** **

**Exhibit10.19**

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**ExecutionCopy**

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**SEPARATION ANDNON-COMPETE AGREEMENT**

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This Separation andNon-Compete Agreement is entered into as of January 16, 2008 (“ExecutionDate”) by and between Vital Images, Inc. (“Company”), a Minnesotacorporation, and Jay D. Miller (“Employee”), a resident of the State ofMinnesota.

 

# 1.             Definitions.  We intend all words used in this Separationand Non-Compete Agreement (“Agreement”) to have their plain meanings inordinary English.  Specific terms we usein this Agreement have the following meanings:

#  

## A.            Employee, as used herein,shall include the undersigned Employee and anyone who has obtained any legalrights or claims through the undersigned Employee.

##  

## B.            Company, as used herein,shall at all times mean Vital Images, Inc., its parent company, theirsubsidiaries, successors and assigns, their affiliated and predecessorcompanies, their successors and assigns, their affiliated and predecessorcompanies and the present or former directors, officers, employees,representatives and agents (including, without limitation, its accountants andattorneys) of any of them, whether in their individual or official capacities,and the current and former trustees or administrators of any pension or otherbenefit plan applicable to employees or former employees of Company, in theirofficial or individual capacities.

##  

## C.            Competitive Products and Services,as used herein, shall include all products and services similar to or the sameas those offered by Company to its customers involving advanced medicalvisualization and analysis software technologies beyond MIP (Minimum IntensityProjection) and MPR (Multi Planar Reformation) that allow for analysis,manipulation, and distribution of images, such as radiological studies, in 2D,3D and 4D.

##  

## D.            Employee’s Claims, as usedherein, means all of the rights Employee, has on or prior to the date hereof,to any relief of any kind from Company, whether or not Employee now knows aboutthose rights, arising out of his employment with Company, and his employmenttermination, including, but not limited to, claims arising under the AgeDiscrimination in Employment Act, as amended by the Older Workers BenefitProtection Act; the Minnesota Human Rights Act; the Americans with DisabilitiesAct; Title VII of the Civil Rights Act of 1964, as amended; the MinnesotaWhistleblower Act; or other federal, state or local civil rights laws; claimspursuant to that certain Employment Agreement between Company and Employeedated February 9, 2002 (the “Employment Agreement”); claims pursuant tothat certain Amended and Restated Change in Control Agreement dated February 9,2002 (the “Change in Control Agreement”); claims pursuant to any otheragreement, understanding, plan or arrangement under which Employee couldreceive compensation from the Company, as the parties intend for this Agreementto settle all obligations remaining between the parties; claims for breach ofcontract; fraud or misrepresentation; defamation, intentional or negligentinfliction of emotional distress; breach of covenant of good faith and fairdealing; promissory estoppel; negligence; wrongful termination of employment;and any other claims for unlawful employment practices arising on or prior tothe date hereof; provided, however, that the term “Employee’s Claims” shall inno event include 

##  

## 

##  

 

## Employee’srights to receive the payments, benefits and continuing protections required tobe provided under this Agreement, including, without limitation, Employee’srights to receive reimbursement of his expenses, in accordance with Companypolicies, benefits under Company’s life insurance and 401(k) plans andsimilar fringe benefit programs for which Employee was eligible as of theSeparation Date, and under laws related thereto.

##  

## E.             Company’s Claims, as usedherein, means all of the rights Company now has to any relief of any kind fromEmployee, or from his heirs, beneficiaries, successors or assigns, whether ornot Company now knows about those rights, arising out of Employee’s employmentwith Company on or prior to the date of this Agreement, including, but notlimited to, claims for breach of contract; fraud or misrepresentation;defamation, intentional or negligent infliction of emotional distress; breachof covenant of good faith and fair dealing, promissory estoppel; negligence orunder applicable federal, state or local law.

##  

## F.             Vested Stock Options, asused herein, shall mean those stock options held by Employee which are vestedas of May 15, 2008, as described on Schedule A, attached hereto.

##  

# 2.             Separation Date.  Employee shall cease to be an officer of theCompany on January 9, 2008.  After January 9,2008, Employee shall continue as an employee of the Company and will remain onthe Company’s payroll and be paid on the Company’s regular pay dates, which aretwice monthly, at his current rate of base salary through January 31,2008, and thereafter as provided below through May 15, 2008 (“SeparationDate”).  From January 10, 2008through the Separation Date, Employee will provide such transition services asare reasonably requested by the Chief Executive Officer of the Company, whowill coordinate the logistics of such services. After January 31, 2008, Employee will receive $3,500 per Companypay period, for not more than five (5) days of service per 30 day period,as such service is reasonably requested by the Chief Executive Officer.  Employee’s service will include attendance atthe ESI Snowmass conference from February 18 through February 20,2008.  If more than five (5) days ofservice per thirty calendar day period after January 31, 2008 is requestedand provided, Company will compensate Employee for such service at the rate of$1,400 per day of service.  Through theSeparation Date, Employee will be entitled to receive his current health andwelfare benefits, including the opportunity to contribute to the Company’s 401Kplan.  Except as expressly set forthherein, Employee shall not be entitled to any compensation or other paymentsduring the period from and after January 9, 2008.  After January 9, 2008, Employee shall nolonger accrue vacation time.

#  

# 3.             Company’s Obligations andSeverance Agreements.  Inconsideration for Employee’s agreements, covenants and promises containedherein, specifically including, but not limited to, the release of EmployeeClaims and Employee’s promises to refrain from competing with the Company andsoliciting its clients and employees as set forth herein, Company and Employeeagree as follows:

#  

## A.            Severance Payment.  Company agrees to pay to Employee a SeverancePayment of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (“SeverancePayment”).  This Severance Payment willbe payable in one lump sum on the first day of the seventh month following theSeparation Date, i.e., on November 17, 2008, or upon his earlier 

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## death.  The Severance Payment shall be subject tofederal and state withholding taxes and FICA.

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## B.            Medical Insurance Benefits.  Company, pursuant to federal and state law,will provide, for a period of eighteen (18) months following the SeparationDate (“COBRA Period”), a continuation of the group medical and dental insurancecoverage on the same basis as it was previously provided to Employee byCompany.  Through the earlier of (i) Employee’sparticipation in equivalent group medical and dental insurance benefits with anew employer or (ii) November 30, 2009 (the “Suspension Date”),Company will pay that portion of the premium for group medical and dentalinsurance that it paid during Employee’s employment, with the remainder to bepaid by Employee.  After the SuspensionDate, Employee will be required to pay for all such benefits for the remainderof the COBRA Period, if any, should Employee elect to continue COBRA coverage.At the conclusion of the Suspension Period, Company will pay Employee anadditional severance payment in an amount equal to the Company’s portion of themonthly premium for group medical and dental insurance for Employee as of theexpiration of the COBRA Period, multiplied by a period of six (6) months (“AdditionalSeverance Payment”). The Additional Severance Payment shall be subject tofederal and state withholding taxes and FICA and Employee shall be solelyresponsible for the additional tax consequences, if any, related to Company’spayments on Employee’s behalf as set forth in this Section 3.B.

##  

## C.            Non-Disparagement.  Company agrees that its directors, seniorofficers and managers shall not disparage or defame Employee in any respect.

##  

## D.            Release.  Effective as of the expiration of the January 2008Rescission Periods, as hereafter defined, Company hereby releases all Company’sClaims, provided, however, that such release is not intended to apply to anywillful misconduct by Employee of which Company does not have presentknowledge.  Company agrees to provide a “bringdown” release in the form attached hereto as Schedule B and incorporated hereinby this reference.  This bring-downrelease will be provided on the Separation Date, and issued simultaneously withand in further consideration for Employee’s bring-down release.  Company’s bring down release shall bedelivered in exchange for the simultaneous delivery to Company of Employee’sbring-down release on the Separation Date, but its effectiveness shall becontingent upon the expiration of Employee’s May 2008 Rescission Periods,without rescission of Employee’s bring-down release.  In the event Employee rescinds his bring-downrelease, Company’s bring-down release shall automatically become null and voidwithout further notice.

##  

## E.             Extension of Exercise Period forVested Stock Options.  The Companyshall extend Employee’s time period to exercise those Vested Stock Options setforth on Schedule A, other than Option Nos. 435 and 436, until the earlier of May 15,2011 or the date set forth on Schedule A. Employee’s non-vested options shall terminate on the SeparationDate.  Company and Employee shall enterinto amendments to the agreements for the Vested Stock Options to memorializethe changes described in the foregoing two sentences, but the changes shall beeffective as of the expiration of the May 2008 Rescission Periods,notwithstanding any failure to enter into any such amendments.

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## F.             Computer and Cell Phone.  Company shall allow Employee to retain thelaptop computer, cell phone and cell phone number issued by or through theCompany to Employee; however, Employee shall remove or destroy any Companyproperty or information identified by the Company contained on the laptopcomputer and cell phone no later than the date of this Agreement, to thesatisfaction of the Company.  For suchpurpose, on the date this Agreement is signed by Employee, Employee shall giveaccess to Company to the laptop computer and cell phone.  Cell phone expenses after the Separation Datewill be the full responsibility of Employee.

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## G.            Accrued But Unused Vacation Time.  Company shall pay Employee for all accruedbut unused vacation time, through the date of this Agreement, an amountestimated to be $35,680.00, less applicable federal and state withholding taxesand FICA.  Employee shall be eligible tocontinue to make contributions to Employee’s 401(k) Plan account fromEmployee’s compensation and payments under this Agreement in accordance withthe terms of the Plan and applicable law.

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## H.            Indemnification of Employee.  Employee shall retain all of his rights to beindemnified, shall be entitled to advancement of expenses, and shall be heldharmless by Company as an officer and director of the Company, for acts or omissionsoccurring while an officer, director or employee of the Company on or prior tothe Separation Date (the “Indemnification Period”), to the fullest extentpermitted by law and the Company’s Articles of Incorporation and Bylaws, and ona basis that is not less favorable than that provided for the Company’s otherofficers and directors, and shall continue to be eligible for coverage and tobe a named insured under the Company’s Corporate Directors’ and Officers’Liability policies as in effect from time to time with respect to theIndemnification Period.

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# 4.             Employee Obligations.  As material inducement to Company in enteringinto this Agreement and providing the consideration described in Section 3,Employee hereby agrees as follows:

#  

## A.            Release.  Employee hereby releases all Employee’sClaims.  Employee agrees to provide a “bringdown” release in the form attached hereto as Schedule C and incorporated hereinby this reference.  This bring-downrelease will be provided on the Separation Date, except in the event of hisdeath or disability prior to the Separation Date.  Employee acknowledges that the money andpromises received and to be received by Employee are in exchange for thereleases of Employee’s Claims.

##  

## B.            Covenant Not To Sue.  Employee agrees that he will not initiate anylitigation to pursue Employee Claims released under either the initial releaseor the bring-down release provided for in Section 4.A.  This covenant does not apply to litigationchallenging the validity of Section 4.A. Excluded from this covenant are any claims which cannot be waived bylaw, including, without limitation, the right to file a charge with orparticipate in any investigation conducted by the Equal Employment OpportunityCommission (“EEOC”) or any state or local agency.  Employee agrees to waive, however, his rightto any monetary recovery should the EEOC or any state or local agency pursueany claims on Employee’s behalf. Further, Employee agrees to pay 

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## Company’sattorneys’ fees if Employee breaches the covenant not to sue contained in this Section 4.B.

##  

## C.            Non-Compete Restrictions.  In exchange for the Company’s agreements,covenants and promises set forth in Section 3 of this Agreement,including, without limitation, Company’s agreement to extend the exerciseperiod of the Vested Stock Options, which Employee acknowledges are adequateconsideration for his obligations in this Section 4.C, Employee agreesthat Employee shall not, directly or indirectly, on behalf of himself or athird party, for a period of eighteen (18) months following theSeparation Date (“Restricted Period”), do any of the following:

##  

### 1.             Own, manage, operate, join,control, consult with, participate in the ownership, operation or control of, beemployed by, or be connected in any manner with any person or entity whichmanufactures, sells, solicits, offers, offers to provide, or provides anyCompetitive Products and Services, unless such employment is by a largediversified entity and on a basis such that Employee will have no involvementwhatsoever with the provision of Competitive Products and Services during theRestricted Period.  This restrictionapplies worldwide, and Employee agrees and acknowledges a worldwide restrictionis reasonable in scope given the Company’s worldwide territory;

###  

### 2.             Solicit customers or the businessof any person, firm, corporation or other entity who is or who was a customeror account of Company or any of Company’s affiliates and subsidiaries whileEmployee was employed by Company, including but not limited to resellers ordistributors of Company products or services, or accept business from anyperson, firm, corporation or other entity who is or who was a customer oraccount of Company or any of Company’s affiliates and subsidiaries whileEmployee was employed by Company, for the purpose of selling to such customeror account any Competitive Product or Service; and

###  

### 3.             Induce or seek to induce any personemployed with Company or its affiliates as of the Separation Date todiscontinue that person’s employment with Company and/or solicit, recruit, hireor participate in any other person’s or entity’s effort to hire an employee ofCompany.

###  

## D.            Company Property.  Unless otherwise set forth herein, Employeewill return to Company all property belonging to Company immediately upon theexecution of this Agreement, whether such property is currently on or off thepremises of Company, including, without limitation, any and all computerhardware or computer software.

##  

## E.             Confidentiality.  For all time hereafter forever, Employee willnot use or make available or divulge to any person, firm, corporation or otherentity any information of or regarding Company including, without limitation,trade secrets, customer lists, business policies, financial information,technical information, employee information, methods of operation, marketingprograms, customer price lists or any other confidential or secret informationconcerning the business and affairs of Company or any of its affiliates, exceptto the extent (i) such information is in the public domain without faultof 

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## Employeeor (ii) Employee is required to respond to a lawful and valid subpoena orother legal process or other government or regulatory inquiry, in which case heshall give Company prompt notice thereof (except to the extent legallyprohibited).

##  

## F.             Confidentiality of Agreement.  Until such time as the terms of thisAgreement have been publicly disclosed by Company, Employee agrees that he willkeep the terms and conditions of this Agreement that have not been so disclosedstrictly confidential except that Employee may disclose the terms andconditions of this Agreement to his spouse, if any, attorney, tax preparer,government agencies or as required by law.

##  

## G.            Non-Disparagement.  For all time hereafter forever, Employeeagrees that he shall not disparage or defame Company or its employees ordirectors in any respect.

##  

## H.            Cooperation and ContinuingAssistance From Employee.  Employeeagrees to cooperate with reasonable requests by the Company through theexpiration of his service on the Board of Directors of the Company to provideinformation or assist Company with the transition of Employee’s job duties toother Company employees, which shall be at Company’s expense.

##  

## I.              Member of Board of Directors.  Employee will continue to serve on Company’sBoard of Directors until the earlier of (i) the shareholders’ meeting ofCompany which is currently scheduled to be held in May 2008 (“Shareholders’Meeting”) or May 15, 2008.  Employeeshall not be entitled to compensation for his service on the Board ofDirectors, and Employee will not be eligible for re-election to the Board ofDirectors after the date of the Shareholders’ Meeting.

##  

## J.             Remedies.  Employee acknowledges that any breach of anyof his agreements, covenants and promises set forth in Sections 4.C., 4.D.,4.E., 4.F., 4.G., 4.H., and 4.I. will cause Company irreparable harm for whichthere is no adequate remedy at law, and Employee therefore consents to theissuance of an injunction in favor of Company enjoining the breach of any ofthose agreements, covenants and promises by any court of competentjurisdiction.  If any agreement, covenantor promise made by Employee in this Section 4 should be held to beunenforceable because of its scope or duration, or the area or subject mattercovered thereby, Employee agrees that the court making such determination shallhave the power to reduce or modify the scope, duration, subject matter or areaof that agreement, covenant or promise to the extent that allows the maximumscope, duration, subject matter or area permitted by applicable law.  Employee further agrees that the remediesprovided for herein are in addition to, and are not to be construed asreplacements for, or a limitation of, rights and remedies otherwise availableto Company.

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# 5.             Employee’s Understandings.  Employee acknowledges and represents that:

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## A.            Employee has the right to consultwith an attorney regarding the meaning and effect of this Agreement.

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## B.            Employee has a period of twenty-one(21) calendar days from the date on which he receives an unsigned copy of thisAgreement during which to consider whether or not 

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## tosign this Agreement and that, having been advised of that entitlement, he mayelect to sign this Agreement at any time prior to the expiration of thattwenty-one (21) day period.  Employeeacknowledges that he received a copy of this Agreement on January 6, 2008and that any revisions to this Agreement after January 6, 2008 will notextend or alter such twenty-one (21) day period for Employee to considerwhether to sign the Agreement.

##  

## C.            Employee may rescind (that is,cancel), within seven (7) calendar days of signing the Agreement, theprovisions of Section 4.A. of this Agreement with respect to claimsarising under the Age Discrimination in Employment Act (“ADEA RescissionPeriod”) and may rescind within fifteen (15) calendar days of signing theAgreement, the provisions of Section 4.A. of this Agreement with respectto claims arising under the Minnesota Human Rights Act (“MHRA Rescission Period”)(collectively, “Rescission Periods”).  Tobe effective, rescission must be in writing, delivered to Company atVital Images, Inc., 5850 Opus Parkway, Suite 300, Minnetonka,MN   55343, ATTN:  VicePresident, Human Resources, within the applicable Rescission Period, or sent toCompany, at such address, by certified mail, return receipt requested, postmarkedwithin the applicable Rescission Period.

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# 6.             Cancellation of Agreement ByCompany.  If Employee exercises hisright of rescission under Section 5.C. of this Agreement, Company willhave the right, exercisable by written notice delivered to Employee, toterminate this Agreement in its entirety, in which event Company will have noobligation whatsoever to Employee hereunder. If Employee exercises his right of rescission under Section 5.C. ofthis Agreement, and Company does not exercise its right to terminate thisAgreement hereunder, the remaining provisions of this Agreement (including,specifically, the remaining provisions of Section 4 of this Agreement)shall remain valid and continue in full force and effect.

#  

# 7.             Performance.  Nothing contained herein shall operate as awaiver or an election of remedies by Company or by Employee should Employee orCompany fail to perform any duty or obligation imposed upon the otherhereunder.  Notwithstanding anythingcontained herein to the contrary, this Agreement and the duties and obligationsof Employee and Company hereunder shall continue in full force and effectirrespective of any violation of any term or provision of this Agreement byEmployee or Company.

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# 8.             No Admission Of Liability.  The parties agree that this Agreement shallnot be considered an admission of liability by Company.  Company expressly denies that it is in anyway liable to Employee or that it has engaged in any wrongdoing with respect toEmployee.

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# 9.             Announcements.  Employee shall be entitled to reasonableinput regarding internal and external announcements regarding the subjectmatter of this Agreement.

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# 10.           Employee Acknowledgements.  Employee acknowledges and represents thatthis Agreement memorializes the terms and conditions agreed to by and betweenCompany and Employee on December 31, 2007. Employee further acknowledges and represents that:  (a) he has read this Agreement andunderstands its consequences; (b) he has received adequate opportunity toread and consider this Agreement; (c) he has determined to execute thisAgreement of his own free will and acknowledges that he has not relied upon anystatements or 

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# explanationsmade by Company regarding this Agreement; (d) the promises of Company madein this Agreement constitute fair and adequate consideration for the promises,releases and agreements made by Employee in this Agreement; (e) the Vested Stock Options whichare “incentive stock options,” as that term is used in Section 422 of theInternal Revenue Code of 1986, as amended, which are being extended as providedin Section 3.E. will become nonqualified stock options that are notincentive stock options; and (f) Company will be required to disclose theterms of this Agreement in a Current Report on Form 8-K to be filed withthe Securities and Exchange Commission (“SEC”) and to file a copy of thisAgreement with the SEC.

#  

# 11.           Entire Agreement.  Unless otherwise set forth herein, thisAgreement, including any Schedules attached hereto or documents expresslyreferred to herein contains the entire agreement between Company and Employeeand, except as expressly set forth herein, supersedes and cancels any and allother agreements, arrangements and understandings, whether oral or in writing,between Company and Employee with respect to the terms and conditions of hisemployment with Company and the termination of his employment.  This Agreement does not supersede, cancel orotherwise void Section 3.5 of the Employment Agreement entitled “WorksMade For Hire,” which shall remain in full force and effect.

#  

# 12.           Termination Clause.  Except as provided in Section 11 of thisAgreement, the Employment Agreement and Change in Control Agreement terminateeffective the Separation Date.

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# 13.           Mitigation.  Employee shall not be required to mitigatethe amount of any payments or benefits Company is required to make or providein connection with this Agreement by seeking other employment or otherwise.

#  

# 14.           Governing Law.  This Agreement shall be construed andenforced in accordance with the laws of the State of Minnesota.  All actions regarding this Agreement shall bebrought in a state or federal court within the State of Minnesota.

#  

# 15.           Effective Date.  This Agreement was originally offered toEmployee on or about January 6, 2008. Employee shall have until the close of business on January 27, 2008to accept this Agreement.  If Employeedesires to accept this Agreement, Employee shall execute the Agreement andreturn the same to Company at the address set forth in Section 5.C.hereof.  If Employee does not so acceptthis Agreement, this Agreement, and the offer contained herein, shall be nulland void as of the close of business on January 27, 2008.

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# 16.           Counterparts.  This Agreement may be executed incounterparts with an executed counterpart to be delivered to the otherparty.  Each such executed counterpartshall be deemed an original but shall constitute one and the same instrument.

#  

|          | VITAL IMAGES, INC. |
|---------------|--------------------|
|          |               |   |
| Dated:1-17-08 | By:                | /s/ Peter J. Goepfrich |
|          | Its:               | Chief Financial Officer |
|          |               |
|          |               |
| Dated:1-17-08 | /s/ Jay D. Miller  |
|          | Jay D. Miller      |

 

 

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Schedule A

 

Vested Stock Options for JayD. Miller

 

| **Option********No.** | ** ** | **Type*** | ** ** | **Grant********Date** | ** ** | **Per Share********Exercise********Price** | ** ** | **Last Exercise********Date** | ** ** | **Number of Shares********Subject to Vested********Portion of Option at********May 15, 2008** |
|-----------------------|------------|-----------|------------|-----------------------|------------|--------------------------------------------|------------|-------------------------------|------------|----------------------------------------------------------------------------------------------------|
| 435                   |       | ISO       |       | 05/11/2000            |       | $7.3438                                    |       | 05/11/2008                    |       | 8,659                                                                                              | ** |
| 436                   |       | NQ        |       | 05/11/2000            |       | $7.3438                                    |       | 05/11/2008                    |       | 4,841                                                                                              | ** |
| 604                   |       | ISO       |       | 02/08/2001            |       | $5.1880                                    |       | 02/08/2009                    |       | 11,574                                                                                             |   |
| 605                   |       | NQ        |       | 02/08/2001            |       | $5.1880                                    |       | 02/08/2009                    |       | 5,926                                                                                              |   |
| 707                   |       | ISO       |       | 03/12/2002            |       | $7.2500                                    |       | 03/12/2010                    |       | 35,000                                                                                             |   |
| 708                   |       | NQ        |       | 03/12/2002            |       | $7.2500                                    |       | 03/12/2010                    |       | 165,000                                                                                            |   |
| 741                   |       | ISO       |       | 02/06/2003            |       | $9.6000                                    |       | 02/06/2011                    |       | 4,572                                                                                              |   |
| 742                   |       | NQ        |       | 02/06/2003            |       | $9.6000                                    |       | 02/06/2011                    |       | 25,428                                                                                             |   |
| 895                   |       | ISO       |       | 02/05/2004            |       | $12.5990                                   |       | 05/15/2011                    |       | 8,224                                                                                              |   |
| 896                   |       | NQ        |       | 02/05/2004            |       | $12.5990                                   |       | 05/15/2011                    |       | 21,776                                                                                             |   |
| 1126                  |       | NQ        |       | 02/15/2005            |       | $15.4000                                   |       | 05/15/2011                    |       | 8,200                                                                                              |   |
| 1553                  |       | NQ        |       | 03/09/2006            |       | $32.1400                                   |       | 05/15/2011                    |       | 14,000                                                                                             |   |
| 1792                  |       | NQ        |       | 02/02/2007            |       | $32.6400                                   |       | 05/15/2011                    |       | 8,840                                                                                              |   |

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* “ISO” means an “incentive stock option,” as that term is used in theInternal Revenue Code of 1986, as amended. “NQ” means an option that is not an incentive stock option.

 

** Options 435 and 436 are not being extended in connection with thisAgreement and, unless exercised prior thereto, will expire on May 11,2008.

 

 

 

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Schedule B

 

Company’s “Bring-down”Release

 

ThisBring-down Release Agreement is entered into as of                  ,2008 by Vital Images, Inc. (“Company”), a Minnesota corporation.

 

1.             Definitions.  We intend all words used in this Bring-downRelease to have their plain meanings in ordinary English.  Specific terms we use in this Bring-downRelease have the following meanings:

 

A.           Employee, asused herein, shall mean Jay D. Miller and anyone who has obtained any legalrights or claims through the undersigned Employee.

 

B.            Company, asused herein, shall at all times mean Vital Images, Inc., its parentcompany, its subsidiaries, successors and assigns, their affiliated andpredecessor companies, their successors and assigns, their affiliated andpredecessor companies and the present or former directors, officers, employees,representatives and agents (including, without limitation, their accountantsand attorneys) of any of them, whether in their individual or officialcapacities, and the current and former trustees or administrators of anypension or other benefit plan applicable to employees or former employees ofCompany, in their official or individual capacities.

 

C.            Company’s Claims,as used herein, means all of the rights Company now has to any relief of anykind from Employee, or from his heirs, beneficiaries, successors or assigns, whetheror not Company now knows about those rights, arising out of Employee’semployment with Company on or prior to the date of this Bring-down Release,including, but not limited to, claims for breach of contract; fraud ormisrepresentation; defamation, intentional or negligent infliction of emotionaldistress; breach of covenant of good faith and fair dealing, promissoryestoppel; negligence or under applicable federal, state or local law.

 

2.             Company Obligations.  As material inducement to Employee in enteringinto that certain Separation and Non-Compete Agreement dated January 16,2008 between the Company and Employee (the “Separation Agreement”), andspecifically in consideration for the releases of claims, as set forth in moredetail in the Separation Agreement, Company hereby agrees as follows:

 

A.           Release.  Effective as of the expiration of Employee’s May 2008Rescission Periods, as defined in the Separation Agreement, without rescissionof Employee’s bring-down release, Company hereby releases all Company’s Claims,provided, however, that such release is not intended to apply to any willfulmisconduct by Employee of which Company does not have present knowledge.

 

3.             Cancellation of Bring-downRelease By Company.  If Employeeexercises his right of rescission under Section 3.C. of the EmployeeBring-down Release, Company will have the right, exercisable by written noticedelivered to Employee, to terminate this Bring-down Release 

 

 

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inits entirety, in which event Company will have no obligation whatsoever toEmployee hereunder.  If Employeeexercises his right of rescission under Section 3.C. of the EmployeeBring-down Release, and Company does not exercise its right to terminate thisBring-down Release hereunder, the remaining provisions of this Bring-downRelease (including, specifically, the remaining provisions of Section 2 ofthis Bring-down Release) shall remain valid and continue in full force andeffect.

 

4.             Governing Law.  This Bring-down Release shall be construedand enforced in accordance with the laws of the State of Minnesota.  All actions regarding this Bring-down Releaseshall be brought in a state or federal court within the State of Minnesota.

 

5.             Effective Date.  This Bring-down Release shall be effectiveupon the date set forth below.

 
|   | VITAL IMAGES, INC. |
|--------|--------------------|
|   |               |
|   |               |   |
| Dated: |               |   | By: |   |
|   |               | Its: |   |
|        |                    |  |  |  |

 

 

 

2

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Schedule C

 

Employee’s “Bring-down”Release

 

ThisBring-down Release Agreement is entered into as of                  ,2008 by Jay D. Miller, a resident of the State of Minnesota (“Employee”).

 

1.             Definitions.  We intend all words used in this Bring-downRelease to have their plain meanings in ordinary English.  Specific terms we use in this Bring-downRelease have the following meanings:

 

A.            Employee, asused herein, shall include the undersigned Employee and anyone who has obtainedany legal rights or claims through the undersigned Employee.

 

B.            Company, asused herein, shall at all times mean Vital Images, Inc., its parentcompany, its subsidiaries, successors and assigns, their affiliated andpredecessor companies, their successors and assigns, their affiliated andpredecessor companies and the present or former directors, officers, employees,representatives and agents (including, without limitation, their accountantsand attorneys) of any of them, whether in their individual or officialcapacities, and the current and former trustees or administrators of anypension or other benefit plan applicable to employees or former employees ofCompany, in their official or individual capacities.

 

C.            Employee’s Claims,as used herein, means all of the rights Employee, has on or prior to the datehereof, to any relief of any kind from Company, whether or not Employee nowknows about those rights, arising out of his employment with Company, and hisemployment termination, including, but not limited to, claims arising under theAge Discrimination in Employment Act, as amended by the Older Workers Benefit ProtectionAct; the Minnesota Human Rights Act; the Americans with Disabilities Act; TitleVII of the Civil Rights Act of 1964, as amended; the Minnesota WhistleblowerAct; or other federal, state or local civil rights laws; claims pursuant tothat certain Employment Agreement between Company and Employee dated February 9,2002 (the “Employment Agreement”); claims pursuant to that certain Amended andRestated Change in Control Agreement dated February 9, 2002 (the “Changein Control Agreement”); claims pursuant to any other agreement, understanding,plan or arrangement under which Employee could receive compensation from theCompany, as the parties intend for the Separation and Non-Compete Agreementdated January 16, 2008 between Company and Employee (“Separation Agreement”)pursuant to which this Bring-down Release is being delivered, to settle allobligations remaining between the parties; claims for breach of contract; fraudor misrepresentation; defamation, intentional or negligent infliction ofemotional distress; breach of covenant of good faith and fair dealing;promissory estoppel; negligence; wrongful termination of employment; and anyother claims for unlawful employment practices arising on or prior to the datehereof; provided, however, that the term “Employee’s Claims” shall in no eventinclude Employee’s rights to receive the payments, benefits and continuingprotections required to be provided under the Separation Agreement, including,without limitation, 

 

 

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Employee’s rights to receive reimbursement of his expenses, inaccordance with Company policies, benefits under Company’s life insurance and401(k) plans and similar fringe benefit programs for which Employee waseligible as of the Separation Date, as defined in the Separation Agreement, andunder laws related thereto.

 

2.             Employee Obligations.  As material inducement to Company in enteringinto the Separation Agreement, and specifically in consideration for thepayments and benefits, as set forth in more detail in the Separation Agreement,Employee hereby agrees as follows:

 

A.            Release.  Employee agrees to release all Employee’sClaims.  Employee acknowledges that themoney and promises received and to be received by Employee are in exchange forthe release of Employee’s Claims.

 

B.            CovenantNot To Sue.  Employee agrees that hewill not initiate any litigation to pursue claims which Employee released in Section 2.A.  This covenant does not apply to litigationchallenging the validity of Section 2.A. Excluded from this covenant are any claims which cannot be waived bylaw, including, without limitation, the right to file a charge with orparticipate in any investigation conducted by the Equal Employment OpportunityCommission (“EEOC”) or any state or local agency.  Employee agrees to waive, however, his rightto any monetary recovery should the EEOC or any state or local agency pursueany claims on Employee’s behalf. Further, Employee agrees to pay Company’s attorneys’ fees if Employeebreaches the covenant not to sue contained in this Section 2.B.

 

3.             Employee’sUnderstandings.  Employeeacknowledges and represents that:

 

## A.            Employeehas the right to consult with an attorney regarding the meaning and effect ofthis Bring-down Release.

##  

## B.            Employee acknowledges that he was offered a period oftwenty-one (21) calendar days from the date on which he receives an unsignedcopy of this Bring-down Release in which to consider whether or not to signthis Bring-down Release and that, having been advised of that entitlement, suchperiod has expired.

##  

## C.            Employee may rescind (that is, cancel) within seven (7) calendardays of signing the Bring-down Release, the provisions of Section 2.A. ofthis Bring-down Release with respect to claims arising under the AgeDiscrimination in Employment Act (“ADEA Rescission Period”) and that he mayrescind within fifteen (15) calendar days of signing the Bring-down Release theprovisions of Section 2.A. of this Bring-down Release with respect toclaims arising under the Minnesota Human Rights Act (“MHRA Rescission Period”)(collectively, “Rescission Periods”).  Tobe effective, rescission must be in writing, delivered to Company at 5850 OpusParkway, Suite 300, Minnetonka, MN 55343, ATTN:  Vice President,Human Resources, within the applicable Rescission Period, or sent to Company,at such address, by certified mail, return receipt requested, postmarked withinthe applicable Rescission Period.

##  

4.             Cancellation of Bring-downRelease By Company.  If Employeeexercises his right of rescission under Section 3.C. of this Bring-downRelease, Company’s Bring-down Release shall 

 

 

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benull and void in its entirety without further notice to Employee.  This shall not limit any other rights orremedies available to Company by law.

 

5.             Employee Acknowledgements.  Employee acknowledges and representsthat:  (a) he has read thisBring-down Release and understands its consequences; (b) he has receivedadequate opportunity to read and consider this Bring-down Release; (c) hehas determined to execute this Bring-down Release of his own free will andacknowledges that he has not relied upon any statements or explanations made byCompany regarding this Bring-down Release; and (d) the promises of Companymade in the Company’s Bring-down Release constitute fair and adequateconsideration for the promises, releases and agreements made by Employee inthis Bring-down Release.

 

6.             Governing Law.  This Bring-down Release shall be construedand enforced in accordance with the laws of the State of Minnesota.  All actions regarding this Bring-down Releaseshall be brought in a state or federal court within the State of Minnesota.

 

7.             Effective Date.  This Bring-down Release shall be effectiveupon the date set forth below.

 
| Dated: |   |   |          |
|--------|--------|--------|---------------|
|   |   |   | Jay D. Miller |

 

 

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