Exhibit 10.1


 


FIRST AMENDMENT TO EMPLOYMENT AGREEMENT


 


First Amendment to Employment Agreement (“First Amendment”) dated December 30,
2008, between Virtual Radiologic Corporation, a Delaware corporation (“Company”),
and Sean Casey (“Executive”).


 


Whereas, Company and Executive
are parties to an Employment Agreement dated October 1, 2007 (“Original
Agreement”); and


 


Whereas, Company and Executive
desire to amend the Original Agreement to comply with the requirements of Section 409A
of the Internal Revenue Code.


 


Now therefore Company and
Executive agree as follows:


 


A.                                   Section 8
of the Original Agreement is hereby amended in its entirety to read as follows:


 


8.                                       Consequences
of Termination.


 


Any
termination payments made and benefits provided under this Agreement to
Executive shall be in lieu of any termination or severance payments or benefits
for which Executive may be eligible under any of the plans, policies or
programs of the Company or its affiliates. 
No termination payments shall be payable hereunder until Executive shall
have returned to the Company all Company property used by Executive including
without limitation any automobile, computer or laptop, cell phone, Blackberry
or similar device.  Subject to Section 9,
the following amounts and benefits shall be due to Executive.


 


(a)                                  Disability.  Upon such termination, the Company shall pay
or provide Executive (i) any unpaid Base Salary through the date of
termination and any accrued vacation; (ii) any unpaid bonus earned with
respect to any fiscal year ending on or preceding the date of termination; (iii) reimbursement
for any unreimbursed expenses incurred through the date of termination; and (iv) all
other payments, benefits or fringe benefits to which Executive may be entitled
under the terms of any applicable compensation arrangement or benefit, equity
or fringe benefit plan or program or grant or this Agreement (collectively, “Accrued
Amounts”), together with a prorated amount of Bonus accrued or earnable for the
fiscal year of termination.


 


(b)                                 Death.  In the event the Employment Term ends on
account of Executive’s death, Executive’s estate shall be entitled to any
Accrued Amounts, together with a prorated amount of Bonus accrued or earnable
for the fiscal year of termination.


 


(c)                                  Termination
for Cause or Without Good Reason.  If
Executive’s employment should be terminated (i) by the Company for Cause,
or (ii) by Executive without Good Reason, the Company shall pay to
Executive any Accrued Amounts.


 

















 


(d)                                 Termination
Without Cause or for Good Reason.  If
Executive’s employment by the Company is terminated by the Company other than
for Cause (other than a termination for Disability) or by Executive for Good
Reason, the Company shall pay or provide Executive with (i) Accrued
Amounts; (ii) a pro-rata portion (determined by multiplying the amount
Executive would have received had employment continued through the end of the
performance year by a fraction, the numerator of which is the number of days
during the performance year of termination that Executive is employed by the
Company and the denominator of which is 365) of Executive’s Annual Bonus for
the performance year in which Executive’s termination occurs at the time that
annual bonuses are paid to other senior executives; provided that the Board
determines in good faith that the Company was on plan for Executive to earn
such bonus at the time of termination; (iii) continue his then current
Base Salary as if his employment continued for a period no less than twelve
(12) months and no more than twenty-four (24) months (herein the “Severance
Period”), subject to the mitigation provisions set forth below; and (iv) subject
to Executive’s continued copayment of premiums, continued participation for the
Severance Period in all health and welfare plans which cover Executive (and
eligible dependents) upon the same terms and conditions (except for the
requirements of Executive’s continued employment) in effect on the date of
termination.  The Company shall be the
sole deciding party with respect to the duration of the Severance Period, and
shall notify Executive within ninety (90) days following termination of the
duration of the Severance Period.  If at
any time after the twelfth month following Executive’s termination while the
Company is obligated hereunder to make such payments of Base Salary or continue
such benefits, Executive receives compensation for providing services as an
employee or as an independent contractor, excluding services provided on behalf
of Virtual Radiologic Professionals, from any person or entity, then Executive
shall immediately notify the Company of such event and the Company’s obligation
to continue to make such payments to Executive shall be reduced by the gross
amount of any such payments. The Company’s obligation to continue to provide benefits,
however, shall cease at such time as Executive is eligible for health insurance
coverage by any successor employer or person or entity, prompt notice of which
Executive shall furnish to the Company. 
For the duration of the Severance Period, the Company shall also provide
Executive with all other benefits specified elsewhere in this agreement other
than this subsection 8(d) at no additional cost to Executive (beyond that
which would have been paid had there been no termination) but excluding paid vacation.  Stock Options awarded to Executive shall
continue to vest according to their vesting schedule for only the first six
months of the Severance Period; thereafter, no vesting shall occur.  To the extent such coverage cannot be
provided under the Company’s health or welfare plans without jeopardizing the
tax status of such plans, for underwriting reasons or because of the tax impact
on Executive, the Company shall pay Executive an amount equal to the amount the
Company would have paid for such benefits on behalf of Executive if the
benefits were provided to him as an employee. 
The continuation of health benefits under this subsection shall reduce
and count against Executive’s rights under the Consolidated Omnibus Budget 


 

















 


Reconciliation
Act of 1985, as amended (“COBRA”).  All
benefits provided under Section 8d(iii) may be paid to the Employee
within thirty (30) days of the termination date once all necessary applicable
releases have been signed by the Employee and returned to the Company.  Notwithstanding
anything to the contrary herein, if Executive is a “specified employee,” as
defined in Section 409A(a)(2)(B)(i) of the Internal Revenue Code as
of the date of any termination, any benefits due under this Section 4(d) otherwise  payable within six months following
termination shall be provided in one lump sum six months from the date of
termination.  However, any payment or portion thereof which is subject to
an exemption for separation pay to specified employees as provided under Section 409A
and the relevant Treasury Regulations, or is subject to any other exemption
provided under Section 409A and the relevant Treasury Regulations allowing
for payment to a specified employee prior to the date that is six (6) months
after the date of separation from service, may be paid to Employee
within thirty (30) days of the termination date once all applicable releases
have been signed by the Executive and returned to the Company.


 


(e)                                  Amounts
Payable.  The Company reserves the
right to set off against amounts payable to Executive hereunder any amounts
owed by Executive to the Company.


 


(f)                                    Dispute
over Termination.  In the event that (i) Executive
terminates his employment claiming Good Reason, which claim is disputed by the
Company or (ii) the Company terminates Executive’s employment for Cause,
which claim is disputed by Executive, then in either case Executive shall
receive severance benefits at fifty percent (50%) of the specified rate until
the dispute is resolved in court or arbitration or for twelve (12) months,
whichever first occurs.  If Executive
ultimately prevails in such a dispute, the Company shall pay to executive
twelve (12) months of full severance benefits, less any partial severance
benefits already paid.  If the Company
prevails, the Company’s obligation to pay Executive severance benefits shall
immediately cease, and Executive shall repay any severance benefits already
paid to him.  As a condition to receipt
of the partial severance benefits during such dispute, Executive shall agree to
a lien on any shares held by Executive in the Company to secure the repayment
obligation in the event that the Company prevails in such disputes.  The duration of any of the applicable
restrictive covenants set forth in Section 10 shall in any case run from
the original date of termination.  The
judge or arbitrator in any such dispute shall have the authority to award the
prevailing party all reasonable legal fees, costs and expenses incurred in
contesting or defending (as the case may be) any termination of employment.


 


B.                                     The
Original Agreement, as amended by this First Amendment, shall continue in full
force and effect according to its terms.


 


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IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.


 


	
   

  	
  COMPANY

  
	
   

  	
   

  
	
   

  	
  Virtual
  Radiologic Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nabil N.
  El-Hage

  
	
   

  	
   

  	
  Name:   Nabil
  N. El-Hage

  
	
   

  	
   

  	
  Its:   Chairman,
  Compensation Committee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  Sean Casey

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean Casey