Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

AGREEMENT dated as of March 20, 2017 between Dennis M. McGrath, residing at 2
Colonial Court, Medford, NJ 08055 (“Executive”), and PAVmed Inc., a Delaware
corporation having its principal office at One Grand Central Place, Suite 4600,
New York, New York 10165 (“Company”).

 

WHEREAS, the Company desires to employ Executive, and Executive desires to be
employed by the Company, on the terms and conditions herein set forth;

 

IT IS AGREED:

 

1.       Employment, Duties and Acceptance.

 

1.1   General. The Company hereby agrees to employ the Executive as its
Executive Vice President and Chief Financial Officer. All of Executive’s powers
and authority in any capacity shall at all times be subject to the direction and
control of the Company’s Chief Executive Officer and Board of Directors
(“Board”). The Board may assign to Executive such management and supervisory
responsibilities and executive duties for the Company or any subsidiary of the
Company, including serving as an executive officer and/or director of any
subsidiary, as are consistent with Executive’s status as Executive Vice
President and Chief Financial Officer. At the earliest time that his appointment
will not result in the Company having less than a majority of independent
directors (as defined under the listing standards of The Nasdaq Stock Market
LLC), the Company shall appoint Executive as a director.

 

1.2   Full-Time Position. Executive accepts such employment and agrees to devote
his best efforts and full time to promote the business and affairs of the
Company and its affiliated entities and shall be engaged in other business
activities only to the extent that such activities do not materially interfere
or conflict with his obligations to the Company hereunder. Nothing herein, other
than Section 5.4 below, shall be construed as preventing Executive from making
and supervising personal investments, or serving on civic, philanthropic,
educational, or charitable boards or committees, or with the prior written
consent of the Board, in its sole discretion, on corporate boards so long as
such activities are permitted under the Company’s Code of Conduct and employment
practices. Executive acknowledges and agrees that Schedule 1.2 attached hereto
represents a complete list of corporate boards on which the Executive serves

 

 

 

 

as of the effective date of this agreement. Notwithstanding any provision of
this Section to the contrary, in no event shall the Executive invest in any
business competitive with the Company or that would otherwise violate the
provisions of Section 5.4 below.

 

1.3   Location. Executive will perform his duties in New York, New York.
Executive shall undertake such occasional travel, within or outside the United
States, as is reasonably necessary in the interests of the Company.

 

2.       Term. The term of Executive’s employment hereunder shall commence on
March 20, 2017 (“Commencement Date”) and terminate on the two year anniversary
of the Commencement Date (“Term”) unless terminated earlier as provided in this
Agreement, or unless extended by mutual written agreement of the Company and
Executive. Unless the Company and Executive have otherwise agreed in writing, if
Executive continues to work for the Company after the expiration of the Term,
his employment thereafter shall be under the same terms and conditions provided
for in this Agreement, except that his employment will be on an “at will” basis
and the provisions of Sections 4.4 and 4.6(c) shall no longer be in effect.

 

3.       Compensation and Benefits.

 

3.1   Salary. The Company shall pay to Executive a salary (“Base Salary”) at the
annual rate of $285,000. Executive’s compensation shall be paid in equal,
periodic installments in accordance with the Company’s normal payroll
procedures. The Executive’s base salary shall be reviewed periodically by the
Board or Committee (as defined below) pursuant to the Board or Committee’s
normal performance review policies for senior level executives.

 

3.2   Bonus. In addition to the Base Salary, Executive shall be eligible to
receive a discretionary performance bonus (“Bonus”) with a target of fifty
percent (50%) of the Executive’s Base Salary as of December 31st of the
preceding year based on Executive’s and the Company’s performance over the
preceding year. The payment and amount of any Bonus shall be in the sole
discretion of the Board or the Compensation Committee of the Board (the
“Committee”).

 

3.3   Stock Options. Upon the Commencement Date, the Company shall grant
Executive an option (“Option”) to purchase 250,000 shares of the Company’s
Common Stock

 

 

 

 

under the Company’s 2014 Long-Term Incentive Plan (“Plan”). The Option shall
have an exercise price equal to the “Fair Market Value” (as defined in the Plan)
of the Company’s Common Stock on such date and shall vest over three years in
twelve equal quarterly installments.

 

3.4   Benefits. Executive shall be entitled to such medical, life, disability
and other benefits as are generally afforded to other executives of the Company,
subject to applicable waiting periods and other conditions, as well as
participation in all other company-wide employee benefits, including a defined
contribution pension plan and 401(k) plan, as may be made available generally to
executive employees from time to time.

 

3.5   Vacation. Executive shall be entitled to twenty (20) days of paid vacation
in each year during the Term and to a reasonable number of other days off for
religious and personal reasons in accordance with customary Company policy.

 

3.6   Expenses. The Company shall pay or reimburse Executive for all
transportation, hotel and other expenses reasonably incurred by Executive on
business trips and for all other ordinary and reasonable out-of-pocket expenses
actually incurred by him in the conduct of the business of the Company,
including expenses relating to his laptop, cell phone or other similar devices,
against itemized vouchers submitted with respect to any such expenses and
approved in accordance with customary procedures.

 

3.7   Housing. The Company and Executive anticipate that Executive will relocate
his primary work residence to the Greater New York City area prior to the
completion of the Term. The Company shall pay Executive an aggregate of up to
$2,250 per month to cover temporary housing (including hotel or apartment
rental) and travel expenses for a period of up to 12 months from the
Commencement Date.

 

4.        Termination.

 

4.1   Death. If Executive dies during the Term, Executive’s employment hereunder
shall terminate and the Company shall pay to Executive’s estate the amount set
forth in Section 4.6(a).

 

 

 

 

4.2   Disability. The Company, by written notice to Executive, may terminate
Executive’s employment hereunder if Executive shall fail because of illness or
incapacity to render services of the character contemplated by this Agreement
for one hundred eighty (180) days. Upon such termination, the Company shall pay
to Executive the amount set forth in Section 4.6(a).

 

4.3   By Company for “Cause” or By the Executive Without “Good Reason”. The
Company, by written notice to Executive, may terminate Executive’s employment
hereunder for “Cause.” As used herein, “Cause” shall mean: (a) the refusal or
failure by Executive to carry out any lawful direction of the Board which are of
a material nature and consistent with his status as Executive Vice President and
Chief Financial Officer (or whichever positions Executive holds at such time),
or the refusal or failure by Executive to perform a material part of Executive’s
duties hereunder; (b) the commission by Executive of a material breach of any of
the provisions of this Agreement; (c) fraud or dishonest action by Executive in
his relations with the Company or any of its subsidiaries or affiliates
(“dishonest” for these purposes shall mean Executive’s knowingly or recklessly
making of a material misstatement or omission for his personal benefit); or (d)
the conviction of Executive of a felony under federal or state law.
Notwithstanding the foregoing, no “Cause” for termination shall be deemed to
exist with respect to Executive’s acts described in clauses (a) or (b) above,
unless the Company shall have given written notice to Executive within a period
not to exceed ten (10) calendar days of the initial existence of the occurrence,
specifying the “Cause” with reasonable particularity and, within thirty (30)
calendar days after such notice, Executive shall not have cured or eliminated
the problem or thing giving rise to such “Cause;” provided, however, no more
than two cure periods need be provided during any twelve-month period. Upon such
termination, the Company shall pay to Executive the amount set forth in Section
4.6(b). The Company shall also pay such amount to Executive upon his termination
of employment without “Good Reason” (as defined below), which Executive shall
have the right to do on at least thirty (30) days written notice to the Company.

 

4.4   By Executive for “Good Reason”. The Executive, by written notice to the
Company, may terminate Executive’s employment hereunder if a “Good Reason”
exists. For purposes of this Agreement, “Good Reason” shall mean the occurrence
of any of the following circumstances without the Executive’s prior written
consent: (a) a substantial and material adverse change in the nature of
Executive’s title, duties or responsibilities with the Company

 

 

 

 

(other than as a director of the Company) that represents a demotion from his
title, duties or responsibilities as in effect immediately prior to such change
(such change, a “Demotion”); (b) material breach of this Agreement by the
Company; (c) a failure by the Company to make any payment to Executive when due,
unless the payment is not material and is being contested by the Company, in
good faith; (d) a change of the principal office or work place assigned to the
Executive to a location more than 35 miles distant from its location immediately
prior to such change; (e) a material reduction of the Executive’s Base Salary or
bonus opportunity, unless pursuant to a reduction in such items applicable
proportionally to all senior management and board members; or (f) a liquidation,
bankruptcy or receivership of the Company. Notwithstanding the foregoing, no
“Good Reason” shall be deemed to exist with respect to the Company’s acts
described in clauses (a), (b), (c), (d) or (e) above, unless Executive shall
have given written notice to the Company within a period not to exceed thirty
(30) calendar days of the initial existence of the occurrence, specifying the
“Good Reason” with reasonable particularity and, within thirty (30) calendar
days after such notice, the Company shall not have cured or eliminated the
problem or thing giving rise to such “Good Reason”; provided, however, that no
more than two cure periods shall be provided during any twelve-month period of a
breach of clauses (a), (b), (c), (d), or (e) above. Upon such termination, the
Company shall pay to Executive the amount set forth in Section 4.6(c).

 

4.5   By Company Without “Cause”. The Company may terminate Executive’s
employment hereunder without “Cause” by giving at least thirty (30) days written
notice to Executive. Upon such termination, the Company shall pay to Executive
the amount set forth in Section 4.6(c).

 

4.6   Compensation Upon Termination. In the event that Executive’s employment
hereunder is terminated, the Company shall pay to Executive the following
compensation:

 

(a)          Payment Upon Death or Disability. In the event that Executive’s
employment is terminated pursuant to Sections 4.1 or 4.2, the Company shall no
longer be under any obligation to Executive or his legal representatives
pursuant to this Agreement except for: (i) the Base Salary due Executive
pursuant to Section 3.1 hereof through the date of termination; (ii) any Bonus
which would have become payable under Section 3.2 for the year in which the

 

 

 

 

employment was terminated prorated by multiplying the full amount of the Bonus
by a fraction, the numerator of which is the number of “full calendar months”
worked by Executive during the year of termination and the denominator of which
is 12 (a “full calendar month” is a month in which the Executive worked at least
two weeks); (iii) all earned and previously approved but unpaid Bonuses for any
year prior to the year of termination; (iv) all valid expense reimbursements,
and (v) all accrued but unused vacation pay.

 

(b)          Payment Upon Termination by the Company For “Cause” or by the
Executive Without Good Reason. In the event that the Company terminates
Executive’s employment hereunder pursuant to Section 4.3, the Company shall have
no further obligations to the Executive hereunder, except for: (i) the Base
Salary due Executive pursuant to Section 3.1 hereof through the date of
termination (ii) all valid expense reimbursements and (ii) all unused vacation
pay through the date of termination required by law to be paid.

 

(c)          Payment Upon Termination by Company Without Cause or by Executive
for Good Reason. In the event that Executive’s employment is terminated pursuant
to Sections 4.4 or 4.5, the Company shall have no further obligations to
Executive hereunder except for: (i) the Base Salary (at the rate in effect
immediately before Executive’s termination or resignation, as applicable) due
Executive pursuant to Section 3.1 hereof for six (6) months from the date of
termination or until the end of the Term, whichever is earlier, payable in
accordance with Section 3.1; (ii) any Bonus which would have become payable
under Section 3.2 for the year in which the employment was terminated prorated
by multiplying the full amount of the Bonus by a fraction, the numerator of
which is the number of “full calendar months” worked by Executive during the
year of termination and the denominator of which is 12 (a “full calendar month”
is a month in which the Executive worked at least two weeks); (iii) the Base
Salary due Executive pursuant to Section 3.1 hereof through the date of
termination; (iv) all valid expense reimbursements; (v) to the extent the
Executive timely elects to receive continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
the Company shall pay or reimburse the Executive, on a monthly basis, an amount
equal to the full monthly premium for such coverage, from the date of
termination until the date six (6) months following the date of termination (the
COBRA health care continuation coverage period under Section 4980B of the
Internal Revenue Code of 1986, as amended (the “Code”) shall run concurrently
with the foregoing period); and (vi) all accrued but unused vacation pay,

 

 

 

 

subject, in the case of clause (i) and (ii), to Executive’s compliance with
Section 5 and to Executive’s execution of a release of claims in favor of the
Company, its affiliates and their respective officers and directors in a form
provided by the Company and such release becoming effective,.

 

(d)          Executive shall have no duty to mitigate awards paid or payable to
him pursuant to this Agreement, and any compensation paid or payable to
Executive from sources other than the Company will not offset or terminate the
Company’s obligation to pay to Executive the full amounts pursuant to this
Agreement.

 

5.       Protection of Confidential Information; Non-Competition.

 

5.1   Acknowledgment. Executive acknowledges that:

 

(a)          As a result of his employment with the Company, Executive will
obtain secret and confidential information concerning the business of the
Company and its subsidiaries (referred to collectively in this Section 5 as the
“Company”), including, without limitation, financial information, proprietary
rights, trade secrets and “know-how,” customers and sources (“Confidential
Information”).

 

(b)          The Company will suffer substantial damage which will be difficult
to compute if, during the period of his employment with the Company or
thereafter, Executive should enter a business competitive with the Company or
divulge Confidential Information.

 

(c)          The provisions of this Agreement are reasonable and necessary for
the protection of the business of the Company.

 

5.2   Confidentiality. Executive agrees that he will not at any time, during the
Term or thereafter, divulge to any person or entity any Confidential Information
obtained or learned by him as a result of his employment with the Company,
except (i) in the course of performing his duties hereunder, (ii) with the
Company’s prior written consent; (iii) to the extent that any such information
is in the public domain other than as a result of Executive’s breach of any of
his obligations hereunder; or (iv) where required to be disclosed by law,
regulation, stock exchange rule, court order, subpoena or other government
process. If Executive shall be

 

 

 

 

required to make disclosure pursuant to the provisions of clause (iv) of the
preceding sentence, Executive promptly, but in no event more than 48 hours after
learning of such subpoena, court order, or other government process, shall
notify, confirmed by mail, the Company and, at the Company’s expense, Executive
shall: (a) take all reasonably necessary and lawful steps required by the
Company to defend against the enforcement of such subpoena, court order or other
government process, and (b) permit the Company to intervene and participate with
counsel of its choice in any proceeding relating to the enforcement thereof.

 

5.3   Documents. Upon termination of his employment with the Company, Executive
will promptly deliver to the Company all memoranda, notes, records, reports,
manuals, drawings, blueprints and other documents (and all copies thereof)
relating to the business of the Company and all property associated therewith,
which he may then possess or have under his control; provided, however, that
Executive shall be entitled to retain copies of such documents reasonably
necessary to document his financial relationship with the Company.

 

5.4   Non-competition. During the Term and for a period of two (2) years
thereafter, Executive, without the prior written permission of the Company,
shall not, anywhere in the world, (i) be employed by, or render any services to,
any person, firm or corporation engaged in the medical device industry (or any
other business) which is directly in competition with any “material” business
conducted by the Company or any of its subsidiaries at the time of termination
(as used herein “material” means a business which generated at least 10% of the
Company’s consolidated revenues for the last full fiscal year for which audited
financial statements are available) (“Competitive Business”); (ii) engage in any
Competitive Business for his or its own account; (iii) be associated with or
interested in any Competitive Business as an individual, partner, shareholder,
creditor, director, officer, principal, agent, employee, trustee, consultant,
advisor or in any other relationship or capacity; (iv) employ or retain, or have
or cause any other person or entity to employ or retain, any person who was
employed or retained by the Company while Executive was employed by the Company
(other than Executive’s personal secretary and assistant); or (v) solicit,
interfere with, or endeavor to entice away from the Company, for the benefit of
a Competitive Business, any of its customers or other persons with whom the
Company has a contractual relationship. Notwithstanding the foregoing, nothing
in this Agreement shall preclude Executive from investing his personal assets in
any manner he

 

 

 

 

chooses, provided, however, that Executive may not, during the period referred
to in this Section 5.4, own more than 4.9% of the equity securities of any
Competitive Business.

 

5.5   Injunctive Relief. If Executive commits a breach, or threatens to commit a
breach, of any of the provisions of Sections 5.2 or 5.4, the Company shall have
the right and remedy to seek to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed by Executive that the services being rendered hereunder
to the Company are of a special, unique and extraordinary character and that any
such breach or threatened breach will cause irreparable injury to the Company
and that money damages will not provide an adequate remedy to the Company. The
rights and remedies enumerated in this Section 5.5 shall be in addition to, and
not in lieu of, any other rights and remedies available to the Company under law
or equity. In connection with any legal action or proceeding arising out of or
relating to this Agreement, the prevailing party in such action or proceeding
shall be entitled to be reimbursed by the other party for the reasonable
attorneys’ fees and costs incurred by the prevailing party.

 

5.6   Modification. If any provision of Sections 5.2 or 5.4 is held to be
unenforceable because of the scope, duration or area of its applicability, the
tribunal making such determination shall have the power to modify such scope,
duration, or area, or all of them, and such provision or provisions shall then
be applicable in such modified form.

 

5.7   Survival. The provisions of this Section 5 shall survive the termination
of employment under this Agreement for any reason, except in the events that
Executive’s employment is terminated by the Company without “Cause,” or if
Executive terminates this Agreement with “Good Reason,” in either of which
events, clauses (i), (ii) and (iii) of Section 5.4 shall be null and void and of
no further force or effect. The non-renewal of this Agreement at the end of the
Term shall not be deemed to be a termination by the Company without “Cause”.

 

6.       Miscellaneous Provisions.

 

6.1   Notices. All notices provided for in this Agreement shall be in writing,
and shall be deemed to have been duly given when (i) delivered personally to the
party to receive the same, or (ii) when mailed first class postage prepaid, by
certified mail, return receipt requested, addressed to the party to receive the
same at his or its address set forth below, or such

 

 

 

 

other address as the party to receive the same shall have specified by written
notice given in the manner provided for in this Section 6.1, or sent via email
or facsimile.

 

If to Executive:

 

Dennis M. McGrath

2 Colonial Court

Medford, NJ 08055

Email: dennis.mcgrathcpa@gmail.com

Facsimile: (609)-953-9303

 

With a copy in either case to:

Pavia & Harcourt LLP

590 Madison Avenue

New York, New York 10022

Attn: Adam D. Mitzner, Esq.

Facsimile: 212-969-2900

 

If to the Company:

 

PAVmed Inc.

One Grand Central Place, Suite 4600

New York, New York 10165

Attn: Lishan Aklog, M.D.

Email: la@pavmed.com

Facsimile: (212) 634-7403

 

With a copy in either case to:

 

Graubard Miller

The Chrysler Building

405 Lexington Ave, 11th Floor

New York, NY 10170

Attn: David Alan Miller; Jeffrey M. Gallant

Email: dmiller@graubard.com; jgallant@graubard.com

Facsimile: (212) 818-8881

 

6.2   Entire Agreement; Waiver. This Agreement, the Option and the separate
indemnification agreement being entered simultaneously herewith sets forth the
entire agreement of the parties relating to the employment of Executive and is
intended to supersede all prior negotiations, understandings and agreements. No
provisions of this Agreement may be waived or changed except by a writing by the
party against whom such waiver or change is sought to be

 

 

 

 

enforced. The failure of any party to require performance of any provision
hereof or thereof shall in no manner affect the right at a later time to enforce
such provision.

 

6.3   Governing Law. All questions with respect to the construction of this
Agreement, and the rights and obligations of the parties hereunder, shall be
determined in accordance with the law of the State of New York applicable to
agreements made and to be performed entirely in New York.

 

6.4   Binding Effect; Nonassignability. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the Company. This
Agreement shall not be assignable by Executive, but shall inure to the benefit
of and be binding upon Executive’s heirs and legal representatives.

 

6.5   Severability. Should any provision of this Agreement become legally
unenforceable, no other provision of this Agreement shall be affected, and this
Agreement shall continue as if the Agreement had been executed absent the
unenforceable provision.

 

6.6   Section 409A. This Agreement is intended to comply with the provisions of
Section 409A of the Internal Revenue Code (“Section 409A”). To the extent that
any payments and/or benefits provided hereunder are not considered compliant
with Section 409A, the parties agree that the Company shall take all actions
necessary to make such payments and/or benefits become compliant.

 

6.7   Preparation of Agreement. This Agreement has been prepared by Graubard
Miller (“GM”) solely as counsel to the Company.  GM is not acting as legal
counsel nor providing any legal representation or consultative services to
Executive in connection with the Agreement and the Company has advised Executive
to seek the advice of other counsel in connection with the negotiation and
preparation of this Agreement.

 

7.       Arbitration; Expenses. In the event of any dispute under the provisions
of this Agreement, other than a dispute in which the primary relief sought is an
equitable remedy such as an injunction, the parties shall be required to have
the dispute, controversy or claim settled by arbitration in the non-moving
parties jurisdiction in accordance with the Employment Arbitration Rules and
Mediation Procedures then in effect of the American Arbitration Association,
before an arbitrator agreed to by both parties. If the parties cannot agree upon
the choice of arbitrator,

 

 

 

 

the Company and the Executive will each choose an arbitrator. The two
arbitrators will then select a third arbitrator who will serve as the actual
arbitrator for the dispute, controversy or claim. Any award entered by the
arbitrator shall be final, binding and nonappealable and judgment may be entered
thereon by either party in accordance with applicable law in any court of
competent jurisdiction. This arbitration provision shall be specifically
enforceable. The arbitrator shall have no authority to modify any provision of
this Agreement or to award a remedy for a dispute involving this Agreement other
than a benefit specifically provided under or by virtue of the Agreement. Each
party shall be responsible for its own expenses relating to the conduct of the
arbitration (including reasonable attorneys’ fees and expenses) and shall share
the fees of the American Arbitration Association.

 

8.        Attorneys’ Fees. Except as provided in Section 7 above, in any action
at law or in equity to enforce or construe any provisions or rights under this
Agreement, the unsuccessful party or parties to such litigation, as determined
by the courts pursuant to a final judgment or decree, shall pay the successful
party or parties all costs, expenses, and reasonable attorneys’ fees incurred by
such successful party or parties (including, without limitation, such costs,
expenses, and fees on any appeals), and if such successful party or parties
shall recover judgment in any such action or proceedings, such costs, expenses,
and attorneys’ fees shall be included as part of such judgment.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.

 

  PAVMED INC.             By: /s/ Lishan Aklog       Name: 

LISHAN AKLOG

      Title: Chairman & CEO                 /s/ Dennis M. McGrath       DENNIS
M. MCGRATH  

 

 

 

 

Schedule 1.2. Schedule of Consultancy, Advisory, or Board of Directors

 

PhotoMedex, Inc. (Nasdaq: PHMD)

DarioHealth Corp. (Nasdaq: DRIO – formerly LabStyle Innovations)

Cagent Vascular, LLC – Wayne, Pa.

Palvella Therapeutics, LLC – Wayne, Pa.

Taylor University Board of Visitors – Upland, Ind.

Manor College Board of Trustees, Jenkintown, Pa.

Noninvasive Medical Technologies, Inc. – Las Vegas, Nev.