FORM OF AGREEMENT
EXHIBIT
10.1
FORM
OF AGREEMENT
This
Agreement (this “Agreement”) is made and entered into on the 26th
day of
June, 2008 by and between LCA-Vision Inc., a Delaware corporation (the
“Corporation”), and ________________
(the
“Employee”).
RECITALS:
A. The
Employee is currently employed by the Corporation.
B. The
Employee desires to continue to be employed by the Corporation, and the
Corporation desires to continue to employ the Employee, on the terms outlined
in
this Agreement.
C. This
Agreement supersedes any previous agreement between the Employee and the
Corporation with respect to the matters covered herein.
NOW,
THEREFORE, in consideration of the recitals and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
Corporation and the Employee agree as follows:
1. Position
and Term.
Effective as of the date of this Agreement, the Corporation continues to employ
the Employee, and the Employee accepts continued employment with the
Corporation, as _____________________
of the
Corporation. The term of the Employee’s employment is “at will” meaning that
either the Employee or the Corporation can end the Employee’s employment at any
time and for any reason. The initial term of this Agreement commences on the
date of this Agreement and terminates on December 31, 2008. The term of this
Agreement will be renewed automatically from year to year thereafter, unless
either the Employee or the Corporation notifies the other at least ninety (90)
days prior to December 31, 2008 or December 31st of any subsequent year of
its
or his desire to terminate this Agreement as of the December 31st immediately
following the service of notice. While he is employed by the Corporation, the
Employee shall devote substantially all of his business time, ability, and
attention for the benefit of the business of the Corporation. Nothing in this
Section 1, however, will prevent the Employee from engaging in additional
activities in connection with personal investments, charitable, civic,
educational, professional, industry, or community affairs that are not
inconsistent with the Employee's duties under this Agreement. The Employee’s
duties shall include those as are customary for someone of his position at
comparable corporations.
2. Best
Efforts.
The
Employee agrees on a full-time basis to perform faithfully, industriously,
and
to the best of his ability, experience, and talents, all of the duties that
may
be required by the terms of this Agreement.
3. Compensation
and Benefits.
The
Corporation shall pay the Employee a base salary of _______________________________________________
Dollars
($_______)
per
year, which shall be paid in accordance with the Corporation’s standard salary
schedule from time to time in effect, but no less frequently than in equal
monthly installments. The base salary will be reviewed by the Compensation
Committee of the Board of Directors not less frequently than annually, and
may
be adjusted upward (but not downward), in the discretion of the Compensation
Committee of the Board of Directors. In addition, the Employee shall be eligible
for annual cash and equity incentive bonuses as may be awarded to him in the
discretion of the Compensation Committee or the Board of Directors. The Employee
shall be entitled to participate in such other group employee benefits,
including but not limited to the benefits listed on Exhibit A of this Agreement.
All reasonable and necessary expenses incurred by Employee in the course of
the
performance of Employee’s duties to the Corporation shall be reimbursable in
accordance with the Corporation’s then current travel and expense policies. In
connection with his employment by the Corporation, the Employee shall be based
at the principal executive offices of the Corporation in the Cincinnati,
Ohio area,
except for travel reasonably required for Corporation business. If elected
as a
Director of the Corporation, the Employee shall serve in such capacity without
further compensation.
4. Confidentiality,
Non-competition, Inventions, Etc.
The
Employee recognizes that the Corporation has and will have information regarding
inventions, products, product designs, processes, technical matters, trade
secrets, copyrights, customer lists, prices, costs, discounts, business and
financial affairs, future plans, and other vital items of information which
are
confidential, valuable, special, and unique assets of the Corporation In order
to protect these assets, and in consideration of Employee’s continued employment
and the agreement of the Corporation to enter into this Agreement, the Employee
agrees to execute the Confidentiality, Inventions and Noncompetition Agreement
attached to this Agreement as Exhibit B, which shall be considered as part
of
this Agreement.
5. Breach.
In the
event of a breach by the Employee of any of the provisions of this Agreement
during or after the term hereof, the Corporation shall be entitled to an
injunction (without the requirement of bond) restraining the Employee from
violating such provisions. Nothing herein shall be construed as prohibiting
the
Corporation from pursuing other remedies, including a claim for losses and
damages.
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6. Termination.
(a) The
Employee may terminate this Agreement for Good Reason. Good Reason means a
separation from service because of (A) the Corporation having breached any
material provision of this Agreement, (B) a material diminution in the
Employee’s authority, duties, or responsibilities; (C) a change in the
geographic location of the Employee’s primary work location that is thirty-five
(35) miles or more from the Corporation’s headquarters in Cincinnati, Ohio; or
(D) a successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Corporation fails to assume all of the Corporation’s obligations
under this Agreement. Besides satisfying (A) - (D), in order to be considered
Good Reason, the Employee must provide written notice to the Corporation of
the
existence of the breach of the material provision within 90 days of the initial
existence of the breach, and within 30 days after receipt of such notice, the
Corporation must fail to cure such breach. The Corporation may terminate the
employment of the Employee if (i) the Employee has breached any material
provision of this Agreement and within 30 days after notice thereof from the
Corporation, the Employee fails to cure such breach; or (ii) the Employee at
any
time refuses or fails to perform, or misperforms, any of his obligations under
or in connection with this Agreement in a manner of material importance to
the
Corporation and within 30 days after notice thereof from the Corporation, the
Employee fails to cure such action or inaction; or (iii) a court determines
that
the Employee committed a fraud or criminal act in connection with his employment
that materially affects the Corporation. If the Employee's employment hereunder
is terminated by the Corporation for any reason other than pursuant to clauses
(i) through (iii) above, or by the Employee for Good Reason or due to death
or
disability (as defined in the Company’s long-term disability policy), or if the
Corporation gives notice of non-renewal pursuant to Section 1 above, the
Employee shall be entitled to the following severance and benefits under this
Agreement: (i) continuation of the Employee's base salary, $_________,
including any subsequent upward adjustments in the Employee’s base
salary,
payable
in 12 equal monthly installments commencing on the next payroll ending date
after the Employee’s date of termination, (ii) continuation of health, dental
and vision benefits for the 12-month period following his date of termination
with premiums charged to the Employee at active employee rates, (iii) in the
case of any such termination occurring after the sixth complete month of the
fiscal year of termination, a bonus under the
Executive Cash Bonus Plan for
the
year of termination in an amount based on actual performance for the year
(provided, all subjective individual performance measures will be deemed
satisfied), pro-rated for the fraction of the year during which the Employee
was
employed, and payable when annual bonuses are paid to other senior executives,
(iv) all of the Employee's Options and Time-Based Restricted Share Awards will
vest in full, (v) the Employee will be issued shares under outstanding
Performance-Based Restricted Share Awards based on the actual level of
achievement of the performance criteria for the applicable performance period
applicable to the Awards, pro-rated to reflect the number of days from the
start
of the applicable performance period to the date the Employee ceases to be
employed by the Corporation divided by the total number of days in the
applicable performance period, any such shares to be issued to the Employee
at
the same time as shares are issued to other senior executive officers, and
(vi)
the following amounts and benefits (“Accrued Obligations”): (a) the Employee's
accrued and unpaid base salary and accrued and unused vacation through the
date
of termination, payable by the next payroll ending date after such termination,
(b) the Employee's unreimbursed business expenses incurred through the date
of
termination and payable in accordance with such policies and procedures as
are
applicable to senior executives of the Corporation, (c) any unpaid annual bonus
earned for the prior fiscal year, payable when annual bonuses are paid to other
senior executives but in no event beyond the last day on which such payment
would qualify as a short-term deferral under Treasury Regulation
§ 1.409A-1(b)(4), and (d) all accrued, vested and unpaid benefits under all
employee benefit plans in which the Employee is a participant immediately prior
to his termination, payable in accordance with the terms of such plans. The
Employee will not be obligated to mitigate his severance and other benefits
provided under this Agreement, and no amounts payable to the Employee hereunder
will be reduced as a result of subsequent employment or self-employment, except
that the Employee's health benefits continuation as provided at clause (ii)
above will be reduced by any comparable coverage from a subsequent employer.
In
the event of a Change in Control (as defined under the Corporation’s 2006 Stock
Incentive Plan) all of the Employee's Options and Time-Based Restricted Share
Awards will vest in full and all of the Employee's Performance-Based Restricted
Share Awards will be treated as earned at target
(if the performance period is not then completed) and the shares subject thereto
will be issued to the Employee within 10 days of such Change in
Control.
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(b) Notwithstanding
the provisions of Subsection (a), to the extent the amount of severance payable
and other benefits provided under the immediately preceding paragraph does
not
exceed the Separation Pay Exemption Amount (defined below), such severance
and
other benefits shall be exempt from Section 409A of the Internal Revenue Code
(“Section 409A”) and shall be paid or provided in accordance with the provisions
of Subsection (a). The amount of the severance payable and other benefits
provided under Subsection (a) that is in excess of the Separation Pay Exemption
Amount shall be subject to the requirements of Section 409A and shall be paid
in
strict accordance with the provisions of Subsection (a), unless the Employee
is
a specified employee (as defined in accordance with Treas. Reg. §1.409A-1(j) and
such rules as many be established by the Corporation (including its delegate)
from time to time) on his date of termination in which case the excess amount
shall be paid as follows: (w) no portion of the excess amount may be paid,
or
commence to be paid, earlier than 6 months after the date the Employee
terminates employment, (x) in the case of a payment that would have otherwise
been paid during such 6-month period, the payment shall be made on the first
day
of the seventh month following the date the Employee terminates employment,
(y)
in the case of installment payments that would have otherwise been paid during
such 6 month period, such installment payments shall be accumulated and paid
on
the first day of the seventh month following the date the Employee terminates
employment and the remaining installments shall be paid in strict accordance
with the provisions of Subsection (a), and (z) the determination of the amount
of severance payable and other benefits provided under this Agreement that
may
considered excess amounts shall be made in the following order (those that
are
listed first shall be considered not to exceed the Separation Pay Exemption
Amount to the maximum extent possible): (I) benefits, then (II) any payments
in
cash that are to be paid in installments, then (III) any payments in cash that
are to be paid in a lump sum, and (IV) any noncash payments. For purposes of
this Subsection (b), the term “Separation Pay Exemption Amount” means an amount
equal to two times the lesser of (x) the sum of the Employee’s annualized
compensation based upon the annual rate of pay for services provided to the
Company for the Employee’s taxable year preceding the taxable year in which the
Employee separates from service (adjusted for any increase during that year
that
was expected to continue indefinitely if the Employee had not separated from
service); or (y) the maximum amount that may be taken into account under a
qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code
for
the year in which the Employee separates from service.
(c) Notwithstanding
anything in this Agreement to the contrary, if any of the payment or payments
or
other benefit to the Employee (prior to any reduction below) provided for in
this Agreement, together with any other payment or payments or other benefit
which the Employee has the right to receive from the Corporation or any
corporation which is a member of an “affiliated group” as defined in Section
1504(a) of the Internal Revenue Code of 1986, as amended (“Code”), without
regard to Section 1504(b) of the Code, of which the Corporation is a member
(the
“Payments”) would constitute a “parachute payment” (as defined in Section
280G(b)(2) of the Code), and if the Safe Harbor Amount (defined below) is
greater than the Taxed Amount (defined below), then the total amount of such
Payments shall be reduced to the Safe Harbor Amount. The “Safe Harbor Amount” is
the largest portion of the Payments that would result in no portion of the
Payments being subject to the excise tax set forth at Section 4999 of the Code
(“Excise Tax”). The “Taxed Amount” is the total amount of the Payments (prior to
any reduction, above) notwithstanding that all or some portion of the Payments
may be subject to the Excise Tax. Solely for the purpose of comparing which
of
the Safe Harbor Amount and the Taxed Amount is greater, the determination of
each such amount, shall be made on an after-tax basis, taking into account
all
applicable federal, state and local employment taxes, income taxes, and the
Excise Tax (all of which shall be computed at the highest applicable marginal
rate). If a reduction of the Payments to the Safe Harbor Amount is necessary,
then the reduction shall occur in the following order unless the Employee elects
in writing a different order (provided, however, that such election shall be
subject to approval of the Corporation if made on or after the date on which
the
event that triggers the Payments occurs): (i) reduction of cash payments; then
(ii) cancellation of accelerated vesting of stock or stock option awards; and
then (iii) reduction of the Employee's benefits. In the event that acceleration
of vesting of stock or stock option award compensation is to be reduced, such
acceleration of vesting shall be cancelled in the reverse order of the date
of
grant of the Employee's stock awards unless the Employee elects in writing
a
different order for cancellation.
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7. Notices.
Any
notice or communication required or permitted to be given by any provision
of
this Agreement shall be deemed to have been sufficiently given or served for
all
purposes to a party: (a) if delivered personally to such party; (b) if sent
to
such party (addressed to such party’s facsimile number which is set forth in
this Agreement) by facsimile, with receipt confirmed by telephone; (c) if sent
to such party (addressed to such party’s address which is set forth in this
Agreement) by regularly scheduled overnight delivery carrier with delivery
fees
either prepaid or an arrangement, satisfactory with such carrier, made for
the
payment thereof; or (d) if sent to such party (addressed to such party’s address
which is set forth in this Agreement) by registered or certified mail, postage
and charges prepaid. Any such notice shall be deemed to be given: (i) upon
personal delivery, as provided above; (ii) upon telephonic confirmation of
receipt of notice sent by facsimile, as provided above; (iii) one (1) business
day after delivery to a regularly scheduled overnight delivery carrier,
addressed and sent as provided above; or (iv) three (3) business days after
the
date on which the same was deposited in a regularly maintained receptacle for
the deposit of United States mail, addressed and sent as provided above. The
addresses of each of the parties are as follows:
To
the
Corporation:
LCA-Vision
Inc.
0000
Xxxxxxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Attention:
____________
Facsimile
No.: (000) 000-0000
To
the
Employee:
Any
party
may change such party’s address or facsimile number for purposes of this
Agreement by notice given in accordance herewith.
8. Entire
Agreement.
This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof, and there are no other promises or conditions between
the
parties in any other agreement, whether oral or written, relating to such
subject matter. This Agreement supersedes any prior written or oral agreements
between the parties with respect to the subject matter hereof.
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9. Amendment.
This
Agreement may only be modified or amended if the amendment is made in writing
and is signed by both parties. Any amendments hereto must be signed by
______________________ on behalf of the Corporation or at the direction of
the
Corporation’s Board of Directors to be effective against the
Corporation.
10. Severability.
If any
provision of this Agreement shall be held to be invalid or unenforceable for
any
reason, the remaining provisions shall continue to be valid and enforceable.
If
a court finds that any provision of this Agreement is invalid or unenforceable,
but that by limiting such provision it would become valid or enforceable, then
such provision shall be deemed to be written, construed, and enforced as so
limited.
11. Waiver.
The
failure of either party to enforce any provision of this Agreement shall not
be
construed as a waiver or limitation of that party’s right subsequently to
enforce and compel strict compliance with every provision of this
Agreement.
12. Applicable
Law.
This
Agreement shall be governed by the laws of the State of Ohio, except the choice
of law provisions thereof.
13. Arbitration
Agreement.
Any and
all claims with respect to this Agreement shall be settled by arbitration
administered by the American Arbitration Association (AAA) in Cincinnati, Ohio
under the AAA’s National Rules for the Resolution of Employment Disputes, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. In any such arbitration proceeding, either party
also may, without waiving any remedy under this Agreement, seek from any court
having jurisdiction any interim or provisional relief that is necessary to
protect the rights or property of that party pending the arbitrator’s
determination of the merits of the controversy. Nothing in this Agreement is
intended to prohibit Employee from filing a claim or communicating with any
governmental agency including the Equal Employment Opportunity Commission or
Department of Labor.
14. Indemnification.
In accordance with the Corporation’s Bylaws, the Corporation will indemnify and
hold harmless, to the fullest extent permitted by applicable law, the Employee
if he is made or is threatened to be made a party or is otherwise involved
in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he is a director or officer of the
Corporation, against all liability or loss suffered (including attorneys’ fees)
reasonably incurred by Employee.
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15. Binding
Effect; Assignment.
This
Agreement shall be binding upon the parties and their respective heirs,
executors, administrators, successors, and assigns; provided, however, that
the
Employee shall not assign any part of his rights or duties under this Agreement
without the prior written consent of the Corporation, which the Corporation
may
grant or withhold in its sole discretion, and any such assignment by the
Employee without the Corporation’s prior written consent shall be void and of no
force or effect. In the event of a merger, sale, transfer, consolidation, or
reorganization involving the Corporation, this Agreement shall continue in
full
force and effect and shall be binding upon, and inure to the benefit of, the
Corporation’s successor.
16. Exemption
from, or Compliance with, Section 409A.
The
payment of amounts and the provision of benefits under this Agreement are
intended to be exempt from, or compliant with, Section 409A of the Internal
Revenue Code. Accordingly, the payment of any amount under this Agreement
subject to Section 409A shall be made in strict compliance with the provisions
hereof, and no such amounts payable hereunder may be accelerated or deferred
beyond the periods provided herein. This Agreement shall be administered and
interpreted in a manner that is consistent with the foregoing
intention.
IN
WITNESS WHEREOF, the parties hereto have duly and validly entered into and
executed this Agreement as of the date first written above.
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LCA-Vision
Inc.
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EMPLOYEE
|
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By:
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|
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Printed
Name: Xxxxxx X.
Xxxxxx
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Print
Name:
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Title:
Chief Executive
Officer
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