EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated August 30, 1999, between Imaging Diagnostic
Systems, Inc. (the "Company"), and Xxxxx X. Xxxxxxxx (the "Executive").
WHEREAS, the Company desires to employ Executive and to ensure the
continued availability to the Company of the Executive's services, and the
Executive is willing to accept such employment and render such services, all
upon and subject to the terms and conditions contained in this 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. Term of Employment.
(a) Term. The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company, for a period
commencing on the date of this Agreement and ending five years from
the date hereof (the "Term").
(b) Continuing Effect. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of
Sections 6 and 7 shall remain in full force and effect and the
provisions of Sections 6(b) and 7 shall be binding upon the legal
representatives, successors and assigns of the Executive, except as
otherwise provided in Section 5(d).
2. Duties.
(a) General Duties. The executive shall serve as Executive Vice
President/Chief Financial Officer of the Company, with duties and
responsibilities that are customary for such executives. The Executive
will also perform services for such subsidiaries as may be necessary.
The Executive will use his best efforts to performs his duties and
discharge his responsibilities pursuant to this Agreement competently,
carefully and faithfully.
(b) Devotion of Time. 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 other persons, 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 his time, without compensation, to charitable or similar
organizations.
3. Compensation and Expenses.
(a) Salary. For the services of the Executive to be rendered
under this Agreement, the Company will pay the Executive an annual
base salary of $119,069.52 during the Term, subject to annual cost of
living increases based upon changes in the Consumer Price Index
published by the Bureau of Labor Statistics (or similar successor
index) for the region in which the Executive resides, but in no event
shall the cost of living increase be less than 7% per annum. The
annual salary under this Section 3(a) will be reduced, however, to the
extent that the Executive elects to defer any portion thereof under
the terms of any deferred compensation or savings plan maintained by
the Company. The Company will pay the Executive his annual salary in
equal installments no less frequently than twice a month.
(b) Bonus. For the services to be rendered by the Executive under
this Agreement, the Company's Board of Directors, on a yearly basis,
shall determine a bonus to be paid to Employee, based upon a
percentage of the adjusted consolidated net earnings of the Company
for each calendar year of Executive's employment, such sum to be
computed as follows:
(i) The adjusted consolidated net earnings of the Company shall
be determined in accordance with accepted accounting practice by the
independent accounting firm employed by the Company as its auditors,
within 90 days after the end of each fiscal year.
(ii) This computation of net earnings and of the Executive's
percentage compensation, made in the manner here provided, shall be
final and binding upon the Company and the Executive, and the Company
shall pay such compensation to the Executive within 120 days after the
end of the fiscal year in question. The Bonus may be paid in cash,
stock, or options, by mutual agreement of the Executive and the
Company.
(iii) For purposes of computing the Executive's percentage
compensation, the adjusted consolidated net earnings of the Company
shall be determined after full allowance for, and deduction of the
following: (a) all federal, state and municipal taxes; (b)
depreciation for the period based on the amount of depreciation set
forth in the annual report of the Company to its shareholders for the
fiscal year which includes such period.
(c) Expenses. In addition to any compensation received pursuant
to Section 3(a), (b) and (c), the Company will reimburse or advance
funds to the Executive for all reasonable travel, entertainment and
miscellaneous expenses incurred in connection with the performance of
his duties under this Agreement, provided that the Executive properly
accounts for such expenses to the Company in accordance with the
Company's practices. Such reimbursement or advances will be made in
accordance with policies and procedures of the Company in effect from
time to time relating to reimbursement of or advances to executive
officers.
4. Benefits.
(a) Vacation. For each 12-month period during the Term, the
Executive will be entitled to six weeks of vacation 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.
(b) Employee Benefit Programs. Without limiting the compensation
to which the Executive is entitled pursuant to the provisions of
Section 3 or this Section 4, during the Term, the Executive will be
entitled to participate in any pension, insurance or other employee
benefit plan that is maintained at that time by the Company for its
executive officers, including programs of life and medical insurance
and reimbursement of membership fees in civic, social and professional
organizations.
(c) Incentive Stock Options. The Executive shall receive
incentive options to purchase up to an aggregate of 2,500,000 shares
of the Company's common or preferred stock, the terms and conditions
of which are more fully set forth in that certain Stock Option
Agreement dated August 30, 1999.
(d) Miscellaneous Benefits. The Company shall also provide
Executive with the following: (a) a $500 per month automobile
allowance, and (b) telephone card, cellular phone, and major credit
card.
5. Termination.
(a) Termination Without Cause. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement without
cause. Such termination will become effective upon the date specified
in such notice, provided that such date is at least 60 days from the
date of such notice. Upon any such termination without cause:
(i) for the remainder of the term of this Agreement or for a
period of 36 months following such termination, whichever is
greater, the Company will continue to pay the Executive his
annual salary pursuant to Section 3(a) and his Bonus pursuant to
Section 3(b), and
(ii) the Company will continue to maintain for such period,
for the benefit of the Executive, the employee benefit programs
referred to in Section 4(b) that were in effect on the date of
such termination.
(b) Termination for Cause. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement at any
time for cause by given written notice of termination. Such
termination will become effective upon the giving of such notice,
except that termination based upon clause (v) below shall not become
effective unless the Executive shall fail to correct such breach
within 30 days of receipt of written notice thereof provided pursuant
to the preceding sentence. Upon any such termination for cause, the
Executive shall have no right to compensation, commission, bonus or
reimbursement under Section 3, or to participate in any employee
benefit programs under Section 4 for any period subsequent to the
effective date of termination. For purposes of this Section 5(b),
"cause" shall mean: (i) the Executive is convicted of a felony which
is related to the Executive's employment or the business of the
Company; (ii) the Executive, in carrying out his duties hereunder, has
been found in a civil action by the Company, to have committed willful
gross negligence or willful gross misconduct resulting, in either
case, in material harm to the Company; (iii) the Executive
misappropriates Company funds or otherwise defrauds the Company; (iv)
the Executive materially breaches any provision of Section 6 or
Section 7; and (v) the Executive materially fails to perform his
duties under Section 2 resulting in material harm to the Company.
(c) Death or Disability. Excepting for the conditions and
obligations contained in this Section 5(c), this Agreement and the
obligations of the Company hereunder will terminate upon the death or
disability of the Executive. For purposes of this Section 5(c),
"disability" shall mean that for a period of six months in any
12-month period the Executive is incapable of substantially fulfilling
the duties set forth in Section 2 because of physical, mental or
emotional incapacity resulting from injury, sickness or disease.
Upon termination by death or disability, the Company will pay the
Executive or his legal representative, as the case may be: (i) his
annual salary at such time pursuant to Section 3(a) through the date of
such termination of employment; and (ii) the Executive's share of the
Bonus as set forth in Section 3(b) of this Agreement. ;
(d) Special Termination. In the event that (i) the Executive,
with or without change in title or formal corporate action, shall no
longer exercise all of the duties and responsibilities and shall no
longer possess substantially all the authority set forth in Section 2;
or (ii) the Company materially breaches this Agreement or the
performance of its duties and obligations hereunder; or (iii) 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 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 5(a) hereof, in which event the Executive shall be entitled to
the compensation payable pursuant to clauses (i)-(iii) of Section
5(a).
(e) Voluntary Termination. The Executive, on 30 days prior
written notice to the Company, may terminate his employment
voluntarily (i) at any time following termination of the initial Term
or (ii) at any time following the death or disabling illness of a
member of the Executive's immediate family or similar personal,
non-business related occurrence as a result of which the Executive
concludes he must devote a substantial amount of his time and energies
to his family or other personal matter and not to his business
activities so as to preclude his fulfilling his obligations under this
Agreement. Upon any such termination, the Company will pay the
Executive (i) his annual salary at such time pursuant to Section 3(a)
through the date of such termination of employment; and (ii) any bonus
which would have been payable through the date of termination pursuant
to Section 3(b).
(f) Continuing Effect. Notwithstanding any termination of the
Executive's employment as provided in this Section 5 or otherwise, the
provisions of Sections 6 and 7 shall remain in full force and effect.
6. Non-competition Agreement.
(a) Competition with the Company. Until termination of his
employment and for a period of 12 months commencing on the date of
termination, the Executive, directly or indirectly, in association
with or as a stockholder, director, officer, consultant, employee,
partner, joint venturer, member or otherwise of or through any person,
firm, corporation, partnership, association or other entity, will not
compete with the Company or any of its affiliates in the offer, sale
or marketing of products or services that are competitive with the
products or services offered by the Company, within any metropolitan
area in the United States or elsewhere in which the Company is then
engaged in the offer and sale of competitive products or services;
provided, however, the foregoing shall not prevent Executive from
accepting employment with an enterprise engaged in two or more lines
of business, one of which is the same or similar to the Company's
business (the "Prohibited Business") if Executive's employment is
totally unrelated to the Prohibited Business; provided, further, the
foregoing shall not prohibit Executive from owning up to 5% of the
securities of any publicly-traded enterprise provided Executive is not
an employee, director, officer, consultant to such enterprise or
otherwise reimbursed for services rendered to such enterprise.
(b) Solicitation of Customers. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, directly
or indirectly, will not seek Prohibited Business from any Customer (as
defined below) on behalf of any enterprise or business other than the
Company, refer Prohibited Business from any Customer to any enterprise
or business other than the Company or receive commissions based on
sales or otherwise relating to the Prohibited Business from any
Customer, or any enterprise or business other than the Company. For
purposes of this Section 6(b), the term "Customer" means any person,
firm, corporation, partnership, association or other entity to which
the Company or any of its affiliates sold or provided goods or
services during the 24-month period prior to the time at which any
determination is required to be made as to whether any such person,
firm, corporation, partnership, association or other entity is a
Customer.
(c) Solicitation of Employees. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, will not
directly or indirectly, solicit employees of the Company for
employment by any person, enterprise, business, company, partnership,
joint venture or other entity. For the purposes of this Agreement, the
term "Employee " means any person, firm, corporation, partnership,
association or other entity which the Company, or any of its
affiliates, employed during the during the 24-month period prior to
the time at which any determination is required to be made as to
whether any such person, firm, corporation, partnership, association
or other entity is an Employee.
(d) No Payment. The Executive acknowledges and agrees that no
separate or additional payment will be required to be made to him in
consideration of his undertakings in this Section 6.
7. Nondisclosure 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) confidential or secret plans, programs, documents, agreements or
other material relating to the business, services or activities of the Company
and its affiliates and (ii) trade secrets, market reports, customer
investigations, customer lists and other similar information that is proprietary
information of the Company or its affiliates (collectively referred to as
"confidential information"). The Executive acknowledges that such confidential
information as is acquired and used by the Company or its affiliates is a
special, valuable and unique asset. All records, files, materials and
confidential information obtained by the Executive in the course of his
employment with the Company are confidential and proprietary and shall remain
the exclusive property of the Company or its affiliates, as the case may be. The
Executive will not, except in connection with and as required by his performance
of his duties under this Agreement, for any reason use for his own benefit or
the benefit of any person or entity with which he may be associated or disclose
any such confidential information to any person, firm, corporation, association
or other entity for any reason or purpose whatsoever without the prior written
consent of the board of directors of the Company, unless such confidential
information previously shall have become public knowledge through no action by
or omission of the Executive.
8. 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 or Section 7, the Company will be entitled
to institute and prosecute proceedings in any court of competent
jurisdiction referred to in Section 8(b) below, to enjoin the
Executive from breaching the provisions of Section 6 or Section 7. 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 8 shall be construed to prevent the Company
from seeking such other remedy in arbitration in case of any breach of
this Agreement by the Executive, as the Company may elect.
(b) Any proceeding or action must be commenced in the federal
courts, or in the absence of federal jurisdiction in state court, in
either case in Florida where the Company maintains its principal
offices. The Executive and the Company irrevocably and unconditionally
submit to the jurisdiction of such courts and agree to take any and
all future action necessary to submit to the jurisdiction of such
courts. The Executive and the Company irrevocably waive any objection
that they now have or hereafter 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 any such court and further
irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
Final judgment against the Executive or the Company in any such suit
shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment, a certified or true copy or which shall be conclusive
evidence of the fact and the amount of any liability of the Executive
or the Company therein described, or by appropriate proceedings under
any applicable treaty or otherwise.
9. Assignability. 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 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.
10. 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 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.
11. 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 addressees 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:
To the Company: Imaging Diagnostic Systems, Inc.
0000 XX 00xx Xxxxx
Xxxxxxxxxx Xxxxxxx 00000
To the Executive: Xxxxx X. Xxxxxxxx
0000 XX 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
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.
12. 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.
13. Arbitration. Except for any controversy or claim seeking equitable
relief as provided in Section 8 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 rules, then obtaining, of the American
Arbitration Association. Any reward 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.
14 Attorney's 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, the prevailing party shall be entitled to a
reasonable attorney's fee, costs and expenses.
15. Governing Law. This Agreement and any dispute, disagreement, or issue
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.
16. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto 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 which enforcement or the change, waiver discharge or termination
is sought.
17. Additional Documents. The parties hereto shall execute such additional
instruments as may be reasonably required by their counsel in order to carry out
the purpose and intent of this Agreement and to fulfill the obligations of the
parties hereunder.
18. 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.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written.
Imaging Diagnostic Systems, Inc.
__________________________ By: ___________________________________
Executive Xxxxx X. Xxxxxx, President
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") entered into as of the 30th
day of August 1999, between Imaging Diagnostic Systems, Inc. the "Company") and
Xxxxx X. Xxxxxxxx, an Executive of the Company ("Executive").
WHEREAS, by action taken by the board of directors of the Company on August
30, 1999, it has adopted a 1999 Equity Incentive Plan (the "Plan"); and
WHEREAS, by action taken by the board of directors of the Company on the
same date, it has been determined that in order to enhance the ability of the
Company to attract and retain qualified officers it will grant Executive the
right to purchase stock in the Company pursuant to incentive options.
NOW THEREFORE, in consideration of the mutual covenants and promises
hereafter set forth and for other good and valuable consideration, receipt of
which is acknowledged, the parties hereto agree as follows:
1. Grant of Incentive Options. The Company irrevocably grants to Executive,
as a matter of separate agreement and not in lieu of salary or other
compensation for services, the right and option (the "Options") to purchase all
or any part of an aggregate of 2,500,000 shares of authorized but unissued
common stock of the Company or, at Executive's option, that number of Voting
Convertible Preferred Stock that would give Executive voting rights equal to the
2,500,000 shares of common stock, on the terms and conditions herein set forth.
The Options are intended to be Incentive Stock Options as defined by Section
422A of the Internal Revenue Code (the "Code").
2. Price. The exercise price of the shares of common stock subject to the
Options shall be 110% of fair market value on the date of the grant ($.21 per
share).
3. When Exercisable.
(a) Provided that Executive is employed by the Company on the
respective dates below, the Options shall vest as follows:
Date No. of Shares
August 30, 1999 500,000
August 30, 2000 500,000
August 30, 2001 500,000
August 30, 2002 500,000
August 30, 2003 500,000
(b) Except as provided in paragraphs 2 and 3 of this Agreement, once
any Option become exercisable they shall remain exercisable through August
30, 2004.
4. Conversion to Non-Qualified Options. In the event that the
stockholders of the Company fail to approve the Plan within one year after
approval by the Board of Directors, or in the event that the Executive is
terminated with pursuant to Section 5 (a) or 5(d) of that certain
Employment Agreement dated August 30, 1999 between the Company and the
Executive, a copy of which, is on file at the Company's corporate office
(the "Employment Agreement"), the exercise period for the Options shall be
extended through August 30, 2009 thereby converting all of the Options to
Non-Qualified Options. In such event, the Company shall pay Executive a
tax-offset bonus each time he exercises any Options. The amount of the tax
offset bonus shall be equal to the amount of federal income tax he incurs
in connection with the exercise of the Options assuming he is at the
highest marginal United States income bracket for the year of exercise.
Such bonus shall be paid to Executive on or before February 1, of the year
following exercise.
5. Termination of Relationship.
(a) Except as set forth in Section 4 above, if for any reason, except
death, Executive ceases to act as an employee of the Company, all rights
granted hereunder shall terminate effective three months from the date
Executive ceases to act as an employee.
(b) If Executive shall die while an employee of the Company, his
estate or any transferee, as defined herein, shall have the right within
three months from the date of Executive's death to exercise Executive's
Options to the extent the right to exercise to the Options shall have
accrued at the date of death, except to the extent the Options shall have
been exercised prior thereto. The exercise period for any Options not
vested, shall be extended through August 30, 2004 thereby converting all of
the Options to Non-Qualified Options. For the purpose of this Agreement,
"transferee" shall mean a person to whom such shares are transferred by
will or by the laws of descent and distribution.
(c) No transfer of the Options by Executive by will or by the laws of
descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of
the letters testamentary or such other evidence as the board may deem
necessary to establish the authority of the state and the acceptance by the
transferee or transferees of the terms and conditions of the Options.
(d) If Executive becomes disabled while employed by the Company within
the meaning of Section 22(e)(3) of the Code, the three month period
referred to in paragraph 3(a) of this Agreement shall be extended to one
year.
6. Method of Exercise/Registration. These Options shall be exercisable by a
written notice, which shall:
(a) state the election to exercise the Options, the number of shares
to be exercised, the person in whose name the stock certificate or
certificates for such shares of common stock is to be registered, his
address and social security number (or if more than one, the names,
addresses and social security numbers of such persons);
(b) contain such representations and agreements as to the holder's
investment intent with respect to such shares of common stock as set forth
in paragraph 8 hereof;
(c) be signed by the person or persons entitled to exercise the
Options and, if the Options is being exercised by any person or persons
other than the Executive, be accompanied by proof, satisfactory to counsel
for the Company, of the right of such person or persons to exercise the
Options.
(d) be accompanied by full payment of the purchase or exercise price
there for either (i) in United States dollars in cash or by check; (ii) by
Executive's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable federal rate, as
defined in Section 1274(d) of the Code; (iii) by having the Company retain
a portion of the Shares covered by the option exercise, or (iv) by any
combination of (i) (ii) and (iii) above.
If the Executive chooses to pay the exercise price pursuant to (iii) above,
the number of Shares to be delivered to or withheld by the Company times the
fair market value shall equal the cash required for exercise. To the extent that
the Participant elects to either deliver or have withheld Shares of the
Company's Common Stock, the Board of Directors may require the Executive to make
such election only during certain periods of time as may be necessary to comply
with appropriate exemptive procedures regarding the "short-swing" profit
provisions of Section 16(b) of the Securities Exchange Act of 1934 or to meet
certain Internal Revenue Code requirements.
The certificate or certificates for shares of common stock as to which the
Options shall be exercised shall be registered in the name of the person or
persons exercising the Options.
The Company shall, if requested by the Executive, as expeditiously as
possible file a registration statement on a form of general use under the
Securities Act to permit the sale or other disposition of the Optioned Shares.
The Executive shall provide all information reasonable requested by the Company
for inclusion in any registration statement to be filed under this Agreement.
The Company will use its best efforts to cause such registration statement first
to become effective at the earliest practicable time and then to remain
effective for such period as the Executive reasonably deems necessary to effect
such sales or other dispositions or until all Optioned Shares no longer will
constitute "restricted securities" with the meaning of Rule 144 under the
Securities Act. Such registration shall be effected at the Company's expense
except for underwriting commissions and the fees and disbursements of the
Executive's counsel attributable to the registration of the Optioned Shares. The
Company and the Executive shall enter into an agreement under which each will
indemnify the other with respect to information provided by such party for use
in the registration statement, such indemnities and the procedures for them to
be in a form customarily included in registration rights agreements. The Company
further agrees to use its best efforts to register or qualify the Optioned Stock
covered under such registration statement under such other securities or
blue-sky laws of such jurisdictions as the Executive shall reasonably request.
7. Reload Options. If the Executive pays all or a portion of the exercise
price of an Option or the tax required to be withheld pursuant to an exercise of
an Option by surrendering shares of Stock pursuant to Section 6(d) above, the
Executive shall be automatically granted an Option for the purchase of Stock
equal to the number of shares surrendered (a "Reload Option"). The grant of the
Reload Option shall be effective on the date the Participant surrenders the
shares of Stock in respect of which the Reload Option is granted (the "Reload
Date"). The Reload Option shall have an exercise price equal to the Fair Market
Value of the Stock on the Reload Date, and shall have a term which is no longer,
and which shall lapse no later, than the original term of the underlying option.
If stock otherwise available under an Incentive Stock Option is withheld
pursuant to Section 6(d) above, any Reload Option granted in connection with the
withholding shall be treated as a new Incentive Stock Option, subject to the
rules set forth in the Plan..
8. Adjustments. Upon the occurrence of any of the following events, the
Executive's rights with respect to Options granted hereunder shall be adjusted
as hereinafter provided unless otherwise specifically provided in the written
agreement between the Executive and the Company relating to such Option:
(a) If the shares of Common Stock shall be subdivided or combined into
a greater or smaller number of shares or if the Company shall issue any
shares of Common Stock as a stock dividend on its outstanding Common Stock,
the number of shares of Common Stock deliverable upon the exercise of
Options shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or stock dividend.
(b) Except as provided for pursuant to Section 5 (a) or 5(d) of the
Employment Agreement, if the Company is to be consolidated with or acquired
by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), the committee or the
board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board") shall at the Executives sole option, as
to outstanding Options, either (i) make appropriate provision for the
continuation of such Options by substituting on an equitable basis for the
shares then subject to such Options the consideration payable with respect
to the outstanding shares of Common Stock in connection with the
Acquisition; or (ii) terminate all Options in exchange for a cash payment
equal to the excess of the fair market value of the shares subject to such
Options (to the extent then exercisable) over the exercise price thereof.
(c) In the event of a recapitalization or reorganization of the
Company (other than a transaction described in subparagraph (b) above)
pursuant to which securities of the Company or of another corporation are
issued with respect to the outstanding shares of Common Stock, the
Executive upon exercising an Option shall be entitled to receive for the
purchase price paid upon such exercise the securities he would have
received if he had exercised his Option prior to such recapitalization or
reorganization.
(d) 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 Options. No
adjustments shall be made for dividends or other distributions paid in cash
or in property other than securities of the Company.
(e) No fractional shares shall be issued pursuant to the Options, the
Executive shall receive from the Company cash in lieu of such fractional
shares.
9. Necessity to Become Holder of Record. Neither the Executive nor his
estate, as provided in paragraph 3(b), shall have any rights as a
shareholder with respect to any shares covered by the Options until such
person shall have become the holder of record of such shares. No adjustment
shall be made for cash dividends or cash distributions, ordinary or
extraordinary, in respect of such shares for which the record date is prior
to the date on which he shall become the holder of record thereof.
10. Reservation of Right to Terminate Relationship. Nothing contained
in this Agreement shall restrict the right of the Company to terminate the
relationship of Executive at any time, with or without cause. The
termination of the relationship of Executive by the Company, regardless of
the reason there for, shall have the results provided for in Section 5 of
this Agreement.
11. Conditions to Exercise of Options. In order to enable the Company
to comply with the Securities Act of 1933 (the "Securities Act") and
relevant state law, the Company shall require Executive, his estate, or any
Transferee as a condition of the exercising of the Options granted
hereunder, to give written assurance satisfactory to the Company that the
shares subject to the Options are being acquired for his own account, for
investment only, with no view to the distribution of same, and that any
subsequent resale of any such shares either shall be made pursuant to a
registration statement under the Securities Act and applicable state law
which has become effective and is current with regard to the shares being
sold, or shall be pursuant to an exemption from registration under the
Securities Act and applicable state law.
The Options are subject to the requirement that, if at any time the
board of directors shall determine, in its discretion, that the listing,
registration, or qualification of the shares of common stock subject to the
Options upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary
as a condition of, or in connection with the issue or purchase of shares
under the Options, the options may not be exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall
have been effected.
12. Duties of Company. The Company will at all times during the term
of Options:
(a) Reserve and keep available for issue such number of shares of
its authorized and unissued common stock as will be sufficient to
satisfy the requirements of this Agreement;
(b) Pay all original issue taxes with respect to the issue of
shares pursuant hereto and all other fees and expenses necessarily
incurred by the Company in connection therewith;
(c) Use its best efforts to comply with all laws and regulations,
which, in the opinion of counsel for the Company, shall be applicable
thereto.
13. Parties Bound by Plan. The Plan and each determination, interpretation
or other action made or taken pursuant to the provisions of the Plan shall be
final and shall be binding and conclusive for all purposes on the Company and
Executive and his respective successors in interest.
14. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or to the interpretations, breach or enforcement thereof, shall
be submitted to one arbitrator and settled by arbitration in Fort Lauderdale,
Florida, in accordance with the rules, then obtaining, of the American
Arbitration Association. 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.
15. Benefit. This Agreement shall be binding upon and insure to the benefit
of the parties hereto and their legal representatives, successors and assigns.
16. 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 addressees 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:
To the Company: Imaging Diagnostic Systems, Inc.
0000 XX 00xx Xxxxx
Xxxxxxxxxx Xxxxxxx 00000
To the Executive: Xxxxx X. Xxxxxxxx
0000 XX 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
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.
17. Attorney's 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, the prevailing party shall be entitled to a
reasonable attorney's fee, costs and expenses.
18. Construction. In the event any parts of this Agreement are found to be
void, the remaining provisions of this Agreement shall nevertheless be binding
with the same effect as though the void parts were deleted.
19. Governing Law. This Agreement and any dispute, disagreement, or issue
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.
20. Oral Evidence. This Agreement supersedes all prior oral and written
agreements between the parties hereto 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 which enforcement or the change, waiver discharge or
termination is sought.
21. Counterparts. 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.
22. Additional Documents. The parties hereto shall execute such additional
instruments as may be reasonably required by their counsel in order to carry out
the purpose and intent of this Agreement and to fulfill the obligations of the
parties hereunder.
23. Paragraph Headings. Paragraph headings herein have been inserted for
reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part any of the terms or
provisions of this Agreement.
IN WITNESS WHEREOF the parties hereto have set their hand and seal the day
and year first above written.
WITNESSES: Imaging Diagnostic Systems, Inc.
___________________________ By: _____________________________
Xxxxx X. Xxxxxx, President
___________________________ By: ______________________________
Xxxxx X. Xxxxxxxx, Executive
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated August 30, 1999, between Imaging Diagnostic
Systems, Inc. (the "Company"), and Xxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company desires to employ Executive and to ensure the
continued availability to the Company of the Executive's services, and the
Executive is willing to accept such employment and render such services, all
upon and subject to the terms and conditions contained in this 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. Term of Employment.
(a) Term. The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company, for a period
commencing on the date of this Agreement and ending five years from
the date hereof (the "Term").
(b) Continuing Effect. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of
Sections 6 and 7 shall remain in full force and effect and the
provisions of Sections 6(b) and 7 shall be binding upon the legal
representatives, successors and assigns of the Executive, except as
otherwise provided in Section 5(d).
2. Duties.
(a) General Duties. The executive shall serve as Executive Vice
President/Chief Financial Officer of the Company, with duties and
responsibilities that are customary for such executives. The Executive
will also perform services for such subsidiaries as may be necessary.
The Executive will use his best efforts to performs his duties and
discharge his responsibilities pursuant to this Agreement competently,
carefully and faithfully.
(b) Devotion of Time. 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 other persons, 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 his time, without compensation, to charitable or similar
organizations.
3. Compensation and Expenses.
(a) Salary. For the services of the Executive to be rendered
under this Agreement, the Company will pay the Executive an annual
base salary of $119,069.52 during the Term, subject to annual cost of
living increases based upon changes in the Consumer Price Index
published by the Bureau of Labor Statistics (or similar successor
index) for the region in which the Executive resides, but in no event
shall the cost of living increase be less than 7% per annum. The
annual salary under this Section 3(a) will be reduced, however, to the
extent that the Executive elects to defer any portion thereof under
the terms of any deferred compensation or savings plan maintained by
the Company. The Company will pay the Executive his annual salary in
equal installments no less frequently than twice a month.
(b) Bonus. For the services to be rendered by the Executive under
this Agreement, the Company's Board of Directors, on a yearly basis,
shall determine a bonus to be paid to Employee, based upon a
percentage of the adjusted consolidated net earnings of the Company
for each calendar year of Executive's employment, such sum to be
computed as follows:
(i) The adjusted consolidated net earnings of the Company shall
be determined in accordance with accepted accounting practice by the
independent accounting firm employed by the Company as its auditors,
within 90 days after the end of each fiscal year.
(ii) This computation of net earnings and of the Executive's
percentage compensation, made in the manner here provided, shall be
final and binding upon the Company and the Executive, and the Company
shall pay such compensation to the Executive within 120 days after the
end of the fiscal year in question. The Bonus may be paid in cash,
stock, or options, by mutual agreement of the Executive and the
Company.
(iii) For purposes of computing the Executive's percentage
compensation, the adjusted consolidated net earnings of the Company
shall be determined after full allowance for, and deduction of the
following: (a) all federal, state and municipal taxes; (b)
depreciation for the period based on the amount of depreciation set
forth in the annual report of the Company to its shareholders for the
fiscal year which includes such period.
(c) Expenses. In addition to any compensation received pursuant
to Section 3(a), (b) and (c), the Company will reimburse or advance
funds to the Executive for all reasonable travel, entertainment and
miscellaneous expenses incurred in connection with the performance of
his duties under this Agreement, provided that the Executive properly
accounts for such expenses to the Company in accordance with the
Company's practices. Such reimbursement or advances will be made in
accordance with policies and procedures of the Company in effect from
time to time relating to reimbursement of or advances to executive
officers.
4. Benefits.
(a) Vacation. For each 12-month period during the Term, the
Executive will be entitled to six weeks of vacation 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.
(b) Employee Benefit Programs. Without limiting the compensation
to which the Executive is entitled pursuant to the provisions of
Section 3 or this Section 4, during the Term, the Executive will be
entitled to participate in any pension, insurance or other employee
benefit plan that is maintained at that time by the Company for its
executive officers, including programs of life and medical insurance
and reimbursement of membership fees in civic, social and professional
organizations.
(c) Incentive Stock Options. The Executive shall receive
incentive options to purchase up to an aggregate of 2,500,000 shares
of the Company's common or preferred stock, the terms and conditions
of which are more fully set forth in that certain Stock Option
Agreement dated August 30, 1999.
(d) Miscellaneous Benefits. The Company shall also provide
Executive with the following: (a) a $500 per month automobile
allowance, and (b) telephone card, cellular phone, and major credit
card.
5. Termination.
(a) Termination Without Cause. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement without
cause. Such termination will become effective upon the date specified
in such notice, provided that such date is at least 60 days from the
date of such notice. Upon any such termination without cause:
(i) for the remainder of the term of this Agreement or for a
period of 36 months following such termination, whichever is
greater, the Company will continue to pay the Executive his
annual salary pursuant to Section 3(a) and his Bonus pursuant to
Section 3(b), and
(ii) the Company will continue to maintain for such period,
for the benefit of the Executive, the employee benefit programs
referred to in Section 4(b) that were in effect on the date of
such termination.
(b) Termination for Cause. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement at any
time for cause by given written notice of termination. Such
termination will become effective upon the giving of such notice,
except that termination based upon clause (v) below shall not become
effective unless the Executive shall fail to correct such breach
within 30 days of receipt of written notice thereof provided pursuant
to the preceding sentence. Upon any such termination for cause, the
Executive shall have no right to compensation, commission, bonus or
reimbursement under Section 3, or to participate in any employee
benefit programs under Section 4 for any period subsequent to the
effective date of termination. For purposes of this Section 5(b),
"cause" shall mean: (i) the Executive is convicted of a felony which
is related to the Executive's employment or the business of the
Company; (ii) the Executive, in carrying out his duties hereunder, has
been found in a civil action by the Company, to have committed willful
gross negligence or willful gross misconduct resulting, in either
case, in material harm to the Company; (iii) the Executive
misappropriates Company funds or otherwise defrauds the Company; (iv)
the Executive materially breaches any provision of Section 6 or
Section 7; and (v) the Executive materially fails to perform his
duties under Section 2 resulting in material harm to the Company.
(c) Death or Disability. Excepting for the conditions and
obligations contained in this Section 5(c), this Agreement and the
obligations of the Company hereunder will terminate upon the death or
disability of the Executive. For purposes of this Section 5(c),
"disability" shall mean that for a period of six months in any
12-month period the Executive is incapable of substantially fulfilling
the duties set forth in Section 2 because of physical, mental or
emotional incapacity resulting from injury, sickness or disease.
Upon termination by death or disability, the Company will pay the
Executive or his legal representative, as the case may be: (i) his
annual salary at such time pursuant to Section 3(a) through the date of
such termination of employment; and (ii) the Executive's share of the
Bonus as set forth in Section 3(b) of this Agreement. ;
(d) Special Termination. In the event that (i) the Executive,
with or without change in title or formal corporate action, shall no
longer exercise all of the duties and responsibilities and shall no
longer possess substantially all the authority set forth in Section 2;
or (ii) the Company materially breaches this Agreement or the
performance of its duties and obligations hereunder; or (iii) 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 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 5(a) hereof, in which event the Executive shall be entitled to
the compensation payable pursuant to clauses (i)-(iii) of Section
5(a).
(e) Voluntary Termination. The Executive, on 30 days prior
written notice to the Company, may terminate his employment
voluntarily (i) at any time following termination of the initial Term
or (ii) at any time following the death or disabling illness of a
member of the Executive's immediate family or similar personal,
non-business related occurrence as a result of which the Executive
concludes he must devote a substantial amount of his time and energies
to his family or other personal matter and not to his business
activities so as to preclude his fulfilling his obligations under this
Agreement. Upon any such termination, the Company will pay the
Executive (i) his annual salary at such time pursuant to Section 3(a)
through the date of such termination of employment; and (ii) any bonus
which would have been payable through the date of termination pursuant
to Section 3(b).
(f) Continuing Effect. Notwithstanding any termination of the
Executive's employment as provided in this Section 5 or otherwise, the
provisions of Sections 6 and 7 shall remain in full force and effect.
6. Non-competition Agreement.
(a) Competition with the Company. Until termination of his
employment and for a period of 12 months commencing on the date of
termination, the Executive, directly or indirectly, in association
with or as a stockholder, director, officer, consultant, employee,
partner, joint venturer, member or otherwise of or through any person,
firm, corporation, partnership, association or other entity, will not
compete with the Company or any of its affiliates in the offer, sale
or marketing of products or services that are competitive with the
products or services offered by the Company, within any metropolitan
area in the United States or elsewhere in which the Company is then
engaged in the offer and sale of competitive products or services;
provided, however, the foregoing shall not prevent Executive from
accepting employment with an enterprise engaged in two or more lines
of business, one of which is the same or similar to the Company's
business (the "Prohibited Business") if Executive's employment is
totally unrelated to the Prohibited Business; provided, further, the
foregoing shall not prohibit Executive from owning up to 5% of the
securities of any publicly-traded enterprise provided Executive is not
an employee, director, officer, consultant to such enterprise or
otherwise reimbursed for services rendered to such enterprise.
(b) Solicitation of Customers. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, directly
or indirectly, will not seek Prohibited Business from any Customer (as
defined below) on behalf of any enterprise or business other than the
Company, refer Prohibited Business from any Customer to any enterprise
or business other than the Company or receive commissions based on
sales or otherwise relating to the Prohibited Business from any
Customer, or any enterprise or business other than the Company. For
purposes of this Section 6(b), the term "Customer" means any person,
firm, corporation, partnership, association or other entity to which
the Company or any of its affiliates sold or provided goods or
services during the 24-month period prior to the time at which any
determination is required to be made as to whether any such person,
firm, corporation, partnership, association or other entity is a
Customer.
(c) Solicitation of Employees. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, will not
directly or indirectly, solicit employees of the Company for
employment by any person, enterprise, business, company, partnership,
joint venture or other entity. For the purposes of this Agreement, the
term "Employee " means any person, firm, corporation, partnership,
association or other entity which the Company, or any of its
affiliates, employed during the during the 24-month period prior to
the time at which any determination is required to be made as to
whether any such person, firm, corporation, partnership, association
or other entity is an Employee.
(d) No Payment. The Executive acknowledges and agrees that no
separate or additional payment will be required to be made to him in
consideration of his undertakings in this Section 6.
7. Nondisclosure 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) confidential or secret plans, programs, documents, agreements or
other material relating to the business, services or activities of the Company
and its affiliates and (ii) trade secrets, market reports, customer
investigations, customer lists and other similar information that is proprietary
information of the Company or its affiliates (collectively referred to as
"confidential information"). The Executive acknowledges that such confidential
information as is acquired and used by the Company or its affiliates is a
special, valuable and unique asset. All records, files, materials and
confidential information obtained by the Executive in the course of his
employment with the Company are confidential and proprietary and shall remain
the exclusive property of the Company or its affiliates, as the case may be. The
Executive will not, except in connection with and as required by his performance
of his duties under this Agreement, for any reason use for his own benefit or
the benefit of any person or entity with which he may be associated or disclose
any such confidential information to any person, firm, corporation, association
or other entity for any reason or purpose whatsoever without the prior written
consent of the board of directors of the Company, unless such confidential
information previously shall have become public knowledge through no action by
or omission of the Executive.
8. 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 or Section 7, the Company will be entitled
to institute and prosecute proceedings in any court of competent
jurisdiction referred to in Section 8(b) below, to enjoin the
Executive from breaching the provisions of Section 6 or Section 7. 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 8 shall be construed to prevent the Company
from seeking such other remedy in arbitration in case of any breach of
this Agreement by the Executive, as the Company may elect.
(b) Any proceeding or action must be commenced in the federal
courts, or in the absence of federal jurisdiction in state court, in
either case in Florida where the Company maintains its principal
offices. The Executive and the Company irrevocably and unconditionally
submit to the jurisdiction of such courts and agree to take any and
all future action necessary to submit to the jurisdiction of such
courts. The Executive and the Company irrevocably waive any objection
that they now have or hereafter 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 any such court and further
irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
Final judgment against the Executive or the Company in any such suit
shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment, a certified or true copy or which shall be conclusive
evidence of the fact and the amount of any liability of the Executive
or the Company therein described, or by appropriate proceedings under
any applicable treaty or otherwise.
9. Assignability. 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 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.
10. 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 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.
11. 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 addressees 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:
To the Company: Imaging Diagnostic Systems, Inc.
0000 XX 00xx Xxxxx
Xxxxxxxxxx Xxxxxxx 00000
To the Executive: Xxxxx X. Xxxxxx
00000 XX 00xx Xxxxxx
Xxxxxxxxxx Xxxxxxx 00000
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.
12. 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.
13. Arbitration. Except for any controversy or claim seeking equitable
relief as provided in Section 8 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 rules, then obtaining, of the American
Arbitration Association. Any reward 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.
14 Attorney's 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, the prevailing party shall be entitled to a
reasonable attorney's fee, costs and expenses.
15. Governing Law. This Agreement and any dispute, disagreement, or issue
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.
16. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto 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 which enforcement or the change, waiver discharge or termination
is sought.
17. Additional Documents. The parties hereto shall execute such additional
instruments as may be reasonably required by their counsel in order to carry out
the purpose and intent of this Agreement and to fulfill the obligations of the
parties hereunder.
18. 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.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written.
Imaging Diagnostic Systems, Inc.
__________________________ By: ___________________________________
Executive Xxxxx X. Xxxxxxxx, Exec Vice President
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") entered into as of the 30th
day of August 1999, between Imaging Diagnostic Systems, Inc. the "Company") and
Xxxxx X. Xxxxxx, an Executive of the Company ("Executive").
WHEREAS, by action taken by the board of directors of the Company on August
30, 1999, it has adopted a 1999 Equity Incentive Plan (the "Plan"); and
WHEREAS, by action taken by the board of directors of the Company on the
same date, it has been determined that in order to enhance the ability of the
Company to attract and retain qualified officers it will grant Executive the
right to purchase stock in the Company pursuant to incentive options.
NOW THEREFORE, in consideration of the mutual covenants and promises
hereafter set forth and for other good and valuable consideration, receipt of
which is acknowledged, the parties hereto agree as follows:
1. Grant of Incentive Options. The Company irrevocably grants to Executive,
as a matter of separate agreement and not in lieu of salary or other
compensation for services, the right and option (the "Options") to purchase all
or any part of an aggregate of 2,500,000 shares of authorized but unissued
common stock of the Company or, at Executive's option, that number of Voting
Convertible Preferred Stock that would give Executive voting rights equal to the
2,500,000 shares of common stock, on the terms and conditions herein set forth.
The Options are intended to be Incentive Stock Options as defined by Section
422A of the Internal Revenue Code (the "Code").
2. Price. The exercise price of the shares of common stock subject to the
Options shall be 110% of fair market value on the date of the grant ($.21 per
share).
3. When Exercisable.
(a) Provided that Executive is employed by the Company on the
respective dates below, the Options shall vest as follows:
Date No. of Shares
August 30, 1999 500,000
August 30, 2000 500,000
August 30, 2001 500,000
August 30, 2002 500,000
August 30, 2003 500,000
(b) Except as provided in paragraphs 2 and 3 of this Agreement, once
any Option become exercisable they shall remain exercisable through August
30, 2004.
4. Conversion to Non-Qualified Options. In the event that the
stockholders of the Company fail to approve the Plan within one year after
approval by the Board of Directors, or in the event that the Executive is
terminated with pursuant to Section 5 (a) or 5(d) of that certain
Employment Agreement dated August 30, 1999 between the Company and the
Executive, a copy of which, is on file at the Company's corporate office
(the "Employment Agreement"), the exercise period for the Options shall be
extended through August 30, 2009 thereby converting all of the Options to
Non-Qualified Options. In such event, the Company shall pay Executive a
tax-offset bonus each time he exercises any Options. The amount of the tax
offset bonus shall be equal to the amount of federal income tax he incurs
in connection with the exercise of the Options assuming he is at the
highest marginal United States income bracket for the year of exercise.
Such bonus shall be paid to Executive on or before February 1, of the year
following exercise.
5. Termination of Relationship.
(a) Except as set forth in Section 4 above, if for any reason, except
death, Executive ceases to act as an employee of the Company, all rights
granted hereunder shall terminate effective three months from the date
Executive ceases to act as an employee.
(b) If Executive shall die while an employee of the Company, his
estate or any transferee, as defined herein, shall have the right within
three months from the date of Executive's death to exercise Executive's
Options to the extent the right to exercise to the Options shall have
accrued at the date of death, except to the extent the Options shall have
been exercised prior thereto. The exercise period for any Options not
vested, shall be extended through August 30, 2004 thereby converting all of
the Options to Non-Qualified Options. For the purpose of this Agreement,
"transferee" shall mean a person to whom such shares are transferred by
will or by the laws of descent and distribution.
(c) No transfer of the Options by Executive by will or by the laws of
descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of
the letters testamentary or such other evidence as the board may deem
necessary to establish the authority of the state and the acceptance by the
transferee or transferees of the terms and conditions of the Options.
(d) If Executive becomes disabled while employed by the Company within
the meaning of Section 22(e)(3) of the Code, the three month period
referred to in paragraph 3(a) of this Agreement shall be extended to one
year.
6. Method of Exercise/Registration. These Options shall be exercisable by a
written notice, which shall:
(a) state the election to exercise the Options, the number of shares
to be exercised, the person in whose name the stock certificate or
certificates for such shares of common stock is to be registered, his
address and social security number (or if more than one, the names,
addresses and social security numbers of such persons);
(b) contain such representations and agreements as to the holder's
investment intent with respect to such shares of common stock as set forth
in paragraph 8 hereof;
(c) be signed by the person or persons entitled to exercise the
Options and, if the Options is being exercised by any person or persons
other than the Executive, be accompanied by proof, satisfactory to counsel
for the Company, of the right of such person or persons to exercise the
Options.
(d) be accompanied by full payment of the purchase or exercise price
there for either (i) in United States dollars in cash or by check; (ii) by
Executive's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable federal rate, as
defined in Section 1274(d) of the Code; (iii) by having the Company retain
a portion of the Shares covered by the option exercise, or (iv) by any
combination of (i) (ii) and (iii) above.
If the Executive chooses to pay the exercise price pursuant to (iii) above,
the number of Shares to be delivered to or withheld by the Company times the
fair market value shall equal the cash required for exercise. To the extent that
the Participant elects to either deliver or have withheld Shares of the
Company's Common Stock, the Board of Directors may require the Executive to make
such election only during certain periods of time as may be necessary to comply
with appropriate exemptive procedures regarding the "short-swing" profit
provisions of Section 16(b) of the Securities Exchange Act of 1934 or to meet
certain Internal Revenue Code requirements.
The certificate or certificates for shares of common stock as to which the
Options shall be exercised shall be registered in the name of the person or
persons exercising the Options.
The Company shall, if requested by the Executive, as expeditiously as
possible file a registration statement on a form of general use under the
Securities Act to permit the sale or other disposition of the Optioned Shares.
The Executive shall provide all information reasonable requested by the Company
for inclusion in any registration statement to be filed under this Agreement.
The Company will use its best efforts to cause such registration statement first
to become effective at the earliest practicable time and then to remain
effective for such period as the Executive reasonably deems necessary to effect
such sales or other dispositions or until all Optioned Shares no longer will
constitute "restricted securities" with the meaning of Rule 144 under the
Securities Act. Such registration shall be effected at the Company's expense
except for underwriting commissions and the fees and disbursements of the
Executive's counsel attributable to the registration of the Optioned Shares. The
Company and the Executive shall enter into an agreement under which each will
indemnify the other with respect to information provided by such party for use
in the registration statement, such indemnities and the procedures for them to
be in a form customarily included in registration rights agreements. The Company
further agrees to use its best efforts to register or qualify the Optioned Stock
covered under such registration statement under such other securities or
blue-sky laws of such jurisdictions as the Executive shall reasonably request.
7. Reload Options. If the Executive pays all or a portion of the exercise
price of an Option or the tax required to be withheld pursuant to an exercise of
an Option by surrendering shares of Stock pursuant to Section 6(d) above, the
Executive shall be automatically granted an Option for the purchase of Stock
equal to the number of shares surrendered (a "Reload Option"). The grant of the
Reload Option shall be effective on the date the Participant surrenders the
shares of Stock in respect of which the Reload Option is granted (the "Reload
Date"). The Reload Option shall have an exercise price equal to the Fair Market
Value of the Stock on the Reload Date, and shall have a term which is no longer,
and which shall lapse no later, than the original term of the underlying option.
If stock otherwise available under an Incentive Stock Option is withheld
pursuant to Section 6(d) above, any Reload Option granted in connection with the
withholding shall be treated as a new Incentive Stock Option, subject to the
rules set forth in the Plan..
8. Adjustments. Upon the occurrence of any of the following events, the
Executive's rights with respect to Options granted hereunder shall be adjusted
as hereinafter provided unless otherwise specifically provided in the written
agreement between the Executive and the Company relating to such Option:
(a) If the shares of Common Stock shall be subdivided or combined into
a greater or smaller number of shares or if the Company shall issue any
shares of Common Stock as a stock dividend on its outstanding Common Stock,
the number of shares of Common Stock deliverable upon the exercise of
Options shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or stock dividend.
(b) Except as provided for pursuant to Section 5 (a) or 5(d) of the
Employment Agreement, if the Company is to be consolidated with or acquired
by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), the committee or the
board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board") shall at the Executives sole option, as
to outstanding Options, either (i) make appropriate provision for the
continuation of such Options by substituting on an equitable basis for the
shares then subject to such Options the consideration payable with respect
to the outstanding shares of Common Stock in connection with the
Acquisition; or (ii) terminate all Options in exchange for a cash payment
equal to the excess of the fair market value of the shares subject to such
Options (to the extent then exercisable) over the exercise price thereof.
(c) In the event of a recapitalization or reorganization of the
Company (other than a transaction described in subparagraph (b) above)
pursuant to which securities of the Company or of another corporation are
issued with respect to the outstanding shares of Common Stock, the
Executive upon exercising an Option shall be entitled to receive for the
purchase price paid upon such exercise the securities he would have
received if he had exercised his Option prior to such recapitalization or
reorganization.
(d) 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 Options. No
adjustments shall be made for dividends or other distributions paid in cash
or in property other than securities of the Company.
(e) No fractional shares shall be issued pursuant to the Options, the
Executive shall receive from the Company cash in lieu of such fractional
shares.
9. Necessity to Become Holder of Record. Neither the Executive nor his
estate, as provided in paragraph 3(b), shall have any rights as a
shareholder with respect to any shares covered by the Options until such
person shall have become the holder of record of such shares. No adjustment
shall be made for cash dividends or cash distributions, ordinary or
extraordinary, in respect of such shares for which the record date is prior
to the date on which he shall become the holder of record thereof.
10. Reservation of Right to Terminate Relationship. Nothing contained
in this Agreement shall restrict the right of the Company to terminate the
relationship of Executive at any time, with or without cause. The
termination of the relationship of Executive by the Company, regardless of
the reason there for, shall have the results provided for in Section 5 of
this Agreement.
11. Conditions to Exercise of Options. In order to enable the Company
to comply with the Securities Act of 1933 (the "Securities Act") and
relevant state law, the Company shall require Executive, his estate, or any
Transferee as a condition of the exercising of the Options granted
hereunder, to give written assurance satisfactory to the Company that the
shares subject to the Options are being acquired for his own account, for
investment only, with no view to the distribution of same, and that any
subsequent resale of any such shares either shall be made pursuant to a
registration statement under the Securities Act and applicable state law
which has become effective and is current with regard to the shares being
sold, or shall be pursuant to an exemption from registration under the
Securities Act and applicable state law.
The Options are subject to the requirement that, if at any time the
board of directors shall determine, in its discretion, that the listing,
registration, or qualification of the shares of common stock subject to the
Options upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary
as a condition of, or in connection with the issue or purchase of shares
under the Options, the options may not be exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall
have been effected.
12. Duties of Company. The Company will at all times during the term
of Options:
(a) Reserve and keep available for issue such number of shares of
its authorized and unissued common stock as will be sufficient to
satisfy the requirements of this Agreement;
(b) Pay all original issue taxes with respect to the issue of
shares pursuant hereto and all other fees and expenses necessarily
incurred by the Company in connection therewith;
(c) Use its best efforts to comply with all laws and regulations,
which, in the opinion of counsel for the Company, shall be applicable
thereto.
13. Parties Bound by Plan. The Plan and each determination, interpretation
or other action made or taken pursuant to the provisions of the Plan shall be
final and shall be binding and conclusive for all purposes on the Company and
Executive and his respective successors in interest.
14. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or to the interpretations, breach or enforcement thereof, shall
be submitted to one arbitrator and settled by arbitration in Fort Lauderdale,
Florida, in accordance with the rules, then obtaining, of the American
Arbitration Association. 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.
15. Benefit. This Agreement shall be binding upon and insure to the benefit
of the parties hereto and their legal representatives, successors and assigns.
16. 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 addressees 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:
To the Company: Imaging Diagnostic Systems, Inc.
0000 XX 00xx Xxxxx
Xxxxxxxxxx Xxxxxxx 00000
To the Executive: Xxxxx X. Xxxxxx
00000 XX 00xx Xxxxxx
Xxxxxxxxxx Xxxxxxx 00000
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.
17. Attorney's 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, the prevailing party shall be entitled to a
reasonable attorney's fee, costs and expenses.
18. Construction. In the event any parts of this Agreement are found to be
void, the remaining provisions of this Agreement shall nevertheless be binding
with the same effect as though the void parts were deleted.
19. Governing Law. This Agreement and any dispute, disagreement, or issue
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.
20. Oral Evidence. This Agreement supersedes all prior oral and written
agreements between the parties hereto 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 which enforcement or the change, waiver discharge or
termination is sought.
21. Counterparts. 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.
22. Additional Documents. The parties hereto shall execute such additional
instruments as may be reasonably required by their counsel in order to carry out
the purpose and intent of this Agreement and to fulfill the obligations of the
parties hereunder.
23. Paragraph Headings. Paragraph headings herein have been inserted for
reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part any of the terms or
provisions of this Agreement.
IN WITNESS WHEREOF the parties hereto have set their hand and seal the day
and year first above written.
WITNESSES: Imaging Diagnostic Systems, Inc.
___________________________ By: _____________________________
Xxxxx X. Xxxxxxxx, Executive
Vice President
___________________________ By: ______________________________
Xxxxx X. Xxxxxx, Executive
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated August 30, 1999, between Imaging Diagnostic
Systems, Inc. (the "Company"), and Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company desires to employ Executive and to ensure the
continued availability to the Company of the Executive's services, and the
Executive is willing to accept such employment and render such services, all
upon and subject to the terms and conditions contained in this 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. Term of Employment.
(a) Term. The Company hereby employs the Executive, and the
Executive hereby accepts employment with the Company, for a period
commencing on the date of this Agreement and ending five years from
the date hereof (the "Term").
(b) Continuing Effect. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of
Sections 6 and 7 shall remain in full force and effect and the
provisions of Sections 6(b) and 7 shall be binding upon the legal
representatives, successors and assigns of the Executive, except as
otherwise provided in Section 5(d).
2. Duties.
(a) General Duties. The executive shall serve as Executive Vice
President/Chief Financial Officer of the Company, with duties and
responsibilities that are customary for such executives. The Executive
will also perform services for such subsidiaries as may be necessary.
The Executive will use his best efforts to performs his duties and
discharge his responsibilities pursuant to this Agreement competently,
carefully and faithfully.
(b) Devotion of Time. 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 other persons, 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 his time, without compensation, to charitable or similar
organizations.
3. Compensation and Expenses.
(a) Salary. For the services of the Executive to be rendered
under this Agreement, the Company will pay the Executive an annual
base salary of $119,069.52 during the Term, subject to annual cost of
living increases based upon changes in the Consumer Price Index
published by the Bureau of Labor Statistics (or similar successor
index) for the region in which the Executive resides, but in no event
shall the cost of living increase be less than 7% per annum. The
annual salary under this Section 3(a) will be reduced, however, to the
extent that the Executive elects to defer any portion thereof under
the terms of any deferred compensation or savings plan maintained by
the Company. The Company will pay the Executive his annual salary in
equal installments no less frequently than twice a month.
(b) Bonus. For the services to be rendered by the Executive under
this Agreement, the Company's Board of Directors, on a yearly basis,
shall determine a bonus to be paid to Employee, based upon a
percentage of the adjusted consolidated net earnings of the Company
for each calendar year of Executive's employment, such sum to be
computed as follows:
(i) The adjusted consolidated net earnings of the Company shall
be determined in accordance with accepted accounting practice by the
independent accounting firm employed by the Company as its auditors,
within 90 days after the end of each fiscal year.
(ii) This computation of net earnings and of the Executive's
percentage compensation, made in the manner here provided, shall be
final and binding upon the Company and the Executive, and the Company
shall pay such compensation to the Executive within 120 days after the
end of the fiscal year in question. The Bonus may be paid in cash,
stock, or options, by mutual agreement of the Executive and the
Company.
(iii) For purposes of computing the Executive's percentage
compensation, the adjusted consolidated net earnings of the Company
shall be determined after full allowance for, and deduction of the
following: (a) all federal, state and municipal taxes; (b)
depreciation for the period based on the amount of depreciation set
forth in the annual report of the Company to its shareholders for the
fiscal year which includes such period.
(c) Expenses. In addition to any compensation received pursuant
to Section 3(a), (b) and (c), the Company will reimburse or advance
funds to the Executive for all reasonable travel, entertainment and
miscellaneous expenses incurred in connection with the performance of
his duties under this Agreement, provided that the Executive properly
accounts for such expenses to the Company in accordance with the
Company's practices. Such reimbursement or advances will be made in
accordance with policies and procedures of the Company in effect from
time to time relating to reimbursement of or advances to executive
officers.
4. Benefits.
(a) Vacation. For each 12-month period during the Term, the
Executive will be entitled to six weeks of vacation 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.
(b) Employee Benefit Programs. Without limiting the compensation
to which the Executive is entitled pursuant to the provisions of
Section 3 or this Section 4, during the Term, the Executive will be
entitled to participate in any pension, insurance or other employee
benefit plan that is maintained at that time by the Company for its
executive officers, including programs of life and medical insurance
and reimbursement of membership fees in civic, social and professional
organizations.
(c) Incentive Stock Options. The Executive shall receive
incentive options to purchase up to an aggregate of 2,500,000 shares
of the Company's common or preferred stock, the terms and conditions
of which are more fully set forth in that certain Stock Option
Agreement dated August 30, 1999.
(d) Miscellaneous Benefits. The Company shall also provide
Executive with the following: (a) a $500 per month automobile
allowance, and (b) telephone card, cellular phone, and major credit
card.
5. Termination.
(a) Termination Without Cause. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement without
cause. Such termination will become effective upon the date specified
in such notice, provided that such date is at least 60 days from the
date of such notice. Upon any such termination without cause:
(i) for the remainder of the term of this Agreement or for a
period of 36 months following such termination, whichever is
greater, the Company will continue to pay the Executive his
annual salary pursuant to Section 3(a) and his Bonus pursuant to
Section 3(b), and
(ii) the Company will continue to maintain for such period,
for the benefit of the Executive, the employee benefit programs
referred to in Section 4(b) that were in effect on the date of
such termination.
(b) Termination for Cause. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement at any
time for cause by given written notice of termination. Such
termination will become effective upon the giving of such notice,
except that termination based upon clause (v) below shall not become
effective unless the Executive shall fail to correct such breach
within 30 days of receipt of written notice thereof provided pursuant
to the preceding sentence. Upon any such termination for cause, the
Executive shall have no right to compensation, commission, bonus or
reimbursement under Section 3, or to participate in any employee
benefit programs under Section 4 for any period subsequent to the
effective date of termination. For purposes of this Section 5(b),
"cause" shall mean: (i) the Executive is convicted of a felony which
is related to the Executive's employment or the business of the
Company; (ii) the Executive, in carrying out his duties hereunder, has
been found in a civil action by the Company, to have committed willful
gross negligence or willful gross misconduct resulting, in either
case, in material harm to the Company; (iii) the Executive
misappropriates Company funds or otherwise defrauds the Company; (iv)
the Executive materially breaches any provision of Section 6 or
Section 7; and (v) the Executive materially fails to perform his
duties under Section 2 resulting in material harm to the Company.
(c) Death or Disability. Excepting for the conditions and
obligations contained in this Section 5(c), this Agreement and the
obligations of the Company hereunder will terminate upon the death or
disability of the Executive. For purposes of this Section 5(c),
"disability" shall mean that for a period of six months in any
12-month period the Executive is incapable of substantially fulfilling
the duties set forth in Section 2 because of physical, mental or
emotional incapacity resulting from injury, sickness or disease.
Upon termination by death or disability, the Company will pay the
Executive or his legal representative, as the case may be: (i) his
annual salary at such time pursuant to Section 3(a) through the date of
such termination of employment; and (ii) the Executive's share of the
Bonus as set forth in Section 3(b) of this Agreement. ;
(d) Special Termination. In the event that (i) the Executive,
with or without change in title or formal corporate action, shall no
longer exercise all of the duties and responsibilities and shall no
longer possess substantially all the authority set forth in Section 2;
or (ii) the Company materially breaches this Agreement or the
performance of its duties and obligations hereunder; or (iii) 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 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 5(a) hereof, in which event the Executive shall be entitled to
the compensation payable pursuant to clauses (i)-(iii) of Section
5(a).
(e) Voluntary Termination. The Executive, on 30 days prior
written notice to the Company, may terminate his employment
voluntarily (i) at any time following termination of the initial Term
or (ii) at any time following the death or disabling illness of a
member of the Executive's immediate family or similar personal,
non-business related occurrence as a result of which the Executive
concludes he must devote a substantial amount of his time and energies
to his family or other personal matter and not to his business
activities so as to preclude his fulfilling his obligations under this
Agreement. Upon any such termination, the Company will pay the
Executive (i) his annual salary at such time pursuant to Section 3(a)
through the date of such termination of employment; and (ii) any bonus
which would have been payable through the date of termination pursuant
to Section 3(b).
(f) Continuing Effect. Notwithstanding any termination of the
Executive's employment as provided in this Section 5 or otherwise, the
provisions of Sections 6 and 7 shall remain in full force and effect.
6. Non-competition Agreement.
(a) Competition with the Company. Until termination of his
employment and for a period of 12 months commencing on the date of
termination, the Executive, directly or indirectly, in association
with or as a stockholder, director, officer, consultant, employee,
partner, joint venturer, member or otherwise of or through any person,
firm, corporation, partnership, association or other entity, will not
compete with the Company or any of its affiliates in the offer, sale
or marketing of products or services that are competitive with the
products or services offered by the Company, within any metropolitan
area in the United States or elsewhere in which the Company is then
engaged in the offer and sale of competitive products or services;
provided, however, the foregoing shall not prevent Executive from
accepting employment with an enterprise engaged in two or more lines
of business, one of which is the same or similar to the Company's
business (the "Prohibited Business") if Executive's employment is
totally unrelated to the Prohibited Business; provided, further, the
foregoing shall not prohibit Executive from owning up to 5% of the
securities of any publicly-traded enterprise provided Executive is not
an employee, director, officer, consultant to such enterprise or
otherwise reimbursed for services rendered to such enterprise.
(b) Solicitation of Customers. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, directly
or indirectly, will not seek Prohibited Business from any Customer (as
defined below) on behalf of any enterprise or business other than the
Company, refer Prohibited Business from any Customer to any enterprise
or business other than the Company or receive commissions based on
sales or otherwise relating to the Prohibited Business from any
Customer, or any enterprise or business other than the Company. For
purposes of this Section 6(b), the term "Customer" means any person,
firm, corporation, partnership, association or other entity to which
the Company or any of its affiliates sold or provided goods or
services during the 24-month period prior to the time at which any
determination is required to be made as to whether any such person,
firm, corporation, partnership, association or other entity is a
Customer.
(c) Solicitation of Employees. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, will not
directly or indirectly, solicit employees of the Company for
employment by any person, enterprise, business, company, partnership,
joint venture or other entity. For the purposes of this Agreement, the
term "Employee " means any person, firm, corporation, partnership,
association or other entity which the Company, or any of its
affiliates, employed during the during the 24-month period prior to
the time at which any determination is required to be made as to
whether any such person, firm, corporation, partnership, association
or other entity is an Employee.
(d) No Payment. The Executive acknowledges and agrees that no
separate or additional payment will be required to be made to him in
consideration of his undertakings in this Section 6.
7. Nondisclosure 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) confidential or secret plans, programs, documents, agreements or
other material relating to the business, services or activities of the Company
and its affiliates and (ii) trade secrets, market reports, customer
investigations, customer lists and other similar information that is proprietary
information of the Company or its affiliates (collectively referred to as
"confidential information"). The Executive acknowledges that such confidential
information as is acquired and used by the Company or its affiliates is a
special, valuable and unique asset. All records, files, materials and
confidential information obtained by the Executive in the course of his
employment with the Company are confidential and proprietary and shall remain
the exclusive property of the Company or its affiliates, as the case may be. The
Executive will not, except in connection with and as required by his performance
of his duties under this Agreement, for any reason use for his own benefit or
the benefit of any person or entity with which he may be associated or disclose
any such confidential information to any person, firm, corporation, association
or other entity for any reason or purpose whatsoever without the prior written
consent of the board of directors of the Company, unless such confidential
information previously shall have become public knowledge through no action by
or omission of the Executive.
8. 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 or Section 7, the Company will be entitled
to institute and prosecute proceedings in any court of competent
jurisdiction referred to in Section 8(b) below, to enjoin the
Executive from breaching the provisions of Section 6 or Section 7. 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 8 shall be construed to prevent the Company
from seeking such other remedy in arbitration in case of any breach of
this Agreement by the Executive, as the Company may elect.
(b) Any proceeding or action must be commenced in the federal
courts, or in the absence of federal jurisdiction in state court, in
either case in Florida where the Company maintains its principal
offices. The Executive and the Company irrevocably and unconditionally
submit to the jurisdiction of such courts and agree to take any and
all future action necessary to submit to the jurisdiction of such
courts. The Executive and the Company irrevocably waive any objection
that they now have or hereafter 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 any such court and further
irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
Final judgment against the Executive or the Company in any such suit
shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment, a certified or true copy or which shall be conclusive
evidence of the fact and the amount of any liability of the Executive
or the Company therein described, or by appropriate proceedings under
any applicable treaty or otherwise.
9. Assignability. 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 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.
10. 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 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.
11. 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 addressees 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:
To the Company: Imaging Diagnostic Systems, Inc.
0000 XX 00xx Xxxxx
Xxxxxxxxxx Xxxxxxx 00000
To the Executive: Xxxxxxx X. Xxxxxx
00000 XX 00xx Xxxxxx
Xxxxxxxxxx Xxxxxxx 00000
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.
12. 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.
13. Arbitration. Except for any controversy or claim seeking equitable
relief as provided in Section 8 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 rules, then obtaining, of the American
Arbitration Association. Any reward 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.
14 Attorney's 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, the prevailing party shall be entitled to a
reasonable attorney's fee, costs and expenses.
15. Governing Law. This Agreement and any dispute, disagreement, or issue
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.
16. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto 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 which enforcement or the change, waiver discharge or termination
is sought.
17. Additional Documents. The parties hereto shall execute such additional
instruments as may be reasonably required by their counsel in order to carry out
the purpose and intent of this Agreement and to fulfill the obligations of the
parties hereunder.
18. 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.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written.
Imaging Diagnostic Systems, Inc.
__________________________ By: ___________________________________
Executive Xxxxx X. Xxxxxxxx, Exec Vice President
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Agreement") entered into as of the 30th
day of August 1999, between Imaging Diagnostic Systems, Inc. the "Company") and
Xxxxxxx X. Xxxxxx, an Executive of the Company ("Executive").
WHEREAS, by action taken by the board of directors of the Company on August
30, 1999, it has adopted a 1999 Equity Incentive Plan (the "Plan"); and
WHEREAS, by action taken by the board of directors of the Company on the
same date, it has been determined that in order to enhance the ability of the
Company to attract and retain qualified officers it will grant Executive the
right to purchase stock in the Company pursuant to incentive options.
NOW THEREFORE, in consideration of the mutual covenants and promises
hereafter set forth and for other good and valuable consideration, receipt of
which is acknowledged, the parties hereto agree as follows:
1. Grant of Incentive Options. The Company irrevocably grants to Executive,
as a matter of separate agreement and not in lieu of salary or other
compensation for services, the right and option (the "Options") to purchase all
or any part of an aggregate of 2,500,000 shares of authorized but unissued
common stock of the Company or, at Executive's option, that number of Voting
Convertible Preferred Stock that would give Executive voting rights equal to the
2,500,000 shares of common stock, on the terms and conditions herein set forth.
The Options are intended to be Incentive Stock Options as defined by Section
422A of the Internal Revenue Code (the "Code").
2. Price. The exercise price of the shares of common stock subject to the
Options shall be 110% of fair market value on the date of the grant ($.21 per
share).
3. When Exercisable.
(a) Provided that Executive is employed by the Company on the
respective dates below, the Options shall vest as follows:
Date No. of Shares
August 30, 1999 500,000
August 30, 2000 500,000
August 30, 2001 500,000
August 30, 2002 500,000
August 30, 2003 500,000
(b) Except as provided in paragraphs 2 and 3 of this Agreement, once
any Option become exercisable they shall remain exercisable through August
30, 2004.
4. Conversion to Non-Qualified Options. In the event that the
stockholders of the Company fail to approve the Plan within one year after
approval by the Board of Directors, or in the event that the Executive is
terminated with pursuant to Section 5 (a) or 5(d) of that certain
Employment Agreement dated August 30, 1999 between the Company and the
Executive, a copy of which, is on file at the Company's corporate office
(the "Employment Agreement"), the exercise period for the Options shall be
extended through August 30, 2009 thereby converting all of the Options to
Non-Qualified Options. In such event, the Company shall pay Executive a
tax-offset bonus each time he exercises any Options. The amount of the tax
offset bonus shall be equal to the amount of federal income tax he incurs
in connection with the exercise of the Options assuming he is at the
highest marginal United States income bracket for the year of exercise.
Such bonus shall be paid to Executive on or before February 1, of the year
following exercise.
5. Termination of Relationship.
(a) Except as set forth in Section 4 above, if for any reason, except
death, Executive ceases to act as an employee of the Company, all rights
granted hereunder shall terminate effective three months from the date
Executive ceases to act as an employee.
(b) If Executive shall die while an employee of the Company, his
estate or any transferee, as defined herein, shall have the right within
three months from the date of Executive's death to exercise Executive's
Options to the extent the right to exercise to the Options shall have
accrued at the date of death, except to the extent the Options shall have
been exercised prior thereto. The exercise period for any Options not
vested, shall be extended through August 30, 2004 thereby converting all of
the Options to Non-Qualified Options. For the purpose of this Agreement,
"transferee" shall mean a person to whom such shares are transferred by
will or by the laws of descent and distribution.
(c) No transfer of the Options by Executive by will or by the laws of
descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of
the letters testamentary or such other evidence as the board may deem
necessary to establish the authority of the state and the acceptance by the
transferee or transferees of the terms and conditions of the Options.
(d) If Executive becomes disabled while employed by the Company within
the meaning of Section 22(e)(3) of the Code, the three month period
referred to in paragraph 3(a) of this Agreement shall be extended to one
year.
6. Method of Exercise/Registration. These Options shall be exercisable by a
written notice, which shall:
(a) state the election to exercise the Options, the number of shares
to be exercised, the person in whose name the stock certificate or
certificates for such shares of common stock is to be registered, his
address and social security number (or if more than one, the names,
addresses and social security numbers of such persons);
(b) contain such representations and agreements as to the holder's
investment intent with respect to such shares of common stock as set forth
in paragraph 8 hereof;
(c) be signed by the person or persons entitled to exercise the
Options and, if the Options is being exercised by any person or persons
other than the Executive, be accompanied by proof, satisfactory to counsel
for the Company, of the right of such person or persons to exercise the
Options.
(d) be accompanied by full payment of the purchase or exercise price
there for either (i) in United States dollars in cash or by check; (ii) by
Executive's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable federal rate, as
defined in Section 1274(d) of the Code; (iii) by having the Company retain
a portion of the Shares covered by the option exercise, or (iv) by any
combination of (i) (ii) and (iii) above.
If the Executive chooses to pay the exercise price pursuant to (iii) above,
the number of Shares to be delivered to or withheld by the Company times the
fair market value shall equal the cash required for exercise. To the extent that
the Participant elects to either deliver or have withheld Shares of the
Company's Common Stock, the Board of Directors may require the Executive to make
such election only during certain periods of time as may be necessary to comply
with appropriate exemptive procedures regarding the "short-swing" profit
provisions of Section 16(b) of the Securities Exchange Act of 1934 or to meet
certain Internal Revenue Code requirements.
The certificate or certificates for shares of common stock as to which the
Options shall be exercised shall be registered in the name of the person or
persons exercising the Options.
The Company shall, if requested by the Executive, as expeditiously as
possible file a registration statement on a form of general use under the
Securities Act to permit the sale or other disposition of the Optioned Shares.
The Executive shall provide all information reasonable requested by the Company
for inclusion in any registration statement to be filed under this Agreement.
The Company will use its best efforts to cause such registration statement first
to become effective at the earliest practicable time and then to remain
effective for such period as the Executive reasonably deems necessary to effect
such sales or other dispositions or until all Optioned Shares no longer will
constitute "restricted securities" with the meaning of Rule 144 under the
Securities Act. Such registration shall be effected at the Company's expense
except for underwriting commissions and the fees and disbursements of the
Executive's counsel attributable to the registration of the Optioned Shares. The
Company and the Executive shall enter into an agreement under which each will
indemnify the other with respect to information provided by such party for use
in the registration statement, such indemnities and the procedures for them to
be in a form customarily included in registration rights agreements. The Company
further agrees to use its best efforts to register or qualify the Optioned Stock
covered under such registration statement under such other securities or
blue-sky laws of such jurisdictions as the Executive shall reasonably request.
7. Reload Options. If the Executive pays all or a portion of the exercise
price of an Option or the tax required to be withheld pursuant to an exercise of
an Option by surrendering shares of Stock pursuant to Section 6(d) above, the
Executive shall be automatically granted an Option for the purchase of Stock
equal to the number of shares surrendered (a "Reload Option"). The grant of the
Reload Option shall be effective on the date the Participant surrenders the
shares of Stock in respect of which the Reload Option is granted (the "Reload
Date"). The Reload Option shall have an exercise price equal to the Fair Market
Value of the Stock on the Reload Date, and shall have a term which is no longer,
and which shall lapse no later, than the original term of the underlying option.
If stock otherwise available under an Incentive Stock Option is withheld
pursuant to Section 6(d) above, any Reload Option granted in connection with the
withholding shall be treated as a new Incentive Stock Option, subject to the
rules set forth in the Plan..
8. Adjustments. Upon the occurrence of any of the following events, the
Executive's rights with respect to Options granted hereunder shall be adjusted
as hereinafter provided unless otherwise specifically provided in the written
agreement between the Executive and the Company relating to such Option:
(a) If the shares of Common Stock shall be subdivided or combined into
a greater or smaller number of shares or if the Company shall issue any
shares of Common Stock as a stock dividend on its outstanding Common Stock,
the number of shares of Common Stock deliverable upon the exercise of
Options shall be appropriately increased or decreased proportionately, and
appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or stock dividend.
(b) Except as provided for pursuant to Section 5 (a) or 5(d) of the
Employment Agreement, if the Company is to be consolidated with or acquired
by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), the committee or the
board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board") shall at the Executives sole option, as
to outstanding Options, either (i) make appropriate provision for the
continuation of such Options by substituting on an equitable basis for the
shares then subject to such Options the consideration payable with respect
to the outstanding shares of Common Stock in connection with the
Acquisition; or (ii) terminate all Options in exchange for a cash payment
equal to the excess of the fair market value of the shares subject to such
Options (to the extent then exercisable) over the exercise price thereof.
(c) In the event of a recapitalization or reorganization of the
Company (other than a transaction described in subparagraph (b) above)
pursuant to which securities of the Company or of another corporation are
issued with respect to the outstanding shares of Common Stock, the
Executive upon exercising an Option shall be entitled to receive for the
purchase price paid upon such exercise the securities he would have
received if he had exercised his Option prior to such recapitalization or
reorganization.
(d) 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 Options. No
adjustments shall be made for dividends or other distributions paid in cash
or in property other than securities of the Company.
(e) No fractional shares shall be issued pursuant to the Options, the
Executive shall receive from the Company cash in lieu of such fractional
shares.
9. Necessity to Become Holder of Record. Neither the Executive nor his
estate, as provided in paragraph 3(b), shall have any rights as a
shareholder with respect to any shares covered by the Options until such
person shall have become the holder of record of such shares. No adjustment
shall be made for cash dividends or cash distributions, ordinary or
extraordinary, in respect of such shares for which the record date is prior
to the date on which he shall become the holder of record thereof.
10. Reservation of Right to Terminate Relationship. Nothing contained
in this Agreement shall restrict the right of the Company to terminate the
relationship of Executive at any time, with or without cause. The
termination of the relationship of Executive by the Company, regardless of
the reason there for, shall have the results provided for in Section 5 of
this Agreement.
11. Conditions to Exercise of Options. In order to enable the Company
to comply with the Securities Act of 1933 (the "Securities Act") and
relevant state law, the Company shall require Executive, his estate, or any
Transferee as a condition of the exercising of the Options granted
hereunder, to give written assurance satisfactory to the Company that the
shares subject to the Options are being acquired for his own account, for
investment only, with no view to the distribution of same, and that any
subsequent resale of any such shares either shall be made pursuant to a
registration statement under the Securities Act and applicable state law
which has become effective and is current with regard to the shares being
sold, or shall be pursuant to an exemption from registration under the
Securities Act and applicable state law.
The Options are subject to the requirement that, if at any time the
board of directors shall determine, in its discretion, that the listing,
registration, or qualification of the shares of common stock subject to the
Options upon any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary
as a condition of, or in connection with the issue or purchase of shares
under the Options, the options may not be exercised in whole or in part
unless such listing, registration, qualification, consent or approval shall
have been effected.
12. Duties of Company. The Company will at all times during the term
of Options:
(a) Reserve and keep available for issue such number of shares of
its authorized and unissued common stock as will be sufficient to
satisfy the requirements of this Agreement;
(b) Pay all original issue taxes with respect to the issue of
shares pursuant hereto and all other fees and expenses necessarily
incurred by the Company in connection therewith;
(c) Use its best efforts to comply with all laws and regulations,
which, in the opinion of counsel for the Company, shall be applicable
thereto.
13. Parties Bound by Plan. The Plan and each determination, interpretation
or other action made or taken pursuant to the provisions of the Plan shall be
final and shall be binding and conclusive for all purposes on the Company and
Executive and his respective successors in interest.
14. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or to the interpretations, breach or enforcement thereof, shall
be submitted to one arbitrator and settled by arbitration in Fort Lauderdale,
Florida, in accordance with the rules, then obtaining, of the American
Arbitration Association. 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.
15. Benefit. This Agreement shall be binding upon and insure to the benefit
of the parties hereto and their legal representatives, successors and assigns.
16. 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 addressees 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:
To the Company: Imaging Diagnostic Systems, Inc.
0000 XX 00xx Xxxxx
Xxxxxxxxxx Xxxxxxx 00000
To the Executive: Xxxxxxx X. Xxxxxx
00000 XX 00xx Xxxxxx
Xxxxxxxxxx Xxxxxxx 00000
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.
17. Attorney's 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, the prevailing party shall be entitled to a
reasonable attorney's fee, costs and expenses.
18. Construction. In the event any parts of this Agreement are found to be
void, the remaining provisions of this Agreement shall nevertheless be binding
with the same effect as though the void parts were deleted.
19. Governing Law. This Agreement and any dispute, disagreement, or issue
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.
20. Oral Evidence. This Agreement supersedes all prior oral and written
agreements between the parties hereto 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 which enforcement or the change, waiver discharge or
termination is sought.
21. Counterparts. 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.
22. Additional Documents. The parties hereto shall execute such additional
instruments as may be reasonably required by their counsel in order to carry out
the purpose and intent of this Agreement and to fulfill the obligations of the
parties hereunder.
23. Paragraph Headings. Paragraph headings herein have been inserted for
reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part any of the terms or
provisions of this Agreement.
IN WITNESS WHEREOF the parties hereto have set their hand and seal the day
and year first above written.
WITNESSES: Imaging Diagnostic Systems, Inc.
___________________________ By: _____________________________
Xxxxx X. Xxxxxxxx, Executive
Vice President
___________________________ By: ______________________________
Xxxxxxx X. Xxxxxx, Executive
