Exhibit 10.1
TERMINATION AND CONSULTING
AGREEMENT
This Termination and Consulting
Agreement (“ Agreement ”), dated as of
June 16, 2009 (the “ Effective Date
”), is by and between HealthTronics, Inc., a Georgia
corporation (“ HealthTronics ”), and
Robert A. Yonke (“ Yonke ”).
RECITALS
WHEREAS, Yonke has served as President of Urology
Services of HealthTronics pursuant to the terms of an Employment
Agreement, effective as of April 17, 2008 (as may have been
amended, the “ Employment Agreement
”);
WHEREAS, on the date hereof (the “
Termination Date ”), Yonke has been
involuntarily terminated from all of his officer, director and
employment positions with HealthTronics and its
subsidiaries;
WHEREAS, HealthTronics and Yonke 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
Yonke as a consultant and Yonke 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 Yonke 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 6 hereof); provided,
that Yonke 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.
Yonke is hereby involuntarily terminated effective as of the
Termination Date from any and all director, manager, employment and
officer positions, relations, and responsibilities that Yonke 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 ”). Yonke agrees that, except
as set forth in the proviso in the first sentence of this
Section 1 , Yonke irrevocably forfeits any rights to
receive any future compensation for Yonke’s prior performance
(including, without limitation, salary, incentive compensation,
stock options and/or restricted stock awards) that Yonke may have
been entitled to receive under the Employment Agreement.
2. Restricted Stock Awards
. HealthTronics and Yonke
acknowledge and agree that (a) Schedule 1 hereto
sets forth the outstanding restricted stock awards of HealthTronics
common stock owned by Yonke immediately following the execution of
this Agreement (the “ Restricted Stock ”)
and (b) other than the Restricted Stock, Yonke forfeits any
rights to any
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other, and holds no, options, warrants,
convertible securities, restricted stock awards, phantom or other
rights to acquire HealthTronics common stock (other than
Yonke’s right to receive consideration in HealthTronics
common stock pursuant to Sections 1.3 and 1.4 of that certain
Stock Purchase Agreement, by and among Advanced Medical Partners,
Inc., HealthTronics, Inc., Litho Management, Inc., Yonke, and the
other sellers party thereto (the “ Purchase
Agreement ”)). HealthTronics and Yonke agree that the
Restricted Stock shall continue in full force and effect under the
terms of the HealthTronics 2004 Equity Incentive Plan and the
Restricted Stock Award Agreements (as defined in
Schedule 1 hereto), which such Restricted Stock Award
Agreements shall be amended as follows:
(a) Section 3(a) of each of the
Restricted Stock Award Agreements is hereby amended by adding the
following after the reference therein to “Grant Date”:
“(provided, that Grantee’s entering into a consulting
relationship with the Company immediately following any termination
of such employment pursuant to the terms of that certain
Termination and Consulting Agreement, dated as of June 16,
2009, by and between the Company and Grantee (the “
Consulting Agreement ”)) shall not be a
voluntary termination by Grantee under this
Section 3(a) ”.
(b) Section 3(b) of each of the
Restricted Stock Award Agreements is hereby amended by adding the
following after the reference therein to “(or any Parent or
Subsidiary)”: “or continues to have a consulting
relationship with the Company pursuant to a written consulting
agreement. The termination of any Consulting Services Period under
a written consulting agreement does not terminate the consulting
relationship between Grantee and the Company”.
(c) Section 3 of each of the
Restricted Stock Award Agreements is hereby amended by adding the
following after the last sentence thereof:
“To the extent the
restrictions described in Section 2 of this Agreement have not
lapsed with respect to any Restricted Stock on or before
July 16, 2010, such Restricted Stock shall be forfeited by the
Grantee and all of the Grantee’s rights with respect to such
stock shall terminate on such date.”
(d) Section 6 of each of the
Restricted Stock Award Agreements is hereby amended by adding the
following after the reference therein to “employment”:
“or consulting relationship, or the Consulting
Agreement,”.
3. Continuation of
Benefits . To the
extent Yonke elects continuation coverage under the
HealthTronics’ medical plan as required to be provided under
the Consolidated Omnibus Budget Reconciliation Act (“
COBRA ”), HealthTronics shall reimburse Yonke
for expenditures made by Yonke to continue such medical coverage at
the same level of coverage as he elected while an employee of the
Company under such plan as of the Effective Date; provided, that
(x) Yonke 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
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coverage under the HealthTronics’ medical
plan as provided under COBRA, and (ii) July 16, 2010. In no
event shall HealthTronics be responsible for making payments
directly to the provider for the HealthTronics’ medical plan
with respect to COBRA coverage. HealthTronics shall make all such
reimbursements to Yonke promptly following Yonke’s
presentation of documentation meeting the above requirements to
HealthTronics evidencing such expenditures. “Promptly”
shall mean within ten (10) business days. To the extent the
benefits provided under this Section 3 are otherwise
taxable to Yonke, such benefits, for purposes of Section 409A
of the Internal Revenue Code of 1986, as amended (and the
regulations and other guidance issued thereunder) (“Section
409A”) shall be provided as separate monthly in-kind payments
of those benefits, and to the extent those benefits are subject to
and not otherwise excepted from Section 409A, the provision of
the in-kind benefits during one calendar year shall not affect the
in-kind benefits to be provided in any other calendar
year.
4. Consulting Services
. From the date hereof
until July 16, 2010 (such date, the “ Consulting
End Date ”, and such period, the “
Consulting Services Period ”), Yonke shall
render consulting services (the “ Services
”) to the Affiliated Entities as may reasonably be requested
by HealthTronics from time to time, including but not limited to
assisting HealthTronics in managing and evaluating operating
performance of the Urology Services division, assisting
HealthTronics in evaluating strategic opportunities, and assisting
HealthTronics in integrating acquisitions of other companies,
businesses or assets. If there is a request for Services in
addition to those described above, whether such additional Services
are reasonable shall be jointly determined by Yonke and the Chief
Executive Officer of HealthTronics. Yonke shall not be required to
work more than 40 hours a week in performing Services, and,
notwithstanding anything to the contrary in this Agreement, the
parties intend that the average level of bona fide services to be
provided by Yonke during the Consulting Services Period shall be
equal to or less than 20% of the average level of the bona fide
services provided by Yonke during the 36-month period immediately
preceding the Effective Date. Yonke shall not incur any travel or
other expenses in performing the Services unless approved in
advance by the Chief Executive Officer of HealthTronics. Yonke 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 and
do not materially interfere with his duties and obligations
hereunder. Yonke shall comply with all applicable laws in providing
Services and shall provide such Services in accordance with
industry standards. HealthTronics may terminate the consulting
relationship at any time upon written notice to Yonke, and in such
event (either such termination or the provision of such notice) the
Consulting Services Period shall expire. HealthTronics shall make
all reimbursements to Yonke for business expenses that are
pre-approved as set forth herein promptly following Yonke’s
presentation of documentation to HealthTronics, which such
documentation must be reasonably acceptable to HealthTronics,
evidencing such expenditures. The amount eligible for reimbursement
under this Agreement during a taxable year may not affect expenses
eligible for reimbursement in any other taxable year, and the right
to reimbursement under this Agreement is not subject to liquidation
or exchange for another benefit.
5. Payment/Benefits
. In consideration for
the provision of the Services by Yonke, HealthTronics will pay
Yonke $10,688.00 semimonthly, on the first and fifteenth day of
each month, beginning on July 1, 2009, until the Consulting
End Date. Notwithstanding anything in this Agreement to the
contrary, HealthTronics shall have no obligation to make any
payment under this Agreement if Yonke is in material breach of any
provision set forth in Article IV of the Employment
Agreement.
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If Yonke 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 Yonke, promptly following the New
Employment Date, an amount equal to the sum of all then remaining
unpaid amounts due under this Section 5 through the
Consulting End Date, and (b) the Consulting Services Period
shall expire on the New Employment Date; provided, that Yonke
provides HealthTronics advance written notice of the New Employment
Date. If the Consulting Services Period terminates or expires prior
to the Consulting End Date for any other reason, unless otherwise
provided herein, HealthTronics shall pay to Yonke, promptly
following such termination or expiration date, an amount equal to
the sum of all then remaining unpaid amounts due under this
Section 5 through the Consulting End Date. Any payment
made in accordance with this Section 5 shall be treated
as a separate payment for purposes of Section 409A to the
extent Section 409A applies to such payments.
6. Restrictive Covenants
. Yonke 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, and any breach of any of
the provisions of such Article IV shall also be deemed a breach of
this Agreement. If a court or arbitration panel finds that Yonke
has breached Article IV of the Employment Agreement, HealthTronics
shall be entitled to recover from Yonke (x) all payments made to
Yonke under
