Document:

exv10w1

 

Exhibit 10.1

NATIONAL ENERGY GROUP, INC.

Incentive Plan

Section 1. Establishment and Purpose

     1.1 Establishment of the Plan. National Energy Group, Inc. (the
“Company”) hereby establishes an incentive plan for its employees, as
described herein, which shall be known as the National Energy Group, Inc.
Incentive Plan” (the “Plan”). The effective date of the Plan is January 1,
2004.

     1.2 Purposes. The purposes of the Plan are to:

	 	a)	 	Promote the interests of National Energy Group, Inc.
	 
	 	b)	 	Enhance the Company’s ability to attract,
retain and motivate employees who can make a contribution
to the Company.

Section 2. Administration

     Administration. The Compensation Committee of the Company’s Board
of Directors (the “Committee”) shall be responsible for the
administration of the Plan. The Committee is authorized to interpret the
Plan, to prescribe, amend and rescind rules and regulations relating to
the Plan, subject to approval by the Board of Directors. The Committee
shall have responsibility for determinations of eligibility,
participation, Award opportunity, and earned Awards under the Plan. The
determinations of the Committee shall be conclusive and binding on all
Participants.

Section 3. Eligibility and Participation

     Eligibility. All employees of the Company (excluding the CEO) shall be
eligible for the Plan. Each employee employed by the Company on January 1
of a calendar year shall be eligible for a base incentive Award for that
year (each such employee, a “Participant”).

Section 4. Determination of Incentive Awards

     4.1 Award Pool. On or before June 1 of each year, the Committee shall
establish an Awards Pool based on NEG Operating LLC’s EBITDA from the
previous year calculated on the audited financial statements for that year.
One and one half percent (1.5%) of NEG Operating LLC’s EBITDA shall be
allocated to the Awards Pool if the net change in proved producing oil and
gas reserves of NEG Operating LLC for the year is at least equal to the
production of such reserves for the same year. These net reserves will be
calculated on an equivalent basis using 6MCF of gas per barrel as the
conversion factor. Any reserves sold during such year shall not be
considered in these replacement calculations.

 

 

     4.2 Maximum Awards Pool. The maximum amount allocated to the Awards
Pool shall be equal to 100% of the Participants’ actual salaries payable for
the year Awards are to be paid.

     4.3 Individual Awards. The Awards Pool shall consist of two segments,
of which 50% shall be designated for the officers (excluding the CEO) and
50% designated for the non-officers. 75% of each segment of the Awards Pool
will be the base incentive. The other 25% of each segment of the Awards
Pool will be distributed at the discretion of the CEO. The base incentive
will be disbursed to all Participants in each segment in an amount equal to
a pro rata share based on their current annual salaries. No Participant
shall have a vested interest in the Awards Pool or any portion thereof until
such time as determined by the Committee.

Section 5. Maximum Individual Awards and Excess Monies

     5.1 Maximum Individual Awards. There is no maximum dollar amount for
an Award payable to any individual Participant under the Plan.

     5.2 Excess Monies. In the event that the formula specified in
Subsection 4.1 generates an Awards Pool that would be larger than permitted
under Subsection 4.2, any excess amount above the maximum may be carried
over into the subsequent calendar year. Any such carryover amounts not
awarded by the Committee in the subsequent calendar year shall revert to the
Company.

Section 6. Form and Timing of Award Payment

     6.1 Form and Timing of Award Payment. Payment of individual awards
under the Plan shall be paid in cash or in such other form specified by the
Committee as of November 1 each year, commencing with November 1, 2004.

     6.2 Funding of Awards. The Company will fund the total amount of the
Awards Pool and invoice NEG Operating LLC (“LLC”) for any amounts in excess
of $300,000 per year. The amount invoiced to LLC under the Plan shall not
be subject to the 15% management fee.

Section 7. Termination of Employment

     7.1 Termination of Employment Due to Death, Disability, or Retirement.
In the event that a Participant ceases to be an employee of the Company due
to death, permanent and total disability, or retirement (as determined by
the Committee), the Committee shall determine, in its sole discretion, the
amount of an Award, if any, to be paid to the Participant or his Beneficiary
for the calendar year of the Participant’s termination. For purposes of
this plan a Participant’s Beneficiary shall be the beneficiary designated by
the Participant under the Company’s group life insurance plan. In the
absence of any such designation, a beneficiary will be designated by a
probate court of competent jurisdiction.

 

 

     7.2 Termination of Employment Due to the Other Causes. In the event
that an individual ceases to be an employee of the Company prior to the end
of a calendar year for any reason other than those contemplated in
Subsection 7.1 hereof, such employee shall not be deemed a Participant for
purposes of the Plan for such year and shall not be eligible for any
carryover amounts from a prior year.

Section 8. Withholding Taxes

     Withholding Taxes. The Company shall withhold applicable payroll and
income taxes from any payments made under this Plan as may be required by
law.

Section 9. Amendment, Modification, and Termination of the Plan

     Amendment, Modification, and Termination of the Plan. The Committee
may, at any time, in its sole discretion, modify or amend in whole or in
part, any or all provisions of the Plan, subject only to the approval of the
Company’s Board of Directors.exv10w19

 

Exhibit 10.19

MANUFACTURING AND DISTRIBUTION AGREEMENT

     THIS MANUFACTURING AND DISTRIBUTION AGREEMENT (the “Agreement”) is made
and entered into as of the 2nd day of September, 2004, by and between
Uroplasty, Inc., 2718 Summer Street N.E., Minneapolis, Minnesota 55413
(“Uroplasty”), and CL Medical SAS, 28, av Général de Gaulle 69110 Ste Foy Lès
Lyon, France (“CL”).

R E C I T A L S :

     WHEREAS, Uroplasty manufactures and currently markets outside of the
United States a family of injectable implant products used for soft-tissue
augmentation for specific indications in urology, urogynecology, colon and
rectal, otolaryngology and plastic surgery markets;

     WHEREAS, Uroplasty plans to make a Premarket Approval Submission to the
FDA for marketing of its Macroplastique® Implants within the United States for
treating female SUI;

     WHEREAS, CL has developed a tension-free vaginal tape for the treatment of
female SUI, currently being marketed in Europe under the brand name “I-Stop”
(the “CL Product”);

     WHEREAS, subject to FDA regulatory approvals, Uroplasty desires to market
the CL Product in the United States and purchase its requirements of the CL
Product from CL, and CL desires to manufacture the CL Product for Uroplasty and
make it the exclusive distributor of the CL Product in the United States;
THEREFORE, IT IS AGREED AS FOLLOWS:

1. Exclusive Distributorship and Manufacturing Arrangements. During the term
of this Agreement, CL appoints Uroplasty as CL’s exclusive distributor in the
United States of the CL Product. In return, Uroplasty agrees during the term
of this Agreement to purchase its entire requirements of CL Product components
from CL, as further detailed below.

     To the extent required, CL hereby grants Uroplasty an exclusive right and
license to make, use and sell the CL Product and to the use of the “I-Stop”
tradename and logo, in the United States, during the term of this Agreement.

2. CL’s Responsibilities. During the term of this Agreement, CL will:

     (a) Regulatory Assistance. Use its best efforts to assist Uroplasty in
obtaining and maintaining FDA 510(k) regulatory approval for the marketing of
the CL Product in the United States, including by sharing (without cost) all
technical files including but not limited to preclinical testing, design files,
clinical, manufacturing, marketing and other data in CL’s possession or
otherwise available to it relating to the CL Product and regulatory approvals,
and by providing (without cost) sample products for testing;

     (b) Regulatory Compliance. Supply Uroplasty with (i) worldwide regulatory
status changes relative to the CL Product market clearances, (ii) worldwide
clinical adverse event experience (including investigational notes) and (iii)
assistance as Uroplasty requests to investigate and resolve CL Product
complaints and/or clinical adverse events.

     (c) Component Supply. Supply Uroplasty in a timely manner with its entire
requirements, in bulk and not sterilized, the stainless steel needles with the
handles, the tape and packaging components that are used to assemble the CL
Product, as further detailed below (the “CL Product Components”), all as
manufactured in accordance with ISO 13485 standards and European Directives.

     (d) Marketing Assistance. Use its best efforts to assist Uroplasty in the
marketing of the CL Product by sharing (without cost) all of CL’s current and
future marketing materials, including product photographs and graphics, I-Stop
trademark logos and designs, brochures and website designs and information.

3. Uroplasty’s Responsibilities. During the term of this Agreement, Uroplasty
will:

     (a) Regulatory Compliance. Manage all U.S. regulatory affairs, including
by using its best efforts to obtain and maintain FDA 510(k) regulatory approval
for the marketing of the CL Product in the United States and for the use of
product brochures and instructions and by keeping CL apprised of all U.S.
clinical adverse events.

     (b) Product Assembly. Establish its own manufacturing facility for (or
outsource to a third party) the assembly of the final CL Product using the CL
Product Components and the sterilization, packaging and English labeling of

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the finished CL Product (including the translation of CL’s French language
materials into English), all in accordance with ISO 13485 standards and FDA
good manufacturing practices; and

     (c) Marketing. Use its best efforts to market and sell the CL Product in
the United States at such prices, and on such terms, as Uroplasty shall
determine in its sole discretion, and aid CL in obtaining a U.S. trademark for
the “I-Stop” product brand.

4. Product Delivery. As to CL Product Components for which Uroplasty places
its purchase order, CL shall deliver such CL Product Components (in accordance
with the specifications described on Exhibit A) to Uroplasty, at its offices in
Minneapolis Minnesota or at such other location, as Uroplasty shall specify,
not later than 60 days after the effective date of the related purchase order.

5. Product Pricing and Payment. Exhibit B is a schedule of CL’s pricing in
U.S. dollars to Uroplasty for CL Product Components. Uroplasty will pay 30% of
the purchase price for CL Product Components, in U.S. dollars, at the time
Uroplasty places its purchase order. As to products that Uroplasty does not
reject for defects, Uroplasty shall pay CL, in U.S. dollars, the remaining 70%
balance net 60 days after receipt.

6. Minimum Purchase Requirements. Despite the above provisions, Uroplasty
agrees during the term of this Agreement to purchase a minimum number of CL
Product Components as described on the attached Exhibit C.

7. Intellectual Property Matters. CL represents and warrants that the CL
Product Components, and Uroplasty’s assembly thereof and sale and marketing of
CL Products, do not and will not infringe the patent or other intellectual
property rights of any third party. CL will indemnify and hold Uroplasty and
its officers, directors, employees and agents harmless from any claim relating
thereto, including for all expenses and legal fees and costs.

8. CL Product Warranty. CL warrants that the CL Product Components will be
manufactured in accordance with ISO 13485 standards and the European Directive
and free of all defects. At Uroplasty’s option, CL will, at its sole cost and
expense, repair, replace or accept return for credit of any CL Product
Components that Uroplasty determines not to meet product specifications and
this warranty.

9. Non-competition by Uroplasty. In consideration of the exclusive
arrangements provided in this Agreement, Uroplasty agrees that, during the term
of this Agreement and, if this Agreement expires pursuant to the opening
paragraph of Section 11 upon the end of the initial or any successive term
hereof, for three years after such expiration, it will not manufacture its own,
or market any other party’s, tension-free vaginal tape product for the
treatment of female SUI.

10. New or Improved CL Products. As further consideration for this Agreement,
if CL develops any improvements or modifications to the CL Product or the CL
Product Components during the term hereof, CL will provide such improvements or
modifications to Uroplasty without additional charge for use under this
Agreement as Uroplasty so determines in its discretion, subject to FDA
regulatory approval. In addition, if CL develops any new medical devices or
procedures during the term hereof, it will offer Uroplasty the right of first
refusal for the exclusive manufacturing, assembly and/or distribution rights as
to such devices or procedures in the United States.

11. Term and Termination. The initial term of this Agreement runs through six
years from the date of this Agreement. Uroplasty may renew this Agreement for
successive five-year terms upon written notice to CL given not later than six
months prior to the end of the initial or any successive term.

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     Despite the foregoing, this Agreement may terminate early as follows:

     (a) by mutual written agreement of the parties;

     (b) by either party upon written notice to the other of a material breach
of this Agreement, but only if the other party does not cure the breach within
30 days after receipt of such written notice;

     (c) by either party upon written notice to the other if the other party
(i) files a bankruptcy or other similar petition relating to its debts (or has
an involuntary petition filed against it that is not dismissed within 30 days),
(ii) becomes insolvent or (iii) makes an assignment for the benefit of
creditors.

Upon any termination, Uroplasty may dispose of all CL Products and CL Product
Components in its remaining inventory in the normal course of business.

12. Confidentiality. Each party agrees to keep confidential all proprietary
and confidential information (written and oral) concerning the other’s
business, financial, operational and acquisition plans and projections. Each
agrees to use this information only to further this Agreement. Neither party
will disclose any of this information to any person, firm or entity, except on
a need-to-know basis to its respective employees, agents, attorneys and
advisors who agree to maintain the confidentiality of this information.

     A party is not responsible to keep confidential any information that (i)
is or becomes public other than as a result of acts by or through such party,
(ii) it can demonstrate is already known by such party at the time of the
other’s disclosure, (iii) it independently obtains from a third party having no
duty of confidentiality to the other, (iv) it independently develops without
using confidential information from the other or (v) it must disclose pursuant
to applicable laws or court order. CL acknowledges that Uroplasty will
disclose regulatory and other data of CL to the FDA in connection with the
510(k) application and that Uroplasty may file this Agreement with the U.S.
Securities and Exchange Commission as part of Uroplasty’s periodic filings.

13. Assignment. This Agreement is binding upon, and will inure to the benefit
of, the parties hereof and their respective permitted successors and assigns.
Uroplasty may assign this Agreement to any person, firm or entity that acquires
all or substantially all of Uroplasty’s assets or acquires Uroplasty by stock
acquisition or merger.

14. Dispute Resolution. All disputes arising out of or in connection with this
Agreement shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce. The arbitration shall be before three
arbitrators to be nominated by the International Chamber of Commerce. One
arbitrator shall be selected by each party and the third arbitrator (who shall
be the Chairperson) shall be selected by the first two arbitrators. The
arbitration shall be in English and held in Amsterdam, Netherlands (or in such
other place as the parties may agreed). This Agreement will be governed by the
laws of the Netherlands and specifically excludes the United States Convention
on Contracts of International Sales of Goods.

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

	 	 	 	 	 	 	 	 	 
	Uroplasty, Inc.	 	 	 	CL Medical SAS
	 
	 	 	 	 	 	 	 	 
	By

	 	 	 	 	 	By	 	 
	

	 	

	 	 	 	 	 	

	Its

	 	 	 	 	 	Its	 	 
	

	 	

	 	 	 	 	 	

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