EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into and effective
this 15th day of June, 1998 ("Effective Date") by and between ACCUIMAGE
DIAGNOSTICS CORP., a Nevada corporation ("Company") and XXXXX X. XXXXXXX
("Executive"), regarding the terms and conditions of his employment by and with
the Company.
RECITALS:
WHEREAS, Company wishes to employ Executive and Executive wishes to be
employed to provide his services to Company on the terms and conditions set
forth below.
NOW, THEREFORE, for good and sufficient consideration, the parties
agree as follows:
AGREEMENT
1. POSITION AND DUTIES: Executive will be employed as President and
Chief Executive Officer of Company, effective as of June 15, 1998, or such other
position and duties as the Company's Board of Directors ("Board") may determine
and assign, consistent with Executive's background, experience and performance.
As President and Chief Executive Officer, Executive will report to the Board,
will have profit and loss responsibility for the Company, as well as overall
responsibility for directing the Company toward the achievement of its business
objectives as approved by the Board, plus those duties of an executive officer
of the Company established from time to time by the board and such additional
duties as may be mutually agreed from time to time.
2. TERM: Executive's employment will be at will and for no specific
term, terminable at the will of either Executive or the Company on thirty (30)
days written notice, subject to the terms and conditions set forth below.
3. STANDARDS OF PERFORMANCE: Executive agrees to perform all of his
duties in a fully professional manner pursuant to the standards of skill,
competence and efficiency expected of his position, and subject to the direction
and control of the Board. He agrees to devote his full business time, energy and
attention and give his best efforts and skills exclusively to the furtherance
and best interests of the Company, and to the performance of his duties
hereunder.
A. The above notwithstanding, and specifically subject to Board
approval and the provisions of Section 6 below, the expenditure of reasonable
amounts of time for personal business, charitable, community or professional
activities will not be deemed a breach of this Agreement, provided that such
activities, individually or in the aggregate, do not interfere materially with
the performance of his duties hereunder, and further provided that in engaging
in such activities he complies fully with the non-compete and confidentiality
provisions of this Agreement and/or related policies of the Company, as they may
be modified from time to time. Executive understands and agrees that the
performance of his duties and his employment with the Company generally are
subject to all of the policies of the Company, the Board, the Company's Articles
of Incorporation and By-laws, and to and all laws and regulations applicable to
corporations generally and to the medical imaging industry in particular.
4. COMPENSATION, BENEFITS, AND PERSONNEL POLICIES:
A. As compensation for all services rendered pursuant to this
Agreement, including serving as a member of the Board, if so elected, Executive
shall be entitled to a base salary in a gross amount equivalent to $140,000
calculated on an annualized basis, and payable pursuant to the Company's regular
payroll practices. The base salary is subject to periodic review, not less
frequently than annually, and adjustment as recommended and approved by the
Board in its sole discretion.
B. Executive is also eligible to be considered for payment of an
incentive bonus of up to $60,000 for each full year of employment, calculated on
the basis of the Company's fiscal year and based on overall Company performance
in meeting revenue and profit goals, as well as any additional specific criteria
mutually agreed upon between Executive and the Board, including such matters as
return on shareholders' equity and meeting overall business objectives. For
fiscal year 1998, which concludes on September 30, 1998, the revenue and profit
goals, as well as any additional specific criteria shall be mutually agreed
between the parties. The payment of any bonus will be made in the good faith
exercise of the Board's discretion, which discretion shall be absolute. Such
bonus, if granted, may take the form of cash or securities or options to
purchase securities.
C. As of the Effective Date, Executive will be granted an option
to purchase four hundred thousand (400,000) shares of Company's common stock at
$0.__ per share, exercisable over a ten year period from the date of grant, at
an exercise price calculated at the market price of the Company's stock as of
the Effective Date, pursuant to a stock option agreement containing additional
terms and conditions as deemed appropriate by the Board, and vesting pursuant to
the following schedule: 100,000 shares on the first anniversary of the date of
grant and 25,000 shares quarterly thereafter until fully vested.
D. Executive will also be covered by and/or entitled to
participate in Company's policies and/or plans regarding benefits of employment,
including all pension, profit sharing and other retirement plans, and all group
health, hospitalization and disability insurance plans and other employee
welfare benefit plans, as are customarily available to and on the same terms as
other key executives. In addition, Executive's employment is subject to
Company's personnel and financial policies as they may be developed and modified
from time to time.
E. The Company has indicated its intention to develop a profit
sharing plan for key executive officers. When developed and implemented,
Executive will be eligible to participate in this plan on the same terms and
conditions as other key executives.
F. The Company will reimburse Executive promptly for reasonable
out-of-pocket expenses incurred in connection with the performance of his
duties, including but not limited to travel expenses, food and lodging while
away from home, and reasonable entertainment expenses, consistent with such
policies as the Company may establish from time to time and provided that
Executive provides appropriate and timely expense reports with appropriate
supporting documentation.
G. During each calendar year of employment, Executive is entitled
paid vacation, sick leave and other paid leaves in accordance with the Company's
polices with respect to paid leaves for executives.
5. TERMINATION OF EMPLOYMENT:
A. Without Cause. Company may terminate Executive's employment
without cause effective upon thirty (30) days' written notice. In the event that
the Company terminates Executive's employment without cause Executive shall be
entitled to: (i) payment of all earned but unpaid compensation through the date
of termination; (ii) payment of base salary and group health coverage for an
additional two month period, payable pursuant to the Company's regular payroll
practices at the time ("Severance Period"); and (iii) vesting of any options
that otherwise would have vested during the Severance Period. All
unvested/unvestable options shall be forfeit as of the date of termination and
the Company shall be relieved of any further obligations under the Agreement in
this regard.
B. With Cause. The Company may also terminate Executive's
employment, at any time and without any prior notice, written or otherwise, for
cause which, for purposes of this Agreement, is defined as any one of the
following: (i) criminal conduct, an act of dishonesty or material breach of this
Agreement; (ii) repeated or demonstrated failure or refusal to perform the
material duties of his position after receiving at least ten (10) days' written
notice of the nature of the failure or refusal to perform, or any failure or
refusal to follow a lawful directive of the Board; or (iii) taking any action or
conducting himself in a manner which is contrary or inimical to the best
interests or reputation of the Company, its parent, subsidiaries or affiliated
companies. In the event the Company terminates Executive for cause, he will be
entitled only to compensation earned, pro rata, and any options that have vested
pursuant to their terms, up to the date of his termination. All unvested options
shall be forfeit as of the date of termination and the Company shall be relieved
of any further obligations hereunder.
C. Incapacity. If during the period of his employment Executive
becomes temporarily disabled from performing his duties hereunder through
illness or otherwise, he will be entitled to a leave of absence with
continuation of base salary for the duration of the disability up to a maximum
in the aggregate of three (3) months. If it reasonably appears to the Company in
the good faith exercise of its judgment that the disability will be permanent,
or in any event if such disability lasts longer than three months, the Company
will have the right to terminate Executive's employment immediately thereafter
and Executive will be entitled to receive whatever benefits he may be entitled
to receive pursuant to the Company's benefit plans or policies.
D. Death. If Executive should die while actively employed
pursuant to this Agreement, the Company shall pay to his estate or designated
beneficiaries within sixty (60) days: (i) any earned but unpaid base salary
through the date of death; (ii) any bonus as determined by the Board to be
appropriate, pro rata through the date of death; and (iii) any other death
benefit made available to similarly situated executives in accordance with the
terms and conditions of Company's regular policies or programs.
E. Resignation. In the event Executive elects to resign,
Executive shall provide at least thirty (30) days' written notice of such
election to resign and shall be entitled to payment of all earned but unpaid
compensation and any options that have vested pursuant to their terms, up to the
date of termination. All unvested options shall be forfeit as of the date of
termination and the Company shall be relieved of any further obligations under
the Agreement.
6. NON-SOLICITATION AND NON-COMPETITION
A. During Executive's employment and during any Severance Period
thereafter, he will not engage, either directly or beneficially, in any outside
business or financial activity, nor render any service in any capacity to anyone
in the business of medical imaging technology. For purposes of this Section 6
and of Section 7, below, Executive agrees and understands that the Company is
defined to include any parent, subsidiary, predecessor, successor or affiliate
of the Company, and further that "engaging in business" or "rendering any
service" includes serving as an officer, director, employee, shareholder,
investor, consultant (with or without compensation) or adviser to any other
entity which engages in the Company's business in the United States. Executive
agrees that with respect to any other outside work during the employment period,
including self-employment, he is required to obtain the advance written approval
of the Company's management, which will evaluate his request taking into account
such factors as his work schedule, duties and responsibilities, any actual or
apparent conflict or incompatibility of employment, and any potential impact on
his performance. The Company's determination shall be made in its sole
discretion, and shall be final.
B. During his employment, during any Severance Period, and for
one year thereafter, except as required by his duties for the Company, Executive
will not, directly or indirectly, or in concert with others, employ nor solicit
nor influence nor otherwise cause any employee of the Company or any of its
affiliated companies to leave their employment with the Company.
7. CONFIDENTIALITY, TRADE SECRETS, AND ASSIGNMENT OF INVENTIONS:
A. Executive acknowledges and agrees that during the course of
his employment with Company, and in preparation therefore and thereafter, he
will be privy to many trade secrets and/or proprietary and other confidential or
privileged information (together "Proprietary Information") regarding the
Company which may affect, among other things, the successful conduct,
furtherance and protection of the Company's business and good will. For these
purposes, confidential information means all business information of whatever
nature regarding the Company (including any and all parents, subsidiaries,
predecessors, successors or affiliates), or about any of its products or
services or potential products or services, business plans, executives,
employees, and methods of doing business, which is not generally known to the
public at large. Trade secrets means information which derives independent
economic value from not being generally known to the public or to others who can
derive economic value from its disclosure or use and is the subject of
reasonable efforts to maintain its secrecy. This Proprietary Information
specifically includes but is not limited to technological information, customer
lists, types and prices of merchandise and orders, future plans, sales methods,
and salary and other personnel information. Executive agrees to keep all such
information in strictest confidence and not to disclose it except for legitimate
purposes of the Company and with the Company's express written consent, either
during his employment or at any time thereafter.
B. On termination of his employment, Executive shall promptly
deliver to the Company all equipment belonging to it, all code and computer
programs of whatever nature, as well as all manuals, letters, correspondence,
reports, price lists, customer lists, sales information, and all copies thereof,
and all other materials of a confidential nature regarding the Company's
business that are in his possession or control. Executive further agrees that
the remedy at law for any breach of the provisions of Sections 6 and 7 herein
will be inadequate, and that the Company will be entitled to seek appropriate
injunctive relief in addition to any remedy at law in case of any such breach.
C. Executives acknowledges and specifically agrees that fully all
work he performs within the scope of his employment, and/or all work which
relates at the time of conception or reduction to the Company's business, or
actual or anticipated research or development of the Company, and/or all work
which results from any work Executive performs for the Company, whether such
work is performed during regular business hours or otherwise, and whether
utilizing the Company's equipment, supplies, facilities or trade secret
information or otherwise, shall belong to the Company. Executive agrees to
assign, or offer to assign, or to take such other reasonable action to assure
that any and all rights to such work shall belong or otherwise be transferred to
the Company.
D. Executive further agrees, as a condition of continued
employment, to promptly disclose to the Company all ideas, processes,
inventions, improvements, developments, methods, designs, analyses, drawings,
reports and discoveries coming within the scope of the Company's business or
related to its products or to any research, design, development, application or
production work carried on by the Company, or to any problems or programs
specifically assigned to Executive, conceived alone or with others during his
employment, and whether or not conceived during regular working hours. All such
ideas, processes, programs, applications, trademarks, inventions, improvements,
developments and discoveries, whether patentable or not, shall be the Company's
sole and exclusive property, and Executive assigns and hereby agrees to assign
his entire right, title and interest in and to the same to the Company, and to
take such other reasonable action to assure that such work shall belong to and
be protected on behalf of the Company.
8. GOVERNING LAW: This Agreement will be governed by and construed
according to the laws of the State of California.
9. RESOLUTION OF DISPUTES: Any controversy between Executive and the
Company involving his employment with the Company or termination thereof,
including but not limited to enforcement, construction, or application of any
term, provision, or condition of this Agreement, except with respect to
paragraphs 6 and 7 hereof, shall be referred to non-binding mediation by a sole
mediator to be selected by agreement between the parties within ten (10)
business days. The mediation shall be scheduled and conducted as promptly as
practicable, and the costs of mediation shall be borne equally by the parties.
A. If the parties cannot themselves agree on a mediator, or if
mediation does not resolve the matter, then either party shall submit the
controversy or claim, within 180 days, to final and binding arbitration in
accordance with the Federal Arbitration Act and the rules of the Judicial and
Mediation Services ("JAMS") then in effect, such arbitration to be conducted in
the County of Santa Clara, California. Failure to initiate arbitration within
such one hundred and eighty (180) day period, or as mutually extended, shall
constitute a waiver of any and all such claims, and they shall be forever
barred. Both parties will attempt to agree upon a mutually acceptable
arbitrator. If they are unable to agree upon an arbitrator, then an arbitrator
will be selected in accordance with the then-current rules of the JAMS. The
parties further agree that arbitrator shall be entitled to award money damages,
including reasonable attorneys' fees to the prevailing party, but shall not be
entitled to award any other remedy at law or equity including but not limited to
exemplary damages, specific performance or injunctive relief. The costs of the
arbitrator will be shared equally by both parties. The parties agree that,
except as specifically excepted herein, arbitration will be their exclusive form
for resolving disputes with one another regarding the employment relationship
and this Agreement, and they expressly waive any entitlement they may have to
have controversies between them decided by a jury or a court of law.
10. ENTIRE AGREEMENT: This Agreement sets forth the entire agreement
and understanding between the parties relating to the subject matter of it, and
supersedes and merges all prior discussions between the parties about such
subject matter.
11. SEVERABILITY: In the event that one or more of the provisions
contained in this Agreement are held to be invalid, illegal, or unenforceable in
any respect by a court of competent jurisdiction, such holding shall not impair
the validity, legality, or enforceability of the remaining provisions herein.
12. SUCCESSORS AND ASSIGNS: This Agreement is binding on Executive's
heirs, executors, administrators, and other legal representatives and will be
for the benefit of the Company, its successors, and assigns.
13. NOTICES: Any notice or other communication required or given
hereunder shall be in writing and delivered personally or sent by telecopier,
certified, registered, or express mail, postage prepaid, and shall be deemed
given when so delivered personally or by telecopier, or if mailed, two days
after the date of mailing, as follows:
If to the Company, addressed to it at:
AccuImage Diagnostics Corp.
000 Xxxxxx Xxxxx Xxxx.
Xx. Xxx Xxxxxxxxx, XX 00000
Attention: Chairman
If to Executive, addressed to him at:
Xx. Xxxxx X. Xxxxxxx
0000 00xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
or at such other address as either party may from time to time specify by giving
notice as provided herein.
14. INDEMNIFICATION AND INSURANCE. The Company will indemnify
Executive to the fullest extent permitted by the laws of the State of
California, as in effect at the time of the subject act or omission, and the
Executive shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its directors and
officers insuring against all costs, charges and expenses whatsoever incurred or
sustained by the Executive in connection with any action, suit or proceeding to
which Executive may be made a part by reason of being or having been an officer
or employee of the Company or any of its subsidiaries, predecessors, or serving
or having served any other enterprises at the request of the Company (other than
any dispute, claim or controversy brought by the Company against Executive for
breach of any provision of this Agreement).
15. SOURCE OF FUNDS. Any and all payments provided pursuant to this
Agreement shall be made in cash from the general funds of the Company and no
special or separate fund or insurance arrangement shall be established or
created and no other segregation of assets made to assure payment. To the extent
that any person acquires a right to receive payments from the Company hereunder,
such right shall be no greater than the right of an unsecured creditor of the
Company.
16. AMENDMENTS AND WAIVERS: This Agreement may not be amended,
modified, superseded, canceled, renewed, extended, or any terms waived, except
by written instrument signed by both parties, or in the case of waiver, by the
party to be charged.
IN WITNESS WHEREOF the parties hereto have executed this agreement as
of the month and date first above written.
EXECUTIVE:
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XXXXX X. XXXXXXX
ACCUIMAGE DIAGNOSTICS CORP.
By:
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Its:
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