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CONSULTING AND NON-COMPETITION
AGREEMENT
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This Consulting and Non-Competition Agreement (“
Agreement ”), dated as of January 23, 2006 (the
“ Effective Date ”), is by and between
HealthTronics, Inc., a Georgia corporation (“
HealthTronics ”), and Joseph M. Jenkins, M.D.
(“ Jenkins ”).
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WHEREAS , Jenkins has been employed by HealthTronics
pursuant to an Employment Agreement dated April 15,
2004;
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WHEREAS , on the Effective Date, Jenkins and HealthTronics
have agreed to the terms of Jenkins’ resignation from all of
his officer, director and employment positions with HealthTronics
and its subsidiaries;
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WHEREAS , HealthTronics and Jenkins agree that it is in
their mutual interests that their employment relationship be
terminated upon the terms and conditions provided in this Agreement
(the “ Termination ”); and
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WHEREAS , HealthTronics desires to engage the services of
Jenkins as a consultant and Jenkins desires to accept such
engagement upon the terms and conditions hereinafter set
forth.
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NOW, THEREFORE , in consideration of the foregoing premises
and the mutual covenants herein contained, and intending to be
legally bound hereby, the parties hereto agree as
follows:
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1. Termination of Employment Relationship .
Jenkins hereby irrevocably resigns effective as of the Effective
Date, and HealthTronics hereby accepts such resignation, from any
and all director, manager, employment and officer positions,
relations, and responsibilities that Jenkins may hold or claim to
hold with HealthTronics and any of HealthTronics’
subsidiaries and/or affiliates (collectively, including
HealthTronics, the “ Affiliated Entities,
” and individually, an “ Affiliated
Entity ”). Jenkins agrees that he irrevocably
forfeits any rights to receive any future compensation for
Jenkins’s prior performance (including, without limitation,
salary, incentive compensation and/or stock options) that Jenkins
may have been entitled to receive under his employment arrangement
with HealthTronics.
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2. Stock Options . HealthTronics and Jenkins
acknowledge and agree that (a) Schedule 1 hereto sets forth
the outstanding stock options to acquire HealthTronics common stock
owned by Jenkins on the date hereof (the “ Stock
Options ”) and (b) other than the Stock Options,
Jenkins holds no options, warrants, convertible securities, phantom
or other rights to acquire HealthTronics common stock. Jenkins
agrees that any stock options not listed on Schedule 1
hereto that would otherwise be effective are canceled.
HealthTronics and Jenkins agree that the Stock Options shall
continue in full force and effect under the terms of the stock
option plan(s) and agreement(s) governing such Stock Options.
HealthTronics and Jenkins further agree that Jenkins’ right
to exercise any Stock Options shall expire ninety days after the
consulting relationship terminates or the expiration date of the
Stock Options, whichever comes first in time.
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3. Consulting Services . Jenkins shall render
consulting services (the “ Services ”) to
the Affiliated Entities as may be requested by HealthTronics from
time to time, consisting of assistance in evaluating strategic
opportunities. Jenkins will not, without his prior written consent,
be required to travel in order to render the Services. Jenkins
agrees to devote up to 5 hours per month in providing Services to
HealthTronics. Jenkins shall provide the Services to HealthTronics
until the date on which the consulting relationship terminates,
which shall automatically occur on the second anniversary of the
Effective Date. Jenkins shall not incur any travel or other
expenses in performing the Services unless approved in advance in
writing by the most senior financial officer of HealthTronics.
Jenkins may engage in other services, employment or occupation
during the term of this Agreement as long as such services,
employment or occupation are not contrary to the provisions of this
Agreement.
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4. Payment/Benefits . In consideration for
Jenkins providing the Services and his other obligations hereunder
including those set forth in Section 5, HealthTronics agrees to pay
Jenkins $200,000 upon execution of this Agreement and $200,000 on
the first anniversary of this Agreement. Notwithstanding anything
in this Agreement to the contrary, HealthTronics shall have no
obligation to make any payment under this Agreement if Jenkins is
in material breach of Sections 5, 6, or 7 of this
Agreement.
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5. Noncompetition . Subject to the other terms
and conditions of this Agreement, during the Non-Competition
Period, as part of the consideration for the payments by
HealthTronics to Jenkins as set forth in Section 4 and the
agreement by HealthTronics to provide Jenkins with access to
Confidential Information (as defined below) of the Affiliated
Entities from time to time, Jenkins will not (unless authorized in
writing by HealthTronics’ Chief Executive Officer (the
“ CEO ”)):
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(a) directly or
indirectly, alone or as a partner, joint venturer, officer,
director, manager, member, employee, consultant, agent, or
independent contractor of, or lender to, any person or business,
engage in any Restricted Business (as defined below) anywhere in
the United States or Europe (provided that the passive ownership of
less than 5% of the ownership interests of an entity having a class
of securities that is traded on a national securities exchange or
over-the-counter market is not a violation of this
paragraph);
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(b) directly or
indirectly, alone or as a partner, joint venturer, officer,
director, manager, member, employee, consultant, agent, or
independent contractor of, or lender to, any person or business,
request or advise any patient, physician, customer or any other
person, firm, vendor, contractor, lessor, hospital, surgery center,
corporation or other entity having a business relationship with any
Affiliated Entity, to withdraw, curtail, or cancel its business
with such Affiliated Entity or engage in any other activity that
could reasonably be expected to have an adverse affect on the
relationship such person or entity has with such Affiliated
Entity;
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(c) directly or
indirectly, alone or as a partner, joint venturer, officer,
director, manager, member, employee, consultant, agent, or
independent contractor of, or lender to, any person or business,
solicit business from, divert business from, or attempt to convert
to other methods of using the same or similar products or services
as provided by an Affiliated Entity, any client, account or
location of an Affiliated Entity; or
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(d) directly or
indirectly, alone or as a partner, joint venturer, officer,
director, manager, member, employee, consultant, agent, or
independent contractor of, or lender to, any person or business,
solicit for employment, or engagement as an independent contractor,
or for any other similar purpose, any person who was in the twelve
month period preceding the solicitation or is at the time of the
solicitation, an employee of any Affiliated Entity, or any entity
related to any of them.
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As used in this Agreement, the term “ Non-Competition
Period ” means the period beginning on the Effective
Date and ending on the second anniversary of the Effective Date. As
used in this Agreement, the term “ Restricted
Business ” means the business engaged in by the
Affiliated Entities as of the date hereof. Provided, that nothing
in the definition of Restricted Business or any other term of this
Agreement shall be deemed to prevent Jenkins from (1) working with
any HIFU project using the Ablatherm made by EDAP as long as
Jenkins’ efforts relate only to use of the device outside the
United States; (2) creating a “locum tenens” type
business for providing physician services other than BPH treatment
and lithotripsy (unless Jenkins obtains the prior written consent
of the CEO in each instance where the services would involve BPH
treatment or lithotripsy); (3) providing consulting services that
might otherwise violate the terms of this Agreement to the extent
the scope and nature of the services to be provided are approved in
writing in advance by HealthTronics’ CEO in each instance. If
HealthTronics enters into a non-Restricted Business after the
Effective Date, said business will not become a “Restricted
Business” for the purposes of this Agreement.
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6. Confidentiality of Information .
HealthTronics agrees to disclose to Jenkins from time to time trade
secrets and other Confidential Information which may be necessary
for Jenkins to perform under this Agreement. In consideration for
HealthTronics’ foregoing agreement to disclose Confidential
Information, unless authorized by the CEO in writing or as
otherwise required to perform his responsibilities, Jenkins will
not directly or indirectly, acting alone
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