EMPLOYMENT AGREEMENT
Exhibit
99.2
AGREEMENT ("Agreement") made
this 6th day of June, 2008, by and between Positron Corporation (the
"Company") and Xxxx Xxxxxx ("Employee").
AGREEMENT:
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the Company and Employee agree as
follows:
1.
Employment/Duties: The
Company hereby agrees to continue to employ Employee, and Employee hereby agrees
to continue to serve, subject to the provisions of this Agreement, as President
of the Pharmaceutical Division or Subsidiary of the Company. Employee
shall continue to perform such duties and responsibilities as are from time to
time assigned to Employee by the President of Positron and shall continue to
report directly to the President. Such duties and responsibilities
shall be substantially the same as Employee currently performs and will continue
to include full authority (i) to shape and implement the strategic business
plan of the Company; (ii) to direct the development and monitoring of
operating goals and objectives; (iii) to oversee financial operations and
(iv) to provide leadership, direction and administration of all aspects of
Company activities, in all cases subject to the supervision and authority of the
Company's Board of Directors. Employee agrees to continue to devote
sufficient attention and energies to the performance of the duties assigned to
him hereunder, and to perform such duties faithfully and to the best of his
abilities and subject to such laws, rules, regulations and policies from time to
time applicable to the Company's employees to the best of his
knowledge. Without limiting the generality of the
foregoing, Employee shall continue to perform the duties associated
with the position of Division or Subsidiary President.
Upon
consultation with the Board of Directors of the Company, Employee may serve on
committees of corporate, civic or charitable organizations so long as such
activities do not interfere materially with the performance of his duties and
responsibilities hereunder. Additionally, Employee shall be permitted to act and
serve as an officer, director, general partner, equity owner, or other principal
or fiduciary of other entities or ventures, whether related or unrelated to the
Company, provided such activities are not in direct competition with the Company
and do not interfere materially with the performance of his duties and
responsibilities hereunder.
Company
shall continue to provide suitable office space in the Indianapolis area and
equipment, and mutually agreeable office personnel, including without
limitation, personal secretarial and other assistance, at the Indianapolis area
office(s) of the Company, to enable Employee to perform his duties
hereunder.
2.
Term: The
term of this Agreement shall be for a period of three (3) years commencing on
June 1, 2008 (“Effective Date”) and ending on May 31, 2011 (the "Initial Term"),
unless terminated sooner pursuant to Section 7 of this
Agreement. Thereafter the Agreement is subject to automatic renewals
of two (2) successive one year periods (each a "Renewal Term" and collectively
with the Initial Term, the "Term") unless Employee or Company notifies the other
in writing of its election not to renew, such notice to be provided not less
than ninety (90) days prior to the end of the Initial Term or the end of any
Renewal Term.
3.
Compensation:
(a) Base
Compensation: For the services to be rendered by the Employee
under this Agreement the Company shall pay Employee a base salary ("Base
Compensation") of One Hundred Thousand Dollars ($100,000.00) on a pro-rated
basis according to the Company's payroll schedule and subject to
applicable withholdings and other payroll deductions. The Company's
Board of Directors will in good faith review Employee's performance and Base
Compensation every twelve (12) months. The Base Compensation may be
increased (but not decreased) from time to time upon review by and within the
sole and absolute discretion of the Board of Directors of the
Company. The Compensation Committee of Company will review the
compensation will look increase the Base Compensation to One Hundred Fifty
Thousand Dollars ($150,000) as of January 1, 2009 in the event Company has
received funding.
(b) Other
Benefits. Subject to the terms of the plans, Employee shall
continue to receive those benefits or rights as Employee currently enjoys, and
shall be entitled to receive such other benefits or rights as may be provided
under any employee benefit plans provided by the Company to its executives that
are now or hereafter adopted, including participation in life, medical,
disability and dental insurance plans, vacation and sick leave, expense
reimbursement and long-term incentive plans. Notwithstanding anything
to the contrary set forth in this Agreement, any restricted stock awards, stock
options or other equity incentives of the Company (including, without
limitation, those outstanding at the time of termination of employment with the
Company) shall be subject to the terms set forth in such long-term incentive
plans, as such plan may be in effect from time to time, and in any restricted
stock award, stock option or other agreements (including, without limitation,
those provisions relating to vesting, exercisability, forefeitability), as may
be entered into between Employee and the Company pursuant to such long-term
incentive plans. Employee shall continue to be entitled to such paid
holidays as are provided to the Company's employees generally.
(c) Compensation in Event of
Disability. In the event Employee is not able to perform his
duties as a result of personal injury, disability or illness, Employee shall be
eligible to receive as a disability wage continuation payment from Company the
percentage of Employee's Base Compensation then in effect in accordance with the
following schedule: 100% thereof for the first three months of
disability; 75% thereof for the next three months of disability; 50% thereof for
the next three months of disability; and 25% thereof for the next three months
of disability.
In the
event of such disability, there shall be offset against Employee's Disability
Compensation (i) the proceeds of any disability insurance which the Company
may provide, (ii) the proceeds of any disability insurance received as New
York State Disability insurance benefits; and (iii) Social Security
Disability Benefits.
For the
purposes of this Agreement, Employee shall be deemed to be "Disabled" or have a
"Disability" if, because of Employee's personal injury, disability or illness,
he has been substantially unable to perform his duties hereunder for sixty (60)
days in any one hundred eighty (180) day period. Employee shall be
considered to have been substantially unable to perform his duties hereunder
only if he is either (i) unable to reasonably and effectively carry out his
duties with reasonable accommodations by the Company or (ii) unable to
reasonably and effectively carry out his duties because any reasonable
accommodation which may be required would cause the Company undue
hardship.
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The
determination as to whether and when the Employee has suffered a personal
injury, disability or illness so as to bring into effect the provisions of
Section 3(c) or Section 7(d) of this Agreement shall be made by a
physician mutually agreed upon by the Company and the
Employee. Should they be unable to agree on a physician, the Company
and the Employee shall each designate a physician specializing in the area of
Employee's disability who together shall designate a third physician similarly
qualified. The three physicians then shall make the determination
regarding the Employee's condition with the opinion of the majority final and
binding on the parties.
When the
disabled Employee returns to work after exhausting his disability benefits
hereunder, he shall not again be entitled to the full disability benefits
provided for in this Section 3(c) unless and until he has returned to work
for a period of at least two (2) consecutive years. Notwithstanding the
foregoing, if the disabled Employee again becomes disabled after he has returned
to work for a period of at least twelve (12) consecutive months, he shall be
entitled to receive additional Disability Compensation at a reduced level of
benefits in accordance with the following schedule: 50% of Employee's
Base Compensation then in effect for the first three months of the second period
of disability; 25% thereof for the next three months of disability; and 12½%
thereof for the next three months of disability.
In the
event the disabled Employee returns to work without having exhausted his
disability benefits hereunder, and again becomes disabled within twelve (12)
months after returning to work, Employee shall be entitled to receive his
remaining, unused disability benefits hereunder during the second period of
disability. Thereafter, he shall not again be entitled to the full
disability benefits provided for in this Section 3(c) unless and until he
has returned to work for a period of at least two (2) consecutive
years.
4.
Vacation: Employee
shall be entitled to receive three (3) weeks paid vacation time in year the
first year of this Agreement, and three (3) weeks paid vacation per year for
each year of employment under this Agreement. Any vacation time which
remains unused at the end of a year of employment may be carried over to a
succeeding year. Upon expiration or termination of this Agreement,
Employee shall receive a cash payment in lieu of the unused vacation
time.
5.
Business
Expenses: The Company will reimburse or advance Employee
promptly (but not later than thirty (30) days after submittal of appropriate
vouchers or receipts) for his reasonable and documented out-of-pocket business
expenses for travel, meals and similar items incurred in connection with the
performance of Employee's duties (“Business Expenses”), and which are consistent
with the Company's general policies in effect regarding the reimbursement of
Business Expenses as the Company may from time to time establish. All
payments for reimbursement of such expenses shall be made to the Employee only
upon the presentation to the Company of appropriate vouchers or
receipts. All outstanding Employee requests for reimbursement of
Business Expenses shall be paid in full not later than the date of execution of
this Agreement.
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6.
Confidentiality,
Non-Competition: See Stock Purchase Agreement.
7.
Termination:
(a) Termination of Employment
With Cause: In addition to any other remedies available to the
Company at law, in equity or as set forth in this Agreement, the Company shall
have the right, upon written notice to Employee, to terminate his employment
hereunder without any further liability or obligation to him in respect of his
employment (other than its obligation to pay Base Compensation, Bonus and
vacation time accrued but unpaid as of the date of termination and reimbursement
of expenses incurred prior to the date of termination in accordance with
Section 3 and 5 above) if Employee: (i) breaches
any material provision of this Agreement; or (ii) has committed an act of
gross misconduct in connection with the performance of his duties hereunder, as
reasonably determined in good faith by the Board of Directors of the Company; or
(iii) demonstrates habitual negligence in the performance of his duties, as
reasonably determined by the Board of Directors of the Company; or (iv) is
convicted of or pleads nolo contendere to any felony; or (v) is convicted
of or pleads nolo contendere to any misdemeanor involving moral turpitude and
the conduct underlying such misdemeanor has materially adverse or detrimental
effect on the Company, its reputation, or its business, as reasonably determined
by the Board of Directors of the Company; or (vi) has committed any act of
fraud, misappropriation of funds or embezzlement in connection with his
employment hereunder (a "Termination With Cause").
Notwithstanding
the foregoing, no purported Termination With Cause pursuant to (i), (ii) or
(iii) of this
Section 7(a) shall be effective unless all of the following provisions
shall have been complied with: (x) Employee shall be given
written notice by the Board of Directors of the Company of the intention to
effect a Termination With Cause, such notice to state in detail the particular
circumstances that constitute the grounds on which the proposed Termination With
Cause is based; and (y) Employee shall have ten (10) business days after
receiving such notice in which to cure such grounds, to the extent such cure is
possible, as determined in the sole reasonable discretion of the Board of
Directors of the Company.
(b) Termination of Employment
Without Cause: Not applicable.
(c) Termination of Employment
With Good Reason: In addition to any other remedies available
to Employee at law, in equity or as set forth in this Agreement, Employee shall
have the right during the Term, upon written notice to the Company, to terminate
his employment hereunder upon the occurrence of any of the following events
without the prior written consent of Employer: (a) a reduction
in Employee's then current Base Compensation; or (b) a breach by the
Company of any material provision of this Agreement (a "Termination With Good
Reason").
Notwithstanding
the foregoing, no purported Termination With Good Reason pursuant to this
Section 7(c) shall
be effective unless all of the following provisions shall have been complied
with: (i) the Company shall be given written notice
by Employee of the intention to effect a Termination With Good Reason, such
notice to state in detail the particular circumstances that constitute the
grounds on which the proposed Termination With Good Reason is based and to be
given no later than ninety (90) days after Employee first learns of such
circumstances; and (ii) the Company shall have fifteen (15) days after
receiving such notice in which to cure such grounds, to the extent such cure is
possible.
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In the
event that a Termination With Good Reason occurs, then, subject to
Section 7(f) below, Employee shall have the same entitlement to the amounts
and benefits over the term of this Agreement as if there had been no occurrence
which had triggered the Termination of this Agreement With Good
Reason.
Employee
acknowledges that the payments and benefits referred to in both Section 3
and this Section 7, together with any rights or benefits under
any written plan or agreement which have vested on or prior to the termination
date of Employee's employment under this Section 7(c), constitute the only
payments which Employee shall be entitled to receive from the Company hereunder
in the event of any termination of his employment pursuant to this
Section 7(c), and the Company shall have no further liability or obligation
to him hereunder or otherwise in respect of his employment
(d) Death;
Disability: In the event that Employee dies or becomes
Disabled (as defined herein) during the Term, Employee's employment shall
terminate when such death or Disability occurs and the Company shall pay
Employee (or his legal representative, as the case may be) as
follows:
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(i)
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any
Base Compensation, Bonus and vacation time accrued but unpaid as of the
date of death or termination for
Disability;
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(ii)
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any
reimbursement for expenses incurred in accordance with Sections 3 and
5;
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(iii)
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any
portion of stock options that has become vested on or before the date of
such termination shall be exercisable in accordance with the terms of the
applicable plan, and all unvested shares shall terminate;
and
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(iv)
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an
amount equal to Employee's monthly base Compensation in effect on such
termination date for six (6) months, payable as and when such amounts
would have been due and payable hereunder had such termination not
occurred.
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Notwithstanding
the foregoing, to the extent and for the period required by any state or federal
family and medical leave law, upon Employee's request (i) he shall be
considered to be on unpaid leave of absence and not terminated, (ii) his
group health benefits shall remain in full force and effect, and (iii) if
Employee recovers from any such Disability, at that time, to the extent required
by any state or federal family and medical leave law, upon Employee's request,
he shall be restored to his position hereunder or to an equivalent position, as
the Company may reasonably determine, and the Term of Employee's employment
hereunder shall be reinstated effective upon such restoration. The
Term shall not be extended by reason of such intervening leave of absence or
termination, nor shall any compensation or benefits accrue in excess of those
required by law during such intervening leave of absence or
termination. Upon the expiration of any such rights, unless Employee
has been restored to a position with the Company, he shall thereupon be
considered terminated.
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Employee
acknowledges that the payments referred to in both Sections 3 and 5 and
this Section 7(d) together with any rights or benefits under any written
plan or agreement which have vested on or prior to the termination date of
Employee's employment under this Section 7(d), constitute the only payments
which Employee (or his legal representative, as the case may be) shall be
entitled to receive from the Company hereunder in the event of a termination of
his employment for death or Disability, and the Company shall have no further
liability or obligation to him (or his legal representatives, as the case may
be) hereunder or otherwise in respect of his employment.
(e) No Mitigation by
Employee. Except as otherwise expressly provided herein,
Employee shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise, nor shall the
amount of any payment provided for herein be reduced by any compensation earned
by Employee as the result of employment by another employer.
(f) Severance Agreement and
Release. In the event that Employee incurs a termination of
employment pursuant to a Termination With Good Reason (as defined in
Section 7(c) above), payment by the Company of the amounts described in
said sections shall be subject to the execution by Employee of the Company's
standard severance agreement and release (the "Release"), a copy of which is
attached hereto as Exhibit "A" and made a part hereof.
Employee
shall have a period of thirty (30) days after the effective date of termination
of this Agreement (the "Consideration Period") in which to execute and return
the original, signed Release to the Company. If Employee delivers the
original, signed Release to the Company prior to the expiration of the
Consideration Period, then the Severance Period shall be deemed to have
commenced as of the first day of the Consideration Period and Employee shall be
entitled to the amounts and benefits set forth in Section 7(b) or 7(c), as
the case may be.
If
Employee does not deliver the original, signed Release to the Company prior to
the expiration of the Consideration Period, then:
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(i)
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the
Company shall pay Employee an amount equal to the sum of (i) any Base
Compensation, Bonus and vacation time accrued but unpaid as of the date of
termination, plus (ii) any reimbursement for expenses incurred in
accordance with Sections 3 and
5;
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(ii)
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the
Company shall have no obligation to (i) pay to Employee the Severance
Payment (as that term is defined in Section 7(b)(ii) above;
and
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(iii)
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any
portion of stock options that has become vested on or before the date of
such termination shall be exercisable in accordance with the terms of the
applicable plan, and all unvested shares shall
terminate.
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8.
Ownership of Company
Property: See Stock Purchase Agreement.
9.
Intellectual
Property Rights: The Company shall be the owner of all inventions,
improvements, designs, methods, plans, computer programs, products, services and
other materials (collectively, “Developments”) created by Employee under this
Agreement or in which Employee assisted in the creation for the benefit of the
Company during the course of employment with the Company under this
Agreement. All intellectual property rights in such Developments of
the Company, including all patents, trademarks, copyrights, trade secrets and
industrial designs, shall be the exclusive property of the
Company. In the event that Employee acquires any rights or interests
in such Developments of the Company as a result of his work under this
Agreement, Employee agrees to assign and by executing this Agreement does assign
all such rights and interests to the Company. The Company shall have
the exclusive rights to obtain copyright registrations, letters patent,
industrial designs, trademark registrations or any other protection in respect
of the work products and the intellectual property rights in the Company’s
Developments anywhere in the world. At the expense and request of the
Company, Employee shall both during and after his employment with the Company,
execute all documents and do all other acts necessary in order to enable the
Company to protect its rights in the Company’s Developments; provided, however,
that Employee shall be entitled to reasonable compensation if he provides such
assistance after the term if this Agreement is ended.
10.
Return of Company
Property: Employee agrees that following the termination of
his employment for any reason, he shall return all property of the Company, its subsidiaries, affiliates
and any divisions thereof he may have managed which is then in or thereafter
comes into his possession, including, but not limited to, documents, contracts,
agreements, plans, photographs, books, notes, electronically stored data and all
copies of the foregoing as well as any automobile or other materials or
equipment supplied by the Company to Employee.
11.
Each Party, the
Drafter: This Agreement and the provisions contained in it
shall not be construed or interpreted for or against any party to this Agreement
because that party drafted or caused that party's legal representative to draft
any of its provisions.
12.
Waiver: The
failure of either party to this Agreement to enforce any of its terms,
provisions or covenants shall not be construed as a waiver of the same or of the
right of such party to enforce the same. Waiver by either party
hereto of any breach or default by the other party of any term or provision of
this Agreement shall not operate as a waiver of any other breach or
default
13.
Severability: In
the event that any one or more of the provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remainder of the Agreement shall not in any way be
affected or impaired thereby. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
14.
Entire
Agreement: The provisions contained herein (including any
schedules, exhibits and documents delivered herewith or attached hereto)
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof.
15.
Independent
Counsel: Employee and the Company each acknowledge that each
of them has had the opportunity to seek independent legal counsel in connection
with entering into this Agreement, and has either done so or has voluntarily
chosen not to.
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16.
Notices: Any
notice given hereunder shall be in writing and shall be deemed to have been
given when delivered by messenger or courier service (against appropriate
receipt), or mailed by registered or certified mail (return receipt requested),
addressed as follows:
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If
to the Company:
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Positron
Corporation
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0000
Xxxxxxx Xxxxx Xx. #000
Xxxxxxx,
XX 00000
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If
to Employee:
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Xxxx
Xxxxxx
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0000
Xxxxxxx Xxxxx
Xxxxxxxxxxxx,
XX 00000
Or at
such other address as shall be indicated to either party in
writing. Notice of change of address shall be effective only upon
receipt.
17.
Governing
Law: This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to its conflict
of law rules.
18.
Descriptive
Headings: The paragraph headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
19.
Counterparts: This
Agreement may be executed in one or more counterparts, which, together, shall
constitute one and the same agreement.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first written above.
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POSITRON
CORPORATION
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By:
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Xxxxxx
Xxxxxxxx
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Xxxx
Xxxxxx
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President
/ Director
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SEVERANCE
AGREEMENT AND RELEASE
Employee
hereby agrees to end his relationship with Positron Corporation (the "Company")
on the following basis:
1.
In reliance on such representations and releases in this Agreement,
Employee's relationship with the Company will end effective ________, _____ and
he will be paid the amounts set forth in Section 7 of his Employment Agreement
dated May ___, 2008.
2.
Employee represents that he is signing this Agreement voluntarily and with a
full understanding of and agreement with its terms, for the purpose of receiving
additional pay and benefits from the Company beyond that provided by normal
Company policy.
3.
Employee agrees that he is not entitled to receive, and will not claim, any
right, benefit, or compensation other than what is expressly set forth in this
Agreement, and hereby expressly waives any claim to any compensation, benefit,
or payment which is not expressly referenced in this Agreement.
4.
In consideration of this Agreement, Employee agrees to forever waive, release
and discharge the Company,
and each of its affiliated or related entities, organizations,
corporations, shareholders, owners, directors, officers, employees,
representatives, agents, attorneys, successors and assigns (collectively,
"Released Parties") from any and all known and/or unknown claims, complaints,
actions, grievances, controversies, disputes, suits, charges of discrimination
or harassment, contracts or agreements of any nature whatsoever which you ever
had, now have or may claim to have as of the moment you sign this Agreement,
including but not limited to (a) any claim arising out of your relationship
with the Company or the cessation of that relationship, (b) any claims for
violations of the Texas Labor Code, claims for additional compensation, wages,
salary, commissions, bonuses, expenses or benefits of any kind, or any
additional claims with the Division of Labor Standards Enforcement, (c) any
common law actions or torts, and/or (d) any federal, state or governmental
constitution, statute, regulation or ordinance, including but not limited to,
Title VII of the Civil Rights Act of 1964 and the Age Discrimination in
Employment Act. You are not waiving rights to claims that may arise
after you enter into this Agreement.
5.
In exchange for the additional pay and benefits provided in Paragraph 1,
Employee agrees to refrain from making any disparaging or unfavorable comments,
in writing or orally, about the Company, including but not limited to press
releases, communication with employees, vendors, customers, professional
references, and others.
6.
This Release shall be governed by the substantive law of the State of
Texas. In the event of any dispute concerning the validity,
interpretation, enforcement or breach of this Release or in any way related to
Employee's employment or termination of employment, the dispute shall be
resolved by arbitration within the County of Houston, Texas, in accordance with
the then existing rules for employment arbitration of the American Arbitration
Association, and
judgment upon any arbitration award may be entered by any state or federal court
having jurisdiction thereof. The Arbitrator's decision in any such
arbitration shall be final and binding on the parties. Employee
intends that this arbitration provision to be valid, enforceable, irrevocable
and construed as broadly as possible. The prevailing party in such
arbitration shall recover its reasonable costs and attorneys' fees.
7.
Employee will have twenty-one (21) days to consider this Agreement, although he
may sign it sooner than that if Employee so desires. Employee may
also retain the right to revoke the Agreement at any time during the seven (7)
day period following execution of the Agreement. The Agreement will
not become effective or enforceable until such seven (7) day period has expired
("Effective Date").
8.
Employee agrees that the terms of this Agreement are confidential and he will
not disclose to any other person any information contained herein with the
exception of his tax and legal advisors and his immediate family. Employee
acknowledges that he continues to be bound by the terms of confidentiality,
non-competition and non-solicitation as stated in Section 6 of the Employment
Agreement with the Company dated May ___, 2008.
9.
By signing below Employee acknowledges that (i) he has carefully read and
considered the matters set forth in this Agreement, (ii) understands the terms
of this Agreement, (iii) has had a sufficient opportunity to review this
Agreement, and (iv) is signing this Agreement voluntarily for the purpose of
receiving additional compensation beyond that provided by normal Company
policy.
10.
Nothing contained in this Agreement or the fact that Employee has signed this
Agreement shall be considered an admission of any liability
whatsoever.
I HAVE
READ THIS RELEASE THOROUGHLY, UNDERSTAND ITS TERMS AND HAVE SIGNED IT KNOWINGLY
AND VOLUNTARILY. I UNDERSTAND THAT THIS RELEASE IS A LEGAL DOCUMENT
AND WILL HAVE LEGAL CONSEQUENCES.
I AGREE
TO THE ABOVE:
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(Employee
Signature)
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(Print
Name)
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(Date)
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