EXHIBIT 10.61
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") dated as of August
1, 1999, is made by and between Positron Corporation a Texas Corporation (the
"Company"), and Xx. Xxxx X. Xxxxxx (the "Executive").
The Company now wishes to employ the Executive and the Executive wishes
to accept such employment, subject to the terms and conditions hereof.
Accordingly, the parties agree as follows:
1. TERM OF EMPLOYMENT. The initial term of the Executive's employment
under this Agreement (the initial "Term") commenced on January 22, 1999 and will
end on June 15, 2000, unless sooner terminated as herein provided. As of June
15, 2000, the Executive shall be employed for rolling (6) six month periods,
whereby the Executive's term of employment shall be (6) six months on a
continuing basis.
2. EMPLOYMENT, DUTIES AND ACCEPTANCE.
2.1. EMPLOYMENT BY THE COMPANY. The Company, for itself and its
affiliates, employs the Executive to render services in such capacities as the
Board of Directors of the Company ("Board") may assign and, in connection
therewith, to perform such duties as are consistent with the Executive's
appointment and as the Board of Directors of the Company shall reasonably
direct. The parties agree and acknowledge that Executive's services will be
rendered on a full time basis on and after June 15, 1999. The Executive shall be
initially appointed to the position of President of the Company. In addition,
the company will nominate Executive to serve as a member of the Board. Subject
to Section 5.1.1 hereof, the Executive's expenditure of reasonable amounts of
time for personal business, charitable or professional activities will not be
deemed as a breach of his undertaking to provide full-time services hereunder,
provided that such activities do not interfere materially with the Executive's
ability to render such services.
2.2. ACCEPTANCE OF EMPLOYMENT BY THE EXECUTIVE. The Executive
accepts such employment and shall render the services described above. The
Executive shall also serve during all or any part of the Term as an officer and
director of the Company and of any of its affiliates without any additional
compensation therefor other than that specified in this Agreement.
2.3. PLACE OF EMPLOYMENT. Executive shall relocate his principal
residence at the Company's expense as provided in Section 2.4 hereof to a within
reasonable commuting distance of the Company's corporate headquarters.
Notwithstanding the foregoing, the Executive acknowledges and agrees that the
nature of his duties to be performed here under are such that he may be required
to travel extensively both throughout the United States and abroad and in some
cases spend certain limited periods of time away from the corporate
headquarters, and the Executive agrees to do so as is necessary or desirable to
perform his duties here under in a fully professional manner to the best of his
ability.
2.4. RELOCATION. In the event that the Executive relocated his
principal residence as provided by Section 2.3 hereof, the Company will provide
an amount not to exceed $20,000.00 as reimbursement of costs of
moving/storing/packing the Executive's household goods, as well as interim
travel expenses, temporary living expenses, etc. The Executive shall provide
receipts to the company to support the reimbursement requested.
3. COMPENSATION.
3.1. SALARY, BONUSES, LIFE INSURANCE. As compensation for all
services to be rendered pursuant to this Agreement, the Company shall pay the
Executive as follows: For the period of January 22, 1999 to June 15, 1999, a
base salary in the gross amount of $1,000.00 per month; for the period June 15,
1999 through August 30, 1999, a base salary in the gross amount of $3,416.67 per
month; on and after September 1, 1999, a base salary of $185,000 on an
annualized basis. All base salary is subject to withholding and authorized
deductions and payable in accordance with the payroll policies of the Company as
from time to time in effect. In addition to the Annual Salary, the Executive
shall be awarded (no less frequently than annually) to such bonuses, if any, as
the Board of Directors of the Company may, from time to time, in its sole
discretion award.
3.2. ANNUAL REVIEW. Commencing June 15, 2000 and annually
thereafter during the Term, the Annual Salary shall be reviewed by the Board and
may be adjusted (but in no event to an amount less than the Annual Salary then
in effect) for the then upcoming year, if the Board in its sole discretion,
determine that such adjustment is warranted.
3.3. PARTICIPATION IN EMPLOYEE BENEFIT PLANS. The Executive
shall be entitled during the Term, if and to the extent eligible, to participate
in the Company's group benefit plans including life, hospitalization or long
term disability insurance plans, health program, pension plan or similar benefit
plans of the Company, which may be available to other senior executives of the
Company on generally the same terms as such other executives.
3.4. EXPENSES. Subject to such policies as may from time to time
be established by the Company, the Company shall pay or reimburse the Executive
for all reasonable business expenses actually incurred or paid by the Executive
during the Term in the performance of the Executive's services under this
Agreement, upon presentation of expense statements or vouchers or such other
supporting information as the Company may reasonably require.
3.5. AUTOMOBILE. The Company shall pay to the Executive an
automobile allowance in the amount of $500 per month during the term of the
Executive's employment.
3.6. EQUITY PARTICIPATION/STOCK OPTIONS. Pursuant to action of
the Board of Directors at its meeting held on June 15, 1999, the Executive shall
be provided with an opportunity to purchase a common stock purchase warrant for
3,000,000 shares of the Company's common stock exercisable at $0.30 per share
for the sum of $20,000. The common stock purchase warrant shall be subject to a
right of repurchase by the Company at the purchase price, or, if previously
exercised, the common stock shall be subject to repurchase by the Company at the
exercise price which repurchase rights shall lapse as follows:
-2-
o June 15, 1999 Repurchase right with respect to 750,000 shares
shall lapse immediately.
o June 15, 2000 Repurchase right with respect to an additional
750,000 shares shall lapse (1,500,000 in the
aggregate).
o June 15, 0000 Xxxxxxxxxx right with respect to an additional
750,000 shares shall lapse (2,250,000 in the
aggregate).
o June 15, 2002 Right to repurchase with respect to the remaining
750,000 shares shall lapse (3,000,000 in the
aggregate).
In addition, during the time periods between the anniversary dates above the
Company's right to repurchase the warrant or the common stock resulting from the
exercise of the warrants above shall lapse in equal quarterly intervals.
3.7. VACATION. The Executive shall be entitled to four (4) weeks
paid vacation per year during the Term, with a maximum accrual of six (6) weeks,
to be taken at a time or times which do not unreasonably interfere with his
duties here under.
4. TERMINATION.
4.1. TERMINATION UPON DEATH. If the Executive dies during the
Term, this Agreement shall terminate as of the date of his death.
4.2. TERMINATION UPON DISABILITY. If, during the Term, the
Executive becomes physically or mentally disabled, whether totally or partially,
so that the Executive is unable substantially to perform his services hereunder
for (i) a period of three consecutive months, or (ii) for shorter periods
aggregating three months during any twelve-month period, the Company may at any
time after the last day of the three consecutive months of disability or the day
on which the shorter periods of disability equal an aggregate of three months,
by 30 days written notice to the Executive, terminate the Term of the
Executive's employment hereunder. Nothing in this Section 4.2 shall be deemed to
extend the Term. If the Term of the Executive's employment is terminated
pursuant to this Section 4.2, the Executive shall be entitled to receive
benefits as defined by the terms of the Company long-term disability insurance
policy for key executives as in effect in the time of termination.
4.3. TERMINATION FOR CAUSE. The Board may terminate Executive's
employment for "cause" which for purposes of this Agreement is defined as: (i)
gross misconduct in connection with performance of his duties hereunder; (ii)
material breach of any undertaking hereunder; or (iii) conviction of, or plea of
nolo contendere to, a felony or any other serious crime or offense. Termination
is effective on written notice to the Executive.
4.4. TERMINATION IN THE DISCRETION OF THE COMPANY. The Board may
terminate Executive's employment without cause in the sound exercise of its
discretion. In such event, the Board may: (i) terminate the Executive's right to
enter the premises of the Company by giving notice of such termination, and such
notice shall be effective on the date given pursuant to
-3-
Section 6.1 hereof; and (ii) by 30 days written notice to the Executive
thereafter shall have only such right to receive monetary compensation or
benefits hereunder in respect of any period after the effective date of such
termination as are provided in Section 4.5.1 hereof.
4.5. COMPENSATION ON TERMINATION.
4.5.1 If the Term of the Executive's employment hereunder
is terminated pursuant to Section 4.4 hereof, the Executive shall be entitled to
receive all compensation accrued and unpaid up to the date of such termination,
plus additional compensation as follows:
o Termination prior to June 15, 2000: continued monthly compensation
for the period from the date of termination through June 15, 2000
or six months at the annual salary rate then in effect whichever
total cumulative salary is greater. Any payments made pursuant to
this Section 4.5.1 shall be reduced by required withholdings or
authorized deductions.
o Termination after June 15, 2000: Six (6) months of compensation at
the annual salary rate then in effect. Any payments made pursuant
to this Section 4.5.1 shall be reduced by required withholdings or
authorized deductions.
4.5.2 If Executive's employment is terminated pursuant to
Section 4.4 or upon a change of control, the Executive shall be immediately
entitled to exercise any equity participation rights (stock options, warrants,
etc.) as provided in the agreement(s) pursuant to which such equity
participation rights were or are granted. For purposes of this Agreement,
"Change of Control" means: (i) a liquidation or dissolution of the Company, or
(ii) a merger or consolidation in which the Company is not the surviving entity,
or (iii) a sale of all or substantially all of the Company" assets, or (iv) an
acquisition (other than directly from the Company) by an individual, entity or
group (excluding the Company or one of its benefit plans or an entity controlled
by the Company's shareholders) of more than 50% of the Company's common stock or
voting securities.
5. CERTAIN COVENANTS OF THE EXECUTIVE.
5.1. COVENANTS AGAINST COMPETITION. The Executive acknowledges
that as of the date hereof (i) the principal business of the Company and its
affiliates is the development and marketing of Positron Emission Tomography
(PET) Scanners and the related equipment and computer programs and "software"
and various distribution methods and investment structures including imaging
clinics (the "Company Business"); (ii) the Company Business is national (and
international) in scope; and (iii) his work for the Company has brought him and
will continue to bring into close contact with many confidential affairs not
readily available to the public, including without limitation, corporate,
business and financial plans, marketing strategy, product research, development
and improvement, plans for future development and other matters. In order to
induce the Company to enter into this Agreement, the Executive covenants and
agrees:
NON-COMPETE. During his employment and any period of payment thereafter, (the
"Restricted Period"), the Executive shall not in the United States of America
(or in any foreign country), directly or indirectly, (i) engage in the Company
Business for his own account; (ii) enter the
-4-
employ of, or render any services to, any person engaged in such activities; and
(iii) become interested in any person engaged in the Company Business, directly
or indirectly, as an individual, partner, shareholder, officer, director,
principal, agent, employee, trustee, consultant or in any other relationship or
capacity; provided, however, that the Executive may own, directly or indirectly,
solely as an investment, securities of any person which are traded on any
national securities exchange if the Executive (a) is not a controlling person
of, or a member of a group which controls, such person or (b) does not directly
or indirectly own 5% or more of any class of securities of such person.
5.1.1 CONFIDENTIAL INFORMATION. The Executive shall keep
secret and retain in strictest confidence, and shall not use except for the
benefit of the Company and the business and affairs of the Company, all
confidential matters of the Company and its affiliates, including without
limitation, trade "know-how," secrets, consultant contracts, customer lists,
investor lists, pricing policies, operational methods, marketing plans or
strategies, product development or improvement techniques or plans, business
acquisition plans, new personnel acquisition plans, methods of manufacture,
methods of manufacture, technical processes, designs and design projects,
inventions and research projects and other business affairs of the Company and
its affiliates learned by the Executive or coming into his possession heretofore
or hereafter, and shall not disclose them to anyone outside of the company and
its affiliates, either during or after employment by the Company or any of its
affiliates, expect as required in the course of performing duties hereunder or
with the Company's express prior written consent.
5.1.2 PROPERTY OF THE COMPANY. All correspondence,
memoranda, notes, lists, records, computer tapes, discs and design and other
document and data storage and retrieval materials (and all copies, compilations
and summaries thereof), and all other personal property, made or compiled by the
Executive, in whole or in part and alone or with others, or in any way coming
into his possession concerning the business or other affairs of the Company or
any of its affiliates, shall be the Company's property and shall be delivered to
the Company promptly upon the termination of the Executive's employment with the
Company or any of its affiliates for any reason or at any other time on request,
and no copies thereof shall be retained by the Executive.
5.1.3 DISCLOSURE AND ASSIGNMENT OF RIGHTS.
(A) The Executive agrees that he will promptly
disclose and assign to the Company and its affiliates or its nominee(s) (except
as expressly provided in paragraphs 5.1.4 (C) and (D) below) all right, title
and interest of the Executive in and to any and all ideas, inventions,
discoveries, secret processes and methods, and improvements, together with any
and all patents that may be issued thereon in the United States and in all
foreign countries, which the Executive may invent, develop or improve, or cause
to be invented, developed or improved, during the Term, or during the
twelve-month period commencing on the date the Executive's employment is
terminated pursuant to Section 4.3 hereof, which are (i) conceived and developed
during normal working hours, or
(ii) which are related to the scope of the Company's Business or are related to
any work carried on by the Company or are related to any problems specifically
assigned to the Executive. The word "invent" as used herein includes "make,"
"discover," "develop," "manufacture," or "produce," or any of them; "invention"
includes the phrase "any new or useful original art, machine, methods of
manufacture, process, composition of matter, design, or configuration of any
kind" and the words "improvement,"
-5-
"discovery" or "production," or any of them; and "patent" includes "Letters
Patent" and "all the extensions, renewals, modifications, improvements and
reissues of such patents."
(B) The Executive agrees to disclose immediately
to duly authorized representatives of the Company any ideas, inventions,
discoveries, secret processes and methods, and improvements covered by the
provisions of paragraph 5.1.4(A), and to execute all documents reasonably
required in connection with the application for an issuance of Letters Patent in
the United States and in all foreign countries, and the assignment thereof to
the Company and its affiliates or its nominee(s).
(C) Set forth in Exhibit A hereto is a brief
description of all inventions, patented and un-patented which the Executive has
made or conceived prior to his employment by the Company which are expressly
excluded from the provisions of this Agreement.
(D) This Agreement does not require the
assignment of any invention which Executive may not be obligated to assign under
Section 2870 of the California Labor Code.
5.2. RIGHT AND REMEDIES UPON BREACH. If the Executive breaches,
or threatens to commit a breach of, any of the provisions of Section 5.1 (the
"Restrictive Covenants"), the Company shall have the following rights and
remedies, each of which rights and remedies shall be independent of the other
and severally enforceable, and all of which rights and remedies shall be in
addition to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity:
o Specific Performance. The right and remedy to have the Restrictive
Covenant specifically enforced by any court having equity
jurisdiction, including without limitation, the granting of a
preliminary injunction which may be granted without the posting of
a bond or other security, it being acknowledged and agreed that
any such breach or threatened breach will cause irreparable injury
to the Company and that money damages will not provide an adequate
remedy to the Company.
5.3. SEVERABILITY OF COVENANTS. If any court determines that any
of the Restrictive Covenants, or any part thereof, is invalid or unenforceable,
the remainder of the Restrictive Covenants shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.
5.4. BLUE PENCILING. If any court construes any of the
Restrictive Covenants, or any part thereof, to be unenforceable because of the
duration of such provision or the area covered thereby, such court shall have
the power to reduce the duration of the area of or otherwise alter such
provision and, in its reduced form, such provision shall then be enforceable and
shall then be enforced.
5.5. ENFORCEABILITY IN JURISDICTION. The parties intend to and
hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts
of any jurisdiction within the geographical scope of such Covenants. If the
courts of any one or more of such jurisdictions
-6-
hold the Restrictive Covenants wholly unenforceable by reason of the breath or
scope or otherwise, it is the intention of the parties that such determination
not bar or in any way effect the Company's right to the relief provided above in
the courts of any other jurisdiction within the geographical scope of such
Covenants as to breaches of such Covenants in such other respective
jurisdictions, such Covenants as they relate to each jurisdiction being, for
this purpose, severable into diverse and independent covenants.
6. MISCELLANEOUS.
6.1. NOTICES. Any notice or other communication required or
which may be given hereunder shall be in writing and shall be delivered
personally, telegraphed, telexed, or telecopies, or sent by certified,
registered or express mail, postage prepaid, and shall be deemed given when so
delivered personally, telegraphed, telexed or telecopied, or if mailed, two days
after the date of mailing, as follows:
o If to the Company, addressed to it at:
Positron Corporation
0000 Xxxxxxx Xxxxx, #000
Xxxxxxx, Xxxxx 00000
o If to the Executive, addressed to him at such address as he shall
have filed with the Company for such purpose or at such other
address as a party may from time to time specify by giving notice
as provided herein.
6.2. ENTIRE AGREEMENT. Subject to Section 3.6 hereof, this
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements, written or oral, with
respect thereto.
6.3. WAIVERS AND AMENDMENTS. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by both
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.
6.4. ASSIGNMENT. This Agreement is personal to the Executive,
and the Executive's rights and obligations hereunder may not be assigned by the
Executive. The Company may assign this Agreement and its rights, together with
its obligations hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its assets or business(es), whether
by merger, consolidation or otherwise.
6.5. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
-7-
6.6. HEADINGS. The section headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Executive Employment
Agreements as of the date first above written.
/s/ Xxxx X. Xxxxxx /s/ S. Xxxxx Xxxxx
-------------------------------------- ---------------------------------------
EXECUTIVE POSITRON CORPORATION
Date: Sept. 1, 1999 Date: Sept 1, 1999
--------------------------------- ----------------------------------
-8-
