EXHIBIT 10(m)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the Effective Date (as defined below)
between Computerized Thermal Imaging, Inc., a Nevada corporation (the
"Company"), and Xxxxx Xxxxxx, an individual residing in Kaysville, Utah (the
"Employee") (hereinafter collectively, the "Parties").
W I T N E S S E T H:
1. EMPLOYMENT. The Company hereby employs the Employee, and Employee
accepts such employment by the Company, upon all the terms and conditions
hereinafter stated, and as subject to termination as provided in Section 4
hereof. Employee is employed as President of the Company, and in such capacity
will report to the Chief Operating Officer of the Company in the performance of
his duties hereunder.
2. EXTENT OF SERVICE. The Employee shall devote his full time, attention
and energy to the business of the Company, and, except as may be specifically
permitted by the Board, shall not be engaged in any other business activity
during the term of this Agreement. The foregoing shall not be construed as
preventing the Employee from making passive investments in other businesses or
enterprises, if (i) such investments will not require services on the part of
the Employee which would in any way impair the performance of his duties under
this Agreement, (ii) such other businesses or enterprises are not engaged in
any business competitive with the business of the Company, and (iii) the
Employee has complied with Section 8 of this Agreement with respect to such
passive investment.
3. COMPENSATION.
(a) SALARY. (1) As payment for the services to be rendered during
the term of this Agreement, Employee shall be entitled to receive a salary of
One Thirty Five Thousand and No/100 Dollars ($135,000.00) per year, payable in
twelve (12) equal monthly installments of Eleven Thousand Two Hundred Fifty and
No/100 Dollars ($11,250.00), payable in accordance with the payroll policies of
the Company in effect from time to time. During the term of this Agreement,
the Employee shall be entitled to participate in all employee benefit and
insurance plans maintained from time to time by the Company for the benefit of
its employees, in accordance with the policies of the Company in effect from
time to time. The Employee shall be entitled a minimum of three weeks annual
vacation time and to any additional annual vacation time as determined in
accordance with the vacation policies of the Company in effect from time to
time. All such benefit plans are subject to change or termination from time to
time by Company in its sole and absolute discretion.
(b) OPTIONS. Employee shall receive, in addition to the salary,
employee benefits, and bonus specified in Section 3(a) above, an option to
purchase common stock of the Company, as more fully described and subject to:
(i) the conditions set forth in EXHIBIT A attached hereto and incorporated by
reference herein and (ii) that certain 1995 Incentive Stock Plan (the "Plan")
of the Company attached hereto as EXHIBIT B.
(c) REGISTRATION RIGHTS. All stock in the Company which Employee
obtains from the exercise of options granted to Employee in paragraph (b) of
this Section 3 will be subject to the following "piggy-back" registration
rights:
If the Company at any time proposes to file, or does file, any registration
statement covering the class of securities of the Company which you then hold,
whether that registration is for securities to be issued by the Company or then
held by another party, you will have the right to have any part or all of the
securities of the Company you then hold to be registered under such proposed
registration statement. If you wish to have any securities you then hold to be
so registered, you will notify the Company in writing of your desire within
thirty (30) days after the date you receive your notice of proposed
registration from the Company. Upon receipt of your timely request for
registration under this paragraph, the Company will add the securities you
requested be registered to the proposed registration statement; provided, that
if after you make a request for registration the Company decides not to
register or delay such registration, for any reason, the Company will give you
written notice of its decision. However, no such determination will prejudice
your rights to other and further registrations made by the Company or with
respect to Company securities
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from time to time. The Company will bear all costs and expenses of each and
all such registrations incurred in connection with the exercise of rights by
you under this paragraph.
4. TERM; TERMINATION.
(a) The term of this Employment Agreement shall commence on the
first date when Employee reports for work for the Company after the date hereof
(the "Effective Date") and shall continue thereafter for a period of three (3)
years, subject to the terms and conditions herein stated; provided that
Employee may terminate this Agreement at any time hereafter by giving the
Company at least fourteen (14) days' prior written notice. If Employee
voluntarily terminates this Agreement, Company shall have no further financial
liability to Employee beyond the effective date of such termination.
(b) If during the term of this Agreement Employee is prevented for a
continuous period of thirty (30) days from performing his duties hereunder by
reason of physical or mental disability ("Disability"), then the Company, on
seven days' prior written notice to the Employee, may terminate this Agreement.
In the event of a termination pursuant to this paragraph 4(b), the Company
shall be relieved of all of its obligations under this Agreement, except that:
(i) the Company shall pay to the Employee that portion of the Employee's wages
earned and accrued by Employee prior to Employee's termination, and (ii) to the
extent provided in the Plan, to exercise the Options described in Paragraph
3(c) hereof.
(c) The Company may at any time discharge the Employee for Cause (as
hereinafter defined) and terminate this Agreement without any further liability
hereunder to the Employee or his spouse or estate, except for the obligation of
the Company to pay the Employee's wages earned to the date of discharge. For
purposes of this Agreement, the Company shall have "Cause" to terminate the
Employee's employment upon (i) the gross negligence of the Employee in
performing his duties hereunder (other than any such failure resulting from the
Employee's incapacity due to physical or mental illness), (ii) the willful
engaging by the Employee in conduct amounting to fraud or embezzlement or any
other act by Employee which is negligently or willfully performed which has the
effect of damaging the reputation of the Company or its business, (iii) breach
of fiduciary duty as an officer and/or director of the Company, (iv) the
violation by the Employee of any material provision of this Agreement,
including but not limited to the provisions of Sections 5, 6, 7, 8 or 10 hereof.
5. BUSINESS OPPORTUNITIES. Subject to the provisions of Paragraph 2(b),
for as long as the Employee shall be employed by the Company, the Employee
agrees that with respect to any new and future business opportunity or other
new and future business proposal which is offered to, or comes to the attention
of, the Employee during employment and which is in any way related to, or
connected with, the business of the Company or its affiliates, the Company
shall have the right to take advantage of such business opportunity or other
business proposal for its own benefit. The Employee agrees to promptly deliver
notice to the board of directors of the Company in writing (the "Notice of
Opportunity") of the existence of such opportunity or proposal and the Employee
may take advantage of such opportunity only if the Company does not elect to
exercise its right to take advantage of such opportunity within thirty (30)
days after receipt of the Notice of Opportunity. Thereafter, the Company shall
be deemed to have waived its rights to such opportunity and the Employee shall
have the right to pursue such opportunity upon the terms and conditions set
forth in this Agreement, specifically subject to the terms of Section 2 of this
Agreement.
6. INTELLECTUAL PROPERTY. Employee hereby assigns to the Company all
inventions, processes, discoveries and improvements (whether or not patentable)
which are conceived, made or learned by Employee alone or jointly with others
in the course of his employment with the Company that pertain to the business
interests of the Company or relating to areas which may be reasonably
anticipated to be encompassed by such business interests of the Company at the
time of conception. Employee at any time during or after his employment will
promptly disclose to the Company all such processes, inventions, discoveries or
improvements assigned hereby. Employee will also at the Company's expense
cooperate in all lawful acts which may be necessary or desirable in the
judgment of the Company to protect or vest title to such inventions, processes,
discoveries or improvements in the Company or its nominee including, without
limitation, applying for, obtaining, maintaining, and enforcing patents thereon
in all countries of the world, and including execution of papers appropriate
thereto.
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7. CONFIDENTIAL INFORMATION. The Employee acknowledges that he will
receive or come in contact with, among other things, trade secrets (both
technical and non-technical), know-how, lists of customers, suppliers,
contractors, customers, employee records and other confidential and proprietary
information about the business of the Company (hereinafter collectively
referred to as "information"), all of which the Company considers highly
confidential, giving the Company significant advantage over competitors, and
which the Company desires to protect. The Employee understands that such
information is the sole property of the Company, and that the information is
confidential, and he agrees that both during and after his employment with the
Company he will not at any time use or reveal such information to anyone except
as permitted by the Company or required by Employee's employment duties with
the Company. Upon termination of employment hereunder, the Employee agrees to
surrender to the Company all papers, documents, writings and other property
produced by him or coming into his possession by or through his employment
hereunder, and the Employee agrees that all such materials and information will
at all times remain the property of the Company.
8. RESTRICTIVE COVENANT. In consideration of $10.00 and other good and
valuable separate consideration given by Company to Employee, Employee agrees
that during the period of time that the Employee is employed by the Company and
for a period of two (2) year(s) following the termination of this Agreement for
any reason, the Employee shall not, except as expressly approved in writing by
the Board of Directors of the Company, directly or indirectly:
(a) (i) cause or be instrumental in the formation of, or
(ii) within any state in which the Company then conducts business
engage in, whether as principal, agent, trustee, member or
employee or through the agency of any corporation, partnership,
association, agent or agency,
any business competitive with the business then conducted by the Company or
its subsidiaries or affiliates (a "Competing Business");
(b) be the owner of more than one percent (1%) of the equity (whether
capital stock, membership or partnership interests) of any entity
(except for stock publicly traded on any recognized stock exchange)
which is engaged, directly or indirectly, in a Competing Business; or
(c) through any person, firm, association or corporation with which he is
now or may hereafter become associated, cause or induce any present or
future employee of the Company to leave the employ of the Company or
to accept employment with the Employee or with any Competing Business.
The foregoing agreement not to compete shall not be held invalid or
unenforceable because of the scope of the territory or actions subject thereto
or restricted thereby, or the period of time within which such agreement is
operative, but any judgment of a court of competent jurisdiction may define the
maximum territory and actions subject to and restricted by this Section 8 and
the period of time during which such agreement is enforceable. In the event
the Company shall cease to do business, this Section 8 shall not apply.
9. SPECIFIC PERFORMANCE; SURVIVAL. The Employee acknowledges that a
remedy at law for any breach or attempted breach of Sections 5, 6, 7 or 8 of
this Agreement will be inadequate, agrees that the Company shall be entitled to
specific performance and injunctive and other equitable relief in case of any
such breach of attempted breach, and further agrees to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such injunctive or any other equitable relief. The Parties hereto acknowledge
that the covenants contained in Sections 5, 6, 7, 8 and 9 shall survive the
termination of this Agreement, by either party, for any reason.
10. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such provision or invalidity only, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
11. BINDING EFFECT. This Agreement shall be binding on the parties
hereto when executed by Employee and the Chief Executive Officer of Company.
Employee acknowledges and agrees that no representative of Company
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other than the Chief Executive Officer has any authority to enter into any
employment contract or bind Company unless authorized in writing by the Chief
Executive Officer of Company to do so.
12. TEXAS LAW TO APPLY; ARBITRATION. This Agreement shall be governed by
and construed pursuant to the laws of the State of Texas, notwithstanding
conflicts of laws principles thereof. Company and Employee hereby submit to
the jurisdiction of the courts, mediations and arbitral panels located in, and
agree that venue shall lie for all purposes in, Xxxxxx County, Texas. EXCEPT
FOR ACTIONS INVOLVING REQUESTS BY COMPANY FOR RELIEF UNDER PARAGRAPH 9 HEREOF,
EMPLOYEE AND COMPANY HEREBY KNOWINGLY AND VOLUNTARILY AGREE THAT ANY DISPUTES
OR CONFLICTS IN ANY WAY ARISING OUT OF OR RELATING TO THE EMPLOYMENT RELATION
BETWEEN EMPLOYEE AND COMPANY CREATED BY THIS AGREEMENT SHALL BE MEDIATED OR
ARBITRATED, AT THE WRITTEN ELECTION OF EITHER PARTY HERETO. IF EITHER EMPLOYEE
OR COMPANY MAKE A PROPER ELECTION TO MEDIATE UNDER THIS PARAGRAPH 12, BUT SUCH
MEDIATION EFFORTS FAIL TO RESOLVE THE SUBJECT DISPUTE(S) BETWEEN THE PARTIES,
THE PARTIES SHALL BE BOUND TO RESOLVE THE SUBJECT DISPUTE(S) BY BINDING
ARBITRATION. WHERE THE SUBJECT DISPUTE(S) ARE ULTIMATELY RESOLVED BY
ARBITRATION, THE PARTIES HERETO IRREVOCABLY AGREE TO BE BOUND BY ALL FINDINGS
OF FACT AND CONCLUSIONS OF LAW OF THE ARBITRATOR(S) SELECTED. Either party
may elect under this paragraph 12 to proceed either to mediation or arbitration
by delivery of written notice to the opposing Party and to the Judicial
Arbitration and Mediation Services office where such proceeding is to be held.
Each mediation or arbitration proceeding hereunder will be conducted in
accordance with the rules of the Judicial Arbitration and Mediation Services
(the "JAMS Rules"), including selection of mediator(s) or arbitrator(s). The
mediation or arbitration will be held in Houston, Texas, unless both parties
agree to another location. All federal and state laws applicable to this
agreement relating to arbitration or mediation of conflicts shall be fully
complied with by the parties.
13. NOTICES. Any notices required by this Agreement shall be effectively
given if given in writing by personal delivery or by depositing same in the
United States mail, registered or certified, postage prepaid, return receipt
requested. For purposes of this provision, Company's address shall be 000
Xxxxx Xxxxx Xx. #000, Xxxx Xxxxxx, Xxxxxx 00000, or at such other place as may
be designated by Company from time to time. Employee's address shall be that
set forth below or at such other place as may be designated by Employee from
time to time.
14. ASSIGNMENT. This Agreement may not be assigned by the Employee.
Neither the Employee, his spouse nor their estates shall have any right to
commute, encumber or dispose of any right to receive payments hereunder, it
being that such payments and the right thereto are nonassignable and
nontransferable.
15. ENTIRE AGREEMENT. This Agreement, together with all exhibits and
attachments hereto and all documents and instruments executed and delivered in
connection herewith, constitutes the entire agreement of the parties hereto,
and supersedes all prior understandings with respect to the subject matter
hereof.
16. ACKNOWLEDGMENT. Employee acknowledges that he has read and
understands this Agreement, and that he has received a fully executed copy of
same.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the Effective Date.
THE COMPANY:
COMPUTERIZED THERMAL IMAGING, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx, Chief Executive Officer
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THE EMPLOYEE:
Dated: April 30, 1997 /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
0000 Xxxxx Xxx Xxxxx
Xxxxxxxxx, XX 00000
(000) 000-0000 Telecopier
(000) 000-0000 Voicemail
EXHIBITS
A - CTI Stock Option (500,000 shares)
B - 1995 Incentive Stock Plan
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EXHIBIT "A"
COMPUTERIZED THERMAL IMAGING, INC.
EMPLOYEE STOCK OPTION AGREEMENT
Pursuant to that certain Employment Agreement (the "Employment Agreement")
dated of even date herewith between Computerized Thermal Imaging, Inc. (the
"Company") and Xxxxx Xxxxxx (the "Employee"), the Company hereby grants to
Employee, subject to all terms and conditions of the Employment Agreement, this
Option Agreement, and that certain Computerized Thermal Imaging, Inc. 1995
Stock Option Plan (the "Plan") of the Company, a copy of which is attached
hereto and incorporated by reference herein for all purposes, the option to
purchase Five Hundred Thousand (500,000) shares (the "Shares") of the Company's
Common Stock, $0.001 par value per share, at a price per share equal to $0.97
("fair market value" under the Plan as of the execution date of the Employment
Agreement).
Subject to forfeiture as hereafter provided, this Option becomes vested to
the extent hereafter provided and may be exercised by Employee, as follows: (i)
this Option may be exercised as to 166,666.67 shares (the "Initial Shares"),
and this Option becomes fully vested with respect to the Initial Shares, from
and after the first anniversary date of Employee's continuous employment with
the Company, and (ii) this Option may be exercised as to the second 166,666.67
shares (the "First Additional Shares"), and this Option becomes fully vested
with respect to the First Additional Shares, from and after the second
anniversary date of Employee's continuous employment with the Company, and
(iii) this Option may be exercised as to the third 166,666.67 shares (the
"Second Additional Shares"), and this Option becomes fully vested with respect
to the Second Additional Shares, from and after the third anniversary date of
Employee's continuous employment with the Company. The rights granted under
this Option must be exercised, if at all, on or before the expiration of five
(5) years from the date hereof.
The Option shall be forfeited, to the extent not previously exercised,
with respect to all shares for which the Option has not vested in accordance
with the immediately preceding paragraph AND been exercised, if, as, and when
Employee's employment with the Company is terminated by the Company for Cause
(as defined in the Employment Agreement) or is voluntarily terminated by the
Employee.
If, as, and when Employee desires to exercise this Option, he may do so by
delivering written notice of such exercise to the Company at its offices in
Lake Oswego, Oregon, together with appropriate payment for the number of shares
covered by such notice.
The Employee hereby accepts and agrees to be bound by all the terms and
conditions of the Plan, to which this Option and the Shares are subject.
Computerized Thermal Imaging, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxx, Chief Executive Officer
AGREED TO AND ACCEPTED this
30 day of April,
1997.
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx, Employee
Date: ________________, 1997
Exhibit B - CTI 95 Stock Option Plan - See "DRC/CTI/Exhibit B" or
"DRL/CTI\Stock95.Fnl"
