This Termination Agreement involves
Title: TERMINATION AND CONSULTING AGREEMENT
Governing Law: Texas Date: 9/22/2008
Industry: Medical Equipment and Supplies Sector: Healthcare
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 ”).
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
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.
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