EMPLOYMENT AGREEMENT
Exhibit 10.2
EMPLOYMENT AGREEMENT (the “Agreement”), entered into as of April 26, 2011, by and
between iCAD, Inc., a Delaware corporation (the “Company”), and Xxxxx X. Xxxxx (the
“Executive”).
WITNESSETH:
WHEREAS, the Company desires to employ the Executive as its Executive Vice
President of Finance and Chief Financial Officer on the terms and conditions set forth
in this Agreement; and
WHEREAS, the Executive is willing to accept such employment upon such terms;
NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT AND DUTIES
1.1 Term of Employment. The Executive’s employment under this Agreement
shall commence on April 26, 2011 (the “Start Date”) and shall continue until April 30,
2014 (such period being herein referred to as the “Initial Term,” and the period from
the Start Date through December 31, 2011 and any calendar year thereafter ending on
December 31 shall be referred to as an “Employment Year”). After the Initial Term and
on the last day of any Employment Year thereafter, this Agreement shall be
automatically renewed for successive one year periods (each such period being referred
to as a “Renewal Term”), unless, more than ninety (90) days prior to the expiration of
the Initial Term or any Renewal Term, either the Executive or the Company gives written
notice that employment will not be renewed, whereupon the term of the Executive’s
employment (the “Term”) shall terminate upon the expiration of the Initial Term or the
then current Renewal Term, unless sooner terminated pursuant to Section 5 hereof.
1.2 General.
1.2.1 During the Term, the Executive shall have the title of Executive Vice
President of Finance and Chief Financial Officer of the Company and shall have such
duties as may be from time to time delegated to him by the Chief Executive Officer and
the Board of Directors of the Company (the “Board”). The Executive shall faithfully
and diligently discharge his duties hereunder and use his best efforts to implement
the policies established by the Board. The Executive’s responsibilities shall include,
among other things, to render executive, policy, operations and other management
services to the Company of the type customarily provided by persons situated in
similar executive and management capacities.
1.2.2 The Executive shall devote all of his business time, attention, knowledge and
skills faithfully, diligently and to the best of his ability, in furtherance of the business
and activities of the Company; provided, however, that nothing in this Agreement shall
preclude the Executive from devoting reasonable periods of time required for (i) serving as a
director, advisor or member of a committee of any organization or corporation involving no
conflict of interest with the
interests of the Company and with the written consent of the Board or Chief Executive
Officer , (ii) engaging in professional organization and program activities, and (iii)
managing his personal investments, provided that such activities do not materially interfere
with the due performance of his duties and responsibilities under this Agreement as
determined by the Board.
1.3 Reimbursement of Expenses.
(a) The Company shall pay to the Executive the reasonable expenses incurred by
him in the performance of his duties hereunder, including, without limitation, those
incurred in connection with the use of an automobile, business related travel or
entertainment, or, if such expenses are paid directly by the Executive, the Company
shall promptly reimburse him for such payments, provided that the Executive properly
accounts for such expenses in accordance with the Company’s policy.
(b) The Company shall pay to the Executive an automobile expense allowance in the
amount of $1,500 per month accruing from day to day. The Executive shall pay all the
expenses of maintaining, insuring and operating such automobile.
To the extent any reimbursements referenced in Section 1.3(a) (and any other reimbursements
of costs and expenses provided for herein) or the automobile expense allowance referenced in
Section 1.3 (b) are includable in the Executive’s gross income for Federal income tax
purposes, all such reimbursements and the automobile expense allowance shall be made no later
than March 15 of the calendar year next following the calendar year in which the expenses to
be reimbursed are incurred or the automobile expense allowance accrued.
1.4 Consideration. In consideration for the Executive’s execution of this
Agreement, the Company agrees that the Executive shall become employed by the Company
as set forth in this Agreement, the Executive shall be permitted access to the
Company’s confidential information and shall be eligible to receive post-Term
severance payments (as described in Sections 5.4.2 and 5.4.4 of this Agreement)
subject to his compliance with Sections 7 and 8 of this Agreement. The Executive
understands, acknowledges and agrees that the Executive would not receive the
consideration specified in this Section 1.4, except for the Executive’s execution of
this Agreement and the fulfillment of the promises contained herein.
2. COMPENSATION
2.1 Base Salary. During the Term, the Executive shall be entitled to
receive a base salary (“Base Salary”) at a rate of two hundred fifty five thousand
dollars ($255,000.00) per annum during the Term, which Base Salary shall be payable in
arrears in equal installments not less frequently than on a bi-monthly basis in
accordance with the payroll practices of the Company, with such increases as may be
determined by the Board from time to time; provided that, the Base Salary may not be
subsequently decreased following any such increase without the Executive’s written
consent.
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2.2 Incentive Bonus. The Executive shall be eligible to receive, for each
Employment Year during the Term, a target annual incentive bonus of 40% of the Base
Salary for such Employment Year (the “Incentive Bonus”) if the Company achieves goals
and
objectives established by the Board of Directors for such Employment Year;
provided, however, that for the 2011 Employment Year, the target Incentive Bonus shall
be 40% of the Base Salary for 2011 multiplied by a fraction, the numerator of which is
the number of days employed by the Company during 2011 and the denominator of which is
365. Any Incentive Bonus shall be paid in full in a single lump sum cash payment
during the calendar year next following the Employment Year for which it is earned
(“Payment Calendar Year”), and no later than the earlier of (1) December 31 of the
Payment Calendar Year or (2) fifteen (15) calendar days following the date on which
the Company publicly announces its results of operations for such Employment Year.
2.3 Equity Compensation. In addition to the Base Salary and Incentive
Bonus, if any, the Executive shall receive, as incentive compensation, options to
purchase up to an aggregate of 500,000 shares of common stock of the Company (the
“Shares”), pursuant to and upon the terms and conditions set forth in the form of
Option Agreement (the “Option Agreement”) attached as Exhibit A hereto. The Option
shall vest and be exercisable as to one third (1/3) of the Shares on each of the first
three year anniversaries from the date of grant and shall expire ten (10) years
following the date of this Agreement, subject to earlier vesting as set forth in
Section 5.4.4, subject to earlier termination in the event of termination of the
Executive’s employment with the Company as provided in the Option Agreement.
2.4 Additional Compensation. In addition to the Base Salary, the
Incentive Bonus, if any, and the Shares, the Executive shall be entitled to receive
such other cash bonuses and such other compensation in the form of stock, stock
options or other property or rights as may from time to time be awarded him by the
Board during or in respect of his employment hereunder.
3. PLACE OF PERFORMANCE. In connection with his employment by the
Company, the Executive shall be based at the Company’s principal executive offices in
Nashua, New Hampshire, subject to the mutual agreement of the Executive and the
Company to relocate him to another office of the Company.
4. EMPLOYEE BENEFITS
4.1 Benefit Plans. The Executive shall, during the Term, be included to
the extent eligible thereunder in all employee benefit plans, programs or arrangements
of general application (including, without limitation, any plans, programs or
arrangements providing for retirement benefits, options and other equity-based
incentive compensation, profit sharing, bonuses, disability benefits, health and life
insurance, or vacation and paid holidays) which shall be established by the Company or
any affiliate of the Company, for, or made available to, their respective senior
executives (“Benefits”). During the Term, the Benefits described in this Section 4.1
may only be reduced as a result of a general reduction for senior executives.
4.2 Vacation. The Executive shall be entitled to not less than four (4)
weeks vacation at full pay for each calendar year during the Term. Such vacation may
be taken in the Executive’s discretion, and at such time or times as are not
inconsistent with the reasonable business needs of the Company. Other than the
specific amount of paid vacation described in this Section 4.2, the Executive’s
entitlement to paid vacation shall be governed by
the terms of the Company’s vacation pay policy currently in effect.
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5. TERMINATION OF EMPLOYMENT
5.1 General. The Executive’s employment under this Agreement may be
terminated without any breach of this Agreement only on the following circumstances:
5.1.1 Death. The Executive’s employment under this Agreement shall
terminate upon his death.
5.1.2 Disability. If, as a result of the Executive’s Disability (as
defined below), the Executive shall have been absent from his duties under this
Agreement for ninety (90) consecutive days (other than absences taken pursuant to the
federal Family Medical Leave Act and/or any other local, state or federal statute,
regulation or executive order addressing protected medical leaves of absence), the
Company may terminate the Executive’s employment upon fifteen (15) days prior written
notice; provided that the Executive has not returned to full time performance of his
duties during such fifteen (15)-day period. For purposes hereof, “Disability” shall
mean that the Executive is unable to perform his normal and customary duties hereunder
as a result of physical or mental incapacity, illness or disability with or without a
reasonable accommodation. Whether the Executive is disabled for purposes of this
Section 5.1.2 shall be determined by a physician mutually acceptable to both the Board
and the Executive.
5.1.3 Good Reason. The Executive may terminate his employment under this
Agreement for Good Reason at any time. For purposes of this Agreement, “Good Reason”
shall mean:
(i) The failure by the Company to comply with its
material obligations and agreements contained in this
Agreement;
(ii) A material diminution of the executive
responsibilities or title of the Executive with the Company
without the consent of the Executive;
(iii) A reduction by the Company in the Base Salary as
in effect on the date hereof, or as the same may be
increased from time to time, without the express written
consent of the Executive; or
(iv) a material change in the principal location at
which the Executive provides services to the Company,
without the Executive’s prior written consent; provided
that, a change in location shall not constitute Good Reason
if it results in the Executive working at a principal
location that is closer to (or no more than 25 miles
further away from) his primary residence in Wellesley,
Massachusetts.
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provided, however, the Executive must give notice to the Company of the
existence of the condition described in paragraph 5.1.3 within a period not to exceed
90 days of the initial existence of the condition, upon notice of which the Company
may, within 30 days thereafter, remedy such condition.
5.1.4 Cause. The Company may terminate the Executive’s employment under
this Agreement for Cause. Termination for “Cause” shall mean termination of the
Executive’s employment because of the occurrence of any of the following as determined
by the Board:
(i) the willful failure or refusal by the Executive to
substantially perform his obligations under this Agreement
(other than any such failure resulting from the Executive’s
incapacity due to physical or mental incapacity, illness or
disease); provided, however, that the
Company shall have provided the Executive with written
notice that such actions are occurring and the Executive
has been afforded a reasonable opportunity of at least
fifteen (15) days to cure same, or
(ii) the indictment of the Executive for a felony or
other crime involving moral turpitude or dishonesty; or
(iii) a breach of Section 7 or Section 8 hereof or a
breach of any representation contained in this Agreement by
the Executive; or
(iv) a breach of fiduciary duty involving personal
profit to the Executive; or
(v) a material act of dishonesty in connection with
his employment with the Company; or
(vi) the Executive’s possession or use of illicit
drugs, a prohibited substance or alcohol, to such extent
that it impairs his ability to perform his duties and
responsibilities; or
(vii) the Executive having committed acts or omissions
constituting gross negligence or willful misconduct
(including theft, fraud, embezzlement, and securities law
violations) which is injurious to the Company, monetarily,
or otherwise. For purposes of this Section 5.1.4(vi), no
act, or failure to act, on the part of the Executive shall
be considered “gross negligence” or “willful” unless done,
or omitted to be done, by him in bad faith and without
reasonable belief that his action or omission was in the
best interest of the Company; or
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(viii) the Executive having committed any willful or
material violation of, or willful or material noncompliance
with, any securities law, rule or regulation or stock
exchange regulation or rule relating to or affecting the
Company, including without limitation, (A) the Executive’s
failure or refusal to honestly provide the chief financial
officer’s and/or principal financial officer’s
certification required under the Xxxxxxxx-Xxxxx Act of
2002, including the rules and regulations promulgated
thereunder (the “Xxxxxxxx-Xxxxx Act”), or failure to take
reasonable and appropriate steps to determine whether or
not any such certificate was accurate or otherwise in
compliance with the requirements of the Xxxxxxxx-Xxxxx Act,
or (B) the Executive’s failure to establish and administer
effective systems and controls necessary for the Company to
timely file reports pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
5.2 Notice of Termination. Any termination of the Executive’s employment
by the Company or by the Executive (other than termination by reason of the
Executive’s death) shall be communicated by written Notice of Termination to the other
party of this Agreement. For purposes of this Agreement, a “Notice of Termination”
shall mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated.
5.3 Date of Termination. The “Date of Termination” shall mean (a) if the
Executive’s employment is terminated by his death, the date of his death, (b) if the
Executive’s employment is terminated pursuant to subsection 5.1.2 above, fifteen (15)
days after Notice of Termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis during such fifteen
(15)-day period), (c) if the Executive’s employment is terminated pursuant to
subsection 5.1.3 or 5.1.4 above, the date specified in the Notice of Termination after
the expiration of any applicable cure periods, if any, and (d) if the Executive’s
employment is terminated for any other reason, the date on which a Notice of
Termination is given.
5.4 Compensation upon Termination.
5.4.1 Termination for Cause. If the Executive’s employment shall be
terminated for Cause, the Company shall pay the Executive his Base Salary through the
Date of Termination in accordance with the Company’s standard payroll practices, at
the rate in effect at the time Notice of Termination is given, and all expenses and
accrued Benefits arising prior to such termination which are payable to the Executive
pursuant to this Agreement through the Date of Termination and the Company shall have
no further obligation with respect to this Agreement.
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5.4.2 Termination without Cause or for Good Reason. Subject to the
provisions of subsection 5.4.3 hereof, if, prior to the expiration of the Term, the
Executive’s
employment hereunder is terminated by the Company without Cause (other than a
termination by reason of Disability), or by the Executive for Good Reason, the Company
shall pay to the Executive all expenses and accrued Benefits arising prior to such
termination which are payable to the Executive pursuant to this Agreement through the
Date of Termination and the Company shall continue to pay the Executive his Base
Salary as then in effect for a period of one year (1) year from the Date of
Termination (such period being referred to hereinafter as the “Severance Period”), in
equal installments on the Company’s normal payroll dates during the Severance Period
in accordance with the payroll practices of the Company, beginning with the first pay
date that begins after the Date of Termination and, shall pay a pro rata portion of
the Incentive Bonus, if any, earned for the Employment Year through the Date of
Termination as determined in the discretion of the Board of Directors, at such time
the Incentive Bonus, if any, would otherwise have been payable in accordance with
Section 2.2 hereof. In addition, during the Severance Period, the Executive shall be
entitled to continue to participate in all employee benefit plans that the Company
provides (and continues to provide) generally to its senior executives, on the same
terms as such employee benefit plans are provided immediately prior to the Date of
Termination.
5.4.3 Death during Severance Period. In the event of the Executive’s
death during the Severance Period, payments of Base Salary under this Section 5.4 and
payments under the Company’s employee benefit plan(s) shall continue to be made in
accordance with their terms during the remainder of the Severance Period to the
beneficiary designated in writing for such purpose by the Executive or, if no such
beneficiary is specifically designated, to the Executive’s estate.
5.4.4 Termination Following Change in Control.
(i) Anything contained herein to the contrary notwithstanding, in the event the
Executive’s employment hereunder is terminated within six (6) months following a
Change in Control (as defined below) by the Company without Cause, or by the Executive
for Good Reason, then the Company shall pay to the Executive in complete satisfaction
of its obligations under this Agreement, as severance pay and as liquidated damages
(because actual damages are difficult to ascertain), an amount equal to (i) (a) his
Base Salary as then in effect for a period of one (1) year from the Date of
Termination, in installments on the Company’s normal payroll dates over the twelve
(12) month period following the Date of Termination and continuing on the same day of
each succeeding month thereafter plus (b) an amount equal to the Incentive Bonus which
would otherwise been payable in accordance with Section 2.2 hereof for the Employment
Year in which the Date of Termination occurs at such time the Incentive Bonus, if any,
would otherwise have been payable in accordance with Section 2.2 hereof; or (ii)
except with regard to the payment of an amount that is a Section 409A Amount, the
Company, in its sole discretion, may elect to make a lump sum cash payment equal to
the present value of the payments otherwise due under clause (i)(a); provided that if
any severance payment payable after a “Change in Control” as defined in Section 280G
of the Internal Revenue Code of 1986 (the “Code”), either alone or together with other
payments or benefits, either cash or non-cash, that the Executive has the right to
receive from the Company, including, but not limited to, accelerated vesting or
payment of any deferred compensation, options, stock appreciation rights or any
benefits payable to the Executive under any plan for the benefit of employees, which
would constitute an “excess parachute payment” (as defined in Code Section 280G), then
such severance payment or other benefit shall be reduced to the largest
amount that will not result in receipt by the Executive of a parachute payment.
The determination of the amount of the payment described in this subsection shall be
made by the Company’s independent auditors at the sole expense of the Company. For
purposes of clarification the value of any options described above will be determined
by the Company’s independent auditors using a Black-Scholes valuation methodology.
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For purposes of this Agreement, a “Change in Control” shall be deemed to occur
(i) when any “person” as defined in Section 3(a)(9) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and as used in Section 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d) of the Exchange Act, but excluding the
Executive, the Company or any subsidiary or any affiliate of the Company or any
employee benefit plan sponsored or maintained by the Company or any subsidiary of the
Company (including any trustee of such plan acting as trustee), becomes the
“beneficial owner” (as defined in Rule 13(d)(3) under the Exchange Act) of securities
of the Company representing 50% or more of the combined voting power of the Company’s
then outstanding securities; or (ii) the occurrence of a transaction requiring
stockholder approval for the acquisition of the Company by an entity other than the
Company or a subsidiary or an affiliated company of the Company through purchase of
assets, or by merger, or otherwise.
(ii) If within six (6) months after the occurrence of a Change in Control, the
Company shall terminate the Executive’s employment without Cause, or the Executive
shall terminate his employment for Good Reason, then notwithstanding the vesting and
exercisability schedule in any stock option or other equity award agreement between
the Company and the Executive, all unvested stock options and other equity awards
granted by the Company to the Executive pursuant to such agreement shall immediately
vest and become exercisable and shall remain exercisable for not less than 180 days
thereafter.
5.4.5 Termination upon Death or Disability. In the event of the
termination of the Executive’s employment by reason of death or Disability, the
Company shall pay the Executive his Base Salary through the Date of Termination in
accordance with the Company’s standard payroll practices, at the rate then in effect,
and all expenses or accrued Benefits arising prior to such termination which are
payable to the Executive pursuant to this Agreement through the Date of Termination.
In addition, the Executive and/or his beneficiaries shall be entitled to such other
Benefits as shall be determined in accordance with the benefit plans maintained by the
Company.
6. INSURABILITY; RIGHT TO INSURE
During the continuance of the Executive’s employment hereunder, the Company shall
have the right to maintain key man life insurance in its own name covering the
Executive’s life in such amount as shall be determined by the Company, for a term
ending on the termination or expiration of this Agreement. The Executive shall aid in
the procuring of such insurance by submitting to the required medical examinations, if
any, and by filling out, executing and delivering such applications and other
instrument in writing as may be reasonably required by an insurance company or
companies to which application or applications for insurance may be made by or for the
Company.
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7. CONFIDENTIALITY; NONCOMPETITION; NONSOLICITATION; NONDISPARAGEMENT
7.1 The Company and the Executive acknowledge that the services to be performed
by the Executive under this Agreement are unique and extraordinary and, as a result of
such employment, the Executive shall be in possession of confidential information
relating to the business practices of the Company. The term “confidential information”
shall mean any and all information (oral and written) relating to the Company or any
of its affiliates, or any of their respective activities, as well as any distributors,
vendors, suppliers, customers or other third party of which the Executive shall
possess in connection with his employment with the Company, other than such
information which (i) can be shown by the Executive to be in the public domain (such
information not being deemed to be in the public domain merely because it is embraced
by more general information which is in the public domain) other than as the result of
breach of the provisions of this Section 7.1; or (ii) the Executive is required to
disclose under any applicable laws, regulations or directives of any government
agency, tribunal or authority having jurisdiction in the matter or under subpoena or
other process of law. The Executive may use and disclose confidential information to
the extent necessary to enforce any rights or defend any claims hereunder, provided
that such disclosure is relevant to the enforcement of such rights or defense of such
claims and is only disclosed in the formal proceedings related thereto. The Executive
shall not, during the Term and for a period of five (5) years thereafter, except as
may be required in the course of the performance of his duties hereunder, directly or
indirectly, use, communicate, disclose or disseminate to any person, firm or
corporation any confidential information regarding the clients, customers or business
practices of the Company acquired by the Executive, without the prior written consent
of the Company; provided, however, that the Executive understands that
Executive shall be prohibited from misappropriating any trade secret at any time
during or after the Term.
7.2 Upon the termination of the Executive’s employment for any reason whatsoever,
all documents, records, notebooks, equipment, price lists, specifications, programs,
customer and prospective customer lists and other materials which refer or relate to
any aspect of the business of the Company which are in the possession of the
Executive, including all copies thereof, shall be promptly returned to the Company.
7.3 The Executive hereby agrees that he shall not, during the Term and for a
period of twelve (12) months after the Date of Termination, directly or indirectly,
within any county (or adjacent county) in any State within the United States or
territory outside of the United States in which the Company is engaged in business
during the Term, engage, have an interest in or render any services to any business
(whether as owner, manager, operator, licensor, licensee, lender, partner,
stockholder, joint venturer, employee, consultant, advisor or otherwise) competitive
with the business activities conducted by the Company, its subsidiaries, or affiliates
during the Term which business activities include the CAD (computer aided detection)
of breast cancer and colon cancer or any other areas the Company may operate or
business activities the Company may engage in. Notwithstanding the foregoing, nothing
herein shall prevent the Executive from owning stock in a publicly traded corporation
whose activities compete with those of the Company’s, provided that such stock
holdings are not greater than two percent (2%) of the outstanding stock of such
corporation.
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7.4 The Executive shall not, during the Term and for a period of twelve (12)
months after the Date of Termination, directly or indirectly, take any action which
constitutes an interference with or a disruption of any of the Company’s business
activities including, without limitation, the solicitations of the Company’s
customers, distributors or vendors or persons listed on the personnel lists of the
Company.
7.5 For purposes of clarification, but not of limitation, the Executive hereby
acknowledges and agrees that the provisions of Sections 7.3 and 7.4 above shall serve
as a prohibition against him from, during the period referred to therein, directly or
indirectly, hiring, offering to hire, enticing, soliciting or in any other manner
persuading or attempting to persuade any officer, employee, agent, lessor, lessee,
licensor, licensee or customer of the Company (but only those suppliers existing
during the time of the Executive’s employment by the Company, or at the termination of
his employment), to discontinue or alter his, his or its relationship with the
Company.
7.6 (a) The Executive agrees that all processes, technologies and inventions
(“Inventions”), including new contributions, improvements, ideas and discoveries,
whether patentable or not, conceived, developed, invented or made by him during the
Term shall belong to the Company, provided that such Inventions grew out of the
Executive’s work with the Company, are related in any manner to the business
(commercial or experimental) of the Company or are conceived or made on the Company’s
time or with the use of the Company’s facilities or materials. The Executive shall
further: (a) promptly disclose such Inventions to the Company; (b) assign to the
Company, without additional compensation, all patent and other rights to such
Inventions for the United States and foreign countries; (c) sign all papers necessary
to carry out the foregoing; and (d) give testimony in support of his inventorship;
(b) If any Invention is described in a patent application or is disclosed to
third parties, directly or indirectly, by the Executive within two (2) years after the
termination of his employment by the Company, it is to be presumed that the Invention
was conceived or made during the Term by the Company; and
(c) The Executive agrees that she will not assert any rights to any Invention as
having been made or acquired by him prior to the date of this Agreement, except for
Inventions, if any, disclosed to the Company in writing prior to the date hereof.
7.7 The Company shall be the sole owner of all products and proceeds of the
Executive’s services hereunder, including, but not limited to, all materials, ideas,
concepts, formats, suggestions, developments, arrangements, packages, programs and
other intellectual properties that the Executive may acquire, obtain, develop or
create in connection with and during the term of the Executive’s employment hereunder,
free and clear of any claims by the Executive (or anyone claiming under the Executive)
of any kind or character whatsoever (other than the Executive’s right to receive
payments hereunder). The Executive shall, at the request of the Company, executive
such assignments, certificates or other instruments as the Company may from time to
time deem necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend its right, or title and interest in or to any such properties.
7.8 At no time during or after the Term shall the Executive, directly or
indirectly, disparage the commercial, business, professional or financial, as the case
may be,
reputation of the Company or its officers or directors.
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7.9 Without intending to limit the remedies available to the Company, the
Executive acknowledges that a breach of any of the covenants contained in this Section
7 may result in material and irreparable injury to the Company, or its affiliates or
subsidiaries, for which there is no adequate remedy at law, that it may not be
possible to measure damages for such injuries precisely and that, in the event of such
a breach or threat the Company shall be entitled to seek a temporary restraining order
and/or a preliminary or permanent injunction restraining the Executive from engaging
in activities prohibited by this Section 7 or such other relief as may be required
specifically to enforce any of the covenants in this Section 7. The Executive hereby
acknowledges and agrees that the type and periods of restrictions imposed in this
Section 7 are fair and reasonable and are reasonably required for the protection of
the Company’s confidential information and the goodwill associated with the business
of the Company. Further, the Executive acknowledges and agrees that the restrictions
imposed in this Section 7 will not prevent him from obtaining suitable employment
after his employment with the Executive ceases or from earning a livelihood. If for
any reason it is held that the restrictions under this Section 7 are not reasonable or
that consideration therefor is inadequate, such restrictions shall be interpreted or
modified to include as much of the duration and scope identified in this Section as
will render such restrictions valid and enforceable.
8. EXECUTIVE’S COOPERATION
During the Term and thereafter, the Executive shall cooperate with the Company in
any internal investigation or administrative, regulatory or judicial proceeding as
reasonably requested by the Company (including, without limitation, the Executive
being available to the Company upon reasonable notice for interviews and factual
investigations, appearing at the Company’s request to give testimony without requiring
service of a subpoena or other legal process, volunteering to the Company all
pertinent information and turning over to the Company all relevant documents which are
or may come into the Executive’s possession, all at times and on schedules that are
reasonably consistent with the Executive’s other permitted activities and
commitments). In the event the Company requires the Executive’s cooperation in
accordance with this section after the termination of the Term, the Company shall
reimburse the Executive for all of his reasonable costs and expenses incurred, in
connection therewith, plus pay the Executive a reasonable amount per day for his time
spent.
9. RIGHTS OF INDEMNIFICATION
The Company shall indemnify the Executive to the fullest extent permitted by the
General Corporation Law of the State of Delaware, as amended from time to time, for
all amounts (including without limitation, judgments, fines, settlement payments,
expenses and attorney’s fees) incurred or paid by the Executive in connection with any
action, suit, investigation or proceeding arising out of or relating to the
performance by the Executive of services for, or the acting by the Executive as a
director, officer or employee of the Company, or any other person or enterprise at the
Company’s request.
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10. MISCELLANEOUS
10.1 Notices. All notices or communications hereunder shall be in
writing, addressed as follows:
To the Company:
|
iCAD, Inc. | |
| 98 Split Xxxxx Xxxx, Xxxxx 000 | ||
| Xxxxxx, Xxx Xxxxxxxxx 00000 | ||
| Attn: Chief Executive Officer | ||
| with a copy to: | ||
| Blank Rome LLP | ||
| 000 Xxxxxxxxx Xxxxxx | ||
| Xxx Xxxx, XX 00000 | ||
| Attn: Xxxxxx X. Xxxxxxx, Esq. | ||
To the Executive:
|
Xxxxx X. Xxxxx | |
| 0 Xxxx Xx | ||
| Xxxxxxxxx, XX 00000 |
All such notices shall be conclusively deemed to be received and shall be
effective (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy or
facsimile transmission, upon confirmation of receipt by the sender of such
transmission, (iii) if sent by overnight courier, one business day after being sent by
overnight courier, or (iv) if sent by registered or certified mail, postage prepaid,
return receipt requested, on the fifth day after the day on which such notice is
mailed.
10.2 Severability. 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 is held to be prohibited by or invalid under applicable law, such
provision will be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
10.3 Binding Effect; Benefits. Executive may not delegate his duties or
assign his rights hereunder. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, legal representatives,
successors and permitted assigns.
10.4 Entire Agreement. This Agreement represents the entire agreement of
the parties and shall supersede any and all previous contracts, arrangements or
understandings between the Company and the Executive. This Agreement may be amended
at any time by mutual written agreement of the parties hereto. In the case of any
conflict between any express term of this Agreement and any statement contained in any
employment manual, memo or rule of general applicability of the Company, this
Agreement shall control.
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10.5 Warranty. The Executive hereby represents and warrants as follows:
(i) that the execution of this Agreement and the discharge of the Executive’s
obligations hereunder will not breach or conflict with any other contract, agreement,
or understanding between the Executive and any other party or parties; and (ii) the
Executive’s resume which was provided to the Company by the Executive and other
statements made about the Executive’s employment history to the Company by the
Executive are true, accurate and complete in all material respects.
10.6 Withholding. The payment of any amount pursuant to this Agreement
shall be subject to applicable withholding and payroll taxes, and such other
deductions as may be required under the Company’s employee benefit plans, if any.
10.7 Governing Law. This Agreement and the performance of the parties
hereunder shall be governed by the internal laws (and not the law of conflicts) of the
State of Delaware. Any claim or controversy arising out of or in connection with this
Agreement, or the breach thereof, shall be adjudicated exclusively by the state courts
for the State of New Hampshire, or by a federal court sitting in New Hampshire. The
parties hereto agree to the personal jurisdiction of such courts and agree to accept
process by regular mail in connection with any such dispute.
10.8 Execution in Counterparts. This Agreement may be executed by the
parties in one or more counterparts, each of which shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement, and shall
become effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto. A photocopy or electronic
facsimile of this Agreement or of any signature hereon shall be deemed an original for
all purposes.
10.9 Section 409A of the Code.
10.9.1 It is intended that the provisions of this Agreement comply with Section 409A of
Code and the regulations and guidance promulgated thereunder (collectively “Code Section
409A”), and all provisions of this Agreement shall be construed in a manner consistent with
the requirements for avoiding taxes or penalties under Code Section 409A. If any provision
of this Agreement (or of any award of compensation, including equity compensation or
benefits) would cause the Executive to incur any additional tax or interest under Code
Section 409A, the Company shall, upon the specific request of the Executive, use its
reasonable business efforts to in good faith reform such provision to comply with Code
Section 409A; provided, that to the maximum extent practicable, the original intent
and economic benefit to the Executive and the Company of the applicable provision shall be
maintained, but the Company shall have no obligation to make any changes that could create
any additional economic cost or loss of benefit to the Company. Notwithstanding the
foregoing, the Company shall have no liability with regard to any failure to comply with Code
Section 409A so long as it has acted in good faith with regard to compliance therewith. Any
provision required for compliance with Code Section 409A that is omitted from this Agreement
shall be incorporated herein by reference and shall apply retroactively, if necessary, and be
deemed a part of this Agreement to the same extent as though expressly set forth herein.
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10.9.2 A termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amounts or benefits upon or
following a termination of employment unless such termination is also a “Separation from
Service” within the meaning of Code Section 409A and, for purposes of any such provision of
this Agreement, references to a “termination,” “termination of employment” or like terms
shall mean Separation from Service. If the Executive is deemed on the date of termination of
his employment to be a “specified employee”, within the meaning of that term under Section
409A(a)(2)(B) of the Code and using the identification methodology selected by the Company
from time to time, or if none, the default methodology, then with regard to any payment or
the providing of any benefit subject to this Section 10.9.2, to the extent required to be
delayed in compliance with Section 409A(a)(2)(B) of the Code, and any other payment or the
provision of any other benefit that is required to be delayed in compliance with Section
409A(a)(2)(B) of the Code, such payment or benefit shall not be made or provided prior to the
earlier of (i) the expiration of the six-month period measured from the date of the
Executive’s Separation from Service or (ii) the date of the Executive’s death. On the first
day of the seventh month following the date of Executive’s Separation from Service or, if
earlier, on the date of his death, all payments delayed pursuant to this Section 10.9.2
(whether they would have otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any
remaining payments and benefits due under this Agreement shall be paid or provided in
accordance with the normal payment dates specified for them herein. On any delayed payment
date under this Section 10.9.2, there shall be paid to the Executive or, if the Executive has
died, to his estate, in a single cash lump sum together with the payment of such delayed
payment, interest on the aggregate amount of such delayed payment at the Delayed Payment
Interest Rate (as defined below) computed from the date on which such delayed payment
otherwise would have been made to the Executive until the date paid. For purposes of the
foregoing, the “Delayed Payment Interest Rate” shall mean the short term Applicable Federal
Rate as of the business day immediately preceding the payment date for the applicable delayed
payment.
10.9.3 Each installment payable hereunder shall constitute a separate payment for
purposes of Treasury Regulation Section 1.409A-2(b), including Treasury Regulation Section
1.409A-2(b)(2)(iii). Each payment that is made within the terms of the “short-term
deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) is intended to meet
the “short-term deferral” rule. Each other payment is intended to be a payment upon an
involuntary termination from service and payable pursuant to Treasury Regulation Section
1.409A-1(b)(9)(iii), et. seq., to the maximum extent permitted by that regulation, with any
amount that is not excepted from Code Section 409A being subject to Code Section 409A
(“Section 409A Amounts”). Notwithstanding anything to the contrary in Section 5.4.4, the
lump sum option in Section 5.4.4(i) shall not apply to any Section 409A Amount and the
payment of the Section 409A Amounts shall begin with the first installment that next follows
the last full installment payment of a non Section 409A Amount or would have been the last
full installment in the event that a lump sum payment is made with regard to non Section 409A
Amounts under Section 5.4.4.
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10.9.4 With regard to any provision herein that provides for reimbursement of costs and
expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for another
benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits,
provided during any taxable year shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year, provided that the
foregoing clause (ii) shall not be violated with regard to
expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely
because such expenses are subject to a limit related to the period the arrangement is in
effect and (iii) such payments shall be made on or before the last day of the Executive’s
taxable year following the taxable year in which the expense was incurred.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and the
Executive has hereunto set his hand, as of the day and year first above written.
| THE COMPANY: | ||||||
| iCAD, INC. | ||||||
| By: | /s/ Xxxxxxx Xxxxx | |||||
| Name: | Xxxxxxx Xxxxx | |||||
| Title: | President and Chief Executive Officer | |||||
| EXECUTIVE | ||||||
| By: | /s/ Xxxxx X. Xxxxx | |||||
| Xxxxx X. Xxxxx | ||||||
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