Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS AGREEMENT is made effective as
of September 20, 2006 between Diametrics Medical, Inc. (the
“ Company ”) and Darrell Dubroc (“
Executive ”).
In consideration of the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment . The
Company shall employ Executive, and Executive hereby accepts
employment with the Company, upon the terms and conditions set
forth in this Agreement, for the period beginning on
September 20, 2006 (the “ Commencement Date
”) and ending as provided in Section 4 hereof (the
“ Employment Period ”).
2. Position and Duties
.
(a) During the Employment Period,
Executive shall serve as President and Chief Operating Officer
of the Company. During the Employment Period, Executive shall
render such administrative, operational and other executive and
managerial services to the Company and its affiliates (the “
Company Group ”) as are consistent with
Executive’s position and the by-laws of the Company and as
the Chief Executive Officer of the Company (the “ CEO
”) may from time to time reasonably direct. Executive
shall also serve for no additional compensation or remuneration as
an officer or director of the Company or such subsidiaries of the
Company as may from time to time be designated by the
Board.
(b) During the Employment Period,
Executive shall report to the CEO and shall devote his best efforts
and his full business time and attention (except for permitted
vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the
Company. Executive shall perform his duties, responsibilities
and functions to the Company hereunder to the best of his abilities
in a diligent, trustworthy, professional and efficient manner and
shall comply with the Company’s policies and procedures in
all material respects. In performing his duties and exercising
his authority under this Agreement, Executive shall support and
implement the business, operational and strategic plans approved
from time to time by the CEO and shall support and cooperate with
the Company’s efforts to operate in conformity with the
business and strategic plans approved by the CEO. During the
Employment Period, Executive shall not serve as an officer or
director of, or otherwise perform services for compensation for,
any other entity without the prior written consent of the CEO which
shall not be unreasonably withheld. Executive may serve as an
officer or director of or otherwise participate in purely
educational, welfare, social, religious and civic organizations so
long as such activities do not interfere with Executive’s
regular performance of duties and responsibilities hereunder in any
material respect. Nothing contained herein shall preclude
Executive from (i) engaging in charitable and community
activities, (ii) participating in industry and trade
organization activities, and (iii) managing his and his
family’s personal investments and affairs; provided ,
that Executive shall not have any ownership interest (of record or
beneficial) in any firm, corporation, partnership, proprietorship
or other business that competes directly with the Company’s
business except for (x) an investment of not more than 1.0% of
the outstanding securities of a company traded on a public
securities exchange or (y) investments made through public
mutual funds.
3. Compensation and Benefits .
(a) The Company shall pay Executive
an annual salary (the “ Base Salary ”) at the
rate of $250,000 in regular installments in accordance with the
Company’s ordinary payroll practices (in effect from time to
time), but in any event no less frequently than monthly. Beginning
with the 2008 calendar year, and each year thereafter during the
Employment Period, the Compensation Committee of the Board of
Directors of the Company (the “ Board ”) shall
review Executive’s Base Salary and make a determination as to
whether an increase in the Base Salary is warranted.
(b) Bonuses and Incentive
Compensation .
(i) Annual Bonus . For
each fiscal year ending during the Employment Period, Executive
will be eligible to earn an annual bonus based on achievement of
performance criteria established by the Board of Directors of the
Company (the “ Board ”) as soon as
administratively practicable following the beginning of each such
fiscal year (the “ Annual Bonus ”). The
Company shall pay the Annual Bonus for each fiscal year in a single
cash lump sum after the end of the Company’s fiscal year in
accordance with procedures established by the Board, but in no
event later than two and a half months following the end of such
fiscal year. To be eligible for an Annual Bonus pursuant to this
Section 3(b), Executive must be an employee on the last day of
the relevant fiscal year. For the fiscal year ending
December 31, 2006, the Annual Bonus amount shall take into
account Executive’s service to the Company’s
subsidiary, Vanguard Synfuels, L.L.C. for the portion of calendar
year 2006 prior to the date hereof.
(ii) Performance Incentive
Bonus . The Company shall pay to Executive the amounts set
for on Exhibit A (the “ Performance Bonuses
”) upon achievement of the related performance criteria set
forth on Exhibit A , as determined by the Board. In
addition, the Company shall pay to Executive a Performance Bonus if
the Board duly resolves to abandon the achievement of the related
performance criteria.
(iii) Business Development
Incentive Compensation . Promptly after the date hereof, the
Company will engage a third party compensation consultant to design
a program to reward Executive with additional compensation that may
be paid in the form of cash or equity securities for the
development of new Company biodiesel plants, including the
biodiesel plant in XXXXX (the “ XXXXX Project
”). Executive will have the opportunity to discuss any
proposed program with such consultant to the extent he reasonably
desires. Executive will have the opportunity to earn bonuses based
on the development of the XXXXX Project and such other plants as
are developed by Executive according to the parameters set forth in
such program.
(c) Expenses . During the
Employment Period, the Company shall reimburse Executive for all
reasonable business expenses incurred by him in the course of
performing his duties and responsibilities under this Agreement in
accordance with the Company’s policies in effect from time to
time with respect to travel, entertainment and other business
expenses for senior executives.
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(d) Other Benefits .
Executive shall also be entitled to the following benefits during
the Employment Period, unless otherwise modified by the
Board:
(i) participation in the
Company’s retirement plans, health and welfare plans,
disability insurance plans and other benefit plans of the Company
as in effect from time to time, under the terms of such plans and
to the same extent and under the same conditions such participation
and coverages are provided generally to other senior executives of
the Company;
(ii) coverage for services rendered
to the Company, its subsidiaries and affiliates while Executive is
a director or officer of the Company, or of any of its subsidiaries
or affiliates, under director and officer liability insurance
policy(ies) maintained by the Company from time to time;
and
(iii) four weeks of vacation per
year.
4. Termination . The
Employment Period shall end on the third anniversary of the
Commencement Date; provided , however , that the
Employment Period shall be automatically renewed for successive
one-year terms thereafter on the same terms and conditions set
forth herein unless either party provides the other party with
notice that it has elected not to renew the Employment Period at
least 90 days prior to the end of the initial Employment Period or
any subsequent extension thereof. Notwithstanding the
foregoing, (i) the Employment Period shall terminate
immediately upon Executive’s resignation (with or without
Good Reason, as defined herein), death or Disability (as defined
herein) and (ii) the Employment Period may be terminated by
the Company at any time prior to such date for Cause (as defined
herein) or without Cause. Except as otherwise provided herein,
any termination of the Employment Period by the Company shall be
effective as specified in a written notice from the Company to
Executive, but in no event more than 90 days from the date of
such notice. The termination of the Employment Period shall
not affect the respective rights and obligations of the parties
which, pursuant to the terms of this Agreement, apply following the
date of Executive’s termination of employment with the
Company.
5. Severance .
(a) Termination Without Cause or
for Good Reason . In the event of Executive’s
termination of employment with the Company (i) by the Company
without Cause (as defined herein) or (ii) by Executive for
Good Reason (as defined herein), subject to execution and
non-revocation of a Release substantially in the form attached as
Exhibit B , Executive shall be entitled to the benefits
set forth below in this Section 5(a).
(i) The Company shall pay Executive
an amount equal to (x) one times Executive’s Annual
Bonus for the year prior to termination of employment plus
(y) the greater of (1) two times Executive’s Base
Salary or (2) Executive’s base salary for the remaining
term of this Agreement if longer than two years. The severance
amount described in the previous sentence shall be paid within
fourteen days of the date of termination (the “ Bonus
Payment Date ”); provided , however , that,
in the event that Executive is considered a “Specified
Employee” as defined in proposed or final Treasury
Regulations promulgated under Section 409A (“ Section
409A ”) of the Internal Revenue Code of 1986, as amended
(the “ Code ”),
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and payments under this
Section 5(a) are considered “deferred
compensation” under Section 409A, the Bonus Payment Date
shall be delayed to the date that is six months and one day after
the date of termination, and shall be paid along with interest at a
floating rate equal to LIBOR from the date such payments were
otherwise due to the date of payment.
(ii) The Company shall pay Executive
any unpaid Performances Bonuses if the Company achieves the related
performance criteria within one year of the date of termination of
Executive.
(iii) The Company shall pay
Executive the amounts described in Section 5(e) within 30
days of the date of termination.
(iv) Executive shall be entitled to
benefits mandated under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“ COBRA
”), under Section 4980B of the Code, or any replacement
or successor provision of United States tax law, with the premium
paid at the Company’s expense until the first to occur of
(A) eighteen months from the date of termination or
(B) such date that Executive becomes covered by successor
group health coverage.
(b) Termination for Cause,
Non-Renewal or Voluntary Resignation . In the event that
Executive’s employment with the Company is terminated
(i) by the Board for Cause, (ii) by reason of the Company
or Executive electing to not renew the Employment Period as
specified in Section 4, or (iii) by Executive’s
resignation from the Company for any reason other than Good Reason
or Disability (as defined herein), subject to applicable law, the
Company agrees to pay Executive the amounts described in
Section 5(e) within 30 days of the date of termination.
For purposes of this Agreement, Executive’s voluntary
resignation or retirement shall be considered Executive’s
resignation from the Company without Good Reason.
(c) Death . In the event
Executive’s employment with the Company is terminated as a
result of Executive’s death, the Company agrees to the
following:
(i) The Company shall pay to
Executive’s estate an amount equal to Executive’s Base
Salary plus Executive’s Executive’s Annual Bonus for
the year prior to termination of employment. The severance amount
described in the previous sentence shall be paid within fourteen
days of Executive’s death.
(ii) The Company shall pay to
Executive’s estate any unpaid Performances Bonuses if the
Company achieves the related performance criteria within one year
of the date of Executive’s death.
(ii) The Company shall pay to
Executive’s estate the amounts described in
Section 5(e) within 30 days of the date of
termination.
(d) Disability . In the
event that Executive’s employment with the Company is
terminated as a result of Executive’s Disability, the Company
agrees to pay Executive the amounts described in
Section 5(e) within 30 days of the date of
termination.
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(e) Payments Upon Termination of
Employment . In the case of any termination of
Executive’s employment with the Company, Executive or his
estate or legal representative shall be entitled to receive, to the
extent permitted by applicable law, from the Company
(i) Executive’s Base Salary through the date of
termination to the extent not previously paid, (ii) to the
extent not previously paid, the amount of any bonus, incentive
compensation, and other compensation earned or accrued by Executive
as of the date of termination under any compensation and benefit
plans, programs or arrangements maintained in force by the Company
for any fiscal year of the Company ended prior to the date of
termination that is then unpaid, (iii) any vacation pay,
expense reimbursements and other cash entitlements accrued by
Executive, in accordance with Company policy for senior executives,
as of the date of termination to the extent not previously paid,
(iv) any equity awards outstanding under any Company long term
incentive plans or arrangements, in accordance with the terms of
the plans or arrangements under which such awards were created or
maintained, and (v) all benefits accrued by Executive under
all benefit plans and qualified and nonqualified retirement,
pension, 401(k) and similar plans and arrangements of the Company,
in such manner and at such times as are provided under the terms of
such plans and arrangements.
(f) Termination Without Cause,
Non-Renewal or for Good Reason Following a Change in Control
. In the event of Executive’s termination of employment
with the Company (i) by the Company without Cause,
(ii) as a result of the Company electing not to renew the
Employment Period as specified in Section 4, or (iii) by
Executive for Good Reason, in any case, during the period beginning
three months before and ending two years following a Change in
Control (as defined herein) of the Company, subject to
Executive’s execution and non-revocation of a Release
substantially in the form attached as Exhibit B ,
Executive shall be entitled to the benefits set forth below in this
Section 5(f).
(i) The Company shall pay Executive
the payments set forth in Section 5(a)(i) at the times set
forth therein.
(ii) The Company shall pay Executive
any unpaid Performances Bonuses if the Company achieves the related
performance criteria within one year of the date of termination of
Executive.
(iii) The Company shall pay
Executive the amounts described in Section 5(e).
(g) No Other Payments
. Except as provided in Sections 5(a), (b), (c), (d),
(e) and (f) above, all of Executive’s rights to
salary, bonuses, employee benefits and other compensation hereunder
which would have accrued or become payable after the termination or
expiration of the Employment Period shall cease upon such
termination or expiration, other than those expressly required
under applicable law (such as COBRA).
(h) No Mitigation, No Offset
. In the event of Executive’s termination of employment
for whatever reason, Executive shall be under no obligation to seek
other employment, and there shall be no offset against amounts due
him under this Agreement or otherwise on account of any
remuneration attributable to any subsequent employment or claims
asserted by the Company or any affiliate; provided , that
this provision shall not apply with respect to any amounts that
Executive owes to the Company or any member of the Company Group on
account of any loan, advance or other payment, in respect of any of
which Executive is obligated to make repayment to the Company or
any member of the Company Group.
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(i) Definitions . For
purposes of this Agreement, the following terms shall have the
following meanings:
(i) “ Cause ”
shall mean one or more of the following:
(A) the conviction of, or an
agreement to a plea of nolo contendere to, a crime involving moral
turpitude or any felony;
(B) Executive’s willful
refusal substantially to perform duties as reasonably directed by
the CEO under this or any other agreement;
(C) in carrying out his duties,
Executive engages in conduct that constitutes fraud, willful
neglect or willful misconduct which, in either case, would result
in demonstrable harm to the business, operations, prospects or
reputation of the Company;
(D) a material violation of the
requirements of the Sarbanes-Oxley Act of 2002 (“ SOX
”) or other federal or state securities law, rule or
regulation; or
(E) any other material breach of
this Agreement.
For purpose of this Agreement, the
Company is not entitled to assert that Executive’s
termination is for Cause unless the Company gives Executive written
notice describing the facts which are the basis for such
termination and such grounds for termination (if susceptible to
correction) are not corrected by Executive within 30 days of
Executive’s receipt of such notice to the reasonable, good
faith satisfaction of the Board.
(ii) “ Change in
Control ” shall mean the first to occur of any of the
following events:
(A) A transaction or series of
transactions (other than an offering of equity securities by the
Company) whereby any “person” or related
“group” of “persons” (as such terms are
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “ Exchange Act ”))
(other than the Company, any of its subsidiaries, an employee
benefit plan maintained by the Company or any of its subsidiaries
or a “person” that, prior to such transaction, directly
or indirectly controls, is controlled by, or is under common
control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of securities of the Company possessing more than 50%
of the total combined voting power of the Company’s
securities outstanding immediately after such acquisition;
or
(B) During any twelve-month period,
individuals who, at the beginning of such period, constitute the
Board together with any new director(s) (other than a director
designated by a person who shall have entered into an agreement
with the Company to effect a transaction described in
Section 5(i)(ii)(A) or Section 5(i)(ii)(C)) whose
election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least
a
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majority of the directors then still in office
who either were directors at the beginning of the twelve-month
period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority thereof;
or
(C) The consummation by the Company
(whether directly involving the Company or indirectly
invo
