Exhibit 10.2
Execution Copy
EMPLOYMENT
AGREEMENT
This Employment Agreement (this
“ Agreement ”) is by and between
HealthTronics, Inc., a Georgia corporation (“
Employer ”), and Robert A. Yonke, an individual
(“ Employee ”), and is entered into and
shall be effective on April 17, 2008 (the “
Effective Date ”).
Preliminary
Statements
Employee desires to be employed by
Employer upon the terms and conditions stated herein, and Employer
desires to employ Employee provided that, in so doing, it can
protect its confidential information, business, accounts, patronage
and goodwill.
Employer and Employee have
specifically determined that the terms of this Agreement are fair
and reasonable.
Statement of
Agreement
NOW, THEREFORE, in consideration of
the premises and mutual covenants contained herein, and for other
good, valuable and binding consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE I
Term; Termination; Prior
Agreements
Section 1.1 Term . Employer
hereby hires Employee and Employee accepts such employment for an
initial term of three years commencing on the Effective
Date.
Section 1.2 Termination Upon
Expiration . The term of this Agreement shall automatically
renew for successive one year periods immediately following the
expiration of the initial three year term and each successive
one-year term thereafter. Either Employee or Employer may provide
the other party with written notice of non-renewal not less than
ninety days prior to the expiration of the then current term, and,
as long as neither Employee nor Employer terminates or gives notice
of termination of this Agreement pursuant to the other terms and
provisions contained herein, then this Agreement shall terminate
automatically upon the expiration of the term during which notice
of non-renewal is properly given pursuant to this Section. Neither
the provision of written notice of non-renewal, nor the termination
upon expiration of this Agreement following delivery of written
notice of non-renewal, shall itself be deemed a termination of this
Agreement by any party pursuant to any other Section of this
Agreement.
Section 1.3 Termination Upon
Death or Permanent Disability . This Agreement shall be
automatically terminated on the death of Employee or on the
permanent disability of Employee if Employee is no longer able to
perform in all material respects the usual and customary duties of
Employee’s employment hereunder. For purposes hereof, any
condition which in reasonable likelihood is expected to impair
Employee’s ability to materially perform Employee’s
duties hereunder for a period of three months or more shall be
considered to be permanent.
Section 1.4 Termination for
Cause . Employer may terminate this Agreement “for
cause” if:
(a) In connection with the business
of Employer, Employee is convicted of an offense constituting a
felony or involving moral turpitude;
(b) Employee
(i) (A) violates any written policy of Employer,
(B) violates any provision of this Agreement, (C) fails
to follow reasonable instructions or directions from the Chief
Executive Officer of Employer (the “ Chief Executive
Officer ”), or any other person authorized by the
Chief Executive Officer of Employer to instruct or supervise
Employee (“ Authorized Designee ”), or
(D) fails to use good-faith efforts to perform the services
required pursuant to this Agreement; and (ii) fails to cure
such violation or failure within fifteen days after receiving
written notice thereof; or
(c) Employee does not relocate to
Austin, Texas on or before the first anniversary of the Effective
Date.
Section 1.5 Termination for Good
Reason . Employee is entitled to terminate this Agreement for
“ good reason, ” with thirty days prior
written notice, upon any of the following occurrences:
(a) Within two months following any
Change of Control, Employee may terminate this Agreement, for any
or no reason, provided that notice of termination cannot be given
prior to the consummation of the Change of Control;
(b) Employee may terminate this
Agreement if Employer relocates its principal executive offices
outside of the Austin, Texas or Arlington, Texas metropolitan areas
and requires the Employee move to a city other than Austin, Texas
or Arlington, Texas;
(c) Employee may terminate this
Agreement if the Chief Executive Officer or any Authorized Designee
materially and unreasonably interferes with Employee’s
ability to fulfill Employee’s job duties;
(d) Employee may terminate this
Agreement if Employee is reassigned to a position with diminished
responsibilities, or Employee’s job responsibilities are
materially narrowed or diminished; or
(e) Employee may terminate this
Agreement if Employer materially violates this Agreement and
Employer fails to cure such violation or failure within fifteen
days after receiving written notice thereof.
Without limiting the provisions of
Section 1.8 hereof, Employee agrees that Employer can
relieve Employee of Employee’s duties hereunder prior to the
end of the applicable notice period provided for in this Section,
and in such event, Employee shall not thereafter be entitled to any
of the benefits or salary described in Article III
hereof. Furthermore, if the term of this Agreement expires upon
notice of non-renewal given pursuant to Section 1.2
prior to the end of any notice period otherwise required under this
Section, then the applicable notice period required under this
Section does not apply and notice may be given at any time prior to
such expiration.
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If Employer does not relieve
Employee of Employee’s duties during any applicable notice
period under this Section, and the applicable notice period extends
beyond the expiration of the term of this Agreement pursuant to
Section 1.2 , then the terms and provisions of this
Agreement shall govern Employee’s employment by Employer
until the end of such notice period, and the term of this Agreement
shall be deemed automatically extended until the end of such notice
period.
Section 1.6 Termination of
Agreement by Employer Without Cause . Employer has the right to
terminate this Agreement, other than “for cause,” on
thirty days prior written notice to Employee. Any termination of
this Agreement by Employer other than pursuant to the terms of
Section 1.2 , Section 1.3 or
Section 1.4 shall be deemed a termination pursuant to
this Section, irrespective of whether the notice required under
this Section is properly given.
Section 1.7 Termination of
Agreement by Employee Without Good Reason . Employee may
terminate Employee’s employment, other than for “good
reason,” upon thirty days prior written notice stating that
this Agreement is terminated other than for “good
reason.” If Employee terminates Employee’s employment
other than for “good reason,” Employee agrees that
Employer can relieve Employee of Employee’s duties hereunder
prior to the end of such thirty day notice period, and in such
event, Employee shall not thereafter be entitled to any of the
benefits or salary described in Article III hereof for the
time period after Employer relieved Employee of Employees’
duties.
Section 1.8 Employee’s
Rights Upon Termination . Upon termination of this Agreement,
Employee shall be entitled to the following:
(a) If this Agreement is terminated
pursuant to Section 1.2 , Section 1.3 ,
Section 1.4 , or Section 1.7 then Employer
shall pay Employee or Employee’s representative, as the case
may be, Employee’s then-current base salary (excluding any
bonuses and non-cash benefits) through the effective date of
termination (which, in the case of Section 1.7 , shall
follow any portion of the applicable notice period during which
Employee has not been relieved of Employee’s duties
hereunder), and Employer shall have no further obligations
hereunder.
(b) If Employer terminates this
Agreement without cause pursuant to Section 1.6 , or
Employee terminates this Agreement pursuant to
Section 1.5 , then, in addition to receiving
Employee’s then current base salary through the effective
date of termination, Employee shall continue to receive his base
salary until: (i) the second anniversary of the effective date
of such termination if such termination occurred on or before the
first anniversary of the Effective Date and (ii) the first
anniversary of the effective date of termination if such
termination occurred after the first anniversary of the Effective
Date. Employee and Employer agree that the effective date of any
termination pursuant to Section 1.5 shall be the
earlier of the end of the applicable notice period, if any, or the
date on which Employer relieves Employee of Employee’s duties
hereunder. Employee and Employer agree that the effective date of
any termination pursuant to Section 1.6 hereof shall be
only upon the expiration of the thirty day notice period described
in Section 1.6 , regardless of whether Employer earlier
relieves Employee of Employee’s duties hereunder. As a
condition to receiving the payments provided in this
Section 1.8(b) , Employee must execute a full release
and waiver of all claims against Employer in a form reasonably
acceptable to Employer (excluding claims for amounts required under
this Agreement to be paid upon severance and existing
indemnification obligations to Employee).
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Section 1.9 Survival . Any
termination of this Agreement and Employee’s employment as a
result thereof shall not release either Employer or Employee from
their respective obligations to the date of termination nor from
the provisions of this Agreement which, by necessary or reasonable
implication, are intended to apply after termination of this
Agreement, including, without limitation, the provisions of
Article IV . Employee and Employer expressly agree
that the provisions of Article IV and Article V survive any
termination of this Agreement, despite any language in this
Agreement to the contrary . Furthermore, neither the
termination of this Agreement nor the termination of
Employee’s employment under this Agreement shall affect,
limit or modify in any manner the existence or enforceability of
any other written agreement between Employee and Employer
(including but not limited to that certain Agreement and Plan of
Merger, dated as of the date hereof, by and among Employee,
Employer, and the other parties signatory thereto (the “
Merger Agreement ”)), even if such other
agreements provide employment related benefits to
Employee.
Section 1.10 Termination of
Existing Agreements . Any previous employment agreement between
Employee on the one hand and Employer or any of Employer’s
Affiliates (as hereinafter defined) (including but not limited to
Advanced Medical Partners, Inc.) on the other hand is hereby
terminated.
Section 1.11 Change of
Control . As used in this Agreement, “ Change of
Control ” shall mean the occurrence of any of the
following:
(a) Any person, entity or
“group” within the meaning of § 13(d) or 14(d) of
the Securities Exchange Act of 1934 (the “ Exchange
Act ”) becomes the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more
than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of the
Board of Directors of the Company (the “ Board
”), but only if such event results in a change in Board
composition such that the directors immediately preceding such
event do not comprise a majority of the Board following such
event;
(b) a merger, reorganization or
consolidation whereby Employer’s equity holders existing
immediately prior to such merger, reorganization or consolidation
do not, immediately after consummation of such reorganization,
merger or consolidation, own more than 50% of the combined voting
power of the surviving entity’s then outstanding voting
securities entitled to vote generally in the election of directors,
but only if such event results in a change in Board composition
such that the directors immediately preceding such event do not
comprise a majority of the board of directors of such surviving
entity following such event;
(c) the sale of all or substantially
all of Employer’s assets to an entity in which Employer, any
subsidiary of Employer, or Employer’s equity holders existing
immediately prior to such sale beneficially own less than 50% of
the combined voting power of such acquiring entity’s then
outstanding voting securities entitled to vote generally in the
election of directors, but only if such event results in a change
in Board composition such that the directors immediately preceding
such event do not comprise a majority of the board of directors of
such acquiring entity following such event; or
(d) any change in the identity of
directors constituting a majority of the Board within a twenty-four
month period unless the change was approved by a majority of the
Incumbent
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Directors, where “Incumbent
Director” means a member of the Board at the beginning of the
period in question, including any director who was not a member of
the Board at the beginning of such period but was elected or
nominated to the Board by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors.]
ARTICLE II
Duties of Employee
Subject to the ultimate supervision
of the Chief Executive Officer and each Authorized Designee,
Employee during the term hereof shall serve in such capacities as
may be from time to time be reasonably requested by the Chief
Executive Officer. Subject to change by the Chief Executive Officer
and any Authorized Designee, Employee shall have the
responsibilities commensurate with Employee’s title and as
otherwise provided in Employer’s bylaws and other governing
documents.
During the period of employment
hereunder, Employee shall devote substantially all of
Employee’s working time, attention, energies and best efforts
to the business of Employer for the profit, benefit and advantage
of Employer, and shall perform such other services as shall be
designated, from time to time, by the Chief Executive Officer or
any Authorized Designee; provided, however, that this
Section shall not be construed as preventing Employee from
investing Employee’s personal assets in business ventures
that do not compete with Employer or Employer’s Affiliates or
are not otherwise prohibited by this Agreement, and spending
reasonable amounts of personal time in the management thereof.
Employee shall use Employee’s best efforts to promote the
interests of Employer and Employer’s Affiliates, and to
preserve their goodwill with respect to their employees, customers,
suppliers and other persons and entities having business relations
with Employer. Employee agrees to accept and hold all such offices
and/or directorships with Employer and Employer’s Affiliates
as to which Employee may, from time to time, be elected. Employee
shall comply with all applicable laws and Employer’s
policies. For purposes of this Agreement, Employer’s
subsidiaries, parent companies and other affiliates are
collectively referred to as “ Affiliates
.” Employer agrees to provide Employee with such facilities,
employees, equipment, offices, information, data, resources and
support as is reasonably necessary or appropriate from time to time
in order to allow Employee to fulfill Employee’s job duties
and responsibilities under this Agreement.
Employee agrees to relocate to
Austin, Texas on or before the first anniversary of the Effective
Date.
ARTICLE III
Salary; Expense
Reimbursements
Section 3.1 Salary . As
compensation for Employee’s service under and during the term
of this Agreement (or until terminated pursuant to the provisions
hereof) Employer shall pay Employee a salary of $242,000.00 per
calendar year (prorated for partial years), payable in accordance
with the regular payroll practices of Employer, as in effect from
time to time. Such salary shall be subject to withholding for
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