Exhibit 10.34

October 8, 2002

Mr. Alfred J. Novak
9375 S.W. 60th Avenue
Miami, FL 33156

Dear Al:

We are delighted to welcome you as you join Novoste Corporation (“Novoste”) as
its new President and Chief Executive Officer (CEO). This letter sets forth the
agreement between you and Novoste as to the terms and conditions of your
employment by Novoste.

1.        Duties and Responsibilities. In your capacity as CEO of Novoste you
will report to Novoste’s Board of Directors (the “Board”) and perform such
duties and responsibilities as are from time to time directed by Novoste’s Board
consistent with your positions as CEO. You will, upon joining Novoste as CEO,
also be appointed to the Board of Directors to fill one of the currently
existing vacancies on the Board, and will be proposed to the shareholders, at
the proper time, for election to the Board.

2.        Related Agreements. Simultaneously herewith, you are entering into the
Confidentiality and Arbitration Agreement, Business Conduct Agreement, Conflict
of Interest Agreement, Patent Agreement, Unfair Competition Agreement, and
Termination Agreement, in the forms for Exhibits A, B, C, D, E and F hereto,
respectively (the “Related Agreements”), all of which agreements are
incorporated herein by reference thereto and made a part hereof. Your employment
is also subject to the successful completion of a pre-employment drug screening.

3.        Term. The term of your employment will commence on October 15, 2002,
or on such earlier date when you have accepted the terms and conditions set
forth herein and the Board has formally elected you to the positions of CEO
(your “Employment Date”), and continues until terminated under the provisions of
Paragraph 7 below. By accepting this Agreement, you accept such employment as a
full-time employee of Novoste and agree to devote substantially all of your
business and professional time, energy and skills to the affairs of Novoste and
to serve faithfully and to the best of your ability; provided, however, that
nothing in this Agreement or the Related Agreements precludes you continuing the
affiliations and associations set forth in Paragraph 7 of the Conflict of
Interest Agreement and any similar professional

 

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Mr. Alfred J. Novak
October 8, 2002
Page 2 of 8

affiliations, or any civic, charitable or other non-professional activities that
do not significantly interfere with your performance of services to Novoste.

4.        Compensation. As compensation for the services to be rendered by you
hereunder, following the commencement of your employment, Novoste will:

(a)       pay you a base salary of at least $350,000 per annum, payable in
installments in accordance with Novoste’s regular payroll practices. Your
performance will be reviewed annually by Novoste’s Board of Directors, in
conjunction with which goals and possible increases in your base salary for the
future will be discussed, it being understood that any such increases shall be
within the discretion of the Board.

(b)       grant you, effective as of your Employment Date, a ten-year
non-incentive stock option to purchase an aggregate of 400,000 shares of
Novoste’s Common Stock, at an exercise price equal to the fair market value, per
share, of the stock at the close of trading on the day of the grant, upon the
terms and conditions as shall be set forth in a Stock Option Agreement between
you and Novoste (the “Stock Option Agreement”). Such options shall become
exercisable as follows: 100,000 shares vesting on the effective date of the
grant, and 100,000 shares thereof vesting thereafter on each of the following
dates, October 16, 2003, October 16, 2004, and October 16, 2005. Such options
shall become exercisable in full upon a Change of Control.

(c)       grant you effective as of your Employment Date an additional ten-year
non-incentive stock option to purchase an aggregate of 300,000 shares of
Novoste’s Common Stock, at an exercise price equal to the fair market value, per
share, of the stock at the close of trading on the day of the grant subject to
the provisions of the Stock Option Agreement and vesting on the following basis:

(i)        The said grant shall fully vest, if not sooner vested pursuant to the
following terms, on October 16, 2007, however;

(ii)       When the Novoste common stock achieves a closing price of $8.00 per
share and maintains that closing price for twenty out of thirty consecutive
trading days, 100,000 shares shall vest;

(iii)     When the Novoste common stock achieves a closing price of $12.00 per
share and maintains that price for twenty out of thirty consecutive trading
days, an additional 100,000 shares shall vest; and

(iv)     When the Novoste common stock achieves a closing price of $15.00 per
share and maintains that

 

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Mr. Alfred J. Novak
October 8, 2002
Page 3 of 8

            closing price for twenty out of thirty consecutive days, the
remaining 100,000 shares shall vest.

In the event of a Change of Control, all unvested shares shall vest that would
have vested at the price per share set forth in paragraphs (c) (i), (ii) and
(iii) above, which equals the fair market value per share at the close of
trading on the date immediately preceding the Change of Control, whether or not
such share price has been at the level for twenty out of thirty consecutive days
prior to the Change of Control.

(d)       entitle you to participate in Novoste’s discretionary annual incentive
cash bonus plan for executive officers, established to reward participating
individuals for their contribution to the achievement of key annual corporate
objectives. You will be eligible for participation in the 2002 Bonus Incentive
Plan, prorated to your date of hire. For 2003, your bonus eligibility will be
40% of your base salary, based upon the successful completion of Novoste’s
Corporate Goals. These company-wide goals will be determined by the Senior
Management team and are subject to Board approval.

(e)       provide a company-paid apartment for your use and will pay all
expenses related to the apartment including rent, utilities, furniture rental,
etc. up to $3,500 per month. Airfare for weekly visits to your family will be
paid by Novoste, provided tickets are purchased with 14-day advance notice.

(f)       entitle you to participate in any and all health, life, disability or
other insurance plans, retirement plans, 401(k) plans, stock purchase plans, and
all other employee benefit plans that are now, or may in the future be offered
by Novoste, subject to the terms and conditions of those plans.

5.        Vacation. You will be entitled to take up to an aggregate of four
weeks of vacation each calendar year as business conditions permit. In
accordance with company policy, you will be allowed to carry over up to 10
unused vacation days to the following year.

6.        Reimbursement of Expenses. Novoste will reimburse you for all
reasonable and documented business expenses incurred by you on behalf of Novoste
during the term of your employment hereunder consistent with Novoste’s expense
reporting policy, as the same may be modified from time to time.

7.        Events of Termination.

(a)       By Novoste for Cause. Your employment hereunder may be terminated at
any time by Novoste for “Cause.” “Cause” shall mean termination due to

 

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Mr. Alfred J. Novak
October 8, 2002
Page 4 of 8

any one or more of the following: (i) if you are indicted for committing a
felony or a decision or determination is rendered by any court or governmental
authority that you have committed any act involving fraud, dishonesty, breach of
trust or moral turpitude, or if you enter a plea of guilty or nolo contendere to
any of the foregoing: (ii) if you willfully breach your duty of loyalty to, or
commit an act of fraud or dishonesty upon, Novoste; (iii) if you demonstrate
gross negligence or willful misconduct, (iv) if, in the reasonable, good faith
opinion of a majority of Novoste’s Board of Directors (excluding yourself if you
shall then be a director of Novoste), you engage in personal misconduct of such
a material nature as to render your presence as CEO detrimental to Novoste or
its reputation and you fail to cure the same (if curable) within five days after
written notice thereof from Novoste; or (v) if you commit a material breach of,
or a default under any of the terms or conditions of this Agreement (including
the Related Agreements) and you fail to cure such breach or default (if curable)
within ten days after written notice thereof from Novoste.

(b)       By Novoste for Unsatisfactory Performance. Your employment may be
terminated at any time by Novoste if a majority of Novoste’s Board of Directors
(excluding yourself if you shall then be a director of Novoste), shall have
given you a vote of no confidence based upon the nature or manner of the
performance of your duties hereunder (“Unsatisfactory Performance”).

(c)       By Novoste without Cause or without Unsatisfactory Performance. Your
employment hereunder may be terminated at any time by Novoste, upon 30 days’
prior written notice to you, without “Cause” or without “Unsatisfactory
Performance.”

(d)       Upon Death or Permanent Disability. Your employment hereunder shall
additionally terminate immediately upon your Death or “Permanent Disability.”
Shall have the meaning set forth in the long-term disability policy or policies
then maintained by Novoste for the benefit of its employees, or if no such
policy shall then be in effect, or if more than one such policy shall then be in
effect in which the term “Permanent Disability” shall be assigned different
definitions, then the term “Permanent Disability” shall be defined for purposes
of this Agreement and the Related Agreements to mean any physical or mental
disability or incapacity which renders you incapable of performing the services
normally required of you as the CEO in substantially the same manner and with
the same degree of competence that you performed them prior to the occurrence of
the physical or mental disability.

(e)       By You without Good Reason. Your employment hereunder may be
terminated at any time by you, upon 90 days’ prior written notice to Novoste,
without Good Reason.

 

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Mr. Alfred J. Novak
October 8, 2002
Page 5 of 8

(f)       By You for Good Reason. Your employment hereunder may be terminated at
any time by you for “Good Reason.” “Good Reason” shall mean one or more of the
following events: (i) a material breach of or default under this Agreement by
Novoste which is not cured by Novoste within thirty days after its receipt of
prior written notice thereof from you; or (ii) a material reduction in your
duties or a material interference with the exercise of your authority by
Novoste’s Board of Directors (not arising from any disabling physical or mental
disability you may sustain) which would be inconsistent with your position as
CEO of Novoste and the same shall not have been remedied by Novoste’s Board of
Directors within thirty days after its receipt of prior written notice thereof
from you. A termination by you of your employment pursuant to this Paragraph
7(f) shall not be deemed for purposes hereof to constitute a termination of your
employment by you for Good Reason if, at the time of such termination by you,
Novoste shall be entitled to terminate this Agreement by reason of your
Permanent Disability (subject to the passage of any remaining time necessary to
render any disability you may sustain a Permanent Disability under Paragraph
7(d) above), or for Cause (subject to the passage of any applicable cure period)
and Novoste shall have sent prior to Novoste’s receipt of your notice of
termination, a notice of termination by Novoste specifying the Cause or notice
by Novoste of such pending Permanent Disability.

8.        Consequences of Termination.

(a)       By Novoste for Cause. If your employment is terminated for Cause, this
Agreement shall terminate immediately upon the date fixed for the cessation of
your employment and you shall be entitled to be paid any accrued, but unpaid,
salary earned by you through the date of such termination.

(b)       By Novoste for Unsatisfactory Performance. In the event your
employment is terminated by Novoste for Unsatisfactory Performance, this
Agreement shall terminate immediately on the date fixed for the cessation of
your employment and you shall be entitled to receive all accrued, but unpaid,
salary earned by you through the date of such termination.

(c)       By Novoste without Cause or without Unsatisfactory Performance. In the
event your employment is terminated by Novoste without Cause or without
Unsatisfactory Performance (other than by reason of your death or Permanent
Disability), this Agreement shall terminate immediately on the date fixed for
cessation of your employment and you shall be entitled to receive: (i) all
accrued but unpaid salary earned by you through the date of such termination;
and (ii) a lump sum, cash severance payment on the date of termination of
employment equal to two times your Annualized Includable Compensation, as
defined in the Termination Agreement, taking as a Base

 

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Mr. Alfred J. Novak
October 8, 2002
Page 6 of 8

Period the two most recent taxable years ending before the date of your
termination of employment.

(d)       Upon your Death or Permanent Disability. In the event your employment
terminates by reason of your Death or Permanent Disability, this Agreement shall
terminate immediately upon such occurrence and you, your estate or your personal
representative, as the case may be, shall be entitled to be paid any accrued but
unpaid salary earned by you through the date of such termination.

(e)       By You without Good Reason. In the event your employment is terminated
by you without Good Reason, this Agreement shall terminate immediately upon the
date of your resignation, consistent with the notice requirements set forth in
Paragraph 7(e) and you shall be entitled to be paid any accrued but unpaid
salary earned by you through the date of such termination.

(f)       By You for Good Reason. In the event your employment is terminated by
you for Good Reason, this Agreement shall terminate on the date set forth in
your notice of termination consistent with Paragraph 7(f) and you shall be
entitled to receive: (i) all accrued but unpaid salary earned by you through the
date of such termination; and (ii) a lump sum, cash severance payment on the
date of termination of employment equal to two times your Annualized Includable
Compensation, as defined in the Termination Agreement, taking as a Base Period
the two most recent taxable years ending before the date of your termination of
employment.

(g)       Effect on Stock Options. In the event of the termination of your
employment, pursuant to paragraphs 7(c) or 7(f) above, any unvested options from
the initial 400,000 share grant set forth in paragraph 4(b) above shall become
fully vested and exercisable on the date of such termination.

9.        Key Man Life Insurance. You agree that Novoste may, in its discretion,
apply for and take out in its name and at its own expense, and solely for its
benefit, key man life insurance on you in any amount deemed necessary or
advisable by Novoste to protect its interests, and you agree that you shall have
no right, title or interest therein and further agree to submit to any medical
or other examination and to execute and deliver any application or other
instruments or information reasonably necessary to effectuate such insurance.

10.      Your Representations and Warranties. You    represent and warrant that
you are not under any obligation, restriction or limitation, contractual or
otherwise, to any other individual or entity which would prohibit or impede you
from performing your

 

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Mr. Alfred J. Novak
October 8, 2002
Page 7 of 8

duties and responsibilities hereunder, and that you are free to enter into and
perform the terms and provisions of this Agreement, such representation and
warranty to survive the execution, delivery and termination hereof; provided,
hereunder, that you shall not be required to disclose to Novoste any information
that you are obligated to keep confidential under any agreement with a third
party.

11.      Notices. Any notice required hereunder shall be delivered by hand, sent
by telecopy, or sent registered or certified mail, addressed to the other party
hereto at its address set forth above or at such other address thereof shall
have been given in accordance with the provisions of this Paragraph 11. Any such
notice shall become effective (a) when mailed, three days after having been
deposited in the mail, postage prepaid, and (b) in the case of delivery by hand
or telecopy, upon delivery.

12.      Entire Agreement. This Agreement, together with the Related Agreements,
contains the entire agreement and understanding between the parties hereto
relating to the subject matter hereof and thereof and supersedes any and all
prior understandings, agreements and representations, written or oral, expressed
or implied, with respect thereto. In the event of a conflict between the terms
of this Agreement and any of the Related Agreements, this Agreement shall
govern.

13.      Amendments. This Agreement may not be amended, modified, altered or
terminated except by an instrument in writing signed by the parties.

14.      Successors and Assigns. This Agreement is personal in nature and
neither this Agreement nor any rights or obligations hereunder may be assigned
or transferred by you without the prior written consent of Novoste. This
Agreement may not be assigned or transferred by Novoste without your prior
written consent, which shall not be unreasonably withheld. Subject to the
foregoing, this Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and Novoste’s successors and
permitted assigns and your executors, administrators, personal representatives,
heirs and distributees.

15.      Severability. In case any one or more of the provisions of this
Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be effected thereby.

16.      Governing Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Georgia applicable to
contracts made and to be performed entirely therein (without giving effect to
the conflicts of law rules thereof).

 

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Mr. Alfred J. Novak
October 8, 2002
Page 8 of 8

17.      Effectiveness. Of course, notwithstanding anything herein to the
contrary, the effectiveness of this Agreement and your employment pursuant
hereto is contingent upon the mutual execution and delivery of this Agreement by
you and Novoste.

We would appreciate it if you would kindly indicate your agreement with the
foregoing by countersigning the enclosed duplicate copy of this letter agreement
and returning it to me on behalf of Novoste.

On behalf of Novoste, we look forward to a long and mutually rewarding
relationship.

 

 

 

Sincerely,

NOVOSTE CORPORATION

 

By: 

 

 

 

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Daniel G. Hall
Vice President, Secretary and General Counsel

 

Attachments:

 

Confidentiality and Arbitration Agreement
Business Conduct Agreement
Conflict of Interest Agreement
Patent Agreement
Unfair Competition Agreement
Termination Agreement
Novoste Proxy Statement dated April 25, 2001
Novoste Proxy Statement dated April 26, 2002

 

Accepted and Agreed to this _____ day of October 2002.

______________________________________________