Exhibit 10.2

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED AGREEMENT (the “Agreement”) is entered into as of
March 15, 2019 is entered into 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”) to become effective immediately.

 

WHEREAS, the Company and Executive are party to an employment agreement entered
into and effective March 20, 2017 (the “Prior Agreement”);

 

WHEREAS, this Agreement amends and supersedes the Prior Agreement and any other
agreement with respect to the matters contained herein.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the Company and the Executive hereby agree as
follows:

 

1. Employment, Duties and Acceptance.

 

1.1 General. The Company hereby agrees to employ the Executive as its 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 (“CEO”) 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 President and Chief Financial Officer. The
Executive will be granted on a non-voting, non-compensated basis (other than
compensation provided herein), the right to participate and observe in all board
of director meetings except for such times the board will hold executive
sessions without any management present.

 

   

 

 

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 either public or private
corporate boards so long as such activities are not restricted 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 or the
Philadelphia (and surrounding Philadelphia suburbs) as required by the best
interest of the Company as determined by the CEO. 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 initial term of this Agreement shall commence on March 15, 2019
(“Effective Date”) and terminate on the third anniversary of the Effective Date
(the “Initial Term”) unless terminated earlier as provided in this Agreement. In
addition, the term of this Agreement shall thereafter automatically renew for
periods of one-year (the “Renewal Term”) unless either party gives written
notice to the other party at least 60 days prior to the end of the term or at
least 60 days prior to any one-year renewal period, that the Agreement shall not
be further extended. The period commencing on the Effective Date and ending on
the date on which the term of the Executive’s employment under the Agreement
terminates is referred to herein as the “Term”.

 

3. Compensation and Benefits.

 

3.1 Salary. The Company shall pay to Executive a salary (“Base Salary”) at the
annual rate of $345,000. 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 in effect 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 Restricted Common Stock Award. Upon the Effective Date, the Company shall
grant Executive 500,000 shares of the Company’s Restricted Common Stock under
the Company’s Second Amended 2014 Long-Term Incentive Plan (“Plan”). Subject to
continued service to the Company through the applicable vesting date and the
provisions of the Plan, the Restricted Common Stock shall become non-forfeitable
over three years in equal amounts on each anniversary date. Any unvested
forfeitable shares, shall become immediately vested and non-forfeitable in the
event of a termination for Good Reason or immediately after any Change of
Control as defined in the Restricted Common Stock Agreement and Indemnification
Agreement.

 

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. The Executive shall be eligible to
participate in the Company’s annual and long-term incentive plans and programs
in accordance with the terms of such plans and programs as in effect and
afforded to other senior executives of the Company at levels determined by the
Board (or committee of the Board).

 

3.5 Vacation. Executive shall be entitled to twenty-five (25) 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.

 

   

 

 

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 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
thirty (30) 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; (f) a liquidation, bankruptcy or
receivership of the Company; or (g) any reason or no reason following a Change
of Control (as defined in the Restricted Common Stock Agreement and
Indemnification Agreement) and the Executive’s notice of resignation under this
subsection is provided to the surviving entity following a Change of Control
within the 60-day period following the closing of the Change of Control .
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 sixty (60) 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 (iii) 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 twelve (12) months from the date of
termination or twenty-four (24) months in the event of a Change of Control that
occurred within 60 days of termination, 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 earlier of (a) the date twelve (12)
months following the date of termination, and (B) the date of Executive becoming
eligible for coverage under a new employer’s health insurance plan (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 one (1) year
thereafter, or two (2) years thereafter in the event of a Change of Control,
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,” (Good Reason for
purposes of this Section shall not include termination for Good Reason defined
in Section 4.4 (g) in connection with a Change of Control and while Executive is
receiving payments in accordance with Section 4.6 (c)) 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.

 

   

 

 

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 Restricted Common Stock Award
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.

 

1

 

 

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/ Ronald M. Sparks   Name:  Ronald M. Sparks  
Title: Chairman Compensation Committee           /s/ Dennis M. McGrath    
DENNIS M. MCGRATH