Exhibit 10.1

TERMINATION AND CONSULTING AGREEMENT

This Termination and Consulting Agreement (“Agreement”), dated as of September
19, 2008 (the “Effective Date”), is by and between HealthTronics, Inc., a
Georgia corporation (“HealthTronics”), and Ross. A. Goolsby (“Goolsby”).

RECITALS

WHEREAS, Goolsby has served as Senior Vice President and Chief Financial Officer
of HealthTronics pursuant to the terms of an Executive Employment Agreement,
effective as of January 8, 2007 (as amended, the “Employment Agreement”);

WHEREAS, on the date hereof, Goolsby has resigned, effective September 30, 2008
(the “Termination Date”), from all of his officer, director and employment
positions with HealthTronics and its subsidiaries;

WHEREAS, HealthTronics and Goolsby agree that it is in their mutual interests
that the Employment Agreement and their employment relationship be terminated
upon the terms and conditions provided in this Agreement (the “Termination”);
and

WHEREAS, HealthTronics desires to engage the service of Goolsby as a consultant
and Goolsby desires to accept such engagement upon the terms and conditions
hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:

1. Termination of Employment Agreement and Employment Relationship.
HealthTronics and Goolsby hereby terminate the Employment Agreement and agree
that the other shall no longer be bound by, and is hereby released from, any and
all of the terms, obligations and conditions contained in the Employment
Agreement (except as provided in Section 7 hereof); provided, that Goolsby shall
be entitled to be paid, based on his current salary, his accrued and unpaid
salary through the Termination Date in accordance with HealthTronics’ regular
payroll practices. Goolsby hereby irrevocably resigns effective as of the
Termination Date, and HealthTronics hereby accepts such resignation, from any
and all director, manager, employment and officer positions, relations, and
responsibilities that Goolsby may hold or claim to hold with HealthTronics and
any of HealthTronics’ subsidiaries and/or affiliates (collectively, including
HealthTronics, the “Affiliated Entities,” and individually, an “Affiliated
Entity”). Goolsby agrees that, except as set forth in the proviso in the first
sentence of this Section 1, Goolsby irrevocably forfeits any rights to receive
any future compensation for Goolsby’s prior performance (including, without
limitation, salary, incentive compensation and/or stock options) that Goolsby
may have been entitled to receive under the Employment Agreement.

2. Stock Options. HealthTronics and Goolsby acknowledge and agree that
(a) Schedule 1 hereto sets forth the outstanding stock options to acquire
HealthTronics common stock owned by Goolsby immediately following the execution
of this Agreement (the “Stock Options”) and (b) other than the Stock Options,
Goolsby forfeits any rights to any other, and

 

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holds no, options, warrants, convertible securities, restricted stock awards,
phantom or other rights to acquire HealthTronics common stock. HealthTronics and
Goolsby agree that the Stock Options shall continue in full force and effect
under the terms of the stock option plan(s) and agreement(s) governing such
Stock Options, including that any unvested Stock Options existing at the
expiration of the Consulting Services Period (as defined below) would be
cancelled at such time. HealthTronics and Goolsby agree that any unvested
restricted stock awards held by Goolsby immediately prior to the date hereof are
hereby terminated and of no further force and effect.

3. Severance Payment. HealthTronics will pay Goolsby $95,000 in a lump sum on
the Termination Date, less applicable withholdings.

4. Continuation of Benefits. From the Termination Date until the earlier of
(a) January 7, 2009 and (b) the expiration of the Consulting Services Period (as
defined below), or such additional period of continued participation as required
by applicable law, Goolsby shall be entitled to continue to participate in
HealthTronics’ employee benefit plans made generally available by HealthTronics
to its employees, but only to the extent permitted under applicable law and the
terms of such plans. To the extent Goolsby elects continuation coverage under
the HealthTronics’ medical plan as required to be provided under the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”), HealthTronics shall
reimburse Goolsby for expenditures made by Goolsby to continue such medical
coverage to the extent necessary to provide the same cost of coverage for
Goolsby under such plan as of the Effective Date; provided, that (x) Goolsby
shall provide HealthTronics documentation reasonably acceptable to HealthTronics
to evidence such expenditures, and (y) HealthTronics’ obligation to reimburse
for such expenditures shall terminate upon the sooner to occur of (i) the
expiration of the period of coverage under the HealthTronics’ medical plan as
provided under COBRA, and (ii) the date upon which Goolsby is eligible to
participate in the medical or health plan of a new employer. In no event shall
HealthTronics be responsible for making payments directly to the provider for
the HealthTronics’ medical plan with respect to COBRA coverage.

5. Consulting Services. From October 1, 2008 until January 7, 2009 (the
“Consulting Services Period”), Goolsby shall render consulting services (the
“Services”) to the Affiliated Entities as may be requested by HealthTronics from
time to time, including but not limited to assisting HealthTronics in evaluating
strategic opportunities and operational performance. Goolsby shall not incur any
travel or other expenses in performing the Services unless approved in advance
by the Chief Executive Officer of HealthTronics. Goolsby may engage in other
services, employment or occupation during the Consulting Services Period as long
as such services, employment or occupation are not contrary to the provisions of
this Agreement.

6. Payment/Benefits. In consideration for the provision of the Services by
Goolsby, HealthTronics will pay Goolsby $11,458 semimonthly, on the first and
fifteenth day of each month, beginning on October 1, 2008, until the expiration
of the Consulting Services Period; provided that Goolsby shall be paid a
pro-rated portion of such semi-monthly amount for the period from January 1,
2009 to January 7, 2009. Notwithstanding anything in this Agreement to the
contrary, HealthTronics shall have no obligation to make any payment under this
Agreement if Goolsby is in material breach of any material term of this
Agreement.

 

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If Goolsby is employed by a new employer (the date of such employment, the “New
Employment Date”) during the Consulting Services Period, then (a) unless
otherwise provided herein, HealthTronics shall pay to Goolsby, promptly
following the New Employment Date, an amount equal to the sum of all then
remaining unpaid amounts due under this Section 6 through January 7, 2009, and
(b) the Consulting Services Period shall expire on the New Employment Date;
provided, that Goolsby provides HealthTronics advance written notice of the New
Employment Date. If the Consulting Services Period terminates or expires prior
to January 7, 2009 for any other reason, unless otherwise provided herein,
HealthTronics shall pay to Goolsby, promptly following such termination or
expiration date, an amount equal to the sum of all then remaining unpaid amounts
due under this Section 6 through January 7, 2009.

7. Nonsolicitation. Goolsby agrees that Section 1.9 and Article IV of the
Employment Agreement shall continue in full force and effect after the date of
this Agreement according to the terms thereof. Goolsby acknowledges and agrees
that during his employment with HealthTronics he has received trade secret and
other proprietary and confidential information of the Affiliated Entities.
Goolsby acknowledges and agrees (a) that the provisions in Article IV of the
Employment Agreement (and related provisions, including but not limited to
Section 5.3 thereof) are enforceable, and (b) not to contest the enforceability
of such provisions.

8. Confidentiality of Information. Goolsby has knowledge of trade secrets and
other Confidential Information of the Affiliated Entities. In addition,
HealthTronics agrees to disclose to Goolsby from time to time trade secrets and
other Confidential Information which may be necessary for Goolsby to perform
under this Agreement. Unless authorized by the Board of Directors of
HealthTronics (the “Board”) in writing, Goolsby shall not directly or
indirectly, acting alone or in conjunction with others, disclose to any person
or entity any Confidential Information. “Confidential Information” shall include
all confidential and proprietary information of the Affiliated Entities,
including, without limitation, all trade, technical or technological secrets,
any details of organization or business affairs, any names of past or present
customers of any Affiliated Entities, any processes, services, compensation and
other employment practices, research, pricing practices, price lists and
procedures, purchasing, accounting, engineering, manufacturing, production,
operations, organization, finances, marketing, customer lists, blueprints,
product specifications, any other information, method, technique or system, or
any other confidential or proprietary information relating to the business of
any Affiliated Entity. Notwithstanding the foregoing, Confidential Information
shall not be deemed to include any information which (a) is or becomes generally
available to the public (except as a result of any misconduct by Goolsby,
including but not limited to Goolsby’s breach of this Agreement or any other
confidentiality obligation of Goolsby’s) or (b) is or becomes lawfully available
to Goolsby on a non-confidential basis from a third party without, to Goolsby’s
knowledge, breach by that third party of any obligation of confidence concerning
that Confidential Information. Nothing herein shall prevent disclosure of any
Confidential Information if, upon the advice of counsel, Goolsby is legally
compelled to disclose such Confidential Information, provided that Goolsby
provides notice of any such compelled disclosure prior to disclosure by Goolsby
so that HealthTronics may seek a protective order or confidential treatment.

9. Non-Disparagement. Goolsby and HealthTronics hereby covenant and agree that
Goolsby and HealthTronics shall, at all times hereafter, refrain from making or
implying any

 

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derogatory or negative references, statements or allusions concerning each
other, including (with respect to statements or references by Goolsby) any of
the Affiliated Entities, their partners, owners, directors, managers, officers,
agents and employees, or their respective businesses or business activities,
except for statements made under oath in any legal process.

10. Release.

(a) Goolsby hereby releases and discharges the Affiliated Entities and their
respective partners, members, stockholders, owners, directors, managers,
officers, agents and employees, individually and collectively (the “Goolsby
Release”), of and from any and all claims, causes of action, suits, debts,
contracts, agreements, promises, liability, demands, damages, and other expenses
of any nature whatsoever, at law or in equity, known or unknown, fixed or
contingent, contemplated or uncontemplated, whether asserted or assertable,
arising out of any matter whatsoever which has occurred from the beginning of
time up through and including the date hereof. Without limiting the generality
of the foregoing, Goolsby hereby acknowledges and agrees that the Goolsby
Release is intended to waive and discharge any and all actions, claims, demands
and causes of action arising out of or in any way related to Goolsby’s
employment by any Affiliated Entity, including, without limitation: any claim
under state or federal law which provides civil remedies for the enforcement of
rights arising out of the employment relationship, including, without
limitation, discrimination claims such as claims or causes of action under Title
VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000 et. seq.; The
Civil Rights Act of 1866, as amended, 42 U.S.C. § 1981; The Civil Rights Act of
1991, as amended, 42 U.S.C. § 1981a; Age Discrimination in Employment Act, as
amended, 29 U.S.C. § 621 et. seq.; Americans With Disabilities Act, as amended,
42 U.S.C. § 12101 et. seq.; Fair Labor Standards Act, as amended, 29 U.S.C. §
201, et. seq.; Employee Retirement Income Security Act, as amended, 29 U.S.C. §
1000 et. seq.; Family and Medical Leave Act, as amended, 29 U.S.C. § 2601, et.
seq.; Texas Labor Code, as amended, § 21.001, et. seq.; as well as any and all
claims for unpaid or withheld wages, relocation allowances or benefits, other
benefits, commissions, stock options, bonuses or profit-sharing, or taxes,
excise taxes, penalties or interest owed (or for reimbursement of such taxes,
excise taxes, penalties or interest) in connection with any of the
aforementioned items of compensation or benefits or with any payments made under
this Agreement, including, without limitation, excise taxes arising out of
failure to comply with the provisions of Section 409A of the Internal Revenue
Code of 1986, as amended; as well as any and all claims for wrongful discharge,
breach of contract, breach of fiduciary duty, promissory estoppel, fraud, breach
of any implied covenants, assault, battery, negligence, defamation, invasion of
privacy, slander, or intentional infliction of emotional distress. The foregoing
provisions do not, and should not be construed so as to, alter, amend or negate
the enforceability of this Agreement. The Goolsby Release is intended to be and
should be construed as a general, complete and final waiver and release of all
claims. The Goolsby Release is being made and executed by Goolsby individually
and on behalf of Goolsby’s heirs, successors, assigns, agents, and all persons
and entities subrogated to Goolsby’s rights or to whom Goolsby’s rights are
secondary or derivative.

 

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(b) HealthTronics hereby releases and discharges Goolsby (the “HTRN Release”),
of and from any and all claims, causes of action, suits, debts, contracts,
agreements, promises, liability, demands, damages, and other expenses of any
nature whatsoever, at law or in equity, known or unknown, fixed or contingent,
contemplated or uncontemplated, whether asserted or assertable, arising out of
any matter whatsoever which has occurred from the beginning of time up through
and including the date hereof. The foregoing provisions do not, and should not
be construed so as to, alter, amend or negate the enforceability of this
Agreement. The HTRN Release is intended to be and should be construed as a
general, complete and final waiver and release of all claims. The HTRN Release
is being made and executed by HealthTronics individually and on behalf of the
Affiliated Entities.

11. Company’s Right to Inventions. Goolsby shall promptly disclose, grant and
assign to HealthTronics for its sole use and benefit any and all discoveries,
inventions, improvements, innovations, technical information and suggestions
(including all data and records relating thereto) that relate to the Affiliated
Entities’ business and were developed by Goolsby while employed by HealthTronics
or are developed while performing pursuant to this Agreement and using
Affiliated Entities’ property (collectively, “Know-how”), including that which
Goolsby has in the past, or may hereafter during Goolsby’s provision of
Services, discover, invent, author, conceive, develop, originate or acquire,
whether or not patentable, copyrightable or reduced to writing. Such Know-how
shall be the exclusive property of HealthTronics. Goolsby shall assist
HealthTronics, at HealthTronics’ expense, in obtaining, defending and enforcing
HealthTronics’ rights therein.

12. Return of Property.

(a) Except as provided in Section 12(b) below, on the date hereof, Goolsby
agrees to end all further use of, and to immediately return to HealthTronics,
all property of the Affiliated Entities including, without limitation, any
property, assets or equipment furnished by an Affiliated Entity or created or
prepared by Goolsby in connection with his employment, either alone or jointly
with others. Without limiting the generality of the foregoing, all
correspondence, reports, records, charts, advertising materials and other
similar data pertaining to the business, activities, research and development,
intellectual property or future plans of the Affiliated Entities that have been
collected by or held by (or under the control of) Goolsby, including any and all
copies or reproductions thereof, whether in written or electronic form, shall be
delivered immediately to HealthTronics. Except as provided in Section 12(b)
below, Goolsby shall cease all further use of and access to any systems,
intranets, networks, software, and other information technology of the
Affiliated Entities, whether owned or licensed. All property, assets,
correspondence, reports, records, charts, and other similar data pertaining to
the business activities, research and development, intellectual property or
future plans of the Affiliated Entities that are received, held or collected by
Goolsby, including all copies or reproductions thereof, whether in written or
electronic form, during the Consulting Services Period shall be delivered
immediately to HealthTronics without request by it upon the expiration of the
Consulting Services Period.

 

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(b) Notwithstanding Section 12(a), Goolsby shall be entitled to (i) permanently
retain his HealthTronics’ laptop as long as all Confidential Information has
been removed from such laptop, (ii) continued access to and use of his
HealthTronics e-mail address until the earlier of December 31, 2008 and the New
Employment Date, and (iii) continued use of his HealthTronics cellular phone
until the earlier of September 30, 2009 and the New Employment Date. The amount
of in-kind benefits provided under this Section 12(b) in one taxable year does
not impact the in-kind benefits to be provided in another taxable year, and the
right to these in-kind benefits cannot be liquidated or exchanged for another
benefit.

13. Remedies. Goolsby acknowledges and agrees that HealthTronics’ remedies at
law for a breach or threatened breach of any of the provisions of Sections 7, 8,
9 or 11 hereof would be inadequate and, in recognition of this fact, in the
event of a breach or threatened breach by Goolsby of any of the provisions of
Sections 7, 8, 9 or 11 hereof, it is agreed that, in addition to its remedies at
law, HealthTronics shall be entitled to equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent injunction or
any other equitable remedy which may then be available. Nothing herein contained
shall be construed as prohibiting HealthTronics from pursuing any other remedies
available to it for such breach or threatened breach.

14. Independent Contractor. Nothing herein contained shall be deemed to create
an agency, joint venture, partnership or franchise relationship between the
parties hereto. Goolsby acknowledges that, with respect to the provision of
Services during the Consulting Services Period, he will be an independent
contractor, will not be an agent or employee of any Affiliated Entity, will not
be entitled to any Affiliated Entity employment rights or benefits (except as
provided herein) and will not be authorized to act on behalf of any Affiliated
Entity. Goolsby further acknowledges and agrees that, with respect to the
provision of Services during the Consulting Services Period, he waives any and
all rights he has, or may have, against any Affiliated Entity under the Employee
Retirement Income Security Act of 1974. Goolsby shall be solely responsible for
any and all tax obligations of Goolsby arising from or relating to Section 6 of
this Agreement, including but not limited to, all city, state and federal income
taxes, social security withholding tax and other self employment tax incurred by
Goolsby, and, in the event of any determination by the Internal Revenue Service
or any other taxing authority that Goolsby is not an independent contractor of
any Affiliated Entity, shall reimburse HealthTronics upon demand for any
withholding taxes that should have been withheld by HealthTronics had he been an
employee of HealthTronics.

15. Miscellaneous.

(a) No Assignment; Binding, Effect. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned (by operation of law or
otherwise) by Goolsby without the prior written consent of HealthTronics and any
attempt to do so will be void. Subject to the preceding sentence, this Agreement
is binding upon, inures to the benefit of and is enforceable by the parties
hereto and their respective successors and assigns.

 

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(b) Amendments. This Agreement cannot be modified or amended except by a written
agreement executed by all parties hereto.

(c) Waiver of Provisions; Remedies Cumulative. Any waiver of any term or
condition of this Agreement must be in writing, and signed by all of the parties
hereto. The waiver of any term or condition hereof shall not be construed as
either a continuing waiver with respect to the term or condition waived, or a
waiver of any other term or condition hereof. No party hereto shall by any act
(except by written instrument pursuant to this Section), delay, indulgence,
omission or otherwise be deemed to have waived any right, power, privilege or
remedy hereunder or to have acquiesced in any default in or breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any party hereto, any right, power, privilege or
remedy hereunder shall operate as a waiver thereof.

(d) Survival. All provisions of this Agreement which by their terms are intended
to survive termination or expiration of this Agreement, including without
limitation, Sections 1, 2, 7, 8, 9, 10, 11, 12, 13, 14 and 15 shall survive such
termination or expiration in accordance with their terms.

(e) Severability; Interpretation. Any provision of this Agreement that is found
in a final judicial determination by a court of competent jurisdiction to be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability (but shall
be construed and given effect to the extent possible), without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.

(f) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING CONFLICTS OF LAWS) OF THE STATE OF
TEXAS.

(g) Counterparts. This Agreement may be executed in several counterparts or with
counterpart signature pages, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same Agreement.

(h) Notices. Any notice required or permitted to be given under this Agreement
shall be deemed properly given if in writing and personally delivered or mailed
by certified U.S. mail, postage prepaid with return receipt requested, in the
case of notices mailed to Goolsby, at the address set forth below or, in the
case of notices to HealthTronics, to its principal office at 1301 Capital of
Texas Hwy., Suite B-200, Austin, Texas 78746, to the attention of its President.

(i) Entire Agreement. This instrument contains the entire agreement of the
parties relating to the subject matter hereof and supersedes all prior
agreements and arrangements, both written and oral, with respect to the subject
matter hereof.

 

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(j) Submission to Jurisdiction. Should a dispute arise regarding this Agreement,
including but not limited to a breach of this Agreement, an alleged breach, or
its enforceability, Goolsby agrees that Austin, Texas is the sole and proper
jurisdiction for the dispute. This Agreement is performable in whole and in part
in Travis County, Texas.

[Signature page follows]

 

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SIGNATURE PAGE TO

TERMINATION AND CONSULTING AGREEMENT

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

 

HEALTHTRONICS: HEALTHTRONICS, INC. By:  

/s/ James S. B. Whittenburg

Name:   James S. B. Whittenburg Title:   President and Chief Executive Officer
GOOLSBY:

/s/ Ross A. Goolsby

Ross A. Goolsby Address:  

10200 Milky Way

  Austin, Texas 78730

 

S-1

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SCHEDULE 1

Stock Options

 

Number of Shares

   Issue Date    Exercise Price
per Share    Vesting Terms

100,000

   1/8/07    $ 6.41    (1)

 

(1) 25,000 shares vested on January 8, 2008; 25,000 shares scheduled to vest on
January 8, 2009, 2010, and 2011 in accordance with the terms of the governing
stock option agreement and 2004 Equity Incentive Plan.

 

Schedule 1