Exhibit 10.3
TERMINATION AND CONSULTING AGREEMENT
This Termination and Consulting Agreement (the "Agreement") made
effectively this 1st day of November, 2002 ("Effective Date") by and between
Vasomedical, Inc., a Delaware Corporation ("Employer" or "Company"), and D.
Xxxxxxx Xxxxxxx, residing at 00 Xxx Xxxxx Xxxx, Xxxxxx Xxxx Xxxxxx, Xxxxx
Xxxxxxxx 00000 ("Employee") (collectively the "Parties").
WHEREAS, the Parties entered into an employment agreement dated December 1,
2000 (the "Employment Agreement"); and
WHEREAS, the Parties are mutually desirous of terminating the Employment
Agreement on the terms and conditions set forth herein, and otherwise entering
into a consulting arrangement (the "Consulting Arrangement") on the terms and
for the additional consideration described herein.
NOW, THEREFORE, based upon the mutual covenants contained herein and for
other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Parties agree as follows:
1. In accordance with paragraphs 4(a) and 6(c) of the Employment Agreement,
the Employer shall pay to Employee for the period from the Effective Date of
this Agreement to October 31, 2003 the sum of $240,000, payable in the manner in
which the Employee's annual salary is currently being paid to the Employee by
the Employer. All of the foregoing payments shall be subject to deductions for
appropriate federal, state and local withholding taxes, Social Security taxes,
and any other charges which by federal, state and local law are required to be
deducted ("Severance Payment").
2. (a) During the period commencing on the Effective Date and ending
December 31, 2003 (the "Consulting Period"), the Employer will retain the
Employee as a consultant to provide, and the Employee agrees to provide, up to
but not more than forty (40) business days of the following services (the
"Services"):
From time to time upon the reasonable request of senior level executives of
the Employer, general advice or information regarding potential opportunities
for the introduction of the company's EECP systems, the Employer's business
operations and affairs, the Employer's current and potential business
relationships and contractual agreements with customers and lending
institutions, pertinent business strategies, personnel matters, and other
related matters.
In addition, as and to the extent reasonably necessary, the Employee will
provide upon request to the Employer and its counsel relevant information
pertaining to any matters which are or will become the subject of litigation,
and will cooperate reasonably with such counsel in connection with the conduct
of any such litigation, including, but not limited to, providing relevant
testimonial evidence by affidavit, preparing for and attending an examination
before trial, and appearing at trial as a witness on behalf of the Employer.
(b) As consideration for the Services described in Section 2 above and any
and all other services which the Advisor may render for and on behalf of the
Company that are not specifically described herein, the Restrictive Covenant
described in paragraph 4(a) hereof, and the Release described in paragraph 5
hereof, the Company shall pay to the Employee the following compensation in
addition to the Severance Payment described in paragraph 1 hereof.
(i) A Consulting Fee (the "Consulting Fee") in the amount of
$40,000.00 payable in 14 equal installments of $2,857.14 per month on the
first day of each such month, commencing on November 1, 2002 and ending
December 31, 2003.
(ii) In addition to the foregoing, the Employee shall be entitled to
be reimbursed by the Employer for all reasonable, pre-approved expenses
incurred by him in connection with the performance of the Services upon the
presentation of substantiating documentation therefor to the Employer.
(iii) It is further agreed between the Employer and the Employee that
any options which otherwise would have vested in the Employee under the
Employment Agreement pursuant to paragraph 4(b) thereof during the period
from the Effective Date to December 31, 2003 had such Agreement not been
terminated, shall vest during the Consulting Period in the manner and to
the extent such options would have vested under the Employment Agreement,
and be exercisable within three months after the end of the Consulting
Period.
3. In the event of the Employee's death prior to full payment to him of the
Severance Payment under this Agreement, the Employer nevertheless shall be
required to pay the unpaid balance of the Severance Payment to the Employee's
Estate at the times and in the same manner in which the Severance Payment was
being paid to the Employee (the "Death Benefit"), but shall have no further
obligation with regard to payment of the unaccrued and unearned balance of the
Consulting Fee.
4. (a) The Employee covenants and agrees that during the Consulting Period
and for a period of one year thereafter (or such longer period as may be
provided therein) he shall abide by, and fully comply with, the provisions of
Paragraphs 8(a) and 8(b) of the Employment Agreement which shall survive
accordingly and are fully incorporated by reference herein (the "Restrictive
Covenant").
(b) The Employee agrees further that in the event of a breach or threatened
breach of the Restrictive Covenant, in addition to any other remedies the
Employer may have in equity or at law, which shall be cumulative and not
mutually exclusive, the Employer shall be entitled to avail itself fully of the
enforcement measures set forth in Sections 9(a) and (b) of the Employment
Agreement, which shall survive accordingly and are fully incorporated by
reference herein.
5. Subject only to the performance of, and compliance with, the provisions
of this Agreement, as a material inducement to Employer to enter into this
Agreement, Employee hereby waives, remits, releases and forever discharges
Employer, its Board members, officers, directors, stockholders, employees,
agents, attorneys, subsidiaries, servants, successors, insurers, affiliates and
their successors and assignees, from any and all manner of action, claims,
liens, demands, liabilities, causes of action, charges, complaints, suits
(judicial, administrative, or otherwise), damages, debts, demands, obligations
of any other nature, past or present, known or unknown, whether in law or in
equity, whether founded upon contract (expressed or implied), tort (including,
but not limited to, defamation), statute or regulation (State, Federal or
local), common law and/or any other theory or basis, from the beginning of the
world to the date hereof, including, but not limited to, any claim that Employee
has asserted, now asserts or could have asserted. This includes, but is not
limited to, claims for compensation or benefits, tortious claims arising out of
the employment relationship, claims of an expressed or implied contract of
employment, claims under the Family and Medical Leave Act, claims arising under
Federal, State or local laws prohibiting employment or other discrimination or
claims growing out of any legal restrictions on the Employer's rights to
terminate its employees, including without limitation any claims arising under
Title VII of the United States Code, and the Age Discrimination in Employment
Act. It is expressly understood by Employee that among the various rights and
claims being waived by him in this release are those arising under the Age
Discrimination in Employment Act of 1967 (29 U.S.C. 621, et seq.). Included in
this General Release are any and all claims for future damages allegedly arising
from the alleged continuation of the effect of any past action, omission or
event. Employee further agrees to waive any rights he may have to reinstatement
or reemployment with Employer (the "Release").
6. (a) The Employment Agreement shall be terminated as of the Effective
Date hereof and neither party shall have any claim against the other thereunder
except as herein expressly provided.
(b) Consistent with the foregoing, the Employer will submit in writing to
the Employer's board of directors prior to the Effective Date, his formal
resignation as the Chief Executive Officer, President and a director of the
Employer effective as of the Effective Date.
7. It is recognized and agreed that the Consulting Arrangement described
herein does not create or continue the relationship of employer and employee
between the Employee and the Company, but rather, that the Services to be
performed hereunder shall be performed by the Employee as an independent
contractor. Accordingly, each of the parties hereto agrees not to hold itself
out in any manner contrary to the terms of this Agreement and none of the
parties hereto shall be or become liable or bound by any representation, act,
omission or agreement whatsoever of any other party. Neither the Company nor the
Employee shall have the right to make any contract or commitment on behalf of
the other or the authority to bind the other in any manner.
8. Any action or proceeding brought to enforce any of the provisions of
this Agreement and/or to seek other relief for breach thereof, including
damages, must be instituted in a federal or state court situated in the State of
New York, Nassau County, to the jurisdiction of which courts, the Parties
irrevocably and unconditionally submit. This Agreement shall be construed and
governed by the laws of the State of New York, without regard to its governing
conflicts of law principles.
9. (a) Except as required by law, the Employer and Employee agree not to
publish, communicate or disseminate any negative or disparaging information
regarding the other, or to divulge, directly or indirectly, any information
regarding this Agreement to the media, present or former employees of the
Employer, suppliers, vendors and other industry participants any other person;
provided, however, that the Parties may disclose the contents of this Agreement
to their respective financial advisors, accountants and attorneys. As may be
appropriate, the Company shall be permitted additionally to make such disclosure
as may be appropriate consistent with the Company's reporting requirements as a
public company.
(b) Upon inquiry by any potential employer of the Employee, the Employer
shall be required to provide only information regarding the Employee's salary,
the Employee's position with the Employer, and the dates of the Employee's
employment with the Employer.
10. This Agreement sets forth the entire agreement and understanding
between the parties and fully supersedes any and all prior agreements or
understandings between the parties hereto pertaining to the subject matter
hereof. All other contracts, agreements or understandings between the Employer
and Employee whether oral or written are null and void. The parties represent
expressly that in signing this Agreement, they do not rely upon, nor have they
relied upon any representation or statement regarding the subject matter not set
forth specifically in this Agreement.
11. Employee acknowledges that:
(a) He has carefully read and fully understands all of the provisions of
this Agreement.
(b) By reason of this Agreement, he is releasing the Employer from any and
all claims of any kind he may have against the Employer.
(c) He agrees, knowingly and voluntarily, to all of the terms set forth in
this Agreement and intends to be fully bound by the same.
12. Any notice to be given to the Company or the Employee hereunder shall
be deemed given if delivered personally, telefaxed or mailed by certified or
registered mail, postage prepaid, to the other party hereto at the following
addresses:
To the Company: Vasomedical, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
To Employee: D. Xxxxxxx Xxxxxxx
33 Cat Xxxxx Xxxx
Xxxxxx Xxxx Xxxxxx, Xxxxx Xxxxxxxx 00000
Either party may change the address to which notice may be given hereunder by
giving notice to the other party as provided herein.
13. This Agreement may not be modified or amended except by a writing
signed by both Parties. This agreement is not assignable by the Employee, and
otherwise shall be binding upon, and inure to the benefit of, the Employee's
successors, heirs, executors, administrators and legal representatives, and the
Employer's successors and assigns.
14. The failure of either party to insist on strict performance of any
provision or to exercise any right shall not be deemed a waiver of any such
provision or right thereafter. Any waiver, to be effective, must be in writing
and signed by the Party waiving compliance.
15. Should any provisions of this Agreement be declared or determined to be
invalid or illegal, the validity of the remaining, terms and provisions shall
not be affected thereby and said illegal or invalid term or provision shall be
deemed not to be part of this Agreement.
16. This Agreement may be executed in counterparts. Each counterpart shall
be deemed an original, and when taken together with the other signed
counterpart, shall constitute one fully executed Agreement.
/s/ D. Xxxxxxx Xxxxxxx
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D. XXXXXXX XXXXXXX
VASOMEDICAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
