EXHIBIT 10.4
EMPLOYMENT AND ROYALTY AGREEMENT
COMPUTERIZED THERMAL IMAGING, INC., a Nevada corporation ("CTI"), hereby
agrees to employ XXXXXXX X. XXXXX ("XXXXX"), and XXXXX agrees to be employed
by CTI, in consideration of and pursuant to the following terms and
conditions:
1. Position.
CTI shall employ Xxxxx in the position of Senior Vice President
and Director of Research and Development.
2. Outside Business Activities.
During his employment, Xxxxx shall devote his full energies,
interests, abilities and productive time to the performance of his duties
under this Agreement and shall not, without CTI prior written consent, render
any services to others for compensation or engage or participate, actively or
passively, in any other business activities that would materially interfere
with the performance of Xxxxx duties hereunder or compete with CTI business.
3. Term.
Subject to earlier termination as provided in Xxxxxxxxx 0, Xxxxx
shall be employed for a term of three years commencing April 17, 2000.
4. Place of Employment.
Xxxxx shall perform his duties at CTI offices located in Walnut
Creek, California, but may be required to travel from time to time as mutually
agreed between CTI and Xxxxx.
5. Compensation and Benefits.
a. Salary.
CTI shall pay an annual salary of $200,000 payable
semi-monthly, prorated for each partial year of employment, with annual
increases (but not decreases) as determined by CTI Board of Directors for CTI
senior executives.
b. Options.
Simultaneously with the execution of this Agreement, and
on the first and second anniversaries thereof, CTI shall deliver to Xxxxx
options to purchase up to 100,000 shares per option of CTI common stock at
the bid price as of the last business day prior to the issuance of the option
on the exchange or in the market system in which CTI common stock is listed.
The options shall be in the form and substance of options heretofore granted
by CTI to CTI senior executives.
c. Vacation.
Xxxxx shall be entitled to no less than three weeks paid
vacation for each full year of employment, with any unused portion
accumulating from year to year.
d. Other Benefits.
CTI shall provide Xxxxx with such other benefits,
including, but not limited to, bonuses, medical and dental insurance and
participation in CTI retirement plan (if one exists or subsequently is
adopted), as CTI may provide for CTI employees, subject to such guidelines,
conditions and restrictions as CTI, in CTI sole discretion, may determine.
6. Royalties.
CTI shall pay Xxxxx a royalty of $250 for each photonic
stimulator or photonic stimulator system or replacement or derivative thereof
(collectively hotonic stimulator manufactured by or on behalf of CTI or any
subsidiary, licensee or affiliate of CTI during the term of this Agreement.
Said royalties shall be paid on or before the 15th day of the month following
the end of CTI fiscal quarter in which the photonic stimulator for which the
royalty is due is manufactured. Said payments do not constitute compensation
for employment. No federal or state tax or related deductions shall be made
therefrom, and said payments shall be reported as royalty payments to the
United States Internal Revenue Service on Form 1099. Xxxxx shall have the
right, upon written reasonable notice to CTI, to inspect and/or have a
representative inspect CTI books and records to assure CTI compliance with
its royalty payment obligations as set forth herein.
7. CTI Ownership of Processes, Inventions, Etc.
a. Except as provided in sub-Paragraph 6(c), all software
programs, documentation, source codes, object codes, processes, inventions,
patents, copyrights, trademarks and all other tangible possessions and
intangible rights (collectively nventions which may be conceived or
developed by Xxxxx, either alone or with others, during the term of this
Agreement, whether or not conceived or developed during Xxxxx working hours,
and which materially relate to CTI programs, products, equipment, supplies,
facilities, trade secrets, CTI business or CTI actual or demonstrably
anticipated research or development, or which result in any manner from any
work performed by Xxxxx at CTI request, shall be the sole property of CTI.
For the purpose of this Paragraph, TI business shall be deemed to mean the
research, development, marketing and sale of devices and systems that utilize
infrared thermal or related imaging technology.
x. Xxxxx shall execute all documents, including, but not
limited to, copyright and patent applications and assignments, required by CTI
to establish and/or enforce CTI rights under this Paragraph.
c. THIS PARAGRAPH 7 DOES NOT APPLY TO INVENTIONS WHICH ARE
DEVELOPED ENTIRELY ON XXXXX OWN TIME WITHOUT USING CTI EQUIPMENT, SUPPLIES,
FACILITIES OR TRADE SECRET INFORMATION AND WHICH: (i) DO NOT RELATE AT THE
TIME OF CONCEPTION OR REDUCTION TO PRACTICE TO CTI BUSINESS OR ACTUAL OR
DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT; OR (ii) DO NOT RESULT FROM
ANY WORK PERFORMED BY XXXXX FOR CTI.
d. The provisions of sub-Paragraph 7(c) are intended to
provide the notice to Xxxxx required under California Labor Code Section 2872.
Xxxxx specifically acknowledges that he has read all of the provisions of
Paragraph 7, including the notice contained in sub-Paragraph 7(c), and that he
has received a copy of this entire Agreement.
8. Termination.
a. CTI may terminate this Agreement at any time without
notice if Xxxxx commits any material act of dishonesty, is convicted of a
crime involving moral turpitude, or, after written notice thereof by CTI,
continues to be negligent in the performance of his duties under this
Agreement in a manner that substantially adversely affects CTI business.
b. CTI may terminate this Agreement at any time if Xxxxx
becomes physically or mentally ill or otherwise incapacitated so that for a
continuous period of six months, Xxxxx has been unable to perform his
obligations under this Agreement in substantially the same manner and with
substantially the same effect as prior to the incapacity. If CTI terminates
Xxxxx employment under this Paragraph 8(b), CTI shall provide Xxxxx with a
one-time disability payment of one-half of Xxxxx then current annual salary.
x. Xxxxx may terminate this Agreement at any time if CTI
breaches any of its obligations under this Agreement. Xxxxx failure or
refusal to terminate this Agreement upon any such breach shall not constitute
a waiver of Xxxxx right to terminate this Agreement upon any subsequent
breach.
9. Unfair Competition Prohibited.
x. Xxxxx understands and acknowledges that during the course
of his employment Xxxxx will be exposed to confidential information and
numerous trade secrets of and concerning CTI whose divulgence to third parties
would substantially adversely affect CTI business and/or reputation. Those
trade secrets and confidential information relate to and include, but are not
limited to, the following:
i. The source and object codes of CTI software;
ii. The source and object codes of third party
software marketed or used by CTI;
iii. CTI marketing techniques;
iv. Customer lists;
v. Contact lists;
vi. Internal accounting and record keeping systems;
vii. Information concerning CTI financial condition;
viii. Management and personnel records;
ix. CTI inventions as defined in Paragraph 7; and
x. Such other technical and nontechnical trade
secrets as may subsequently be developed or
obtained by CTI.
x. Xxxxx expressly agrees that he shall not, without CTI
prior written consent, either during the term of this Agreement or at any time
thereafter, divulge to third parties any of CTI trade secrets or confidential
information. In this regard, the parties specifically acknowledge and agree
that if Xxxxx breaches any of his obligations under this Paragraph 9, CTI may
not have an adequate remedy at law, and a prohibitory injunction restraining
and enjoining Xxxxx from divulging CTI trade secrets and confidential
information to third parties and a mandatory injunction requiring Xxxxx to
inform CTI of the recipients and nature of all trade secrets and confidential
information theretofore divulged by Xxxxx are proper remedies in addition to
all other remedies which CTI may have at law and in equity.
10. Attorneys Fees.
If either party commences an action for the enforcement and/or
interpretation of any of the provisions of this Agreement, the prevailing
party shall be entitled to recover his or its reasonable attorneys fees in
addition to all other remedies.
11. Necessary Acts.
Each party agrees to perform all further acts and execute and
deliver all other documents which may be reasonably necessary to carry out the
provisions of this Agreement.
12. Severability.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be unenforceable, the remaining provisions shall
remain in full force and effect.
13. Entire Agreement.
This Agreement contains the entire agreement between the
parties and supersedes all prior oral and written understandings and
agreements concerning the subject hereof. No amendments may be made except by
a writing signed by both parties.
14. Applicable Law.
This Agreement, and all provisions hereof, shall be interpreted
and enforced in accordance with the laws of the State of California.
Executed at Walnut Creek, California, as of April 17, 2000.
COMPUTERIZED THERMAL IMAGING, INC.,
a Nevada corporation
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
