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Exhibit 10.3
 

THERAGENICS CORPORATION
2007 LONG-TERM
CASH INCENTIVE PLAN

SECTION I. INTRODUCTION

1.1 Purpose. The purpose of the Theragenics Corporation 2007 Long-Term Cash
Incentive Plan (the “Plan”) set forth below is to provide cash incentive
compensation to certain employees of Theragenics Corporation (the “Company”) and
its affiliates to stimulate their efforts to attain certain cumulative revenue
and earnings per share goals of the Company over the period beginning on January
1, 2007 and ending on December 31, 2009.

1.2 Effective Date. This Plan is effective as of February 13, 2007 (the
“Effective Date”), the date it was approved by the Board of Directors of the
Company (the “Board”).

SECTION II. ELIGIBILITY AND ADMINISTRATION

2.1 Eligibility. The Board shall determine, in its sole discretion, the
employees of the Company or its Affiliates eligible to participate in the Plan
(the “Participants”). As of the Effective Date, the Participants are set forth
in Exhibit A. The Board may designate additional Participants during the
Performance Period. Once a person becomes a Participant in the Plan, the
Participant shall remain a Participant until any Cash Incentive Award payable
hereunder has been paid out or forfeited.

2.2 Administration. The Plan shall be administered by the Compensation Committee
of the Board (the “Committee”).

SECTION III. DEFINITIONS
 
                3.1“Affiliate” means:

(a) Any Subsidiary or Parent,

(b) An entity that directly or through one or more intermediaries controls, is
controlled by, or is under common control with the Company, as determined by the
Company, or

(c) Any entity in which the Company has such a significant interest that the
Company determines it should be deemed an “Affiliate,” as determined in the sole
discretion of the Company.

3.2 “Cash Incentive Award” means an award of either or both a cumulative revenue
cash award pursuant to Section 4.1 hereof and a cumulative earnings per share
cash award pursuant to Section 4.2 hereof.
 

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3.3 “Cause” shall have the meaning set forth in the employment agreement then in
effect between the Participant and the Company or, if there is none, then Cause
shall mean the occurrence of any of the following events: (i) willful and
continued failure (other than such failure resulting from his incapacity during
physical or mental illness) by the Participant to substantially perform his
duties with the Company or an affiliate; (ii) conduct by the Participant that
amounts to willful misconduct or gross negligence; (iii) any act by the
Participant of fraud, misappropriation, dishonesty, embezzlement or similar
conduct against the Company or an affiliate; (iv) commission by the Participant
of a felony or any other crime involving dishonesty; or (v) illegal use by the
Participant of alcohol or drugs.

3.4 “Change in Control” means any one of the following events which occurs
following the Grant Date:
 
        (a) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of voting
securities of the corporation where such acquisition causes such person to own
thirty-five percent (35%) or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this Subsection (a), the following acquisitions
shall not be deemed to result in a Change in Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a transaction that complies
with clauses (i), (ii) and (iii) of Subsection (c) below; and provided, further,
that if any Person’s beneficial ownership of the Outstanding Company Voting
Securities reaches or exceeds thirty-five percent (35%) as a result of a
transaction described in clause (i) or (ii) above, and such Person subsequently
acquires beneficial ownership of additional voting securities of the Company,
such subsequent acquisition shall be treated as an acquisition that causes such
Person to own thirty-five percent (35%) or more of the Outstanding Company
Voting Securities; or

(b) individuals who as of the date hereof, constitute the Board of Directors
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board of Directors; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least
two-thirds of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors; or

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(c) the approval by the shareholders of the Company of a reorganization, merger
or consolidation or sale or other disposition of all or substantially all of the
assets of the Company (“Business Combination”) or, if consummation of such
Business Combination is subject, at the time of such approval by shareholders,
to the consent of any government or governmental agency, the obtaining of such
consent (either explicitly or implicitly by consummation); excluding, however,
such a Business Combination pursuant to which (i) all or substantially all of
the individuals and entities who were the beneficial owners of the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Voting
Securities, (ii) no Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, thirty-five percent
(35%) or more of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or

(d) approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

Notwithstanding the foregoing, no Change in Control shall be deemed to have
occurred for purposes of this Agreement by reason of any actions or events in
which the Participant participates in a capacity other than in his capacity as
an employee of the Company or an affiliate.

3.5 “Disability” shall have the meaning set forth in the employment agreement
then in effect between the Participant and the Company or, if there is none,
Disability shall mean the inability of the Participant to perform any of his
duties for the Company and its affiliates due to a physical, mental, or
emotional impairment, as determined by an independent qualified physician (who
may be engaged by the Company), for a ninety (90) consecutive day period or for
an aggregate of one hundred eighty (180) days during any three hundred
sixty-five (365) day period.

3.6 “Parent” means any corporation (other than the Company) in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company owns stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain. A Parent
shall include any entity other than a corporation to the extent permissible
under Section 424(f) or regulations and rulings thereunder.
 
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3.7 “Performance Period” shall mean the three-consecutive-year period beginning
January 1, 2007 and ending on December 31, 2009.

3.8 “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the
other corporations in the chain. A “Subsidiary” shall include any entity other
than a corporation to the extent permissible under Section 424(f) or regulations
or rulings thereunder.

IV. CASH INCENTIVE AWARD

4.1 Amount of Cumulative Revenue Cash Award. The cumulative revenue cash award
payable at the end of the Performance Period shall be determined based upon the
performance level of the Company over the Performance Period according to the
following schedule:

Performance Level
of the Company
Cumulative
Revenue
Award
Amount
Maximum Performance
Level
(Revenue level
associated with
maximum)*
1xTarget
Target Performance
Level
(Revenue level
associated with
target)*
.5xTarget
Threshold Performance
Level
(Revenue level
associated with
threshold)*
.25xTarget

 

For purposes of the above schedule, “Cumulative Revenue” means the Company’s
cumulative revenue for the Performance Period determined from the Company’s
audited financial statements. No cumulative revenue cash award is payable if the
Cumulative Revenue is less than the Threshold Level.

        * Cash award payable will be determined by linear interpolation for
Cumulative Revenue between (revenue level associated with target) and (revenue
level associated with maximum) or between (revenue level associated with
threshold) and (revenue level associated with target).

4.2 Amount of Cumulative Earnings Per Share Award. The cumulative earnings per
share award payable at the end of the Performance Period shall be determined
based upon the performance level of the Company over the Performance Period
according to the following schedule:

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Performance Level
of the Company
Cumulative
Earnings Per Share
Award
Amount
Maximum Performance
Level
(EPS level
associated with
maximum)**
1xTarget
Target Performance
Level
(EPS level
associated with
target)**
.5xTarget
Threshold Performance
Level
(EPS level
associated with
threshold)**
.25xTarget

For purposes of the above schedule, “Cumulative Earnings Per Share” means the
Company’s earnings per share determined on a fully diluted basis for the
Performance Period and determined from the Company’s audited financial
statements. No cumulative earnings per share award is payable if the Cumulative
Earnings Per Share is less than the Threshold Level.

** Cash award payable will be determined by linear interpolation for Cumulative
Earnings Per Share between (EPS level associated with target) and (EPS level
associated with maximum) or between (EPS level associated with threshold) and
(EPS level associated with target).
 
4.3 Determination of “Target.” For purposes of calculating the award amount
under Sections 4.1 and 4.2, “Target” shall be determined by the Board for each
Participant; provided that, in the case of the employees who are Participants as
of the Effective Date, the Targets are set forth on Exhibit A.

4.4 Additional Participants. If employees other than those listed on Exhibit A
hereto become Participants in the Plan, the Board will determine whether any
form of proration will apply to determine his or her Cash Incentive Award.
 
4.5 Payment of Cash Incentive Award. The Committee shall certify the cumulative
revenue and earnings per share results before any Cash Incentive Award is paid.
Except as provided in Section 5.1, the Cash Incentive Award will be earned and
accrued and payable if the Participant is an employee of the Company or an
Affiliate on the last day of the Performance Period, regardless of whether the
Participant ceases to be an employee of the Company or an Affiliate before the
payment date for any reason whatsoever, including without limitation, a
termination by the Company for Cause or resignation by the Participant. Except
as provided in Section 5.2, any Cash Incentive Award earned by a Participant
over the Performance Period shall be paid in cash following the close of the
final year of the Performance Period but in no event after the 15th day of the
third month following the end of the Company’s first taxable year following the
end of the Performance Period; provided, however, if audited financial
statements are not available by such date, payment will be made as soon as
administratively practicable following the availability of audited financial
statements.

V. TERMINATION OF EMPLOYMENT

        5.1 Termination of Employment. If the Company or an Affiliate terminates
the Participant’s employment for Cause or the Participant resigns his employment
with the Company or an Affiliate before the last day of the Performance Period,
the Participant shall not receive the Cash Incentive Award. If, before the last
day of the Performance Period, the Company or an Affiliate terminates the
Participant’s employment without Cause, or the Participant dies while employed
by the Company or an Affiliate or suffers a Disability while employed by the
Company or an Affiliate, the amount of the Cash Incentive Award to which the
Participant is entitled shall be prorated in the same proportion that the number
of days elapsed from the beginning of the Performance Period through the date
the Participant ceases to be an employee of the Company or an Affiliate bears to
the total number of days in the Performance Period. Notwithstanding the
foregoing sentence, if, before the last day of the Performance Period, the
Participant retires (i.e., voluntarily resigns) on or after reaching age 65, the
Participant shall be entitled to the full value of the Cash Incentive Award
determined as if the Participant had remained employed for the duration of the
Performance Period.

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        5.2 Change in Control. If a Change in Control occurs during the
Performance Period while the Participant is an employee of the Company or an
Affiliate, the Participant shall be paid on the date of the Change in Control
the full value of the Cash Incentive Award determined as if the Company had
performed at the Target Performance Level for the duration of the Performance
Period and the Participant had remained employed for the duration of the
Performance Period.

VI. MISCELLANEOUS
 
        6.1 Taxes. The Company shall withhold the amount of taxes, which in the
determination of the Company are required to be withheld under federal, state
and local laws and all other applicable payroll withholding with respect to any
amount payable under the Plan.
 
                6.2 No Right to Continued Employment. Neither the establishment
of the Plan, nor the participation in the Plan or any payment thereunder shall
be deemed to constitute an express or implied contract of employment of any
Participant for any period of time or in any way abridge the rights of the
Company or an Affiliate to determine the terms and conditions of employment or
to terminate the employment of any Participant with or without Cause at any
time.
 
                6.3 Choice of Law. The laws of the State of Delaware shall
govern the Plan, to the extent not preempted by federal law, without reference
to the principles of conflict of laws.

 
                    THERAGENICS CORPORATION
 
 
                    By:  /s/ Francis J. Tarallo                                
 
 
                    Title:  Chief Financial Officer                          
 
 

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EXHIBIT A

 

Participants
 
Target
     
M. Christine Jacobs
 
$ 175,000
     
Francis J. Tarallo
 
$   85,000
     
Bruce W. Smith
 
$   75,000
     
Patrick J. Ferguson
 
$   75,000
     
Michael O’Bannon
 
$   40,000

 

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