EXECUTIVE EMPLOYMENT AGREEMENT Roger E. Girard
EXECUTIVE
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This
Employment Agreement, is made and entered into as of October 6, 2005, between
ISORAY, INC., a Minnesota corporation (the “Company”),
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual residing at ▇▇▇▇ ▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“Employee”).
RECITALS:
A. Employee
is and has been the Chief Executive Officer of the Company’s subsidiary
corporation, IsoRay Medical, Inc., a Delaware corporation (“IMI”),
and
IMI and the Company desire to have the continuing benefit of Employee’s
knowledge, experience and services in the operation of the Company;
and
B. Employee’s
assistance to IMI was instrumental in consummating IMI’s merger with the Company
(the “Merger”);
and
C. The
Board
of Directors of the Company considers sound and vital management to be essential
to the overall success of the Company and has decided to employ Employee
on the
terms and conditions set forth herein.
AGREEMENT
In
consideration of the covenants and agreements set forth herein and other
good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. For
purposes of this Agreement, the following terms shall have the meanings
indicated:
1.1 Company
means
IsoRay, Inc. or any successor entity.
1.2 Company
Board
means
the Company Board of Directors or the Board of Directors of any successor
entity
of Company.
1.3 Effective
Date. The
Effective Date of this Agreement is the date first set forth above.
1.4 Good
Reason
means
the occurrence of any of the following events to which Employee has not
expressly agreed to in writing:
(a) A
material reduction in Employee’s base salary as in effect on the Effective Date
or renewal date of this Agreement, whichever occurs later;
(b) A
material reduction in any fringe benefit provided to the Employee below the
level of such fringe benefit provided generally to other actively employed
and
similarly situated executives of the Company;
(c) The
change, in a materially adverse manner, of Employee's title, position, authority
or responsibilities (including reporting responsibilities and
authority);
(d) The
failure of the Company to obtain the assumption of this Agreement by any
successor, assignee, affiliate, or parent of the Company; and
(e) Any
material breach by the Company of any provision of this Agreement which is
not
cured by the Company within sixty (60) days written notice from Employee
specifying the nature of such breach.
1.5 Termination
for Cause
means
the termination of employment of Employee by the Company Board because of
Employee’s personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform
his
stated duties, willful violation of a material law, rule or regulation resulting
in a detriment to the Company or reflecting upon the Company’s integrity (other
than traffic infractions or similar offenses) or a material breach by Employee
of any term of this Agreement and failure to cure such breach within sixty
(60)
days after receipt of written notice from the Company specifying the nature
of
such breach or to pay compensation to the Company deemed reasonable by the
Company if the breach cannot be cured.
For
purposes of this Agreement, Employee’s termination of employment shall not be
considered to be a Termination for Cause unless and until there shall have
been
delivered to Employee a copy of a resolution, duly adopted by the affirmative
vote of not less than two-thirds of the entire membership of the Board at
a
meeting called and held for that purpose after reasonable notice to Employee
and
an opportunity for him, together with his counsel (if he elects to have counsel
represent him), to be heard, finding that, in the good faith opinion of the
Board, Employee is guilty of misconduct of the type described in this paragraph,
and specifying the particulars thereof in detail, which determination shall
be
subject to a complete and de novo review as to reasonableness and good
faith.
1.6 Total
and Permanent Disability
means a
physical or mental injury or illness of Employee that prevents him from
performing his customary duties and which is expected to be of long continued
and indefinite duration and that has caused Employee’s absence from service for
at least sixty (60) days.
2. Employment. The
Company hereby employs the Employee and the Employee accepts employment on
the
terms and conditions set forth herein.
2.1 Term.
The
term
of this Agreement shall commence on the date hereof and shall end on the
close
of business on the day before the fourth anniversary of the date of
commencement, unless terminated in accordance with the provisions of
Section 3 hereof. After the fourth anniversary of the date of commencement,
the term hereof shall be extended automatically for an additional one
(1) year on each anniversary date hereof beginning, unless prior to
ninety
(90) days before any such anniversary date the Company Board decides to modify
the term of, or to terminate in accordance with the provisions of Section 3
of this Agreement.
2.2 Duties
and Responsibilities. Employee
shall serve as Chief Executive Officer of the Company and be responsible
for
managing all of the ongoing operations of the Company, such duties to include,
maximizing the efficiency of operations, reviewing the performance and
compensation of all personnel of the Company, attending meetings from time
to
time at the headquarters of the Company.
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2.3 Compensation;
Fringe Benefits. During
the term of this Agreement and so long as Employee’s employment has not been
subject to Termination for Cause, he shall be entitled to the salary and
other
employment benefits provided in this Section 2.3 notwithstanding the
level
of compensation or benefits received by similarly situated employees. Employee
shall be entitled to an annual salary of no less than $180,000 payable pursuant
to the Company’s employment compensation policy as may exist from time to time,
with increases as may be made from time to time in accordance with the Company’s
regular salary administration practices as applied to executive officers
of the
Company, and which annual salary shall be increased to $220,000 effective
January 1, 2006. On or before January 1, 2006, the Company Board shall
establish, in its sole discretion, written performance objectives for Employee,
and if Employee has met these performance objectives on or before July 1,
2006,
then effective July 1, 2006, Employee’s annual salary shall be increased to
$300,000. Employee shall also be eligible to receive bonus payments under
a
bonus plan as established by the Board based upon performance goals established
in writing and agreed to by Employee and the Board within ninety (90) days
of
the Effective Date and each anniversary of the Effective Date. Employee shall
be
entitled to reimbursement for business expenses and automobile or other
transportation allowances on a basis no less favorable to Employee than in
accordance with the policy of the Company on the Effective Date. Employee
shall
also be entitled to continuing participation, consistent with past practices,
in
all other employee benefit plans and practices of the Company in place on
the
Effective Date, including, without limitation, life, long-term disability
and
accident insurance, employee savings and investment plans, stock plans, medical,
dental, hospitalization and other welfare benefit plans, and vacation plans,
without any material reduction in the value of the benefits previously provided
to Employee by IMI.
3. Termination. Employee’s
employment under this Agreement shall terminate upon the occurrence of any
one
of the following events:
3.1 Total
and Permanent Disability. In
the event that Employee suffers Total and Permanent Disability, the Company
may
terminate Employee’s employment, but shall be obligated to continue Employee’s
then regular salary and continue his benefits hereunder for a one year period.
Employee agrees, in the event of any dispute under this Section, to submit
to a
physical examination by a licensed physician selected by the Company, the
cost
of such examination to be paid by the Company, and the decision as to Employee’s
disability shall be conclusive and binding upon the Company and Employee.
Nothing contained herein shall be construed to affect Employee’s rights under
any disability insurance or similar policy, whether maintained by the Company,
Employee or another party.
3.2 Death. This
Agreement shall terminate upon the death of the Employee and no further
liability to Employee or to Employee’s estate hereunder shall remain other than
the payment, within ninety (90) days of the termination, of any accrued but
unpaid compensation as set forth in Section 2.3 hereof. Nothing contained
herein
shall be construed to affect Employee’s rights under any life insurance or
similar policy, whether maintained by the Company, or another
party.
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3.3 Termination
for Cause or Other Than For Good Reason. The
Company may terminate Employee’s employment for cause. The Company shall have no
further obligation to pay salary or benefits hereunder after the date of
any
Termination for Cause or termination by Employee other than for Good Reason,
but
shall be obligated to pay, within ninety (90) days of the termination, any
accrued but unpaid compensation as set forth in Section 2.3 hereof.
3.4 Good
Reason. Employee
may terminate Employee’s employment for Good Reason at any time during the term
of this Agreement. In the event Employee terminates his employment for Good
Reason, or the Company terminates Employee’s employment “without cause”, the
Company shall be obligated to continue Employee’s then regular salary and
continue his benefits hereunder for a one year period.
4. Covenant
Not to Compete and Confidentiality.
4.1 Covenant
Not to Compete. Employee
shall not engage in any business or perform any service, directly or indirectly,
or have any interest, whether as a proprietor, partner, employee, investor,
principal, agent, consultant, director or officer, in any enterprise which
manufactures radioisotopes or radioactive brachytherapy devices for commercial
purposes in the United States or which is in competition with the business
of
the Company (i) during the term of his employment, or (ii) one
(1) year after the termination of this Agreement; provided,
however, that
this
Covenant Not to Compete shall not apply if Employee’s employment is terminated
by the Company without cause; or by Employee for Good Reason; or if Employee
makes himself available for employment by the Company at the end of the term
of
this Agreement upon similar terms and conditions to those contained herein
and
the Company thereupon refuses to employ Employee. Nothing in this Section 4
shall be deemed to prohibit Employee from purchasing less than five percent
(5%)
of the outstanding shares of any corporation whose shares are traded on a
national exchange and which, at the time of purchase, is not engaged in
competition with the Company.
If
any
court shall determine that the duration or geographical limit of the foregoing
restriction is unenforceable, it is the intention of the parties that the
foregoing restriction shall not be terminated but shall be deemed amended
to the
extent required to render it valid and enforceable, such amendment to apply
only
with respect to the operation of this Section 4 in the jurisdiction
of the
court that has made the adjudication.
4.2 Confidential
Information. Employee
acknowledges that he has and will have access to trade secrets and confidential
business information of the Company and IMI throughout the term of this
Agreement and that any such trade secret or confidential information, regardless
of whether Employee alone or with others developed any such trade secret
or
confidential information, shall be and shall remain the property of the Company.
During the term of this Agreement and after termination of employment, Employee
shall not, either voluntarily or involuntarily, on either his own account,
as a
member of a firm, or on behalf of another employer or otherwise, directly
or
indirectly use or reveal to any person, partnership, corporation or association
any trade secret or confidential information of the Company, its parent,
subsidiaries, or affiliates. Such trade secrets shall include, but shall
not be
limited to, business plans, marketing plans or programs, financial information,
forecasts, compensation arrangements, contracts (whether leases, financing
arrangements, or other contracts) customer lists, and business opportunities.
The term “trade secrets” shall not include information generally available to
the public or a governmental agency except such term “trade secrets” shall
include information provided to the Securities and Exchange Commission or
other
governmental agency on a confidential basis. Employee will not make available
to
any person, partnership, limited liability company, corporation or association,
or retain after termination of employment, any Company or IMI policy manuals,
contracts or other written materials.
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4.3 Injunctive
Relief. Employee
acknowledges that the restrictions contained in this Section 4 are
a
reasonable and necessary protection of the immediate interests of the Company
and IMI and that any violation of these restrictions would cause substantial
injury to the Company and IMI. In the event of a breach or threatened breach
by
Employee of these restrictions, each of the Company and IMI shall be entitled
to
apply to any court of competent jurisdiction for an injunction restraining
Employee from such breach or threatened breach; provided,
however,
that the
right to apply for an injunction shall not be construed as prohibiting either
the Company or IMI from pursuing any other available remedies for such breach
or
threatened breach.
5. Binding
Effect; Assignment. This
Agreement shall be binding upon and inure to the benefit of Employee, the
Company and their respective heirs, executors, administrators, successors
and
assigns; provided,
however,
that
Employee may not assign his rights hereunder without the prior written consent
of the Company and may not assign his obligations hereunder. The Company
may
assign either its rights or obligations hereunder to any of its subsidiaries
or
affiliated corporation or to any successor to substantially all of the assets
or
business of the Company.
6. Amendments. This
Agreement may not be amended, modified or supplemented in any respect except
by
a subsequent written agreement executed by the Company and
Employee.
7. Miscellaneous.
7.1 Entire
Agreement. This
Agreement rescinds and supersedes any other agreement, whether oral or written,
relating to Employee’s employment by the Company and IMI, including without
limitation that certain Employment Agreement between Employee and IMI (the
“Prior Agreement”), and contains the entire understanding between the parties
relative to the employment of Employee, there being no terms, conditions,
warranties, or representations other than those contained or referred to
herein,
and no amendment hereto shall be valid unless made in writing and signed
by both
of the parties hereto. As of the Effective Date, Employee shall have no further
rights, and the Company no further obligations, under the Prior Agreement.
Without limiting the generality of the foregoing, Employee expressly
acknowledges and agrees that the incentive bonus set forth in Section 4
thereof is no longer in effect and that all employee benefits set forth therein
have been replaced by such benefits provided by the Company
hereunder.
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7.2 Governing
Law. This
Agreement shall be interpreted and construed in accordance with the laws
of the
State of Washington as applied to residents of Washington without regard
to
conflicts of law principles.
7.3 Severability. In
the event that any provisions herein shall be legally unenforceable, the
remaining provisions nevertheless shall be carried into effect.
7.4 Attorneys’
Fees. In
the event of any litigation between the parties hereto arising out of the
terms,
conditions and obligations expressed in this Agreement, the prevailing party
in
such litigation shall be entitled to recover reasonable attorneys’ fees incurred
in connection therewith.
7.5 Notices. All
notices required or permitted to be given hereunder shall be deemed given
if in
writing and delivered personally or sent by telex, telegram, telecopy, or
forwarded by prepaid registered or certified mail (return receipt requested)
to
the party or parties at the following addresses (or at such other addresses
as
shall be specified by like notices), and any notice, however given, shall
be
effective when received:
To
Employee:
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To
Company:
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7.6 Waiver. The
waiver by any party of a breach of any provision of this Agreement by the
other
shall not operate or be construed as a waiver of any subsequent breach of
the
same provision or any other provision of this Agreement.
7.7 Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
7.8 Headings. The
subject headings to the sections in this Agreement are included for purposes
of
convenience only and shall not affect the construction or interpretation
of any
of its provisions.
7.9 Construction. Each
party has had the opportunity to set forth in this Agreement all matters
related
to the subject hereof. The Company and Employee acknowledge the binding legal
effect of this Agreement, that this Agreement has been negotiated by the
parties
hereto and that each party has, to the extent desired, sought legal counsel
related to the terms, conditions and effect of this Agreement.
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7.10 Assistance
in Litigation. Employee
shall upon reasonable notice, furnish such information and reasonable assistance
to the Company as it may reasonably require in connection with any litigation
in
which it is, or may become, a party either during or after
employment.
7.11 Limited
Effect of Waiver by Company. Should
the Company waive breach of any provision of this Agreement by the Employee,
that waiver will not operate or be construed as a waiver of further breach
by
the Employee.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first
hereinabove written.
| COMPANY: | ||
| ISORAY, INC., a Minnesota corporation | ||
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| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
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Its: Chief Financial Officer |
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| Attest: | EMPLOYEE: | ||
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||
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Secretary
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