Exhibit 10.5
EMPLOYMENT AGREEMENT
This sets forth the
terms of the Employment Agreement made effective as of January 20,
2009 between ANGIODYNAMICS, INC., a
Delaware corporation with its principal office located at 603
Queensbury Avenue, Queensbury, New York 12804 (the
"Employer"), and EAMONN P. HOBBS, an individual currently
residing at 3 Heron Hollow Road, Queensbury, New York
12804("Employee").
W I T
N E S S E T H
IN CONSIDERATION of
the promises and mutual agreements and covenants contained herein,
and other good and valuable consideration, the parties agree as
follows:
a.
Term as Chief Executive Officer . Employer shall
employ Employee, and Employee shall serve, as Chief Executive
Officer and President for Employer until such time as a new Chief
Executive Officer and President begins employment with
Employer.
b.
Term as Vice Chair . At the time that a new Chief
Executive Officer and President begins employment with Employer,
Employer shall employ Employee, and Employee shall serve, as Vice
Chair of Employer until the earlier of: (i) October 20,
2009 (the date of Employer’s 2009 shareholders’
meeting) or (ii) the date that Employee accepts full-time
employment elsewhere, at which earlier time his employment will
terminate.
c.
Salary . Employer shall continue to pay Employee
the same annual base salary ("Base Salary"), which Employee was
receiving at the time of execution of this Agreement. Employee's
Base Salary is payable in accordance with Employer's regular
payroll practices for executive employees.
d.
Incentive Compensation . Except as otherwise set
forth in this section, Employee shall retain the same eligibility
for annual bonuses and other incentive compensation pursuant to the
Company’s then current plans and policies, including
performance based awards of stock or options, as he had at the time
of execution of this Agreement. Any such performance based award of
stock or options will be pro-rated through the earlier of: (i) May
31, 2009 or (ii) the date that Employee’s employment with
Employer terminates. Any such performance based award of stock or
options will have a three year vesting schedule (with 1/3 of such
award of stock or options vesting per year), and any such options
that become vested must be exercised within six months of the date
of the termination of Employee’s consulting agreement with
Employer dated as of the date of this Agreement (the
“Consulting Agreement”).
2. Duties During
Employment . While serving as Chief Executive
Officer and President, Employee’s duties shall be those
assigned by Employer’s Board of Directors, including, without
limitation, assisting in the transition to a new Chief Executive
Officer and President. While serving as Vice Chair,
Employee’s duties shall be only those assigned by
Employer’s Board of Directors. Employee will report to the
Chairman of the Board of Directors during the term of his
employment with Employer.
3.
Employer’s Policies . Employee shall abide by and
comply in all respects with all of the rules, regulations, policies
and procedures of Employer that may be in effect and amended from
time to time, including without limitation Employer’s human
resources, personnel and benefits policies and policies related to
trading in Employer stock. If Employee fails to comply
with any such policy, rule, regulation or procedure, Employer will
give Employee written notice of such failure. If
Employee fails to cure such failure within the fifteen (15) days of
such notice, such failure shall constitute “cause” as
defined in section 4, below.
4.
Termination . Employee's employment by Employer
shall be subject to termination as follows:
a.
Termination Upon Death . This Agreement shall
terminate upon Employee's death.
b.
Termination for Cause . Employer may terminate
Employee's employment immediately for "cause" by written notice to
Employee. For purposes of this Agreement, a termination
shall be for "cause" if the termination results from any of the
following events:
i. The
material breach of any provision of this Agreement, which breach
Employee shall have failed to cure within fifteen (15) days
following Employer’s written notice to Employee specifying
the nature of the breach;
ii. Any
misconduct by Employee, which is materially adverse to the
interests, monetary or otherwise, of Employer;
iii. Failure
to perform the duties assigned to Employee under or pursuant to
this Agreement, unless cured within fifteen (15) days following
Employer’s written notice to Employee;
iv. Failure
to cure within fifteen (15) days of receipt of written notice any
failure to comply with Employers’ written policies, rules,
regulations or procedures, including those related to ownership or
trading of Employer stock;
v. Conviction
of a crime involving any act of dishonesty, acts of moral
turpitude, or the commission of a felony; or
vi. Failure
to follow the written instructions of the Employer’s Chairman
of the Board, provided that the instructions do not require
Employee to engage in unlawful or unethical conduct.
vii. Failure
to comply with Section 9 of this Agreement.
Notwithstanding any
other term or provision of this Agreement to the contrary, if
Employee's employment is terminated for cause, Employee shall
forfeit all rights to payments and benefits otherwise provided
pursuant to this Agreement; provided, however, that Base Salary
shall be paid through the date of termination.
5. Fringe
Benefits .
a.
Benefit Plans . Employee shall be eligible to
participate in any employee pension benefit plans (as that term is
defined under Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended), Employer-paid group life
insurance plans, medical plans, dental plans, long-term disability
plans, business travel insurance programs and other fringe benefit
programs maintained by Employer for the benefit of (or which are
applicable to) its executive employees. Participation in
any of Employer's benefit plans and programs shall be based on, and
subject to satisfaction of, the eligibility requirements and other
conditions of such plans and programs.
b.
Expenses . During the term of employment, upon
submission to Employer of vouchers or other required documentation,
Employee shall be reimbursed for (or Employer shall pay directly)
Employee's travel and other expenses reasonably incurred and paid
by Employee in connection with Employee's duties hereunder pursuant
to the terms of Employer’s travel and expense policies.
c.
Other Benefits . During employment, Employee also
shall be entitled to the same customary benefits of employment that
he received from Employer at the time of execution of this
Agreement.
6. Signing
Incentive Payment .
a.
Options . Upon the full execution of this Agreement,
Employee shall be granted options to purchase 75,000 shares of
Employer stock, which will become exercisable on October 31,
2009 provided that Employee has executed and not revoked the
release described in Section 6(b), remain exercisable until January
31, 2010, be priced in accordance with Employer’s policies
and be subject to the terms of a separate grant agreement, which
shall provide for forfeiture of the options if Employee’s
employment or consulting agreement is terminated for cause.
b.
Release . Employee agrees to sign a release (in
the form attached as Exhibit A) of any potential claims against the
Employer that he may have at the time of execution of this
Agreement; such release will be revocable for seven days after it
is executed.
c.
Payment . Upon the end of the seven day
revocation period for the above-referenced release, Employee will
receive a “Signing Incentive Payment” of $400,000 from
Employer, which will be treated as wages and will be
subject to customary withholding and taxes.
7. Transition
Incentive Payment .
a. Subject
to Sections 7(b), 7(c) and 9 below, following Employee’s
termination of employment with Employer (which termination shall
occur no later than October 20, 2009), Employee will be entitled to
receive 8,000 restricted shares of Employer common stock (1/3 of
which will vest on each anniversary of the date of termination of
Employee’s employment) and the sum of (i) two (2) times
his then “current compensation” minus $400,000 and (ii)
if the date of Employee’s termination of employment is
earlier than October 20, 2009, unpaid Base Salary plus unpaid
incentive compensation, if any, that Employee would have actually
received from Employer through October 20, 2009, if his employment
had continued through that date. For purposes of this Agreement,
Employee’s “current compensation” will mean the
total of Employee’s then current salary, plus the average of
the last two annual cash bonuses Employee received.
b. Employee’s
right to receive the payments described in this Section 7
