EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into June 28,
2004, by and between HealthTronics Surgical Services Inc., a Georgia corporation
(the “Company”), and Victoria Beck (the “Employee”).

 

PRELIMINARY STATEMENTS

 

A. The Company desires to secure the services of the Employee and the Employee
desires to be employed by the Company, on the terms and subject to the
conditions set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties agree as follows:

 

1. Employment. The Company hereby agrees to continue to employ the Employee and
the Employee hereby agrees to continue to serve the Company, on the terms and
conditions set forth in this Agreement.

 

2. Term of Agreement. This Agreement shall commence on the date hereof, and
unless it is terminated earlier in the manner provided in this Agreement, shall
continue until March 31, 2005 (the “Term”).

 

3. Position and Duties. The Employee shall serve as Executive Vice President and
Chief Accounting Officer. The Employee shall report to the Chief Financial
Officer and/or Chief Executive Officer, and shall have such other powers and
duties as may from time to time be delegated to her by the Chief Financial
Officer and/or Chief Executive Officer. The Employee shall devote substantially
all of her working time and efforts during normal business hours to the business
and affairs of the Company.

 

4. Place of Performance. In connection with her employment by the Company, the
Employee shall be based at the Company’s offices in Marietta, Georgia, except
for reasonable required travel on the Company’s business.

 

5. Compensation and Related Matters.

 

(a) Base Salary; Bonus. The Employee shall receive a base salary, payable in
substantially equal bi-weekly installments, at the monthly rate of at least
$11,250 per month during the Term, or such greater amount as shall be determined
by the Chief Executive Officer (the “Base Salary”). The Base Salary may, by
action and in the discretion of the Chief Executive Officer, be increased at any
time or from time to time; provided that the Base Salary shall not be decreased
for any reason whatsoever. In addition, Employee shall be entitled to any bonus
payments determined by the Chief Executive Officer.

 

(b) Other Benefits. The Employee shall be entitled to participate in or receive
benefits under any employee benefit plan or arrangement made available generally
by the Company to its executives, subject to and on a basis consistent with the
terms, conditions and

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overall administration of such plan or arrangement. The Company shall also
provide the Employee such coverage under any directors’ and officers’ liability
policies it maintains as is provided to its other senior management employees.
Nothing paid or provided to the Employee under any plan or arrangement presently
in effect or made available in the future shall be deemed to be in lieu of the
Base Salary or any other obligation payable to the Employee pursuant to this
Agreement.

 

(c) Vacation. The Employee shall be entitled to the greater of (i) four (4)
weeks of paid vacation per year, or (ii) the number of paid vacation days in
each calendar year determined by the Company from time to time for its senior
executive officers. The Employee shall also be entitled to all paid holidays
given by the Company to its senior officers.

 

6. Restrictive Covenants.

 

(a) Unauthorized Disclosure. During the Term and for a period of one (1) year
following any termination of this Agreement, the Employee shall not, without the
written consent of the Board of Directors of the Company or a person authorized
thereby, disclose to any person, other than an employee of the Company (or its
subsidiaries) or a person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Employee of her duties as
an Employee of the Company, any confidential information obtained by her while
in the employ of the Company with respect to any of the Company’s customers,
suppliers, creditors, lenders, investment bankers, methods of distribution or
methods of marketing; provided, however, that confidential information shall not
include any information known generally to the public (other than as a result of
unauthorized disclosure by the Employee). Notwithstanding the foregoing, nothing
herein shall be deemed to restrict the Employee from disclosing confidential
information to the extent required by law.

 

(b) Nonsolicitation of Employees. During the Term and for a period of six (6)
months following any termination of this Agreement, the Employee shall not
(other than for the benefit of the Company) directly or indirectly, for herself
or for any other person, firm, corporation, partnership, association or other
entity, attempt to employ or enter into any contractual arrangement with any
employee or former employee of the Company, unless (i) such employee or former
employee has not been employed by the Company for a period in excess of three
(3) months, (ii) such employee has been terminated by the Company or (iii)
solicitation is approved by Argil Wheelock, in each such case the three (3)
month restriction shall not apply.

 

7. Termination. The Employee’s employment under this Agreement may be terminated
without any breach of this Agreement only on the following circumstances:

 

(a) Death. The Employee’s employment under this Agreement shall terminate
automatically upon her death.

 

(b) Disability. If, as a result of the Employee’s incapacity due to physical or
mental illness, the Employee is absent from the performance of her duties under
this Agreement for a period of sixty (60) days during any four-month period, and
within 10 days after written notice of such absence is received by the Employee
from the Company, the Employee does not return to the performance of her duties
under this Agreement, the Company may terminate the Employee’s employment under
this Agreement for “Disability.”

 

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(c) Cause. The Company may at any time terminate the Employee’s employment under
this Agreement for Cause. For purposes of this Agreement, “Cause” means: (i) the
willful and continued failure by the Employee to substantially perform her
duties under this Agreement (other than any such failure resulting from the
Employee’s incapacity due to physical or mental illness or from the termination
of this Agreement by the Employee for Good Reason), after a written demand for
substantial performance is delivered to the Employee by the Company specifically
identifying the manner in which the Company believes the Employee has not
substantially performed her duties, and the Employee shall have failed to resume
substantial performance of such duties within thirty (30) days of receiving such
written demand, (ii) the willful engaging by the Employee in criminal conduct
(including embezzlement and criminal fraud) which is demonstrably and materially
injurious to the Company, monetarily or otherwise, or (iii) the conviction of
the Employee of a felony (other than a traffic violation).

 

(d) Termination by the Employee. The Employee may terminate her employment under
this Agreement (i) for Good Reason, (ii) in connection with the expiration of
the initial term, or (iii) if her health should become impaired to any extent
that makes the continued performance of her duties under this Agreement
hazardous to her physical or mental health, provided that the Employee shall
have furnished the Company with a written statement from a board certified
doctor to such effect and provided, further, that at the Company’s request and
expense the Employee shall submit to an examination by a board certified doctor
reasonably selected by the Company and such doctor shall have concurred in the
conclusion of the Employee’s doctor.

 

For purposes of this Agreement, “Good Reason” means, without the Employee’s
prior written consent, the occurrence of any one or more of the following: (A)
any action by the Company which results in a material diminution in the nature
or status of the Employee’s position, authority, duties or responsibilities; (B)
a failure by the Company to pay any amounts of Base Salary or other amounts
payable hereunder, or to comply with its other obligations and agreements
contained herein; (C) a failure of the Company to obtain an agreement from any
successor to the Company to assume and agree to perform this Agreement, as
contemplated in Section 9(c) hereof; (D) Employee no longer reports directly to
the person(s) specified in Section 3 hereof, or (E) any purported termination by
the Company of the Employee’s employment that is not effected in accordance with
the terms of this Agreement, and for purposes of this Agreement, no such
termination shall be effective.

 

The Employee’s right to terminate her employment for Good Reason shall not be
affected by her incapacity due to physical or mental illness, nor shall the
Employee’s continued employment constitute consent to, or a waiver of her rights
with respect to, any circumstances constituting Good Reason.

 

(e) Notice of Termination. Any termination of the Employee’s employment by the
Company or by the Employee (other than termination pursuant to Section 7(a),
above) shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a
written notice which indicates the specific termination provision in this
Agreement relied upon and sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee’s
employment under the provision so indicated. The failure by the Employee to set
forth in any Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason shall not waive any right of the Employee hereunder or
preclude the Employee from asserting such fact or circumstance in enforcing her
rights hereunder.

 

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(f) Date of Termination. “Date of Termination” shall mean (i) if the Employee’s
employment is terminated by her death, the date of her death, (ii) if the
Employee’s employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Employee shall not have
returned to the performance of her duties during such thirty (30) day period),
(iii) if the Employee’s employment is terminated by the Company for Cause, the
date specified in the Notice of Termination after the expiration of any cure
periods, and (iv) if the Employee’s employment is terminated for any other
reason, the date on which a Notice of Termination is given after the expiration
of any cure periods; provided, that if within thirty (30) days after any Notice
of Termination one party notifies the other party that a dispute exists
concerning the termination, the Date of Termination shall be the date finally
determined to be the Date of Termination, either by mutual written agreement of
the parties or by a binding and final arbitration award or an adjudication by a
court of competent jurisdiction (and in such event the Company shall continue to
perform its obligations hereunder until the date so determined).

 

(g) Effect of Termination. Notwithstanding anything to the contrary in this
Agreement, upon termination of this Agreement, Employee shall not be deemed to
have released the Company or any of its affiliates or any of their respective
successors in interest, from any obligation to indemnify Employee in accordance
with (i) the Company’s directors’ and officers’ insurance policies in effect
prior or subsequent to the termination of this Agreement, (ii) the Company’s
Bylaws, (iii) the Company’s Articles of Incorporation, or (iv) that certain
Agreement and Plan of Merger, dated as of June 11, 2004, by and between Prime
Medical Technologies, Inc. and the Company, because Employee is or was a
director or officer of the Company or any of its affiliates.

 

8. Compensation Upon Termination or During Disability.

 

(a) Death. If the Employee’s employment is terminated by reason of her death,
the Company shall pay to such person as the Employee shall have designated in a
notice filed with the Company, or, if no such person has been designated, to her
estate, any unpaid amounts of her Base Salary accrued prior to the date of her
death; and upon making such payments, the Company shall have no further
liability hereunder (other than for reimbursement for reasonable business
expenses incurred prior to the date of the Employee’s death pursuant to the
Company’s customary practices); provided, that the Employee’s spouse,
beneficiaries or estate shall also be entitled to receive any amounts or other
benefits payable pursuant to any pension or employee benefit plan, life
insurance policy or other plan, program or policy then maintained or provided by
the Company in accordance with the terms thereof. In addition, all unvested
options to purchase stock in the Company (the “Options”) held by the Employee
under any plan or arrangement between the Employee and the Company on the Date
of Termination shall immediately vest and upon vesting shall become exercisable.
Moreover, each such Option that is deemed vested pursuant to the preceding
sentence, together with any previously vested and unexercised Options, shall be
exercisable by the Employee in accordance with their respective terms for a
period of three (3) years following the Date of Termination, or, if earlier,
until the then scheduled expiration date(s) of such Options. The Company shall
provide the Employee such cooperation and assistance as may reasonably be
necessary to effect cashless exercises of such Options beneficially owned by the
Employee at the Date of Termination.

 

(b) Disability. During any period that the Employee fails to perform her duties
hereunder as a result of incapacity due to physical or mental illness, the
Employee shall continue to receive her Base Salary until the Employee’s
employment is terminated pursuant to Section 7(b) hereof, or until the Employee
terminates her employment pursuant to Section 7(d)(ii) hereof,

 

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whichever first occurs. If the Employee’s employment is terminated by reason of
her Disability, the Company shall pay to the Employee any unpaid amounts of her
Base Salary accrued prior to the date of such termination; and upon making such
payments, the Company shall have no further liability hereunder (other than for
reimbursement for reasonable business expenses incurred prior to the date of
such termination pursuant to the Company’s customary practices); provided, that
the Employee shall also be entitled to receive any amounts or other benefits
payable pursuant to any pension or employee benefit plan, life insurance policy
or other plan, program or policy then maintained or provided by the Company in
accordance with the terms thereof. In addition, all unvested Options held by the
Employee on the Date of Termination shall immediately vest and upon vesting
shall become exercisable. Moreover, each such Option that is deemed vested
pursuant to the preceding sentence, together with any previously vested and
unexercised Options, shall be exercisable by the Employee in accordance with
their respective terms for a period of three (3) years following the Date of
Termination, or, if earlier, until the then scheduled expiration date(s) of such
Options. The Company shall provide the Employee such cooperation and assistance
as may reasonably be necessary to effect cashless exercises of such Options
beneficially owned by the Employee at the Date of Termination.

 

(c) Cause; Other than for Good Reason. Except as otherwise provided herein, if
the Employee’s employment is terminated by the Company for Cause, or by the
Employee for other than Good Reason, the Company shall pay the Employee her Base
Salary and accrued vacation pay through the Date of Termination at the rate in
effect at the time Notice of Termination is given (or on the Date of Termination
if no Notice of Termination is required hereunder) plus all other amounts to
which the Employee is entitled under any plan, program, policy or practice of
the Company or otherwise at the time such payments are due and such payments
shall, assuming the Company is in compliance with the provisions of this
Agreement, fully discharge the Company’s obligations hereunder. In addition, all
unvested Options shall terminate.

 

(d) Good Reason; Other than for Cause or Disability. If the Company terminates
the Employee’s employment other than for Cause or Disability, the Employee
terminates her employment for Good Reason, or when Employee’s employment
terminates at the end of the Term as provided in Section 2, then:

 

        (i) within thirty (30) days after the Date of Termination, the Company
shall pay the Employee an amount equal to the sum of: (i) her accrued but unpaid
Base Salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given (or the Date of Termination where no Notice of
Termination is required hereunder) and (ii) any accrued incentive compensation
and other amounts to which the Employee is then entitled under any plan, policy,
practice or program of the Company at the time such payments are due, including,
but not limited to, accrued but unpaid vacation in Section 5(c) hereof; and

 

        (ii) in lieu of any further salary, incentive compensation or other
payments for periods subsequent to the Date of Termination, and as a severance
benefit to the Employee (the “Severance Benefit”), the Company will pay to the
Employee in a prompt lump-sum payment, payable in cash, no later than thirty
(30) days following the date of termination, an amount equal to two (2) times
the Employee’s average annual compensation averaging all forms of compensation
for the three years included in the December 31, 2003 HealthTronics Surgical
Services, Inc. proxy Summary Compensation Table.

 

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(e) Acceleration of Vesting; Sale of Shares. Unless the Company terminates the
Employee’s employment for Cause or the Employee terminates her employment for
other than Good Reason, upon (i) termination of the Employee’s employment or
(ii) a Change of Control, all unvested Options held by the Employee on the Date
of Termination shall immediately vest and upon vesting shall become exercisable.
Moreover, each such Option that is deemed vested pursuant to the preceding
sentence, together with any previously vested and unexercised Options, shall be
exercisable by the Employee in accordance with their respective terms for a
period of three (3) years following the Date of Termination or the date of the
Change in Control, as the case may be, or, if earlier, until the then scheduled
expiration date(s) of such Options. The Company shall provide the Employee such
cooperation and assistance as may reasonably be necessary to effect cashless
exercises of such Options beneficially owned by the Employee at the Date of
Termination.

 

For purposes of this Agreement, a “Change in Control” means and shall be deemed
to have occurred if: (i) any person, entity or “group”, within the meaning of
Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), other than (A) the Company, its subsidiaries or
any employee benefit plan established and maintained by the Company or its
subsidiaries, or (B) the Employee or any of the Employee’s affiliates, becomes
the “beneficial owner” (within the meaning of Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company representing
forty percent (40%) or more of the combined voting power of the Company’s then
outstanding securities entitled to vote generally in the election of directors;
(ii) the individuals who, as of the date hereof constitute the Company’s Board
of Directors (as of the date hereof, the “Incumbent Board”) cease for any reason
to constitute a majority of the Board of Directors, provided that any person
becoming a director subsequent to the date hereof whose election, or nomination
for election by the Company’s stockholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than the
election or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board; or (iii) the shareholders of the Company approve (A) a reorganization,
merger or consolidation with respect to which persons who were the shareholders
of the Company immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than 50% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated company’s then outstanding voting securities, (B) a
liquidation or dissolution of the Company, or (C) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.

 

(f) Maintenance of Benefit. Unless the Employee is terminated for Cause, the
Company shall maintain in full force and effect, for the continued benefit of
the Employee and/or her family for one (1) year after termination for any
reason, all employee medical, health and hospitalization plans and programs in
which the Employee and/or her family was entitled to participate in immediately
prior to the Date of Termination provided that the continued participation of
the Employee and/or her family is possible under the general terms and
provisions of such plans and programs. In the event that the participation of
the Employee and/or her family in any such plan or program is barred, the
Company shall arrange to provide the Employee and/or her family with benefits
substantially similar to those which the Employee and/or her family would
otherwise have been entitled to receive under such plans and programs from which
her or their continued participation is barred.

 

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9. Successors.

 

(a) This Agreement is personal to the Employee and without the prior written
consent of the Company shall not be assignable by the Employee other than by
will or the laws of descent and distribution. This Agreement and all rights of
the Employee hereunder shall inure to the benefit of and be enforceable by the
Employee’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If the Employee dies
while any amounts would still be payable to her hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Employee’s personal or legal representatives or, if there
be no such persons, the Employee’s estate.

 

(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

 

(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, by agreement in form and substance
satisfactory to the Employee, to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Employee to compensation from the Company in the same amount and on the same
terms as she would be entitled to hereunder if she terminated her employment for
Good Reason, except for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, the term “Company” means the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers an assumption and agreement provided for
in this Section 9(c) or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law, or otherwise.

 

10. Miscellaneous.

 

(a) The failure by either party hereto to insist upon compliance with any
condition or provision of this Agreement shall not be deemed a waiver of such
condition or provision or any other provision hereof.

 

(b) No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement and this Agreement supersedes any
other agreement or understanding between the Company and the Employee relating
to the Employee’s employment and any compensation or benefits in respect
thereof.

 

(c) The Company may withhold from any accounts payable under this Agreement all
Federal, state or other taxes as legally shall be required.

 

(d) The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Georgia, without reference to
principles of conflicts of laws.

 

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(e) The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.

 

(f) This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and
the same instrument.

 

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SIGNATURE PAGE TO

EMPLOYMENT AGREEMENT WITH VICTORIA W. BECK

 

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective for
all purposes as of the date provided above.

 

COMPANY: HEALTHTRONICS SURGICAL SERVICES, INC.

By:

 

/s/    Argil J. Wheelock

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Argil J. Wheelock, M.D.

   

Chairman of the Board and

Chief Executive Officer

EMPLOYEE:

/s/    Victoria W. Beck

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Victoria W. Beck

 

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