Exhibit 10.6
IMAGE TECHNOLOGY LABORATORIES, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 21st day of December, 1999, by
and between Image Technology Laboratories, Inc. a Delaware Corporation ( the
"Corporation"), and Xxxxx Xxxx, M.D. (the "Executive") and is effective as of
January 1, 2000 (the "Effective Date").
WITNESSETH
The Executive is President and Chief Executive Officer of the
Corporation and possesses an intimate knowledge of the business and affairs of
the Corporation. The Corporation recognizes the Executive's contribution to the
growth and success of the Corporation and desires to ensure to the Corporation
the continued benefits of the Executives expertise and knowledge. The Executive,
in turn desires to continue in full-time employment with the Corporation on the
terms provided herein.
Accordingly, in consideration of the mutual covenants and
representations contained herein, the parties hereto agree as follows:
Full-Time Employment of Executive.
1.1. Duties and Status.
(a) The Corporation hereby engages the
Executive as a full-time executive employee for the period (the "Employment
Period") specified in Section 4, and the Executive accepts such employment, on
the terms and conditions set forth in this Agreement. During the Employment
Period, the Executive shall exercise such authority and perform such executive
duties as are commensurate with the authority being exercised and duties being
performed by the Executive for the Corporation immediately prior to the
effective date of this Agreement.
(b) During the Employment Period, the
Executive shall (i) devote his full time and efforts to the business of the
Corporation and will not engage in consulting work or any trade or business for
his own account or for or on behalf of any other person, firm or corporation
which competes, conflicts or interferes with the performance of his duties
hereunder
1
in any way, and (ii) accept such additional office or offices to which he may be
elected by the Board of Directors of the Corporation, provided that the
performance of the duties of such office or offices shall be consistent with the
scope of the duties provided for in subsection (a) of this Section 1.1.
(c) The Executive will be required to
perform the services and duties provided for in subsection (a) of this Section
1.1 only at the location where the Executive was employed immediately prior to
the effective date of this Agreement or such other location of the principal
executive offices of the Corporation in the State of New York as the Board of
Directors of the Corporation may designate. The Executive shall be entitled to
vacation, leave of absence, leave for illness or temporary disability in
accordance with the policies of the Corporation in effect, which shall not be
less favorable than those in effect at the date of this Agreement; and any leave
on account of illness or temporary disability which is short of total
disability, as defined in the Corporation's long-term disability insurance plan
("Total Disability"), shall not constitute a breach by the Executive of his
agreement hereunder.
1.2. Compensation and General Benefits. As compensation for his
services under this Agreement, the Executive shall be compensated as follows:
(a) The Corporation shall pay the Executive
an annual salary which is not less than the greater of $150,000 payable in
accordance with the Company's regular payroll schedule ("Base Salary"), less
applicable withholdings and deductions. Such salary shall be payable in periodic
equal installments which are no less frequent than the periodic installments
relating to his salary immediately prior to the effective date of this
agreement. Such salary shall be subject to normal periodic review at least
annually based on the policies of the Corporation and contributions to the
enterprises.
(b) The Executive shall be eligible to
participate in such profit-sharing, bonus, incentive, stock options and
performance award programs which provide opportunities to receive compensation
which are the greater of opportunities (i) then provided by the Corporation to
executives with reasonably comparable authority and duties (and in any event not
lesser than those provided to executives with junior authority or duties), or
(ii) available to the Executive immediately prior to the effective date of this
Agreement.
(c) The Executive shall be entitled to
receive employee benefits, including, without limitation, pension, disability,
group life, sickness, accident and health insurance programs and split-dollar
life insurance programs, and prerequisites provided by the Corporation to
executives which are the greater of the employee benefits and prerequisites (i)
then provided by the Corporation to executives with comparable authority or
duties (and in any event not lesser than those provided to executives with
junior authority or duties), or (ii) available to the Executive immediately
prior to the effective date of this Agreement.
(d) The Company shall reimburse Executive
for all reasonable management
2
approved expenses including, a) business development expenses, such as travel
and entertainment and cellular telephone, and b) expenses incurred in setting up
office operations, such as rent for office space, telephone lines, office
supplies and equipment, printing, furniture, taxes, documentation, insurance and
fees which are the greater of opportunities (i) then provided by the Corporation
to executives with reasonably comparable authority and duties (and in any event
not lesser than those provided to executives with junior authority or duties),
or (ii) available to the Executive immediately prior to the effective date of
this Agreement.
2. Competition: Confidential Information. The Executive and the
Corporation recognize that due to the nature of his prior association with the
Corporation and his engagement hereunder, and the relationship of the Executive
to the Corporation, both in the past as an executive and in the future
hereunder, the Executive has had access to and has acquired, will have access to
and will acquire, and has assisted in and may assist in developing confidential
and proprietary information relating to the business and operations of the
Corporation and its affiliates, including, without limiting the generality of
the foregoing, information with respect to their present and prospective
products, systems customers, agents, processes, and sales and marketing methods.
The Executive acknowledges that such information has been and will continue to
be of central importance to the business of the Corporation and its affiliates
and that disclosure of it to or its use by others could cause substantial loss
to the Corporation. The Executive and the Corporation also recognize that an
important part of the Executive's duties will be to develop good will for the
Corporation and its affiliates through his personal contact with customers,
agents and others having business relationships with the Corporation and its
affiliates, and that there is a danger that this good will, a proprietary asset
of the Corporation and its affiliates, may follow the Executive if and when his
relationship with the Corporation is terminated. The Executive accordingly
agrees as follows:
2.1. Noncompetition.
(a) During the Employment Period and for a
period of two years thereafter the Executive will not, without the prior written
consent of the Corporation directly or indirectly, either individually or as
owner, partner, agent, employee, consultant or otherwise, except for the account
of and on behalf of the Corporation or their affiliates, engage in any activity
competitive with the business of the Corporation or its affiliates, nor will he
in competition with the Corporation or its affiliates, solicit or otherwise
attempt to establish for himself or any other person, firm or entity, any
business relationship with any person, firm or corporation which was, at any
time during the Employment Period, a customer of the employee of the Corporation
or one of its affiliates.
(b) Nothing in this Section 2 shall be
construed to prevent the Executive from owning, as an investment, not more than
1% of a class of equity securities issued by any competitor of the Corporation
or its affiliates and publicily traded and registered under Section 12 of the
Securities Exchange Act of 1934.
3
2.2. Trade Secrets. The Executive will keep confidential
any trade secrets or confidential or proprietary information of the Corporation
and its affiliates which are now known to him or which hereafter may become
known to him as a result of his employment or association with the Corporation
and shall not at any time directly or indirectly disclose any such information
to any person, firm or corporation, or use the same in any way other than in
connection with the business of the Corporation or its affiliates during and at
all times after the of the Employment Period. For purposes of this Agreement,
"trade secrets or confidential or proprietary information" means information
unique to the Corporation or any of its affiliates which has a significant
business purpose and is not known or generally available from sources outside
the Corporation or any of its affiliates or typical of industry practice.
2.3. Patents. The Executive will assign permanently to
the Corporation exclusive rights to any patents awarded to him on the basis of
ideas developed by the Executive for the Corporation and its affiliates and
ideas developed by the Executive within one year following the termination of
his employment by the Corporation which are related to such employment.
3. Corporation's Remedies for Breach. It is recognized that damages
in the the event of breach of paragraph 2 by the Executive would be difficult,
if not impossible, to ascertain, and it is therefore, agreed that the
Corporation, in addition to and without limiting any other remedy or right it
may have, shall have the right to an injunction or other equitable relief in any
court of competent jurisdiction, enjoining any breach, and the Executive hereby
waives any and all defenses he may have on the ground of lack of jurisdiction or
competence of the court to grant such an injunction or other equitable relief.
The existence of this right shall not preclude any other rights and remedies at
law or in equity which the Corporation may have.
4. Employment Period: Certain Rights.
4.1. Duration. The Employment Period shall commence on
the date of this Agreement and shall continue until the earlier of (i) close of
business on the day immediately preceding the third anniversary of the date of
this Agreement, or (ii) death or total disability of the Executive. The
Employment Period may be renewed from year to year by agreement executed in
writing prior to such third anniversary each anniversary thereafter.
4.2. Definitions. The following words shall have the
specified meanings when used in the sections specified:
(a) In this Section 4, the phrase
"termination resulting in rights of the Executive" means termination (i) by the
Corporation of the employment of the Executive with the Corporation for any
reason other than death or Total Disability of the Executive or cause; or (ii)
by resignation of the Executive due to a significant diminution in the nature or
scope of his authorities or duties from those contemplated in subsection (a) of
Section 1.1, a reduction in total compensation from that provided in Section
1.2, or the breach by the
4
Corporation of any other provisions of this Agreement.
(b) In subsection (a) of this Section 4.2
the term "cause" means (i) fraud, misappropriation or intentional material
damage to the property or business of the Corporation; commission of a felon;
(ii) continuance of failure by the Executive to perform his duties in compliance
with this Agreement after written notice to the Executive by the Board of
Directors specifying such failure, provided that such "cause" shall have been
found by a majority vote of the members of the Board of Directors of the
Corporation other than the Executive; or (iii) a violation of Section 2 of this
Agreement.
4.3. Certain Rights. If a termination resulting in
rights of the Executive (as defined in Section 4.2) occurs, then (a) the
Corporation shall be obligated to comply with all the provisions of Section 1.2
until the end of the Employment Period, (b) the Executive shall not thereafter
be obligated to fulfill any of his obligations under Section 1.1, and (c)
obligations of the Executive under Section 2 shall continue. If a termination
other than a termination resulting in rights of the Executive (as defined in
Section 4.2) occurs, 4.2(a)(ii), the Corporation shall cease to have any
obligations to the Executive under this Agreement and the Executive shall
continue to be bound by all of the provisions hereof.
5. Notices. All notices, demands and requests required by this
Employment Agreement should be in writing and shall be deemed to have been given
or made for all purposes (i) upon personal delivery, (ii) one day after being
sent, when sent by professional overnight courier service, (iii) five days after
posting when sent by registered or certified mail, or (iv) on the date of
transmission when sent by telegraph, telegram, telex, or other form of "hard
copy" transmission, to either party hereto at the address set forth below or at
such other address as either party may designate by notice pursuant to this
Section 5.
If to the Company, to:
Image Technologies Laboratories, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
And a Copy to:
Xxxxxxx Xxxxx, Esq.
Xxxxx & Xxxxxxx LLP
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Executive, to:
Xxxxx Xxxx, M.D.
000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
5
6. Assignment. This Employment Agreement shall be binding on, and
shall inure to the benefit of, the parties hereto and their respective heirs,
legal representatives, successors and assigns; provided, however, the Executive
may not assign, transfer or delegate his rights or obligations hereunder and any
attempt to do so shall be void.
7. Deductions. All amounts paid to Executive hereunder are subject
to all withholdings and deductions required by law, as authorized under this
Employment Agreement, and as authorized from time to time.
8. Entire Agreement. This Employment Agreement contains the entire
agreement of the parties with respect to the subject matter hereof.
9. Amendment. This Employment Agreement may be modified or amended
only by a written agreement signed by the Board and Executive.
10. Waivers. No Waiver of any term or provision of this Employment
Agreement will be valid unless such waiver is in writing signed by the party
against whom enforcement of the waiver is sought. The waiver of any term or
provision of this Employment Agreement shall not apply to any subsequent breach
of this Employment Agreement.
11. Counterparts. This Employment Agreement may be executed in
several counterparts, each of which shall be deemed an original, but together
they shall constitute one and the same instrument.
12. Severability. The provisions of the Employment Agreement shall
be deemed severable, and if any part of any provision is held illegal, void or
invalid under applicable law, such provision may be changed to the extent
reasonably necessary to make the provision, as so changed, legal, valid and
binding. If any provision of the Employment Agreement is held illegal, void or
invalid in its entirety, the remaining provisions of this Employment Agreement
shall not in any way be affected or impaired but shall remain binding in
accordance with their terms.
13. Governing Law. THIS EMPLOYMENT AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE COMPANY AND EXECUTIVE HEREUNDER SHALL BE DETERMINED UNDER,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE
PERFORMED ENTIRELY WITHIN NEW YORK.
14. Arbitration. The Executive understands and agrees that, as a
condition of his employment with the Company, any and all disputes that the
Executive may have with the Company, or any of its employees, officers,
directors, agents or assigns, which arise out of the Executive's employment or
investment or compensation shall be resolved through final and
6
binding arbitration, as specified in this Employment Agreement. This shall
include, without limitation, any controversy, claim or dispute of any kind,
including disputes relating to any employment by the Company or the termination
thereof, claims for breach of contract or breach of the covenant of good faith
and fair dealing, infliction of emotional distress, defamation and any claims of
discrimination, harassment or other claims under Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, the Americans With
Disabilities Act, the Employee Retirement Income Securities Act, or any other
federal, state or local law or regulation now in existence or hereinafter
enacted and as amended from time to time concerning in any way the subject of
the Executive's employment with the Company or its termination. The only claims
not covered by this Employment Agreement are claims for benefits under the
unemployment insurance or workers' compensation laws, and any claims pursuant to
paragraph 2 of this Employment Agreement which will be resolved pursuant to
those laws. Any disputes and/or claims covered by this Employment Agreement
shall be submitted to final and binding arbitration to be conducted in New York
County, New York, in accordance with the rules and regulations of the American
Arbitration Association. The Executive and the Company will split the cost of
the arbitration filing and hearing fees and the cost of the arbitrator, provided
that the arbitrator will have authority to award these fees to the prevailing
party. Each side will bear its own attorneys' fees, provided that the arbitrator
will have authority to award attorneys' fees to the prevailing party unless a
statutory section at issue in the dispute authorizes the award of attorneys'
fees, in which case the arbitrator has authority to make such award as permitted
by the statute in question. The arbitration shall be instead of any civil
litigation; this means that the Executive is waiving any right to a jury trial,
and that the arbitrator's decision shall be final and binding to the fullest
extent permitted by law and enforceable by any court having jurisdiction
thereof.
IN WITNESS WHEREOF, the parties have executed, sealed and delivered
this Agreement as of the date first above written.
ATTEST: IMAGE TECHNOLOGY LABORATORIES, INC.
___________________________ By:_________________________________
,Secretary ,Vice President
WITNESS:
__________________________ By:_________________________________
(Executive)
7
