EMPLOYMENT AGREEMENT
This
Employment Agreement (“Agreement”) is entered into and made effective as of
January 1, 2007 (“Effective Date”), by and between Noninvasive Medical
Technologies, Inc. (“Company”) and Xxxxxx XxXxxxxxx (“Executive”).
1. Employment. Company
employs Executive, and Executive agrees to continue employment with Company,
upon the terms and conditions set forth in this Agreement.
2. Term
of Employment.
The
employment of Executive pursuant to the terms of this Agreement will continue
for five years from the Effective Date unless extended or sooner terminated
pursuant to this Agreement (“Term”).
3. Duties.
3.1. Basic
Duties.
Executive
agrees to serve as Chief Executive Officer and will be responsible for the
general supervision of the business and affairs of the Company and will have
such other powers, duties and responsibilities usually vested in a Chief
Executive Officer, subject to the direction of the Board of Directors. During
the Term, Executive’s title, duties, and responsibilities are subject to change
as determined from time to time by the Board of Directors.
3.2. Time
Devoted to Employment.
Executive will devote his full time to the business of Company during the term
of this Agreement and will perform his duties and responsibilities
faithfully, diligently and to the best of his ability, consistent with the
highest and best standards of the industry and in compliance with all applicable
laws and the Company’s policies and procedures.
3.3. No
Conflicting Agreements.
Executive represents and warrants that his performance of all the terms and
conditions of this Agreement does not and will not breach any other agreement,
including any confidentiality and non-disclosure agreements with prior employers
or other persons. Executive represents and warrants that he has not entered
into, and will not enter into, any agreement, either written or oral in conflict
with this Agreement.
3.4. Place
of Performance of Duties.
The
services of Executive will be performed in Las Vegas, Nevada.
4. Compensation
and Method of Payment.
4.1. Total
Compensation.
As
compensation under this Agreement, Company will pay and Executive will accept
the following:
4.1.1. Executive’s
base compensation (“Base Salary”) for the period beginning on the Effective Date
and ending on the first anniversary of the Effective date will be Two Hundred
and Fifty Thousand Dollars ($250,000). On each anniversary of the Effective
Date
Executive’s Base Salary will be increased to a sum equal to 115% of the amount
of Executive’s Base Salary for the immediately prior year, unless the Board of
Directors takes an action to the contrary.
4.1.2. For
each
year of this Agreement, Executive is eligible for an annual bonus in such
amounts (if any) as may be approved by the Compensation Committee and subject
to
criteria to be established at the discretion of the Board of Directors
(“Bonus”).
4.1.3. Company
will reimburse Executive for all reasonable travel, entertainment and other
expenses incurred or paid by Executive in connection with, or related to, the
performance of Executive’s duties, responsibilities or services under this
Agreement, upon presentation by the Executive of documentation, expense
statements, vouchers and/or such other reasonable supporting information as
Company may request.
4.1.4. Executive
will be entitled to participate in Company’s employee fringe benefit, health
insurance, life insurance, key man insurance and other programs in effect from
time to time for executives of Company and its affiliates at comparable levels
of responsibility. Participation will be in accordance with any applicable
policies adopted by Company. Executive will be entitled to vacations of not
less
than two weeks per year, absences for illness, and to similar benefits of
employment, and will be subject to such policies and procedures as may be
adopted by Company.
4.1.5. Executive
will be entitled to an automobile allowance of $400 per month.
4.1.6. Subject
to the approval of the Board of Directors, Executive will be granted incentive
stock options (as such term is defined in Section 422(b) of the Internal Revenue
Code of 1986, as amended) in accordance with the Employee Stock Option Plan.
4.2. Reservation
of Rights.
Notwithstanding any other provision of this Agreement, Company reserves the
right to modify, suspend or discontinue any and all benefit plans, practices,
policies and programs at any time whether before or after termination of
employment without advance notice to or recourse by Executive.
4.3. Payment
of Compensation.
All
compensation to the Executive will be subject to applicable taxes, withholding
and other required, normal or elected employee deductions.
5. Termination
of Agreement.
This
Agreement and all obligations under this Agreement (except the obligations
contained in Section 6 below which will survive any termination of this
Agreement) will terminate upon the earliest to occur of any of the
following:
5.1. By
Expiration or Notice.
This
Agreement and the employment of Executive will terminate at the expiration
of
the Term and may otherwise be terminated by Executive or Company upon thirty
(30) days written notice of termination.
5.2. Other
Termination by Company.
Company
may terminate Executive immediately for “Cause.”
Executive’s employment will terminate
immediately following written notice from Company to Executive which identifies
the termination provision relied upon and outlines in reasonable detail the
circumstances claimed to provide the basis for termination. If appropriate
to
the circumstances, Executive will be provided a reasonable opportunity to
correct the circumstances leading to termination before the notice of
termination is issued. For the purpose of this Section 5.2, “Cause” for
termination will be deemed to include (a) acts or omissions by Executive which,
in the reasonable opinion of Company, could materially adversely affect
Company’s reputation in the community; (b) acts or omissions by Executive which
constitute discriminatory, harassing or retaliatory conduct; (c) theft, fraud,
dishonesty or Executive’s conviction of a felony; (d) Executive’s breach of his
fiduciary duty or duty of loyalty to Company, including violation of the
restrictive covenants in Section 6 of this Agreement; (e) the failure of
Executive to comply with any material term of this Agreement; and (f)
Executive’s disability or death.
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5.3. Other
Termination by Executive.
Executive may terminate this Agreement for “Good Reason.” For purposes of this
Section 5.3, “Good Reason” will mean the following unless such circumstances are
fully corrected within a reasonable period following written notice from
Executive to Company which identifies the termination provision relied upon
and
outlines in reasonable detail the circumstances claimed to provide the basis
for
terminating his employment for Good Reason: (a) a material adverse change in
Executive’s status, working conditions or management responsibilities; or (b)
any reduction by Company in Executive’s Base Salary (other than as agreed to by
Executive) in effect on the Effective Date or as the same may be increased
after
such date.
5.4. Effect
of Termination.
5.4.1. Termination
due to Expiration of Employment Period.
If
Executive’s employment is terminated due to the expiration of the Term, Company
will pay Executive the compensation (including Base Salary and accrued Bonus,
if
any) and benefits due to Executive under Section 4 through the last day of
Executive’s actual employment.
5.4.2. Termination
by Company for Cause.
In the
event that Executive’s employment is terminated for “Cause” pursuant to Section
5.2, Company will pay Executive the Base Salary (but not any accrue Bonuses,
if
any) and benefits due to Executive under Section 4 through the last day of
Executive’s actual employment.
5.4.3. Termination
by Company Without Cause of by Executive for Good Reason .
Company
may not terminate Executive’s employment without cause until after the second
anniversary of the Effective Date. In the event that Company terminates
Executive’s employment other than pursuant to Section 5.2 or Section 7 or in the
event of termination by Executive for Good Reason pursuant to Section 5.3,
Company will pay Executive the greater of the amount of one year’s of Base
Salary at the date of termination or the remaining amount of unpaid Base Salary
that Executive would have received if this Agreement did not terminate before
the end of the Term (payments to be made in equal monthly installments).
Further, Executive will be paid the amount of Bonus that would have been due
pursuant to Section 4 during the year of his termination, payable at the usual
time such Bonus payments are made by Company. In addition, Company will pay
or
reimburse Executive for the costs of health care benefits that Executive would
have received if this Agreement did not terminate before the end of the Term
(“Continued Benefits”). In addition, to the extent permitted under the Employee
Stock Option Plan, the vesting schedule for all incentive stock options granted
to the Executive pursuant to Section 4.1.6 will accelerate and will fully vest
effective immediately prior to termination.
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5.4.4. Termination
by Executive Without Good Reason.
In the
event Executive’s employment is terminated by his not for “Good Reason”, as
defined in Section 5.3, Company will pay Executive the Base Salary (but not
accrued bonus, if any) and benefits due Executive under Section 4 through the
last day of Executive’s actual employment.
5.4.5. Resignation
as Board Member or Officer.
Immediately upon the termination of Executive’s employment with Company,
Executive will tender a written notice of Executive’s resignation from any and
all offices of the Company and all subsidiaries, affiliates or clients in which
the Executive represents the Company in the capacity of an officer or director.
Notwithstanding any failure by the Executive to provide the Company with such
written notice of resignation within three days after the date of the
termination of Executive’s employment with Company, Executive authorizes and
directs the Board of Directors to accept the Executive’s resignation from all
said positions effective as of the date of termination of the Executive’s
employment.
6. Property
Rights and Obligations of Executive.
6.1. Trade
Secrets.
For
purposes of this Agreement, “trade secrets” will include without limitation any
and all financial, cost and pricing information and any and all information
contained in any drawings, designs, plans, proposals, customer lists, records
of
any kind, data, formulas, specifications, concepts or ideas, where such
information is reasonably related to the business of Company, has been divulged
to or learned by Executive during the term of his employment by Company, and
has
not previously been publicly released by duly authorized representatives of
Company or otherwise lawfully entered the public domain. The definition of
trade
secrets is not intended to be narrowly interpreted or limited to statutory
definitions of trade secrets but is intended to broadly refer and relate to
all
confidential information of the Company.
6.2. Preservation
of Trade Secrets.
Executive will preserve as confidential all trade secrets pertaining to
Company’s business that have been obtained or learned by his by reason of his
employment. Executive will not, without the prior written consent of Company,
either use for his own benefit or purposes or disclose or permit disclosure
to
any third parties, either during the term of his employment hereunder or
thereafter (except as required in fulfilling the duties of his employment),
any
trade secret connected with the business of Company.
6.3. Trade
Secrets of Others.
Executive agrees that he will not disclose to Company or induce Company to
use
any trade secrets belonging to any third party.
6.4. Property
of Company.
Executive agrees that all documents, reports, files, analyses, drawings,
designs, tools, equipment, plans (including, without limitation, marketing
and
sales plans), proposals, customer lists, computer software or hardware, and
similar materials that are made by his or come into his possession by reason
of
and during the term of his employment with Company are the property of Company
and will not be used by his in any way adverse to Company’s interests. Executive
will not allow any such documents or things, or any copies, reproductions or
summaries thereof to be delivered to or used by any third party without the
specific consent of Company. Executive agrees to deliver to the Board of
Directors or its designee, upon demand, and in any event upon the termination
of
Executive’s employment, all of such documents and things which are in
Executive’s possession or under his control.
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6.5. Non-Solicitation
by Executive.
6.5.1. General.
Executive agrees during the Term and for one year following the termination
of
his employment, not to recruit, solicit or induce any person or entity who
during the period within one year prior to the termination of Executive’s
employment with Company, was an employee or independent contractor of Company
or
any of its affiliates (“Company Group”) to leave or cease employment or other
relationship with Company Group for any reason whatsoever or hire or engage
the
services of such person for Executive in any business substantially similar
to
or competitive with that in which Company Group was engaged during Executive’s
employment.
6.5.2. Non-Solicitation
of Customers.
Executive acknowledges that in the course of his employment, he will learn
about
Company Group’s business, services, materials, programs and products and the
manner in which they are developed, marketed, served and provided. Executive
knows and acknowledges that Company Group has invested considerable time and
money in developing its programs, agreements, offices, representatives,
services, products and marketing techniques and that they are unique and
original. Executive further acknowledges that Company Group must keep secret
all
pertinent information divulged to Executive about Company Group business
concepts, ideas, programs, plans and processes, so as not to aid Company Group’s
competitors. Accordingly, Company Group is entitled to the following protection,
which Executive agrees is reasonable: Executive agrees that for a period of
one
year following the termination of his employment, he will not, on his own behalf
or on behalf of any person, firm, partnership, association, corporation, or
other business organization, entity or enterprise, knowingly solicit, call
upon,
or initiate communication or contact with any person or entity or any
representative of any person or entity, with whom Executive had contact during
his employment, with a view to the sale or the providing of any product,
equipment or service sold or provided or under development by Company Group
during the period of one (1) year immediately preceding the date of Executive’s
termination.
6.6. Survival
Provisions and Certain Remedies.
Unless
otherwise agreed to in writing between the parties hereto, the provisions of
this Section 6 will survive the termination of this Agreement. The covenants
in
this Section 6 will be construed as separate covenants and to the extent any
covenant will be judicially unenforceable, it will not affect the enforcement
of
any other covenant. In the event Executive breaches any of the provisions of
this Section 6, Executive agrees that Company will be entitled to injunctive
relief in addition to any other remedy to which Company may be
entitled.
7. General
Provisions.
7.1. Notices.
Any
notices or other communications required or permitted to be given under this
Agreement must be in writing and addressed to Company or Executive at the
addresses below, or at such other address as either party may from time to
time
designate in writing. Any notice or communication that is addressed as provided
in this Section will be deemed given (a) upon delivery, if delivered personally
or via certified mail, postage prepaid, return receipt requested; or (b) on
the
first business day of the receiving party after the transmission if by facsimile
or after the timely delivery to the courier, if delivered by overnight courier.
Other methods of delivery will be acceptable only upon proof of receipt by
the
party to whom notice is delivered.
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If
to
Company: {Please
fill in}
If
to
Executive: {Please
fill in}
7.2. Choice
of Law and Forum.
Except
as expressly provided otherwise in this Agreement, this Agreement will be
governed by and construed in accordance with the laws of the State of Nevada
and
both parties consent to the personal jurisdiction of the courts of the State
of
Nevada.
7.3. Entire
Agreement; Modification and Waiver.
This
Agreement supersedes any and all other agreements, whether oral or in writing,
between the parties hereto with respect to the employment of Executive by
Company and contains all covenants and agreements between the parties relating
to such employment in any manner whatsoever. Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements,
oral
or written, have been made by any party, or anyone acting on behalf of any
party, that are not embodied herein, and that no other agreement, statement,
or
promise not contained in this Agreement will be valid or binding. Any
modification of this Agreement will be effective only if it is in writing signed
by the party to be charged. No waiver of any of the provisions of this Agreement
will be deemed, or will constitute, a waiver of any other provision, whether
or
not similar, nor will any waiver constitute a continuing waiver. No waiver
will
be binding unless executed in writing by the party making the
waiver.
7.4. Assignment.
Because
of the personal nature of the services to be rendered hereunder, this Agreement
may not be assigned in whole or in part by Executive without the prior written
consent of Company. However, subject to the foregoing limitation, this Agreement
will be binding on, and will inure to the benefit of, the parties hereto and
their respective heirs, legatees, executors, administrators, legal
representatives, successors and assigns.
7.5. Severability.
If for
any reason whatsoever, any one or more of the provisions of this Agreement
will
be held or deemed to be inoperative, unenforceable, or invalid as applied to
any
particular case or in all cases, such circumstances will not have the effect
of
rendering any such provision inoperative, unenforceable, or invalid in any
other
case or of rendering any of the other provisions of this Agreement inoperative,
unenforceable or invalid.
7.6. Representation
by Counsel; Interpretation.
Company
and Executive acknowledge that each party to this agreement has had the
opportunity to be represented by counsel in connection with this Agreement
and
the matters contemplated by this Agreement. Accordingly, any rule of law or
decision which would require interpretation of any claimed ambiguities in this
Agreement against the party that drafted it has no application and is expressly
waived. The provisions of this Agreement will be interpreted in a reasonable
manner to affect the intent of the parties.
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7.7.
Indemnification.
Company
agrees that it will indemnify and hold harmless Executive to the fullest extent
permitted by law from and against any and all liabilities, costs, claims and
expenses, including all costs and expenses incurred in defense of litigation
(including attorneys’ fees), arising out of the employment of Executive, except
to the extent arising out of or based upon the gross negligence or willful
misconduct of Executive. Costs and expenses incurred by Executive in defense
of
such litigation (including attorneys’ fees) will be paid by Company upon
receiving from Executive (a) a written request for payment, (b) appropriate
documentation evidencing the incurrence, amount and nature of the costs and
expenses for which payment is being sought, and (c) an undertaking adequate
under Nevada law made by or on behalf of Executive to repay the amounts so
paid
if it will ultimately be determined that Executive is not entitled to be
indemnified by Company under this Agreement.
7.8. Attorneys’
Fees.
In any
action at law or in equity to enforce or construe any provisions or rights
under
this Agreement, the unsuccessful party or parties to such litigation, as
determined by the courts pursuant to a final judgment or decree, will pay the
successful party or parties all costs, expenses, and reasonable attorneys’ fees
incurred by such successful party or parties (including, without limitation,
such costs, expenses, and fees on any appeals), and if such successful party
or
parties will recover judgment in any such action or proceedings, such costs,
expenses, and attorneys’ fees will be included as part of such
judgment.
7.9. Counterparts.
This
Agreement may be executed simultaneously in one or more counterparts, each
of,
which will be deemed an original, but all of which together will constitute
one
and the same instrument. Fax signatures will be valid and binding.
7.10. Headings
and Captions.
Headings and captions are included for purposes of convenience only and are
not
a part hereof.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of
the day and year first written above at Las Vegas, Nevada.
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“Company”
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Noninvasive
Medical Technologies, Inc.
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By:
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/s/
Xxxxxx XxXxxxxxx
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Its:
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Chairman
of the Board
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“Executive”
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/s/
Xxxxxx XxXxxxxxx
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