1
EXHIBIT 10.44
EMPLOYMENT AGREEMENT
This Agreement shall be effective as of the 1st day of August, 1996,
between AMERICAN DENTAL TECHNOLOGIES, INC. a Delaware corporation (the
"Company" or "ADT"), and XXX X. XXXXXXX ("Xxxxxxx").
WHEREAS, the Company is engaged in the business of designing,
manufacturing and marketing dental laser products and dental air abrasive
products.
WHEREAS, Xxxxxxx is a significant stockholder of the Company and, subject
to the terms of this Agreement, shall be employed by the Company.
WHEREAS, the parties desire to enter into this Agreement to confirm their
respective rights and obligations.
NOW THEREFORE, in consideration of the mutual covenants and promises
recited herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Employment. Subject to the terms and conditions of this Agreement, the
Company shall employ Xxxxxxx as the President and Chief Executive Officer of
the Company's wholly owned subsidiary, Texas Airsonics, Inc. and as a member of
the Company's Executive Committee.
2. Term and Compensation. The term of this Agreement shall be three years
from the effective date, or through July 31, 1999 (the "Term"). During the
Term, Xxxxxxx'x compensation shall be in pari pasui with that of Xxxxxxx X.
Xxxxxxxx. Xxxxxxx shall receive the following compensation from the Company in
consideration of the performance of Xxxxxxx'x duties hereunder:
(a) beginning on the effective date hereof, an annual base salary (before
appropriate payroll deductions) of $225,000 per year, payable in 24
semi-monthly installments in accordance with the normal payroll practices of
the Company;
(b) beginning on the effective date hereof, Company shall maintain an
existing $400,000 life insurance (or comparable policy) on Xxxxxxx'x life for
the benefit of his designated beneficiaries and shall timely pay the premium
when due;
(c) beginning on the effective date hereof, Company shall provide Xxxxxxx
with an automobile allowance of $750 per month;
(d) beginning on the effective date hereof, all other benefits of
employment generally available to the Company's executive employees (which
shall be no less favorable to Xxxxxxx than those generally available to ADT's
other executive employees) shall be available to Xxxxxxx, including without
limitation, group health and 401(k) benefit plans and a paid vacation of four
weeks per year;
(e) beginning on the effective date hereof, reimbursement for reasonable
out-of-pocket expenses incurred by Xxxxxxx in connection with the Company's
business, including expenses for travel, food and lodging while away from home,
subject to compliance with such procedures as the Company may from time to time
reasonably establish for its employees; and
(f) for so long as Xxxxxxx shall be a member of ADT's board of directors,
reasonable out-of-pocket expenses incurred by Xxxxxxx in connection with his
participation on such board, provided however, Xxxxxxx shall receive no other
compensation from ADT for services as a director.
2
3. Duties. Xxxxxxx hereby convenants and undertakes as follows:
(a) During the Term, Xxxxxxx shall devote his full energies, interest,
abilities and productive time to the Company and shall not, without the
Company's prior written consent, render to others services of any kind for
compensation, or engage in any other business activity that would materially
interfere with the performance of his duties under this Agreement or that could
adversely affect the Company.
(b) During the Term, Xxxxxxx shall not, directly or indirectly, whether
as a partner, employee, creditor, shareholder or otherwise (i) promote,
participate or engage in any activity or other business competitive with the
Company's business, or (ii) take any action to establish, form or become
employed by a competing business during the Term, or within 12 months after the
end of the Term.
4. Confidential Information/Non-Competition.
(a) In the course of his employment, Xxxxxxx will have access to
confidential information and trade secrets relating to the Company's business.
Except as required in the course of his employment by the Company, Xxxxxxx will
not, without the Company's prior written consent, either during his employment
by Company or for 12 months after termination of that employment, directly or
indirectly disclose to any third person any such confidential information or
trade secrets.
(b) In the course of his employment, Xxxxxxx will have access to
confidential records and data pertaining to the Company's customers and to the
relationship between these customers and the Company's products. Such
information is considered secret and is disclosed to Xxxxxxx in confidence.
During his employment by the Company and for 12 months after termination of
that employment, Xxxxxxx shall not directly or indirectly disclose or use any
such information, except as required in the course of his employment by the
Company. In addition, during, and for the 12 months after termination of his
employment, Xxxxxxx shall not induce or attempt to induce any agent, sales
representatives or distributor of the Company to discontinue representing the
Company for the purpose of representing any competitor of the Company.
(c) Due to his employment by the Company, Xxxxxxx will have access to
trade secrets and confidential information and its methods of doing business.
In consideration of his access to this information, Xxxxxxx agrees that for a
period of 12 months after termination of his employment, he shall not be
employed directly or indirectly by Kreativ, Inc.; Danville Engineering, Inc.;
Sunrise Technologies International, Inc.; Excel Technology, Inc.; Luxar
Corporation; or HGM Dental Laser Systems, Inc. and he shall not directly
compete with the Company in the field of dental-laser or air abrasive
technology within the United States. Xxxxxxx acknowledges that direct
competition includes design, development, production, promotion or sale of
products or services competitive with those of the Company.
(d) As used in this Agreement, the terms "confidential information" shall
not include information that (i) is now, or hereafter becomes, through no act
or failure to act on the part of Xxxxxxx or persons under his control,
generally known or available to the public, (ii) was acquired by Xxxxxxx before
receiving such information from the Company (or through his affiliation with,
or in his capacity as an employee of, the Company) and without restriction as
to use or disclosure, (iii) is hereafter rightfully furnished to Xxxxxxx by a
third party without restriction as to use or disclosure, (iv) is required to be
disclosed pursuant to law, provided Xxxxxxx uses reasonable efforts to give the
Company reasonable prior notice of such required disclosure, or (v) is
disclosed with the prior written consent of the Company.
5. Intangibles. All processes, inventions, patents, copyrights,
trademarks and other intangible rights that are already owned (or otherwise
owned) by the Company or that may be conceived or developed by Xxxxxxx, either
alone or with others, during the Term, whether or not conceived or developed
during Xxxxxxx'x working hours, and with respect to which the equipment,
supplies, facilities or trade secret information of the Company was used, or
that relate, at the time of conception or reduction-to-practice of the
invention, to the business of the Company or to the Company's actual or
demonstrably anticipated research and development, or that result from any work
3
performed by Xxxxxxx for the Company or its predecessor, shall be the sole
property of the Company. Xxxxxxx shall disclose to the Company all inventions
conceived during the term of employment and, for one year thereafter, inventions
that arise from property of the Company under this section, provided that such
disclosure shall be received by the Company in confidence. Xxxxxxx shall
execute all documents, including patent applications and assignments, required
by the Company to establish the Company's rights under this section.
6. Indemnification
(a) The Company shall indemnify, defend and hold harmless Xxxxxxx against
all losses, claims, demands, liabilities and expenses (including reasonable
legal and other expenses incurred in defending such claims or liabilities),
whether or not resulting in any liability to Xxxxxxx, that he may incur,
arising out of or based upon any breach by the Company of the terms of this
Agreement or arising out of or related to the proper performance of Xxxxxxx'x
duties in accordance with the terms of this Agreement.
(b) Xxxxxxx shall indemnify, defend and hold harmless the Company, its
officers, directors, employees and agents against all losses, claims, demands,
liabilities and expenses (including reasonable legal and other expenses
incurred in defending such claims or liabilities), whether or not resulting in
any liability to the Company, its officers, directors, employees or agents,
that they or any of them may incur, arising out of or based upon breach by
Xxxxxxx of any of the terms of this Agreement.
7. Duration. The Term of this Agreement shall continue, until the first
to occur of:
(a) Three years from the date hereof; except as provided in sub-paragraph
(b) below.
(b) In the event Xxxxxxx shall commit any material criminal act, fraud,
dishonesty or malfeasance with respect to the Company or his employment,
Company may terminate this Agreement.
8. Disputes.
(a) In the event (i) Xxxxxxx'x employment is terminated without cause,
(ii) Company materially changes his duties as President and Chief Executive
Officer of Texas Airsonics, Inc., or (iii) Company liquidates, dissolves,
merges with, or transfers substantially all of its assets to a corporation
which does not assume Company's obligations under this Agreement; Xxxxxxx will
continue to be entitled to his base salary and health insurance coverage.
(b) If either party institutes any action against the other relating to
this Agreement, the unsuccessful party in such action or proceeding shall
reimburse the successful party for its disbursements incurred in connection
therewith, including without limitation, reasonable attorneys' fees, to be
fixed by the court.
9. Assignment. This Agreement is personal to the Company and Xxxxxxx and
no party shall have the right, power or authority to assign this Agreement, or
any portion hereof or any monies due or to become due hereunder, or to delegate
any duties or obligations arising hereunder, whether voluntarily, involuntarily
or by operation of law, without the prior written approval of the other
parties.
10. Miscellaneous.
(a) Each provision of this Agreement is intended to be severable. If any
provision hereof shall be determined by a court of competent jurisdiction to be
illegal or invalid for any reason whatsoever, such provision shall be severed
from this Agreement and shall not affect the remainder of this Agreement unless
the essential purposes of this Agreement would thereby be confounded.
(b) No consent or waiver, express or implied, by either party to or of
any breach or default by the other party in the performance by the other of its
obligations hereunder shall be valid unless in writing, and no such consent or
waiver shall be deemed or construed to be a consent or waiver to or of any such
breach or default in the performance by such other party of the same or any
4
other obligations of such party hereunder. Failure on the part of any party to
complain of any act or failure to act of the other party or to declare the other
party in default, irrespective of how long such failure continues, shall not
constitute a waiver by such party of its rights hereunder. The granting of any
consent or approval in any one instance by or on behalf of a party shall not be
construed to waive or limit the need for such consent in any other or subsequent
instance.
(c) This Agreement is entered into in the State of Michigan and shall
be governed by the laws thereof. The venue of any action or proceeding brought
by Company against Xxxxxxx arising out of this Agreement shall be in the County
of Oakland, Michigan. The venue of any action or proceeding brought by Xxxxxxx
against Company arising out of this Agreement shall be in the County of Nueces,
Texas.
(d) This constitutes the entire agreement between the parties with
regard to Xxxxxxx'x employment. Any modification of this Agreement must be in
writing and signed by the party to be charged thereby.
(e) Nothing in this Agreement changes, alters or amends Xxxxxxx'x rights
under an existing February 12, 1993 agreement with Company.
(f) All notices, requests and communications required or permitted
hereunder shall be in writing and be sufficiently given and deemed to have been
received upon personal delivery or, if mailed, upon the first to occur of
actual receipt or 48 hours after being placed in the United States mail,
postage prepaid, registered or certified mail, with return receipt requested,
addressed to the above parties as follows:
American Dental Technologies, Inc. Xxx X. Xxxxxxx
Attention: Xxxxxxx X. Xxxxxxxx 0000 Xxxx Xxxx
00000 Xxxxxxxxxxxx Xxx., #0000 Xxxxxx Xxxxxxx, Xxxxx 00000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
(g) The headings of this Agreement are inserted for convenience of
reference only and shall not affect the construction of anything herein
contained.
(h) This Agreement may be executed in counterparts, each of which when so
executed shall be deemed an original and all of which together shall constitute
but one agreement.
IT WITNESS WHEREOF, the parties have hereunto set their hands as of the
day and year first above written.
American Dental Technologies, Inc.
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx, President and
Chief Executive Officer
/s/ Xxx X. Xxxxxxx
-----------------------------------
Xxx X. Xxxxxxx
