**Exhibit 10.17**

 

August 5,2008

 

VikramSimha

49Trefry Lane

Stow,MA 01775

 

DearVikram,

 

Onbehalf of Vital Images, Inc., I am pleased to offer you the full-timeposition of Chief Technology Officer and Executive Vice President ofEngineering reporting directly to me. Your base salary will be $10,000.00 semi-monthly, which annualizes to$240,000.  Your start date will be August 6th, 2008.  This offer letter willexpire on August 6th, 2008.

 

Inaddition to your base salary, you will be eligible for the management bonusprogram.  Your management bonus incentivetarget for calendar year 2008 will be 35% of base pay.  Awards under the management bonus incentiveplan will be based on achievement of a combination of both company and personalperformance goals. Moreover, there is an opportunity for the bonus payout to bemore than your incentive target, based on overachievement of Company goals.Payouts under the management incentive bonus plan are expected to be made toqualifying employees on a lump sum basis on or before March 15, 2009.  Please be advised that Vital Images reservesthe right, without prior notice, to make any changes to the manager bonusprogram at its discretion, of which you will be notified.

 

Additionally,the Company will pay you a signing bonus of $35,000.  Appropriate taxes will be withheld on thisbonus.  Should you leave the Companyvoluntarily within one year after your start date; the sign-on bonus must berepaid to the Company.

 

In addition to your salary, management willrecommend that you receive non-qualified options to purchase 150,000 shares ofVital Images Common Stock and 15,000 shares of restricted stock. The grants will be priced as of your start datewith Vital Images (or the first preceding trading date, if the markets are closedon your start date) and will be under our standard terms and conditions forsuch grants.

 

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We have agreed that youwill relocate to the Minneapolis, MN area no later than May 2010.  To assist you in your relocation we will payfor temporary housing in the Minneapolis area for the next 18 months.  Wewill also pay for the move of your household goods and two house hunting tripsfor you and your spouse for four days duration each and reimburse you for anytravel expenses associated with traveling to and from our headquarters prior toyour relocation.  Please see “Exhibit A”for more details surrounding the relocation assistance.

 

*  *  *

 

You represent and warrantthat as of the date that you sign this letter agreement, you have not,personally or through your agent, * * * .  If you voluntarily terminateyour employment with the Company or are terminated for Cause, as such isdefined in your employment agreement, within six (6) months of your startdate, you also agree to reimburse the Company for any amounts paid under thisprovision, and if you voluntarily terminate your employment with the Company orare terminated for Cause within the following twelve (12) months, you agree toreimburse the Company a prorated portion of these amounts, amortized on a straight-linebasis commencing with your seventh (7th) month of employment.  Yourepresent and warrant that you have provided the Company with * * *.  Youfurther represent, warrant and covenant that you have not misappropriated anyconfidential, proprietary or trade secret information of your former employer,will not do so, and that you will not disclose to the Company any of suchinformation.  The Company’s obligation under this clause will not apply toany claim or lawsuit brought by the Company against you.  In exchange, youagree to repay the Company the signing bonus and any amounts paid under thisprovision if you produce work product for the Company that you know or shouldhave known infringes on the intellectual property rights of any third party, includingany of your former employers.  To theextent allowable under any relevant litigation, and subject and in addition tothe other terms and conditions of your employment, including its at-will natureand the Company’s severance obligations, the Company agrees to * * * whetherdirectly or indirectly, as an employee, contractor, advisor, director orproprietor, during that period, other than employment for non-profitorganizations, as such term is defined under the Internal Revenue Code, inareas wholly unrelated to the Company’s business, provided that, if you do notcommence working with the Company within thirty (30) days * * * you areterminated for Cause or resign voluntarily, you shall reimburse to the Companyall salary paid to you * * *. Notwithstanding the above, * * *

 

*** * *Confidential Treatment has been requested, the portion indicated has beenredacted and the redacted portion has been separately filed with the Securitiesand Exchange Commission.**

 

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Uponjoining Vital Images, you will be eligible to participate in the Company’sfringe benefit program. Specifically, you will accrue 1.66 days per month (.833days per pay period) which equals 20 days (4 weeks) of vacation per year. Youwill also receive ten (10) paid holidays per calendar year.  Medical, Dental, and Disability Insurance willbe effective the first of the month following the start date.  You mayparticipate in the Vital Images Employee Stock Purchase Plan the first day ofany quarter, and the Vital Images 401(k) plan the first day of the month,following a three-month waiting period.  Please be advised that Companyfringe benefit programs are subject to change as a matter of Company policy.

 

Incompliance with the Immigration Reform and Control Act, all new employees arerequired to provide proof of work eligibility and identification. In order tosatisfy these requirements, certain documents must be presented within 72 hoursof your start date.  Please review thelist, which is attached to the Form I-9, of appropriate documentation andbring these with you on your first day of employment.

 

Youshould be aware that your employment with Vital Images is for no specifiedperiod and constitutes at will employment. As a result, you are free to resign at any time, for any reason or forno reason.  Similarly, Vital Images isfree to conclude our employment relationship with you at any time, with orwithout cause, and with or without notice, subject to any severance obligationsunder any written employment agreement with the Company.

 

Thisoffer of employment is contingent upon successful completion of a backgroundinvestigation by the Human Resources Department at Vital Images.  Confirmation of completion of theinvestigation will be provided to you as soon as the investigation is complete.

 

Toaccept this offer of employment, please sign below and return one copy of thisletter as soon as possible in the enclosed envelope, along with your signednon-disclosure agreement.

 

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Vikram, we are excited abouthaving you on the Vital Images’ team.  Weare confident that you will contribute to our Company’s growth and that we canprovide a challenging and rewarding work environment to further yourprofessional career.

 
| Sincerely,                         |   |
|------------------------------------|--------|
|                               |   |
| /s/ Michael H. Carrel              |   |
|                               |   |
| Michael Carrel                     |   |
| President/Chief  Executive Officer |   |

 

 
| Accepted  by  | /s/Vikram  Simha |   | Date  | 8/6/2008 |
|--------------------|------------------|--------|------------|----------|

 

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**Exhibit A**

 

**VITAL IMAGES, INC.**

**RELOCATION AGREEMENT**

 

**THIS RELOCATION AGREEMENT**(the “Agreement”) isentered into on the 6th day of August, 2008 by and between VitalImages, Inc. (the “Company”) and Vikram Simha (the “Employee”).

 

**IT IS AGREED AS FOLLOWS:**

 

**I.)  Payment of Relocation Costs.**  The Company will pay to Employee, or todesignated third parties on behalf of Employee, the following CoveredRelocation Costs:

 

**Physical Move**

 

The Company will pay reasonable costs (pre-approval based upon 3estimates required) incurred in moving household effects from the old principalresidence in Stow, MA to the new principal residence in Minnesota. Thisincludes the costs of packing, unpacking, disconnecting and reconnectingappliances, and standard value insurance. The Company will not assume the costs for the purchase of new items ifthe old items cannot be reinstalled. The Company will not be responsible forthe expense of transporting personal effects which are heavy, bulky, or requirehandling and transportation costs which are disproportionate to the value ofthe items. Examples include, but are not limited to, the following: heavy hobbyequipment, firewood, garden sheds and similar portable buildings and equipment,boats which cannot be accommodated in the van with household furnishings, andhousehold pets which do not accompany the family. This exclusion also appliesto furnishings and effects that are located elsewhere than Employee’s principalresidence, as for example, in a second home, or in a storage warehouse.Arrangements and charges for these items, if transported, will be the employee’sresponsibility and expense.

 

Vital Images, Inc. will not be responsible for the loss or damageto your property. Carriers normally disclaim responsibility for currency,valuable papers, watches, jewelry, collectables and precious metals. Propertyof this nature, as well as that of high sentimental value, should not beshipped or placed in storage, but transported personally.

 

**II.) Temporary Housing**

 

During theinterval between arrival of Employee’s family and the time when the newresidence can be occupied (i.e., household effects have been delivered and setin place, necessary appliances connected, and utilities turned on) Vital Imageswill pay reasonable costs for reasonable living expenses (lodging), for aperiod not to exceed eighteen (18) months.

 

**III.) House Hunting Trip**

 

All actual, reasonable expenses incurred for one (2) house huntingtrips between the old and new location will be reimbursed. This will includetransportation, food, and lodging  forthe employee and spouse.  Reimbursementwill be limited to a maximum of a four (4) day trip, exclusive of traveltime.

 

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**IV.)****         Taxes**.

 

Employee is advised to consult with his/her tax advisor or accountantor the Internal Revenue Service with regard to deductibility andnondeductibility of items reimbursed and paid for by the Company under thispolicy. The Company agrees to gross up the Employee an additional amount of hiswages such that his total out of pocket costs arising out of any tax liabilityassociated with the benefits provided hereunder together with such additionalamount of his wages is zero.

** **

**V.)****           Repayment of RelocationCosts**.

 

Upon Employee’svoluntary resignation with the Company (the “End Date”), Employee willimmediately repay to the Company all Covered Relocation Costs advanced by theCompany, reduced by an amount equal to 8.33% of such Costs for each full monththat Employee has been employed by the Company since relocating toMinneapolis/St. Paul (the “Repayment Amount”).

** **

**VI.)****         Consent to Offset**.

 

The RepaymentAmount may be deducted from any and all amounts due permitted by law anypayments that would otherwise be due to me, from the Company, including,without limitation, wages, accrued vacation pay and commissions, and Employeeexpressly authorizes the Company to effect such deductions up to the totalrelocation expenses.

 

 
| **VITAL IMAGES, INC.** | ** **            | **EMPLOYEE** |
|------------------------|-----------------------|--------------|
|                   |                  |         |
| Sign              | /s/ Michael H. Carrel |         | Sign  | /s/ Vikram Simha |
|                   |                  |         |
| Print             | Michael Carrel        |         | Print  | Vikram Simha |
|                   |                  |         |
| Date:             | 8/6/08                |         | Date:  | 8/6/2008 |

 

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