AGREEMENT
Exhibit
10.1
AGREEMENT
This
Agreement (this "Agreement") is made and entered into on the 8th day of
September, 2009 by and between LCAVision Inc., a Delaware corporation (the
"Corporation"), and Xxxxxx Xxxxxxxxx (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 Senior Vice President of Human Resources of the Corporation.
Employee will report directly to the Chief Executive Officer (CEO) and will be a
member of the Executive Management team. 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, 2009. 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, 2009 or December 31st
of any subsequent year of its or her desire to terminate this Agreement as of
the December 31st immediately following the service of notice. While she is
employed by the Corporation, the Employee shall devote substantially all of her
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 her
position at comparable corporations.
2. Best
Efforts. The Employee agrees on a full-time basis to perform
faithfully, industriously, and to the best of her 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 One
Hundred Ninety Thousand Dollars ($190,000) 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 her in the discretion of the
Compensation Committee or the Board of Directors. Your bonuses for 2009 will be
determined as set forth in your offer letter of June 1, 2009. 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 her 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.
2
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 her 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 her 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, $190,000, 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 her 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 die 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-tern 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 her termination,
payable in accordance with the tears of such plans. The Employee will not be
obligated to mitigate her 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.
3
(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 her 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.
4
(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.
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:
5
To the
Corporation:
LCA-Vision,
Inc.
0000
Xxxxxxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Attention: Chief
Executive Officer
Facsimile
No.: (000) 000-0000
To the
Employee:
Xxxxxx
Xxxxxxxxx
0000
Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
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.
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 the Chief
Executive Officer on behalf of the Corporation or at the direction of the
Corporation's Board of Directors to be effective against the
Corporation.
6
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 she 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 she is a director or officer of the
Corporation, against all liability or loss suffered (including attorneys' fees)
reasonably incurred by Employee.
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 her 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.
7
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.
| LCA-Vision Inc. | EMPLOYEE |
|
By: /s/
Xxxxxx X. Xxxxxx
|
/s/
Xxxxxx Xxxxxxxxx
|
|
Printed
Name: Xxxxxx X. Xxxxxx
|
Printed
Name: Xxxxxx Xxxxxxxxx
|
|
Title: Chief
Executive Officer
|
8
