for that year.

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## (b)           You will participate inthe Angeion 2004 Bonus Program on a pro rata basis from the Employment Datethrough October 31, 2004.

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## (c)           You will participate inthe third year of the Angeion Long Term Incentive Bonus Plan ending October 31,2005.

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## (d)           You will be grantedstock options in the amount set forth in Exhibit A.

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# 4.             Fringe Benefits.

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## (a)           You will be eligible toparticipate in any and all Company sponsored insurance (including medical,dental, life and disability insurance), retirement, and other fringe benefitprograms that it maintains for its executive officers, subject to and on abasis consistent with the terms of each such plan or program.

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## (b)           You will be entitled tofour weeks of paid vacation annually.

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## (c)           The Company will pay orreimburse you $600 per month for all costs associated with a private automobileselected by you, including, but not limited to, lease costs, gas, repairs,general maintenance and insurance.

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# 5.             Expenses.

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During the term ofyour employment, the Company will reimburse you for your reasonable travel andother expenses incident to your rendering of services in conformity with itsregular policies regarding reimbursement of expenses as in effect from time totime.  Payments to you under thisparagraph will be made upon presentation of expense vouchers in such detail asthe Company may from time to time reasonably require.

 

# 6.             Term andTermination.

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## (a)           Term.  Your employment with the Company willcontinue unless and until terminated in accordance with the terms of thisAgreement.

 

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## (b)           Termination.  Your employment under this Agreement may beterminated as follows:

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### (i)            Byyour resignation upon 60 days prior written notice to the Company.

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### (ii)           Bythe Company for Cause (as defined in this Agreement) immediately upon writtennotice to you.

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### (iii)          By the Company for any reason and at any timeupon 60 days prior written notice to you.

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### (iv)          Bythe Company at any time in the event of your Disability (as defined in thisAgreement).

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In the event ofyour termination of employment for any of the foregoing reasons, you mustimmediately resign as a director of the Company and any of its subsidiaries.

 

## (c)           Death.  This Agreement will automatically terminateupon your death.

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# 7.             Consequences ofTermination.

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## (a)           Termination forCause; Resignation Prior to Change in Control or More Than 24 Months AfterChange in Control.  If youremployment is terminated at any time by the Company for Cause or if you resignprior to a Change in Control (as defined in the separate Change-in-ControlAgreement attached hereto (the “Change-in-Control Agreement”)) or more than24 months after a Change in Control, then you will be paid (i) yourbase salary to the date of termination and (ii) the unpaid portion of any bonusor incentive amount earned by you for the fiscal year ending prior to thetermination of your employment that you are entitled to receive under the termsof the annual incentive plan.  You willnot be entitled to receive any base salary or fringe benefits for any periodafter the date of termination, except for the right to receive benefits thathave become vested under any benefit plan or to which you are entitled as amatter of law.

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## (b)           Termination withoutCause Prior to Change in Control or More Than 24 Months After Change in Control.  If the Company terminates your employmentwithout Cause prior to a Change in Control or more than 24 months after aChange in Control, then:

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### (i)            TheCompany will pay you a lump sum equal to 12 months of your current basesalary, less applicable tax withholdings; and

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### (ii)           TheCompany will pay the unpaid portion of any bonus or incentive amount earned byyou for the fiscal year ending prior to the termination of your employment thatyou are entitled to receive under the terms of the applicable incentive plan;and

 

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### (iii)          You will be entitled to continuedparticipation in the health care coverage, and life insurance benefit plans ofthe Company, as in effect on the date of your termination as permitted bylaw.  The Company will continue to payits share of the health care and life insurance premiums for this coverage fora period of up to 12 months, and you will be obligated to pay your shareof the cost associated with that coverage as if you were still activelyemployed by the Company.  If you cannotbe covered under any of the Company’s group plans or policies, the Company willreimburse you for your full cost of obtaining comparable alternative orindividual coverage elsewhere, less any contribution that you would have beenrequired to make under the Company’s group plans or policies.  If, during the aforesaid 12-month period,you are employed by a third party and become eligible for any health care orlife insurance coverage provided by that third party, the Company will not,thereafter, be obligated to provide you with the insurance benefits describedin this paragraph (b)(iii).  This12-month coverage shall run concurrently with COBRA and thereafter you will beresponsible for the full cost of any coverage thereafter.

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## (c)           Termination in theEvent of Death or Disability.  Ifyour employment terminates due to your death or if the Company terminates youremployment due to a Disability, then

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### (i)            TheCompany will continue to pay your base salary to your estate or to you for theremainder of the month in which your death occurs or in which your employmentis terminated due to Disability, together with the unpaid portion of any bonusor incentive amount earned by you for the fiscal year ending prior to thetermination of your employment that you are entitled to receive under the termsof the applicable incentive plan; and in the event of termination due toDisability, you will continue to receive, during that month, all of the fringebenefits then being paid or provided to you;

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### (ii)           Youwill be entitled to receive all Disability and other benefits, such ascontinued health coverage or life insurance proceeds, provided in accordancewith the terms and conditions of the health care coverage, life insurance,disability, or other employee benefit plans of the Company and applicable law.

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## (d)           Termination Within24 Months After Change in Control. If, within 24 months after a Change in Control, your employmentterminates, your rights will be governed by the Change-in-Control Agreementattached hereto and executed concurrently herewith.  After the expiration of such 24-month period, you rights willagain be governed solely by this agreement.

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## (e)           The benefits providedyou under this Section 7 or in the Change-in-Control Agreement are in lieuof any benefits that would otherwise be provided to you under any severance payor other policies of the Company.

 

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# 8.             No Mitigation.  Following termination of your employment forany reason you will be under no obligation to mitigate your damages by seekingother employment, and there will be no offset against the amounts due you underSection 7, except as specifically provided in Section 7(b)(iii) orfor any claims which the Company may have against you.

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# 9.             Property Rights,Confidentiality, Non-Solicit and Non-Compete Provisions.

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## (a)           Company’s Property.

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### (i)            Youmust promptly disclose to the Company in writing all inventions, discoveries,and works of authorship, whether or not patentable or copyrightable, that areconceived, made, discovered, written, or created by you alone or jointly withanother person, group, or entity, whether during the normal hours of employmentat the Company or on your own time, during the term of this Agreement.  You agree to assign all rights to all suchinventions and works of authorship to the Company.  You further agree to give the Company any of the assistance itreasonably requires in order for the Company to perfect, protect and use itsrights to inventions and works of authorship.

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This provisiondoes not apply to an invention, discovery, or work of authorship for which noequipment, supplies, facility, or trade secret information of the Company wasused and that was developed entirely on your own time and that does not relateto the business of the Company, to the Company’s anticipated research ordevelopments, or does not result from any work performed by you for theCompany.

 

### (ii)           Youmay not remove any records, documents, or any other tangible items (excludingyour personal property) from the premises of the Company in either original orduplicate form, except as is needed in the ordinary course of conductingbusiness for the Company.

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### (iii)          You must immediately deliver to the Company,upon termination of employment with the Company, or at any other time upon theCompany’s request, any property, records, documents, and other tangible items(excluding your personal property) in your possession or control, includingdata incorporated in word processing, computer, and other data storage media,and all copies of such records, documents, and information, including allConfidential Information, as defined below.

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## (b)           ConfidentialInformation.  During the course ofyour employment you will develop, become aware of, and accumulate expertise,knowledge, and information regarding the Company’s and its subsidiaries’organization strategies, business, and operations and their past, current, orpotential customers, and suppliers.  TheCompany considers such expertise, knowledge, and information to be valuable,confidential, and proprietary, and it is considered Confidential Informationfor purposes of this Agreement.  Duringthis Agreement and at all times thereafter you will agree not to use suchConfidential Information or disclose it to other persons or entities except asis necessary

 

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## for the performance ofyour duties for the Company or as has been expressly permitted in writing bythe Company.  The foregoing covenantdoes not apply to any information possessed by you prior to your employment bythe Company, or to any information that is in or has entered the pubic domainor has been disclosed with any industry segment in which the Company or anysubsidiary or affiliated company of the Company operates by or pursuant to theauthority of the Company or any subsidiary or affiliated company of theCompany.

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## (c)           Non-Solicitation.  During (i) the term of this Agreement,and (ii) the greater of (A) any period for which you are receivingpayments under Section 7 of this Agreement, or (B) one year after thetermination of this Agreement or the date on which you are no longer employedby the Company in any capacity, whichever shall last occur, you may notdirectly or indirectly attempt to hire away any then-current employee of theCompany or any subsidiary or to persuade any such employee to leave employmentwith the Company or any subsidiary.

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## (d)           Non-Competition.  During (i) the term of this Agreementand (ii) the greater of (A) any period for which you are receivingpayments under Section 7 of this Agreement, or (B) one year aftertermination of this Agreement or the date on which you are no longer employedby the Company in any capacity, whichever shall last occur, you may not engageor participate, either individually or as an employee, consultant, or principal,partner, agent, trustee, officer, or director of a corporation, partnership, orother business entity, in any business in which the Company or any subsidiaryin which the Company has a more than 20 percent equity interest, was engagedprior to the termination of this Agreement. Mere ownership by you of not more than 5% of the outstanding commonstock of a company the securities of which are publicly traded will notconstitute competition for purposes of this Section 9(d).

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The provisions ofthis Section 9 survive the termination of this Agreement.

 

# 10.           Arbitration.  Any disputes arising under or in connectionwith this Agreement (including without limitation the making of this Agreement)must be resolved by final and binding arbitration to be held in Minneapolis,Minnesota in accordance with the rules and procedures of the AmericanArbitration Association.  The partieswill select a mutually agreeable single arbitrator to resolve the dispute or ifthey fail or are unable to do so, each side will within the following ten (10)business days select a single arbitrator and the two so selected will select athird arbitrator within the following ten (10) business days.  The arbitration award or other resolution maybe entered as a judgment at the request of the prevailing party by any court ofcompetent jurisdiction in Minnesota or elsewhere.  The arbitrator will have no power to award any punitive orexemplary damages.  The arbitrator mayconstrue or interpret, but may not ignore or vary the terms of this Agreement,and may be bound by controlling law. You acknowledge that your failure to comply with the terms of theAgreement regarding Confidential Information, Inventions, and Non-Competitioncould cause immediate and irreparable injury to the Company and that therefore,the arbitrators, or a court of competent jurisdiction, if an arbitration panelcannot immediately be convened, will be empowered to provide injunctive relief,including temporary or preliminary relief, to restrain any such failure to

 

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# comply.  Each party will bear its own costs andattorneys’ fees in connection with the arbitration.

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# 11.           Definitions.  For purposes of this Agreement, thefollowing terms will have the meanings set forth below:

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## (a)           Cause.  “Cause” has the meaning given to it in theChange-in-Control Agreement.

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## (b)           Disability.  “Disability” means that you are deemed to bedisabled under the terms of the Company’s long term disability plan and havesatisfied the qualifying period for entitlement to benefits under such plan.

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# 12.           General Provisions.

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## (a)           This Agreement may notbe amended or modified except by a written agreement signed by both of us.

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## (b)           In the event that anyprovision or portion of this agreement is determined to be invalid orunenforceable for any reason, the remaining provisions of this Agreement willremain in full force and effect to the fullest extent permitted by law.

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## (c)           This Agreement willbind and benefit the parties hereto and their respective successors andassigns, but none of your rights or obligations hereunder may be assigned byeither party hereto without the written consent of the other, except byoperation of law upon your death.

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## (d)           This Agreement has beenmade in and shall be governed and construed in accordance with the laws of theState of Minnesota without giving effect to the principles of conflict of lawsof any jurisdiction.

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## (e)           No failure on the partof either party to exercise, and no delay in exercising, any right or remedyunder this Agreement will operate as a waiver; nor will any single or partialexercise of any right or remedy preclude any other or further exercise of anyright or remedy.

 

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## (f)            Any notice or othercommunication under this Agreement must be in writing and will be deemed givenwhen delivered in person, by overnight courier (with receipt confirmed), byfacsimile transmission (with receipt confirmed by telephone or by automatictransmission report), or upon receipt if sent by certified mail, return receiptrequested, as follows (or to such other persons and/or addresses as may bespecified by written notice to the other party):

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If to Angeion Corporation:

 

Angeion Corporation

Attention: Chairman of the Board of Directors

350 Oak Grove Parkway

St. Paul, MN 55127

 

If to Rodney A. Young

 

Mr. Rodney A. Young

5804 Olinger Road

Edina, Minnesota 55436

 

## (g)           This Agreement, theChange-in-Control Agreement and the stock option agreements ancillary hereto,contains our entire understanding and agreement with respect to these mattersand supersedes all previous agreements, discussions, or understandings, whetherwritten or oral, between or on the same subjects.

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## (h)           In the event anyprovision of this Agreement is held unenforceable, that provision will besevered and shall not affect the validity or enforceability of the remainingprovisions.  In the event any provisionis held to be overbroad, that provision shall be deemed amended to narrow itsapplication to the extent necessary to render the provision enforceableaccording to applicable law.

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## (i)            All terms of thisAgreement intended to be observed and performed after the termination of thisAgreement will survive such termination and will continue in full force andeffect thereafter, including without limitation, Section 7, Consequence ofTermination; Section 8, No Mitigation; Section 9, Property Rights,Confidentiality, Non-Solicit and Non-Compete Provisions; Section 10,Arbitration; Section 11, Definitions; and Section 12, General Provisions.

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## (j)            The headings containedin this Agreement are for convenience only and in no way restrict or otherwiseaffect the construction of the provisions hereof.  Unless otherwise specified herein, references in this Agreementto Sections or Exhibits are to the sections or exhibits to this Agreement.  This Agreement may be executed in multiplecounterparts, each of which is an original and all of which together willconstitute one and the same instrument.

 

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If the foregoingcorrectly sets forth your understanding of our agreement, please indicate so bysigning and returning to us a copy of this letter.

 
|                    | Very truly yours,             |
|-------------------------|-------------------------------|
|                    |                          |
|                    | ANGEION CORPORATION           |
|                    |                          |
|                    |                          |
|                    | /s/ Arnold A. Angeloni        |   |
|                    | Arnold A. Angeloni,  Chairman |
|                    |                          |
| Accepted and agreed to: |                          |
|                    |                          |
| /s/ Rodney A. Young     |                          |   |
| Rodney A. Young         |                          |
|                         |                               |  |  |

 

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**Exhibit A.**

**Options**

 
| **Options** |   | **Exercise  price** |   | **Vesting**   |                                                        | **Expiration**   |             | **Comments**                                                                                                                                              |
|-------------|--------|---------------------|--------|---------------|-------------------------------------------------------------|------------------|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| 24,000      |   | 2.00                |   | 10/1/2009 (1) |                                                        | October 25, 2012 |             | Subject to earlier vesting if common stock FMV  equals or exceeds the price set forth below.   Subject to earlier termination after employment ends. |
| 24,000      |   | $                   | 6.23   |          | Immediately.                                                |             | October 25, 2012 |                                                                                                                                                      | Subject to earlier termination after employment ends. |
| 33,000      |   | $                   | 7.79   |          | One-half on October 25, 2004; balance on October 25,  2005. |             | October 25, 2012 |                                                                                                                                                      | Subject to earlier termination after employment  ends. |

 

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(1) The Option may be exercised in full beginningOctober 1, 2009.  The Option will becomeexercisable earlier, however, if the Common Stock trades at the following pricefor 20 of 30 consecutive trading days.

 
| **Closing  Price** |   | **Percent of  Option Exercisable** |   |
|--------------------|--------|------------------------------------|--------|
|               |   |                               |   |
| $                  | 4.00   |                               |   | 15 | % |
| $                  | 4.50   |                               |   | 40 | % |
| $                  | 5.00   |                               |   | 60 | % |
| $                  | 5.50   |                               |   | 80 | % |
| $                  | 6.00   |                               |   | 100 | % |

 

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