THIS AGREEMENT is
made and entered into to be effective as of the 21st day of
September, 2005 by and among Valley Forge Scientific Corp.
, a Pennsylvania corporation (“VF”), and
Kurt W. Gampp,
Jr. (the “Employee”).
WHEREAS, the
Employee is a shareholder and director of Synergetics, Inc., a
Missouri corporation (“Synergetics”), and prior to the
consummation of the merger (the “Closing”) of
Synergetics with Synergetics Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of VF, pursuant to an
Agreement and Plan of Merger dated May 2, 2005, as amended
(the “Merger Agreement”), was the COO of
Synergetics.
WHEREAS, the term
“Company” shall mean VF following the Closing, and
“Board of Directors” shall mean the Board of Directors
of the Company.
WHEREAS, the
Merger Agreement provides that an express condition to Closing
under the Merger Agreement is that the Employee enter into this
Agreement with the Company.
NOW, THEREFORE, in
consideration of the premises hereof and of the mutual promises and
agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
1.
Employment and Term of Employment . The Company hereby
agrees to employ the Employee as Chief Operating Officer, and the
Employee hereby agrees to serve the Company as Chief Operating
Officer, on the terms and conditions set forth herein for the
period commencing on the date of the Closing (“Commencement
Date”) and expiring on the third anniversary of such date
(the “Expiration Date”), subject to the terms and
conditions hereinafter set forth.
2. Extent
of Duties . The Employee shall devote substantially all his
working time to the business and affairs of the Company, and shall
not engage in outside business activities that materially interfere
with the performance of his duties hereunder. Other than when
absent from work for pre-approved vacation, Company holidays or
sickness, the Employee will be available on Company premises as
needed to participate in activities of the Company and to
accomplish those tasks assigned to him to carry out his duties
hereunder. Notwithstanding the foregoing, nothing in this Agreement
shall restrict the Employee from: (i) managing his personal
investments, personal business affairs and other personal matters;
and (ii) serving on civic or charitable boards or committees,
if such civic or charitable activities do not materially interfere
with the performance of his duties hereunder or conflict with the
Company’s interests. Employee shall oversee the manufacturing
operations of the Company and perform such other duties as
determined by Gregg D. Scheller, Chief Executive Officer of the
Company (“CEO”). Employee will be provided with
reasonable office space and engineering, manufacturing and
administrative support in connection with his duties. Employee
shall assist the CEO in the transition of the manufacturing
operations in the Philadelphia area. Employee shall report on the
status of his activities to and as required by the CEO and shall
use his best efforts in the performance of his duties
hereunder.
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a.
Base Salary . Subject to the terms and conditions of this
Agreement, the Company shall pay to the Employee a base salary at
the rate of $346,000.00 per annum for the first twelve
(12) months after the Commencement Date, and at all times
thereafter at a rate per annum determined by the Compensation
Committee of the Board of Directors and approved by the Board of
Directors, but in no event in an amount less than the initial base
rate (the “Base Salary”) payable in accordance with the
regular payroll policies of the Company.
b.
Benefits/ Vacation . The Employee shall receive such other
benefits including, healthcare, dental, life insurance, disability
and under other plans, which the Company provides to its executive
officers from time-to-time. Notwithstanding the foregoing or
anything contained herein to the contrary, the Company reserves the
right to adopt, amend or discontinue any employee benefit plan or
policy to all its employees in accordance with then-applicable law.
Employee shall have at least thirty (30) days paid vacation a
year, which shall be in addition to paid holidays and sick leave
that the Company provides to its executive officers,
c.
Bonus . In addition to the Base Salary, the Employee may
receive an annual bonus as determined in the sole discretion of the
Compensation Committee of the Board of Directors.
d.
Expenses . During the term of his employment hereunder, the
Employee shall be entitled to be reimbursed (in accordance with the
policies and procedures established by the Board of Directors) for
all reasonable expenses incurred by him in performing services
hereunder; provided that the Employee properly accounts therefor in
accordance with the Company’s policies.
e.
Participation in Benefit Plans . Employee shall be entitled
to participate in and receive benefits under the Company’s
benefit plans on a basis consistent with the Company’s other
executive officers.
a.
Termination for Cause . The Company shall have the right to
terminate Employee’s employment for Cause (as defined herein)
at any time during the term of this Agreement by giving written
notice to the Employee thereof. In such event, the Company shall
pay the Employee the Base Salary and all benefits due him under
this Agreement through the day of such termination. The Employer
shall have no further obligations to the Employee under this
Agreement, except obligations required under law.
b.
Termination without Cause . The Company shall have the right
to terminate Employee’s employment without Cause (as defined
herein) at any time during the term of this Agreement by giving
written notice to the Employee thereof. The termination shall
become effective immediately upon notice. In the event that the
Company terminates the Employee’s employment without Cause,
the Company shall (i) pay to the Employee an amount equal to
his Base Salary, as set forth in Section 3 a, above (and any
previously earned bonus) for the period from the termination until
the Expiration Date (the “Severance Period”); and
(ii) provide to Employee health care benefits
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under the
Company’s benefit plans for the Severance Period. The payment
of the amount in Section 4 b (i), above, shall be made in
equal monthly installments over the Severance Period in accordance
with Company payroll policies then in effect. Employee shall
execute a release relating to his employment in favor of the
Company, and the Company shall have no further obligations to the
Employee under this Agreement, except for the obligations under
this Section 4 b and obligations required under
law.
c.
Termination Upon Death . In the event of the
Employee’s death during the term of this Agreement, all
obligations of the parties hereunder shall terminate immediately,
and the Employer shall pay to the Employee’s legal
representatives the Base Salary (and any previously earned bonus)
due the Employee through the end of the month in which his death
shall have occurred. Except as provided in this Section 4c,
upon termination by reason of Death of the Employee, the Company
shall have no further obligations to the Employee, his beneficiary
or estate under this Agreement, except obligations required under
law.
d.
Termination Due to Disability . If this Agreement is
terminated by either party as a result of the Employee’s
Disability (as defined below), in addition to the benefits
otherwise due the Employee and as otherwise required by law, the
Company will pay Employee his Base Salary (and any previously
earned bonus) until the effective date of the termination of
employment due to the Disability (“Disability Effective
Date”). The Employee shall be eligible to receive disability
insurance coverage at those levels which the Company provides to
its executive officers from time-to-time. In the event
Employee’s employment is terminated at any time due to
Disability, Employee will continue to receive his Base Salary
during any waiting period required under the Company’s
disability insurance policy then in effect and such payments will
terminate upon the expiration of any such waiting period. In the
event Employee’s employment is terminated due to Disability
during the period Employee is prohibited from selling his stock in
the Company pursuant to that certain Shareholders Agreement of even
date herewith, the Company will pay Employee his Base Salary during
the prohibition period, less any benefits received by Employee
under Company’s disability insurance coverage. Any amounts
paid to the Employee pursuant to disability insurance policies
provided by the Company shall be offset against the amount of Base
Salary due or paid to Employee under this Section 4 d for the
same periods covered by the payments under the disability insurance
policies. Except as provided herein, upon termination as a result
of Employee’s Disability, the Company shall have no further
obligations to Employee under this Agreement, except as otherwise
required under law. For purposes of this Agreement, the Employee
will be deemed to have a “Disability” if, for physical
or mental reasons, the Employee is unable to perform the
Employee’s essential duties under this Agreement without
reasonable accommodation for ninety (90) consecutive days, or one
hundred eighty (180) days during any twelve (12)-month period,
as determined in accordance with this Section 4 d. The
disability of the Employee will be determined by a medical doctor
selected by written agreement of the Company and the Employee upon
the request of either party by notice to the other. If the Company
and the Employee cannot agree on the selection of a medical doctor,
each of them will select a medical doctor and the two medical
doctors will select a third medical doctor who will
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