Exhibit 10.1
I NDEMNIFICATION A GREEMENT
This I NDEMNIFICATION A GREEMENT (this “ Agreement ”) is made
this 4th day of August, 2006, between Diametrics Medical, Inc., a
Minnesota corporation (the “ Company ”), and
(the “Indemnitee”).
WHEREAS, it is essential to the
Company and its stockholders to attract and retain qualified and
capable directors, officers, employees, agents and
fiduciaries;
WHEREAS, the Bylaws of the Company
(the “Bylaws”) require the Company to indemnify and
advance expenses to its directors and officers to the extent not
prohibited by law and, subject to the approval of the Board of
Directors of the Company, allows the Company to indemnify employees
and agents; and
WHEREAS, in recognition of
Indemnitee’s need for protection against personal liability
and in order to induce Indemnitee to serve or continue to serve the
Company in an effective manner and to supplement or replace the
Company’s Directors’ and Officers’ liability
insurance coverage, if any, and in part to provide Indemnitee with
specific contractual assurance that the protection promised by the
Certificate of Incorporation will be available to Indemnitee, the
Company wishes to provide the Indemnitee with the benefits
contemplated by this Agreement.
NOW, THEREFORE, the parties hereto
hereby agree as follows:
1. Definitions . The
following terms, as used herein, shall have the following
respective meaning:
An “ Affiliate ”
of a specified Person is a Person who directly, or indirectly
through one or more intermediaries, controls or is controlled by,
or is under common control with, the Person specified.
The term “ Associate
” used to indicate a relationship with any Person shall
mean:
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(i)
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any corporation
or organization (other than the Company or a Subsidiary) of which
such Person is an officer or partner or is, directly or indirectly,
the Beneficial Owner of ten (10) percent or more of any class
of Equity Securities;
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(ii)
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any trust or
other estate in which such Person has a substantial beneficial
interest or as to which such Person serves as trustee or in a
similar fiduciary capacity (other than an Employee Plan
Trustee);
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(iii)
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any Relative of
such Person; or
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(iv)
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any officer or
director of any corporation controlling or controlled by such
Person.
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“ Beneficial Ownership
” shall be determined, and a Person shall be the
“Beneficial Owner” of all securities which such Person
is deemed to own beneficially, pursuant to Rule 13d-3 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as amended (or any successor rule or statutory provision),
or, if such Rule 13d-3 shall be rescinded and there shall be no
successor rule or statutory provision thereto, pursuant to such
Rule 13d-3 as in effect on the date hereof; provided ,
however , that a Person shall, in any event, also be deemed
to be the Beneficial Owner of any Voting Shares:
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(i)
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of which such
Person or any of its Affiliates or Associates is, directly or
indirectly, the Beneficial Owner; or
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(ii)
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of which such
Person or any of its Affiliates or Associates has: (A) the
right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise; or
(B) sole or shared voting or investment power with respect
thereto pursuant to any agreement, arrangement, understanding,
relationship or otherwise (but shall not be deemed to be the
Beneficial Owner of any Voting Shares solely by reason of a
revocable proxy granted for a particular meeting of stockholders,
pursuant to a public solicitation of proxies for such meeting, with
respect to shares of which neither such Person nor any such
Affiliate or Associate is otherwise deemed the Beneficial Owner);
or
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(iii)
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of which any
other Person is, directly or indirectly, the Beneficial Owner if
such first mentioned Person or any of its Affiliates or Associates
acts with such other Person as a partnership, syndicate or other
group pursuant to any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or disposing of any
shares of capital stock of the Company; and provided further,
however, that: (A) no director or officer of the Company, nor
any Associate or Affiliate of any such director or officer, shall,
solely by reason of any or all of such directors and officers
acting in their capacities as such, be deemed for any purposes
hereof, to be the Beneficial Owner of any Voting Shares of which
any other such director or officer (or any Associate or Affiliate
thereof) is the Beneficial Owner; and (B) no trustee of an
employee stock ownership or similar plan of the Company or any
Subsidiary (“Employee Plan Trustee”) or any Associate
or Affiliate of any such Trustee, shall, solely by reason of being
an Employee Plan Trustee or Associate or Affiliate of an Employee
Plan Trustee, be deemed for any purposes hereof to be the
Beneficial Owner of any Voting Shares held by or under any such
plan.
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A “ Change in Control
” shall be deemed to have occurred if:
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(i)
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any Person
(other than an Excepted Person) is or becomes, after the date of
this Agreement, the Beneficial Owner of 20% or more of the total
voting power of the Voting Shares;
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(ii)
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during any
period of two consecutive years (not including any period prior to
the execution of this Agreement), individuals who at the beginning
of such period constitute the Board of Directors of the Company and
any new director whose election or appointment by the Board of
Directors or nomination or recommendation for election by the
Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof;
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(iii)
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the
stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Shares of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into Voting Shares of the surviving entity) at least 80% of the
total voting power represented by the Voting Shares of the Company
or such surviving entity outstanding, or 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
substantially all of the Company’s assets; or
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(iv)
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a change in
control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14 (or a
response to any similar item on any similar schedule or form)
promulgated under the Securities Exchange Act of 1934, as amended,
as in effect on the date hereof, whether or not the Company is then
subject to such reporting requirement.
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“ Claim ” means
any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding brought by, against,
or in the right of the Company or otherwise, or any inquiry or
investigation that Indemnitee in good faith believes might lead to
the institution of any such action, suit, arbitration or
proceeding, whether civil, criminal, administrative, investigative
or other, or any appeal therefrom.
“ Corporation Law
” means the Minnesota Business Corporation Act, as amended,
or the corporate law of any other jurisdiction in which the Company
is reincorporated by merger or otherwise.
“ D&O Insurance
” means any valid directors’ and officers’
liability insurance policy maintained by the Company which covers
members of the Company’s board of directors and executive
officers of the Company, including Indemnitee, if any.
“ Determination ”
means a determination, and “ Determined ” means
a matter which has been determined based on the facts known at the
time, by:
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(i)
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a majority vote
of a quorum of disinterested directors; or
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(ii)
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if such a
quorum is not obtainable, or even if obtainable, if a quorum of
disinterested directors so directs, by Independent Counsel in a
written opinion; or
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(iii)
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in the event
there has been a Change of Control, by Independent Counsel (in a
written opinion) selected by Indemnitee as set forth in
Section 6.
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“ Equity Security
” shall have the meaning given to such term under Rule 3a11-1
of the General Rules and Regulations under the Securities Exchange
Act of 1934, as in effect on the date hereof.
“ Excepted Person
” is:
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(i)
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the Company or
any Subsidiary;
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(ii)
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any pension,
profit sharing, employee stock ownership or other employee benefit
plan of the Company or any Subsidiary or any trustee of or
fiduciary with respect to any such plan when acting in such
capacity; or
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(iii)
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any Person who
is as of the date hereof the Beneficial Owner of 20% or more of the
total voting power of the Voting Shares.
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“ Excluded Claim
” means any payment for Losses or Expenses to the extent that
any Claim:
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(i)
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is based upon
or attributable to Indemnitee gaining in fact any personal profit
or advantage to which Indemnitee is not entitled;
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(ii)
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is for an
accounting of profits in fact made from the purchase or sale by
Indemnitee of securities of the Company in violation of
Section 16 of the Securities Exchange Act of 1934, as amended,
or similar provisions of any state law;
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(iii)
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results from
Indemnitee’s willful or knowingly dishonest or fraudulent
misconduct;
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(iv)
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is one for
which the payment of which by the Company under this Agreement is
not permitted by applicable law; or
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(v)
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is one for
which payment has actually been made to or on behalf of Indemnitee
under any insurance policy or other indemnity provision, except
with respect to any excess beyond the amount paid under any
insurance policy or other indemnity provision.
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“ Expenses ”
means any and all reasonable expenses incurred by Indemnitee as a
result of a Claim or Claims made against Indemnitee for
Indemnifiable Events including, without limitation,
attorneys’ fees and all other costs, expenses and obligations
paid or incurred in connection with investigating, defending, being
a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in any Claim
relating to any Indemnifiable Event.
“ Fines ” means
any fine, penalty or, with respect to an employee benefit plan, any
excise tax or penalty assessed with respect thereto.
“ Indemnifiable Event
” means any event or occurrence, whether occurring prior to
or after the date of this Agreement, related to the fact that
Indemnitee is, was or agreed to serve as, a director, officer,
employee, trustee, agent or fiduciary of the Company, or is or was
serving (or had agreed to serve) at the request of the Company as a
director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan,
trust or other enterprise, or by reason of anything done or not
done by Indemnitee in any such capacity, including, but not limited
to, any breach of duty, neglect, error, misstatement, misleading
statement, omission, or other act done or wrongfully attempted by
Indemnitee, or any of the foregoing alleged by any
claimant.
“ Independent Counsel
” means a law firm, or a member of a law firm that is
experienced in matters of corporation law and neither presently is,
nor in the past five years has been, retained to represent:
(i) the Company or Indemnitee in any matter material to either
such party, or (ii) any other party to the Claim giving rise
to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement.
If a Change in Control has not occurred, Independent Counsel shall
be selected by the Board, with the approval of Indemnitee, which
approval will not be unreasonably withheld. If a Change in Control
has occurred (other than a Change in Control which has been
approved by a majority of the Company’s Board of Directors
who were directors immediately prior to such Change in Control, in
which case the sentence immediately preceding this sentence shall
apply), Independent Counsel shall be selected by Indemnitee, with
the approval of the Board, which approval may not be unreasonably
withheld.
“ Losses ” means
any amounts or sums which Indemnitee is legally obligated to pay as
a result of a Claim or Claims made against Indemnitee for
Indemnifiable Events including, without limitation, damages,
judgments and sums or amounts paid in settlement of a Claim or
Claims, and Fines.
“ Person ” means
any individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever
nature.
“ Relative ”
means a Person’s spouse, parents, children, siblings, mother-
and father-in-law, sons- and daughters-in-law, and brothers- and
sisters-in-law.
“ Subsidiary ”
means any corporation of which a majority of any class of Equity
Security is owned, directly or indirectly, by the
Company.
“ Voting Shares ”
means any issued and outstanding shares of capital stock of the
Company entitled to vote generally in the election of
directors.
2. Basic Indemnification
Agreement . The Company agrees that in the event Indemnitee is
or becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant
in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company will indemnify Indemnitee to the
fullest extent permitted by law, against any and all Losses and
Expenses (including all interest, assessments and other charges
paid or payable in connection with or in respect of such Losses and
Expenses) in respect of such Claim, whether or not such Claim
proceeds to judgment or is settled or otherwise is brought to a
final disposition, subject in each case, to the further provisions
of this Agreement. To the extent that a change in the Corporation
Law (whether by statute or judicial decision or reincorporation of
the Company in another jurisdiction whether by merger or otherwise)
permits greater indemnification by agreement than would be afforded
currently under the Bylaws and this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement
the greater benefits so afforded by such change.
3. Limitations on
Indemnification . Notwithstanding the provisions of
Section 2, Indemnitee shall not be indemnified and held
harmless from any Losses or Expenses:
(a) which have been Determined, as
provided herein, to constitute an Excluded Claim;
(b) to the extent Indemnitee is
otherwise indemnified by the Company and has actually received
payment pursuant to the Bylaws, D&O
