Vice President, Sales Employment Agreement

EXHIBIT 10.25


EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (this "Agreement"), is executed and delivered as of March 25, 2003 (the "Effective Date"), by and between Endocare, Inc., a Delaware corporation (the "Company"), and Kevin Quilty, an individual resident of the State of California ("Employee").


1. POSITION AND RESPONSIBILITIES


a. POSITION. Employee is employed by the Company to render services to the Company in the position of Senior Vice President, Sales & Marketing. Employee shall perform such duties and responsibilities as are normally related to such position, in accordance with industry standards, and any additional duties now or hereafter assigned to Employee by the Company. Employee shall abide by the Company's rules, regulations and practices, as adopted or modified from time to time in the Company's sole discretion.


b. OTHER ACTIVITIES. Except with the prior written consent of the Company, Employee shall not, during the term of this Agreement, (i) accept any other employment, or (ii) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary gain) that might interfere with Employee's duties and responsibilities hereunder or create a conflict of interest with the Company. Employee may serve as a member of the board of directors of any company that does not compete with the Company.


c. NO CONFLICT. Employee represents and warrants that Employee's execution of this Agreement, Employee's employment with the Company and the performance of Employee's proposed duties under this Agreement shall not violate any obligations Employee may have to any prior employer, or any other person or entity, including, without limitation, any obligations with respect to proprietary or confidential information of any prior employer, or any other person or entity.


2. COMPENSATION AND BENEFITS


a. BASE SALARY. In consideration of the services to be rendered under this Agreement, the Company shall pay to Employee a salary at the rate of Two Hundred Thousand ($200,000) per year (the "Base Salary"). The Base Salary shall be paid in accordance with the Company's payroll practices. The Base Salary will be reviewed from time to time in accordance with the Company's procedures for adjusting salaries for similarly-situated employees and may be increased or decreased at any time in the Company's sole discretion.


b. BONUS. Employee shall be eligible to receive commission of 0.3% of gross domestic revenue, subject to Employee's attainment of a minimum of 70% of agreed upon gross revenue


objectives. In addition, Employee shall be eligible for an incremental commission of 1% of all gross revenues in excess of plan.


c. BENEFITS. Effective as of the Effective Date, Employee shall be eligible to participate in the benefits made generally available by the Company to similarly-situated employees, in accordance with the benefit plans established by the Company, as such plans may be amended from time to time in the Company's sole discretion.


d. VACATION. Employee shall receive paid vacation time in accordance with the executive vacation plan to be established by the Company.


3. AT-WILL EMPLOYMENT


a. AT-WILL TERMINATION BY COMPANY. The employment of Employee shall be "at-will" at all times. The Company may terminate Employee's employment with the Company at any time, without any advance notice, for any reason or no reason at all, notwithstanding anything to the contrary contained in or arising from any statements, policies or practices of the Company relating to the employment, discipline or termination of its employees. Upon and after the date of such termination, all obligations of the Company shall cease, except as set forth below in Section 3(c).


b. AT-WILL TERMINATION BY EMPLOYEE. Employee may terminate employment with the Company at any time for any reason or no reason at all, upon two weeks' advance written notice. During such notice period Employee shall continue to diligently perform all of Employee's duties hereunder. The Company shall have the option, in its sole discretion, to make Employee's termination effective at any time prior to the end of such notice period as long as the Company pays Employee all compensation to which Employee is entitled up through the last day of the two-week notice period. Thereafter all obligations of the Company shall cease, except as set forth below in Section 3(c).


c. TERMINATION BY COMPANY WITHOUT CAUSE OR BY EMPLOYEE FOR GOOD REASON.


(i) If the Company terminates Employee's employment other than for Cause (as defined below) prior to the first anniversary of the Effective Date, or if Employee terminates his employment for Good Reason (as defined below) prior to the first anniversary of the Effective Date, then, during the period of time from the termination date until the first anniversary of the Effective Date, the Company shall continue to (A) pay to Employee the Base Salary, in accordance with the Company's payroll practices, and (B) make available to Employee the benefits made generally available by the Company to its employees, to the extent permitted under applicable law and the terms of the benefit plans. Notwithstanding the foregoing, if at any time (whether before, on or after the first anniversary of the Effective Date) the Company terminates Employee's employment other than for Cause, or if at any time Employee terminates his employment for Good Reason, then Employee shall be entitled to a minimum of six (6) months' worth of severance, so that, during the period of time from the termination date until the six (6)-


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month anniversary of the termination date, the Company shall continue to (A) pay to Employee the Base Salary, in accordance with the Company's payroll practices, and (B) make available to Employee the benefits made generally available by the Company to its employees, to the extent permitted under applicable law and the terms of the benefit plans.


(ii) The Company's termination of Employee's employment shall be for "Cause" if Employee: (A) exhibits willful misconduct or dishonesty; (B) is convicted of a felony; (C) acts (or fails to act) in bad faith and to the Company's detriment; (D) materially breaches this Agreement or any other agreement with the Company; or (E) engages in misconduct that is demonstrably and materially injurious to the Company, including, without limitation, willful and material failure to perform his duties as an officer or employee of the Company or excessive absenteeism unrelated to illness or vacation.


(iii) Employee's termination of his employment shall be for "Good Reason" if Employee terminates his employment: (A) within the thirty (30)-day period immediately following the six (6)-month anniversary of the date of the occurrence of a Change in Control (as defined below); (B) within six (6) months of the Company's material reduction of Employee's level of responsibility; or (C) within six (6) months of the Company's material reduction of the Base Salary, except for any salary reduction that is generally applicable to the Company's executives.


(iv) For purposes of this Agreement, the term "Change in Control" shall mean any of the following transactions:


(A) a merger or consolidation in which the Company is not
the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated;


(B) the sale, transfer or other disposition of all or
substantially all of the assets of the Company;


(C) any reverse merger in which the Company is the
surviving entity but in which securities possessing more than fifty
percent (50%) of the total combined voting power of the Company's
outstanding securities are transferred to a person or persons different
from those who held such securities immediately prior to such merger;
or


(D) the acquisition in a single or series of related
transactions by any person or related group of persons (other than by
the Company or by a Company-sponsored employee benefit plan) of
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities.


(v) Employee's right to receive any payments or other benefits under this Section 3(c) is expressly conditioned upon: (A) Employee's execution of a general release of all claims as of the date of Employee's termination, in substantially the form attached to this Agreement as


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Exhibit A (the "General Release"); and (B) Employee's compliance with his obligations under this Agreement, the General Release and all other agreements between Employee and the Company.


4. TERMINATION OBLIGATIONS


a. RETURN OF PROPERTY. Employee agrees that all property (including, without limitation, all equipment, tangible proprietary information, documents, records, notes, contracts and computer-generated materials) furnished to or created or prepared by Employee incident to Employee's employment belongs to the Company and shall be promptly returned to the Company upon termination of Employee's employment.


b. COOPERATION. Following any termination of his employment, Employee shall perform any and all acts requested by the Company to ensure the orderly and efficient transition of Employee's duties. Such acts may include, but are not limited to: (i) participating in meetings or telephone conferences; (ii) reviewing, preparing or executing documents; and (iii) providing assistance in connection with any litigation ...