EXHIBIT 10(x)
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into this 13th day of
November, 1997, and effective September 18, 1997 (the "Effective Date") by and
between COMPUTERIZED THERMAL IMAGING, INC., a Nevada corporation ("Company"),
and XXXXXXX X. XXXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, the Executive has served as Chief Operating Officer-International
Operations, then as President and now as Chief Operating Officer, of the Company
and during the period of his service has contributed significantly to the
development, expansion, and management of the business of the Company in a
capable and efficient manner resulting in substantial benefits to the Company;
and
WHEREAS, the Company recognizes that the Executive's experience,
knowledge, reputation and contacts will continue to be of great value to the
Company and, therefore, the Company desires to retain the benefit of such
experience, knowledge, reputation and contacts and to prevent them from being
availed of by the Company's competitors; and
WHEREAS, the Company recognizes that substantial inducements and
incentives must be offered to the Executive so that the Company may retain
his services for the future.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Executive agree as follows:
1. EMPLOYMENT.
The Company hereby agrees to employ the Executive, and the
Executive hereby accepts employment, upon the terms and conditions specified
in this Agreement. Unless otherwise provided, this Agreement shall supersede
all prior agreements, oral or written, between the parties.
2. DUTIES AND RESPONSIBILITIES.
2.1 The Executive shall devote his full business time, efforts,
and abilities to the Company for the profit, benefit, and advantage of the
Company, and shall promptly obey and comply with all lawful rules,
regulations, and orders that may be issued from time to time by the Company.
The Executive also agrees to perform, without additional compensation, such
other executive, management, and administrative services for any parent,
subsidiary, partnership, joint venture, or other entity affiliated with the
Company as may be reasonably necessary. The Executive shall not be required
to provide such services from any particular location.
2.2 The Executive shall be employed initially under this Agreement
in the capacity of Chief Operating Officer and shall report to the Board of
Directors of the Company. During the term hereof, the Executive shall
perform such services and functions as may be designated from time to time by
the Company.
2.3 The Executive represents and warrants that Executive has no
prior obligations, written or oral, including confidentiality agreements or
other agreements, which restrict Executive's ability to enter into this
Agreement or to perform any duties for the Company. Executive agrees to
indemnify and hold harmless the Company from any and all legal actions in
which it is alleged or asserted that Executive has such obligations or
agreements including, but not limited to, paying the Company's attorney's
fees, costs, and any damages the Company may be assessed.
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3. COMPENSATION.
3.1 In consideration for the services provided hereunder during
the term of the Executive's employment under this Agreement and the covenants
contained in this Agreement, the Executive shall be paid an annual
compensation of $175,000, payable in 12 equal monthly installments of
$14,583.33 each ("Salary"). Any Salary owed shall be payable in accordance
with the usual payroll practices of the Company and subject to all customary
payroll deductions. The Salary may be increased at any time during the
course of the Executive's term of employment at the sole discretion of the
Company.
3.2 The Executive shall retain the options to purchase common
stock of the Company granted to the Executive by the Personal Services
Agreement ("PSA") and the Employee Stock Option Agreement, as amended and
attached hereto as EXHIBIT "A", (2,000,000 shares at $1.25) both deemed
effective June 12, 1995. The terms and conditions of the Employee Stock
Option Agreement, as amended, and "piggy-back" registration rights are
granted to Executive.
3.3 The Executive shall be granted an additional Option to
purchase 1,250,000 shares of common stock of the Company pursuant to the
Employee Stock Option Agreement, attached hereto as EXHIBIT "B", and
incorporated by reference herein.
3.4 During the term of the Executive's employment under this
Agreement, the Executive also shall be entitled to receive the following:
(i) participation in the Company's present and future benefit
plans generally offered to other employees;
(ii) reimbursement of reasonable expenses related to the
performance of his duties hereunder; provided, however, that in order to be
reimbursed the Executive must submit vouchers or other satisfactory evidence
of such expenses as required by Company policies;
(iii) three (3) weeks of vacation (paid, if a Salary has been set
by the Board of Directors) per work year earned ratably per year and all
holidays for which the Company is not open for business; and
(iv) a monthly automobile allowance of $500.00 per month.
4. TERM AND TERMINATION.
4.1 The term of the Executive's employment under this Agreement
shall commence on the Effective Date and shall continue thereafter for a
period of three (3) years, but shall be renewed for successive one (1) year
terms thereafter unless and until either party provides written notice of
non-renewal at least fourteen (14) days prior to the annual renewal date.
Notwithstanding the foregoing, the Executive may terminate this Agreement for
any reason by giving the Company at least fourteen (14) days written notice.
If the Executive voluntarily terminates this Agreement, the Company shall
have no further financial liability to the Executive beyond the effective
date of such termination.
4.2 Notwithstanding anything in this Agreement to the contrary,
the Executive's employment with the Company may be terminated immediately at
any time by the Company for "cause" which shall mean upon the occurrence of
any of the following events:
(i) breach or attempted breach by Executive of any provision of
this Agreement or negligent or unsatisfactory performance of his duties;
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(ii) breach or attempted breach by Executive of fiduciary duties
owed to the Company as an officer and/or director, including the
misappropriation or attempted misappropriation of funds or property of the
Company;
(iii) attempting to or securing any personal profit or benefit
by Executive not thoroughly disclosed to and approved by the Board of
Directors in connection with any transaction entered or to be entered on
behalf of the Company or any affiliate;
(iv) conduct on any part of the Executive, even if not in
connection with the performance of his duties hereunder, which would result
in serious prejudice to the interests or reputation of the Company including,
without limitation, conviction of a felony criminal offense; or
(v) if, for a continuous period of thirty (30) calendar days, or
for more than thirty (30) calendar days in any calendar year, excluding any
authorized vacation or authorized leave of absence, the Executive is absent
or expected to be absent from his full time employment or is otherwise unable
to perform his duties, as reasonably determined by a disinterested physician
selected by the Company, by reason of illness, injury, or mental or physical
disability.
4.3 In the event of termination of employment, the Executive shall
be entitled to receive (i) the Salary compensation due, if any, on a pro-rata
basis, (ii) reimbursement of expenses to the effective date of termination,
and (iii) an amount, if any, equal to any earned but unused vacation time
based upon the then Salary, if any, computed on a daily basis subject to all
customary payroll deductions.
5. CONFIDENTIAL INFORMATION AND DISCOVERIES OF THE COMPANY.
5.1. INTELLECTUAL PROPERTY. Executive hereby assigns to the
Company all inventions, processes, discoveries, creations and improvements
(whether or not patentable) which are conceived, made or learned by Executive
alone or jointly with others in the course of his employment with the Company
that pertain to the business interests of the Company or relating to areas
which may be reasonably anticipated to be encompassed by such business
interests of the Company at the time of conception. Executive, at any time
during or after his employment, agrees to promptly disclose to the Company
all such processes, inventions, discoveries, creations or improvements
assigned hereby. All works of authorship created by the Executive on behalf
of the Company during the term of this Agreement, solely or jointly with
others, shall be considered works made for hire under the Copyright Act of
1976, as amended, and shall be owned entirely by the Company. Executive will
also, at the Company's expense, cooperate in all lawful acts which may be
necessary or desirable in the judgment of the Company to protect or vest
title to such inventions, processes, discoveries, creations or improvements
in the Company or its nominee, including, without limitation, applying for,
obtaining, maintaining, and enforcing patents thereon in all countries of the
world, and the execution of documents related thereto.
5.2. CONFIDENTIAL INFORMATION. The Executive acknowledges that in
the performance of his services and duties hereunder he will receive or come
in contact with, among other things, trade secrets (both technical and
non-technical), know-how, lists of customers, suppliers, contractors,
customers, employee records and other confidential and proprietary
information about the business of the Company (hereinafter collectively
referred to as "Confidential Information"). The Executive further
acknowledges that such Confidential Information was obtained at substantial
cost to the Company and provides the Company with a significant advantage
over competitors. The Executive understands that such Confidential
Information is the sole property of the Company, and agrees that both during
and after his employment with the Company he will not at any time use or
reveal Confidential Information to anyone except as permitted by the Company
or required by Executive's employment duties with the Company. The Executive
further agrees not to use any information made available to or coming into
the possession of the Executive in a manner that is adverse to the business
of the Company. Upon termination of employment hereunder, the Executive
agrees to surrender to the Company all papers, documents, writings and other
property produced by him or coming
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into his possession by or through his employment hereunder, and the Executive
agrees that all such materials and Confidential Information will at all times
remain the property of the Company.
6. AGREEMENT NOT TO SOLICIT.
As an express condition to this Agreement, the Executive agrees,
during the term of his employment, and for a period of two (2) years after
the termination of his employment with the Company for any reason, the
Executive will not, directly or indirectly, for his own account or for the
account of others, induce any of the Company's employees to leave their
employment, nor will the Executive in any other way interfere with the
employee relations of the Company.
7. NON-COMPETITION.
7.1 The Executive acknowledges that he shall receive special
training and knowledge from the Company, including access to information as
detailed in Section 5.2. The Executive acknowledges that this information is
valuable to the Company and, therefore, its protection and maintenance
constitutes a legitimate interest to be protected by the Company by this
covenant not to compete. Therefore, the Executive agrees that during his
employment with the Company, and for a period of two (2) years after the
termination of his employment with the Company for any reason, the Executive
will not, directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer,
director, or in any other individual or representative capacity, engage or
participate in any business that is in competition in any manner whatsoever
with the business of the Company on the date of termination of employment
within 50 miles of each city in which the Company is conducting substantial
business. Notwithstanding the preceding sentence to the contrary, the
Executive may purchase or otherwise acquire up to (but not more than) one
percent (1%) of any class of securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if such
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of 1934.
The Executive represents to the Company that his experience and capabilities
are such that the enforcement of the restrictions contained in this Section 7
would not be unduly burdensome to the Executive.
8. REMEDIES.
The Executive acknowledges that the provisions of Sections 5, 6,
and 7 shall survive the termination of Executive's employment with the
Company and are reasonable and necessary for the protection of the Company
and that the Company will be irrevocably damaged if such provisions are not
specifically enforced. Accordingly, in the event of breach or threatened
breach of the provisions of Sections 5, 6, or 7, it is understood and agreed
that the Company shall be entitled to injunctive relief (without bond or
other security being required) as well as any and all other applicable
remedies at law and in equity. Should a court of competent jurisdiction
declare any of these provisions unenforceable due to an unreasonable
restriction, or for any other reason, such court shall have the express
authority of the parties to this Agreement to reform such provisions and/or
to grant the Company any and all other relief, at law or in equity,
reasonably necessary to protect the interests of the Company. The Executive
expressly acknowledges that (i) he has been encouraged to obtain separate
legal counsel in connection with the negotiation of this Agreement who can
explain the legal effects of these provisions and (ii) he considers these
provisions to be reasonable.
9. SUBMISSION TO JURISDICTION.
Each party hereby irrevocably submits to the personal jurisdiction
of the United States District Court for Xxxxxx County, Texas, as well as of
the District Courts of the State of Texas in Xxxxxx County, Texas over any
suit, action or proceeding arising out of or relating to this Agreement.
Each party hereby irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue
of any such mediation, arbitration, suit, action or proceeding brought in any
such county and any claim that any such mediation, arbitration, suit, action
or proceeding brought in such county has been brought in an inconvenient
forum.
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10. ALTERNATIVE DISPUTE RESOLUTION.
ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE BREACH, TERMINATION, OR VALIDITY THEREOF, SHALL BE SETTLED
BY FINAL AND BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("AAA RULES") IN
EFFECT AS OF THE EFFECTIVE DATE OF THIS AGREEMENT. THE AMERICAN ARBITRATION
ASSOCIATION ("AAA") SHALL BE RESPONSIBLE FOR (i) APPOINTING A SOLE
ARBITRATOR, AND (ii) ADMINISTERING THE CASE IN ACCORDANCE WITH THE AAA
RULES. THE SITUS OF THE ARBITRATION SHALL BE HOUSTON, TEXAS. UPON THE
APPLICATION OF EITHER PARTY TO THIS AGREEMENT, AND WHETHER OR NOT AN
ARBITRATION PROCEEDING HAS YET BEEN INITIATED, ALL COURTS HAVING JURISDICTION
HEREBY ARE AUTHORIZED TO: (a) ISSUE AND ENFORCE IN ANY LAWFUL MANNER, SUCH
TEMPORARY RESTRAINING ORDERS, PRELIMINARY INJUNCTIONS AND OTHER INTERIM
MEASURES OF RELIEF AS MAY BE NECESSARY TO PREVENT HARM TO A PARTIES INTEREST
OR AS OTHERWISE MAY BE APPROPRIATE PENDING THE CONCLUSION OF ARBITRATION
PROCEEDINGS PURSUANT TO THIS AGREEMENT; AND (b) ENTER AND ENFORCE IN ANY
LAWFUL MANNER SUCH JUDGMENTS FOR PERMANENT EQUITABLE RELIEF AS MAY BE
NECESSARY TO PREVENT HARM TO A PARTIES INTEREST OR AS OTHERWISE MAY BE
APPROPRIATE FOLLOWING THE ISSUANCE OF ARBITRAL AWARDS PURSUANT TO THIS
AGREEMENT. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH PARTY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT TO CONSEQUENTIAL, EXEMPLARY,
OR PUNITIVE DAMAGES REGARDLESS OF THE FORUM FOR THE PROCEEDINGS. ANY ORDER
OR JUDGEMENT RENDERED BY THE ARBITRATOR MAY BE ENTERED AND ENFORCED BY ANY
COURT HAVING COMPETENT JURISDICTION.
11. MISCELLANEOUS.
11.1 NOTICES. Any notice required or permitted under this
Agreement shall be in writing and shall be deemed to be delivered three (3)
business days after deposit in the United States mail, postage prepaid,
certified or registered mail, return receipt requested, addressed as follows:
Company: Computerized Thermal Imaging, Inc.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxx 00000
Executive: Xxxxxxx X. Xxxxxx
000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxx Xxxxx, Xxxxxxx 00000
Notice given in any other manner shall be effective when delivered to
the addressee. The address for notice may be changed by notice given in
accordance with this provision.
11.2 AMENDMENTS. This Agreement and the documents referred to
herein constitute the entire agreement between the parties with respect to
the employment of the Executive and supersedes any prior agreements and may
not be amended, supplemented, waived, modified, or amended except by written
instrument executed by the parties hereto. There are no oral agreements
between the parties.
11.3 PRESERVATION OF BUSINESS: FIDUCIARY RESPONSIBILITY. The
Executive shall use his best efforts to preserve the business and
organization of the Company, to keep available to the Company the services of
its employees, to preserve the business relations of the Company, and the
Executive shall not commit any act that might reasonably be expected to
injure the Company. The Executive shall observe and fulfill proper standards
of fiduciary responsibility attendant upon his service and office.
11.4 ASSIGNMENTS. The Company may not assign this Agreement
without the consent of the Executive, except in connection with a sale of
substantially all of the assets of the Company or the merger or
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consolidation of the Company with a successor entity provided in such events
such transferee entity assumes all of the obligations of the Company pursuant
to this Agreement. The rights and obligations of the Executive hereunder are
personal to him, and no such rights, benefits, duties or obligations shall be
subject to voluntary or involuntary alienation, assignment, or transfer.
11.5 EFFECT OF AGREEMENT. This Agreement shall be binding upon the
Executive and his heirs, executors, administrators, and legal representatives
and upon the Company and its successors and assigns.
11.6 WAIVER OF BREACH. The waiver by either party hereto of a
breach of any provision of this Agreement by the other party hereto shall not
operate or be construed as a waiver by such party of any subsequent breach of
such other party.
11.7 GOVERNING LAW. This Agreement and all matters relating
thereto shall be governed by and construed in accordance with the laws of the
State of Texas without regard to any conflicts of laws provisions thereof.
11.8 SEVERABILITY. If any provision of this Agreement is declared
unenforceable, such declaration shall not affect the validity of any other
provision of this Agreement.
11.9 CONSTRUCTION. The headings contained in this Agreement are
for reference purposes only and shall not affect this Agreement in any manner
whatsoever. Wherever required by the context, any gender shall include any
other gender, the singular shall include the plural, and the plural shall
include the singular.
IN WITNESS WHEREOF, INTENDING TO BE LEGALLY BOUND, the undersigned have
executed this Consent in multiple counterparts, to be effective as of the
date and time first mentioned above, each of which together shall be
considered one original, and whether by original or facsimile signature shall
be effective in all respects as though an original. The Executive
acknowledges that he has read this Agreement and has been represented by
separate legal counsel and he understands that executing this Agreement is a
condition of his employment by the Company.
COMPANY:
COMPUTERIZED THERMAL IMAGING, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxx, CEO
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
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