exv10w24



 






Exhibit 10.24




EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into by and between Uroplasty,
Inc., a Minnesota corporation (“the Company”), and Mahedi A. Jiwani (the “Executive”) effective as
of the 14th day of November, 2005.



R E C I T A L S :




     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 Executive desire to set forth in this Agreement the terms under
which Executive will serve as Vice President, Chief Financial Officer and Treasurer of the Company;



     NOW, THEREFORE, the parties hereto agree as follows:


1. Employment and Duties. The Company hereby agrees to employ the Executive, and the
Executive hereby accepts the Company’s offer to serve, as Vice President, Chief Financial Officer
and Treasurer of the Company. As such, the Executive shall have responsibilities, duties and
authority reasonably accorded to and expected of such an officer of the Company and will report to
the Company’s President and Chief Executive Officer, Audit Committee and Board of Directors. The
Executive agrees to devote the Executive’s full business time, attention and efforts to promote and
further the business of the Company. The Executive will faithfully adhere to, execute and fulfill
all policies established by the Company’s Audit Committee and Board of Directors.




     The Executive will not, during the Term of Executive’s employment hereunder, be engaged in any
other business activity pursued for gain, profit or other pecuniary advantage if such activity
interferes with the Executive’s duties and responsibilities hereunder. The foregoing limitations
will not be construed to prohibit the Executive from making personal investments in such form or
manner as will neither require the Executive’s services in the operation or affairs of the
companies or enterprises in which such investments are made nor violate the terms of Section 4
hereof.


2. Compensation. For all services rendered by the Executive on and after the date hereof,
the Company will compensate the Executive as follows:




     (a) Base Salary. Commencing on the date hereof, the base salary payable to the
Executive shall be $175,000 per year, payable on a regular basis in accordance with the Company’s
standard payroll procedures but not less than semi-monthly. Such base salary will be subject to
annual review and adjustment by the Company’s Compensation Committee.



     (b) Incentive Bonus Plan. During the Term, the Executive is entitled to an annual
cash bonus (the “Annual Bonus”), a part of which will be based on attainment of particular
financial milestones (the “Financial Milestones”) and the other part of which will be based on
attainment of particular business milestones (the “Business Milestones”). The Annual Bonus is
computed as a percentage of the Executive’s base salary for the fiscal year for which achievement
of the Financial and Business Milestones relate.



          (i) Financial and Business Milestones. The Executive and the Company shall mutually
agree upon the Financial and Business Milestones for each fiscal year by May 1 of each year (except
as to the balance of fiscal 2006, by November 30, 2005). The Financial Milestones shall be based
on line items regularly appearing on the Company’s audited financial statements. Computation of
the portion of the Annual Bonus based on Financial Milestones is as follows:







      











Financial Milestone Bonus




	 	 	 	 	 
	Percentage of Annual	 	Percentage of Annual Base
	Financial Milestone	 	Compensation Payable as
	Target Achieved	 	Bonus
	 

	 	 	 	 
	90%

	 	 	15	%
	100%

	 	 	30	%
	120%

	 	 	36	%











      









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Computation of the portion of the Annual Bonus based on Business Milestones is as follows:







      










Business Milestone Bonus




	 	 	 	 	 
	Percentage of Annual	 	Percentage of Annual Base
	Business Milestone	 	Compensation Payable as
	Target Achieved	 	Bonus
	 

	 	 	 	 
	90%

	 	 	10	%
	100%

	 	 	20	%
	120%

	 	 	24	%















For achievement of Financial and Business Milestones from 90% up to 100%, and over 100% up to 120%,
as specified above, the related Bonus percentages will increase proportionally between the
applicable two percentage levels. The related Bonus percentages do not increase above the 120%
levels. In the event of any disagreement, the Company’s Compensation Committee will determine the
percentage of the annual Financial and Business Milestone targets achieved by the Executive.




          (ii) Payment. Each Annual Bonus amount is payable within 15 days of the completion of
the audit of the financial statements for the related fiscal year.




     (c) Executive Perquisites, Benefits and Other Compensation. Commencing on the date
hereof, the Executive shall be entitled to receive additional benefits and compensation from the
Company in such form and to such extent as specified below:



          (i) Payment of premiums for coverage for the Executive and the Executive’s dependent family
members under health, hospitalization, disability, dental, life and other insurance plans that the
Company may have in effect from time to time, at the levels, and with the co-payments, as
established by the Company under such plans.




          (ii) Reimbursement for all business travel and other out-of-pocket expenses reasonably
incurred by the Executive in the performance of the Executive’s services pursuant to this
Agreement. All reimbursable expenses shall be appropriately documented in reasonable detail by the
Executive upon submission of any request for reimbursement, and in a format and manner consistent
with the Company’s expense reporting policy.




          (iii) Four weeks of paid vacation during each calendar year. If the Executive does not
utilize all vacation time during a year, it is forfeited.



3. Stock Options. The Company hereby grants to the Executive options (the “Options”) to
acquire 100,000 shares of the Company’s Common Stock, par value $.01 per share (the “Common
Stock”), at an exercise price per share (the “Exercise Price”) equal to the last price of the
Company’s Common Stock on the American Stock Exchange as reported by bigcharts.com for the date of
this Agreement. The Options are not pursuant to the Company’s 1995, 1997 or 2002 Stock Option
Plans. The Options will not be treated as “incentive options” within the meaning of Section 422 of
the Code.




     (a) Anti-Dilution Adjustments. The Options are subject to adjustment as provided in
this subsection (a).



          (i) Exercise Price Adjustments. The Exercise Price shall be adjusted from time to
time such that in case the Company shall hereafter:




               (A) pay any dividends on any class of stock of the Company payable in Common Stock or
securities convertible into Common Stock;



               (B) subdivide its then outstanding shares of Common Stock into a greater number of shares; or



               (C) combine outstanding shares of Common Stock, by reclassification or otherwise;


then, in any such event, the Exercise Price in effect immediately prior to such event shall (until
adjusted again pursuant hereto) be adjusted immediately after such event to a price (calculated to
the nearest full cent) determined by dividing (A) the number of shares of Common Stock outstanding
immediately prior to such event, multiplied by the then existing Exercise Price, by (B) the total
number of shares of Common Stock outstanding immediately after such
event (including in each case the maximum number of shares of Common Stock issuable in respect of any securities convertible into
Common Stock), and




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 the resulting quotient shall be the adjusted Exercise Price per share. An
adjustment made pursuant to this subsection shall become effective immediately after the record
date in the case of a dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification. If, as a result of
an adjustment made pursuant to this subsection, the Executive shall become entitled to receive
shares of two or more classes of capital stock or shares of Common Stock and other capital stock of
the Company, the Board of Directors (whose determination shall be conclusive) shall determine the
allocation of the adjusted Exercise Price between or among shares of such classes of capital stock
or shares of Common Stock and other capital stock. All calculations under this subsection shall be
made to the nearest cent or to the nearest 1/100 of a share, as the case may be. In the event that
at any time as a result of an adjustment made pursuant to this subsection, the Executive shall
become entitled to receive any shares of the Company other than shares of Common Stock, thereafter
the Exercise Price of such other shares so receivable upon exercise of any Options shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in this subsection.




          (ii) Share Adjustments. Upon each adjustment of the Exercise Price pursuant to
subsection (a)(i) above, the Executive shall thereafter (until another such adjustment) be entitled
to purchase at the adjusted Exercise Price the number of shares, calculated to the nearest full
share, obtained by multiplying the number of shares covered by the Options (as adjusted as a result
of all adjustments in the Exercise Price in effect prior to such adjustment) by the Exercise Price
in effect prior to such adjustment and dividing the product so obtained by the adjusted Exercise
Price.




          (iii) Reorganization Events. In case of any consolidation or merger to which the
Company is a party other than a merger or consolidation in which the Company is the continuing
corporation, or in case of any sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, or in the case of any statutory exchange of
securities with another corporation (including any exchange effected in connection with a merger of
a third corporation into the Company), there shall be no adjustment under subsection (a)(i) above;
but the Executive shall have the right thereafter to convert the Options into the kind and amount
of shares of stock and other securities and property which the Executive would have owned or have
been entitled to receive immediately after such consolidation, merger, statutory exchange, sale or
conveyance had the Options been converted immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale or conveyance and, in any such case, if necessary,
appropriate adjustment shall be made in the application of the provisions set forth in this
subsection with respect to the rights and interests thereafter of the Executive, to the end that
the provisions set forth in this subsection shall thereafter correspondingly be made applicable, as
nearly as may reasonably be, in relation to any shares of stock and other securities and property
thereafter deliverable on the exercise of the Options. The provisions of this subsection shall
similarly apply to successive consolidations, mergers, statutory exchanges, sales or conveyances.




          (iv) Notice of Adjustments. Upon any adjustment of the Exercise Price, then and in
each such case, the Company shall give written notice thereof, by first-class mail, postage
prepaid, addressed to the Executive, which notice shall state the Exercise Price resulting from
such adjustment and the increase or decrease, if any, in the number of shares of Common Stock
purchasable at such price upon the exercise of the Options, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.




     (b) Vesting; Change of Control. Notwithstanding anything else, the Executive may
exercise the Options only to the extent that the Executive is vested in them. Vested Options will
be exercisable for ten (10) years from the date hereof. The Options will vest in installments of
25% on each of the date hereof and the first, second and third anniversaries of the date hereof;
provided, however, that the Executive must continue in the employ of the Company through the
applicable anniversary date in order to vest in the Options for such anniversary date (and in any
case, must be employed with the Company through the first anniversary date hereof in order to
exercise the Options vested on the date of this Agreement). Despite the foregoing, the Options
will fully vest upon (aa) termination without good cause as defined in Section 5(d) herein or (bb)
a “Change of Control,” which will be deemed to occur as of the first day after the date hereof that
any one or more of the following conditions is satisfied (the “Change of Control Date”):



          (i) any person or entity, or group of persons or entities acting together, other than the
Company or an employee benefit plan of the Company, acquires directly or indirectly the beneficial
ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended)
of any voting security of the Company and, immediately after such acquisition, such person, entity
or group is, directly or indirectly, the beneficial owner of voting securities representing a
majority of the total voting power of all of the then-outstanding voting securities of the Company
and has a larger percentage of voting securities of the Company than any other person, entity or
group holding voting securities of the Company;




          (ii) the following individuals no longer constitute a majority of the members of the Board:
(A) Sam B. Humphries, Daniel G. Holman, Joel R. Pitlor, Thomas E. Jamison and R. Patrick Maxwell
(the “Original Directors”); (B) the individuals who thereafter are elected to the Company’s Board
of Directors and whose election, or nomination for




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election, to the Board of Directors was approved
by a vote of at least a majority of the Original Directors then still in office (such directors
becoming “Additional Original Directors” immediately following their election); and (C) the
individuals who are elected to the Board of Directors and whose election, or nomination for
election, to the Board of Directors was approved by a vote of at least a majority of the Original
Directors and Additional Original Directors then still in office (such directors also becoming
“Additional Original Directors” immediately following their election);




          (iii) the stockholders of the Company approve a merger, consolidation, recapitalization or
reorganization of the Company, or a reverse stock split of outstanding voting securities, other
than any such transaction which results in at least a majority of the total voting power
represented by the voting securities of the surviving entity outstanding immediately after such
transaction being beneficially owned by at least a majority of the holders of outstanding voting
securities of the Company immediately prior to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders not substantially altered in the
transaction; or




          (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of all or a substantial portion of the
Company’s assets (i.e., 50% or more of the total assets of the Company).




     However, no “Change in Control” will be deemed to have occurred with respect to Executive if
Executive is part of a purchasing group which consummates the Change in Control transaction. The
Executive will be deemed “part of a purchasing group” for purposes of the preceding sentence if the
Executive is an equity participant in the purchasing company or group except for (i) passive
ownership of less than three percent (3%) of the stock of the purchasing company or (ii) ownership
of an equity participation in the purchasing company or group which is otherwise not significant,
as determined prior to the Change in Control by a majority of the Original and Additional Original
Directors.



     (c) Payment of Exercise Price; Cashless Exercise. The Executive may exercise the
Options by cash payment (including by check or wire transfer). In the alternative, the Executive
may exercise the Options by instructing the Company to withhold from the shares of Common Stock
otherwise to be issued upon the exercise of the Options a number of whole or fractional shares of
Common Stock equal to the number of shares for which the Options are being exercised (including any
Options to be surrendered) multiplied by the Exercise Price per share, and then divided by the
“Market Price” (as defined below) of a share of Common Stock as of the close of business on the
date of exercise (a “Cashless Exercise”). The Company may condition the Cashless Exercise upon the
Executive’s payment of any required withholding taxes.



     The term “Market Price” with respect to shares of Common Stock of any class or series means
the last reported sale price on the American Stock Exchange or, if none, the average of the last
reported closing bid and asked prices on any other national or regional securities exchange or as
quoted in the National Association of Securities Dealers, Inc.’s Automated Quotations System
(“Nasdaq”), or if not listed on a national or regional securities exchange or quoted in Nasdaq, the
closing price as reported by bigcharts.com (or if this service is discontinued, such other
reporting service acceptable to the Holder), or if no quotations in such Common Stock are
available, the fair market value of the shares as determined in good faith by the Board of
Directors of the Company.



     (d) Subscription Representations; Transfer Restrictions. The Executive understands
that the Options, and the shares of Common Stock issuable upon their exercise, are and will be
“restricted securities” within the meaning of the Securities Act of 1933, as amended (the “Act”).
Accordingly, even if the Executive is fully vested in the Options, the Executive may never be able
to resell the underlying shares for a profit, or at all. In any event, the Executive will be able
to resell or otherwise transfer the underlying shares only if the sale or other transfer is
registered under the Act and applicable state securities laws or there is an available exemption
from this registration. The Executive confirms that Executive can bear the loss of Executive’s
entire investment in the Company.



     The Executive agrees and acknowledges that (i) none of the Options may be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated, other than by will or by the laws of
decent and distribution and then only to Executive’s spouse and/or children (or a trust for their
benefit) and (ii) the vested Options may be exercised during the Executive’s lifetime only by the
Executive or the Executive’s legal representative.



     (e) Lock-Up Agreement. The Executive agrees that, in the event of each future public
offering of the Company’s equity securities (an “Offering”), the Executive will agree to such
restrictions on the resale of any shares of the Company’s Common Stock (including the shares
underlying the Options) then beneficially owned by Executive as requested
by the managing underwriter or underwriters of the Offering; provided, however, that such
restrictions run no longer than the period of resale restriction imposed by such underwriters on
the Company’s other executive officers and directors. The Executive agrees not to sell or
otherwise transfer (including upon death) any of the shares underlying the Options, or any



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other
shares beneficially owned by the Executive, unless the purchaser or recipient agrees in writing to
be bound by the foregoing lock-up agreement.



     (f) Stock Certificate Restrictions. The Executive acknowledges that the Company will
place a restrictive legend on any certificate representing the shares underlying the Options, and a
“stop transfer order” with any transfer agent of the Company’s securities, barring the sale or
other transfer of such shares without registration under the Act or an exemption therefrom, and
noting the existence of the lock-up agreement above.



     (g) Registration of Shares Underlying the Options. Notwithstanding the above
provisions, the Company shall use its best efforts, at its expense, to register the issuance or
resale (as applicable) of the shares underlying the Options on Form S-8 under the Act and under
applicable state securities laws, and to maintain the effectiveness of the Form S-8 registration
statement during the Term of this Agreement and for two years thereafter. Notwithstanding the
expiration of this two-year period, if any shares of the Company are registered on Form S-8, the
Company will use its best efforts, at its expense, to continue to register the issuance or resale
(as applicable) of the Executive’s shares underlying the options for so long as the Company
maintains the effectiveness of such registration statement or, if sooner, until the last date that
the Executive may exercise the Options.


4. Non-Competition and Non-Solicitation.




     (a) Basic Terms. The Executive will not, during the period of the Executive’s
employment with the Company and for a period of one (1) year immediately following the termination
of the Executive’s employment under this Agreement, for any reason whatsoever, directly or
indirectly, for the Executive or on behalf of or in conjunction with any other person, persons,
entity, company, business, partnership, corporation, limited liability company or limited liability
partnership of whatever nature:



     (i) engage, as an officer, director, shareholder, owner, partner, joint venturer or in a
managerial capacity, whether as an employee, independent contractor, consultant or advisor or as a
sales representative, in any business in competition with the Company anywhere worldwide (the
“Territory”);



     (ii) call upon or solicit any person who is at that time within the Territory an employee of
the Company for the purpose or with the intent of enticing such employee away from or out of the
employ of the Company;



     (iii) call upon or solicit any person or entity which is, at that time, or which has been,
within one (1) year prior to that time, a customer or prospective customer (such prospective status
being determined by whether the Company within the prior year solicited such person or entity’s
business) of the Company within the Territory for the purpose of selling products or services in
competition with the Company within the Territory; or



     (iv) call upon or solicit any prospective acquisition candidate, on the Executive’s own behalf
or on behalf of any competitor, which candidate was, to the Executive’s actual knowledge after due
inquiry, either called upon by the Company or for which the Company made an acquisition analysis,
for the purpose of acquiring such entity or its assets.



     Notwithstanding the above, the Executive may acquire as a passive investment not more than two
percent (2%) of the capital stock of a competing business, whose stock is traded on a national
securities exchange or over-the-counter.



     (b) Equitable Relief. Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenants, and because of the immediate and
irreparable damage that could be caused to the Company for which it would have no other adequate
remedy, the Executive agrees that the foregoing covenants may be enforced by the Company in the
event of breach by the Executive by injunctions and restraining orders.



     (c) Severability and/or Reformation. The covenants in this Section 4 are severable
and separate, and the unenforceability of any specific covenant shall not affect the provisions of
any other covenant. Moreover, in the event any court of competent jurisdiction determines that the
scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the court deems reasonable,
and the Agreement shall be reformed in accordance therewith.



     (d) Independently Enforceable. All of the covenants in this Section 4 shall be
construed as an agreement independent of any other provision in this Agreement, and the existence
of any claim or cause of action of the Executive against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such
covenants. It is specifically agreed that the period of one (1) year following termination of
employment stated at the beginning of this Section 4, during which the agreements and covenants of
the Executive made in



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this Section 4 shall be effective, shall be computed by excluding from such
computation any time during which the Executive is in violation of any provision of this Section 4.


5. Term; Termination; Rights on Termination.




     The term of Executive’s employment under this Agreement begins on the date hereof and
continues for one (1) year, and, unless terminated sooner as herein provided, will continue
thereafter on a year-to-year basis on the same terms and conditions contained herein in effect as
of the time of renewal. As used herein, the word “Term” means (i) during the one-year period
referred to in the preceding sentence, such one-year period and (ii) during any one-year renewal
pursuant to the terms hereof, such one-year period. This Agreement and the Executive’s employment
may be terminated in any one of the following ways:



     (a) Death. The Executive’s death will immediately terminate this Agreement. The
Company will pay the Executive’s estate any of Executive’s accrued base salary and any earned, but
unpaid, Annual Bonus (at the time otherwise payable under this Agreement) through the date of
termination and reimbursement of expenses.



     (b) Disability. If, as a result of incapacity due to physical or mental illness or
injury, as reasonably determined by the Executive’s physician, the Executive is absent from the
Executive’s full-time duties hereunder for four (4) consecutive months, then thirty (30) days after
receiving written notice (which notice may occur before or after the end of such four (4) month
period, but which will not be effective earlier than the last day of such four (4) month period),
the Company may terminate the Executive’s employment hereunder; provided that the Executive is
unable to resume the Executive’s full-time duties at the conclusion of such notice period. The
Company will pay the Executive any of the Executive’s accrued base salary and any earned, but
unpaid, Annual Bonus (at the time otherwise payable under this Agreement) through the date of
termination and reimbursement of expenses.



     (c) Good Cause. The Company may terminate this Agreement ten (10) days after
delivery of written notice to the Executive for “good cause,” which is (i) the Executive’s willful,
material and irreparable breach of this Agreement; (ii) the Executive’s gross negligence in the
performance or intentional nonperformance (continuing for thirty (30) days after receipt of written
notice of need to cure) of any of the Executive’s material duties and responsibilities under this
Agreement; (iii) the Executive’s willful dishonesty, fraud or misconduct with respect to the
business or affairs of the Company which materially and adversely affects the operations or
reputation of the Company; or (iv) the Executive’s conviction of a felony crime which materially
and adversely affects the operations or reputation of the Company. Upon any termination for good
cause above, the Executive will receive no severance compensation other than base salary accrued
through the date of termination, a prorated share of the Annual Bonus related to the Financial
Milestones (but not the Business Milestones) earned to the date of termination (computed as
provided hereafter) and reimbursement of expenses.



     In computing the prorated share of the Annual Bonus related to the Financial Milestones, the
Company will prorate the relevant target(s) to the date of termination, apply the applicable
percentages (i.e., between 90% and 120% in Section 2(b)(i) above) to determine the Annual Bonus
rate and then prorate the Annual Bonus for the portion of the year that the Company employed the
Executive. As an example, assume the Financial Milestone is $15 million of net sales, the
Executive is terminated for good cause 3/4ths through the year and at that point, the Company had
achieved $10.125 million of net sales. The deemed Financial Milestone at the date of termination
would be $11.25 million of net sales (i.e., 3/4ths of $15 million). Since $10.125 million is 90%
of $11.25 million, the applicable percentage of base compensation payout is at an annualized 15%
rate, or 11.25% (3/4ths of 15%) at the date of termination. Accordingly, if the Executive’s base
compensation at the date of termination with good cause is $175,000, the prorated share of the
Annual Bonus related to the Financial Milestones payable is $19,687.50.



     (d) Without Good Cause. At any time, either the Executive or the Company may
terminate this Agreement and the Executive’s employment, effective thirty (30) days after written
notice is provided to the other. The Executive will receive from the Company any base salary
accrued through the date of termination and reimbursement of expenses if (i) the Company terminates
the Executive’s employment without good cause during any Term (including upon a Change of Control),
(ii) the Executive voluntarily terminates employment with the Company as a result of the Company’s
imposition of material and adverse changes, without the Executive’s consent, in the Executive’s
principal duties (including upon a Change of Control), (iii) the Executive voluntarily terminates
employment (including upon a Change of Control) after the Company
moves its principal executive offices more than 50 miles from its current location without the
Executive’s consent, (iv) the Executive voluntarily terminates employment with the Company
(including upon a Change of Control) as a result of the Company’s reduction of the Executive’s base
salary without the Executive’s consent by more than the weighted average percentage reduction made
contemporaneously by the Company of the base salaries all other executive officers, (v) the Company
terminates the Executive’s employment without good cause (aa) upon expiration of this Agreement at
the end of the Term without renewal (including upon a Change of Control) or (bb) at any time
thereafter (including upon a Change of



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Control) if the Executive continues employment with the
Company without an employment agreement or (vi) the Executive voluntarily terminates employment
with the Company upon expiration of this Agreement at the end of the Term without renewal, or at
any time thereafter (including upon a Change of Control), unless the Company offers a replacement
employment agreement to the Executive on terms substantially similar to those of this Agreement.
In addition, in any of these circumstances, and conditioned on the Executive’s continuing
compliance with the other provisions of this Agreement, including Section 4 above, the Company
shall (aa) pay the Executive, as severance pay, an aggregate amount equal to 100% of Executive’s
base salary in effect at the time of termination and (bb) pay the Executive a prorated share of the
Annual Bonus earned to the date of termination, assuming 100% of target achievement of both the
Financial and Business Milestones (computed as provided hereafter). The severance payments will be
subject to customary tax withholdings and will be payable in equal monthly installments on the
first day of each month over the first twelve months after the date of termination; provided,
however, if the Executive secures full-time employment, payment of any remaining severance pay will
discontinue.



     In computing the prorated share of the Annual Bonus related to the Financial Milestones, the
Company will apply 100% in Section 2(b)(i) above to determine the Annual Bonus rate and then
prorate the Annual Bonus for the portion of the year that the Company employed the Executive. As
an example, assume the Financial Milestone is $15 million of net sales, the Business Milestone is
restructuring of employee benefits, the Executive is terminated without good cause 3/4ths through
the year and at that point, the Company had achieved $10.125 million of net sales but had not yet
accomplished its employee benefits restructuring. Nevertheless, the Executive earns a prorated
Bonus based on deemed achievement of both the Financial and Business Milestones. At the 100% Bonus
level for the full year, the Executive would receive 50% of base compensation. Therefore, for a
termination without cause 3/4ths into the year, the Executive will receive 37.5% of base
compensation.


6. Return of Company Property. All records, designs, tradenames and trademarks, service
names and service marks, patents, business plans, financial statements, manuals, memoranda,
customer and other lists and other property delivered to or compiled by the Executive by or on
behalf of the Company, or its representatives, vendors or customers which pertain to the business
of the Company are and will remain the property of the Company, and be subject at all times to its
discretion and control. Likewise, all correspondence, reports, records, charts, advertising and
marketing materials and other similar data pertaining to the business, activities or future plans
of the Company which is collected by or in the possession of the Executive shall be delivered
promptly to the Company without request by it upon termination of the Executive’s employment.



7. Inventions. The Executive will disclose promptly to the Company any and all significant
conceptions and ideas for inventions, improvements and valuable discoveries, whether patentable or
not, which are conceived or made by the Executive, solely or jointly with another, during the
period of employment, and which are directly related to the business or activities of the Company
and which the Executive conceives as a result of the Executive’s employment by the Company. The
Executive hereby assigns and agrees to assign all of the Executive’s interests therein to the
Company or its nominee. Whenever requested to do so by the Company, the Executive will execute any
and all applications, assignments or other instruments that the Company shall deem necessary to
apply for and obtain letters patent of the United States or any foreign country or to otherwise
protect the Company’s interest therein. Nothing in this Agreement shall apply to an invention for
which no equipment, supplies, facility or trade secret information of the Company was used and
which was developed entirely on the Executive’s own time and (i) which does not relate (a) directly
to the business of the Company or (b) to the Company’s actual or demonstrably anticipated research
or development or (ii) which does not result from any work performed by the Executive for the
Company.



8. Trade Secrets. The Executive will not, other than as required by court order, during or
after employment with the Company, disclose the confidential terms of the Company’s relationships
or agreements with its significant vendors or customers or any other significant and material trade
secret of the Company to any person, firm, partnership, corporation or business for any reason or
purpose whatsoever.



9. Complete Agreement. This Agreement supersedes any other agreements or understandings,
written or oral, between the Company and the Executive, and the Executive has no oral
representations, understandings or agreements with the Company or any of its officers, directors,
employees or representatives covering the same subject matter as this
Agreement. This document is the final, complete and exclusive statement and expression of the
agreement between the Company and the Executive and of all the terms of this Agreement, and it
cannot be varied, contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. This document may not be later modified except by a written instrument signed
by a duly authorized officer of the Company and the Executive, and no term of this Agreement may be
waived except by a written instrument signed by the party waiving the benefit of such term.




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10. Notice. Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:




	 	 	 
	To the Company:

	 	Uroplasty, Inc.
	 

	 	2718 Summer Street N.E.
	 

	 	Minneapolis, Minnesota 55413
	 

	 	Attention: Sam B. Humphries, President and Chief Executive Officer
	 
	 	 
	To the Executive:

	 	Mahedi A. Jiwani
	 

	 	5809 Fairfax Avenue South
	 

	 	Edina, Minnesota 55424





Notice is given and effective three (3) days after the deposit in the U.S. mail of a writing
addressed as above and sent first class mail, certified, return receipt requested, or when actually
received. Either party may change the address for notice by notifying the other party of such
change in accordance with this Section 10.



11. Arbitration. Except as to matters of injunctive or equitable relief (over which the
parties agree that the federal and state courts located in Minneapolis, Minnesota will have
exclusive jurisdiction and are deemed to be of proper venue and convenience to the parties), any
unresolved dispute or controversy arising under or in connection with this Agreement will be
settled exclusively by arbitration, conducted before a panel of three (3) arbitrators in
Minneapolis, Minnesota, in accordance with the rules of the American Arbitration Association then
in effect. The arbitrators will not have the authority to add to, detract from or modify any
provision hereof nor to award punitive damages to any injured party. A decision by a majority of
the arbitration panel will be final and binding. Judgment may be entered on the arbitrators’ award
in any court having jurisdiction. The direct expense of any arbitration proceedings, including,
but not limited to, the administrative fees and the arbitrators’ fees and expenses, will be borne
by the Company.



12.
Binding Effect; Governing Law. This Agreement will inure to the benefit of
the successors or assigns of the Company. The Company agrees that, as a condition of any merger of
the Company into or with, or the sale of all or substantially all of the Company’s assets to,
another person, firm or entity, it will require the successor expressly to assume the Company’s
obligations hereunder. This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota, exclusive of its conflicts of laws rules.




     IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures.



	 	 	 	 	 	 
	UROPLASTY, INC.	 	EXECUTIVE	
	 
	 	 	 	 	
	By
	 	 	 	 	
	 

	 	 
	 	 	
	 

	 	Sam B. Humphries, President and
	 	Mahedi A. Jiwani	
	 

	 	    Chief Executive Officer	 	 	







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