EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This Agreement is made as of this 16th day of April, 2001, by and
between Primedex Health Systems, Inc., a New York corporation, having its
principal place of business at 0000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000, hereinafter referred to as Employer, and Xxxxxxx X. Xxxxxx, 00000 Xxxx
Xxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, hereinafter referred to as Employee.
Employee shall serve as Vice President and General Counsel of Employer.
PART 1.
TERM OF EMPLOYMENT
Section 1.1. PERIOD OF EMPLOYMENT. Employer hereby employs Employee and
Employee hereby accepts employment with the Employer for a period of five (5)
years, commencing on June 1, 2001, and terminating five (5) years thence. As
used herein, the phrase "Employment Term" refers to the actual period of
employment of Employee by Employer hereunder, whether for the period provided
above, or whether terminated earlier as hereinafter provided, or extended by
mutual agreement by Employer and Employee. At the end of the initial five-year
term this Agreement shall automatically renew for successive one (1) year terms
unless either party delivers written notice of such Party's intention not to
renew at least ninety (90) days prior to the then applicable termination date.
Section 1.2. EARLY TERMINATION FOR CAUSE.
(a) Either Party may immediately terminate this Agreement for
cause, which shall be any material breach of this Agreement which persists
thirty (30) days after the noticed Party is served notice, as described in
Section 6.2. Employer may immediately terminate this Agreement for cause, if
Employee willfully breaches or habitually neglects the duties Employee is
required to perform under the terms of this Agreement, or commits any acts of a
criminal nature, fraud, dishonesty, misrepresentation, or any acts of moral
turpitude. In any such case, Employer may terminate this Agreement by giving
written notice to Employee advising Employee of the specific acts or omissions
constituting the basis for such termination and such acts or omissions continue
after Employee shall have had reasonable opportunity (which shall be defined as
15 days from the date Employee received said notice) to correct the specific
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acts or omissions, which termination shall become effective if Employee has not
cured the complained of acts, or omissions, or if not capable of complete cure
within the 15 day period, then begun the cure and proceeds diligently to
completion. A termination shall be without prejudice to any other remedy to
which Employer or Employee may be entitled, either by Law, or in equity, or
under the terms of this Agreement.
(b) Notwithstanding any provision of this Agreement, if
Employer terminates this Agreement pursuant to Subsection 1.2(a), it shall pay
Employee on the effective date of such termination an amount equal to one year
of Employee's Base Salary at the then current rate.
Section 1.3. EARLY TERMINATION WITHOUT CAUSE.
(a) Either party may terminate this Agreement without cause at
any time upon ninety (90) days' prior written notice to the other. This ninety
(90) day period is hereinafter referred to as the "Notice Period." In the event
of such termination, the following provisions apply:
(i) Notwithstanding anything to the contrary
contained in this Agreement, in the event that Employer terminates this
Agreement without cause, Employee, if requested by Employer, shall continue to
perform his obligations and duties under this Agreement and assist with the
transition of duties to a new executive during the Notice Period. Employer, at
its option, may notify Employee at any time during the Notice Period that no
further services are to be performed.
(ii) In the event that Employee terminates this
Agreement or otherwise resigns his position with Employer without cause,
Employee shall be entitled only to Employee's Base Salary accrued through the
effective date of termination, plus any accrued but unused vacation time. If
requested by the Employer, Employee will perform his regular duties during the
Notice Period and assist in the transition of duties to a new executive.
(b) In the event of termination of this Agreement pursuant to
Subsection 1.3(a), Employer shall pay to Employee on the effective date of such
termination an amount equal to the sum of (i) Employee's Base Salary to the date
of termination; (ii) an amount equal to Employee's Base Salary for the balance
of the Term but no less than five (5) years, without regard to its
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termination, (iii) an amount equal to the cost of benefits which Employee would
have received during the balance of the term of this Agreement without regard to
its termination and (iv) any accrued but unused vacation time.
(c) This Agreement shall terminate upon the death or total and
permanent disability of Employee. Employee shall be deemed to be totally and
permanently disabled in the event that he is unable to regularly and
consistently perform his normal duties as contemplated hereunder for a
continuous period of six (6) months. In the event that this Agreement terminates
due to Employee's death or total and permanent disability, Employer shall pay to
Employee upon such termination Employee's Base Salary accrued through the date
of Employee's death or the end of the six (6) month period during which he or
she becomes totally and permanently disabled, as the case may be.
Section 1.4. EFFECT OF MERGER, TRANSFER OF ASSETS, OR DISSOLUTION.
(a) This Agreement shall not be terminated by any voluntary or
involuntary dissolution of Employer resulting from either a merger or
consolidation in which Employer is not the consolidated or surviving
corporation, or a transfer of all or substantially all of the assets of
Employer.
(b) In the event of any such merger or consolidation or
transfer of assets, Employer's rights, benefits, and obligations hereunder shall
be assigned to the surviving or resulting corporation or the transferee of
Employer's assets.
(c) In the event of the occurrence of an event pursuant to
Section 1.4(a) then Employee shall have from the date of the announcement of
such event through sixty (60) days from the occurrence of such event within to
elect to terminate this Agreement whereupon Employee shall be paid in accordance
with Section 1.3(b) hereinabove.
PART 2.
DUTIES OF EMPLOYEE
Section 2.1. GENERAL DUTIES. Employee shall serve as Vice President,
and General Counsel of Employer. Employee shall direct the legal affairs of
Employer and such other management duties as shall be designated by the
president and chief operating officer of the Employer, subject always to the
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policy set by Employer. Employer shall provide Employee with an office,
facilities, equipment and personnel in keeping with the position to which he is
employed and as necessary to assist in the proper function of his job.
Section 2.2. DEVOTION OF TIME TO EMPLOYER'S BUSINESS. Employee shall
devote the majority of his productive time, ability, and attention to the
business of Employer during the term of this Agreement. Employee shall not
directly or indirectly render any services of a business, commercial, or
professional nature to any other person or organization for compensation without
the prior written consent of Employer. Notwithstanding the foregoing, Employer
agrees that Employee may continue to engage in the private practice of law,
either individually or with a law firm so long as such activities do not include
representation of any clients in the medical imaging business and so long as
such activities do not materially interfere with Employee's performance pursuant
to this Agreement. It is anticipated such time will not average more than twenty
(20) hours per week per year.
PART 3.
COMPENSATION OF EMPLOYEE
Section 3.1. SALARY. As compensation for his services hereunder,
Employee shall receive a salary at the rate of Three Hundred Fifty Thousand
Dollars ($350,000) per annum, exclusive of the Employer benefits to Employee
described elsewhere in this Agreement, payable in equal installments every other
week on Employer's standard payment dates. Nothing contained herein is intended
to prohibit Employer from making salary increases based upon business growth
and/or executive performance by Employee as determined annually by Employer.
Section 3.2. OPTION EXTENSION. Upon execution of this Agreement
Employer will extend Employee's outstanding options to acquire one hundred
forty-five thousand (145,000) shares of Employer's common stock for an
additional period through and including May 31, 2006.
Section 3.3. NONSTATUTORY STOCK OPTION. The Employer hereby grants
Employee an option to purchase one million (1,000,000) shares of common stock of
Employer at a purchase price of forty-three cents ($0.43)per share, the closing
price in the public market in which the Company's common stock trades as of the
date of this Agreement. The number of shares subject to this option
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shall be proportionately adjusted for any change in the stock structure of
Employer because of share dividends, recapitalizations, reorganizations,
mergers, or otherwise. The option is not assignable and may only be exercised by
Employee during the term of employment under this agreement; provided, however,
that in the event that the employment term is terminated by Employer for reasons
other than cause against Employee, Employee shall retain the right to exercise
any unused portion of the option until June 1, 2006. The option may be exercised
in whole or in part but may only be exercised in lots of one hundred thousand
(100,000) shares or more. Employee shall not have any of the rights of, nor be
treated as, a shareholder with respect to the shares subject to this option
until he has exercised that option and has become the shareholder of record of
those shares.
PART 4.
EMPLOYEE BENEFITS
Section 4.1. USE OF AUTOMOBILE. Employer shall provide an automobile
allowance to Employee of no less than Eight Hundred Dollars ($800) per month or
such greater amount as is necessary to provide Employee with an executive
automobile, plus the cost of gas, oil, maintenance, and insurance expenses of
said automobile.
Section 4.2. MEDICAL COVERAGE. Employer agrees to provide Employee and
Employee's immediate family eligible dependents with a standard Medical benefit
package (non-HMO), and at all times no less advantageous than that package, as
offered to other senior executives of Employer, throughout the term of this
Agreement.
Section 4.3. DENTAL COVERAGE. Employer agrees to provide Employee and
Employee's immediate family eligible dependents with a standard Dental benefit
package, as offered to other executives of Employer, throughout the term of this
Agreement.
Section 4.4. VACATION. Employee shall be entitled to six (6) weeks of
fully compensated vacation time per annum. Vacation time shall cease to accrue
at such times as an amount equal to two (2) years of vacation time shall have
been earned and not have been used until such time as it shall be used.
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Section 4.5. HOLIDAY BENEFITS. Employee shall receive, throughout the
term of this Agreement, the standard holiday benefits, as pro rata accumulated,
as offered to other employees of Employer, which are a minimum of seven full
days and two one-half (1/2) days per annum.
Section 4.6. SICK LEAVE BENEFIT. Employer agrees to provide Employee
throughout the term of this Agreement with up to a maximum of twelve (12) days
in aggregate sick leave per annum, as pro rata accumulated, for bona fide
illness/injury, without loss of compensation. Sick leave benefit shall be
cumulative and credited unto future years, if not utilized concurrently.
Section 4.7. PROFESSIONAL FEES/JOURNALS/SOCIETY MEMBERSHIPS. Employer
shall pay or reimburse Employee, Employee's costs in maintaining professional
memberships, continuing education and related expenses.
Section 4.8. DIRECTORS AND OFFICERS INSURANCE. Employer shall provide
Employee with a standard directors and officers insurance policy, as provided by
Employer to other directors and/or officers.
Section 4.9. WORKER'S COMPENSATION COVERAGE BENEFIT. Employer shall
provide Employee with a Worker's Compensation insurance coverage
throughout the term of this Agreement.
Section 4.10. PROFIT SHARING, Bonus and Retirement Plan Benefit.
Employee shall be entitled to participate on the same terms and conditions as
other employees in Employer's 401(k) qualified Profit-Sharing and Retirement
Plan and any other stock option or bonus programs.
Section 4.11. USE OF CELLULAR PHONE. Employer shall provide Employee
with a cellular phone and cover all associated fees.
PART 5.
BUSINESS EXPENSES
Section 5.1. BUSINESS EXPENSES. The services required by Employer will
require Employee to incur business expenses on behalf of Employer, and Employer
hereby agrees to reimburse Employee for all bona fide and reasonable expenses,
provided that such expenses are documented by invoice to Employer.
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Section 5.2. OTHER BUSINESS EXPENSES. Employer will promptly reimburse
Employee for all other reasonable business expenses incurred by Employee in
connection with the business of Employer, including, but not limited to, travel,
society dues and state licenses required in connection with Employee's rendering
services to Employer hereunder.
PART 6.
GENERAL PROVISIONS
Section 6.1. DISAGREEMENTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
Party shall be entitled to reasonable attorneys' fees, and court costs in
addition to any other relief to which it may be entitled.
Section 6.2. NOTICES. Any notices to be given herein by either Party to
the other may be effected by personal delivery in writing, or by mail,
registered, or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the Parties at the addresses appearing in the
introductory paragraph of this Agreement, but each Party may change its or his
address by written notice in accordance with this paragraph. Notices delivered
personally shall be deemed communicated as of three (3) days after mailing.
Section 6.3. ENTIRE AGREEMENT. This Agreement supersedes any and all
other agreements, either oral or in writing, between the Parties hereto, with
respect to the employment of Employee by Employer, and contains all of the
covenants and agreements between the parties with respect to such employment in
any manner whatsoever. Each Party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, originally, or otherwise,
have been made by either Party, or any one acting on behalf of any Party, which
are not embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement will be effec tive unless it is in writing, signed
by the Party to be charged therewith.
Section 6.4. PARTIAL INVALIDITY. If any provision in this Agreement is
held by a court of competent jurisdiction to be invalid, void, or unenforceable,
the remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
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Section 6.5. CONFIDENTIALITY. In the course of performing services as
provided herein, Employee shall be engaged on behalf of Employer and use files,
records, agreements, documents, client lists, and other information of a
confidential nature, all of which are the property of and of great value to
Employer in connection with such business. Employee shall not give, sell, loan,
communicate, or otherwise disclose any of such information or materials, except
in the course of performing services as provided herein for the sole and
exclusive benefit of Employer. Upon termination of this Agreement, Employee
shall return to Employer forthwith any and all of the Employer's records,
documents, and materials in Employee's possession or control, and Employee shall
not directly or indirectly use for Employee's benefit, or for the benefit of any
other person, firm or corporation, any of such confidential materials as shall
have come into Employee's possession, use, or attention, in the course of, or as
a result of, this association with Employer, as such relates to Employer's
business.
Section 6.6. NON-SOLICITATION AGREEMENT.
(a) Employee agrees for a period of one (1) year after
termination of this Agreement, not to solicit any hospital, clinic, healthcare
facility or other client having a contractual or business relationship with
Employer or any of its affiliates or subsidiaries, or any identified prospect or
identified potential client to which a marketing proposal or presentation was
made during the one (1) year period immediately preceding the termination of
this Agreement, involving the provision of imaging or radiation therapy
healthcare services. The agreement in the preceding sentence shall not relate to
solicitations (i) by the Employee with respect to a business or activity in
which the Employer or its affiliates are not involved or (ii) with respect to
any business arrangement which is to be conducted more than thirty (30) miles
from any location of Employer or its affiliates as of the effective date of
termination.
(b) During the one (1) year period after termination of employ
ment hereunder, Employee shall not, without the prior written consent of
Employer, which consent shall not be unreasonably withheld, become employed by
or make, directly or indirectly, any proposal to acquire, alone or with others,
any business or entity, as to which substantive discussions involving a
potential acquisition, joint venture or other similar or comparable business
arrangement have been conducted by Employee or on behalf of Employer, or any of
its
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affiliates or subsidiaries during the one (1) year period immediately preceding
the termination of this Agreement.
(c) Employee further agrees to refrain from any activity of
any nature intended or reasonably calculated to result in the termination or
cancellation of any contractual or business arrangement between Employer or any
of its affiliates or subsidiaries and any insurer, client, facility or other
business or entity during the one (1) year period after termination of
employment hereunder.
(d) Nothing in this Agreement shall prevent Employee from
making passive investments in third parties so long as such investments do not
require Employee to perform any services in connection with any such investments
in such third parties.
(e) Employee shall not during a one (1) year period after the
termination of this Agreement, solicit or seek to influence, either directly or
indirectly, any employee or any healthcare provider under contract with Employer
or any of its affiliates or subsidiaries, to enter into any employment
agreement, independent contractor arrangement, or any other contractual
arrangement whereby such individual would perform services for compensation,
either directly or indirectly, for any person, firm, corporation or other entity
or business that provides products or services in competition with Employer or
any of its affiliates or subsidiaries.
Section 6.7. BREACH AND REMEDIES.
(a) Employee acknowledges that the breach or threatened breach
of any of the covenants set forth in Sections 6.5 and 6.6 may result in
immediate and irreparable injury to Employer. Accordingly, Employee agrees that
in addition to any rights or remedies available to Employer for a breach by
Employee of said sections, Employer shall be entitled to injunctive relief to
enforce the obligations of Employee contained in such Sections. Nothing herein
shall be construed as prohibiting Employer from pursuing any other legal or
equitable remedies that may be available to it for any such breach or threatened
breach, including the recovery of damages from Employee.
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(b) The periods of time provided for in Sections 6.5 and 6.6
shall be extended by any period of violation or periods of time required to
resolve by arbitration, not to exceed 45 days, any dispute regarding the
provisions thereof.
(c) Employee hereby acknowledges that the covenants set forth
in Sections 6.5 and 6.6 are reasonable in all respects and are necessary to
protect the legitimate business interests of Employer. In the event that any of
the provisions of this Agreement are found to be unenforceable or void (either
in whole or in part), then the offending portion shall be construed as valid and
enforceable only to the extent permitted by law and the balance of this
Agreement will remain in full force and effect. It is the intention of the
parties to restrict the activities of Employee only to the extent necessary to
protect the legitimate business interests of Employer, its subsidiaries and/or
affiliates, and not to deprive Employee of the right to earn a livelihood.
Section 6.8. WAIVER. No waiver by any Party to this Agreement of any
provision hereof, shall be deemed to be a waiver of any other provision hereof,
or any subsequent breach of the same, or any other provision by any other Party
or Parties hereto.
Section 6.9. AMENDMENTS. This Agreement may not be modified or
amended, except in writing executed by the Parties hereto.
Section 6.10. BINDING EFFECT. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the Parties, their
respective representatives, successors in interest and assigns.
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Section 6.11. LAW GOVERNING AGREEMENT. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California.
EMPLOYER:
PRIMEDEX HEALTH SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx Date:
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Xxxxxx X. Xxxxxx, M.D., President
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxx Date:
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Xxxxxxx X. Xxxxxx
EXHIBIT 10.14
