Exhibit 10.1
EMPLOYMENT AGREEMENT
This Agreement, made and entered
into effective the 4 th day of October, 2006, by and
between Kevin R. Davidson, an individual residing at 16771 Ironwood
Circle, Lakeville, MN 55044, (“Employee”), and BioDrain
Medical Incorporated, 699 Minnetonka Highlands Lane, Orono, MN
55356-9728, a Minnesota corporation
(“Company”).
WITNESSETH:
WHEREAS,
the Company desires to employ the
Employee to render services for the Company as its President &
Chief Executive Officer (CEO) on the terms and conditions
hereinafter set forth, and the Employee desires to be employed by
the Company on such terms and conditions;
NOW,
THEREFORE, in
consideration of the premises and of the mutual covenants and
agreements contained herein, the parties hereby agree as
follows:
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1.
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Employment.
The Company agrees to employ the
Employee for a period of four (4) years from the date of this
Agreement unless Employee violates the terms set forth in Paragraph
7: Termination for Cause or the Employee voluntarily resigns. The
term is automatically renewable annually except by action of the
Board of Directors.
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2.
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Duties.
The Employee will hold the title of
President and CEO and shall report to the Board of Directors of the
Company. The general scope of the Employee’s duties shall
include:
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a.
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Exhibit A.
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The Employee’s duties may
be modified from time to time by mutual agreement between the
Employee and the Board of Directors as they deem to be in the best
interest of the Company, provided that the Employee’s duties
shall be commensurate with those of a senior executive of the
Company.
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3.
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Extent of Services.
The Employee shall devote his full
attention, energy and skills to the business of the Company and use
his best efforts to fully and competently perform the duties of his
office; with the exception of the time period from the date of this
Agreement to December 31, 2006, during which time the Employee has
prior part-time engagement responsibilities. The Employee has
assured the Company that such prior responsibilities will not
interfere with performance of his obligations to the
Company.
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4.
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Compensation.
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a.
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Base Salary.
$150,000 per year. Initial payment
will be monthly and will be according to the Company’s salary
schedule, which will begin as funds become available, but not later
than when cumulative new funding has reached a minimum of $250,000.
With the exceptions noted below, annual reviews will determine
future salary and bonus amounts, as a part of Company compensation
procedures. The following exceptions are
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Upon reaching total new funding
of $1,000,000, annual salary shall increase to $170,000 beginning
with the next full month.
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Upon reaching a cumulative total
of $5,000,000 in net sales, annual salary shall increase to
$200,000 per year beginning with the next full month.
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b.
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Bonus. The Employee will be eligible for participation
in the Company’s bonus plan when completed and approved by
the Board of Directors and the Compensation Committee. The
following bonus schedule is in force:
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Initial grant of 50,000 shares of
BioDrain common stock upon signing the Agreement. Such stock will
include an anti-dilution protection amounting to 3.81% (percent) of
the Company’s outstanding fully diluted common stock
up to the completion of the first $1,000,000 in new funding raised.
This would mean that, at $1.00 per share for 1,000,000 new shares
of common stock, an additional 45,536 shares of common stock would
be issued to Employee.
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Additional 50,000 shares of
BioDrain common stock upon reaching the first $200,000 of new
funding. (170,000 New)
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Additional 50,000 shares of
BioDrain common stock upon reaching an additional $500,000 of new
funding, or a total of $700,000 of new funding.
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$25,000 in cash or BioDrain
common stock having an equal market value upon reaching an
additional $300,000 in new funding, or a total of $1,000,000 of new
funding.
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Total potential shares as a
result of these milestones would equal 220,536 shares, assuming the
final milestone was taken in shares, not cash.
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c.
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Executive
Compensation. The
Employee will be eligible for executive compensation such as stock,
stock options, deferred compensation, life insurance, etc., as
approved by the Board of Directors and the Compensation Committee
when such executive compensation plan is completed.
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5.
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Additional
Benefits.
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a.
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Automobile.
The Company shall reimburse the
Employee for deductible automobile mileage or auto allowance
according to its Expense Reporting Procedures.
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b.
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Business Expense.
The Company will reimburse the
Employee for all reasonable, deductible and substantiated business
expenses per its Expense Reporting Procedures. This includes, but
is not limited to such expenses as telephone, cell phone, home
office, business meetings, etc.
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c.
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Benefits.
The Employee will be eligible for
the Company’s benefits package and executive benefits listed
in Paragraph 4.c. which will be implemented as funds become
available and upon development and approval by the Compensation
Committee.
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d.
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Vacation.
The Employee will receive a minimum
of three weeks’ vacation per year or as per the executive
vacation plan when written, whichever is greater.
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e.
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Education.
The Company will support the
Employee in his pursuit of continuing education provided sufficient
cash flows support tuition reimbursement and he meets the
conditions and terms of the tuition reimbursement guidelines as
outlined in the Employee Manual when written.
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6.
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Board of Directors
Membership. The Employee,
as of the date of the Agreement,
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