THIS AGREEMENT,
with an effective date of March 30, 2009, is by and between
Cardiac Science Corporation (the “Company”) and John R.
Hinson (“Hinson”). Hinson has voluntarily resigned from
his position as President and Chief Executive Officer of the
Company. This resignation shall be effective March 30,
2009.
The Parties
desire to enter into this consulting agreement to ensure continuity
during the transition to a new CEO and to retain access to
Hinson’s skills and relationships resulting from his ten
years of unique experience with the Company.
Commencing
March 31, 2009 and continuing through March 30, 2010 (the
“Consultancy Period”), the Company agrees to retain
Hinson as a consultant.
During the
Consultancy Period, Hinson agrees to assist the Company’s new
President and Chief Executive Officer in transitioning to his new
role and to perform such other duties as are assigned to him from
time to time by the Chairman of the Board of Directors or his
designee (the “Services”). Without either requiring
such activities to be performed, or limiting the scope of any
potential activities that may be assigned by the Chairman or his
designee, the Services may include the following:
|
|
a.
|
|
maintaining relationships with
important customers and key partners;
|
|
|
|
|
|
|
|
b.
|
|
transferring industry-related board
memberships;
|
|
|
|
|
|
|
|
c.
|
|
supporting the company with respect
to employee matters;
|
|
|
|
|
|
|
|
d.
|
|
providing industry and competitive
perspective;
|
|
|
|
|
|
|
|
e.
|
|
participating in business
development activities;
|
|
|
|
|
|
|
|
f.
|
|
performing strategic planning and
analysis; and
|
|
|
|
|
|
|
|
g.
|
|
offering background and historical
context for various issues.
|
2.
NONCOMPETITION CONSIDERATION, CONSULTING FEES AND
BENEFITS
In
consideration for the promises in Section 6 below, the Company
shall pay Hinson an initial lump sum payment of $10,000, plus a set
of twelve payments totaling $180,000 to be paid in 12 equal monthly
payments of $15,000 (collectively, this $190,000 shall be referred
to herein as the “Noncompetition Consideration”). In
consideration for the Services, the Company shall pay Hinson $250
for each hour of the Services (the “Hourly Fee”). All
payments made under this Agreement
1
will be subject
to applicable taxes and withholdings. No later than the 25th of
each month, Hinson will provide the Company with a statement of
time and a description of activity for all services performed over
the previous 30 days. The Company will pay the initial lump
sum component of the Noncompetition Consideration on or before
May 31, 2009. The Company will pay the monthly component of
the Noncompetition Consideration and the Hourly Fee on the last day
of each month.
The Company
will pay Hinson all accrued and unused vacation pay on or before
April 15, 2009. Hinson will not accrue vacation pay during the
Consultancy Period and except as otherwise provided herein and
except as otherwise provided under any applicable Cardiac Science
Employee Stock Option Plan, during the Consultancy Period, Hinson
will not be eligible for any other compensation or
employment-related benefits. Notwithstanding any provision of a
plan or policy to the contrary, Hinson hereby waives any and all
rights to such other compensation and employment-related
benefits.
The Company
shall reimburse Hinson for his reasonable expenses incurred in
performing services rendered at the direction of the Company. In
addition, during the term of this agreement, Hinson will be
permitted to continue to use his Company-owned computer and
Blackberry device, with related expenses to be paid by the Company,
to assist with fulfilling his obligations under this agreement.
Hinson will provide the Company with receipts or other
documentation for all expenses submitted for reimbursement. Payment
by Company shall be due within 15 days of receipt of each
invoice. Without limitation on the foregoing, any reimbursement
payment made under this Section 3 shall be made in accordance
with applicable Company policies and procedures for such
reimbursements and within 30 days after the month during which
the expense was incurred.
This Agreement
will become effective on March 31, 2009 and will continue
until March 30, 2010, provided, however, that the Company may
terminate the Agreement prior to March 30, 2010 upon 20 days
written notice if, at any time, (a)(i) Hinson willfully and
materially fails to provide, within a reasonable time frame,
services requested by the Chairman of the Board of Directors or his
designee or (ii) Hinson materially violates Section 6 of
this Agreement or his Quinton Instrument Company Non-Disclosure
Agreement; and (b) Hinson does not cure any such failure or
violation within 20 days of receipt of such written notice.
Any such early termination, if not subsequently cured as provided
herein, shall be deemed effective upon Hinson’s receipt of
such written notice of termination. Hinson’s obligations
under Section 6 of this Agreement shall continue through March
30, 2010 notwithstanding any early termination of this
Agreement.
2
5.
OUTSTANDING EQUITY AWARDS
5.1 Restricted
Stock Units
Hinson and the
Company are parties to a certain restricted stock unit agreement
dated March 7, 2008, under which 22,500 unvested restricted
stock units are scheduled to vest in three equal parts of 7,500
units each on March 7, 2010, March 7, 2011 and
March 7, 2012. In consideration for the promises herein by
Hinson, the Company agrees to accelerate the vesting date of such
22,500 restricted stock units to March 30, 2009.
Any non-vested
stock options will be cancelled on March 30, 2009. Any vested
unexercised stock options will be cancelled as of 5:00 PM Pacific
Time on June 30, 2009.
6.
EXCLUSIVITY AND NON-COMPETITION
6.1
Non-Competition and Non-Solicitation
During the
Consultancy Period, Hinson shall not, directly or indirectly, and
whether or not for compensation, either on his own behalf or as an
employee, officer, agent, consultant, director, owner, partner,
joint venturer, shareholder, investor, or in any other capacity
(except when acting for the benefit of the Company pursuant to this
Agreement), knowingly:
(a) accept
or solicit investment capital, directly or indirectly, from any
individual or entity, or from an officer, partner, or principal of
any entity, from w
|