EXHIBIT
10.1


 


EMPLOYMENT AGREEMENT


 


THIS AGREEMENT (“Agreement”) is entered into as of
August 22, 2003 by and between MedAmicus, Inc., a Minnesota corporation
(the “Company”), and Vincent P. Owens (“Employee”) and will become effective on
the Effective Date, as defined in Section 1.


 


WHEREAS, Employee is currently employed as the
President of BIOMEC Cardiovascular Inc. (“BCI”), and the Company has entered
into an Asset Purchase Agreement among the Company, Medacquisition, Inc.,
BIOMEC Inc. and BCI dated as of July 21, 2003 (the “Asset Purchase
Agreement”), under which the Company has agreed to purchase the operating
assets of BCI if certain conditions are met; and


 


WHEREAS, the Company wishes Employee to render
services for the Company beginning on the Effective Date and subject to the
terms and conditions set forth in this Agreement, and Employee wishes to be
retained and employed by the Company subject to these terms and conditions; and


 


WHEREAS, Employee understands that Company is offering
him employment in a position of trust and confidence and that he will generate,
have access to, and become familiar with confidential information; and


 


WHEREAS, Employee understands that the Company has
expended significant time and money on the development of customer goodwill and
a sound business reputation, and as part of Employee’s duties, he will develop
and maintain close working relationships with the Company’s customers; and


 


WHEREAS, Employee understands that this Agreement
prohibits the unauthorized use or disclosure of the Company’s confidential
information and an obligation not to compete with the Company.


 


NOW, THEREFORE, in consideration of the promises and
the respective undertakings of the Company and Employee set forth in this
Agreement, the Company and Employee agree as follows:


 


1.                       Effective
Date.  The “Effective Date” means
the date immediately following the Closing Date, as defined in the Asset
Purchase Agreement.  This Agreement will
be null and void and of no force or effect if the Closing (as defined in the
Asset Purchase Agreement) does not occur.


 


2.                       Employment.  The Company employs Employee as of the
Effective Date, and Employee accepts such employment as President of
Medacquisition, Inc. (to be renamed with input from Employee), subject to the
terms and conditions set forth in this Agreement.


 

















 


3.                       Term.  Subject to Employee’s full compliance with
section 4 and subject to the provisions of section 9, Employee’s
employment under this Agreement will continue for an initial term from the
Effective Date until December 31, 2004 (the “Initial Term”).  After the Initial Term, Employee’s
employment will continue on an at will basis, and either party may terminate
this Agreement with or without Cause (as defined in Section 9) on 30 days
prior written notice.  Termination of
this Agreement by either party will automatically terminate Employee’s
employment by the Company.


 


4.                       Position
and Duties.


 


4.1.                              Service
with Company.  Employee agrees to
perform all reasonable employment duties for the Company as arise during the
term of this Agreement.  Employee will
devote his full time and attention and best efforts to the business and affairs
of the Company, and faithfully and diligently perform in a competent and
professional manner and to the best of his ability all of his duties and
responsibilities described in this Agreement.


 


4.2.                              Conflict
of Interest.  Employee represents
and warrants to the Company that he has no contractual commitments inconsistent
with his obligations set forth in this Agreement, and that during the term of
this Agreement, he will not render or perform services for any other
corporation, firm, entity, or person which are inconsistent with the provisions
of this Agreement and which are not authorized by the Company.


 


5.                       Compensation.


 


5.1.                              Base
Salary.  As compensation for all
services to be rendered by Employee under this Agreement, the Company will pay
to Employee a Base Salary (“Base Salary” means regular cash compensation paid
on a periodic basis exclusive of benefits, bonuses or incentive payments) at an
annual rate of $150,000.  The Company
will pay the Base Salary in accordance with normal Company payroll practices
for employees, subject to state and federal taxes, social security, and any
other applicable withholdings.  The Base
Salary will be reviewed not less often than annually, and increased or
decreased as may be determined from time to time by the Company.


 


5.2.                              Stock
Options.  Employee will be eligible
after 90 days of employment with the Company to receive stock options to
purchase 50,000 shares of the Company’s common stock under the Company’s Stock
Option Incentive Plan, subject to approval by the Company’s Board of Directors.


 


5.3.                              Bonus
and Incentive.  Employee will be
eligible to participate in the Company’s “2004 Salaried Employee Bonus Plan”,
if and when adopted by the Board of Directors. 
The Company does not guarantee the adoption of any employee bonus
program during the term of this Agreement, and Employee’s participation in the
plan or program would be subject to the provisions, rules and regulations
applicable to the plan, and the terms of this Agreement.  The amount and criteria for determination of
Employee’s bonus and incentive compensation in the plan or program (if any) is
solely within the discretion of the Board of Directors.


 


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5.4.                              Benefits.  In addition to the compensation payable to
Employee as provided in this Section 5:


 


(a)                                  Vacation
and Holidays.  The Company will
honor any accrued but unused paid vacation earned during the Employee’s
employment with BIOMEC Cardiovascular Inc. 
Such paid vacation must be used by Employee according to the Company’s
existing policies regarding vacation time. 
Employee is eligible for three (3) weeks of paid vacation to accrue annually
beginning on the Effective Date of this Agreement.  Employee may rollover up to two hundred (200) hours of unused
vacation into the next calendar year. 
Employee shall also be entitled to eighty (80) hours of paid holidays
each calendar year per the Company’s Holiday Schedule.


 


(b)                                 Group
Health Insurance and Pension Plan. 
To the extent available or offered, Employee will be entitled to
participate in all other benefit programs offered by the Company to its
employees, subject to terms of the benefit plans as the Board of Directors may
approve, including but not limited to, any medical, dental or other health
plan, pension plan, profit-sharing plan and life insurance plan that the
Company may adopt or maintain, any of which may be changed, terminated or
eliminated by the Company at any time in the exclusive discretion of the Board
of Directors.  The Company will attempt
to give credit for prior service with BIOMEC Cardiovascular, Inc., to the
extent permitted under the benefit plans.


 


5.5.                              Business
Expenses.  The Company will pay or
reimburse Employee for all reasonable and necessary out-of-pocket expenses
incurred by Employee for the benefit of the Company in the performance of his
duties under this Agreement, so long as Employee complies with the Company’s
policies for expense reimbursement.


 


6.                       Confidential
Information.


 


6.1.                              “Confidential
Information” Defined.  “Confidential
information” means any information not generally known in this profession by
third parties, including the Company’s competitors or the general public.  It includes (but is not limited to) methods,
procedures, trade secrets, client lists, marketing plans and techniques, new
products and new product development, strategic plans, business plans, budgets,
product prices, sales volume, information about clients and potential clients
(including identities of the clients and the clients’ contact person(s), the
clients’ buying history and tendencies and other details about the Company’s
relationship with them), drawings, specifications, reports and information
about employee compensation and finances. 
All information which Employee acquires or becomes acquainted with
during the period of his employment by the Company (including employment by an
affiliated company), whether developed by Employee or by others, which he has a
reasonable basis to believe to be Confidential Information, or which is treated
by the Company as being Confidential Information, shall be presumed to be
Confidential Information.


 


6.2.                              Obligations
of Employee.  Except to the extent
required during the course of Employee’s employment for the Company, Employee
agrees that he will not, during or after


 


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the term of his employment, disclose Confidential Information to any other
person or entity, or use the Company Confidential Information for his own
benefit or for the benefit of another, unless the Company expressly directs him
to do so.  Employee acknowledges that
the Confidential Information constitutes a unique and valuable asset of the
Company and represents a substantial investment of time and expense by the
Company and its predecessors, and that any disclosure or other use of such
Confidential Information other than for the sole benefit of the Company would
seriously harm the Company’s business and cause monetary loss that would be
difficult, if not impossible, to measure.


 


7.                       Non-competition
and Non-solicitation.  In
consideration of employment, Employee agrees to the following:


 


7.1.                              Non-competition.  During Employee’s employment with the
Company, Employee will devote his full time and energy to furthering Company
business and will not become affiliated in any capacity with any individual or
entities who are competing or planning to compete with the Company at that time.  For a period of one year after the
termination of Employee’s employment (whether voluntary or involuntary),
Employee will not directly or indirectly solicit, offer to provide, or provide
any services on behalf of or to any entity with whom the Company competes,
except with the Company’s written consent.


 


7.2.                              Non-solicitation.  Employee further agrees that he will not,
during the term of his employment or for a period of one year following the
termination of his employment, directly or indirectly solicit any of the
Company’s employees or independent contractors for the purpose of hiring them
to work for him or another person, entity or employer, or for the purpose of
inducing them to leave their employment with the Company, without the Company’s
written consent.


 


8.                       Inventions.  During Employee’s employment with the
Company, Employee will promptly disclose to the Company in writing any ideas,
inventions or discoveries (collectively known as “inventions”) related to the
Company’s business.  Employee agrees that
these inventions belong to the Company, and agree to assign or offer to assign
to the Company all rights, title and interest in such inventions, and will
cooperate in the Company’s efforts to protect the Company’s rights to them.  Employee understands that this Agreement
does not apply to any invention for which none of the Company’s equipment,
supplies, facility or trade secret information was used and which was developed
entirely on Employee’s own time, and (1) which does not relate (a) directly to
Company business, or (b) to the Company’s actual or demonstrably anticipated
research or development, or (2) which does not result from any work that
Employee performed for the Company.


 


9.                       Termination.


 


9.1.                              Grounds
for Termination.  This Agreement may
be terminated prior to the expiration of the Initial Term set forth in
section 3, if:


 


(a)                                 the
Company elects to terminate this Agreement for “Cause” (as defined in
Section 9.2) and notifies Employee in writing;


 


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(b)                                Employee
becomes “disabled” (as defined in Section 9.3); or


(c)                                 Employee
dies.


 


Termination under events 9.1 (a) through (c) will be effective
immediately and Employee shall be entitled to receive compensation due to the
Employee through the last day of employment. 
After the Initial Term, in addition to the reasons set forth in 9.1 (a),
(b) and (c), this Agreement may be terminated if:


 


(d)                                Employee
elects to terminate this Agreement and gives thirty (30) days notice, or


(e)                                 the
Company elects to terminate this Agreement without Cause and gives thirty (30)
days notice.


 


If this Agreement is terminated by Employee under 9.1 (d), Employee
shall receive compensation through the end of the 30-day notice period.  If the Company terminates this Agreement
under 9.1 (e), the Company will pay Employee a severance equal to four months
of Employee’s annual Base Salary in effect as of the date of termination.  The severance will be paid in equal
semi-monthly payments in accordance with the Company’s general payroll
practices for employees, subject to all appropriate withholdings for state,
federal and local taxes, and such other deductions as are otherwise required by
law or authorized by Employee.  The
Company will not be obligated to pay Employee severance if Employee breaches
those provisions that Employee remains bound by after the date of termination,
specifically including Sections 6, 7 and 8 of this Agreement.


 


9.2.                              “Cause”
Defined.  As used in this Agreement,
“Cause” means Employee has:  (a)
breached the provisions of sections 6, 7 or 8 of this Agreement in any respect
or materially breached any other provision of this Agreement; (b) engaged in
material misconduct, including material failure to perform Employee’s duties as
an employee of the Company; (c) committed fraud, misappropriation or
embezzlement in connection with the Company’s business; (d) convicted or has
pleaded nolo contendere to criminal misconduct (except for parking violations,
minor traffic violations, and other petty or insignificant misdemeanors); or
(e) use of narcotics, liquor or illicit drugs has had a detrimental effect on
the performance of his employment responsibilities, as determined by the
Company.


 


9.3.                              “Disabled”
Defined.  As used in this Agreement,
“disabled” means any mental or physical condition which renders Employee unable
to perform the essential functions of his position, with or without reasonable
accommodation, as defined by various state and federal disability laws.  Employee will be presumed to be disabled if
Employee qualifies because of illness or incapacity, to begin receiving
disability income insurance payments under any long term disability income
insurance policy that the Company maintains for the benefit of Employee.  If there is no policy in effect at the date
of Employee’s illness or incapacity, Employee will be presumed to be disabled
for purposes of this Agreement if Employee is substantially incapable of
performing his duties for a period of more than twelve (12) consecutive weeks.


 


9.4.                              Bound
by Provisions.  Despite any
termination of this Agreement, Employee, in consideration of his employment to
the date of termination will remain bound by


 


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the provisions of this Agreement that specifically relate to periods,
activities or obligations upon or subsequent to the termination of Employee’s
employment.


 


9.5.                              Surrender
of Records and Property.  If either
Employee or Company terminate Employee’s employment, Employee will deliver to
the Company immediately all records, documents or information he generated or
received in connection with his employment with the Company, including but not
limited to:  all originals and all
copies of any records, documents or information (whether in paper, computer or
other form) including drawings, specifications, reports, client lists,
financial information, or any confidential information as described in
Section 6.  Employee will at the
same time also deliver to the Company all other property he received in
connection with his employment with the Company, including but not limited to,
computer equipment, computer hard drives or diskettes, telephone equipment, and
facsimile machines.


 


10.                 Settlement of
Disputes.


 


10.1.                        Resolution
of Certain Claims - Injunctive Relief. 
Claims brought by the Company asserting a violation of Sections 6, 7 or
8, or seeking to enforce, by injunction or otherwise, the terms of either
Sections 6, 7, or 8 may be maintained by the Company in a lawsuit subject to
the terms of Section 10.2. 
Employee agrees that, in addition to, but not to the exclusion of any
other available remedy, the Company has the right to enforce the provisions of
Sections 6, 7 or 8 by applying for and obtaining temporary and permanent
restraining orders or injunctions from a court of competent jurisdiction
without the necessity of filing a bond, and the Company will be entitled to
recover from Employee its reasonable attorneys’ fees and costs in enforcing the
provisions of Sections 6, 7 or 8 and will repay to the Company all profits, compensation,
commissions or other benefits which Employee has realized as a result of his
violation.


 


10.2.                        Venue.  Any action at law, suit in equity, or
judicial proceeding arising directly, indirectly, or otherwise in connection
with, out of, related to or from this Agreement will be litigated only in the
courts of the state of Minnesota, County of Hennepin, or the Federal District
Court, District of Minnesota, Fourth Division. 
Employee waives any right Employee may have to transfer or change the
venue of any litigation brought against Employee by the Company.  Employee also waives any claim of
inconvenient forum.


 


10.3.                        Severability.  To the extent any provision of this
Agreement is held to be invalid or unenforceable, it will be considered deleted
therefrom and the remainder of the provision and of this Agreement will be
unaffected and will continue in full force and effect.  If the duration or geographical extent of,
or business activities covered by, any provision of this Agreement is in excess
of that which is valid and enforceable under applicable law, then the provision
will be construed to cover only that duration, geographical extent or business
activities which may be valid and enforceable under applicable law.  Employee acknowledges the uncertainty of the
law in this respect and expressly stipulates that this Agreement be given the
construction which renders its provisions valid and enforceable to the maximum
extent (not exceeding its express terms possible under applicable law).


 


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11.                 Miscellaneous.


 


11.1.                        Governing
Law.  This Agreement is made under
and is governed by and construed in accordance with the laws of the state of
Minnesota, other than its laws dealing with conflicts of law principles.


 


11.2.                        Prior
Agreements.  This Agreement contains
the entire agreement of the parties relating to the employment of Employee by
the Company and the ancillary matters described in this Agreement and
supersedes all prior agreements and understandings with respect to those
matters.


 


11.3.                        Withholding
Taxes.  The Company may withhold
from any benefits payable under this Agreement all federal, state, city or
other taxes as may be required pursuant to any law or governmental regulation
or ruling.


 


11.4.                        Amendments.  No amendment or modification of this
Agreement will be deemed effective unless made in writing and signed by both
Employee and the Company.


 


11.5.                        No
Waiver.  No term or condition of
this Agreement will be deemed to have been waived, nor will there be any
estoppel to enforce any provision of this Agreement, except by a statement in
writing signed by the party against whom enforcement of the waiver or estoppel
is sought.  Any written waiver will not
be deemed a continuing waiver unless specifically stated, will operate only as
to the specific term or condition waived and will not constitute a waiver of
the term or condition for the future or as to any act other than that
specifically waived.


 


11.6.                        Assignment.  This Agreement may not be assigned, in whole
or in part, by the Employee.


 


11.7.                        Counterparts.  This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
will constitute one and the same instrument.


 


11.8.                        Captions
and Headings.  The captions and
paragraph headings used in this Agreement are for convenience of reference
only, and do not affect the construction or interpretation of this Agreement.


 


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IN WITNESS WHEREOF, Employee and the Company have
executed this Agreement as of the date set forth in the first paragraph.


 


	
   

  	
  MEDAMICUS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:

  	
  /s/ Deborah
  Schuneman

  	
   

  
	
   

  	
   

  	
  Its:

  	
  HR Manager

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
     /s/
  Vincent P. Owens

  	
   

  
	
   

  	
  VINCENT P. OWENS

  	
   

  
					



 


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