THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered
into as of the 31st day of August, 2005, by and between HearUSA,
Inc., a Delaware corporation (the “Company”), and Paul
A. Brown, M.D. (“Employee”).
(a) Employee
has been serving as the Chairman of the Board of Directors of the
Company prior to the date hereof pursuant to the terms of a
five-year Employment Agreement dated effective May 12,
2003.
(b) The
Company and Employee wish to continue their relationship, but
pursuant to the terms and conditions provided herein.
In consideration
of the mutual promises hereinafter set forth, it is hereby agreed as
follows:
1.
Employment . Employee shall continue to be employed by the
Company, with such continued employment to be under the terms and
conditions set forth herein, and Employee hereby accepts such
continued employment upon the terms and conditions set forth
herein. The Employment Agreement between the parties dated
effective May 12, 2003, is hereby superseded in its entirety
by this Agreement.
2. Term
of Employment . The term of this Agreement shall commence on
the date first set forth above and shall end on the fifth
anniversary of such date (the “Initial Employment
Period”), and shall continue in effect for successive periods
of five years thereafter unless either the Company or Employee
gives written notice of non-renewal prior to the end of the then
current term of this Agreement, or unless sooner terminated as
provided in Section 6 or Section 7 hereof. The Initial
Employment Period and any renewal terms of this Agreement are
referred to herein as the “Term of
Employment.”
3.
Location of Employment . Employee will continue to be
located at the Company’s corporate offices in West Palm,
Florida.
(a) Employee
shall serve in a full-time capacity with the title of Chairman of
the Board, reporting to the Board of Directors of the Company, and
the Employee shall have the authority, duties, responsibilities and
status (including office, title and reporting requirement)
associated with the office of Chairman of the Board (including
those contemplated by the Company’s bylaws).
(b) Employee
shall be authorized by the Board of Directors to employ reasonable
discretion in performing Employee’s
responsibilities.
(c) Employee
shall have such further duties and responsibilities, not
inconsistent with such position, as shall be assigned to the
Employee by the Board of Directors of the Company.
(d) Employee
shall devote his full business time and attention and such skill,
energy and best efforts as may be necessary for the faithful
performance of duties assigned to Employee.
(a) During
the Term of Employment, the Company shall pay Employee, as
compensation for his services during the Employment Period, a base
salary (the “Base Salary”) at a rate of Two Hundred
Forty Thousand Dollars ($240,000.00) per year, such Base Salary to
be payable in accordance with the Company’s usual payment
practices and to be subject to adjustment from time to time as may
be agreed between the Employee and the Company. Employee shall be
entitled to participate in the Company’s current employee
benefit plans, and will in the future be entitled to participate in
any new employee benefit plans that are put in place for the
Company executive officers, provided that any such plans shall be
subject to the approval of the Board of Directors. Additionally,
Employee shall be entitled to such prerogatives of office as are
the Company’s current practice, subject to the right of the
Company to revise such practices.
(b) The
Employee will be eligible to participate in the Company’s
stock plan and bonus plan, subject to the discretion of the Board
of Directors of the Company.
(c) All
compensation shall be subject to customary withholding taxes and
other employment taxes as required with respect thereto.
6.
Termination of Employment by the Company . This Agreement
and Employee’s employment may be terminated by the Company as
follows:
(a) At
the election of the Company, upon thirty days’ prior written
notice to Employee in the event Employee becomes disabled and such
disability continues for a period exceeding three (3) consecutive
months. In the event of a disagreement concerning the existence of
any such disability, the matter shall be resolved by a
disinterested licensed physician chosen by the Company.
(b) At
the election of the Company, for “Cause” immediately
upon notice by the Company to the Employee. “Cause”
shall mean:
(i)
willful or prolonged absence from work by the Employee (other than
by reason of disability) or failure, neglect or refusal by the
Employee to perform his duties and responsibilities
hereunder;
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(ii)
material breach by the Employee of any of the covenants contained
in this Agreement;
(iii)
the Employee’s commission of fraud or dishonesty against the
Company, its subsidiaries, parent, affiliates or their respective
officers, directors, stockholders or employees; conduct intended to
injure or having the effect of injuring the reputation, business or
business relationships of the Company, its subsidiaries, parent or
affiliates or their respective officers, directors or
employees;
(iv)
upon a charge by a governmental entity against the Employee of any
crime involving moral turpitude or which could reflect unfavorably
upon the Company or upon the filing of any civil action involving
the Employee and a charge of embezzlement, theft, fraud or other
similar act; or
(v)
failure or refusal of Executive to materially comply with the
policies, standards and regulations of the Company as from time to
time may be made known to Executive.
(c) At
the election of the Company, at any time, without Cause immediately
upon notice by the Company to Employee.
(d) Upon
termination of this Agreement by the Company, all rights and
obligations of the parties hereunder shall cease, except:
(i) if this Agreement is terminated without Cause by the
Company prior to the end of the Term of this Agreement; or
(ii) if the Company gives written notice of non-renewal of
this Agreement pursuant to Section 2 above; or (iii) if
there is a Change in Control of the Company (as defined below) and
this Agreement is terminated without Cause by the Company, then
(x) Employee shall receive a lump sum equal to his Base Salary
times three plus any bonus or other long term incentive
compensation to which the Employee would have been entitled absent
the termination, (y) Employee’s health and life
insurance benefits shall continue for a period of 36 months
after such termination, and (z) all of Employee’s
unvested options shall immediately vest and may be exercised by
Employee for such post-termination period as is prescribed by such
option agreements and related stock plan(s). Termination of
employment pursuant to this Section 6 or otherwise shall not
terminate or otherwise affect the rights and obligations of the
parties pursuant to Sections 9 through 12 and Section 15
hereof.
(e) Nothing
contained herein will be construed to prevent Employee from seeking
or obtaining other employment in the event the employment of
Employee is terminated by the Company without Cause.
7.
Termination of Employment by Employee . Employee may
terminate his employment with the Company at any time and for any
reason, such termination to be effective immediately upon notice by
Employee to the Company. Upon such termination by Employee, all
rights and obligations of the parties hereunder shall cease,
except: if Employee terminates his employment under this Agreement
for Good Reason (as defined below) within one year of a Change in
Control (as defined below), (i) Employee shall receive a lump
sum equal to his Base Salary times three plus any bonus or other
long term incentive compensation to which the Employee would
have
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been entitled
absent the termination, (ii) Employee’s health and life
insurance benefits shall continue for a period of 36 months
after such termination, and (iii) all of Employee’s
unvested options shall immediately vest and may be exercised by
Employee for such pos
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