EMPLOYMENT AGREEMENT
EXHIBIT
10.71
THIS
EMPLOYMENT AGREEMENT
is dated
as of September 12, 2006, between Imaging
Diagnostic Systems, Inc.,
a
Florida corporation (the "Company"), and
Xxxxx X. Xxxxxxxx (the
"Executive").
WITNESSETH:
WHEREAS,
The
Company is engaged in the business of developing laser-based medical optical
imaging devices; and
WHEREAS,
the
Company has the intent to market and sell its products and services to clients
and potential clients throughout the world; and
WHEREAS,
the
Company wishes to continue to employ the Executive as its Executive
Vice-President and Chief Financial Officer, charged with all the
responsibilities and duties legally required by the State of Florida and
to
oversee various broad and specific aspects of its business; and
WHEREAS,
in the
course of the Executive’s employment, the Executive will continue to have access
to and acquire knowledge of valuable trade secrets, confidential information
and
other proprietary information belonging and relating to the Company and its
business, and which the Company has a legitimate interest in protecting;
and
WHEREAS,
the
Company and Executive are willing to continue the employment, subject to
the
terms and conditions contained in this Employment Agreement (the
“Agreement”);
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants set forth in this
Agreement, and intending to be legally bound, the Company and the Executive
agree as follows:
1. EMPLOYMENT.
The
Company hereby continues the employment of the Executive and the Executive
hereby accepts employment upon the terms and condition hereinafter set
forth.
2. TERM
& TERMINATION.
(a) Term.
The
Company hereby continues the employment of the Executive, and the Executive
hereby accepts employment with the Company, for a period commencing on August
30, 2006, and ending one year from that date (the "Term"). All Company
obligations under this Agreement shall cease upon its termination, except
for
those stock options which have been vested.
(b) Termination
without Cause.
The
Company may terminate the Executive’s employment without cause. Such termination
will become effective upon the date specified in the termination notice,
provided that such date is at least 60 days from the date of such notice.
In the
event of such termination without cause:
(i) For
the
remainder of the Term following the effective date of termination, the Company
will continue to pay the Executive his salary pursuant to Section
3(a).
(ii) The
Company will continue to maintain for the remainder of the Term following
the
effective date of termination, for the benefit of the Executive, the employee
benefit programs referred to in Section 3(b) as in effect on the date of
termination.
(iii) On
the
effective date of termination, all options that were scheduled to vest will
vest
and will remain exercisable for a period of three years from the date of
termination.
(c) Termination
for Cause.
The
Company may terminate the Executive’s employment at any time for cause by giving
written notice of termination setting forth such cause. Such termination
shall
become effective upon the giving of such notice, except that, where the basis
for cause is capable of cure within 30 days, termination based upon cause
shall
not become effective unless Executive shall fail to complete such cure within
30
days of receipt of written notice of the existence of such cause. Upon such
termination the Executive shall have no right to compensation, commission,
bonus, benefits or reimbursement pursuant to this Agreement, for any period
subsequent to the effective date of termination. Further, upon termination
for
cause, all of the Executive’s unvested stock options shall terminate. For
purposes of this section, “cause” shall mean; (1) the Executive is convicted of
a felony; (2) the Executive, in carrying out his duties hereunder, commits
gross
negligence or willful misconduct resulting, in either case, in material harm
to
the Company; (3) the Executive misappropriates Company funds or otherwise
defrauds the Company; (4) the Executive materially breaches any provision
of
this Agreement; or (5) the Executive materially fails to perform his duties
under section 4.
(d) Death
or Disability.
Upon
the death or disability of the Executive, the Executive shall be entitled
to and
the Company will pay the Executive’s salary from the date of death or from the
date of disability through the end of the Term. (For purposes of this Section,
“disability” shall mean that for a period of six months in any 12-month period
the Executive is incapable of substantially fulfilling his duties because
of
physical, mental or emotional incapacity arising from injury, sickness or
disease.) Should the Executive be rendered disabled, the Company will continue
to maintain for the benefit of the Executive the employee benefit programs
referred to in Section 3(b) that were in effect on the date of the
disability.
(e) Special
Termination.
In the
event that (i) the Company materially breaches this Agreement or the performance
of its duties and obligations hereunder; or (ii) any entity or person not
now an
executive officer of the Company becomes either individually or as part of
a
group the beneficial owner of 20% or more of the Company’s common stock, the
Executive, by
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written
notice to the Company, may elect to deem the Executive’s employment hereunder to
have been terminated by the Company without cause under Section 2(b) hereof,
in
which event the Executive shall be entitled to the compensation provided
for in
Section 2(b).
(f) Voluntary
Termination.
The
Executive, on 30 days prior written notice to the Company, may terminate
his
employment voluntarily. Upon such termination, the Company will pay the
Executive’s compensation through the date of such termination. After such date,
the Executive shall no longer be entitled to receive any compensation,
reimbursement or benefits and all unvested stock options shall terminate
upon
termination of the Executive’s employment.
(g) Continuing
Effect. Notwithstanding
any termination of this Agreement at the end of the Term or otherwise, the
provisions of Sections 6 - 11 shall remain in full force and effect and the
provisions of these Sections shall be binding upon the legal representatives,
heirs, successors and assigns of the Executive.
3. COMPENSATION.
(a) The
Company will continue to pay the Executive an annual base salary of $185,000
per
annum in equal semi-monthly installments.
(b) During
the term of his employment, the Executive shall be entitled to participate
in
employee benefits plans or programs of the Company, if any, to the extent
the
Executive is eligible to participate thereunder, including the Comprehensive
Group Insurance Program maintained by the Company, paid by the Company for
the
Executive and his spouse, except for the appropriate employee and spouse
portion.
(c) The
Company shall provide the Executive with a $500 per month car allowance and
a
cellular phone and major credit card for use on Company business.
(d) The
Executive shall receive an option to purchase up to an aggregate of 250,000
shares of the Company’s common stock at an exercise price of $.114 per share
pursuant to the Company’s standard form of stock option agreement. The option
shall vest one year from the date of this Agreement, provided that the Executive
remains employed by the Company through that time, except to the extent that
earlier vesting is provided under specified circumstances as set forth elsewhere
in this Agreement or in the Company’s applicable form of stock option
agreement.
(e) The
Executive will be entitled to nine paid holidays and six weeks of vacation
for
each 12-month period without loss of compensation or other benefits to which
he
is entitled under this Agreement, to be taken at such times as the Executive
may
select and the affairs of the Company may permit.
4. DUTIES.
(a) General
Duties.
The
Executive shall be employed as the Executive Vice-President and Chief Financial
Officer, with duties and responsibilities that are customary for
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such
position, subject to the direction of the CEO and as directed by the Company’s
by-laws. The Executive will use the standard of care befitting of such an
executive in performing duties and in discharging responsibilities pursuant
to
this Agreement, which duties and responsibilities shall be discharged
competently, carefully, and faithfully.
(b) Corporate
Code of Conduct.
The
Executive agrees to adhere to the Company’s Corporate Code of
Conduct.
(c) Extent
of Services.
The
Executive will devote all of his time, attention and energies during normal
business hours (exclusive of periods of sickness and disability and of such
normal holiday and vacation periods as have been established by the Company)
to
the affairs of the Company. The Executive will not enter the employ of, or
serve
as a consultant to, or in any way perform any services with or without
compensation to any person, business or organization without the prior consent
of the board of directors of the Company; provided, that the Executive shall
be
permitted to devote a limited amount of time, without compensation, to
charitable or similar organizations.
5. PLACE
OF PERFORMANCE.
The
Executive hereby acknowledges that the Company’s existing and potential clients
are located throughout the world and that the Company is actively engaged
in
marketing and selling its products and services to such clients throughout
the
world.
6. NON-DISCLOSURE
OF CONFIDENTIAL INFORMATION.
The
Executive acknowledges that, during his employment, he will learn and will
have
access to confidential information regarding the Company and its affiliates,
including without limitation (i) proprietary or secret plans, designs,
processes, programs, documents, software, agreements or material relating
to the
business, products, services or activities of the Company and its affiliates
and
(ii) market reports, customer investigations, clinical data, scientific or
engineering research, customer lists and/or similar information that is
proprietary information of the Company or its affiliates (collectively,
“Confidential Business and Technical Information”). The Executive recognizes and
acknowledges that the Confidential Business and Technical Information, as
it may
exist from time to time, represents valuable, special and unique assets of
the
Company access to and knowledge of which are essential to the performance
of the
Executive’s duties hereunder.
The
Executive will not, during or after the term of his employment by the Company,
in whole or in part, disclose any such Confidential Business and Technical
Information to any person, firm, corporation, association or entity for any
reason or purpose whatsoever, nor shall the Executive make use of any such
Confidential Business and Technical Information for his own purposes or for
the
benefit of any person, firm, corporation or entity except the Company under
any
circumstances during or after the term of his employment, provided that after
the term of his employment these restrictions shall not apply to such secrets,
information and processes which are then in the public domain provided that
the
Executive was not responsible, directly or indirectly, for such secrets,
information or processes entering the public domain without the Company’s
consent.
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In
the
event an action is instituted and prior knowledge is an issue, it shall be
the
obligation of the Executive to prove by clear and convincing evidence that
the
Confidential Business and Technical Information disclosed was in the public
domain, was already known by the recipient, or was developed independently
by
the recipient. The Executive agrees to hold as the Company’s property all
memoranda, books, papers, letters, formulas and other data, and all copies
thereof and therefrom, in any way containing Confidential Business and Technical
Information or otherwise relating to the Company’s business and affairs, whether
made by him or otherwise coming into his possession, and upon termination
of his
employment, or on demand of the Company, at any time, to deliver the same
to the
Company.
7. NON-COMPETITION
AGREEMENT.
(a) The
Executive acknowledges and agrees that, pursuant to Florida Statutes Section
542.335, based on having access to and acquiring knowledge of highly sensitive
and valuable trade secrets, and confidential or proprietary information
belonging or relating to the Company, the Executive would be in a position
to
cause serious and irreparable harm to the Company in the event that, following
the termination of his employment hereunder, the Executive were to compete
with
or be involved in an enterprise which competes with the Company, engages
in the
same business as the Company, or performs research and development in the
field
of medical optical imaging.
(b) Until
termination of his employment and for a period of 24 months commencing on
the
date of termination, the Executive, directly or indirectly, in association
with
or as a stockholder, director, officer, consultant, executive, partner, joint
venturer, member or otherwise of or through any person, firm, corporation,
partnership, association or entity, covenants that the Executive will not
compete with the Company or any of its affiliates in the design, manufacture,
construction, offer, sale or marketing of products or services that are
competitive with the products or services offered by the Company during such
period, within the United States or anywhere in the world. The Executive
covenants and agrees that during his employment and for a period of 24 months
immediately following the termination of such employment, the Executive will
not, either individually or in partnership or jointly or in conjunction with
any
person, firm, business, corporation, partnership, joint venture, entity,
syndicate or association, as an executive, principal, agent, officer, director,
consultant, advisor, distributor, dealer, contractor, trustee, lender,
shareholder or in any manner or capacity whatsoever, directly or indirectly,
be
employed by, render services to, carry on or be engaged in, or be concerned
with
or be interested in or advise, lend money to, guarantee the debts or obligations
of, or in any manner participate in the management, operation or control
of any
business which is directly competitive with the business of the Company,
engages
in the same business as the Company or performs research and development
in the
medical optical imaging field with any entity located anywhere in the
world.
(c) For
the
purposes of this paragraph a business shall be deemed to be in “direct
competition” or “directly competitive” with the Company if such business is
engaged in developing, manufacturing, marketing, selling, or distributing
medical optical imaging devices.
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8. NON-SOLICITATION.
The
Executive covenants and agrees that while he is employed by the Company and
for
a period of 24 months immediately following the termination of such employment,
he will not, directly or indirectly, in any manner whatsoever, on his own
behalf, or on behalf of any person, firm, business, corporation, partnership,
joint venture, entity, syndicate or association solicit, induce or cause,
or
attempt to induce or cause, any person who is then an employee of or consultant
to the Company to cease providing services to the Company.
9. REASONABLENESS
OF CONFIDENTIALITY, NON-COMPETITION AND NON-SOLICITATION OBLIGATION AND
COVENANTS.
(a) The
Executive hereby acknowledges and confirms that the obligations and covenants
set out in the above paragraphs are reasonable and necessary to protect the
legitimate interests of the Company. Without limiting the generality of the
foregoing, the Executive hereby acknowledges and confirms that given, among
other things, the nature and international scope of the Company’s operations and
of the employment duties to be performed by the Executive hereunder, the
geographic scope and duration of the restrictions set forth above are reasonable
and necessary to protect the legitimate interests of the Company.
(b) The
Executive further acknowledges and agrees that these obligations and covenants
will not preclude him from becoming gainfully employed following their
termination of his employment in his profession.
10. INVENTIONS.
(a) The
Executive hereby sells, transfers and assigns to the Company or to any person
or
entity designated by the Company, all of the entire right, title and interest
of
the Executive in and to all inventions, ideas, disclosures and improvements,
whether patented or unpatented, and copyrightable material, made or conceived
by
the Executive, solely or jointly, in whole or in part, during the term hereof
which (i) relate to methods, apparatus, designs, products, processes or devices
sold, leased, used or under construction or development by the Company or
any
subsidiary, or (ii) otherwise relate to or pertain to the business, functions
or
operations of the Company or any subsidiary, or (iii) arise wholly or partly
from the efforts of the Executive during the term hereof. The Executive shall
communicate promptly and disclose to the Company, in such form as the Company
requests, all information, details and data pertaining to the aforementioned
inventions, ideas, disclosures and improvements; and, whether during the
term
hereof or thereafter, the Executive shall execute and deliver to the Company
such formal transfers and assignments and such other papers and documents
as may
be required of the Executive at the Company’s expense to permit the Company or
any person or entity designated by the Company to file and prosecute the
patent
applications and, as to copyrightable material, to obtain copyright thereon.
Any
invention made by the Executive within one year following the termination
of
employment shall be deemed to fall within the provisions of this Section
unless
proven by the Executive to have been first conceived and made following such
termination.
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(b) No
Payment.
The
Executive acknowledges and agrees that no separate or additional payment
or
compensation will be required to be made to him in consideration of his
undertakings in this Section.
11. EQUITABLE
RELIEF.
(a) The
Company and the Executive recognize that the services to be rendered under
this
Agreement by the Executive are special, unique and of extraordinary character,
and that in the event of the breach by the Executive of the terms and conditions
of this Agreement or if the Executive, without the prior consent of the Board
of
Directors of the Company, shall leave his employment for any reason and take
any
action in violation of Section 6, Section 7 or Section 8, the Company will
be
entitled to institute and prosecute proceedings in any court of competent
jurisdiction referred to in Section 11(b) below, to enjoin the Executive
from
breaching the provisions of Section 6, Section 7, or Section 8. In such action,
the Company will not be required to plead or prove irreparable harm or lack
of
an adequate remedy at law. Nothing contained in this Section 11 shall be
construed to prevent the Company from seeking such other remedy as the Company
may elect in any arbitration proceeding based on any breach of this Agreement
by
the Executive.
(b) Any
proceeding or action for equitable relief must be commenced in state court
in
Broward County, Florida. The Executive and the Company irrevocably and
unconditionally submit to the jurisdiction of such court and agree to take
any
and all future action necessary to submit to the jurisdiction of such court.
The
Executive and the Company irrevocably waive any objection that they now have
or
hereafter may have to the laying of venue of any suit, action or proceeding
brought in such court for equitable relief and further irrevocably waive
any
claim that any such suit, action or proceeding brought in such court has
been
brought in an inconvenient forum.
12. ASSIGNMENT. The
rights and obligations of the Company under this Agreement shall inure to
the
benefit of and be binding upon the successors and assigns of the Company,
provided that any such successor or assign shall acquire all or substantially
all of the assets and business of the Company. The Executive's obligations
hereunder may not be assigned or alienated and any attempt to do so by the
Executive will be void.
13. SEVERABILITY.
(a) The
Executive expressly agrees that the character, duration and geographical
scope
of the provisions set forth in this Agreement are reasonable in light of
the
circumstances, as they exist on the date hereof. Should a decision, however,
be
made at a later date by a court of competent jurisdiction that the character,
duration or geographical scope of such provisions is unreasonable, then it
is
the intention and the agreement of the Executive and the Company that this
Agreement shall be construed by the court in such a manner as to impose only
those restrictions on the Executive's conduct that are reasonable in the
light
of the circumstances and as are necessary to assure to the Company the benefits
of this Agreement. If, in any judicial proceeding, a court shall refuse to
enforce all of the separate covenants deemed
7
included
herein because taken together they are more extensive than necessary to assure
to the Company the intended benefits of this Agreement, it is expressly
understood and agreed by the parties hereto that the provisions of this
Agreement that, if eliminated, would permit the remaining separate provisions
to
be enforced in such proceeding shall be deemed eliminated, for the purposes
of
such proceeding, from this Agreement.
(b) If
any
provision of this Agreement otherwise is deemed to be invalid or unenforceable
or is prohibited by the laws of the state or jurisdiction where it is to
be
performed, this Agreement shall be considered divisible as to such provision
and
such provision shall be inoperative in such state or jurisdiction and shall
not
be part of the consideration moving from either of the parties to the other.
The
remaining provisions of this Agreement shall be valid and binding and of
like
effect as though such provision were not included.
14. NOTICES
AND ADDRESSES. All
notices, offers, acceptance and any other acts under this Agreement (except
payment) shall be in writing, and shall be sufficiently given if delivered
to
the addressee in person, by Federal Express or similar receipted delivery,
by
facsimile delivery or, if mailed, postage prepaid, by certified mail, return
receipt requested, as follows:
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To
the Company:
|
Imaging
Diagnostic Systems, Inc.
|
|
0000
X.X. 00xx
Xxxxx
|
|
|
Xxxxxxxxxx,
Xxxxxxx 00000
|
|
|
To
the Executive:
|
Xxxxx
X. Xxxxxxxx
|
|
0000
X.X. 00xx
Xxxxx
|
|
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Xxxxxxxxxx,
Xxxxxxx 00000
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or
to
such other address as either of them, by notice to the other may designate
from
time to time. The transmission confirmation receipt from the sender's facsimile
machine shall be conclusive evidence of successful facsimile delivery. Time
shall be counted to, or from, as the case may be, the delivery in person
or by
mailing.
15. COUNTERPART. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the
same
instrument. The execution of this Agreement may be by actual or facsimile
signature.
16. ARBITRATION. Except
for any controversy or claim seeking equitable relief as provided in Section
11
of this Agreement, any controversy or claim arising out of or relating to
this
Agreement, or to the interpretation, breach or enforcement thereof or any
other
dispute between the parties, shall be submitted to one arbitrator and settled
by
arbitration in Fort Lauderdale, Florida, in accordance with the commercial
arbitration rules of the American Arbitration Association in effect at such
time. Any award made by such arbitrator shall be final, binding and conclusive
on all parties hereto for all purposes, and judgment may be entered thereon
in
any court having jurisdiction thereof.
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17. ATTORNEYS
FEES.
In the
event that there is any controversy or claim arising out of or relating to
this
Agreement, or to the interpretation, breach or enforcement thereof, and any
action or proceeding is commenced to enforce the provisions of this Agreement,
whether through litigation or arbitration, the prevailing party shall be
entitled to recover from the non-prevailing party his/its reasonable attorney’s
fees, costs and expenses incurred at all levels.
18. GOVERNING
LAW. This
Agreement and any dispute, disagreement, or issues of construction or
interpretation arising hereunder whether relating to its execution, its
validity, the obligations provided therein or performance shall be governed
or
interpreted according to the internal laws of the State of Florida without
regard to choice of law considerations.
19. ENTIRE
AGREEMENT.
This
Agreement constitutes the entire Agreement between the parties and supersedes
all prior oral and written agreements between the parties with respect to
the
subject matter hereof. Neither this Agreement nor any provision hereof may
be
changed, waived, discharged or terminated orally, except by a statement in
writing signed by the party or parties against whom enforcement or the change,
waiver, discharge or termination is sought.
20. ADDITIONAL
DOCUMENTS.
The
parties hereto shall execute and deliver such additional instruments as may
be
reasonably required in order to carry out the purpose and intent of this
Agreement and to fulfill the obligations of the parties hereunder.
21. SECTION
AND PARAGRAPH HEADINGS.
The
section and paragraph headings in this Agreement are for reference purposes
only
and shall not affect the meaning or interpretation of this
Agreement.
22. WAIVER
OF BREACH.
A waiver
by the Company or the Executive of a breach of any provision of the Agreement
by
the other party shall not operate or be construed as a waiver of any subsequent
breach by the other party.
IN
WITNESS WHEREOF,
the
Company and the Executive have executed this Agreement as of the 12th day
of
September, 2006.
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IMAGING
DIAGNOSTIC SYSTEMS, INC.
By:
/s/
Xxx Xxxxxx
Xxx
Xxxxxx, Chief Executive Officer
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EXECUTIVE
/s/
Xxxxx X. Xxxxxxxx
Xxxxx
X. Xxxxxxxx
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STOCK
OPTION AGREEMENT
(2004
Non-Statutory Stock Option Plan)
Imaging
Diagnostic Systems, Inc.
(the
“Company”), desiring to afford an opportunity to the Grantee named below to
purchase certain shares of common stock of the Company (the “Common Stock”) to
provide the Grantee with an added incentive as an employee of the Company,
hereby grants to Grantee, and the Grantee hereby accepts, an option to purchase
the number of such shares optioned as specified below, during the term ending
at
midnight (prevailing local time at the Company’s principal offices) on the
expiration date of this Option specified below, at the option exercise price
specified below, subject to and upon the following terms and
conditions:
1. Identifying
Provisions.
As
used
in this Option, the following terms shall have the following respective
meanings.
(a) Grantee:
Xxxxx X. Xxxxxxxx;
(b) Date
of
grant: September 12, 2006;
(c) Number
of
shares optioned: 250,000;
(d) Option
exercise price per share: $.114;
(e) Expiration
Date: September 12, 2016;
(f) Plan:
The
Company’s 2004 Non-Statutory Stock Option Plan; and
(g)
Committee:
The stock option committee of the Company’s Board of Directors, or if none, the
Board of Directors.
This
Option is not intended to be an incentive stock option pursuant to Section
422
of the Internal Revenue Code.
2. Vesting.
This
Option shall vest and become exercisable on the following date(s) in the
following amount(s):
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Vesting
Date
|
Number
of Shares
|
|
September
12, 2007
|
250,000
|
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3. Restrictions
on Exercise.
The
following additional provisions shall apply to the exercise of this
Option:
(a) Termination
of Employment.
If the
Grantee’s employment by the Company or any of its subsidiaries is terminated for
any reason other than death, only that portion of this Option exercisable
at the
time of such termination of employment may thereafter be exercised, and it
may
not be exercised after the earlier of (i) three years after such termination
or
(ii) the Expiration Date.
(b) Death
of Grantee.
If the
Grantee shall die during the term of this Option, the Grantee’s legal
representative or representatives, or the person or persons entitled to do
so
under the Grantee’s last will and testament or under applicable intestate laws,
shall have the right to exercise this Option, but only for the number of
shares
as to which the Grantee was entitled to exercise this Option in accordance
with
Section 2 hereof on the date of his death, and such right shall expire and
this
Option shall terminate three years after the date of the Grantee’s death or on
the expiration date of this Option, whichever date is sooner.
(c) Continuity
of Employment.
This
Option shall not be exercisable by the Grantee in any part unless at all
times
beginning with the date of grant and ending no more than three years prior
to
the date of exercise, the Grantee has, except for military service leave,
sick
leave or other bona fide leave of absence (such as temporary employment by
the
United States Government) been in the continuous employ of the
Company.
4. Non-Transferable.
The
Grantee may not transfer this Option except by will or the laws of descent
and
distribution. This Option shall not be otherwise transferred, assigned, pledged,
hypothecated or disposed of in any way, whether by operation of law or
otherwise, and shall be exercisable during the Grantee’s lifetime only by the
Grantee or his guardian or legal representative.
5. Adjustments
and Corporate Reorganization.
Subject
to any required action by the shareholders of the Company, the number of
shares
covered by the Option, as well as the exercise price per share of the Option,
shall be proportionately adjusted for any increase or decrease in the number
of
issued shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase
or
decrease in the number of issued shares of Common Stock effected without
receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company
of
shares of stock of any class, or securities convertible into shares of stock
of
any class, shall affect, and no adjustment by reason thereof shall be made
with
respect to, the number or price of shares subject to the Option.
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In
the
event of the proposed dissolution or liquidation of the Company, the Option
will
terminate immediately prior to the consummation of such proposed action,
unless
otherwise provided by the Committee. The Committee may, in the exercise of
its
sole discretion in any such instance, declare that the Option shall terminate
as
of a date fixed by the Committee and give Grantee the right to exercise his
Option as to all or any part of the Option, including shares as to which
the
Option would not otherwise be exercisable. In the event of the proposed sale
of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation in a transaction in which the Company
is not the survivor, the Option shall be assumed or an equivalent option
shall
be substituted by such successor corporation or a parent or subsidiary of
such
successor corporation, unless the Committee determines, in the exercise of
its
sole discretion and in lieu of such assumption or substitution, that the
Grantee
shall have the right to exercise the Option as to all of the optioned stock,
including shares as to which the Option would not otherwise be exercisable.
If
the Committee makes an Option fully exercisable in lieu of assumption or
substitution in the event of such a merger or sale of assets, the Committee
shall notify the Grantee that the Option shall be fully exercisable for a
period
of 30 days from the date of such notice, and the Option will terminate upon
the
expiration of such period.
6. Exercise,
Payment For and Delivery of Stock.
This
Option may be exercised by the Grantee or other person then entitled to exercise
it by giving four business days’ written notice of exercise to the Company
specifying the number of shares to be purchased and the total purchase price.
The exercise price shall become immediately due upon exercise of the Option
and
shall be payable in one of the following alternative forms specified
below:
(a) full
payment in cash or check drawn to the Company’s order;
(b) full
payment in shares of Common Stock held for at least six months and valued
at
fair market value on the Exercise Date (as such term is defined
below);
(c) full
payment through a combination of shares of Common Stock held for at least
six
months and valued at fair market value on the Exercise Date and cash or check;
or
(d) full
payment through a broker-dealer sale and remittance procedure provided that
sale
of the optioned stock is permitted as a result of an effective registration
statement under the Securities Act of 1933, as amended, and Grantee complies
with all applicable securities laws, pursuant to which the Grantee (i) shall
provide irrevocable written instructions to a Company-designated brokerage
firm
to effect the immediate sale of the purchased shares and remit to the Company,
out of the sale proceeds available on the settlement date, sufficient funds
to
cover the aggregate exercise price payable for the purchased shares plus
all
applicable Federal and State income taxes required to be withheld by the
Company
in connection with such purchase and (ii) shall provide written directives
to
the Company to deliver the certificates for the purchased shares directly
to
such brokerage firm in order to complete the sale transaction.
For
purposes of this section 6, the Exercise Date shall be the date on which
written
notice of the Option exercise is delivered to the Company. Except to the
extent
the sale and remittance
12
procedure
is utilized in connection with the exercise of the Option, payment of the
exercise price for the purchased shares must accompany such notice.
The
fair
market value per share of Common Stock on any relevant date shall be determined
in accordance with the following provisions:
(i) If
the
Common Stock is not at the time listed or admitted to trading on any national
stock exchange but is traded on The NASDAQ National Market, the fair market
value shall be the closing selling price per share of Common Stock on the
date
in question, as such price is reported by the National Association of Securities
Dealers on The NASDAQ National Market or any successor system. If there is
no
reported closing selling price for the Common Stock on the date in question,
then the closing selling price on the last preceding date for which such
quotation exists shall be determinative of fair market value.
(ii) If
the
Common Stock is at the time listed or admitted to trading on any national
stock
exchange, then the fair market value shall be the closing selling price per
share of Common Stock on the date in question on the stock exchange determined
by the Committee to be the primary market for the Common Stock, as such price
is
officially quoted in the composite tape of transactions on such exchange.
If
there is no reported sale of Common Stock on such exchange on the date in
question, then the fair market value shall be the closing selling price on
the
exchange on the last preceding date for which such quotation
exists.
(iii) If
the
Common Stock is quoted on The NASDAQ Capital Market or any similar system
of
automated dissemination of quotations of securities in common use, the fair
market value shall be the mean between the closing bid and asked quotations
for
the Common Stock on such date.
(iv) If
neither clause (i), (ii) or (iii) is applicable, then the fair market value
shall be the mean between the closing bid and asked quotations for the Common
Stock as reported by the National Quotation Bureau, Inc., if at least two
securities dealers have inserted both bid and asked quotations for Common
Stock
on at least five of the ten preceding business days.
(v) If
none
of clauses (i) - (iv) is applicable then the fair market value shall be
determined by the Committee.
7. Rights
in Shares Before Issuance and Delivery.
No
person shall be entitled to the privileges of stock ownership in respect
of any
shares issuable upon exercise of this Option unless and until such shares
have
been issued to such person as fully paid shares.
8. Requirements
of Law and of Stock Exchanges. By
accepting this Option, the Grantee represents and agrees for himself and
his
transferees by will or the laws of descent and distribution that, unless
a
registration statement under the Securities Act of 1933 is in effect as to
shares purchased upon any exercise of this Option, (i) any and all shares
so
purchased shall be
13
acquired
for his personal account and not with a view to or for sale in connection
with
any distribution, and (ii) each notice of the exercise of any portion of
this
Option shall be accompanied by a representation and warranty in writing,
signed
by the person entitled to exercise the same, that the shares are being so
acquired in good faith for his personal account and not with a view to or
for
sale in connection with any distribution.
No
certificate or certificates for shares of stock purchased upon exercise of
this
Option shall be issued and delivered unless and until, in the opinion of
counsel
for the Company, such securities may be issued and delivered without causing
the
Company to be in violation of or incur liability under any federal, state
or
other securities law, any requirement of any securities exchange listing
agreement to which the Company may be a party, or any other requirement of
law
or of any regulatory body having jurisdiction over the Company.
9. Stock
Option Plan.
This
Option is subject to, and the Company and the Grantee agree to be bound by,
all
of the terms and conditions of the Plan, as the same shall have been amended
from time to time in accordance with the terms thereof, provided that no
such
amendment shall deprive the Grantee, without his consent, of this Option
or any
of his rights hereunder. Pursuant to the Plan, the Committee is vested with
final authority to interpret and construe the Plan and this Option and is
authorized to adopt rules and regulations for carrying out the Plan. A copy
of
the Plan in its present form is available for inspection during business
hours
by the Grantee or other persons entitled to exercise this Option at the
Company’s principal office. The Plan, as amended from time to time, is hereby
incorporated by reference.
10. Notices.
Any
notice to be given to the Company shall be addressed to the Company in care
of
its Secretary at its principal office, and any notice to be given to the
Grantee
shall be addressed to him at the address given beneath his signature hereto
or
at such other address as the Grantee may hereafter designate in writing to
the
Company. Any such notice shall be deemed duly given when actually delivered
by
hand, facsimile, certified or registered mail or recognized overnight
courier.
11. Conflict
with Employment Agreement.
In the
event that any provision of this Option Agreement is inconsistent with a
provision of an employment agreement between the Grantee and the Company,
the
employment agreement provision shall govern and supersede the inconsistent
provision of this Agreement.
12. Laws
Applicable to Construction.
This
Agreement has been executed and delivered by the Company in the State of
Florida, and this Agreement shall be construed and enforced in accordance
with
the laws of said State.
14
IN
WITNESS WHEREOF,
the
Company has granted this Option on September 12, 2006.
|
IMAGING
DIAGNOSTIC SYSTEMS, INC.
/s/
X.X. Xxxxxx
By:
Xxxxxxx X. Xxxxxx, Chief Executive Officer
|
GRANTEE
/s/
Xxxxx X. Xxxxxxxx
Xxxxx
X. Xxxxxxxx
|
15
