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EXHIBIT 15
FORM OF EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
the ____ day of ____________, 1997, by and among New Image Industries, Inc., a
Delaware corporation ("New Image"), DENTSPLY International Inc., a Delaware
corporation ("DENTSPLY") and Xxxxx X. Xxxxxxx (the "Employee"), an individual.
W I T N E S S E T H:
WHEREAS, DENTSPLY and New Image are parties to an Agreement and Plan
of Merger, dated as of January __, 1997 (the "Merger Agreement") , which
contemplates the merger of Image Acquisition Corp., a wholly owned subsidiary
of DENTSPLY ("Merger Sub") with and into New Image pursuant to which New Image,
as the surviving corporation, will become a wholly owned subsidiary of DENTSPLY
(the "Merger");
WHEREAS, the Employee presently serves as an employee of New Image
pursuant to that certain letter agreement, dated May 22, 1995, between Employee
and New Image (the "Current Employment Agreement");
WHEREAS DENTSPLY and New Image desire that the Employee continue as an
employee of New Image following the Effective Date (as defined below) on the
terms and conditions contained in this Agreement and the Employee wishes to
continue in the employ of New Image following the Effective Date on the terms
and conditions contained in this Agreement;
WHEREAS, the parties hereto desire that the Current Employment
Agreement shall terminate and be superseded by this Agreement as of the
Effective Date;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, DENTSPLY, New Image and the Employee, each
intending to be legally bound hereby, agree as follows:
1. EMPLOYMENT. New Image shall, and DENTSPLY shall cause New
Image to, employ the Employee as an employee of New Image, and the Employee
hereby accepts employment with New Image, for
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the Term (as defined in Section 3 hereof) and upon the terms and conditions
contained in this Agreement.
2. POSITION AND DUTIES.
(a) During the Term, Employee shall serve as Vice President
and General Manager of New Image or any entity (including a division of
DENTSPLY) that succeeds to all or any substantial part of the business and
operations of New Image. Employee shall be responsible for the day-to-day
management and operations of New Image or any such successor entity and shall
report to the Senior Vice President, Pacific Rim, Latin America, Gendex and
Tulsa Dental of DENTSPLY. Employee's services shall be performed at New Image's
or its successor's principal place of business, which shall be Carlsbad,
California.
(b) Employee shall at all times devote his full business time
and efforts to the performance of his duties and to promote the best interests
of the Company and its Affiliates (as defined below).
3. TERM. The term of Employee's employment pursuant to this Agreement
commences on the Effective Date and ends on February 28, 1999 (the "Term"),
unless sooner terminated as hereinafter provided. For purposes of this
Agreement, the term "Effective Date" shall mean the date upon which Merger Sub
purchases shares of New Image's common stock pursuant to the Offer (as defined
in the Merger Agreement). Upon expiration of the Term, Employee shall become an
at-will employee of New Image.
4. COMPENSATION.
(a) For all of the services rendered by the Employee to New
Image pursuant to this Agreement, Employee shall be entitled to receive the
following monetary compensation:
i) New Image shall pay Employee an annual base
salary of not less than $180,000, or such larger amount as may from time to
time be fixed by DENTSPLY (the "Base Salary"), payable in approximately equal
installments (not less frequently than monthly) in accordance with New Image's
regular payroll practices in effect from time to time. The Base Salary may be
increased from time to time by action of DENTSPLY.
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ii) Employee shall be entitled to bonus
compensation that is comparable (in the manner in which it is determined and
with respect to the timing of payment) to that of DENTSPLY's domestic executive
employees who perform duties and have responsibilities comparable to those of
Employee.
(b) Throughout the Term, Employee shall be entitled to
participate in all plans and other benefits made available by DENTSPLY
generally to its domestic executive employees who perform duties and have
responsibilities comparable to those of Employee, including (without
limitation) benefits under any pension, profit sharing, employee stock
ownership, stock option, bonus, performance stock appreciation right,
management incentive, vacation (of not less than three (3) weeks each year),
disability, annuity or insurance plans or programs. Employee's service to New
Image prior to the Effective Date shall be credited toward the service
requirements, if any, of such plans or programs. Any payments to be made to
Employee under the provisions of section 6 or 7 of this Agreement shall not be
diminished by any payments made or to be made to Employee or his designees
pursuant to any such plan, nor shall any payments to be made to Employee or his
designees pursuant to any such plan be diminished by any payment made or to be
made to Employee under the provisions of section 6 or 7.
(c) Employee shall be eligible to participate in DENTSPLY's
1993 Stock Option Plan. Following the Effective Date, DENTSPLY management will
recommend to the Compensation Committee of the DENTSPLY Board of Directors that
Employee be granted options under such plan in an amount that is determined in
a manner comparable to the manner in which option grants are determined for
DENTSPLY's domestic executive employees who perform duties and have
responsibilities comparable to those of Employee.
5. DISCHARGE.
(a) Employee may terminate this Agreement upon thirty (30)
days' prior written notice delivered to New Image within thirty (30) days after
the occurrence of one or more of the following events:
i) failure by DENTSPLY or New Image to maintain
the duties, status and responsibilities of the Employee
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substantially consistent with those of Employee's position following the
Effective Date; or
ii) a reduction in Employee's then current Base
Salary, other than any reduction implemented as part of a formal austerity
program approved by the Board of Directors of DENTSPLY and applicable to all
continuing employees of DENTSPLY and New Image, provided such reduction does
not reduce Employee's salary by a percentage greater than the average reduction
in the compensation of all employees who continue as employees of DENTSPLY and
New Image during such austerity program; or
iii) the failure of DENTSPLY to maintain and to
continue Employee's participation in DENTSPLY's benefit plans as in effect from
time to time on a basis substantially equivalent to the participation and
benefits of employees of DENTSPLY similarly situated to the Employee; or
iv) a change in the location where Employee is
required to perform his services hereunder to any location that is greater than
20 miles from the current location without Employee's prior consent; or
v) any substantial and uncorrected breach of
the Agreement by either DENTSPLY or New Image.
(b) This Agreement shall terminate as of the date of
Employee's death.
(c) New Image may terminate the Employee's employment for
Disability by giving the Employee thirty (30) days' prior written notice. For
all purposes under this Agreement, "Disability" shall mean that the Employee,
at the time notice is given, has been unable to substantially perform his
duties under this Agreement for a period of not less than six (6) months as the
result of his incapacity due to physical or mental illness, despite reasonable
accommodation by New Image. In the event that the Employee resumes the
performance of substantially all of his duties hereunder before the termination
of his employment under this section becomes effective, the notice of
termination shall automatically be deemed to have been revoked.
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6. PAYMENT UPON DISCHARGE.
(a) Upon termination of Employee's employment for whatever
reason, Employee shall be entitled to receive the compensation accrued and
unpaid as of the date of his termination. If (i) Employee at the time of
termination is eligible to receive bonus compensation or is otherwise
participating in an incentive or bonus plan maintained by DENTSPLY or New Image
and (ii) a bonus or other form of incentive payment becomes payable with
respect to the year in which termination of Employee's employment occurred,
Employee shall be entitled to receive a pro-rata share of such bonus
compensation or other incentive or bonus award based upon the number of days he
is employed during the year up to the date of his termination. Such pro-rata
amount shall be calculated in the usual way and paid at the usual time.
(b) If Employee's employment terminates upon the death
of Employee, New Image shall continue payment of (i) his then current Base
Salary for a period equal to the longer of the remainder of the Term or 12
months from the termination date, and (ii) his pro-rata share of any incentive
or bonus payments due for the period prior to the termination date. Such
payments shall be made (x) in the case of death, to Employee's designated
beneficiary or, if no beneficiary has been effectively designated, then to
Employee's estate, and (y) in the case of Disability, to Employee.
(c) If Employee's employment is terminated by the Employee
under section 5(a) or by New Image for any reason other than for "Cause" (as
defined below) or Employee's death, New Image shall continue to pay compensation
and provide benefits to the Employee as provided in this section 6(c) for a
period (the "Termination Period") beginning on the date of the termination
notice and ending on the later of the second anniversary of such date or
February 28, 1999, as follows:
i) Compensation shall be paid to the Employee
at the rate of Base Salary in effect immediately before the termination;
ii) Bonus and incentive compensation shall be
paid to the Employee in accordance with plans in which the
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Employee participated at the termination date, using the same formula and
calculations as if termination had not occurred;
iii) Employee shall receive the benefits that
would have been accrued by the Employee during the Termination Period under any
pension, profit sharing, employee stock ownership plan ("ESOP") or similar
retirement plan or plans of DENTSPLY or New Image in which the Employee
participated immediately before the termination (or, if not available, in lieu
thereof Employee shall be compensated for such benefits), based on service the
Employee would have had during the Termination Period and on the compensation
(including, if applicable, bonus and incentive compensation) as determined
under subsections (i) and (ii) above;
iv) Employee shall receive continued coverage
during the Termination Period under all employee disability, annuity, insurance
or other employee welfare benefit plans, programs or arrangements of DENTSPLY
or New Image in which Employee participated immediately before the notice of
termination, plus all improvements subsequent thereto (or, if not available, in
lieu thereof Employee shall be compensated for such coverage).
Except as provided in section 7, payment of compensation under subsection
6(c)(i) above shall be made at the same time as payments of compensation under
section 4(a), and payments of other benefits under subsection 6(c)(ii) and
(iii) shall be paid at the same time and to the same person as compensation or
benefits would have been paid under the plan, program or arrangement to which
they relate (after taking into account any election made by the Employee with
respect to payments under such plan, program or arrangement).
(d) In no event will New Image or DENTSPLY be obligated to continue
Employee's compensation and other benefits under this Agreement if Employee's
employment is terminated because of gross negligence or significant willful
misconduct (i.e., conviction of misappropriation of corporate assets or heinous
criminal offense) (any of the foregoing, "Cause").
(e) In no event shall the Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Employee under any of the
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provisions of this Agreement and such amounts shall not be reduced whether or
not the Employee obtains other employment.
7. CHANGE OF CONTROL. If at any time during the Term after a Change of
Control (as defined below), Employee's employment is terminated by the Employee
pursuant to section 5(a), or DENTSPLY or New Image terminates or gives written
notice of termination to the Employee, then in lieu of the periodic payment of
the amounts specified in subsections 6(c)(i), (ii) and (iii) (except as may be
otherwise prohibited by law or by said plans), DENTSPLY and New Image, at the
written election of Employee, shall pay to Employee within five (5) business
days of such termination or notice of termination the present value of the
amounts specified in subsection 6(c)(i), (ii) and (iii), discounted at the
greater rate of interest then payable by Bank of America on any federally
insured savings account into which Employee could deposit such amount and make
immediate withdrawals therefrom without penalty, and shall provide for the
remainder of the Termination Period, if any, the benefit coverage required by
subsection 6(c)(iv).
8. PRIOR AGREEMENTS. The Employee represents to New Image that:
(a) there are no restrictions, agreements or understandings whatsoever to which
the Employee is a party or by which he is bound which would prevent or make
unlawful his execution of this Agreement or his employment hereunder; (b) his
execution of this Agreement and his employment hereunder do not constitute a
breach of any contract, agreement or understanding, oral or written, to which
he is a party or by which he is bound; (c) he is free and able to execute this
Agreement and to enter into employment hereunder on the terms and subject to
the conditions hereof; and (d) Employee acknowledges that this Agreement
terminates and supersedes the Current Employment Agreement (except that the
provisions therein relating to the immediate vesting of options upon a Change
of Control shall continue in full force and effect in accordance with the terms
thereof subject to Section 2.11 of the Merger Agreement).
9. CONFIDENTIAL INFORMATION: INVENTION ASSIGNMENT.
(a) The Employee shall not, directly or indirectly, at any
time during the term of his employment hereunder or thereafter and without
regard to when or for what reason, if any, such employment shall terminate, use
or permit the use of
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any trade secret or other confidential, proprietary or other information of, or
relating to, DENTSPLY, New Image or any other subsidiary or affiliate of
DENTSPLY, and shall not divulge any such trade secret or information to any
person, firm or corporation whatsoever, except as may be necessary in the
performance of his duties of employment or as may be required by law or a final
determination of any court of competent jurisdiction from which no appeal can
be taken.
(b) All inventions, discoveries, designs, developments,
ideas, computer programs and reports that are made or conceived of by the
Employee in the course of his employment hereunder, whether or not patentable
or copyrightable, shall be disclosed to New Image by the Employee and shall be
and remain the sole property of New Image. The Employee hereby transfers and
assigns all right, title, copyright and interest in such works to New Image and
will, from time to time, give New Image all reasonable assistance, execute all
papers and do all things that may reasonably be required to protect and
preserve the rights of New Image in such works.
(c) The Employee represents that, in the course of performing
services hereunder, he will not breach any agreement he may have with others
with respect to confidential information, and will not bring to New Image or
use in any way materials or documents obtained from others under an agreement
of or with any restriction as to confidentiality.
10. DEFINITIONS. Any capitalized terms used in this Agreement
and not defined in this Agreement shall be given the meanings assigned to them
in the Merger Agreement. Unless otherwise provided, the following terms shall
have the following respective meanings:
(a) "Affiliate" when used with reference to any person or
entity means any other person or entity directly or indirectly controlling,
controlled by or under common control with the referenced person or entity. For
purposes of this definition, "control" means ownership of or power to vote 50%
or more of the voting stock, venture interests or other comparable
participation interests in the applicable entity.
(b) "Change of Control" means any event by which (x) an
Acquiring Person attains such status, or (y) Continuing
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Directors cease to comprise a majority of the members of the Board of Directors
of DENTSPLY (the "Board"). For purposes of this definition:
i) An "Acquiring Person" means any person or
group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder as in effect
on the date of this Agreement (the "Exchange Act") who or which, together with
all affiliates and associates (as defined in Rule 12B-2 under the Exchange Act)
becomes, by way of any transaction, the beneficial owner of shares DENTSPLY,
having more than 50% of the total number of votes that may be cause for the
election of directors of DENTSPLY; provided that an Affiliate of DENTSPLY shall
not constitute an Acquiring Person; and
ii) "Continuing Director" means any member of
the Board, while such person is a member of the Board, who is not an Acquiring
Person, or an Affiliate or associate of an Acquiring Person or a representative
of an Acquiring Person or of any such Affiliate or associate and who (A) was a
member of the Board prior to the date of this Agreement, or(B) subsequently
becomes a member of the Board and whose nomination for election or election to
the Board is recommended or approved by resolution of a majority of the
Continuing Directors or who is included as a nominee in a proxy statement of
DENTSPLY distributed when a majority of the Board consists of Continuing
Directors.
11. MISCELLANEOUS.
(a) INDULGENCES, ETC. Any failure or delay on the part of any
party to exercise any right, remedy, power or privilege under this Agreement
will not operate as a waiver thereof, nor will any single or partial exercise
of any right, remedy, power or privilege preclude any other or further exercise
of the same or of any other right, remedy, power or privilege, nor will any
waiver of any right, remedy, power or privilege with respect to any occurrence
be construed as a waiver of that right, remedy, power or privilege with respect
to any other occurrence.
(b) NOTICES. All notices, requests, demands and other
communications required or permitted under this Agreement
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must be in writing and will be deemed to have been duly given, made and
received only when delivered (personally, by facsimile transmission or by
courier service such as Federal Express, or by other messenger) or when
deposited in the United States mails, registered or certified mail, postage
prepaid, return receipt requested, addressed as set forth below:
i) If to the Employee:
Xxxxx X. Xxxxxxx
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
ii) If to New Image:
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
with a copy given in the manner prescribed
above to:
DENTSPLY International Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxx, XX 00000
Attention: Secretary
and:
Xxxxxx, Xxxxx & Bockius LLP
Xxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esquire
Any party may alter the address to which
communications or copies are to be sent by giving notice of any change of
address to the other party in conformity with the provisions of this paragraph
for the giving of notice.
(c) BINDING NATURE OF AGREEMENT; ASSIGNMENT. This
Agreement shall be binding upon and inure to the benefit of New
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Image and DENTSPLY and its successors and assigns and shall be binding upon the
Employee, his heirs and legal representatives. New Image may assign this
Agreement at any time to any subsidiary or parent of New Image, provided that
such assignee assumes all of the obligations of New Image hereunder; the
Employee may not assign this Agreement.
(d) EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which will be deemed to be an original
and all of which will together constitute one and the same instrument.
(e) PROVISIONS SEPARABLE. The provisions of this Agreement
are independent of and separable from each other, and no provision will be
affected or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or unenforceable in whole
or in part.
(f) ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter of
this Agreement, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
with respect to the subject matter of this Agreement, provided that the Current
Employment Agreement shall not be superseded by this Agreement and shall
continue in full force and effect until the occurrence of the Effective Date.
The express terms of this Agreement control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms
hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
(g) SECTION HEADINGS. The section headings in this
Agreement are for convenience only; they form no part of this Agreement and
will not affect its interpretation.
(h) GENDER, ETC. Words used herein, regardless of the number
and gender specifically used, will be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context indicates is appropriate.
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(i) GOVERNING LAW. This Agreement shall be construed
and interpreted in accordance with and governed by the laws of the State of
California, other than the conflict of laws
provisions of such laws.
(j) SURVIVAL. The provisions of Sections 8, 9, and 11 shall
survive the termination of this Agreement to the extent necessary to effectuate
the respective purposes of such provisions.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
New Image Industries, Inc.
By: _____________________________________
Name:
Title:
DENTSPLY International Inc.
By: _____________________________________
Name:
Title:
EMPLOYEE:
_________________________________________
Xxxxx X. Xxxxxxx
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