Exhibit 10.1
TERMINATION AND CONSULTING
AGREEMENT
This Termination and Consulting
Agreement (“ Agreement ”), dated as of
September 19, 2008 (the “ Effective Date
”), is by and between HealthTronics, Inc., a Georgia
corporation (“ HealthTronics ”), and
Ross. A. Goolsby (“ Goolsby
”).
RECITALS
WHEREAS , Goolsby has served as Senior Vice President
and Chief Financial Officer of HealthTronics pursuant to the terms
of an Executive Employment Agreement, effective as of
January 8, 2007 (as amended, the “ Employment
Agreement ”);
WHEREAS , on the date hereof, Goolsby has resigned,
effective September 30, 2008 (the “ Termination
Date ”), from all of his officer, director and
employment positions with HealthTronics and its
subsidiaries;
WHEREAS , HealthTronics and Goolsby agree that it is in
their mutual interests that the Employment Agreement and their
employment relationship be terminated upon the terms and conditions
provided in this Agreement (the “ Termination
”); and
WHEREAS , HealthTronics desires to engage the service of
Goolsby as a consultant and Goolsby desires to accept such
engagement upon the terms and conditions hereinafter set
forth.
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:
1. Termination of Employment
Agreement and Employment Relationship . HealthTronics and Goolsby hereby terminate the
Employment Agreement and agree that the other shall no longer be
bound by, and is hereby released from, any and all of the terms,
obligations and conditions contained in the Employment Agreement
(except as provided in Section 7 hereof); provided,
that Goolsby shall be entitled to be paid, based on his current
salary, his accrued and unpaid salary through the Termination Date
in accordance with HealthTronics’ regular payroll practices.
Goolsby hereby irrevocably resigns effective as of the Termination
Date, and HealthTronics hereby accepts such resignation, from any
and all director, manager, employment and officer positions,
relations, and responsibilities that Goolsby 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 ”). Goolsby agrees that, except as set forth
in the proviso in the first sentence of this Section 1
, Goolsby irrevocably forfeits any rights to receive any future
compensation for Goolsby’s prior performance (including,
without limitation, salary, incentive compensation and/or stock
options) that Goolsby may have been entitled to receive under the
Employment Agreement.
2. Stock
Options .
HealthTronics and Goolsby acknowledge and agree that (a)
Schedule 1 hereto sets forth the outstanding stock options
to acquire HealthTronics common stock owned by Goolsby immediately
following the execution of this Agreement (the “ Stock
Options ”) and (b) other than the Stock Options,
Goolsby forfeits any rights to any other, and
1
holds no, options, warrants, convertible
securities, restricted stock awards, phantom or other rights to
acquire HealthTronics common stock. HealthTronics and Goolsby 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, including that any unvested Stock
Options existing at the expiration of the Consulting Services
Period (as defined below) would be cancelled at such time.
HealthTronics and Goolsby agree that any unvested restricted stock
awards held by Goolsby immediately prior to the date hereof are
hereby terminated and of no further force and effect.
3. Severance
Payment .
HealthTronics will pay Goolsby $95,000 in a lump sum on the
Termination Date, less applicable withholdings.
4. Continuation of
Benefits . From the
Termination Date until the earlier of (a) January 7, 2009 and
(b) the expiration of the Consulting Services Period (as
defined below), or such additional period of continued
participation as required by applicable law, Goolsby shall be
entitled to continue to participate in HealthTronics’
employee benefit plans made generally available by HealthTronics to
its employees, but only to the extent permitted under applicable
law and the terms of such plans. To the extent Goolsby elects
continuation coverage under the HealthTronics’ medical plan
as required to be provided under the Consolidated Omnibus Budget
Reconciliation Act (“ COBRA ”),
HealthTronics shall reimburse Goolsby for expenditures made by
Goolsby to continue such medical coverage to the extent necessary
to provide the same cost of coverage for Goolsby under such plan as
of the Effective Date; provided, that (x) Goolsby shall
provide HealthTronics documentation reasonably acceptable to
HealthTronics to evidence such expenditures, and
(y) HealthTronics’ obligation to reimburse for such
expenditures shall terminate upon the sooner to occur of
(i) the expiration of the period of coverage under the
HealthTronics’ medical plan as provided under COBRA, and
(ii) the date upon which Goolsby is eligible to participate in
the medical or health plan of a new employer. In no event shall
HealthTronics be responsible for making payments directly to the
provider for the HealthTronics’ medical plan with respect to
COBRA coverage.
5. Consulting
Services . From
October 1, 2008 until January 7, 2009 (the “
Consulting Services Period ”), Goolsby shall
render consulting services (the “ Services
”) to the Affiliated Entities as may be requested by
HealthTronics from time to time, including but not limited to
assisting HealthTronics in evaluating strategic opportunities and
operational performance. Goolsby shall not incur any travel or
other expenses in performing the Services unless approved in
advance by the Chief Executive Officer of HealthTronics. Goolsby
may engage in other services, employment or occupation during the
Consulting Services Period as long as such services, employment or
occupation are not contrary to the provisions of this
Agreement.
6.
Payment/Benefits .
In consideration for the provision of the Services by Goolsby,
HealthTronics will pay Goolsby $11,458 semimonthly, on the first
and fifteenth day of each month, beginning on October 1, 2008,
until the expiration of the Consulting Services Period; provided
that Goolsby shall be paid a pro-rated portion of such semi-monthly
amount for the period from January 1, 2009 to January 7,
2009. Notwithstanding anything in this Agreement to the contrary,
HealthTronics shall have no obligation to make any payment under
this Agreement if Goolsby is in material breach of any material
term of this Agreement.
2
If Goolsby is employed by a new
employer (the date of such employment, the “ New
Employment Date ”) during the Consulting Services
Period, then (a) unless otherwise provided herein,
HealthTronics shall pay to Goolsby, promptly following the New
Employment Date, an amount equal to the sum of all then remaining
unpaid amounts due under this Section 6 through
January 7, 2009, and (b) the Consulting Services Period
shall expire on the New Employment Date; provided, that Goolsby
provides HealthTronics advance written notice of the New Employment
Date. If the Consulting Services Period terminates or expires prior
to January 7, 2009 for any other reason, unless otherwise
provided herein, HealthTronics shall pay to Goolsby, promptly
following such termination or expiration date, an amount equal to
the sum of all then remaining unpaid amounts due under this
Section 6 through January 7, 2009.
7.
Nonsolicitation .
Goolsby agrees that Section 1.9 and Article IV of the
Employment Agreement shall continue in full force and effect after
the date of this Agreement according to the terms thereof. Goolsby
acknowledges and agrees that during his employment with
HealthTronics he has received trade secret and other proprietary
and confidential information of the Affiliated Entities. Goolsby
acknowledges and agrees (a) that the provisions in Article IV
of the Employment Agreement (and related provisions, including but
not limited to Section 5.3 thereof) are enforceable, and
(b) not to contest the enforceability of such
provisions.
8. Confidentiality of
Information . Goolsby
has knowledge of trade secrets and other Confidential Information
of the Affiliated Entities. In addition, HealthTronics agrees to
disclose to Goolsby from time to time trade secrets and other
Confidential Information which may be necessary for Goolsby to
perform under this Agreement. Unless authorized by the Board of
Directors of HealthTronics (the “ Board
”) in writing, Goolsby shall not directly or indirectly,
acting alone or in conjunction with others, disclose to any person
or entity any Confidential Information. “ Confidential
Information ” shall include all confidential and
proprietary information of the Affiliated Entities, including,
without limitation, all trade, technical or technological secrets,
any details of organization or business affairs, any names of past
or present customers of any Affiliated Entities, any processes,
services, compensation and other employment practices, research,
pricing practices, price lists and procedures, purchasing,
accounting, engineering, manufacturing, production, operations,
organization, finances, marketing, customer lists, blueprints,
product specifications, any other information, method, technique or
system, or any other confidential or proprietary information
relating to the business of any Affiliated Entity. Notwithstanding
the foregoing, Confidential Information shall not be deemed to
include any information which (a) is or becomes generally
available to the public (except as a result of any misconduct by
Goolsby, including but not limited to Goolsby’s breach of
this Agreement or any other confidentiality obligation of
Goolsby’s) or (b) is or becomes lawfully available to
Goolsby on a non-confidential basis from a third party without, to
Goolsby’s
