Exhibit 10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of the 6th day of January 2000 by and
between VASOMEDICAL, INC., a Delaware corporation (hereinafter the "Company")
and D. Xxxxxxx Xxxxxxx, an individual residing at 6 Wax Xxxxxx Xxxxx, Xxxxxx
Xxxx Xxxxxx, Xxxxx Xxxxxxxx 00000 (hereinafter called "Xxxxxxx").
W I T N E S S E T H:
WHEREAS, the Company desires to enter into an Employment Agreement with
Xxxxxxx; and
WHEREAS, Xxxxxxx desires to enter into an Employment Agreement with the
Company;
NOW, THEREFORE, it is agreed as follows:
1. Prior Agreements Superseded. This Agreement supersedes any employment,
consulting or other agreements, oral or written, entered into between Xxxxxxx
and the Company prior to the date of this Agreement.
2. Employment. The Company hereby agrees to employ Xxxxxxx and Xxxxxxx
hereby agrees to serve as President and Chief Executive Officer of the Company
with responsibility for the overall supervision, direction and administration of
all activities and affairs of the Company and performance of such other
executive duties on behalf of the Company as the Board of Directors may
determine. Xxxxxxx'x duties shall also include general supervision and control
over all subsidiaries of the Company, if any. Xxxxxxx'x employment hereunder
shall be on a full-time basis and Xxxxxxx shall not engage in any other
business, including directorships, except with the prior approval of the Board
of Directors of the Company. Xxxxxxx shall serve in similar capacities of such
of the subsidiary corporations of the Company as may be selected by the Board of
Directors without additional compensation. Notwithstanding the foregoing, it is
understood that the duties of Xxxxxxx during the performance of employment shall
not be inconsistent with his position and title as President and Chief Executive
Officer of the Company.
3. Term. Subject to earlier termination on the terms and conditions
hereinafter provided, the term of this Employment Agreement shall end on
December 31, 2000. The Company shall have the right to extend the term of this
Employment Agreement for additional one-year periods upon written notification
to Xxxxxxx on or before November 30, 2000 and on or before November 30 of
subsequent years for additional one-year extensions of employment.
4. Compensation. For all services rendered by Xxxxxxx under this Agreement,
compensation shall be paid to Xxxxxxx as follows:
(a) Xxxxxxx shall be paid a per annum base salary of One Hundred
Eighty Thousand ($180,000) Dollars for the contract year January 6, 2000
through December 31, 2000, such amount to be payable in equal periodic
installments in accordance with the Company's regular payroll procedures
for its executive employees. For the year January 1, 2001 through December
31, 2001, and subsequent years, if employment is extended, Xxxxxxx'x per
annum base salary may be increased based upon merit and increased
responsibilities as determined by the Company's Board of Directors
consistent with its salary administration guidelines.
(b) During the period of employment Xxxxxxx shall be eligible to
participate in the Company's stock option and stock purchase plans to the
extent determined in the discretion of the Board of Directors of the
Company or committee thereof.
(c) The Company shall forthwith issue to Xxxxxxx non-qualified stock
options to purchase an aggregate of six hundred thousand (600,000) shares
of the Company's Common Stock at the closing price per share on the Nasdaq
exchange on January 6, 2000 (the "Options"). The Options shall be vested
and exercisable in accordance with the following schedule: 150,000 shares
on January 1, 2001, 100,000 shares on January 1, 2002, 100,000 shares on
January 1, 2003, 100,000 shares on January 1, 2004 and 150,000 on January
1, 2005; provided that the Options shall vest only in the event Xxxxxxx is
a full-time employee of the Company at the time of vesting. The time within
which the Options may be exercised shall be ten (10) years from January 6,
2000.
(d) Xxxxxxx shall be entitled to participate in any short-term or
long-term incentive plan which the Company has in existence or which may be
adopted.
(e) During the period of employment, Xxxxxxx shall be furnished with
office space and secretarial service and facilities commensurate with his
position and adequate for the performance of his duties.
(f) Xxxxxxx shall be entitled to fully participate in all benefit
programs available to executive employees of the Company throughout the
term of this Agreement.
(g) Xxxxxxx shall be entitled to four (4) weeks of vacation and sick
leaves consistent with current practice of the Company.
5. Expenses. Xxxxxxx shall be reimbursed for all out-of-pocket expenses
reasonably incurred by him in the performance of his duties hereunder. Expense
reports, with receipts and justifications, must be submitted to the Chairman of
the Board for approval.
Moreover, Xxxxxxx is entitled to a relocation allowance up to a total of Thirty
Thousand ($30,000) Dollars payable upon submission of supporting documentation.
6. Severance Benefits. Xxxxxxx shall be entitled to the severance
benefits provided for in this section in the event of the termination of his
employment by the Company without cause or in the event of a voluntary
termination of employment by Xxxxxxx for good reason. In such event, Xxxxxxx
shall have no duty to mitigate damages hereunder. Xxxxxxx and the Company
acknowledge that the foregoing provisions of this paragraph 6 are reasonable and
are based upon the facts and circumstances of the parties at the time of
entering into this Agreement, and with this Agreement, and with due regard to
future expectations.
(a) The term "cause" shall mean:
(i) Xxxxxxx'x willful and continued failure to substantially perform his
duties under this Agreement (other than any such failure resulting from his
incapacity due to physical or mental illness) after demand for substantial
performance is delivered to Xxxxxxx by the Chairman of the Board of the Company
which specifically identifies the manner in which the Board believes Xxxxxxx has
not substantially performed his duties.
(ii) Xxxxxxx'x failure to refuse to follow directions from the Company's
Board of Directors provided that (a) Xxxxxxx is provided written notice of such
directions and a reasonable period in which to comply and (b) Xxxxxxx'x
compliance with any such direction would not be illegal or unlawful.
(iii) Any act or fraud, embezzlement or theft committed by Xxxxxxx whether
or not in connection with his duties or in the course of his employment.
(iv) Any willful disclosure by Xxxxxxx of confidential information or trade
secrets of the Company or its affiliates.
For purposes of this paragraph, no act or failure to act on Xxxxxxx'x part
shall be considered "willful" unless done, or omitted to be done, by Xxxxxxx not
in good faith and without reasonable belief that his action or omission was in
the best interest of the Company. Notwithstanding the foregoing, Xxxxxxx shall
not be deemed to have been terminated for cause unless and until there shall
have been delivered to him a copy of a notice of termination from the Chairman
of the Board of the Company after reasonable notice to Xxxxxxx and an
opportunity for Xxxxxxx with his counsel to be heard before the Board of
Directors of the Company finding that in the good faith opinion of such Board of
Directors Xxxxxxx was guilty of the conduct set forth in clauses (i), (ii) or
(iii) of this paragraph and specifying the particulars thereof in detail.
(b) For these purposes, Xxxxxxx shall have "good reason" to terminate this
Agreement if:
(i) the Company removes Xxxxxxx from the position of President and Chief
Executive Officer at any time during the term of this Agreement;
(ii) Xxxxxxx'x place of employment is moved beyond a hundred-mile radius,
as the crow flies, from 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (or the
Company's then current business address) as a direct result of an event
described in Section 14(a) or (b) hereof.
(c) The severance benefits under this section shall consist of the
continued payment to Xxxxxxx, for the balance of the term of this Agreement, of
the annual salary provided in Section 4(a) hereof plus the immediate vesting of
the options that would normally vest in that year.
7. Death. In the event of Xxxxxxx'x death during the term of this
Agreement, Xxxxxxx'x legal representative shall be entitled to receive his per
annum base salary as provided in paragraph 4(a) of this Agreement to the last
day of the calendar quarter following the calendar quarter in which Xxxxxxx'x
death shall have occurred and thereafter to receive one-half (1/2) of the base
salary provided in paragraph 4(a) of this Agreement for the balance of the
period covered by this Employment Agreement.
8. Non-Competition.
(a) Xxxxxxx agrees that, during the term of this Agreement, he will not,
without the prior written approval of the Board of Directors of the Company,
directly or indirectly, through any other individual or entity, (a) become an
officer or employee of, or render any services [including consulting services]
to, any competitor of the Company, (b) solicit, raid, entice or induce any
customer of the Company to cease purchasing goods or services from the Company
or to become a customer of any competitor of the Company, and Xxxxxxx will not
approach any customer for any such purpose or authorize the taking of any such
actions by any other individual or entity, or (c) solicit, raid, entice or
induce any employee of the Company, and Xxxxxxx will not approach any such
employee for any such purpose or authorize the taking of any such action by any
other individual or entity. However, nothing contained in this paragraph 8 shall
be construed as preventing Xxxxxxx from investing his assets in such form or
manner as will not require him to become an officer or employee of, or render
any services (including consulting services) to, any competitor of the Company.
(b) During the term hereof and at all times thereafter, Xxxxxxx shall not
disclose to any person, firm or corporation other than the Company any trade
secrets, trade information, techniques or other confidential information of the
business of the Company, its methods of doing business or information concerning
its customers learned or acquired by Xxxxxxx during Xxxxxxx'x relationship with
the Company and shall not engage in any unfair trade practices with respect to
the Company.
9. Enforcement.
(a) The necessity for protection of the Company and its subsidiaries
against Xxxxxxx'x competition, as well as the nature and scope of such
protection, has been carefully considered by the parties hereto in light of the
uniqueness of Xxxxxxx'x talent and his importance to the Company. Accordingly,
Xxxxxxx agrees that, in addition to any other relief to which the Company may be
entitled, the Company shall be entitled to seek and obtain injunctive relief
(without the requirement of any bond) for the purpose of restraining Xxxxxxx
from any actual or threatened breach of the covenants contained in paragraph 8
of this Agreement.
(b) If for any reason a court determines that the restrictions under
paragraph 8 of this Agreement are not reasonable or that consideration therefor
in adequate, the parties expressly agree and covenant that such restrictions
shall be interpreted, modified or rewritten by such court to include as much of
the duration and scope identified in paragraph 8 as will render the restrictions
valid and enforceable.
10. Notices. Any notice to be given to the Company or Xxxxxxx hereunder
shall be deemed given if delivered personally, telefaxed or mailed by certified
or registered mail, postage prepaid, to the other party hereto at the following
addresses:
To the Company: Vasomedical, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
To Xxxxxxx: D. Xxxxxxx Xxxxxxx
6 Wax Xxxxxx Xxxxx
Xxxxxx Xxxx Xxxxxx, Xxxxx Xxxxxxxx 00000
Either party may change the address to which notice may be given hereunder by
giving notice to the other party as provided herein.
11. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns, and upon Xxxxxxx,
his heirs, executors, administrators and legal representatives.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties except as specifically otherwise indicated herein.
13. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York.
14. In the event (a) the Company has been consolidated or merged into or
with any other corporation or all or substantially all of the assets of the
Company have been sold to another corporation, with or without the consent of
Employee, in his sole discretion; or (b) the Company undergoes a Change of
Control, as hereinafter defined below, without prior Board approval; then
Employee is entitled to the following settlement benefits:
(i) a lump-sum payment for the greater of (A) twelve (12) months of the
annual salary provided in section 4(a) hereof or (B) the balance of
compensation for the term of this Employment Agreement; and
(ii) any and all stock options and warrants held by Employee shall become
immediately vested and exercisable; if
(A) Employee voluntarily and unilaterally resigns his position with
the Company within 30 days of an event described in Section 14(a)
or (b) hereof, or
(B) Employee is given notice of termination directly as a result of
such Change in Control within six (6) months of an event
described in Section 14(a) or (b) hereof, or
(C) Employee's place of employment is moved beyond a hundred-mile
radius, as the crow flies, from 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxx 00000 (or the Company's then current business address) as a
direct result of an event described in Section 14(a) or (b)
hereof.
A "Change of Control" of the Company, or in any person directly or
indirectly controlling the Company, shall mean:
(i) a change of control as such term is presently defined in Regulation
240.12b-2 under the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx");
(ii) if during the Term of employment any "person" (as such term is used in
Section 13(d) and 14(d) of the Exchange Act) other than the Company or any
person who on the date of this Employment Agreement is a director or officer of
the Company, becomes the "beneficial owner" (as defined in Rule 13(d)03 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% of the voting power of the Company's then outstanding
securities; or
(iii) if during the Term of employment the individuals who at the beginning
of such period constitute the Board cease for any reason other than death,
disability or retirement to constitute at least a majority thereof."
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day and year first above written.
VASOMEDICAL, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Chairman of the Board
/s/ D. Xxxxxxx Xxxxxxx
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D. Xxxxxxx Xxxxxxx
Employee
