Exhibit 10.1
SEPARATION
AGREEMENT
THIS SEPARATION AGREEMENT (the
“Agreement”), is made as of this 30th day of June, 2008
(the “Effective Date”) by and between Vital
Images, Inc., a Minnesota corporation (the
“Company”) and Philip I. Smith (the
“Executive”).
BACKGROUND
1.
Executive is currently the Executive
Vice President of Corporate Development and Strategic Planning for
the Company.
2.
The Company and Executive have
entered into an Employment Agreement dated September 8, 2005
(the “Employment Agreement”), and a Change in Control
Agreement dated April 29, 2004 (the “Change in Control
Agreement”).
3.
The Company and Executive have
entered into various agreements regarding stock options and
restricted stock. These agreements are the following:
Incentive Stock Option Agreement dated February 28, 2003;
Non-Statutory Stock Option Agreement dated February 28, 2003;
Incentive Stock Option Agreement dated August 7, 2003;
Non-Statutory Stock Option Agreement dated August 7, 2003;
Incentive Stock Option Agreement dated February 5, 2004;
Non-Statutory Stock Option Agreement dated February 5, 2004;
Non-Statutory Stock Option Agreement dated February 15, 2005;
Restricted Stock Award Agreement dated February 15, 2005;
Non-Statutory Stock Option Agreement dated September 8, 2005;
Restricted Stock Award Agreement dated September 8, 2005;
Non-Statutory Stock Option Agreement dated March 9, 2006;
Non-Statutory Stock Option Agreement dated February 2, 2007;
and Restricted Stock Award Agreement dated February 28,
2007.
All shares underlying options
exercisable by Executive as of the Termination Date pursuant to the
option agreements shall be referred to as Executive’s
“Options” and all shares of restricted stock that have
been granted to Executive pursuant to the restricted stock
agreements and have vested as of the Termination Date shall be
referred to as Executive’s “Restricted
Stock.” The agreements regarding Options shall
collectively be referred to as the “Option Agreements,”
and the agreements regarding Restricted Stock shall collectively be
referred to as the “Restricted Stock Agreements.”
All Option Agreements and Restricted Stock Agreements were entered
into pursuant to and are governed by the Company’s 1997 Stock
Option and Incentive Plan (the “1997 Plan”).
4.
The Company and Executive have
decided to terminate Executive’s employment with the Company
as of July 31, 2008 (the “Termination
Date”).
5.
The Company and Executive desire to
resolve all present and potential issues between them relating to
Executive’s employment and termination of Executive’s
employment, and have agreed to a full resolution of any such issues
as set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual
promises and provisions contained in this Agreement and in the
Release referred to below, the parties, intending to be legally
bound, agree as follows:
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AGREEMENT
1.
Termination of
Employment .
Executive’s employment with the Company shall terminate as of
the Termination Date. On the Termination Date, Executive shall
cease to be an employee of the Company without further action by
either party. For purposes of this Agreement
“Executive” shall mean the undersigned Executive and
anyone who has obtained any legal rights or claims through him, and
“Company” shall mean Vital Images, Inc., its
parent company, their subsidiaries, successors and assigns, their
affiliated and predecessor companies, their successors and assigns,
their affiliated and predecessor companies and the present or
former directors, officers, officers, employees, representatives
and agents (including, without limitation, its accountants and
attorneys) of any of them, whether in their individual or official
capacities, and the current and former trustees or administrators
of any pension or other benefit plan applicable to employees or
former employees of Company, in their official or individual
capacities.
2.
Earned Compensation
. The Company shall pay Executive
all earned base salary through the Termination Date, as well as the
amount accrued for Executive’s vacation time through the
Termination Date. Executive will continue to participate in
all Executive benefit plans in which he is currently a participant,
in accordance with the terms of such plans, through the Termination
Date.
3.
Executive’s Options and
Restricted Stock . All
vesting or exercise rights, limitations, restrictions or other
terms or conditions related to Executive’s Options and
Restricted Stock shall remain subject to and governed by the
respective agreements and the 1997 Plan, except that Article 9
of the Option Agreements and Article 3(d) of the
Restricted Stock Agreements shall be deleted and of no effect as of
the Termination Date.
4.
Company’s Obligations and
Separation Agreements . In consideration for Executive’s
promises contained herein, specifically including, but not limited
to, Executive’s Obligations as set forth in Paragraph 5,
Company agrees to provide Executive with the following
benefits:
A. The Company will pay Executive severance pay in
the amount of One Hundred Ninety Thousand Dollars
($190,000.00). The severance pay will be paid on the
Company’s first regular payroll date after the expiration of
any applicable rescission periods, as set forth in Paragraph
7. All payments shall be subject to applicable taxes and
withholding.
B. Executive, pursuant to federal and state law,
may, for a period of eighteen (18) months following the Termination
Date (“COBRA Period”), continue the group medical and
dental insurance coverage previously provided to Executive by
Company. Executive will be required to pay the entire premium
for such benefits for any portion of the COBRA Period that
Executive elects to continue COBRA coverage. The benefit
described in this paragraph B is provided in exchange for the
release of Executive’s claims under the Age Discrimination in
Employment Act (“ADEA) and is the only consideration provided
for this purpose.
C. Company shall allow Executive to retain the
laptop computer, cell phone and cell phone number issued by or
through the Company to Executive; however, Executive shall remove
or destroy any Company property or information identified by the
Company contained on the laptop computer and cell phone no later
than the date of this Agreement, to the satisfaction of the
Company. For such purpose, on the date this Agreement is
signed by Executive, Executive shall give access to Company to the
laptop computer and cell phone. Cell phone expenses after the
Termination Date will be the full responsibility of
Executive.
5.
Executive’s
Obligations . As
material inducement to Company in entering into this Agreement and
providing the consideration described in Paragraph 4, Executive
hereby agrees as follows:
A. General Release of Claims.
Executive knowingly and voluntarily
releases and forever discharges Company, to the full extent
permitted by law, of and from any and all claims, known and
unknown, asserted and unasserted, Executive have or may have
against Company as of the date the Executive signs this Agreement,
including, but not limited to:
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i. All claims arising out of or relating to
Executive’s employment with Company and the termination of
Executive’s employment; and
ii. All claims arising out of or relating to
statements, actions, or alleged omissions of Company;
and
iii. All
claims for any alleged unlawful discrimination, harassment,
retaliation or reprisal or any other alleged unlawful practices
arising under any federal, state, or local statute, ordinance, or
regulation, including without limitation claims under Title VII of
the Civil Rights Act of 1964, as amended; the Americans with
Disabilities Act, 42 U.S.C. sec. 1981; the Sarbanes-Oxley Act of
2002; the Employee Retirement Income Security Act of 1974; the
Equal Pay Act; the Immigration Reform and Control Act; the Worker
Adjustment and Retraining Notification Act; the O.C.G.A. and its
counterparts; the Fair Credit Reporting Act; and state and local
human rights acts;
iv. All
claims for alleged wrongful discharge; breach of contract; breach
of implied contract; breach of a covenant of good faith and fair
dealing; breach of fiduciary duty; estoppel; Executive’s
activities, if any, as a “whistleblower;” defamation;
infliction of emotional distress; fraud; misrepresentation;
negligence; harassment; retaliation or reprisal; constructive
discharge; assault; batter; false imprisonment; invasions of
privacy; interference with contractual or business relationships;
any other wrongful employment practices or violation of any common
law; and
v. All claims for compensation of any kind,
including without limitation, bonuses, commissions, vacation pay,
and expense reimbursements; and
vi. All
claims for back pay, front pay, reinstatement, other equitable
relief, compensatory damages, damages for alleged personal injury,
liquidated damages, and punitive damages; and
vii. All claims for attorney’s fees, costs and
interest.
However, by signing this Agreement
Executive does not waive any claims that may arise after the date
on which Executive signs this Agreement, the right to take legal
action to enforce the terms of this Agreement, or any claims that
the law does not allow Executive to waive in a private agreement
such as this, including, without limitation, the right to file a
charge with or participate in any investigation conducted by the
Equal Employment Opportunity Commission (“EEOC”) or any
state or local human rights agency. Executive agrees to
waive, however, his right to any monetary recovery should the EEOC
or any state or local human rights agency pursue any claims on
Executive’s behalf in a private agreement such as
this.
Should Executive bring any claims
against Company, Executive agrees to immediately return all
payments made to Executive under Paragraph 4 of this Agreement,
other than the payments provided in exchange for the release of
claims under the ADEA. Executive further agrees that if
Executive fails to do so, the payments made in Paragraph 4 of this
Agreement, other than those provided in exchange for the release of
claims under the ADEA, may be offset against any payments that
Company is ordered by a court or administrative agency to make to
Executive.
B.
Covenant Not To Sue.
Executive agrees that he
will not initiate any litigation to pursue claims which Executive
released in this Paragraph 5. This covenant does not apply to
litigation challenging the validity of this Paragraph 5.
Further, Executive agrees to pay Company’s attorney’s
fees if Executive breaches the covenant not to sue contained in
this Section 5.B.
C.
Company Property.
Subject to Section 4.C.
of this Agreement, Executive will return all property belonging to
Company no later than two weeks after the Termination Date, whether
such property is currently on or off the premises of Company,
including, without limitation, any and all computer hardware or
computer software. The company will turn off access to the
Company network on the Termination Date.
D.
Confidentiality and
Loyalty. Executive
acknowledges and reaffirms his continuing obligations to Company
regarding confidentiality and loyalty pursuant to the Employment
Agreement and as exist by operation of law. Executive also
agrees not to disclose the terms and conditions of this
Agreement,
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other than to Executive’s
spouse or significant other, attorneys, tax preparer, and other
individuals or entities that need to know the terms and conditions
to provide services on Executive’s behalf or as required by
law.
E.
Non-Disparagement.
Executive agrees that he
shall not disparage or defame Company in any respect.
F.
Expense Reimbursement.
Executive shall have sixty
(60) days from the Termination Date to submit Executive’s
last expense report. Company reserves its right to review and
deny payment on any expenses submitted by Executive that do not
comply with Company policies and procedures regarding expense
reimbursement.
G.
Bring-down Release.
Executive agrees to provide
a “bring down” release in the form attached hereto as
Schedule A and incorporated herein by this reference.
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