Document:

exv10w1

 

April 24, 2006

Ms. Karen Krumeich

2 Deerfield Street

Bergenfield, NJ 07621

Dear Karen:

This letter will confirm our discussion about your resignation from employment with Electro-Optical
Sciences, Inc. (“EOS”). You and EOS agree that this letter agreement (“Agreement”) represents the
full and complete agreement concerning your resignation from employment with EOS.

	1.	 	Resignation: Your resignation from employment with EOS is effective on April 24,
2006 (the “Resignation Date”). From and after the Resignation Date, you shall no longer be an
employee of EOS and effective as of such date you resigned from all offices held by you at EOS
including Chief Financial Officer, Vice President of Finance and Treasurer.
	 
	2.	 	Health Benefits: You shall be eligible to elect continued health coverage with EOS
pursuant to the provisions of the Consolidated Omnibus Reconciliation Act of 1985 (as amended,
“COBRA”), and the requirements and limitations thereof. If you elect COBRA coverage, in
consideration for your execution of this Agreement, EOS will reimburse you for the cost to you
of COBRA benefits from the Resignation Date until October 24, 2006. EOS will provide you with
additional information concerning your right to elect continued coverage under COBRA in a
separate mailing.
	 
	3.	 	Stock Option: You and EOS acknowledge and agree that (i) pursuant to that certain
Standard Form Incentive Stock Option Agreement dated as of December 17, 2004 (as amended as of
May 13, 2005, the “Option Agreement”), the stock option granted thereunder (the “Option”) to
purchase up to 60,000 shares of common stock, par value $0.001 per share, of EOS (the “Option
Shares”) is exercisable at a per share exercise price of $.46 in its entirety as of the
Resignation Date and shall remain exercisable for ninety (90) days following the Resignation
Date in accordance with the terms of the Option Agreement and (ii) the Option Shares will be
included in and covered under the registration statement on Form S-8 that EOS intends to file
with the Securities and Exchange Commission on or before July 28, 2006 with respect to shares
of EOS common stock authorized for issuance pursuant to EOS’ stock option plans.
	 
	4.	 	Consulting Services and Other Agreements: From the Resignation Date until July 24,
2006, upon reasonable notice you shall be available from time to time to provide consulting

3 West Main Street, Suite 201, Irvington, New York 10533

 

 

	 	 	services to EOS relating to the information acquired by you and services performed by you
during your employment.
	 
	 	 	In consideration of the payments and benefits set forth in Sections 2 and 6 of this
Agreement, which you acknowledge are in excess of any benefits to which you would
otherwise be entitled, you voluntarily, knowingly and willingly release and forever
discharge EOS and its affiliates, together with each of those entities’ respective
officers, employees, agents, fiduciaries, employee benefit plans and administrators and
all of their predecessors, successors and assigns (collectively, the “Releasees”) from any
and all claims and rights of any nature whatsoever which you now have or in the future may
have against them. This release includes, but is not limited to, any rights or claims
relating in any way to your employment relationship with EOS or any of the other Releasees
any rights or claims relating in any way to the resignation of your employment, any
contract claims (express or implied, written or oral), or any rights or claims arising
under any statute, including, without limitation, the Americans with Disabilities Act, the
Age Discrimination in Employment Act, the Older Workers’ Benefit Protection Act, the
Rehabilitation Act of 1973 (including Section 504 thereof), the Family Medical Leave Act,
Title VII of the 1964 Civil Rights Act, the Civil Rights Act of 1866 (42 U.S.C. § 1981),
the Civil Rights Act of 1991, the Equal Pay Act, the Fair Labor Standards Act, the
National Labor Relations Act, the Worker Adjustment and Retraining Notification Act, the
New York State and City Human Rights Laws, the Employee Retirement Income Security Act of
1974, Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002 (the
Sarbanes-Oxley Act), all as amended, all laws relating to violation of public policy,
retaliation, or interference with legal rights; whistleblower claims; any tort, fraud or
constitutional claims; and any other federal, state or local law. This release
specifically includes, but is not limited to, any claims based upon the right to the
payment of wages, vacation, pension benefits, any other employee benefits, or any other
rights arising under federal, state or local laws prohibiting discrimination and/or
harassment on the basis of race, color, age, religion, sex, national origin, sexual
orientation, military status, physical or mental disability, marital status or domestic
partnership status, genetic information, harassment or any other basis prohibited by law.
Notwithstanding the foregoing this release shall not include any claims pertaining to
benefits provided by this Agreement, and rights, if any, to government-provided
unemployment benefits, or rights, if any, to vested retirement benefits or COBRA benefits.
	 
	5.	 	Certain Personal Property; Confidential Information: Immediately upon execution of
this Agreement, you shall (i) return all personal property provided to you by EOS in
connection with the performance of your duties as an employee of EOS, including, without
limitation, all keys, card keys, identification cards and credit cards, and all other property
of EOS in your possession; provided, however, that you shall be entitled to keep the personal
computer provided to you by EOS after EOS has had an opportunity to remove all company data
files from the hard drive of such computer in a manner that does not adversely affect the
operation of the application software installed on such computer and (ii) as requested by EOS,
return all materials containing confidential information including, without limitation, all
confidential information as defined in the Employee Invention, Non-Disclosure and
Non-Competition Agreement dated January 11, 2005 between you and EOS (the “Confidentiality
Agreement”) and all memoranda, books, papers, letters, customer lists, processes, computer

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	 	 	software, records, financial information, policy and procedure manuals, training and
recruiting procedures and other data, and all copies thereof and therefrom, in any way
relating to EOS’ business and affairs. You acknowledge and agree that you shall continue to be
bound by the Confidentiality Agreement.
	 
	6.	 	Payment: Although you are not otherwise entitled to severance pay or any similar
payment on account of your resignation of employment with EOS, as consideration for the
consulting services provided in Section 4 hereof and for your execution of and compliance with
the other terms of this Agreement, EOS agrees to pay to you an amount equal to your base
salary (less usual withholdings) for a period beginning on the Resignation Date and ending on
October 24, 2006 payable in accordance with EOS’ customary payroll practices subject to
Section 17 hereof.
	 
	7.	 	Employee Benefits: Subject to your election in Section 2 regarding health benefits,
your coverage under all of EOS’ health and welfare plans (dental and life insurance, short
term disability, long term disability, accidental death and dismemberment insurance) will
terminate on the Resignation Date.
	 
	8.	 	No Claims Filed: As a condition of EOS entering into this Agreement, you represent
that you have not filed with any government agency or court or other regulatory agency any
claim against EOS or its subsidiaries, affiliates and parents, officers, directors, employees
or agents relating to your employment, your resignation from employment, or otherwise. You
further agree not to file or assist anyone else in filing any such claim with a federal, state
or local government agency or any court, with the exception that if EOS does not comply with
its promises under this Agreement, you may sue EOS to enforce the terms of this Agreement.
	 
	9.	 	No Admission of Wrongdoing: By entering into this Agreement, neither you nor EOS nor
any of EOS’ officers, agents or employees, admit any wrongdoing or violation of any law.
	 
	10.	 	No Negative Statements: You agree not to make, or cause to be made, any negative or
disparaging statements express or implied, whether in writing, orally, or through the use of
any other communications medium about, or to engage in any other conduct or course of conduct
of any nature which would result in an injury (whether monetary or otherwise) to EOS, the
Releasees, or collectively their services, reputation, financial status, business
relationships, or any of their directors, officers or employees; provided, however, that your
enforcement of the terms of this Agreement shall not constitute a breach of the foregoing
covenant. EOS agrees not to make, or cause to be made, any negative or disparaging statements
express or implied, whether in writing, orally, or through the use of any other communications
medium about, or to engage in any other conduct or course of conduct of any nature which would
result in an injury (whether monetary or otherwise) to you, your reputation, financial status
or business relationships; provided, however, that EOS’ enforcement of the terms of this
Agreement shall not constitute a breach of the foregoing covenant.
	 
	11.	 	Breach of this Agreement: You promise to abide by the terms and conditions in this
Agreement, and you understand that if you do not, EOS shall be entitled to attorneys’ fees

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	 	 	and
any other damages incurred due to such breach. EOS promises to abide by the terms and
conditions in this Agreement, and EOS understands that if it does not, you shall be entitled to
attorneys’ fees and any other damages incurred due to such breach.
	 
	12.	 	Severability: If at any time, after the date of the execution of this Agreement, any
court or administrative agency finds that any provision of this Agreement is illegal, void, or
unenforceable, that provision will no longer have any force and effect. However, the
provision’s illegality or unenforceability will not impair the enforceability of any other
provision of this Agreement.
	 
	13.	 	Changes to the Agreement: This Agreement may not be changed unless the changes are
in writing and signed by you and an authorized representative of EOS.
	 
	14.	 	Governing Law: This Agreement shall be governed by the law of the State of New York
without regard to New York’s law of conflicts.
	 
	15.	 	Entire Agreement: This Agreement constitutes the entire agreement between you and EOS
and supersedes all other agreements between you and EOS, except that (i) this Agreement shall
not relieve you of any contractual or common law obligations to maintain EOS’ confidential,
proprietary and trade secret information as confidential and not to use such information for
your benefit or the benefit of any third party and (ii) this Agreement does not supersede the
Option Agreement or the Confidentiality Agreement.
	 
	16.	 	Waiver: By signing this Agreement, you acknowledge that:

	 	a.	 	You have carefully read and understand this Agreement;
	 
	 	b.	 	EOS advised you to consult with an attorney and/or any other advisors of your choice
before signing this Agreement;
	 
	 	c.	 	You understand that this Agreement is LEGALLY BINDING and by signing it you give up
certain rights, including any right to bring an age discrimination claim under the Age
Discrimination in Employment Act;
	 
	 	d.	 	You have voluntarily chosen to enter into this Agreement and have not been forced or
pressured in any way to sign it; and
	 
	 	e.	 	You acknowledge and agree that the benefits set forth in Sections 2 and 6 of this
Agreement are contingent on execution of this Agreement, which releases all of your claims
against EOS, and you KNOWINGLY AND VOLUNTARILY AGREE TO RELEASE EOS and the Releasees from
any and all claims you may have, known or unknown, in exchange for the benefits you have
obtained by signing, and that these benefits are in addition to any benefit you would have
otherwise received if you did not sign this Agreement.

	17.	 	Return of Signed Agreement: You have up to twenty-one (21) days to review, sign and
return this Agreement to Joseph V. Gulfo, MD at EOS after which time this offer will be 

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	 	 	withdrawn. You may revoke the Agreement at any time up to seven (7) days after you have
signed the Agreement by written notice of such revocation delivered to me within such seven day
period. You will not receive any severance payment or other benefits under this Agreement
until after this revocation period has passed.
	 
	18.	 	Miscellaneous: The rights and obligations of you and EOS hereunder shall inure to
the benefit of, and be binding on, the parties hereto, their heirs, personal representatives,
successors and assigns, provided however that, your duties and rights hereunder are personal
and may not be delegated or assigned. Notwithstanding the foregoing, nothing in this
Agreement, express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement.

	 	 	 
	Sincerely,
	 	 
	 
	 	 
	/s/ Joseph V. Gulfo
	 	 
	 	 	 
	President & Chief Executive Officer
	 	 
	 
	 	 
	Read, Accepted and Agreed to:
	 	 
	 
	 	 
	/s/ Karen Krumeich
	 	 
	 	 	 
	Karen Krumeich
	 	 
	 
	 	 
	Dated: April 27, 2006
	 	 

5exv10w2

 

April 24, 2006

Mr. Richard I. Steinhart

49 Country Club Road

Ridgefield, CT 06877

Dear Rich:

     It gives me great pleasure to offer you the position of Vice President of Finance, Treasurer,
and Chief Financial Officer, Electro-Optical Sciences, Inc. This is a critical post as EOS
transitions from late stage development to commercialization of MelaFind®.

     Reporting to and working closely with the President & Chief Executive Officer, you will be
responsible for all phases of financial management of the company and interactions with the Board
of Directors, Audit Committee, Compensation Committee, auditors, legal counsel and investors. In
addition, you will be responsible for implementing and maintaining appropriate administrative
management and support systems. It is expected that you will provide strong internal professional
leadership, and represent the company to external stakeholders, including existing public
investors, potential investors, customers, and strategic partners. You will be an integral member
of the senior executive management team of EOS, under the direction of the CEO.

     Compensation will consist of a yearly salary of $195,000 paid semi-monthly ($8,125.00) and a
grant of options to acquire up to 100,000 shares of EOS common stock pursuant to the company’s 2005
Stock Incentive Plan (the “Plan”). The options will be exercisable at a value equivalent to the
end of day trading price of MELA stock on the date of issue and will vest according to the
following schedule: (1) options to purchase 40,000 shares with vesting of 20% (8,000 shares) yearly
on the anniversary date of hire with the first option grant for 8,000 shares vesting on the day of
hire; (2) options to purchase up to 40,000 shares with vesting upon completion of the next equity
financing completed by EOS as follows: options for 30,000 shares vesting if the financing results
in gross proceeds to EOS of at least $7.5 MM but less than $10 MM, and in the alternate, options
for 40,000 shares vesting if the next financing results in gross proceeds to EOS of at least $10
MM; and (3) options for 20,000 shares vesting upon PMA approval of MelaFind®.
Acceleration of option vesting will be triggered by the occurrence of an Acquisition Event (as
defined in the Plan); provided, that any Acquisition Event that results in EOS’ Board of Directors
consisting of individuals who are the same as, or share affiliations with, the directors
representing at least 51% of the Board of Directors prior to the Acquisition Event, shall not be
considered an Acquisition Event for the purpose of this paragraph. A salary review will be
performed following the next financing resulting in gross proceeds to EOS of at least $10 MM.

 

 

Mr. Richard Steinhart

April 24, 2006

Page 2

     The position requires travel, not anticipated to exceed 40% per month, on average. As a
development stage company with no earnings, EOS is not in a position to offer a yearly cash bonus.
However, at the discretion of the Compensation Committee and Board of Directors, cash bonuses may
be awarded. Reasonable travel expenses and other business expenses, such as the cost of calls from
a personal telephone for corporate business, will be reimbursed upon submission of receipts in
accordance with EOS’ business expense reimbursement policy. You will be issued a corporate AMEX
credit card, to be used for EOS business, and reasonable expenses charged to that card will be paid
upon submission of appropriate receipts.

     As you know, employment in the state of New York is on an “at will basis,” meaning either you
or EOS may terminate your employment at any time with or without cause. However, if you are
terminated without “cause,” you will be awarded a severance payment equivalent to 6 months of base
salary paid semi-monthly, acceleration of time based-options, and milestone-based options if the
milestone(s) is (are) achieved within 6 months of your termination; provided that the foregoing
severance payments and acceleration of option vesting shall be subject to execution by you of EOS’
form of separation and release agreement. “Cause” is defined as: (i) commission of any felony;
(ii) commission of any or conviction or entry of plea of nolo contendere to any crime involving
dishonesty or moral turpitude; (iii) your refusal to abide by or comply with the reasonable
directives of the Board of Directors or CEO of EOS; (iv) your willful failure or refusal to abide
by EOS’ material policies, rules, procedures or directives; (v) your willful dishonesty, fraud or
misconduct with respect to the business affairs of EOS; (vi) intentional damage to any property of
EOS; (vii) conduct which demonstrates gross unfitness to serve as CFO of EOS; or (viii) any act or
omission which could reasonably be expected to cause harm to EOS, intentionally or otherwise.

     Additionally, you will be eligible to participate in EOS’s health insurance plan, which
includes family medical, dental, and prescription drug coverage, as well as a non-contributory
401(k). You will be granted 4 weeks of paid personal time off (PTO).

     The start date for full-time employment is to be on or about the date hereof. There may be an
opportunity to engage you as a consultant prior to this time. You will be compensated on a pro
rata basis for any days worked prior to joining on a full-time basis; payment will be made upon
commencement of full-time employment. The position is based full-time at EOS headquarters,
presently at 3 West Main Street, Irvington, NY. Although occasional telecommuting is permitted
with prior approval of the President & CEO, this position requires maximal time on premises.

     This is an exciting time for EOS. The future of the company depends on our ability to
efficiently execute and achieve the milestones that we have set. I believe that you can make a
great contribution in helping to achieve our goals. Moreover, I feel that you will be able to work
effectively with our fine staff, and enhance the professionalism of EOS.

3 West Main Street Suite 201, Irvington-on-Hudson, New York 10533

(Cell) 914.400.6724; (Tel) 914.591.3783 x10; (Fax) 914.591.3785

jvgulfo@eosciences.com

 

 

Mr. Richard Steinhart

April 24, 2006

Page 3

     Please sign below indicating your acceptance of the offer and mail it to me at my office.

     Please call me if you have any questions – (914) 400-6724.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/ Joseph V. Gulfo
 	 
	 	Joseph V. Gulfo, MD, MBA 	 
	 	President & Chief Executive Officer 	 
	 

ACCEPTED AND AGREED:

/s/ Richard I. Steinhart                    

Richard I Steinhart

Date: April 24, 2006

3 West Main Street Suite 201, Irvington-on-Hudson, New York 10533

(Cell) 914.400.6724; (Tel) 914.591.3783 x10; (Fax) 914.591.3785

jvgulfo@eosciences.com

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