Exhibit 10.32
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of
March 1, 1998 between Image Guided Technologies, Inc., a Colorado corporation
(the "Company"), and Xxxxxxx X'Xxxxxx ("X'Xxxxxx").
In consideration of the mutual covenants and conditions set
forth herein, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs X'Xxxxxx in the
capacity of Vice President and Chief Operating Officer of the Company's
Boulder and Springfield operations. X'Xxxxxx accepts such employment and
agrees to perform such services as are customary to such office and as shall
from time to time be assigned to him by the Chairman of the Board, the
President or the Board of Directors.
2. TERM. Subject to earlier termination as provided in
Section 5, the employment hereunder shall be for a period of one year,
commencing on March 1, 1998 (the "Commencement Date") and ending on February
28, 1999 and shall automatically be renewed on the same terms and conditions
for two additional one-year periods unless either party notifies the other at
least 90 days prior to the expiration of the initial term or the first
renewal term, as the case may be, not to renew the Agreement (i.e., unless
earlier terminated, the initial term and the two renewal terms will end on
February 28, 2001). X'Xxxxxx'x employment will be on a full-time basis
requiring the devotion of such amount of his productive time as is necessary
for the efficient operation of the business of the Company.
3. COMPENSATION AND BENEFITS.
3.1. SALARY. For the performance of X'Xxxxxx'x duties
hereunder, the Company shall pay X'Xxxxxx an annual salary of $135,000,
payable (less required withholdings) no less frequently than twice monthly.
3.2. BENEFITS. X'Xxxxxx shall be entitled to such
medical, disability and life insurance coverage and such vacation, sick leave
and holiday benefits, if any, as are made available to the Company's top
executive personnel, all in accordance with the Company's benefits program in
effect from time to time.
3.3. REIMBURSEMENT OF EXPENSES. X'Xxxxxx shall be
entitled to be reimbursed for all reasonable expenses, including but not
limited to expenses for travel, meals and entertainment, incurred by X'Xxxxxx
in connection with and reasonably related to the furtherance of the Company's
business.
4. CHANGE OF CONTROL. In the event of a Change of Control
of the Company (as defined below), all options then granted to X'Xxxxxx which
are unvested at the date of the Change of Control will be immediately vested.
In addition, in the event of a termination of
X'Xxxxxx'x employment during the term hereof for any reason (other than as
set forth in Section 5.1(f)) following a Change of Control, the Company will
promptly pay X'Xxxxxx, in addition to the amounts required under Section
5.2(a), severance in accordance with Section 5.2(b) below.
As used herein, a "Change of Control" of the Company shall be
deemed to have occurred:
(a) Upon the consummation, in one transaction or a series of
related transactions, of the sale or other transfer of voting power
(including voting power exercisable on a contingent or deferred basis as well
as immediately exercisable voting power) representing effective control of
the Company to a person or group of related persons who, on the date of this
Agreement, is not affiliated (within the meaning of the Securities Act of
1933) with the Company, whether such sale or transfer results from a tender
offer or otherwise; or
(b) Upon the consummation of a merger or consolidation in
which the Company is a constituent corporation and in which the Company's
shareholders immediately prior thereto will beneficially own, immediately
thereafter, securities of the Company or any surviving or new corporation
resulting therefrom having less than a majority of the voting power of the
Company or any such surviving or new corporation; or
(c) Upon the consummation of a sale, lease, exchange or
other transfer or disposition by the Company of all or substantially all its
assets to any person or group of related persons.
5. TERMINATION.
5.1. TERMINATION EVENTS. The employment hereunder
will terminate upon the occurrence of any of the following events
("Termination Event"):
(a) X'Xxxxxx dies;
(b) The Company, by written notice to X'Xxxxxx or his
personal representative, discharges X'Xxxxxx due to the inability to perform
the duties assigned to him hereunder for a continuous period exceeding 90
days by reason of injury, physical or mental illness or other disability,
which condition has been certified by a physician; provided, however, that
prior to discharging X'Xxxxxx due to such disability, the Company shall give
a written statement of findings to X'Xxxxxx or his personal representative
setting forth specifically the nature of the disability and the resulting
performance failures, and X'Xxxxxx shall have a period of ten (10) days
thereafter to respond in writing to the Board of Directors' findings;
(c) X'Xxxxxx is discharged by the Board of Directors
of the Company for cause. As used in this Agreement, the term "cause" shall
mean:
(i) X'Xxxxxx'x conviction of (or pleading guilty
or nolo contendere to) a felony or any misdemeanor involving dishonesty or
moral turpitude; or
(ii) (a) The willful and continued failure of
X'Xxxxxx to substantially perform his duties with the Company (other than any
such failure resulting from illness or disability) after a demand for
substantial performance is requested by the Company's Board of Directors,
which specifically identifies the manner in which it is claimed X'Xxxxxx has
not substantially performed his duties, or (b) X'Xxxxxx is willfully engaged
in misconduct which has a direct and material adverse monetary affect on the
Company. For purposes of this subpart (ii) no act or failure to act on
X'Xxxxxx'x part shall be considered "willful" unless done, or omitted to be
done, by X'Xxxxxx not in good faith and without reasonable belief that
X'Xxxxxx'x action or omission was in the best interest of the Company. No
termination shall be effected for cause pursuant to this subpart (ii) unless
X'Xxxxxx has been provided with specific information as to the acts or
omissions which form the basis of the allegation of cause, and X'Xxxxxx has
had an opportunity to be heard, with counsel if he so desired, before the
Board of Directors and such Board determines in good faith that X'Xxxxxx was
guilty of conduct constituting "cause" as herein defined, specifying the
particulars thereof in detail;
(d) X'Xxxxxx is discharged by the Board of Directors
of the Company without cause, which the Company may do at any time upon
notice to X'Xxxxxx, or if the Agreement is not renewed by the Company at the
end of the initial term or the first renewal term as provided in Section 2;
(e) X'Xxxxxx voluntarily terminates his employment
due to either (i) a default by the Company in the performance of any of its
obligations hereunder, or (ii) an Adverse Change in Duties (as defined
below), which default or Adverse Change in Duties remains unremedied by the
Company for a period of ten days following its receipt of written notice
thereof from X'Xxxxxx; or
(f) X'Xxxxxx voluntarily terminates his employment
for any reason other than the Company's default or an Adverse Change in
Duties, which X'Xxxxxx may do at any time with at least 30 days advance
notice, or if the Agreement is not renewed by X'Xxxxxx at the end of the
initial term or the first renewal term as provided in Section 2.
As used herein, "Adverse Change in Duties" means an action or
series of actions taken by the Company, without X'Xxxxxx'x prior written
consent, which results in:
(1) A change in X'Xxxxxx'x reporting
responsibilities, titles, job responsibilities or offices which, in
X'Xxxxxx'x reasonable judgment, results in a diminution of his status,
control or authority; or
(2) The assignment to X'Xxxxxx of any positions,
duties or responsibilities which, in X'Xxxxxx'x reasonable judgment, are
inconsistent with X'Xxxxxx'x positions, duties and responsibilities or status
with the Company; or
(3) A requirement by the Company that X'Xxxxxx be
based or perform his duties anywhere other than (i) at the Company's
corporate office location on the date of this Agreement, or (ii) if the
Company's corporate office location is moved after the date of this
Agreement, at a new location that is no more than 60 miles from such prior
location.
5.2. EFFECTS OF TERMINATION.
(a) Upon termination of X'Xxxxxx'x employment
hereunder for any reason, the Company will promptly pay X'Xxxxxx all
compensation owed to X'Xxxxxx and unpaid through the date of termination
(including, without limitation, salary and employee expense reimbursements).
(b) In addition, if X'Xxxxxx'x employment is
terminated under Section 4 or under Sections 5.1(a), (b), (d) or (e), the
Company shall also pay X'Xxxxxx:
(i) if terminated within the first three
months of employment, X'Xxxxxx is not entitled to any compensation.
(ii) if terminated after the first three months
of employment, the Company shall continue to pay X'Xxxxxx $11,250.00 per
month for a period equal to one year (or total severance of $135,000).
(c) Upon termination of X'Xxxxxx'x employment
hereunder for any reason, X'Xxxxxx agrees that for the twelve (12) month
period following the Termination Event:
(i) X'Xxxxxx will not directly or indirectly,
whether for his own account or as an individual, employee, director,
consultant or advisor, or in any other capacity whatsoever, provide services
to any person, firm, corporation or other business enterprise which is
involved in the design, development or marketing of optical localizers or
image guided surgical products unless he obtains the prior written consent of
the Board of Directors.
(ii) X'Xxxxxx will not directly or indirectly
encourage or solicit, or attempt to encourage or solicit, any individual to
leave the Company's employ for any reason or interfere in any other manner
with the employment relationships at the time existing between the Company
and its current or prospective employees.
(iii) X'Xxxxxx will not induce or attempt to
induce any customer, supplier, distributor, licensee or other business
relation of the Company to cease doing business with the Company or in any
way interfere with the existing business relationship between any such
customer, supplier, distributor, licensee or other business relation and the
Company.
X'Xxxxxx acknowledges that monetary damages may not be
sufficient to compensate the Company for any economic loss which may be
incurred by reason of breach of the foregoing restrictive covenants.
Accordingly, in the event of any such breach, the Company shall, in addition
to any remedies available to the Company at law, be entitled to obtain
equitable relief in the form of an injunction precluding X'Xxxxxx from
continuing to engage in such breach.
If any restriction set forth in this paragraph is held to be
unreasonable, then X'Xxxxxx and the Company agree, and hereby submit, to the
reduction and limitation of such prohibition to such area or period as shall
be deemed reasonable.
6. GENERAL PROVISIONS.
6.1. ASSIGNMENT. X'Xxxxxx may not assign or delegate
any of his rights or obligations under this Agreement.
6.2. ENTIRE AGREEMENT. This Agreement contains the
entire agreement between the parties with respect to the subject matter
hereof and supersedes any and all prior agreements between the parties
relating to such subject matter.
6.3. MODIFICATIONS. This Agreement may be changed or
modified only by an agreement in writing signed by both parties hereto.
6.4. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall inure to the benefit of, and be binding upon, the Company and
its successors and assigns and X'Xxxxxx and X'Xxxxxx'x legal representatives
and heirs.
6.5. GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of Colorado.
6.6. SEVERABILITY. If any provision of the Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall nevertheless continue in full
force and effect.
6.7. FURTHER ASSURANCES; COMMITTEES OF BOARD. The
parties will execute such further instruments and take such further actions
as may be reasonably necessary to carry out the intent of this Agreement.
The term "Board of Directors" shall include any committee of the Board.
6.8. NOTICES. Any notices or other communications
required or permitted hereunder shall be in writing and shall be deemed
received by the recipient when delivered personally or, if mailed, five (5)
days after the date of deposit in the United States mail, certified or
registered, postage prepaid and addressed, in the case of the Company, to
0000-X Xxxxxxxx Xxxxxxx, Xxxxxxx, XX 00000, and in the case of X'Xxxxxx, to
the address shown for X'Xxxxxx on the signature page hereof, or to such other
address as either party may later specify by at least ten (10) days advance
written notice delivered to the other party in accordance herewith.
6.9. NO WAIVER. The failure of either party to
enforce any provision of this Agreement shall not be construed as a waiver of
that provision, nor prevent that party thereafter from enforcing that
provision or any other provision of this Agreement.
6.10. LEGAL FEES AND EXPENSES. In the event of any
disputes under this Agreement, each party shall be responsible for their own
legal fees and expenses which it may incur in resolving such dispute.
6.11. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and X'Xxxxxx have executed this
Agreement effective as of the date first above written.
COMPANY X'XXXXXX
Image Guided Technologies, Inc.
By: /s/ Xxxx X. Xxx /s/ Xxxxxxx X'Xxxxxx
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Xxxx X. Xxx Xxxxxxx X'Xxxxxx
President
