Exhibit 10.1

 

FIRST AMENDMENT TO THE

EMPLOYMENT AGREEMENT BETWEEN BIO-LOGIC SYSTEMS, CORP.

AND GABRIEL RAVIV

 

WHEREAS, Bio-logic Systems Corporation (the “Company”) entered into an
Employment Agreement (the “Agreement”) with Gabriel Raviv, Ph.D. (the
“Executive”) dated March 1, 2004;

 

WHEREAS, Section 21 of the Agreement provides that the Company and the Executive
have the right to modify the Agreement if such modification is executed by both
the Company and the Executive

 

WHEREAS, the Company and the Executive now desire to modify the Agreement.

 

NOW, THEREFORE, the Agreement is hereby modified as follows, effective as of
December 16, 2005:

 

I.

 

Subsection 3(b) of the Agreement is modified by adding the following to the end
thereof:

 

“Notwithstanding the foregoing, any such bonus shall be paid no later than the
March 15 of the calendar year following the calendar year during which ends the
fiscal year for which the bonus is paid.”

 

II.

 

Subsection 3(c) of the Agreement is modified by adding the following to the end
thereof:

 

“Notwithstanding the foregoing, the exercise price of any such stock option
shall (i) never be less than the fair market value of the underlying stock on
the date of grant, (ii) be subject to taxation under Section 83 of the Internal
Revenue Code of 1986, as amended (the “Code”), and (iii) not include any feature
that provides for the deferral of compensation. To the extent necessary to avoid
liability to the Executive under Section 409A of the Code, the Company hereby
agrees to timely amend, in a manner acceptable to the Executive, any and all
stock option plans that it maintains and any and all grants of stock options to
the Executive that are outstanding on December 16, 2005.”

--------------------------------------------------------------------------------

III.

 

Subsection 6(e) of the Agreement is modified to read in its entirety as follows:

 

“(e) As consideration for the covenants set forth in this Section 6, on the
six-month anniversary of the date of termination of the Executive’s employment
with the Company, the Company shall pay $470,000 to the Executive; provided,
however, that no such payment shall be made if the Executive’s employment with
the Company is terminated for reasons of Cause (as defined in Subsection 8(e)),
even though such covenants shall remain enforceable and in full force and
effect.”

 

IV.

 

The first paragraph of Section 8 of the Agreement is modified by inserting the
following sentence immediately after the first sentence thereof:

 

“Any such Accrued Obligations shall be paid or transferred to the Executive
under this paragraph on the six-month anniversary of the date of termination of
the Executive’s employment with the Company upon conclusion of the Term.”

 

V.

 

Subsection 8(a) of the Agreement is modified by deleting the last two sentences
of Subsection 8(a) and replacing them with the following:

 

“The payment of such amounts shall be made to the Executive (or surviving spouse
or estate, as appropriate) in a single lump sum on the six-month anniversary of
the date of termination of the Executive’s employment with the Company. Other
than payment of such amounts, the Company shall have no obligations under this
Agreement.”

 

VI.

 

Subsection 8(b) of the Agreement is modified by deleting the last two sentences
of Subsection 8(b) and replacing them with the following:

 

“The payment of such amounts shall be made to the Executive in equal monthly
installments over a period of twenty-four months beginning on the six-month
anniversary of the date of termination of the Executive’s employment with the
Company. Other than payment of such amounts, the Company shall have no
obligations under this Agreement.”

 

VII.

--------------------------------------------------------------------------------

The heading to subsection 8(c) of the Agreement is modified to read in its
entirety as follows:

 

“Change in Control”

 

VIII.

 

Subsection 8(c)(i) of the Agreement is modified to read in its entirety as
follows:

 

“Sixty (60) days following a Change in Control, the Company shall provide to the
Executive the following (subject to the execution and delivery by the Executive
to the Company of the General Release and Cooperation Agreement described in
Section 17 hereof):

 

(A) the Accrued Obligation;

 

(B) a lump sum payment equal to three times the Executive’s Base Salary;

 

(C) a lump sum payment equal to the unpaid portion of the Executive’s target
bonus for the year of termination, determined on a pro rata basis according to
the number of days elapsed since the beginning bonus plan year;

 

(D) a lump sum payment equal to the aggregate premiums to be paid for the
continuation of coverage of medical and dental benefits under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA) for a period of 18 months
following the Change in Control; and

 

(E) a lump sum payment equal to the aggregate premiums to be paid for
continuation of the Supplemental Disability Policy for a period of 18 months
following the Change in Control.

 

Other than payment of such amounts, the Company shall have no obligations under
this Agreement.”

 

IX.

 

Subsection 8(c)(ii) of the Agreement is modified to read in its entirety as
follows:

 

  “(ii) For purposes of this Agreement, a “Change in Control” shall be deemed to
have occurred if any of the following events occurs:

 

  (A)

A change in the ownership of the Company. A change in ownership of the Company
shall occur on the date that any one person, or more than one person acting as a
“Group” (as defined under section 409A of the Code), acquires ownership of stock
of

--------------------------------------------------------------------------------

 

the Company that, together with stock held by such person or Group, constitutes
more than 50% of the total fair market value or total voting power of the stock
of the Company; provided, however, that, if any one person or more than one
person acting as a Group, is considered to own more than 50% of the total fair
market value or total voting power of the stock of the Company, the acquisition
of additional stock by the same person or persons is not considered to cause a
change in the ownership of the Company.

 

  (B) A change in the effective control of the Company. A change in the
effective control of the Company occurs on the date that:

 

  (I) any one person, or more than one person acting as a Group, acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company
possessing 35% or more of the total voting power of the stock of the Company; or

 

  (II) a majority of the members of the Company’s board of directors is replaced
during any 12-month period by directors whose appointment or election is not
endorsed by a majority of the members of the Company’s board of directors prior
to the date of the appointment or election; provided, however, that, if one
person, or more than one acting as a Group, is considered to effectively control
the Company, the acquisition of additional control of the Company by the same
person or persons is not considered a change in the effective control of the
Company.

 

  (C) A change in the ownership of a substantial portion of the Company’s
assets. A change in the ownership of a substantial portion of the Company’s
assets occurs on the date that any one person, or more than one person acting as
a Group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by such person or persons) assets from the
Company that have a total Gross Fair Market Value (as defined in Subsection
8(c)(iii) hereof) equal to or more than 40% of the total Gross Fair Market Value
of all of the assets of the Company immediately prior to such acquisition or
acquisitions; provided, however, that, a transfer of assets by the Company is
not treated as a change in the ownership of such assets if the assets are
transferred to:

 

  (I) a stockholder of the Company (immediately before the asset transfer) in
exchange for or with respect to its stock;

--------------------------------------------------------------------------------

  (II) an entity, 50% or more of the total value or voting power of which is
owned, directly or indirectly, by the Company;

 

  (III) a person, or more than one person acting as a Group, that owns, directly
or indirectly, 50% or more of the total value or voting power of all the
outstanding stock of the Company; or

 

  (IV) an entity, at least 50% of the total value or voting power of which is
owned, directly or indirectly, by a person described in Subsection
8(c)(ii)(C)(III) hereof).

 

  (iii) For purposes of this Subsection 8(c):

 

  (A) Gross Fair Market Value means the value of the assets of the Company, or
the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets, and

 

  (B) stock ownership shall be determined under section 409A of the Code.”

 

X.

 

Subsection 8(d) of the Agreement is modified by deleting the last two sentences
of Subsection 8(d) and replacing them with the following:

 

“The aggregate amounts payable to the Executive as set forth in parts (i), (ii),
(iii), (iv) and (v) of this Subsection 8(d) shall be payable to the Executive in
one lump sum payment on the six-month anniversary of the date of termination of
the Executive’s employment with the Company. Other than payment of such amount,
the Company shall have no obligations under this Agreement.”

 

XI.

 

Section 15 of the Agreement is modified by adding the following to the end
thereof:

 

“Notwithstanding the foregoing, any such indemnification payment shall be made
to the Executive no later than the March 15 of the calendar year following the
calendar year in which the Executive incurs the expense subject to
indemnification.”

 

XII.

 

As hereby amended, the Agreement shall remain in full force and effect.

--------------------------------------------------------------------------------

Date: 16 December 2005

 

BIO-LOGIC SYSTEMS CORP. By:   /s/    Roderick G. Johnson Name:   Roderick G.
Johnson Its:   President and Chief Operating Officer /s/    Gabriel Raviv, Ph.D.

Gabriel Raviv, Ph.D.