(10) (b) Employment Agreement dated July 14, 1997 by and
between Xxxx X. Xxxxxx and Diagnon Corporation.
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 14th day of July, 1997, by and between DIAGNON
CORPORATION, a Delaware Corporation, hereinafter referred to as "Diagnon" and
Xx. Xxxx Xxxxxx, hereinafter referred to as "Xx. Xxxxxx".
WHEREAS Xx. Xxxxxx is currently serving as President, Chief Executive
Officer, a member of the Executive Committee and as a director of Diagnon and
WHEREAS the Board of Directors of Diagnon recognized that Xx. Xxxxxx'x
contribution to the growth and success of Diagnon, has been substantial and
WHEREAS Diagnon wishes to assure continued employment of Xx. Xxxxxx in
these positions pursuant to the terms and conditions hereinafter set forth,
and
WHEREAS, these terms and conditions are satisfactory to Xx. Xxxxxx.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment. Diagnon hereby employs Xx. Xxxxxx as its President, Chief
Executive Officer, a member of its Executive Committee and as director of
Diagnon upon the terms and conditions herein after set forth. Xx. Xxxxxx will
also serve as President and Chief Executive of its subsidiaries Enhanced
Therapeutics, Inc. and BIOQUAL, Inc. As President and Chief Executive Officer,
Xx. Xxxxxx shall be subject to the direction and control of the Board of
Directors of Diagnon.
2. Compensation. For this services rendered under this Agreement Xx. Xxxxxx
shall receive a base salary of $275,000 per year. The following incentive
compensation is a part of their agreement:
(a) A bonus determined by the Board of Directors based on a variety of
criteria that are unspecified, may be made available after close of each
Fiscal Year. This will be capped at $40,000, unless changed by the
Compensation Committee.
(b) A Split Dollar Whole Life Insurance policy for $1,000,000 will be
carried for Xx. Xxxxxx with beneficiary designated by Xx. Xxxxxx.
(c) An individual disability insurance policy will be carried for Xx.
Xxxxxx, supplementing the group insurance disability.
(d) Additional incentive compensation may be provided at the discretion of
the Board of Directors and/or the Compensation Committee.
3. Conditions of Employment and Fringe Benefits. Xx. Xxxxxx shall be entitled to
vacations, sick leave, and fringe benefits consistent with the policies of
Diagnon, in addition to those fringe benefits to which Xx. Xxxxxx is entitled as
President and Chief Executive Officer of BIOQUAL, Inc. and Enhanced
Therapeutics, Inc., if any.
4. Terms of Employment. Unless terminated earlier pursuant to the provisions of
the Agreement, the Agreement shall remain in effect for a five (5) year period.
If there is a "change of control of Diagnon", the Agreement shall remain in
effect for the remainder of the five (5) year period or an
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additional 2 1/2 years, whichever is greater. For the purpose of this Agreement
a "change in control" shall be considered to occur whenever, as a result of a
change in ownership of Diagnon stock, individuals who are currently members of
the Board of Directors cease for any reason to constitute at least a majority of
the Board of Directors of Diagnon unless the election of individuals who are not
currently directors has been approved in advance by at least two thirds of the
current directors of Diagnon. This Agreement may be terminated prior to the end
of its five year term under the following circumstances:
(a) upon the death of Xx. Xxxxxx during the term of this agreement;
(b) in the event that Xx. Xxxxxx incurs a disability which is an injury or
a sickness which restricts his ability to perform the material and substantial
duties as President and Chief Executive Officer and prevents him from working on
a full-time basis on behalf of Diagnon for a period in excess of six consecutive
months;
(c) in the event that Diagnon and Xx. Xxxxxx mutually agree to the
termination of employment;
(d) in the event that Xx. Xxxxxx is discharged for cause. Xx. Xxxxxx will
be considered to have been discharged for cause in the event (i) he is convicted
of any offense punishable as a felony, (ii) he admits in writing to the
commission of a crime against Diagnon or (iii) he engages in activities which
compete with the business of Diagnon.
(e) Xx. Xxxxxx may terminate his employment hereunder in the event of a
failure by Diagnon to comply with any material provision of the Agreement which
has not been cured within ten (10) days after notice of such noncompliance has
been given by Xx. Xxxxxx to Diagnon's Board of Directors.
5. Notice of Termination. Any termination of Xx. Xxxxxx'x employment by Diagnon
or by Xx. Xxxxxx (other than termination due to the death of Xx. Xxxxxx) shall
be communicated by written Notice of Termination to the other party hereto. For
purposes o this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in the agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Xx. Xxxxxx'x employment under the provision
as indicated.
The date of termination shall be determined as follows;
(a) if Xx. Xxxxxx'x employment is terminated by his death, the date of
this death;
(b) if Xx. Xxxxxx'x employment is terminated due to disability, the sixth
month anniversary of the date Xx. Xxxxxx was first absent from work due to the
disability, provided, that he has not returned to the performance of his duties
on a full-time basis during such time; and
(c) if Xx. xxxxxx'x employment is terminated for any other reason, the
date specified in the Notice of Termination.
If within thirty (30) days after any Notice of Termination is given, the
party receiving such Notice of Termination notifies the other party that a
dispute exist concerning the termination, the date of the termination shall have
been deemed the date on which the dispute is finally resolved, either by mutual
written agreement of the parties, by a binding and final arbitration award, or
by final judgement, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been taken).
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6. Compensation Upon Termination
(a) If Xx. Xxxxxx'x employment is terminated by his death, Diagnon shall
pay to his estate the total compensation which otherwise would have been payable
to Xx. Xxxxxx for the twelve month period following the date of his death.
Payments to his estate shall be made bi-weekly.
(b) If Xx. Xxxxxx is unable to perform his duties hereunder as a result of
incapacity due to disability, he shall continue to receive his salary until his
employment is terminated pursuant to Paragraph 5(b) above.
(c) If Xx. Xxxxxx is terminated for cause, or if Diagnon and Xx. Xxxxxx
mutually agree to terminate Xx. Xxxxxx'x employment, the date stated in the
Notice of Termination shall be the date employment is terminated and thereafter
Diagnon shall have no further obligation to Xx. Xxxxxx under this Agreement.
7. Agreement Not To Compete. Xx. Xxxxxx agrees that during the term of this
employment by Diagnon and or a period of three (3) years following termination
of employment, so long as Diagnon has not breached this Agreement, he will not,
directly or indirectly, engage in activities competitive with the activities of
Diagnon, either as sole proprietor, partner, stockholder, officer, director,
agent, consultant, independent contractor, or in any other capacity with the
exception of government contract work in the scientific field in which Xx.
Xxxxxx has been normally making a livelihood. In the event of breach of this
Agreement Diagnon shall have the right to injunctive relief against such
violation, as well as any other rights and remedies provided by law. In this
connection Xx. Xxxxxx acknowledges that his services are unique and that
monetary damages may not adequately compensate Diagnon for its losses resulting
from violation of this agreement not to compete.
8. Confidential Information. Xx. xxxxxx shall keep confidential any trade
secrets or other confidential information derived as a result of his services on
behalf of Diagnon and, on termination of his employment, will turn over to
Diagnon all document's relating to his employment by Diagnon and the business
activities of Diagnon except those documents in which Xx. Xxxxxx has a
proprietary interest (e.g., copies of professional papers, transcripts of
speeches, etc.).
9. Notices. Any notices required to be given pursuant to this Agreement shall be
in writing and shall be sent by registered or certified mail, return receipt
requested, to the parties at the following addresses:
If to Diagnon delivered or addressed to:
Diagnon Corporation
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
With a copy delivered or addressed to:
Xx. Xxxxx X'Xxxxx
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
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If to Xx. Xxxxxx, addressed to:
Xx. Xxxx X. Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
With a copy to:
Xx. Xxxxxx Xxxxxxx
0000 X Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
10. Arbitration. Any controversy or claim arising out of or relating to this
contract, or breach thereof, shall be settled by arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association, and
judgement upon the award rendered by the Arbitration(s) may be entered in any
Court having jurisdiction thereof.
11. Renewal. At the option of Diagnon, the employment of Xx. Xxxxxx may be
renewed from year to year under such terms and conditions as are mutually agreed
to by Diagnon and Xx. Xxxxxx. Diagnon shall require any successor to all or
substantially all of the business and/or assets of Diagnon expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that Diagnon would be required to perform if not such succession had been taken.
This agreement shall be binding upon the parties hereto and their respective
heirs, successors and permitted assigns.
IN WITNESS WHEREOF the undersigned have executed this Agreement as of this day
14th of July, 1998.
ATTEST DIAGNON CORPORATION
/s/ Xxxxxxx X. X'Xxxxxxxx BY: /s/ Xxxxxxx X. Xxxxxx
____________________________ ____________________________
/s/ Xxxxxxx X. X'Xxxxxxxx BY: /s/ Xxxxxxx X. Francisco
____________________________ ____________________________
/s/ Xxxxxxx X. X'Xxxxxxxx BY: /s/ X. Xxxxxx August
____________________________ ____________________________
BY:
____________________________ ____________________________
WITNESS
/s/ Xxxxxxx X. X'Xxxxxxxx /s/ Xxxx X. Xxxxxx
____________________________ ____________________________
Xx. Xxxx X. Xxxxxx
