Exhibit 10.28
 
NewCardio, Inc.
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of
August 18, 2008 (the “Effective Date”) by and between NewCardio, Inc., a
Delaware corporation (the “Company”), and Vincent W. Renz, Jr., MBA (the
“Executive”).
 
BACKGROUND
 
A.           The Company desires to retain the services of the Executive as the
President & Chief Operating Officer of the Company from the Effective Date.  The
Company also desires to provide employment security to the Executive, thereby
inducing the Executive to continue employment with the Company and enhancing the
Executive’s ability to perform effectively.
 
B.           The Executive is willing to be employed by the Company on the terms
and subject to the conditions set forth in this Agreement.
 
THE PARTIES AGREE AS FOLLOWS:

1.           Title, Duties and Responsibilities.
 
1.1           Title.  The Executive will be employed by the Company as its
President & Chief Operating Officer, at the pleasure of the Board of Directors
of the Company (the “Board”).  Executive shall report directly to the Chief
Executive Officer.
 
1.2           Duties.  The Executive’s duties shall be described generally to
include, but not be limited to, sales, marketing, regulatory, business
operations that shall include IT infrastructure,  systems validation, tactical
systems development, professional services, customer service, corporate systems,
and human resources, and such other duties consistent with Executive’s title or
as requested by the Board.  The Executive will devote all of the Executive’s
business time, energy, and skill to the affairs of the Company; provided,
however, that reasonable time for the activities set forth on Exhibit A and such
other activities which have been approved in advance by the Board will be
permitted, in any case so long as such activities do not materially interfere
with the Executive’s performance of services under this Agreement.
 
1.3           Performance of Duties.  The Executive will discharge the duties
described herein and duties as set forth by the Board from time to time, in a
diligent and professional manner.  The Executive will further comply with the
Company’s business policies, rules and regulations, as adopted from time to time
by the Board.
 
2.           Terms of Employment.
 
2.1           Definitions.  For purposes of this Agreement, the following terms
will have the following meanings:
 

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(a)           “Accrued Compensation” means any accrued Total Cash Compensation,
any benefits under any plan of the Company in which the Executive is a
participant to the full extent of the Executive’s rights under such plans, any
accrued vacation pay, and any appropriate business expenses incurred by the
Executive in connection with the performance of the Executive’s duties
hereunder, all to the extent unpaid on the date of termination.
 
(b)           “Base Salary” will have the meaning set forth in Section 3.1
hereof.
 
(c)            “Death Termination” means termination of the Executive’s
employment due to the death of the Executive.
 
(d)           “Disability Termination” means termination of the Executive’s
employment by the Company due to the Executive’s incapacitation due to
disability.  The Executive will be deemed to be incapacitated due to disability
if at the end of any month the Executive is unable to perform substantially all
of the Executive’s duties under this Agreement in the normal and regular manner
due to illness, injury or mental or physical incapacity, and has been unable so
to perform for either (i) three consecutive full calendar months then ending, or
(ii) 90 or more of the normal working days during the 12 consecutive full
calendar months then ending.  Nothing in this paragraph will alter the Company’s
obligations under applicable law, which may, in certain circumstances, result in
the suspension or alteration of the foregoing time periods.
 
(e)           “Termination For Cause” means termination of the Executive’s
employment by the Company due to (i) the Executive’s dishonesty or fraud, or
negligence in the performance of the Executive’s duties and responsibilities;
(ii) the Executive’s conviction of a felony involving moral turpitude; (iii) the
Executive’s incurable material breach of the terms of this Agreement or the
Confidentiality Agreement (as defined below); or (iv) the willful and continued
refusal by Executive to substantially perform Executive’s duties or
responsibilities for the Company described herein and as set forth by the Board
from time to time.
 
(f)           “Termination Other Than For Cause” means termination of the
Executive’s employment by the Company due to any reason other than as specified
in Sections 2.1(c), (d), or (e) hereof.
 
(g)           “Total Cash Compensation” means the Executive’s Base Salary plus
any cash bonuses, commissions or similar payment accrued during the preceding
calendar year, and if there is no complete preceding calendar year, then the
preceding twelve (12) month period, and if there is no complete preceding twelve
(12) month period, then the preceding employment period annualized to a twelve
(12) month period.
 
(h)           “Voluntary Termination” means termination of the Executive’s
employment by the voluntary action of the Executive, other than by reason of a
Disability Termination or a Death Termination.
 

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2.2           Employee at Will.  The Executive is an “at will” employee of the
Company, and the Executive’s employment may be terminated by the Company at any
time by giving the Executive written notice thereof, subject to the terms and
conditions of this Agreement and the At-Will Employment, Confidential
Information, Invention Assignment and Arbitration Agreement and attached as
Exhibit B hereto (the “Confidentiality Agreement”), the terms of which are
herein incorporated by reference.
 
2.3           Termination For Cause.  Upon a Termination For Cause, the Company
shall provide 30 days notice, and the Company will pay the Executive Accrued
Compensation, if any.
 
2.4           Termination Other Than For Cause.
 
(a)           Upon a Termination Other Than For Cause, the Company shall provide
30 days notice, and provided Executive executes and delivers to the Company a
release and waiver of claims in the form attached hereto as Exhibit C and such
release and waiver of  claims is not revoked and has become effective pursuant
to its terms, the Company will pay or reimburse, as applicable, the Executive
upon the effectiveness of such release and waiver of claims: (a) Accrued
Compensation, if any, and (b) a monthly cash severance payment equal to six (6)
months of Executive’s then Base Salary, and (c) six (6) months of Executive’s
COBRA-related expenses, provided that such COBRA-related reimbursement shall
cease upon such date that Executive is afforded health benefits from a
subsequent employer, , and (d)  six (6) months of accelerated vesting of the
unvested common stock held by Executive at the time of such termination.
 
2.5           Disability Termination.  The Company will have the right to effect
a Disability Termination by giving written notice thereof to the
Executive.  Upon a Disability Termination, the Company will pay the Executive
Accrued Compensation, if any.
 
2.6           Death Termination.  Upon a Death Termination, the Executive’s
employment will be deemed to have terminated as of the last day of the month
during which her death occurs, and the Company will promptly pay to the
Executive’s estate Accrued Compensation, if any.
 
2.7           Voluntary Termination.  In the event the Executive wishes to
consummate a Voluntary Termination, the Company requests that Executive give the
Company ninety (90) days advance written notice.  During such period, the
Executive will continue to receive regularly scheduled Base Salary payments and
benefits.  Following the effective date of a Voluntary Termination, the Company
will pay the Executive Accrued Compensation, if any.
 
2.8           Timing of Termination Payments.  Unless expressly provided
otherwise, the foregoing termination payments will be made at the usual and
agreed times provided for in Section 3.1 of this Agreement or as otherwise made
during the normal course of employment.
 

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3.           Compensation and Benefits.
 
3.1           Base Salary.  As payment for the services to be rendered by the
Executive as provided in Section 1 and subject to the provisions of Section 2 of
this Agreement, the Company will pay the Executive a “Base Salary” at the rate
of $270,000.00 per year, payable on the Company’s normal payroll schedule.  The
Executive’s “Base Salary” may be increased in accordance with the provisions
hereof or as otherwise determined from time to time, but reviewed at least
annually, by the Board or the Compensation Committee of the Board.
 
3.2           Additional Benefits.
 
(a)           Benefit Plans.  The Executive will be eligible to participate in
such of the Company’s benefit plans as are now generally available or later made
generally available to senior officers of the Company, including, without
limitation, medical, dental, life, and disability insurance plans.
 
(b)           Expense Reimbursement.  The Company agrees to reimburse the
Executive for all reasonable, ordinary and necessary travel and entertainment
expenses incurred by the Executive in conjunction with the Executive’s services
to the Company consistent with the Company’s standard reimbursement
policies.  The Company will pay travel costs incurred by the Executive in
conjunction with the Executive’s services to the Company consistent with the
Company’s standard travel policies.
 
(c)           Vacation.  The Executive will be entitled to vacation as fitting
the position, whereby it is discretionary and the executive will provide contact
information while away. Vacation is not specifically accrued.
 
(d)           Bonus.  For fiscal year 2008, the Executive will be entitled to
earn a prorated annual bonus based on Executive’s achievement of certain
milestones to be defined by the Board and discussed with the Executive as soon
as practicable following the date hereof, not exceed forty-five percent (45%) of
Executive’s Base Salary as of the Effective Date. Bonuses to be paid to
Executive in subsequent years shall be on terms and conditions determined by the
Board.  Each annual (or prorated) bonus shall be paid not later than March 15 of
the year following the year (or prorated year) for which the bonus is being
paid.
 
3.3           Option to Purchase Common Stock.  Promptly following the Effective
Date, the senior management of the Company will recommend that the Board grant
the Executive an option (the “Option”) to purchase 800,000 shares of the
Company’s Common Stock (the “Shares”) pursuant to the Company’s 2004 Equity
Incentive Plan as Amended (the “Plan”) at an exercise price per share equal to
the fair market value of a share of the Company’s Common Stock as of the date of
such grant, as determined by the Board, and subject to the following vesting
schedule:
 

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(a)  One quarter (25%) of the Shares subject to the Option shall vest on the
date that is twelve (12) months after the date that your vesting begins -
subject to your continuous employment with the Company, and no Shares shall vest
before such date.  The remaining three quarters (75%) of the Shares shall vest
monthly over the next thirty six (36) months (immediately following the said
twelve (12) months) in equal monthly increments subject to your continuous
employment with the Company.  Hence, after four (4) years of continuous service
with the Company, one hundred percent (100%) of the Shares would be vested.

(b)  No right to any Shares is earned or accrued until such time as that vesting
occurs, nor does the grant confer any right to continue vesting or continued
employment.  The Company shall have the full right to repurchase any and all
unvested Shares under the terms of the stock option agreement memorializing the
option grant.

4.           Miscellaneous.
 
4.1           Waiver.  The waiver of the breach of any provision of this
Agreement will not operate or be construed as a waiver of any subsequent breach
of the same or other provision hereof.
 
4.2           Notices.  All notices and other communications under this
Agreement will be in writing and will be given by personal or courier delivery,
facsimile or first class mail, certified or registered with return receipt
requested, and will be deemed to have been duly given upon receipt if personally
delivered or delivered by courier, on the date of transmission if transmitted by
facsimile, or three business days after mailing if mailed, to the addresses of
the Company and the Executive contained in the records of the Company at the
time of such notice.  Any party may change such party’s address for notices by
notice duly given pursuant to this Section 4.2.
 
4.3           Headings.  The section headings used in this Agreement are
intended for convenience of reference and will not by themselves determine the
construction or interpretation of any provision of this Agreement.
 
4.4           Governing Law.  This Agreement will be governed by and construed
in accordance with the laws of the State of California, excluding those laws
that direct the application of the laws of another jurisdiction.
 
4.5           Survival of Obligations.  This Agreement will be binding upon and
inure to the benefit of the executors, administrators, heirs, successors, and
assigns of the parties; provided, however, that except as herein expressly
provided, this Agreement will not be assignable either by the Company (except to
an affiliate or successor of the Company) or by the Executive without the prior
written consent of the other party.
 
4.6           Counterparts and Facsimile Signatures.  This Agreement may be
executed in two or more counterparts, each of which will be deemed an original,
but all of which together will constitute one and the same instrument.  This
Agreement may be executed by facsimile signature (including signatures in Adobe
PDF or similar format).
 

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4.7           Withholding.  All sums payable to the Executive hereunder will be
reduced by all federal, state, local, and other withholdings and similar taxes
and payments required by applicable law.
 
4.8           Enforcement.  If any portion of this Agreement is determined to be
invalid or unenforceable, such portion will be adjusted, rather than voided, to
achieve the intent of the parties to the extent possible, and the remainder will
be enforced to the maximum extent possible.
 
4.9           Entire Agreement; Modifications.  Except as otherwise provided
herein or in the exhibits hereto, this Agreement and all exhibits hereto
represent the entire understanding among the parties with respect to the subject
matter of this Agreement, and supersedes any and all prior and contemporaneous
understandings, agreements, plans, and negotiations, whether written or oral,
with respect to the subject matter hereof, including, without limitation, any
understandings, agreements, or obligations respecting any past or future
compensation, bonuses, reimbursements, or other payments to the Executive from
the Company.  All modifications to the Agreement must be in writing and signed
by each of the parties hereto.
 
4.10          Section 409A.
 
(a)           Notwithstanding anything to the contrary in this Agreement, if
Executive is a “specified employee” within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and the final regulations
and any guidance promulgated thereunder (“Section 409A”) at the time of
Executive’s termination, and the severance payable to Executive, if any,
pursuant to this Agreement, when considered together with any other severance
payments or separation benefits which may be considered deferred compensation
under Section 409A (together, the “Deferred Compensation Separation Benefits”)
will not and could not under any circumstances, regardless of when such
termination occurs, be paid in full by March 15 of the year following
Executive’s termination, then only that portion of the Deferred Compensation
Separation Benefits which do not exceed the Section 409A Limit (as defined
below) may be made within the first six (6) months following Executive’s
termination of employment in accordance with the payment schedule applicable to
each payment or benefit. For these purposes, each severance payment is hereby
designated as a separate payment and will not collectively be treated as a
single payment.  Any portion of the Deferred Compensation Separation Benefits in
excess of the Section 409A Limit shall accrue and, to the extent such portion of
the Deferred Compensation Separation Benefits would otherwise have been payable
within the first six (6) months following Executive’s termination of employment,
will become payable on the first payroll date that occurs on or after the date
six (6) months and one (1) day following the date of Executive’s termination of
employment.  All subsequent Deferred Compensation Separation Benefits, if any,
will be payable in accordance with the payment schedule applicable to each
payment or benefit.
 

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(b)           The foregoing provision is intended to comply with the
requirements of Section 409A so that none of the severance payments and benefits
to be provided hereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply.  The
Company and Executive agree to work together in good faith to consider
amendments to this Agreement and to take such reasonable actions which are
necessary, appropriate or desirable to avoid imposition of any additional tax or
income recognition prior to actual payment to Executive under Section 409A.
 
(c)           For purposes of this Agreement, “Section 409A Limit” means the
lesser of two (2) times: (i) Executive’s annualized compensation based upon the
annual rate of pay paid to Executive during the Company’s taxable year preceding
the Company’s taxable year of Executive’s termination of employment as
determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal
Revenue Service guidance issued with respect thereto; or (ii) the maximum amount
that may be taken into account under a qualified plan pursuant to Section
401(a)(17) of the Code for the year in which Executive’s employment is
terminated.
 
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as of the Effective Date.
 
 

 
NewCardio, Inc.
            By:  /s/ Richard Brounstein             Name: Richard Brounstein    
        Title: Executive Vice President and CFO  

 

  /s/ Vincent W. Renz, Jr.     Vincent W. Renz, Jr., MBA             Address:
6 Gristmill Rd.
     
Cedar Knolls, NJ  07927
     
 
    Telephone:
(973) 652-8379
            Email: 
78dulac@gmail.com
                 

 

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EXHIBIT A

OTHER ACTIVITIES

None
 
 
 
1.

 
2.

 
 
 
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EXHIBIT B

AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION, INVENTION ASSIGNMENT AND
ARBITRATION AGREEMENT

(Previously provided to Employee)
 
 
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EXHIBIT C

RELEASE AND WAIVER OF CLAIMS

In consideration of the payments and other benefits set forth in the Employment
Agreement dated ___________, 2008, to which this form is attached (the
“Employment Agreement”), I, Vincent W. Renz, Jr., MBA, hereby furnish NewCardio,
Inc. (the “Company”) with the following release and waiver (“Release and
Waiver”).

In exchange for the consideration provided to me by the Employment Agreement
that I am not otherwise entitled to receive, I hereby generally and completely
release the Company and its directors, officers, employees, stockholders,
partners, agents, attorneys, predecessors, successors, parent and subsidiary
entities, insurers, affiliates, and assigns from any and all claims, liabilities
and obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring prior to my signing
this Release and Waiver.  This general release includes, but is not limited to:
(1) all claims arising out of or in any way related to my employment with the
Company or the termination of that employment; (2) all claims related to my
compensation or benefits from the Company, including, but not limited to,
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including, but not limited to, claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including, but not limited to, claims for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment
and Housing Act (as amended).

I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows:  “A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” I hereby expressly waive
and relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against the
Company.
 

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I acknowledge that, among other rights, I am waiving and releasing any rights I
may have under ADEA, that this Release and Waiver is knowing and voluntary, and
that the consideration given for this Release and Waiver is in addition to
anything of value to which I was already entitled as an executive of the
Company.  I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that:  (a) the release and waiver granted
herein does not relate to claims under the ADEA which may arise after this
Release and Waiver is executed; (b) I should consult with an attorney prior to
executing this Release and Waiver; (c) if I am over the age of forty (40) on the
date I am signing this Release and Waiver, I have 21 days in which to consider
this Release and Waiver (although I may choose voluntarily to execute this
Release and Waiver earlier); (d) if I am over the age of forty (40) on the date
I am signing this Release and Waiver, I have seven days following the execution
of this Release and Waiver to revoke my consent to this Release and Waiver; and
(e) if I am over the age of forty (40) on the date I am signing this Release and
Waiver, this Release and Waiver shall not be effective until the eighth day
after I execute this Release and Waiver and the revocation period has expired;
otherwise it shall be effective upon the date of my signature below.

I acknowledge my continuing obligations under the At-Will Employment,
Confidential Information, Invention Assignment and Arbitration Agreement a copy
of which is attached hereto (the “Confidentiality Agreement”).  Pursuant to the
Confidentiality Agreement, I understand that among other things, I must not use
or disclose any confidential or proprietary information of the Company and I
must immediately return all Company property and documents (including all
embodiments of proprietary information) and all copies thereof in my possession
or control.  I understand and agree that my right to the severance pay I am
receiving is in exchange for my agreement to the terms of this Release and
Waiver and is contingent upon my continued compliance with my Confidentiality
Agreement.
 
This Release and Waiver, including the Confidentiality Agreement, constitutes
the complete, final and exclusive embodiment of the entire agreement between the
Company and me with regard to the subject matter hereof.  I am not relying on
any promise or representation by the Company that is not expressly stated
herein.  This Release and Waiver may only be modified by a writing signed by
both me and a duly authorized officer of the Company.

 

 

Date: __________________ By: _________________________________________  
Vincent W. Renz, Jr., MBA

 
 
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